Larkin v. Select Portfolio Servicing, Inc., No. 1:2009cv01280 - Document 14 (E.D. Cal. 2009)
Court Description: MEMORANDUM, OPINION and ORDER signed by Judge Oliver W. Wanger on 10/21/2009 re 5 Motion to Dismiss. (Lundstrom, T)
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Larkin v. Select Portfolio Servicing, Inc. Doc. 14 1 2 3 4 5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 DENNIS R. LARKIN, 1:09-CV-01280-OWW-DLB Plaintiff, 9 v. 10 11 SELECT PORTFOLIO SERVICING, INC., 12 Defendant. 13 14 15 16 17 18 I. MEMORANDUM DECISION ON DEFENDANTS’ MOTION TO DISMISS (Doc. 5) INTRODUCTION Before the court for decision is Defendant Select Portfolio Servicing, Inc.’s motion to dismiss Plaintiff’s Complaint for failure to state a claim or, alternatively, for a more definite statement. Plaintiff Dennis R. Larkin, proceeding pro se, did not oppose the motion. 19 20 21 22 23 24 25 26 27 II. BACKGROUND This matter involves a dispute between Plaintiff Dennis R. Larkin (“Larkin”) and Defendant Select Portfolio Servicing, Inc. (“SPS”), a residential mortgage servicing company headquartered in Salt Lake City, Utah. The dispute concerns a mortgage loan obtained by Plaintiff on real property located at 6627 West Morris Avenue, Fresno, California. According to the complaint, SPS serviced the mortgage and was unresponsive to Plaintiff’s attempts 28 1 Dockets.Justia.com 1 to avoid delinquency and obtain an “in-house loan modification.” 2 On June 2, 2009, Plaintiff filed the instant action in the 3 Superior Court of California, County of Fresno, alleging four 4 causes of action: (1) Non-Compliance; (2) Violation of California 5 Civil Code 1288; (3) Breach of Fiduciary Duty; and (4) Legal True 6 Beneficiary. 7 “declaration 8 servicing agreement to identify the true beneficiary.” 9 also requests preliminary and permanent injunctions to prevent 10 Defendant “from foreclosing on Plaintiff’s home or from conducting 11 a trustee’s sale or causing a trustee’s sale to be conducted 12 relative to Plaintiff’s home.” 13 Plaintiff seeks to recover costs of suit and a that the Defendant must produce a copy of the Plaintiff On July 22, 2009, this case was removed on the basis of 14 federal question jurisdiction. 15 Plaintiff’s action is founded on claims arising under federal laws, 16 including the Federal Fair Debt Collection Practices Act, 15 U.S.C. 17 § 1692, et seq. Alternatively, the notice provides that removal is 18 proper 19 different states and the manner [sic] in controversy exceeds the 20 sum of $75,000.” 21 22 because “this is a The notice of removal asserts that civil action between Defendant filed this motion on July 27, 2009. citizens of Plaintiff did not oppose the motion. 23 24 25 III. LEGAL STANDARD Defendant SPS attacks Plaintiff’s claims as incognizable and 26 lacking necessary elements and factual allegations. 27 Rule of Civil Procedure 12(b)(6), a motion to dismiss can be made 28 and granted when the complaint fails “to state a claim upon which 2 Under Federal 1 relief 2 appropriate where the complaint lacks a cognizable legal theory or 3 sufficient facts to support a cognizable legal theory. 4 v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). 5 can To be granted.” sufficiently state Dismissal a claim under for Rule relief 12(b)(6) and is Balistreri survive a 6 12(b)(6) motion, a complaint “does not need detailed factual 7 allegations” but the “[f]actual allegations must be enough to raise 8 a right to relief above the speculative level.” 9 Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). 10 Mere “labels and conclusions” or a “formulaic recitation of the 11 elements of a cause of action will not do.” 12 must be “enough facts to state a claim to relief that is plausible 13 on its face.” Id. at 570. In other words, “[t]o survive a motion to 14 dismiss, 15 accepted as true, to state a claim to relief that is plausible on 16 its face.” 17 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). “The 18 plausibility standard is not akin to a probability requirement, but 19 it asks for more than a sheer possibility that a defendant has 20 acted unlawfully. Where a complaint pleads facts that are merely 21 consistent with a defendant's liability, it stops short of the line 22 between possibility and plausibility of entitlement to relief.” 23 Id. (internal citation and quotation marks omitted). a complaint must contain Bell Atl. Corp. v. Id. sufficient Rather, there factual matter, Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 24 In deciding whether to grant a motion to dismiss, the court 25 must accept as true all “well-pleaded factual allegations.” Iqbal, 26 129 S.Ct. at 1950. 27 true allegations that are merely conclusory, unwarranted deductions 28 of fact, or unreasonable inferences.” A court is not, however, “required to accept as 3 Sprewell v. Golden State 1 Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see, e.g., Doe I v. 2 Wal-Mart Stores, Inc., --- F.3d ----, 2009 WL 1978730, at *3 (9th 3 Cir. July 10, 2009) (“Plaintiffs' general statement that Wal-Mart 4 exercised control over their day-to-day employment is a conclusion, 5 not a factual allegation stated with any specificity. 6 accept Plaintiffs' unwarranted conclusion in reviewing a motion to 7 dismiss.”). 8 9 We need not The Ninth Circuit has summarized the governing standard, in light of Twombly and Iqbal, as follows: “In sum, for a complaint 10 to survive a motion to dismiss, the non-conclusory factual content, 11 and reasonable inferences from that content, must be plausibly 12 suggestive of a claim entitling the plaintiff to relief.” 13 U.S. Secret Service, 572 F.3d 962, 2009 WL 2052985, at *6 (9th Cir. 14 July 16, 2009) (internal quotation marks omitted). Moss v. 15 IV. 16 DISCUSSION 17 A. Non-Compliance (Count I) 18 The complaint’s first claim alleges that Defendant was “non- 19 complaint” because it “refused to negotiate in good faith [and] a 20 proper assessment by the Defendant would have shown the Plaintiffs 21 financial situation prohibits him from committing to any increase 22 of the current mortgage.” The complaint alleges that this conduct, 23 Defendant’s purported failure to negotiate in good faith, violated 24 California 25 2924b(b)(2).1 Civil Code §§ 2823.6(b), 2923.6, 2924b(b)1, and Defendant moves to dismiss Plaintiff’s first claim 26 27 28 1 It appears Plaintiff intended to bring his claim under California Civil Code § 2923.6(b), not § 2823.6(b). Section 2823.6(b) is not part of California’s Civil Code. Plaintiff also 4 1 because “[b]eyond mere recitation of the section number and text of 2 the statute, Plaintiff fails to state any facts in support of the 3 purported violations.” Defendant is correct. 4 Defendant observes the absence of any factual allegations to 5 identify a violation of §§ 2823.6(b), 2923.6, 2924b(b)1, and 6 2924b(b)2. For example, to support a violation of §§ 2924b(b)1 and 7 2924b(b)2, which set forth the notice requirements for a “Notice of 8 Default” and “Notice of Sale,” the complaint alleges only that 9 Defendant “did not comply” with §§ 2924b(b)1 and 2924b(b)2. No 10 other facts are alleged. 11 participated in the notice of default or notice of trustee sale; 12 the complaint also fails to identify who issued and recorded the 13 notice of default, if it occurred. 14 complaint 15 Defendant was the “person or party authorized to record the notice 16 of default or the notice of sale,” the claim does not provide 17 sufficient allegations for a viable claim under § 2924b(b)1 or § 18 2924b(b)2. 19 does not The complaint does not allege Defendant include a single Under Iqbal, because the factual allegation that The same is true as to the remaining allegations of the first 20 claim. Section 2923.6 states that a loan servicer acts in the best 21 interests of the all parties if it agrees to or implements a loan 22 modification where the (1) loan is in payment default, and (2) 23 anticipated recovery under the loan modification or workout plan 24 exceeds the anticipated recovery through foreclosure on a net 25 present value basis. 26 intent of the Legislature that the mortgagee, beneficiary, or Section 2923.6(b), states that “it is the 27 28 sets forth the text of § 2923.6(b) in his complaint. 5 1 authorized agent offer the borrower a loan modification or workout 2 plan 3 contractual or other authority.” Although the complaint references 4 Plaintiff’s attempts to “mediate” and/or “negotiate,” it fails to 5 specify how Defendant’s purported conduct is actionable under §§ 6 2923.6 and 2923.6(b). 7 failure to “act in the best interest of the parties” or whether 8 Defendant’s loan modifications, if they occurred, triggered § 9 2923.6. The complaint is equally silent to how and why Defendant’s 10 purported conduct violated the “legislative intent” enumerated in 11 § 2923.6(b). if such a modification or plan is consistent with its There are no facts bearing on Defendant’s 12 A claim is plausible only “when the plaintiff pleads factual 13 content that allows the court to draw the reasonable inference that 14 the defendant is liable for the misconduct alleged." 15 S.Ct. 1937, 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 16 544, 570.). 17 not meet this burden. Iqbal, 129 The complaint’s first claim for non-compliance does The motion to dismiss is GRANTED. 18 19 B. Violation of California Civil Code § 1788 (Count II) 20 The complaint’s second claim alleges that “Defendants violated 21 the Rosenthal Act [and] 15 U.S.C.A. 1962d by engaging in conduct 22 the natural consequence of which is to harass, oppress, and abuse 23 persons in connection with the collection of an alleged debt.” 24 Although unclear, the complaint appears to allege that Defendant 25 engaged in abusive debt collection practices in violation of 26 federal 27 context, however, the complaint’s second claim fails for the same 28 reasons as its first, namely that Plaintiff has not pled any facts and state laws regulating 6 debt collection. In this 1 that would even suggest that Defendant engaged in unlawful debt 2 collection practices. 3 Although the complaint alleges that Defendant used “unfair or 4 unconscionable means to collect a debt,” these are conclusions of 5 law. 6 timing, or methods of Defendant’s debt collection practices – or 7 even that it was a “debt collector.” 8 “fact” asserted against Defendant is that “Plaintiff has not 9 received any communication regarding the loan modification or work 10 out plan,” which is not indicative of improper debt collection 11 practices under either federal or state debt collection statutes. 12 In addition, the complaint’s allegations that Defendant “used 13 deceptive means” to collect a debt are conclusory and severely 14 underdeveloped. 15 matter Defendant regularly engaged in the challenged practice. Plaintiff has not alleged one fact concerning the frequency, The only debt collection There is not one fact to indicate how or in what 16 It also appears that Defendant is not a “debt collector” 17 under the federal Fair Debt Collection Practices Act (“FDCPA”), 15 18 U.S.C. §§ 1692, et seq. 19 See 15 U.S.C. §§ 1692(e)-(f). 20 person who uses any instrumentality of interstate commerce or the 21 mails in any business the principal purpose of which is the 22 collection of any debts, or who regularly collects or attempts to 23 collect, directly or indirectly, debts owed or due or asserted to 24 be owed or due another.” § 1692a(6). 25 include persons who collect debt “to the extent such activity ... 26 (ii) concerns a debt which was originated by such person; [or] 27 (iii) concerns a debt which was not in default at the time it was 28 obtained by such person ....“ § 1692a(6)(F). FDCPA's definition of FDCPA regulates only “debt collectors.” “Debt collector” is defined as “any 7 “Debt Collector” does not 1 debt collector “does not include the consumer's creditors, a 2 mortgage servicing company, or any assignee of the debt, so long as 3 the debt was not in default at the time it was assigned.” 4 Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985). 5 the complaint suggests that Defendant is a “debt collector” under 6 the FDCPA. Perry v. Nothing in Plaintiff's allegations do not trigger the FDCPA. 7 The complaint's second claim neither identifies Defendant as 8 a “debt collector” nor that Defendant’s purported wrongs violate 9 any federal or state debt collection statutes. While Rule 8 does 10 not demand detailed factual allegations, "it demands more than an 11 unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 12 129 S.Ct. 1937, 1949. 13 cause of action, supported by mere conclusory statements, do not 14 suffice." 15 claim and is DISMISSED. Id. "Threadbare recitals of the elements of a The complaint’s second claim states no cognizable 16 17 C. Breach of Fiduciary Duty (Count III) 18 The complaint’s breach of fiduciary duty claim alleges that 19 Defendant breached its fiduciary duty by “plac[ing] themselves in 20 a position of great trust by virtue of expertise represented by and 21 through its employees [and] act[ing] and continu[ing] to act for 22 their own benefit and to the detriment of Plaintiff.” 23 Fatal to Plaintiffs’ fiduciary duty claim is the absence of a 24 fiduciary duty between lender and borrower. “The relationship 25 between a lending institution and its borrower-client is not 26 fiduciary in nature.” 27 (citing Price v. Wells Fargo Bank, 213 Cal. App. 3d 465, 476-478 28 (1989)). Nymark, 231 Cal. App. 3d at 1093, n. 1 A commercial lender is entitled to pursue its own 8 1 economic interests in a loan transaction. Nymark, 231 Cal. App. 3d 2 at 1093, n. 1 (citing Kruse v. Bank of America, 202 Cal. App. 3d 3 38, 67, 1988)). 4 is “at arms-length and there is no fiduciary relationship between 5 the borrower and lender.” 6 466 (“the bank is in no sense a true fiduciary”). Absent “special circumstances” a loan transaction Oaks Management, 145 Cal. App. 4th at 7 “[T]o plead a cause of action for breach of fiduciary duty, 8 there must be shown the existence of a fiduciary relationship, its 9 breach, and damage proximately caused by that breach. The absence 10 of any one of these elements is fatal to the cause of action.” 11 Pierce v. Lyman, 1 Cal.App.4th 1093, 1101 (1991). 12 Here, the complaint fails to demonstrate existence of a 13 fiduciary duty. In the absence of alleged special circumstances 14 and a legal duty owed by Defendant, the breach of fiduciary duty 15 claim fails. Defendant’s motion to dismiss the breach of fiduciary 16 claim is GRANTED. 17 18 D. Legal True Beneficiary (Count IV) 19 The complaint's fourth claim is comprised of one paragraph 20 21 22 23 24 entitled “Legal True Beneficiary”: The proper true beneficiary has not be identified, Plaintiff has requested documentation that demonstrates the Defendant is the true beneficiary, this request includes all transfers and proper recording of those transfers and a copy of the Defendants servicing agreement that will outline all rights and authorities given to the defendants. 25 (Compl. 7:5-7:11.) 26 The complaint's fourth cause of action for “Legal True 27 Beneficiary” requests “documentation” demonstrating that Defendant 28 9 1 is the true beneficiary. It also requests all transfers, the 2 proper recording of such transfers, and copies of the servicing 3 agreements. 4 states a request for relief, not a cause of action. 5 that reason. 6 the 7 DISMISSED. Defendant correctly notes that this claim merely It fails for It also fails because it appears to be premised on complaint’s other flawed claims. The fourth claim is 8 E. 9 Attempt At Amendment Plaintiff’s claims are incognizable or barred as a matter of 10 11 law. Plaintiff is unable to cure his claims by allegation of other 12 facts and thus is not granted an attempt to amend. 13 Select 14 PREJUDICE. Portfolio Servicing, Inc.’s motion is Defendant GRANTED WITH 15 16 F. Motion For a More Definite Statement 17 Defendant, in the alternative, moves for a more definite 18 statement under Fed. R. Civ. Proc. 12(e) on grounds that the 19 complaint consisted of “conclusive statements which are not enough 20 to state a claim for relief.” 21 pled causes of action have been addressed in the 12(b)(6) analysis 22 above. 23 is MOOT. Any issues concerning sufficiently Defendant’s alternative motion for more definite statement 24 V. CONCLUSION. 25 26 For the reasons stated: 27 (1) 28 The action against Select Portfolio Servicing, Inc. is DISMISSED with prejudice. 10 1 Defendant Select Portfolio Servicing, Inc. shall submit a form 2 of order consistent with, and within five (5) days following 3 electronic service of, this memorandum decision. 4 IT IS SO ORDERED. 5 Dated: aa70i8 October 21, 2009 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11
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