Monreal v. GMAC Mortgage, LLC et al, No. 3:2013cv00743 - Document 16 (S.D. Cal. 2013)

Court Description: ORDER granting 4 Defendants' Motion to Dismiss. Amended complaint due 7/5/13. Signed by Judge Anthony J. Battaglia on 6/4/13. (cge)

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Monreal v. GMAC Mortgage, LLC et al Doc. 16 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 JUANA MONREAL, an Individual, ) ) Plaintiff, ) v. ) ) GMAC MORTGAGE, LLC FKA ) GMAC MORTGAGE ) CORPORATION; DEUTSCHE BANK ) NATIONAL TRUST COMPANY, A ) FEDERALLY CHARTERED ) BANKING INSTITUTION, AS ) TRUSTEE PURSUANT TO THE ) HARBOURVIEW MORTGAGE ) LOAN PASS-THROUGH ) CERTIFICATES, SERIES 2006-14; ) EXECUTIVE TRUSTEE SERVICES ) LLC D/B/A ETS SERVICES, LLC; ) MORTGAGE ELECTRONIC ) REGISTRATION SYSTEMS, INC.; ) ALL PERSONS UNKNOWN ) CLAIMING ANY LEGAL OR ) EQUITABLE RIGHT, TITLE, ) ESTATE, LIEN OR INTEREST IN ) THE PROPERTY DESCRIBED IN ) THE COMPLAINT ADVERSE TO ) PLAINTIFF’S TITLE, OR ANY ) CLOUD ON PLAINTIFF’S TITLE ) THERETO, AND DOES 1-50, ) INCLUSIVE, ) ) Defendants. ) ) Civil No. 13cv743 AJB (NLS) ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS (Doc. No. 4.) Presently before the Court is Defendants GMAC Mortgage, LLC (“GMAC”), 26 Executive Trustee Services, LLC, dba ETS Services, LLC (“ETS”), and Mortgage 27 Electronic Registration System, Inc. (“MERS”) (collectively, “Defendants”) motion to 28 dismiss, (Doc. No. 4), Plaintiff Juana Montreal’s (“Plaintiff”) Complaint, (Doc. No. 1). 1 13v743 AJB (JMA) Dockets.Justia.com 1 In accordance with Civil Local Rule 7.1.d.1, the Court finds the motion suitable for 2 determination on the papers and without oral argument. Accordingly, the motion hearing 3 scheduled for June 20, 2013 is hereby vacated. For the reasons set forth below, the Court 4 GRANTS Defendants’ motion to dismiss in its entirety providing Plaintiff limited leave 5 to amend the complaint in compliance with this order. 6 BACKGROUND 7 On August 17, 2006, Plaintiff borrowed $301,600.00 (“the Loan”) from Suntrust 8 Mortgage, Inc. (“Suntrust”) to purchase the property located at 4414 Newton Ave., San 9 Diego, California 92113 (“the Property”). (Compl. ¶¶ 26, 27.) The Loan was memorial- 10 ized by a Promissory Note (the “Note”) and secured by a Deed of Trust (“Deed of Trust”) 11 on the Property. (Id. at ¶ 27, Ex. A; Doc. No. 4, Ex. 2.) The Deed of Trust named MERS 12 as the beneficiary and Jackie Miller as the trustee. (Doc. No. 1, Ex. A; Doc. No. 4, Ex. 13 2.) On August 24, 2012, MERS assigned the beneficial interest in the Deed of Trust 14 (“Assignment of the Deed of Trust”) to Deutsche Bank National Trust Company as 15 trustee for Haborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, 16 Series 2006-14 (“Deutsche Bank”). (Compl., Ex. B; Doc. No. 4, Ex. 3.) The Assignment 17 of the Deed of Trust was recorded in the official records of the San Diego County 18 Recorder’s Office on August 31, 2012, as Document No.: 2012-0527658. (Id.) On 19 October 4, 2012, Deutsche Bank substituted ETS as trustee under the Deed of Trust 20 (“Substitution of Trustee”). (Doc. No. 1, Ex. C; Doc. No. 4, Ex. 4.) The Substitution of 21 Trustee was recorded in the official records of the San Diego County Recorder’s Office 22 on November 9, 2012, as Document No.: 2012-0701420. (Id.) 23 On November 7, 2012, ETS, as trustee under the Deed of Trust, issued a notice of 24 default and election to sell under the deed of trust (“Notice of Default”). (Compl., Ex. D; 25 Doc. No. 4, Ex. 5.) The Notice of Default stated that as of November 7, 2012, Plaintiff 26 was in default of the Loan in the amount of $29,987.00. (Id.) The Notice of Default also 27 informed Plaintiff that she must contact Deutsche Bank to arrange for payment in order to 28 stop foreclosure of the Property. (Id.) The Notice of Default was recorded in the official 2 13v743 AJB (JMA) 1 records of the San Diego County Recorder’s Office on November 9, 2012, as Document 2 No.: 2012-0701421. (Id.) On February 12, 2012, ETS recorded a notice of trustee’s sale 3 (“Notice of Trustee’s Sale”) in the official records of the San Diego County Recorder’s 4 Office as Document No.: 2013-0103723. (Compl., Ex. E; Doc. No. 4, Ex. 6.) The Notice 5 of Trustee’s Sale informed Plaintiff that the unpaid balance on the Loan was currently 6 $360,222.88. (Id.) The Notice of Trustee Sale also informed Plaintiff that the sale of the 7 Property would take place on March 12, 2013. (Id.) On March 14, 2013, after the 8 Property was sold at auction, ETS executed a trustee’s deed (“Trustee Deed”), indicating 9 that the Property had been sold to Aslan Residential I, LLC. (Doc. No. 4, Ex. 7.) The 10 Trustee Deed was recorded in the official records of the San Diego County Recorder’s 11 Office on March 29, 2013, as Document No.: 2013-0200241. (Id.) 12 Plaintiff filed the instant complaint on March 28, 2013. (Doc. No. 1.) The 13 complaint alleged ten causes of action: (1) violation of California’s Unfair Competition 14 Law (“UCL”), Bus. & Prof. Code § 17200, et seq.; (2) intentional misrepresentation; (3) 15 negligent misrepresentation; (4) fraudulent concealment; (5) quiet title; (6) declaratory 16 relief; (7) violation of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq.; (8) 17 violation of the Home Ownership and Equity Protection Act (“HOEPA”), 15 U.S.C. § 18 1639, et seq.; (9) violation of the Real Estate Settlement Procedures Act (“RESPA”) 12 19 U.S.C. §§ 2601, et seq.; and (10) violation of the Fair Debt Collection Practices Act 20 (“FDCPA”), 15 U.S.C. § 1692, et seq. Plaintiff was originally proceeding pro se, but 21 elected to retain counsel before filing a response to Defendants’ instant motion. (Doc. 22 Nos. 11, 13.) LEGAL STANDARD 23 24 I. Motion to Dismiss 25 Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when a 26 plaintiff’s allegations fail “to state a claim upon which relief can be granted.” Fed. R. 27 Civ. P. 12(b)(6). In ruling on a motion to dismiss, the court must “accept all material 28 allegations of fact as true and construe the complaint in a light most favorable to the 3 13v743 AJB (JMA) 1 non-moving party.” Vasquez v. L.A. Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007). Courts 2 are not however, “bound to accept as true a legal conclusion couched as a factual allega- 3 tion.” Ashcroft v. Iqbal, 556 U.S. 662, 664, 129 S. Ct. 1937, 1949-50 (2009). 4 A Rule 12(b)(6) dismissal “can be based on the lack of a cognizable legal theory or 5 the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. 6 Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). To survive a motion to 7 dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on 8 its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1960 9 (2007). Plausibility does not equate to probability, but it requires “more than a sheer 10 possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 664, 129 S. Ct. at 11 1949. “A claim has facial plausibility when the plaintiff pleads factual content that 12 allows the court to draw the reasonable inference that the defendant is liable for the 13 misconduct alleged.” Id. Dismissal of claims that fail to meet this standard should be 14 with leave to amend unless it is clear that amendment could not possibly cure the com- 15 plaint’s deficiencies. See Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1296 (9th Cir. 16 1998). 17 Under Rule 12(b)(6), complaints alleging fraud must satisfy the heightened 18 pleading requirements of Federal Rule of Civil Procedure 9(b). Rule 9(b) requires that in 19 all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be 20 stated with particularity. Fed. R. Civ. P. 9(b). Malice, intent, knowledge, and other 21 conditions of a person’s mind may be alleged generally. A pleading is sufficient under 22 Rule 9(b) if it “state[s] the time, place and specific content of the false representations as 23 well as the identities of the parties to the misrepresentation.” Misc. Serv. Workers, 24 Drivers & Helpers v. Philco–Ford Corp., 661 F.2d 776, 782 (9th Cir. 1981) (citations 25 omitted); see also Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) 26 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)) (“Averments of fraud 27 must be accompanied by ‘the who, what, when, where, and how’ of the misconduct 28 charged.”). Additionally, “the plaintiff must plead facts explaining why the statement 4 13v743 AJB (JMA) 1 was false when it was made.” Smith v. Allstate Ins. Co., 160 F. Supp. 2d 1150, 1152 2 (S.D. Cal. 2001) (citation omitted). Regardless of the title given to a particular claim, 3 allegations grounded in fraud are subject to Rule 9(b)’s pleading requirements. See Vess, 4 317 F.3d at 1103-04. Thus, even where fraud is not an essential element of a consumer 5 protection claim, Rule 9(b) applies where a complaint “rel[ies] entirely on [a fraudulent 6 course of conduct] as the bases of that claim . . . the claim is said to be ‘grounded in 7 fraud’ or to ‘sound in fraud,’ and the pleading . . . as a whole must satisfy the particularity 8 requirement of Rule 9(b).” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 9 2009) (quoting Vess, 317 F.3d at 1103-04). DISCUSSION 10 11 I. Defendants’ Request for Judicial Notice Defendants seek judicial notice of seven documents: (1) Grant Deed (Exhibit 1); 12 13 (2) Deed of Trust (Exhibit 2); (3) Assignment of the Deed of Trust (Exhibit 3); (4) 14 Substitution of Trustee (Exhibit 4); (5) Notice of Default (Exhibit 5); (6) Notice of 15 Trustee’s Sale (Exhibit 6); and (7) Trustee’s Deed upon Sale (Exhibit 7). (Doc. No. 5.) 16 The first six exhibits were attached to Plaintiff’s complaint and Plaintiff did not otherwise 17 object to Defendants’ request. (Compl., Exs. A-E.) Accordingly, because each of the 18 documents was recorded in the official records of the San Diego County Recorder’s 19 Office, the Court grants Defendants’ request with respect to all seven documents. See 20 Fed. R. Evid. 201(b)(2) (stating that the court may take notice of facts that are “not 21 subject to reasonable dispute in that [they are] . . . capable of accurate and ready determi- 22 nation by resort to sources whose accuracy cannot be reasonably questioned.”); Reyn’s 23 Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (finding that 24 matters that are part of the public record may be judicially noticed). 25 II. 26 Defendants’ Motion to Dismiss Defendants move to dismiss the entire complaint on three grounds: (1) Plaintiff has 27 not alleged she can tender the full amount due and owing on the Loan; (2) under Gomes 28 v. Countywide, 192 Cal. App. 4th 1149 (Cal. Ct. App. 2011), Plaintiff does not have 5 13v743 AJB (JMA) 1 standing to bring a judicial action to challenge the validity of the nonjudicial foreclosure; 2 and (3) notwithstanding Plaintiff’s inability to tender the amount due or Plaintiff’s 3 standing to challenge the foreclosure/sale of the Property, each of Plaintiff’s claims fail 4 for separate, independent reasons. (Doc. No. 4 at 3-4.) The Court considers each of 5 Plaintiff’s individual causes of action in turn, addressing Defendants’ arguments regard- 6 ing tender and standing as applicable. 7 A. Violation of the UCL 8 Plaintiff’s first cause of action is for unfair competition in violation of the UCL. 9 (Compl. ¶¶ 69-81.) California Business and Professions Code Section 17200 defines 10 unfair competition as “any unlawful, unfair or fraudulent business act or practice” and 11 any “unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code § 12 17200. Because the statute is written in the disjunctive, it prohibits three separate types 13 of unfair competition: (1) unlawful acts or practices, (2) unfair acts or practices, and (3) 14 fraudulent acts or practices. Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 15 4th 163, 180 (Cal. 1999) (emphasis added). 16 Plaintiff alleges Defendants violated all three subparts of the UCL. (Compl. ¶¶ 71, 17 74, 76.) As a result, Plaintiff seeks an order requiring Defendants to restore all monies 18 and property that may have been acquired as a result of the alleged unfair, deceptive, 19 and/or unlawful business acts or practices, restitution for out-of-pocket expenses and 20 economic harm, and prejudgment interest. (Id. at ¶¶ 78-80.) Defendants move to dismiss 21 this cause of action on the basis that Plaintiff fails to allege any unlawful, unfair, or 22 fraudulent business practices because each of the underlying predicate acts in the 23 complaint also fail. (Doc. No. 4 at 10-11.) 24 1. Unlawful, Unfair, and Fraudulent Conduct 25 By proscribing “any unlawful” business practice, Section 17200 “borrows” 26 violations of other laws and treats them as unlawful practices that the unfair competition 27 law makes independently actionable. Cal. Bus. Prof. Code § 17204. Thus “violation of 28 almost any federal, state, or local law may serve as the basis for a[n] [unfair competition] 6 13v743 AJB (JMA) 1 claim.” Plascencia v. Lending 1st Mortg., 583 F. Supp. 2d 1090, 1098 (N.D. Cal. 2008) 2 (citing Saunders v. Super. Ct., 27 Cal. App. 4th 832, 838-39 (Cal. Ct. App. 1994). To 3 establish “fraudulent acts” under the UCL, a plaintiff must demonstrate that reasonable 4 “members of the public are likely to be deceived.” Williams v. Gerber Prods. Co., 552 5 F.3d 934, 938 (9th Cir. 2008). Under Federal Rule of Civil Procedure 9(b), allegations of 6 fraud or mistake must be stated “with particularity.”1 Furthermore, although the Califor- 7 nia Supreme Court has yet to define “unfair” in the context of a consumer action, many 8 courts of appeal have held that “an unfair business practice occurs when it offends an 9 established public policy or when the practice is immoral, unethical, oppressive, unscru- 10 pulous or substantially injurious to consumers.” Morgan v. AT&T Wireless Servs., 177 11 Cal. App. 4th 1235, 1254 (Cal. Ct. App. 2009). Alternatively, an act is “unfair” under the 12 UCL “if the consumer injury is substantial, is not outweighed by any countervailing 13 benefits to consumers or to competition, and is not an injury the consumers themselves 14 could have reasonably avoided.” Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 15 1544, 1555 (Cal. Ct. App. 2006). 16 With regard to the unlawful prong, Plaintiff alleges Defendants committed 17 unlawful business practices by using fraudulent and ineffective documents to illegiti- 18 mately foreclose upon and sell the property at auction. (Compl. ¶ 76.) Plaintiff however 19 does not articulate which statute(s) Defendants allegedly violated, or specify the role of 20 each individual Defendant in this fraudulent scheme. See Swartz v. KPMG LLP, 476 21 F.3d 756, 765 (9th Cir. 2007) (citing Moore v. Kayport Package Express, Inc., 885 F.2d 22 531, 541 (9th Cir. 1989)). Therefore, the complaint fails to meet the requirements of 23 Rule 9(b), as it does not inform Defendants of which law(s) Plaintiff alleges were 24 25 1 Rule 9(b) serves three purposes: (1) to provide defendants with adequate notice to allow them to defend the charge and deter plaintiffs from the filing of complaints “as a 26 pretext for the discovery of unknown wrongs”; (2) to protect those whose reputation would be harmed as a result of being subject to fraud charges; and (3) to “prohibit [ ] 27 plaintiff[s] from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.” In re Stac Elecs. Sec. Litig., 89 28 F.3d 1399, 1405 (9th Cir. 1996) (quoting Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985)) (internal quotations omitted, brackets in original). 7 13v743 AJB (JMA) 1 violated, and how each Defendant allegedly violated the specific law(s). Although the 2 Court can infer that Plaintiff intended to rely on the other violations alleged in the 3 complaint, such reliance fails to defeat Defendants’ motion to dismiss for three reasons. 4 First, Plaintiff must clearly allege (within the UCL cause of action) which law(s) or 5 statute(s) she intends to utilize as the predicate acts under the unlawful prong. Second, 6 even though Plaintiff listed several statutes she alleges were violated in different areas of 7 the complaint, including the background section, merely listing statutes without articulat- 8 ing specific facts to satisfy each element of the identified statute is insufficient. See 9 Bejou v. Bank of America, N.A., No. F 13-0125 LJO SMS, 2013 WL 1759126, at *5 10 (E.D. Cal. Apr. 24, 2013); Saldate v. Wilshire Credit Corp., 686 F. Supp. 2d 1051, 1067 11 (E.D. Cal. 2010) (“The complaint’s bare reference to federal statutes and common law 12 claims provides not the slightest inference that [the plaintiff] has a viable UCL claim.”). 13 And third, as stated below, because the Court dismisses each of Plaintiff’s individual 14 claims, none of these claims can serve as the predicate acts under the UCL’s unlawful 15 prong. 16 Plaintiff’s claims under the unfair and fraudulent prongs are similarly defective. 17 Both of these claims allege Defendants committed unfair and fraudulent acts by deliver- 18 ing and posting the Notice of Trustee’s Sale and proceeding with the sale of the Property 19 without the legal authority to do so. (Compl. ¶¶ 71, 74.) These are the same allegations 20 Plaintiff utilized to support her intentional misrepresentation, negligent misrepresenta- 21 tion, and fraudulent concealment claims. (Compl. ¶¶ 82-109.) As stated below, none of 22 these allegations meet the heightened pleading standard under Rule 9(b) because Plaintiff 23 fails to allege how each individual Defendant participated in the alleged fraudulent 24 scheme. Moreover, because Plaintiff’s allegations with respect to the unfair and fraudu- 25 lent prongs are dependent on Plaintiff’s contentions that the Trustee’s Sale was void 26 because Defendants did not have standing to foreclose on the Property, (which is at odds 27 with Plaintiff’s other allegations that this is a contract case and not a wrongful foreclosure 28 case), such allegations also fail because Plaintiff has not alleged sufficient facts to 8 13v743 AJB (JMA) 1 support her willingness and ability to tender the full amount due under the Loan. Simply 2 stating she will tender the amount due and owing in insufficient. See Mitchell v. Bank of 3 America, No.: 10cv432 L (WVG), 2011 WL 334988, *3 (S.D. Cal. Jan. 31, 2011); see 4 also Briosos v. Wells Fargo Bank, 737 F. Supp. 2d 1018, 1029 (N.D. Cal. 2010) (“While 5 Plaintiff has alleged an ‘ability to tender.’ Plaintiff's allegation is conclusory and there 6 are no other facts in the Complaint demonstrating such an ability.”). Furthermore, to the 7 extent Plaintiff’s claims under the unfair and fraudulent prongs depend on the viability of 8 Plaintiff’s other claims, this argument is also without merit as the Court grants Defen- 9 dants’ motion to dismiss in its entirety. 10 Therefore, the Court finds Plaintiff has failed to state a claim under either the 11 unlawful, unfair, or fraudulent prongs of the UCL. Accordingly, Plaintiff’s first cause of 12 action for violation of the UCL is DISMISSED without prejudice. 13 14 B. Intentional Misrepresentation, Negligent Misrepresentation, and Fraudulent Concealment 15 Plaintiff’s second, third, and fourth causes of action allege intentional misrepresen- 16 tation (count two), negligent misrepresentation (count three), and fraudulent concealment 17 (count four). (Compl. ¶¶ 82-109.) The basis of each of these causes of action is Plain- 18 tiff’s belief that Defendants sent her a notice of trustee’s sale indicating that they had a 19 lawful right to foreclose upon and sell the Property, when in fact, such representations 20 were false, Defendants knew such representations were false, Defendants concealed the 21 truth of these matters from Plaintiff, and as a result, Plaintiff suffered direct financial 22 harm. (Id. at ¶¶ 83, 88, 89, 94, 96, 99, 100, 102, 106.) With respect to the fourth cause of 23 action for fraudulent concealment, Plaintiff also alleges that Defendants were bound to 24 disclose the truth of these concealed facts, but failed to disclose such facts in order to 25 induce Plaintiff to surrender the Property without challenge. (Id. at ¶¶ 103, 104.) 26 Defendants move to dismiss all three fraud based claims on the basis that Plaintiff lacks 27 standing to challenge the nonjudicial foreclosure sale and the allegations fail to meet the 28 specificity required by Rule 9(b). 9 13v743 AJB (JMA) 1 Under California law, “[t]he elements of intentional misrepresentation, or actual 2 fraud, are: ‘(1) misrepresentation (false representation, concealment, or nondisclosure); 3 (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) 4 justifiable reliance; and (5) resulting damage.’ ” Anderson v. Deloitte & Touche, 56 Cal 5 .App. 4th 1468, 1474, 66 Cal. Rptr. 2d 512 (Cal. Ct. App. 1997). To assert a claim for 6 negligent misrepresentation, a plaintiff must allege: (1) the misrepresentation of a past or 7 existing material fact; (2) without reasonable ground for believing it to be true; (3) with 8 the intent to induce another’s reliance on the fact misrepresented; (4) justifiable reliance 9 on the misrepresentation; and (5) resulting damage. Apollo Capital Fund, LLC v. Roth 10 Capital Partners, LLC, 158 Cal. App. 4th 226, 243 (Cal. Ct. App. 2007). To establish a 11 cause of action for fraudulent concealment, a plaintiff must plead and prove five ele- 12 ments: (1) the defendant must have concealed or suppressed a material fact; (2) the 13 defendant must have been under a duty to disclose the fact to the plaintiff; (3) the 14 defendant must have intentionally concealed or suppressed the fact with the intent to 15 defraud the plaintiff; (4) the plaintiff must have been unaware of the fact and would not 16 have acted as he did if he had known of the concealed or suppressed fact; and (5) as a 17 result of the concealment or suppression of the fact, the plaintiff must have sustained 18 damage. Mktg. West, Inc. v. Sanyo Fisher (USA) Corp., 6 Cal. App. 4th 603, 612-13, 7 19 Cal. Rptr. 2d 859 (Cal. Ct. App. 1992). 20 Claims alleging intentional misrepresentation, negligent misrepresentation, and 21 fraudulent concealment all sound in fraud and thus must be pled with particularity under 22 Federal Rule of Civil Procedure 9(b). See Vess v. Ciba–Geigy Corp. USA, 317 F.3d 23 1097, 1103 (9th Cir. 2003) (“Rule 9(b)’s particularity requirement applies to state-law 24 causes of action.”). “Averments of fraud must be accompanied by ‘the who, what, when, 25 where, and how’ of the misconduct charged.” Id. at 1106 (quoting Cooper v. Pickett, 137 26 F.3d 616, 627 (9th Cir. 1997)). “ ‘[A] plaintiff must set forth more than the neutral facts 27 necessary to identify the transaction. The plaintiff must set forth what is false or mislead- 28 ing about a statement, and why it is false.’ ” Id. at 1106 (quoting Decker v. GlenFed, Inc. 10 13v743 AJB (JMA) 1 (In re GlenFed, Inc. Sec. Litig.), 42 F.3d 1541, 1548 (9th Cir. 1994)). “While statements 2 of the time, place and nature of the alleged fraudulent activities are sufficient, mere 3 conclusory allegations of fraud” are not. Moore v. Kayport Package Express, Inc., 885 4 F.2d 531, 540 (9th Cir. 1989). Moreover, in “the context of a fraud suit involving 5 multiple defendants, a plaintiff must, at a minimum, ‘identif[y] the role of [each] 6 defendant[ ] in the alleged fraudulent scheme.’ ” Swartz, 476 F.3d at 765 (citing Moore, 7 885 F.2d at 541). 8 9 The Court finds each of Plaintiff’s fraud based claims fail for lack of specificity under Rule 9(b), and Plaintiff nevertheless lacks standing to challenge the propriety of the 10 nonjudicial foreclosure. Plaintiff has not alleged any specific information about who 11 made the alleged misrepresentations, when the alleged misrepresentations were made, the 12 content or form of the represenations, and which Defendants allegedly made which 13 representations. Instead, Plaintiff alleges that the Notice of Trustee’s Sale, which was 14 sent by ETS, contained misrepresentations, which Defendants jointly knew were false. 15 Thus, Plaintiff does not identify the role of each Defendants in the alleged “fraudulent 16 scheme,” as required under Rule 9(b). Moreover, as stated in more detail below, tender 17 of the amount owed is a condition precedent to any claim for wrongful foreclosure or 18 challenge to an irregularity in a foreclosure sale. See Abdallah v. United Sav. Bank, 43 19 Cal. App. 4th 1101, 1109, 51 Cal. Rptr. 2d 286 (1996 (tender rule applies to any cause of 20 action for irregularity in sales procedure). Although Plaintiff goes to great lengths to 21 convince the Court that this is a contract case and not a foreclosure case, Plaintiff’s 22 allegations that the foreclosure sale is void as a result of defects in the assignment of the 23 Deed of Trust directly contradicts Plaintiff’s prior allegations. As a result, the Court 24 finds Plaintiff lacks standing to challenge the nonjudicial foreclosure sale. 25 Furthermore, with respect to Plaintiff’s fourth cause of action for fraudulent 26 concealment, Plaintiff has failed to allege how each Defendant was under a duty to 27 disclose the alleged misrepresentations. Conclusory allegations that “Defendants were 28 bound to disclose the truth of these matters,” are insufficient. Plaintiff must identify the 11 13v743 AJB (JMA) 1 role of each Defendant in the alleged fraudulent scheme.2 (Compl. ¶ 103.) Moreover, as 2 acknowledged by Defendants, the relationship “between a lending institution and its 3 borrower-client is not fiduciary in nature.” Nymark v. Heart Fed. Sav. & Loan Assn., 231 4 Cal. App. 3d 1089, 1093, n.1 283 Cal. Rptr. 53 (Cal. Ct. App. 1991). Similarly, loan 5 servicers, like lenders do not owe borrowers any fiduciary obligations, Downey v. 6 Humphreys, 102 Cal. App. 2d 323, 332, 227 P.2d 484 (Cal. Ct. App. 1951), and trustees 7 have no duty to provide notice of the sale except as specifically required by statute. See 8 Cal. Civ. Code, § 2924g, subd. (d); see also Cal. Livestock Prod. Credit Assn. v. Sutfin, 9 165 Cal. App. 3d 136, 141–142, 211 Cal. Rptr. 152 (Cal. Ct. App. 1985); Hatch v. 10 11 Collins, 225 Cal. App. 3d 1104, 1111, 275 Cal. Rptr. 476 (Cal. Ct. App. 1990). Therefore, the Court finds Plaintiff’s allegations fail to meet the requirements of 12 Rule 9(b), fail to allege standing to challenge the nonjudicial foreclosure, and fail to 13 allege a duty by each Defendant to support a cause of action for fraudulent concealment. 14 Accordingly, Plaintiff’s second, third, and fourth causes of action for intentional misrep- 15 resentation, negligent misrepresentation, and fraudulent concealment are DISMISSED 16 without prejudice. 17 C. Quiet Title 18 Plaintiff’s fifth cause of action is for quiet title and seeks a judicial determination 19 of her fee simple title in the Property against Deutsche Bank as of August 17, 2006—the 20 date the Loan was executed. (Compl. ¶¶ 110-118.) Plaintiff alleges that Defendants 21 lacked standing to sell the Property at the trustee’s sale, and as a result, Plaintiff is the 22 actual owner of the Property because the trustee’s sale is void and the transfer of the 23 Property to Aslan Residential I, LLC (the entity that purchased the Property at auction) is 24 without legal or equitable effect. (Id. at ¶¶ 111, 114.) Defendants move to dismiss this 25 cause of action on the basis that Plaintiff cannot quiet title to the Property without paying 26 or tendering the sums she borrowed against it. (Doc. No. 4 at 11.) 27 2 28 In response to Defendants’ pending motion to dismiss, Plaintiff did not offer any new allegations as to how Defendants were under a “duty” to Plaintiff or otherwise respond to Defendants’ arguments for dismissal. 12 13v743 AJB (JMA) 1 An action to quiet title may be brought to establish title against adverse claims to 2 real property or any interest therein. See Cal. Code Civ. Proc. § 760.020. To state a 3 claim for quiet title a plaintiff must set forth the following in a verified complaint: (1) a 4 description of the property, both legal description and street address; (2) the title of the 5 plaintiff, and the basis for that title; (3) the adverse claims to the plaintiff's title; (4) the 6 date as of which the determination is sought; and (5) a prayer for the determination of the 7 plaintiff's title against the adverse claims. Cal. Civ. Proc. Code § 761.020(a)-(e). 8 Moreover, “[i]n order to allege a claim to quiet title, [a p]laintiff must allege tender or 9 offer of tender of the amounts borrowed.” Ricon v. Recontrust Co., No.: 09cv936 IEG 10 (JMA), 2009 WL 2407396, at *6 (S.D. Cal. Aug. 4, 2009); Shimpones v. Stickney, 219 11 Cal. 637, 649, 28 P.2d 673 (Cal. 1934) (“It is settled in California that a mortgagor 12 cannot quiet his title against the mortgagee without paying the debt secured.”); Aguilar v. 13 Bocci, 39 Cal. App. 3d 475, 477, 114 Cal. Rptr. 91 (Cal. Ct. App. 1974) (holding that the 14 trustor is unable to quiet title “without discharging his debt”). The quiet title remedy “is 15 cumulative and not exclusive of any other remedy, form or right of action, or proceeding 16 provided by law for establishing or quieting title to property.” Cal. Code Civ. Proc., § 17 760.030. 18 Although Plaintiff submitted a verified complaint that provided the legal descrip- 19 tion of the Property, the date on which a judicial determination is sought, and a prayer for 20 determination of title, the Court finds Plaintiff has not alleged that Defendants have 21 asserted any adverse claims to title of the Property. Instead, Plaintiff alleges that GMAC 22 was the loan servicer, ETS was the substituted trustee, and MERS was the beneficiary 23 under the Deed of Trust. However, as of March 12, 2013, Aslan Residential I, LLC has 24 been conveyed all rights, title, and interest to the Property as a result of the trustee’s sale. 25 Thus, any claim to the Property must be made, if at all, against Aslan Residential I, LLC, 26 which appears to be the basis of Plaintiff’s pending state court unlawful detainer action. 27 Even if the Court found Defendants GMAC, ETS, and MERS (the moving 28 Defendants) asserted a claim against the Property, Plaintiff has failed to plead facts that 13 13v743 AJB (JMA) 1 tend to show that she has a colorable claim to the Property. Plaintiff appears to assert she 2 has title to the Property because the trustee’s sale was void or invalid. However, Plaintiff 3 also acknowledges that there is currently a pending unlawful detainer action in San Diego 4 Superior Court against Aslan Residential I, LLC, the entity that purchased the Property at 5 the trustee’s sale. Thus, because a “properly conducted foreclosure sale constitutes a 6 final adjudication of the rights of the borrower and lender, ” and Plaintiff has not alleged 7 any irregularities in the non-judicial foreclosure sale, it appears the March 12, 2013 sale 8 resolved the ownership rights to the Property.3 See e.g., Knapp v. Doherty, 123 Cal. App. 9 4th 76, 87, 20 Cal. Rptr. 3d 1 (Cal. Ct. App. 2004); Miller v. Bank of N.Y., No.:C 12-2942 10 PJH, 2013 WL 663928, at * 2 (N.D. Cal. Feb. 22, 2013) (“To the extent that plaintiff 11 seeks to quiet title ‘now,’ he lacks standing to do so, because the property at issue has 12 already been sold.”); Distor v. U.S. Bank NA, No.: C 09-02086 SI, 2009 WL 3429700, 13 *6 (N.D. Cal. Oct. 22, 2009) (“[B]ecause the property has already been sold, quiet title is 14 no longer an appropriate action to seek to undo the foreclosure. Plaintiff’s claim to title 15 has already been extinguished.”); Myvett v. Litton Loan Servicing, LP, No.: CV-08-5797 16 MMC, 2010 WL 761317, *6 (N.D. Cal. Mar. 3, 2010) (“[P]laintiffs’ claim to the property 17 is extinguished as they allege and admit the property has been sold; consequently, 18 plaintiffs’ action to quiet title necessarily fails.”). 19 Furthermore, although a plaintiff is not required to make an evidentiary showing 20 that he or she is able to tender the proceeds due and owing on an outstanding debt before 21 pursuing an action to quiet title, the Court finds Plaintiff has not even alleged that she is 22 “financially capable of tendering the loan proceeds.” Mitchell v. Bank of Am., No.: 23 10cv432 L (WVG), 2011 WL 334988, *3 (S.D. Cal. Jan. 31, 2011); see also Briosos v. 24 Wells Fargo Bank, 737 F. Supp. 2d 1018, 1029 (N.D. Cal. 2010) (“While Plaintiff has 25 alleged an ‘ability to tender.’ Plaintiff's allegation is conclusory and there are no other 26 facts in the Complaint demonstrating such an ability.”). Requiring a plaintiff to “allege 27 3 28 Plaintiff has gone to ample effort to persuade the Court that this is not a foreclosure case, but rather a case based on contract. (Doc. No. 12 at 1:8-15, 2:21-27, 3:1-7, 8:11-13, 9:4-10.) 14 13v743 AJB (JMA) 1 either the present ability to tender the loan proceeds or the expectation that they will be 2 able to tender within a reasonable time” is appropriate because “[i]t makes little sense to 3 let the instant rescission claim proceed absent some indication that the claim will not 4 simply be dismissed at the summary judgment stage after needless depletion of the 5 parties’ and the Court’s resources.” Romero v. Countrywide Bank, N.A., No.: C 07-4491 6 JF (PVT), 2010 WL 2985539 (N.D. Cal. July 27, 2010). Therefore, the Court finds Plaintiff has failed to state a viable claim for quiet title 7 8 and amendment of such claim would be futile. See Lopez v. Chase Home Fin., LLC, No. 9 09–0449, 2009 WL 981676, at *7 (E.D. Cal. Apr. 9, 2009) (“If the foreclosure is 10 successful, title will change, and the quiet title claim is an improper means to challenge 11 foreclosure.”). Accordingly, Plaintiff’s fifth cause of action for quiet title is DISMISSED 12 with prejudice. 13 D. 14 Plaintiff’s sixth cause of action is for declaratory relief and seeks a judicial 15 determination of the respective rights and duties of the parties with respect to the 16 Property. (Compl. ¶¶ 119-126.) Defendants move to dismiss this cause of action on the 17 basis that it is derivative of Plaintiff’s other claims and thus also fails. (Doc. No. 4 at 12- 18 13.) 19 Declaratory Relief Under 28 U.S.C. § 2201(a), “any court of the United States, upon the filing of an 20 appropriate pleading, may declare the rights and other legal relations of any interested 21 party seeking such declaration, whether or not further relief is or could be sought.” 22 Declaratory relief should be denied if it will “neither serve a useful purpose in clarifying 23 and settling the legal relations in issue nor terminate the proceedings and afford relief 24 from the uncertainty and controversy faced by the parties.” United States v. Wash., 759 25 F.2d 1353, 1356–57 (9th Cir. 1985). A claim for declaratory relief is unnecessary where 26 an adequate remedy exists under some other cause of action. Manown v. Cal–Western 27 Reconveyance Corp., No. 09cv1101 JM (JMA), 2009 WL 2406335, at *6 (S.D. Cal. Aug. 28 4, 2009). 15 13v743 AJB (JMA) 1 Here, the Court finds Plaintiff’s request for declaratory relief is entirely commen- 2 surate with the relief sought through her other causes of action. Therefore, to the extent 3 Plaintiff is successful in any of her remaining causes of action, this claim is duplicative 4 and unnecessary. Accordingly, Plaintiff’s sixth cause of action for declaratory relief is 5 DISMISSED with prejudice. 6 E. TILA Violation 7 Plaintiff’s seventh cause of action is for violation of TILA. (Compl. ¶¶ 127-133.) 8 Plaintiff alleges Defendants violated TILA: (1) by refusing and continuing to refuse to 9 validate or otherwise make a full accounting and the required disclosures of the true 10 finance fees and charges; (2) improperly retaining funds belonging to Plaintiff; and (3) 11 failing to disclose the ownership of the loans. (Id. at ¶129.) As a result of these alleged 12 violations, Plaintiff seeks rescission or cancellation of the loan and a return of all funds 13 received by Defendants from Plaintiff, compensatory damages in an amount to be 14 determined at trial, attorneys’ fees, and punitive damages in light of Defendants willful 15 and conscious disregard for Plaintiff’s rights. (Id. at ¶¶ 130-133.) Defendants allege that 16 Plaintiff’s TILA claims are barred by the applicable statute of limitations and should be 17 dismissed without leave to amend. 18 19 1. TILA Damages Claim TILA seeks to protect credit consumers by mandating “meaningful disclosure of 20 credit terms.” 15 U.S.C. § 1601(a). Its provisions impose certain duties on creditors “to 21 provide borrowers with clear and accurate disclosures of [the] terms [of their loan, 22 including] . . . finance charges, annual percentage rates of interest, and the borrower’s 23 rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412, 118 S. Ct. 1408, 140 L. Ed. 2d 24 566 (1998) (citing 15 U.S.C. §§ 1631, 1632, 1635, 1638). If a lender fails to satisfy 25 TILA’s disclosure requirements, it is liable for “statutory and actual damages traceable to 26 [its] failure to make the requisite disclosures.” Id. (citing 15 U.S.C. § 1640(e)). A TILA 27 damages claim must be brought “within one year from the date of the occurrence of the 28 violation.” 15 U.S.C. § 1640(e). The statutory period generally “starts at the consumma16 13v743 AJB (JMA) 1 tion of the [loan] transaction.” King v. Cal., 784 F.2d 910, 915 (9th Cir. 1986). How- 2 ever, equitable tolling may be appropriate “in certain circumstances,” such as when a 3 borrower might not have had a reasonable opportunity to discover the nondisclosures at 4 the time of loan consummation. Id. 5 Here, the Court concludes Plaintiff has failed to sufficiently allege a cause of 6 action against Defendants for damages under TILA. Specifically, Plaintiff fails to allege 7 which provisions of TILA Defendants allegedly violated, how each Defendant allegedly 8 violated the selected TILA provision(s), and when such violations took place. Instead, 9 Plaintiff relies on conclusory allegations that Defendants have improperly retained funds 10 belonging to Plaintiff, failed to disclose “true finance charges and fees,” and failed to 11 make a full accounting. Such bare bone allegations are not sufficient to put Defendants 12 on fair notice of how each Defendant failed to provide the required disclosures under 13 TILA. 14 Furthermore, Plaintiff’s request for damages under TILA is subject to a one year 15 statute of limitations, typically running from the date the loan transaction was consum- 16 mated. 15 U.S.C. § 1640(e). Here, Plaintiff’s loan was executed on August 17, 2006, 17 (Doc. No. 5, Ex. 2; Compl., Ex. A), however Plaintiff did not file the instant action until 18 March 28, 2013, approximately six years, seven months, and eleven days after the Loan 19 closed. This is well beyond the one-year limitation period. Moreover, although Plaintiff 20 alleges that she did not become aware of the facts that form the basis of her TILA damage 21 claim until after Defendants initiated foreclose proceedings against the Property, Plaintiff 22 fails to allege why she could not have discovered this alleged wrongdoing earlier. There 23 is no suggestion that Defendants prevented Plaintiff from comparing her loan documents 24 and disclosures with the TILA requirements. See, e.g., Garcia v. Wachovia Mortg. 25 Corp., 676 F. Supp. 2d 895, 906 (C.D. Cal. 2009) (“Nothing prevented [the plaintiff] 26 from comparing the loan contract, [the lender’s] initial disclosures, and TILA’s statutory 27 and regulatory requirements.”) (citation omitted); Meyer v. Ameriquest Mortg. Co., 342 28 F.3d 899, 902 (9th Cir. 2003) (stating that the failure to make the required disclosures 17 13v743 AJB (JMA) 1 occurred, if at all, at the time the loan documents were signed because the plaintiff was 2 aware of the disclosures, or lack of proper disclosures, at that time). Therefore, the Court 3 finds Plaintiff has failed to allege which provisions of TILA were violated, how each 4 Defendant allegedly violated such provision(s), and why equitable tolling is applicable. 5 Accordingly, Plaintiff’s TILA damages claim is DISMISSED without prejudice. 6 7 2. Rescission Claim In additional to a claim for damages, TILA allows an obligor to rescind a loan 8 transaction under certain circumstances. However, an obligor’s right of rescission under 9 TILA expires, at the latest, “three years after the date of consummation of the transaction 10 or upon the sale of the property, whichever occurs first.” 15 U.S.C. § 1635(f) (emphasis 11 added); King, 784 F.2d 910, 915 (9th Cir. 1986). “Consummation means the time that a 12 consumer becomes contractually obligated on a credit transaction.” 12 C.F.R. § 13 226.2(a)(13). Section 1635(f) is an “absolute limitation on rescission actions,” and bars 14 any claim filed more than three years after the consummation of the transaction or sale of 15 the subject property. King, 784 F.2d at 913; see also Miguel v. Cnty. Funding Corp., 309 16 F.3d 1161, 1164–65 (9th Cir. 2002). To exercise the right to rescind, a borrower must 17 “notify the creditor of the rescission by mail, telegram or other means of written commu- 18 nication.” 12 C.F.R. § 226.23(a)(2). 19 Under this statutory scheme, the latest Plaintiff could have exercised her right to 20 rescind would have been three years after the loan transaction, (August 17, 2006), or 21 upon the sale of the Property, whichever occurred first. See 15 U.S.C. § 1635(f). Here, 22 although the Property was sold at public auction on March 12, 2013, (Doc. No. 5, Ex. 7 at 23 3), Plaintiff consummated her Loan on August 17, 2006, (Doc. No. 1, Ex. A). Therefore, 24 even though Plaintiff alleges that her TILA rescission claim is not barred by the sale of 25 the Property because an unlawful detainer action is currently pending in San Diego 26 Superior Court, Plaintiff’s rescission claim nonetheless expired on August 17, 2009 (prior 27 to the sale of the Property), three years after the consummation of her Loan. Accord- 28 18 13v743 AJB (JMA) 1 ingly, the Court finds Plaintiff’s TILA rescission claim is barred by the applicable statute 2 of limitations and is therefore DISMISSED with prejudice. 3 F. 4 Plaintiff’s eighth cause of action alleges Defendants violated RESPA by placing 5 loans for the purpose of unlawfully increasing or otherwise obtaining yield spread fees 6 and sums in excess of what would have been lawfully earned. (Compl. ¶ 136.) Plaintiff 7 also alleges that Defendants violated RESPA because the servicing contract or duties 8 were transferred or hypothecated without the required notice. (Id. at ¶ 137.) Defendants 9 move to dismiss this cause of action on the ground that it is time-barred. 10 RESPA 12 U.S.C. § 2607(a) provides that “[n]o person shall give and no person shall 11 accept any fee, kickback, or thing of value pursuant to any agreement or understanding, 12 oral or otherwise, that business incident to or a part of a real estate settlement service 13 involving a federally related mortgage loan shall be referred to any person.” 12 U.S.C. § 14 2605(b)(1) & (d) provides that “[e]ach servicer of any federally related mortgage loan 15 shall notify the borrower in writing of any assignment, sale, or transfer of the servicing of 16 the loan to any other person” and that “[d]uring the 60-day period beginning on the 17 effective date of transfer of the servicing of any federally related mortgage loan, a late fee 18 may not be imposed on the borrower.” “Servicer” is defined in the statute as, “the 19 person responsible for servicing of a loan (including the person who makes or holds a 20 loan if such person also services the loan).” 12 U.S.C. § 2605(i)(2). RESPA contains a 21 one year statute of limitations for any action brought pursuant to the above provisions. 22 See 12 U.S.C. § 2614. 23 The Court concludes Plaintiff has failed to state a claim against Defendants under 24 RESPA. For example, the complaint fails to allege when any alleged violation of RESPA 25 occurred in relation to the alleged Yield Spread Premium (“YSP”), and how each 26 individual Defendant should/would be liable, as Suntrust was the original lender of the 27 Loan. (Compl. ¶ 136.) Furthermore, federal and state courts have rejected the proposi- 28 tion that YSPs are illegal per se. See Bjustrom v. Trust One Mortg. Corp., 322 F.3d 1201, 19 13v743 AJB (JMA) 1 1206 (9th Cir. 2003); Byars v. SCME Mortg. Bankers, Inc., 109 Cal. App. 4th 1134, 2 1143-44, 135 Cal. Rptr. 2d 796 (Cal. Ct. App. 2003). In addition, Plaintiff makes only 3 conclusory allegations that Defendant Guild Mortgage, Defendant BAC Home Loans, 4 and the Doe Defendants were either individually or jointly “Servicers” of Plaintiff’s loan 5 as defined under 26 U.S.C. § 2605(B). Plaintiff does not allege when any such transfer(s) 6 took place, or how the moving Defendants (GMAC, ETS, and MERS) are liable. 7 Moreover, Plaintiff does not allege any damage as a result of the alleged failure to 8 provide the required notice. See 12 U.S.C. § 2605(f)(1) (borrow can recover “any actual 9 damages to the borrow as a result of the failure”). Finally, as stated above, because the 10 Loan was consummated in 2006, and this action was not commenced until 2013, Plaintiff 11 has failed to sufficiently allege why this claim should not be barred by the one-year 12 limitation period. Accordingly, Plaintiff’s eighth cause of action for violations of RESPA 13 is DISMISSED without prejudice. 14 G. HOEPA Violation 15 Plaintiff’s ninth cause of action alleges her loan is in violation of HOEPA because 16 it was placed and administered without regard for Plaintiff’s income or cash flow and 17 with the intention of inducing Plaintiff’s default. (Compl. ¶ 143.) Plaintiff further 18 alleges that she became aware of this violation “upon the discovery of Defendants’ intent 19 to wrongfully foreclose and sell the property.” (Id. at ¶ 144.) Defendants seek dismissal 20 of this cause of action on the ground that is time-barred. (Doc. No. 4 at 6-7.) 21 “HOEPA is an amendment of TILA, and therefore is governed by the same 22 remedial scheme and statutes of limitations as TILA.” Hamilton v. Bank of Blue Valley, 23 746 F. Supp. 2d 1160, 1179 (E.D. Cal. 2010) (citation and internal quotation marks 24 omitted). Therefore, claims for rescission are subject to the three-year statute of limita- 25 tions and claims for damages are subject to the one-year statute of limitations. See also 26 Kemezis v. Matthew, No.: 075086, 2008 WL 2468377, at *3 (E.D. Pa. June 16, 2008) 27 (“HOEPA is an amendment of TILA, and therefore is governed by the same remedial 28 scheme and statutes of limitations as TILA.”). In order to be subject to the protections 20 13v743 AJB (JMA) 1 afforded by HOEPA, one of two factors has to be established—either the annual percent- 2 age rate of the loan at consummation must exceed by more than ten percent the applicable 3 yield on treasury securities, or the total points and fees payable by the consumer at or 4 before closing has to be greater than eight percent of the total amount. See 15 U.S.C. § 5 1602(aa)(1) & (3); see also Lynch v. RKS Mortg., Inc., 588 F. Supp. 2d 1254, 1260 (E.D. 6 Cal. 2008). In addition, HOEPA expressly excludes “residential mortgage transactions.” 7 15 U.S.C. § 1602(aa). Among other things, a residential mortgage transaction is for the 8 purpose of “financ[ing] the acquisition or initial construction of such dwelling.” Id. § 9 1602(w). Here, Plaintiff fails to allege facts to support a finding that the Loan at issue is 10 11 covered by HOEPA. See 15 U.S.C. § 1602(aa)(1) (describing loans to which HOEPA 12 disclosure requirements apply). Plaintiff merely states that the Loan falls within the 13 purview of HOEPA. (Compl. ¶ 142.) Such conclusory allegations are not sufficient. 14 Furthermore, since the same statute of limitations applies to Plaintiff’s HOEPA claims as 15 her TILA claims, the claims are time-barred. Accordingly, Plaintiff’s ninth cause of 16 action for violation of HOEPA is DISMISSED without prejudice. 17 H. FDCPA 18 Plaintiff’s tenth cause of action is for violation of the FDCPA. (Compl. ¶¶ 146- 19 150.) Plaintiff alleges that Defendants are “debt collectors,” and that Defendants did not 20 respond to Plaintiff’s requests for validation of the debt as required under the FDCPA. 21 (Id. at ¶¶ 147-149.) Defendants move to dismiss this cause of action on the ground that a 22 loan servicer is not a “debt collector” as defined under the FDCPA, and foreclosing on a 23 property pursuant to a deed of trust is not a “debt collection activity.” (Doc. No. 4 at 7- 24 8.) 25 The declared purpose of the FDCPA is to “eliminate abusive debt collection 26 practices by debt collectors . . . and to promote consistent state action to protect consum- 27 ers against debt collection abuses.” 15 U.S.C. § 1692. To state a claim under the 28 FDCPA, “a plaintiff must allege facts that establish the following: (1) the plaintiff has 21 13v743 AJB (JMA) 1 been the object of collection activity arising from a consumer debt; (2) the defendant 2 attempting to collect the debt qualifies as a ‘debt collector’ under the FDCPA; and (3) the 3 defendant has engaged in a prohibited act or has failed to perform a requirement imposed 4 by the FDCPA.” Adesokan v. U.S. Bank, N.A., 2011 U.S. Dist. LEXIS 125591, 2011 WL 5 5341178, at *4 (E.D. Cal. Oct. 31, 2011). The FDCPA defines “debt collector” as one 6 who collects consumer debts owed to another. 15 U.S.C. § 1692(a)(6). The term does 7 not include any person who collects any debt owed or due to the extent such activity 8 concerns a debt which “was originated by such person” or “was not in default at the time 9 it was obtained by such person.” 15 U.S.C. § 1692a(6)(F)(ii), (iii). The FDCPA’s 10 definition of debt collector “does not include the consumer’s creditors, a mortgage 11 servicing company, or any assignee of the debt, so long as the debt was not in default at 12 the time it was assigned.” Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. 13 Cal. 2009) (quoting Perry v. Steward Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)) 14 (emphasis added). 15 The Ninth Circuit has yet to determine if foreclosure proceedings constitute “debt 16 collection” within the ambit of the FDCPA, but most district courts within the circuit 17 have found that they do not. See, e.g., Garfinkle v. JPMorgan Chase Bank, 2011 U.S. 18 Dist. LEXIS 81054, 2011 WL 3157157 (N.D. Cal. July 26, 2011) (collecting cases); but 19 see Wilson v. Draper & Goldberg PLLC, 443 F.3d 373, 376–77 (4th Cir. 2006) (conclud- 20 ing that a plaintiff's “ ‘debt’ remained a ‘debt’ even after foreclosure proceedings com- 21 menced” and the actions “surrounding the foreclosure proceedings were attempts to 22 collect that debt.”); Carter v. Deutsche Bank Nat. Trust Co., 2010 U.S. Dist. LEXIS 23 44984, 2010 WL 1875718, at *1–2 (N.D. Cal. May 7, 2010) (discussing split in authority 24 and declining to dismiss plaintiff's FDCPA claim at the pleading stage). 25 Here, although Plaintiff alleges Defendants are “debt collectors,” she fails to 26 specifically allege facts indicating that any of the Defendant are “debt collectors” as 27 defined under the FDCPA. Conclusory allegations simply parroting the language of the 28 statute will not suffice. Furthermore, Plaintiff admits in the complaint that Defendant 22 13v743 AJB (JMA) 1 GMAC is the “loan servicer for the subject loan of this action.” (Compl. ¶ 8.) Therefore, 2 because “[a] mortgage servicing company is not a debt collector within the meaning of 3 the FDCPA,” Plaintiff cannot maintain a FDCPA claim against Defendant GMAC. 4 Jelsing v. MIT Lending, No. 10cv416 BTM (NLS), 2010 U.S. Dist. LEXIS 68515, 2010 5 WL 2731470 (S.D. Cal. July 9, 2010). Moreover, although it remains unclear whether 6 ETS or MERS is a “debt collector,” Plaintiff nevertheless fails to state a claim for 7 violation of the FDCPA against either Defendant because Plaintiff does not allege that 8 either ETS or MERS “attempted to collect a debt” from Plaintiff. Even if Plaintiff 9 alleged that the foreclosure action was an “attempt to collect a debt,” the law is unsettled 10 as to whether foreclosure proceedings constitute collection of a debt. Nool, 653 F. Supp. 11 2d at 1053 (quoting Perry, 756 F.2d at 1208). Furthermore, Plaintiff does not allege how, 12 when, or to whom she “requested validation” of the debt, or how Defendants responded. 13 Therefore, the Court finds Plaintiff's allegations are insufficient to state a claim for 14 violation of the FDCPA, and amendment would be futile because the Loan was not in 15 default before it was assigned.4 Accordingly, Plaintiff’s tenth cause of action for 16 violation of the FDCPA is DISMISSED with prejudice. CONCLUSION 17 18 19 20 For the reasons set forth above, the Court GRANTS Defendants’ motion to dismiss. (Doc. No. 4.) Specifically, the Court makes the following findings: 1. GRANTS Defendants’ motion to dismiss with respect to the First Cause of 21 Action (UCL), Second Cause of Action (intentional misrepresentation), 22 Third Cause of Action (negligent misrepresentation), Fourth Cause of 23 Action (fraudulent concealment), Seventh Cause of Action (TILA damages 24 claim), Eighth Cause of Action (RESPA), and Ninth Cause of Action 25 (HOEPA damages claim) without prejudice. 26 27 28 4 Plaintiff did not specifically respond to Defendants arguments for dismissal of the FDCPA cause of action in her response. (Doc. No. 12.) 23 13v743 AJB (JMA) 1 2. GRANTS Defendants’ motion to dismiss with respect to the Fifth Cause of 2 Action (quiet title), Sixth Cause of Action (declaratory relief), Seventh 3 Cause of Action (TILA rescission claim), and Tenth Cause of Action 4 (FDCPA) with prejudice. 5 3. Plaintiff may file an amended complaint to cure the deficiencies noted 6 above. No new parties or claims may be added without leave of Court. 7 Failure to file an amended complaint by July 5, 2013 will result in dismissal 8 of the action. 9 10 IT IS SO ORDERED. 11 12 13 14 DATED: June 4, 2013 Hon. Anthony J. Battaglia U.S. District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 13v743 AJB (JMA)

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