Hinrichsen et al v. Bank of America, N.A. et al

Filing 32

ORDER Granting 23 Motion to Dismiss. Signed by Judge Dana M. Sabraw on 8/10/2017. (All non-registered users served via U.S. Mail Service)(aef)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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RODNEY L. HINRICHSEN and
DEBORAH A. HINRICHSEN,

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Plaintiffs,

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Case No. 17-cv-0219 DMS (RBB)
ORDER GRANTING MOTION
TO DISMISS

v.

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BANK OF AMERICA, N.A. ET
AL.,

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Defendants.

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Pending before the Court is Defendant MTC Financial, Inc. dba Trustee Corps

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(“MTC”)’s motion to dismiss Plaintiffs Rodney L. Hinrichsen and Deborah A.

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Hinrichsen’s First Amended Complaint (“FAC”). Plaintiffs filed an opposition, and

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MTC filed a reply. For the reasons set forth below, MTC’s motion is granted.

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On May 9, 2017, this Court issued an order granting in part and denying in

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part MTC and Bank of America, N.A. (“BofA”)’s motions to dismiss. 1 On May 22,

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2017, Plaintiffs filed a FAC, alleging the following three claims: (1) violation of the

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Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692f(6), (2) violation

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of Cal. Civil Code § 2924.17, and (3) cancellation of instruments. Subsequently, on

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The Court issued an amended order on July 14, 2017.
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17-cv-0219 DMS (RBB)

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June 8, 2017, MTC filed present motion. Specifically, MTC moves to dismiss

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Plaintiffs’ second claim under § 2924.17, arguing § 2924.17 only applies to

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mortgage servicers, not trustees, and MTC is statutorily immune from liability

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pursuant to Cal. Civ. Code § 2924(d).

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A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests

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the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6);

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Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). To determine whether

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dismissal under Rule 12(b)(6) is proper, the Court must accept as true Plaintiffs’

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nonconclusory factual allegations, construe all reasonable inferences in favor of

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Plaintiffs, and consider in that light whether the facts are sufficient to state a claim

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for relief that is plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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In their second claim, Plaintiffs allege MTC and BofA violated § 2924.17

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based on their recording of the notice of default and notice of trustee’s sale.2 (See

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FAC ¶¶ 14–15, 30.) Section 2924.17(b) provides, “Before recording or filing any

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of the documents described in subdivision (a), a mortgage servicer shall ensure that

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it has reviewed competent and reliable evidence to substantiate the borrower’s

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default and the right to foreclose, including the borrower's loan status and loan

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information.” Cal. Civ. Code § 2924.17(b) (italics added). Section 2924.17 “applies

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to a mortgage servicer, which is defined in § 2920.5 to specifically exclude a

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trustee.”3 Dahnken v. Wells Fargo Bank, NA, No. 4:13-cv-02838-PJH, 2017 WL

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3049552, at *2 (9th Cir. 2017); McKinney v. Citi Residential Lending Inc., No.

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15CV307-MMA (WVG), 2015 WL 11822150, at *6 (S.D. Cal. Dec. 8, 2015)

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(“California Civil Code § 2924.17 only applies to mortgage servicers”). Plaintiffs

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have alleged MTC is a “foreclosure trustee,” not a mortgage servicer. 4 (FAC ¶ 3.)

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Records show these notices were issued by MTC, not BofA.
Section 2920.5 expressly states, “‘Mortgage servicer’ shall not include a trustee, or
a trustee's authorized agent, acting under a power of sale pursuant to a deed of trust.”
Cal. Civ. Code § 2920.5(a)
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Plaintiffs also refer to MTC as a “debt collector.” (FAC ¶ 21.) However, debt
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17-cv-0219 DMS (RBB)

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Because there is nothing in the record to suggest MTC is a mortgage servicer,

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Plaintiffs cannot state a claim against MTC. Accordingly, this claim is dismissed

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with prejudice as to MTC. 5

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IT IS SO ORDERED.
Dated: August 10, 2017

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collectors are not subject to § 2924.17 either. See McKinney, 2015 WL 11822150,
at *6 n.13.
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Because MTC’s motion is granted, the Court declines to address its remaining
arguments. The Court denies MTC’s request for judicial notice because the
documents contained therein were not necessary to decide the present motion.
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17-cv-0219 DMS (RBB)