Olivier v. America's Home Servicing Company, et al., No. 1:2009cv00099 - Document 22 (E.D. Cal. 2009)
Court Description: ORDER GRANTING 8 Defendant's Motion to Dismiss for Failure to State a Claim; GRANTING 7 Defendant's Motion to Expunge Lis Pendens; and DENYING Defendant's Request for Attorney's Fees, signed by Judge Oliver W. Wanger on 8/10/2009. (Jessen, A)
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1 2 3 UNITED STATES DISTRICT COURT 4 FOR THE EASTERN DISTRICT OF CALIFORNIA 5 6 7 1:09-CV-00099 OWW GSA RICHARD OLIVIER, Plaintiff, ORDER RE DEFENDANT’S MOTION TO DISMISS OR IN THE ALTERNATIVE FOR MORE DEFINITE STATEMENT; AND MOTION TO EXPUNGE LIS PENDENS (DOCS. 7 & 8). 8 v. 9 10 11 NDEX WEST, LLC; AMERICA’S HOME SERVICING COMPANY, and Does 1-50 inclusive, Defendant. 12 13 I. INTRODUCTION 14 Before the court for decision is Defendant Wells Fargo Home 15 16 Mortgage’s motion to dismiss, or in the alternative for a more 17 definite statement, and motion to expunge lis pendens. 18 8. 19 was represented by Mitchell W. Roth of the law firm of M.W. Roth, 20 PLC. 21 Superior Court for the County of Los Angeles has assumed 22 jurisdiction over Roth’s practice. 23 Docs. 7 & At the time the complaint in this case was filed, Plaintiff That law firm has ceased operations, and the California See Doc. 15. A hearing on the pending motions was originally set for 24 April 13, 2009, at which time Plaintiff appeared and expressed 25 his desire to obtain new counsel. 26 opportunity to secure new counsel, the hearing was continued to 27 July 20, 2009. 28 the hearing was again continued to August 10, 2009. Doc. 19. To permit Plaintiff a fair Due to the unavailability of the court, 1 Counsel has 1 yet to file a notice of appearance on behalf of Plaintiff, nor 2 has Plaintiff filed any opposition to the pending motions. 3 II. BACKGROUND 4 5 On December 12, 2008, Plaintiff filed suit against NDEX 6 West, LLC (“NDEX”), 1 America’s Home Servicing Company, and Does 7 1-50, inclusive. 8 monetary damages and to enjoin foreclosure of real property 9 located at 1155 Sorrel Avenue, Lemoore, California 93245. See Doc. 2, Ex. A (Complaint). Plaintiff seeks Id. at 10 7. 11 Court for the County of Kings, Hanford Division, was removed by 12 Wells Fargo Bank, N.A., erroneously sued as America’s Home 13 Servicing Company, pursuant to 28 U.S.C. § 1441(b) (permitting 14 removal of any civil action founded on a claim or right arising 15 under the “laws of the United States”), because Plaintiff 16 asserted claims against the bank arising under various federal 17 statutes. 18 The Complaint, originally filed in the California Superior Id. at 2 (notice of removal). The Complaint contains allegations that have been asserted Id. 19 against Defendant in numerous other lawsuits. 20 alleges that Defendant improperly commenced a non-judicial 21 foreclosure against residential property owned by Plaintiff, id. 22 at ¶8, in part because America’s Home Servicing Company may not 23 possess the original endorsed note, id. at ¶7. 24 alternative, the Complaint alleges that Defendants “added costs 25 and charges to the payoff amount of the note that were not 26 justified and proper under the terms of the note or the law.” 27 1 28 Plaintiff In the NDEX, which has not appeared in this or other cases, serves as an agent to initiate the foreclosure process. See Ramos v. NDEX West, LLC, 2009 WL 1675911, at *1 (E.D. Cal. June 1, 2009). 2 1 2 Id. at ¶17. The Complaint asserts three causes of action. First, under 3 a claim entitled “Unfair Debt Collection Practices,” Plaintiff 4 alleges that Defendant violated California’s Rosenthal Fair Debt 5 Collections Practices Act (“R-FDCPA”), California Civil Code § 6 1788(e)-(f), the federal Fair Debt Collections Practices Act 7 (“FDCPA”), 15 U.S.C. § 1692, et seq.; and the Real Estate 8 Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617. 9 at ¶¶ 19-21. Id. Second, in a claim entitled “Predatory Lending 10 Practices,” it is alleged that Defendant violated the Home 11 Ownership and Equity Protection Act (“HOEPA”), 15 U.S.C. § 1637; 12 the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq.; 13 “Reg Z,” 12 C.F.R. § 226, et seq.; and the Federal Trade 14 Commission Act (“FTCA”), 15 U.S.C. §§ 41-58. 15 Finally, it is alleged that Defendant violated the Racketeer 16 Influenced and Corrupt Organization Act (“RICO”), 18 U.S.C. §§ 17 1961, et seq., through attempts to collect unlawful debts, mail 18 fraud, and prohibited interference with commerce, robbery, or 19 extortion as defined under 18 U.S.C. § 1951. 20 Id. at ¶¶ 22-25. Id. at ¶¶ 26-30. Plaintiff does not specify which sections of these various 21 laws he contends were violated, nor does he describe the conduct 22 that allegedly caused the violations. 23 III. STANDARD OF DECISION 24 25 In deciding whether to grant a motion to dismiss, the court 26 “accept[s] all factual allegations of the complaint as true and 27 draw[s] all reasonable inferences” in the light most favorable to 28 the nonmoving party. Rodriguez v. Panayiotou, 314 F.3d 979, 983 3 1 (9th Cir. 2002). 2 of Civil Procedure 12(b)(6) “tests the legal sufficiency of a 3 claim.” 4 survive a motion to dismiss, a complaint must “contain sufficient 5 factual matter, accepted as true, to ‘state a claim to relief 6 that is plausible on its face.’” 7 1937, 1949 (May 18, 2009) (quoting Bell Atl. Corp v. Twombly, 550 8 U.S. 544, 570 (2007)). 9 A motion to dismiss brought under Federal Rule Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Ashcroft v. Iqbal, 129 S. Ct. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” 10 11 12 13 14 15 Id. (citing Twombly, 550 U.S. 556-57). 16 based on the lack of a cognizable legal theory. 17 Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). 18 Dismissal also can be Balistreri v. . IV. DISCUSSION 19 20 To A. Possession of the Original Note is Not a Prerequisite to Foreclosure. 21 22 23 24 25 26 27 28 Plaintiff cites Uniform Commercial Code §§ 3-301 and 3-309 for the proposition that in order to enforce a note, one must be in possession of that note. Compl. at ¶17. Those provisions of the UCC pertain to negotiable instruments, not non-judicial foreclosure under deeds of trust, which is governed by California Civil Code section 2924, et seq. Section 2924(a)(1) provides that a “trustee, mortgagee or beneficiary or any of their 4 1 authorized agents” may conduct the foreclosure process. 2 Civ. Code § 2924(a)(1). 3 Civil Code Provisions “cover every aspect” of the foreclosure 4 process, I.E. Assocs. v Safeco Title Ins. Co., 39 Cal. 3d 281, 5 285 (1985), and are “intended to be exhaustive,” Moeller v. Lien, 6 25 Cal. App. 4th 822, 834 (1994). 7 the party initiating foreclosure be in possession of the original 8 note and courts have repeatedly held that possession of the 9 original note is not a prerequisite to foreclosure. Cal. California courts have held that the There is no requirement that See, e.g., 10 Candelo v. NDEX West, LLC, 2008 WL 5382259, at *4 (E.D. Cal. Dec. 11 23, 2008) (“No Requirement exists under statutory framework to 12 produce the original note to initiate non-judicial 13 foreclosure.”); Putkkuri v. ReconTrust Co., 2009 WL 32567, at *2 14 (S.D. Cal. Jan 5, 2009) (“Production of the original note is not 15 required to proceed with a non-judicial foreclosure.”). 16 claim is meritless and is DISMISSED WITH PREJUDICE. This 17 18 19 B. Unfair Debt Collection Practices Claim. Plaintiff’s first cause of action purports to assert claims 20 for violations of the FDCPA, R-FDCPA, and RESPA. 21 alleges that the “actions aforementioned,” which include the 22 initiation of foreclosure without possession of the original note 23 and the addition of costs and charges to the payoff amount of the 24 note that were not justified and proper under the terms of the 25 note, constitute violations of these laws. 26 27 Plaintiff First, FDCPA regulates only “debt collectors”. U.S.C. §§ 1692(e)-(f). See 15 “Debt collector” is defined as “any 28 5 1 person who uses any instrumentality of interstate commerce or the 2 mails in any business the principal purpose of which is the 3 collection of any debts, or who regularly collects or attempts to 4 collect, directly or indirectly, debts owed or due or asserted to 5 be owed or due another.” 6 include persons who collect debt “to the extent such activity ... 7 (ii) concerns a debt which was originated by such person; [or] 8 (iii) concerns a debt which was not in default at the time it was 9 obtained by such person....” § 1692a(6). “Debt Collector” does not § 1692a(6)(F). Nothing in the 10 complaint suggests that U.S. Bank, which is the current 11 beneficiary of Plaintiff’s note and deed of trust, is not a “debt 12 collector,” nor has Plaintiff sued any debt collector. 13 Therefore, the FDCPA is not triggered by Plaintiff’s allegations. 14 The absence of a violation of FDCPA results in failure of 15 Plaintiff’s California R-FDCPA claim, as the scope of 16 California’s law mirrors the federal statute. 17 Code, § 1788, et seq. 18 exempts the trustees’ acts of recording and servicing the 19 required notice of default and notice of sale from R-FDCPA’s 20 scope. 21 See Cal. Civil Moreover, California Civil Code 2924(b) Plaintiff’s RESPA claim is likewise unfounded. RESPA 22 primarily regulates charges and disclosures at or before the 23 closing of a real estate sale or loan transaction. 24 no private right of action regarding these disclosure 25 requirements. 26 (N.D. Cal. 1994), aff'd, 77 F.3d 318 (1996). 27 some provisions governing mortgage loan servicers, e.g., 12 28 U.S.C. § 2605(a)-(d)(forbidding imposition of late fees on 6 It contains See Bloom v. Martin, 865 F. Supp. 1377, 1384-1385 RESPA does contain 1 payments made within 60 days of a loan’s transfer to a new 2 servicer), and § 2605(e)(requiring servicer respond to “qualified 3 written requests” to correct a loan account or provide 4 information). 5 letter to NDEX demanding a detailed accounting of all charges 6 constituting the pay off demand for the note, this was sent to 7 the foreclosure agent (NDEX), not the loan servicer. 8 complaint does not allege any claims under RESPA. 9 10 Although Plaintiff alleges his attorney sent a The Defendant’s motion to dismiss the FDCPA, R-FDCPA, and RESPA claims is GRANTED WITHOUT LEAVE TO AMEND. 11 12 C. 13 14 Plaintiff’s second cause of action alleges that Defendants violated HOEPA, TILA, Reg Z, and FTCA. 15 16 Predatory Lending Practices Claim. Id. at ¶¶ 22-25. There are two types of damages available under HOEPA and TILA: statutory damages and rescission. 15 U.S.C. §§ 1635(f), 17 1640(a). The statute of limitations for bringing a claim for 18 19 statutory damages is one year from the date of the occurrence of § 1640(e); Fonua v. First Allied Funding, No. C 20 the violation. 21 09-497 SI, 2009 U.S. Dist. LEXIS 30195, at *11 (N.D. Cal. Mar. 22 27, 2009) (acknowledging that “[c]laims under HOEPA are governed 23 by TILA’s one year statute of limitations”). 24 Here, Plaintiff entered into the challenged loan transaction on October 25, 2006. 25 There is no allegation in the complaint suggesting that any 26 HOEPA/TILA violation would have accrued on a later date. 27 28 Therefore, the statute of limitations for any statutory damages 7 1 claim expired on October 25, 2007. 2 lawsuit until December 12, 2009, more than two years later. 3 Plaintiff did not file this Any damages claims under HOEPA or TILA are barred 4 In addition to damages, rescission may be available under 5 HOEPA and TILA in some circumstances. 15 U.S.C. § 1635; 12 6 7 C.F.R. § 226.23. To the extent rescission may apply here, any 8 such claim is also time-barred. The consumer’s right to 9 rescission is absolute only for a period of three days after the 10 loan is consummated, 15 U.S.C. § 1635(a); 12 C.F.R. § 11 226.23(a)(3), unless the lender fails to provide “material 12 disclosures” at the closing, in which case the period is extended 13 to three years, 15 U.S.C. § 1635(f); 12 C.F.R. § 226.23(a)(3) 14 15 16 There are no allegations in the complaint that the lender failed to make “material disclosures.” Therefore, the three-day 17 limitations period applies. 18 lawsuit within that time period, any rescission action is time 19 barred. 20 As Plaintiff did not initiate this Reg Z, 12 C.F.R. § 226.4(c)(2), interprets TILA by defining 21 terms such as “finance charge.” Claims brought under Reg Z are 22 subject to TILA’s statute of limitations. See, e.g., Diessner v. 23 24 Mortgage Elec. Registration Sys., 618 F. Supp. 2d 1184, 11990-91 25 (2009). 26 barred. 27 Therefore, Plaintiff’s Reg Z claims are also time- Finally, Plaintiff’s FTCA claim fails because there is no 28 8 1 private right of action under that statute. 2 against unfair trade practices afforded by the [FTCA] vests 3 “[P]rotection initial remedial power solely in the Federal Trade Commission.” 4 Carlson v. Coca-Cola Co., 483 F.2d 279, 280 (9th Cir. 1973). 5 Defendant’s motion to dismiss the TILA, HOEPA, Reg Z, and 6 7 FTCA claims is GRANTED WITHOUT LEAVE TO AMEND. 8 9 D. RICO Claim 10 Finally, the third cause of action alleges that Defendant 11 violated RICO, 18 U.S.C. §§ 1961, et seq., through attempts to 12 collect unlawful debts, mail fraud, and prohibited interference 13 with commerce, robbery, or extortion as defined under 18 U.S.C. § 14 1951. Compl. at ¶¶ 26-30. 15 Subsection (c) of 18 U.S.C. § 1962 provides: 16 It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. 17 18 19 20 21 “A violation of § 1962(c) “requires (1) conduct (2) of an 22 enterprise (3) through a pattern (4) of racketeering activity. 23 The plaintiff must, of course, allege each of these elements to 24 state a claim.” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 25 (1985). “Racketeering activity” is any act indictable under 26 several provisions of Title 18 of the United States Code, 27 Rothman v. Vetter Park Mgmt., 912 F.2d 315, 316 (9th Cir.1990), 28 9 1 and includes “any act or threat involving murder, kidnapping, 2 gambling, arson, robbery, bribery, extortion, dealing in obscene 3 matter, or dealing in a controlled substance or listed chemical 4 (as defined in section 102 of the Controlled Substances Act), 5 which is chargeable under State law and punishable by 6 imprisonment for more than one year,” 18 U.S .C. § 1961(1)(A). 7 Subsection (5) of 18 U.S.C. § 1961 defines “pattern of 8 racketeering activity” to require “at least two acts of 9 racketeering activity, one of which occurred after the effective 10 date of this chapter and the last of which occurred within ten 11 years (excluding any period of imprisonment) after the commission 12 of a prior act of racketeering activity.” 13 so much define a pattern of racketeering activity as state a 14 minimum necessary condition for the existence of such a pattern.” 15 H.J., Inc. v. N.W. Bell Tele. Co., 492 U.S. 229, 237 (1989). 16 Section 1961 “does not “Section 1961(5) concerns only the minimum number of 17 predicates necessary to establish a pattern; and it assumes that 18 there is something to a RICO pattern beyond simply the number of 19 predicate acts involved.” 20 pattern in not formed by “sporadic activity.” 21 term pattern requires a relationship between predicates and the 22 threat of continuing activity. 23 “continuity plus relationship [] combine[] to produce a pattern.” 24 Id. at 239. H.J., Inc., 492 U.S. at 238. Id. at 238. A Id. at 239. The The factors of 25 Fraud claims brought under RICO are subject to the 26 particularity and specificity requirements of Federal Rule of 27 Civil Procedure 9(b). 28 Furniture Co., 806 F.2d 1393 (9th Cir. 1986). Schreiber Distrib. Co. v. Serv-Well 10 Here, among other 1 things, Plaintiff fails to allege any nexus between Wells Fargo 2 and the commission of two or more acts constituting a pattern of 3 racketeering activity. 4 allege the commission of two or more predicate acts by any named 5 party or third party. 6 to time, place, and nature. 7 Plaintiff has, in fact, utterly failed to Any such allegations must be specific as H.J. Inc., 492 U.S. at 241. Defendant’s motion to dismiss the RICO claim is GRANTED. 8 9 10 E. Motion to Expunge the Lis Pendens. A lis pendens is a recorded instrument that provides 11 constructive notice of a pending lawsuit affecting title to 12 certain real property and that ensures that any person who 13 attempts to buy that property takes it subject to any judgment 14 that may be entered. 15 4th 1721, 1733 (1996). 16 to “cloud title” to the property and prevent its transfer until 17 the lis pendens is expunged. 18 Bishop Creek Lodge v. Scira, 46 Cal. App. The practical effect of a lis pendens is Id. Because of the potentially serious effects to the 19 transferability of property, a lis pendens must be expunged if a 20 plaintiff cannot establish the “probable validity” of its claim 21 by a “preponderance of the evidence.” 22 (“CCP”) § 405.32. 23 lis pendens] be expunged if the court finds that the claimant has 24 not established by a preponderance of the evidence the probable 25 validity of the real property claim.” 26 the motion to expunge has the burden of proving the “probable 27 validity.” Cal. Code Civ. Pro. “[T]he court shall order that the notice [of CCP § 405.30. Id. The party opposing A claim has “probable validity” where 28 11 1 “it is more likely than not that the plaintiff will obtain 2 judgment against the defendant on the claim.” 3 The reviewing court is required to consider the relative merits 4 of the parties’ positions and must decide whether plaintiff has 5 met his burden of establishing the probable validity of his 6 claims by a preponderance of the evidence. 7 Beverly Glen Music, Inc., 166 Cal. App. 3d 1110, 1120 (1985). 8 Here, where Plaintiff’s complaint fails to state any claim upon 9 which relief may be granted, Plaintiff cannot establish the 10 probable validity of those claims. 11 expungement of the lis pendens is GRANTED. CCP at § 405.3. Loeb & Loeb v. Defendant’s request for Under CCP § 405.38, when a court orders a lis pendens 12 13 expunged, the order must direct that the prevailing party be 14 awarded reasonable attorneys’ fees and costs. 15 mandatory, unless the Court finds that the opposing party acted 16 with substantial justification, or that other circumstances make 17 the imposition of attorneys’ fees unjust. 18 requests attorneys’ fees in this case. 19 law firm involved in the serial filing of this and numerous 20 related lawsuits is no longer in operation, imposing fees upon a 21 probably uninformed Plaintiff already in financial distress would 22 be unjust. 23 // 24 // 25 // 26 // 27 // 28 // Id. This award is Defendant However, given that the Defendant’s request for attorneys’ fees is DENIED. 12 1 V. CONCLUSION 2 For the reasons set forth above, Defendant’s motion to 3 4 dismiss for failure to state a claim is GRANTED and the lis pendens is EXPUNGED. Plaintiff has not requested leave to amend. 5 Defendant’s request for attorney’s fees is DENIED. 6 7 SO ORDERED DATED: August 10, 2009 8 /s/ Oliver W. Wanger____ Oliver W. Wanger United States District Judge. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13
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