-AJB Caravantes v. California Reconveyance Company et al, No. 3:2010cv01407 - Document 17 (S.D. Cal. 2010)

Court Description: ORDER granting in part and denying in part Defendants' 11 Motion to Dismiss Plaintiff's Complaint. The following causes of action are dismissed w/ prejudice: 1.) 1st, 3rd, 15th and 16th causes of action as to Dft JPMorgan, 2.) 2nd cause o f action as to Dft JPMorgan, 3.) 4th, 5th, and 6th causes of action as to all moving Dfts. The following causes of action are dismissed with leave to amend: 1.) the 2nd cause of action for violation of RESPA as to all moving Dfts, 2.) 7th and 8th cau ses of action for civil conspiracy and unfair business practices, 3.) 9th, 10th, 11th and 12th causes of action for violations of RICO, and 4.) 14th cause of action for violations of Cal. Civ. Code 2923.54. Motion to Dismiss is denied as to the 13th cause of action for violation of Cal. Civ. Code 2923.5. If Pla wishes to file an amended complaint, he should do so w/in 21 days of the filing of this Order. Signed by Judge Irma E. Gonzalez on 10/14/2010. (All non-registered users served via U.S. Mail Service)(jah)

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-AJB Caravantes v. California Reconveyance Company et al Doc. 17 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 DAVID CARAVANTES, an individual, CASE NO. 10-CV-1407 - IEG (AJB) 11 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S COMPLAINT 12 vs. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 CALIFORNIA RECONVEYANCE COMPANY, a California corporation; WASHINGTON MUTUAL BANK, FA, a Federal Savings Bank organized and existing under the laws of the United States; CHASE HOME FINANCE LLC, a Delaware Limited Liability Company; VREJ JOUKADARIAN, an individual, CLEMENTS J. DURKIN, an individual, DEBORAH BRIGNAC, an individual, ANN THORN, an individual, and DOES 1-20, inclusive, [Doc. No. 11] Defendants. Presently before the Court is a motion to dismiss brought by Defendants California Reconveyance Company, JPMorgan Chase Bank, N.A., an acquirer of certain assets and liabilities of Washington Mutual Bank from the FDIC acting as receiver, and Chase Home Finance LLC (collectively “Defendants”). (Doc. No. 11.) In his Complaint, Plaintiff has asserted thirteen separate causes of action stemming from Defendants’ conduct in issuing a mortgage loan and, upon Plaintiff’s default, initiating non-judicial foreclosure proceedings. (See Doc. No. 1.) For the reasons described herein, the Court GRANTS IN PART and DENIES IN PART Defendants’ motion to dismiss. 28 -1- 10cv1407 Dockets.Justia.com 1 BACKGROUND 2 Plaintiff became the owner of property located at 5189 Argonne Court, San Diego, CA 92117 3 on or about August 15, 2007. (See Compl. ¶¶ 5, 18.) He acquired the property via a loan from 4 Defendant Washington Mutual Bank, F.A. (“WaMu”). (Id. ¶ 18.) The corresponding Deed of Trust 5 was recorded in San Diego on August 27, 2007. (Id. ¶ 19.) The Deed of Trust identified Defendant 6 WaMu as the lender and Defendant California Reconveyance Company (“CRC”) as the trustee. (Id.) 7 Plaintiff alleges that when the loan was consummated, he did not receive all of the required documents 8 and disclosures, including the Truth in Lending Disclosure statement containing required material 9 disclosures and the required number of copies of the Notice of Right to Cancel containing the date that 10 the rescission period expires. (Id. ¶ 20.) 11 Subsequently, Plaintiff appears to have experienced problems in making his loan payments 12 when his income decreased dramatically in 2008. (Id. ¶ 21.) In September 2008, after Defendant 13 WaMu closed, Plaintiff alleges he received a form letter stating that Defendant WaMu had become 14 Defendant JPMorgan Chase Bank (“JPMorgan”). (Id. ¶ 22.) The letter did not state anything about 15 whether Defendant JPMorgan was now the beneficiary under the Deed of Trust, nor has Plaintiff 16 received any other notice of any change in beneficiary. (Id.) Plaintiff subsequently received 17 statements from Defendant Chase Home Finance (“Chase”), and he directed payments to Defendant 18 Chase, assuming that Chase was the new servicer of his loan. (Id.) 19 In or around November 2009, Plaintiff received a letter from Chase Home Ownership 20 Preservation Office stating that many Americans are experiencing difficulty with their mortgage 21 payments and that if Plaintiff was experiencing financial difficulty, there were some options available 22 to him that would assist him with making payments. (Compl. ¶ 23.) Plaintiff subsequently received 23 several of such letters. (Id.) According to Plaintiff, none of these letters discussed Plaintiff’s actual 24 financial situation. (Id.) 25 On January 25, 2010, Defendant Chase mailed to Plaintiff a letter titled “Notice of Collection 26 Activity,” alleging Plaintiff was in default under the terms of his loan. (Id. ¶ 24; Def.’s Request for 27 Judicial Notice (“RJN”), Ex. 3.) The letter did not attempt to discuss any options available to Plaintiff 28 to avoid foreclosure other than paying the full amount allegedly due. (Compl. ¶ 24.) On March 10, -2- 10cv1407 1 2010, Defendant CRC recorded a Notice of Default on Plaintiff’s property. (Id. ¶ 25.) The Notice of 2 Default was accompanied by a Declaration of Compliance, which stated that the undersigned “tried 3 with due diligence but was unable to contact the borrower to discuss the borrower’s financial situation 4 and to explore options for the borrower to avoid foreclosure as required by Cal. Civ. Code Section 5 2923.5. Thirty days or more have elapsed since these due diligence efforts were completed.” (Id. ¶ 6 27.) However, according to Plaintiff, except for the generic letters discussed above, none of 7 Defendants sent any letters or made any phone calls to Plaintiff concerning his personal financial 8 situation and options to avoid foreclosure that were specifically available to him. (Id. ¶ 28.) 9 In March 2010, Plaintiff retained a mortgage auditing firm to analyze his loan. Compl. ¶ 29.) 10 On March 23, 2010, Plaintiff sent a Qualified Written Request (“QWR”) letter to Defendants CRC, 11 JPMorgan, and Chase. (Id. ¶ 30.) The letter made several requests for documentation and information 12 concerning Plaintiff’s loan. (Id.) Defendant CRC acknowledged the receipt of the letter on March 26, 13 2010 and stated that it forwarded the letter to Defendant JPMorgan. (Id. ¶ 31.) Also on March 26, 14 2010, Defendant Chase acknowledged the receipt of Plaintiff’s letter and indicated that a further 15 response would be forthcoming. (Id.) On June 3, 2010, Defendant Chase responded to Plaintiff’s 16 letter, providing some of the requested information and indicating that other information was being 17 withheld because it was either proprietary or unavailable. (Id. ¶ 33.) 18 On June 11, 2010, Defendant CRC executed a Notice of Trustee’s Sale, indicating that the sale 19 was scheduled for July 6, 2010 at 10:00 a.m. (Id. ¶ 34.) The sale was subsequently postponed until 20 July 12, 2010 at 10:00 a.m. (Id.) The Notice of Trustee’s Sale was accompanied by a Declaration 21 Pursuant to California Civil Code Section 2923.54, indicating that the undersigned loan servicer has 22 complied with the requirements under Section 2923.54. (Id. ¶ 35.) 23 Plaintiff filed suit, along with a motion for a temporary restraining order (“TRO”), in this Court 24 on July 6, 2010. Plaintiff filed a motion for a preliminary injunction on July 7, 2010. The Court 25 granted a TRO on July 8, 2010 and granted a preliminary injunction on July 27, 2010. Defendants 26 filed the present motion to dismiss on July 30, 2010, and Plaintiff filed a response in opposition on 27 September 24, 2010. 28 -3- 10cv1407 1 2 DISCUSSION I. Legal Standard 3 A complaint must contain “a short and plain statement of the claim showing that the pleader 4 is entitled to relief.” Fed. R. Civ. P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of 5 the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. 6 Fed. R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept 7 all factual allegations pled in the complaint as true, and must construe them and draw all reasonable 8 inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 9 337-38 (9th Cir. 1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed 10 factual allegations, rather, it must plead “enough facts to state a claim to relief that is plausible on its 11 face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has “facial plausibility when 12 the plaintiff pleads factual content that allows the court to draw the reasonable inference that the 13 defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949, 14 173 LED.2d 868 (2009) (citing Twombly, 550 U.S. at 556). 15 However, “a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ 16 requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of 17 action will not do.” Twombly, 550 U.S. at 555 (citation omitted). A court need not accept “legal 18 conclusions” as true. Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949, 173 LED.2d 868 (2009). 19 In spite of the deference the court is bound to pay to the plaintiff's allegations, it is not proper for the 20 court to assume that “the [plaintiff] can prove facts that [he or she] has not alleged or that defendants 21 have violated the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., 22 Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 LED.2d 723 (1983). 23 24 II. Analysis 25 A. 26 As an initial matter, Defendants argue that Plaintiff’s claims based on the alleged wrongdoings 27 of WaMu fail as asserted against JPMorgan. Defendants argue that the Purchase and Assumption 28 Agreement (“P & A Agreement”) entered into with the Federal Deposit Insurance Corporation Defendant JPMorgan’s Assumption of Liability -4- 10cv1407 1 (“FDIC”) establishes that JPMorgan expressly did not assume WaMu’s liabilities relating to borrower 2 claims. See Memorandum of Points and Authorities in Support of Motion to Dismiss Complaint 3 (“Def.’s Mot.”) at 3-4. 4 Under the Federal Deposit Insurance Act, 12 U.S.C. §§ 1811-1832(d), the FDIC may accept 5 appointment as a receiver for any closed insured depository institution. 12 U.S.C. § 1821(c). As a 6 receiver, “the FDIC . . . ‘steps into the shoes’ of the failed [financial institution]” and operates as its 7 successor. O’Melveny & Myers v. F.D.I.C., 512 U.S. 79, 86 (1994); see also 12 U.S.C. § 8 1821(d)(2)(A)(i), (B)(i) (providing that when it becomes a receiver, the FDIC succeeds to “all rights, 9 titles, powers, and privileges of the insured depository institution” and may “take over the assets of 10 and operate the insured depository institution”). The FDIC then has “broad powers to allocate assets 11 and liabilities,” such as through a P & A Agreement. West Park Assocs. v. Butterfield Sav. & Loan 12 Ass’n, 60 F.3d 1452, 1459 (9th Cir. 1995). Absent an express transfer of liability, no liability is 13 transferred from a failed bank to an assuming bank. See Kennedy v. Mainland Sav. Ass’n, 41 F.3d 14 986, 990-91 (5th Cir. 1994); Payne v. Sec. Sav. & Loan Ass’n, F.A., 924 F.2d 109, 111 (7th Cir. 15 1991); Williams v. F.D.I.C., 2009 WL 5199237, at *2 (E.D. Cal. Dec. 23, 2009). 16 In this case, the Office of Thrift Supervision closed WaMu on September 25, 2008 and 17 appointed the FDIC as WaMu’s receiver. On the same day, JPMorgan acquired certain assets and 18 liabilities of WaMu pursuant to a P & A Agreement. See RJN, Ex. 4. Section 2.5 of the agreement 19 provides: “any liability associated with borrower claims . . . related in any way to any loan or 20 commitment to lend made by the Failed Bank [WaMu] prior to failure . . . are specifically not assumed 21 by the Assuming Bank.”1 See id. Accordingly, Section 2.5 establishes that JPMorgan has expressly 22 not assumed WaMu’s liabilities relating to borrower claims. See Yeomalakis v. FDIC, 562 F.3d 56, 23 1 24 25 26 27 28 Section 2.5 states in full: Borrower Claims. Notwithstanding anything to the contrary in this Agreement, any liability associated with borrower claims for payment of or liability to any borrower for monetary relief, or that provide for any other form of relief to any borrower, whether or not such liability is reduced to judgment, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed, legal or equitable, judicial or extrajudicial, secured or unsecured, whether asserted affirmatively or defensively, related in any way to any loan or commitment to lend made by the Failed Bank prior to failure, or to any loan made by a third party in connection with a loan which is or was held by the Failed Bank, or otherwise arising in connection with the Failed Bank's lending or loan purchase activities are specifically not assumed by the Assuming Bank. -5- 10cv1407 1 62 (1st Cir.2009) (finding that Section 2.5 of JPMorgan’s agreement with the FDIC retained for the 2 FDIC “any liability associated with borrower claims”); Hilton v. Wash. Mut. Bank., 2009 WL 3 3485953, at *2 (N.D.Cal. October 28, 2009) (same); Cassese v. Wash. Mut. Bank, 2008 WL 7022845, 4 at *2-3 (E.D.N.Y. Dec.22, 2008) (same). 5 To the extent that Plaintiff’s claims relate to the origination of the loan, Plaintiff’s claims 6 against JPMorgan fail. Accordingly, the Court DISMISSES WITH PREJUDICE Plaintiff’s first, 7 third and sixteenth causes of action (asserting violations of the Truth in Lending Act (“TILA”), Home 8 Ownership and Equity Protection Act (“HOEPA”), and breach of fiduciary duty). 9 10 B. 11 Plaintiff’s second cause of action is for statutory damages, actual damages and attorney fees 12 under the Real Estate Settlement Procedures Act (“RESPA”) against Defendants WaMu, JPMorgan 13 and Chase. Specifically, Plaintiff alleges Defendants violated RESPA during the loan closing and by 14 their subsequent failure to respond to Plaintiff’s QWR letter. See Compl. ¶¶ 55-65. In their motion 15 to dismiss, Defendants maintain that JPMorgan and Chase cannot be held liable for purported 16 violations of RESPA during the origination of the loan because they did not participate in the loan 17 transaction. See Def.’s Mot. at 7. In addition, Defendants argue the Court must dismiss Plaintiff’s 18 RESPA claims because Plaintiff’s damages allegations are insufficient. Id. at 7-8. They contend 19 Plaintiff has not alleged facts demonstrating that Defendants made it a regular practice to ignore the 20 provisions of RESPA, and Plaintiff has failed to allege he sustained pecuniary loss resulting from 21 Defendants’ alleged RESPA violations. Id. Violations of Real Estate Settlement Procedures Act 22 As stated above, Plaintiff cannot maintain any claims related to the origination of the loan 23 against Defendant JPMorgan because JPMorgan did not assume liability for borrower claims related 24 to loans or commitments to lend made by WaMu when JPMorgan entered into P & A Agreement with 25 the FDIC. The Court DISMISSES WITH PREJUDICE Plaintiff’s RESPA claims to the extent they 26 derive from the loan origination. 27 Separately, and apart from the loan origination, Plaintiff alleges Defendants failed to 28 adequately respond to his QWR letter and claims entitlement to statutory and actual damages resulting -6- 10cv1407 1 from such failure. In order to recover statutory damages under 12 U.S.C. § 2605(f)(1)(B), a plaintiff 2 must plead a pattern or practice of noncompliance with RESPA. Lal v. Am. Home Servicing, Inc., 680 3 F. Supp. 2d 1218, 1223 (E.D. Cal. 2010). To recover actual damages under 12 U.S.C. § 2605(f)(1)(A), 4 a number of courts have held a plaintiff must state allegations demonstrating pecuniary loss. See, e.g., 5 Amaral v. Wachovia Mortgage Corp., 692 F. Supp. 2d 1226, 1232 (E.D. Cal. 2010) (dismissing 6 RESPA claim because Plaintiff’s damages allegation did not amount to a factual allegation, only a 7 conclusory statement of law); Garcia v. Wachovia Mortgage Corp., 676 F. Supp. 2d 895, 909 (C.D. 8 Cal. 2009) (same). 9 Here, Plaintiff alleges “Defendant WaMu has engaged in a pattern or practice of non- 10 compliance with the requirements of the mortgage servicer provisions of RESPA,” and that “Plaintiff 11 has suffered and continues to suffer damages . . .” See Compl. ¶¶ 60, 61. Aside from these general 12 allegations, however, Plaintiff does not allege any specific facts sufficient to “raise [his] right to relief 13 above the speculative level.” Twombly, 550 U.S. at 555. The Court is not bound to accept as true 14 legal conclusions couched as a factual allegations. Iqbal, 129 S. Ct. at 1949-50. Accordingly, because 15 Plaintiff’s allegations fall short, the Court DISMISSES WITH LEAVE TO AMEND Plaintiff’s third 16 cause of action. 17 18 C. 19 Plaintiff’s fourth cause of action is for damages resulting from Defendants alleged violations 20 of the California’ Fair Debt Collection Practices Rosenthal Act (“Rosenthal Act”), Cal. Civ. Code §§ 21 1788-1788.33 (2009), against Defendants CRC, WaMu, JPMorgan, and Chase Home Finance. 22 Plaintiff alleges Defendants violated the Rosenthal Act by threatening to take actions not permitted 23 by law, including: “attempting to foreclose on a void security interest; causing to be recorded a Notice 24 of Default and a Notice of Sale that they knew or should have known were irregular and thus invalid; 25 and using unfair and unconscionable means in an attempt to collect a debt . . .” Compl. ¶ 72. 26 Defendants argue that the act of foreclosure on the subject property does not constitute “debt 27 collection” under the Rosenthal Act. See Def.’s Mot. at 9-10. 28 Violations of California Rosenthal Act To establish a claim under the Rosenthal Act, Plaintiff must establish Defendant is a “debt -7- 10cv1407 1 collector” within the meaning of the Act. Numerous courts have held that foreclosing on a deed of 2 trust does not constitute collection of a debt within the meaning of the Rosenthal Act. See, e.g., Ricon 3 v. Reconstrust Co., 2009 WL 2407396, at *4 (S.D. Cal. Aug. 4, 2009); Pittman v. Barclays Capital 4 Real Estate, Inc., 2009 WL 110889, at *3 (S.D. Cal. April 24, 2009); Blanco v. Am. Home Mortg. 5 Servicing, Inc., 2009 WL 4674904, at *4 (E.D. Cal. Dec. 4, 2009); Gallegos v. Reconstrust Co., 2009 6 WL 215406, at *3 (S.D. Cal. Jan. 29, 2009); Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193, 1199 7 (C.D. Cal. 2008). Accordingly, because Plaintiff’s claim is premised on Defendants’ foreclosing on 8 a deed of trust, his allegations are insufficient to establish any of the Defendants is a debt collector 9 within the meaning of the Rosenthal Act. The Court therefore DISMISSES WITH PREJUDICE 10 Plainitff’s fourth cause of action. 11 12 D. 13 Plaintiff’s fifth and sixth causes of action are for slander of title against Defendants CRC, 14 WaMu, JPMorgan, Joukardian, Durkin, Brignac, and Thorn. Specifically, Plaintiff alleges Defendants 15 disparaged Plaintiff’s title by preparing, submitting, publishing and recording the Notice of Default 16 and the Notice of Sale. See Compl. ¶¶ 76, 85. Defendants maintain that their actions are privileged 17 under California law. See Def.’s Mot. at 11-12. Slander of Title 18 The elements of the cause of the action for slander of title are: (1) publication, (2) falsity, (3) 19 absence of privilege, and (4) disparagement of another’s land which is relied upon by a third party and 20 which results in a pecuniary loss. Appel v. Burman, 159 Cal. App. 3d 1209, 1215 (Cal. Ct. App. 21 1984). Relevant here is whether there is an absence of privilege. Pursuant to Cal. Civ. Code § 22 2924(d), mailing, publication, delivery of notices, and performance of procedures related to and 23 necessary to perform a non-judicial foreclosure sale are privileged.2 Defendants’ conduct in 24 connection with recording the Notice of Default and Notice of Sale cannot constitute a basis for 25 slander of title claims. Accordingly, the Court DISMISSES WITH PREJUDICE Plaintiff’s fifth and 26 27 28 2 Cal. Civ. Code § 2924(d) states, in relevant part: “All of the following shall constitute privileged communications . . . (1) The mailing, publication, and delivery of notices as required by this section. (2) Performance of the procedures set forth in this article. (3) Performance of the functions and procedures set forth in this article if those functions and procedures are necessary to carry out the duties described in Sections 729.040, 729.050, and 729.080 of the Code of Civil Procedure.” 10cv1407 -8- 1 sixth causes of action. 2 3 E. 4 Plaintiff’s seventh cause of action is for civil conspiracy against Defendants CRC, WaMu, 5 JPMorgan, and Chase Home Finance. Plaintiff alleges Defendants “conspired and agreed to 6 implement a scheme to defraud and victimize Plaintiff through the unlawful acts alleged herein.” 7 Compl. ¶ 93. Defendants contend Plaintiff fails to allege any fact as to the formation and operation 8 of the alleged conspiracy. See Def.’s Mot. at 12-13. Civil Conspiracy 9 Civil conspiracy is “not a cause of action, but a legal doctrine that imposes liability on persons 10 who, although not actually committing a tort themselves, share with the immediate tortfeasors a 11 common plan or design in its perpetration.” Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 869 12 P.2d 454, 457 (Cal. 1994). The elements of civil conspiracy are (1) the formation and operation of the 13 conspiracy, (2) a wrongful act done pursuant to the conspiracy, and (3) damage resulting to the plaintiff 14 from the act. See id. “Plaintiff must allege facts showing the role each defendant allegedly played 15 in the conspiracy . . .” Green v. Alliance Title, 2010 WL 3505072, at *12 (E.D. Cal. Sept. 2, 2010); 16 Velasquez v. Chase Home Finance LLC, 2010 WL 3211905, at *5 (N.D. Cal. Aug. 12, 2010). In this 17 case, Plaintiff's bare allegation that Defendants conspired to defraud Plaintiff is insufficient to raise 18 his right to relief above a speculative level. See Twombly, 550 U.S. at 555. Accordingly, the Court 19 DISMISSES WITH LEAVE TO AMEND Plaintiff’s seventh cause of action. 20 21 F. 22 Plaintiff’s eighth cause of action seeks restitution, attorney fees and injunctive relief against 23 all Defendants for unfair business practices in violation of the California Business & Professions Code 24 § 17200. See Compl. ¶¶ 98-102. Defendants contend that Plaintiff lacks standing to assert an unfair 25 business practices claim and, in the alternative, challenge the sufficiency of his allegations. See Def.’s 26 Mot. at 14-15. Unfair Business Practices 27 The Court evaluates the preliminary question of standing first. A private person has standing 28 to assert an unfair competition claim only if he or she “has suffered injury in fact” and “has lost money or property as a result of the unfair competition.” Cal. Bus. & Prof. Code § 17204. In this case, 10cv1407 -9- 1 accepting Plaintiff’s allegations as true, he has adequately pled that he suffered an injury as a direct 2 result of Defendants’ actions. See, e.g., Sullivan v. Wash. Mut. Bank, FA, 2009 WL 3458300, at *4-5 3 (N.D.Cal. Oct. 23, 2009) (concluding that the initiation of foreclosure proceedings put the plaintiff’s 4 interest in her property sufficiently in jeopardy to allege an injury under § 17200); Rabb v. BNC 5 Mortgage, Inc., 2009 WL 3045812, at *2 (C.D. Cal. Sept. 21, 2009) (same). Accordingly, Plaintiff 6 has standing to assert an unfair business practices claim. 7 The question remains, however, whether Plaintiff’s allegations suffice to state an unfair 8 business practices claim. Section 17200 defines unfair competition as “any unlawful, unfair or 9 fraudulent business act or practice” and “unfair, deceptive, untrue or misleading advertising.” Cal. 10 Bus. & Prof. Code § 17200. Because the statute is written in the disjunctive, it prohibits three separate 11 types of unfair competition: (1) unlawful acts or practices, (2) unfair acts or practices, and (3) 12 fraudulent acts or practices. Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 540 13 (Cal. 1999). A plaintiff alleging unfair business practices under Section 17200 “must state with 14 reasonable particularity the facts supporting the statutory elements of the violation.” Fortaleza v. PNC 15 Financial Servs. Group, Inc., 642 F. Supp. 2d 1012, 1019 (N.D. Cal. 2009) (internal quotation marks 16 and citation omitted); see also Khoury v. Maly’s of Cal., 14 Cal. App. 4th 612, 619 (Cal. Ct. App. 17 1993). 18 In this case, Plaintiff fails to differentiate between the different Defendants and also fails to 19 explain how Defendants’ actions were unlawful, unfair, and/or fraudulent. This is insufficient to 20 provide Defendants with notice of the claims against them. See Fortaleza, 642 F. Supp. 2d at 1020 21 (dismissing Section 17200 claim because plaintiff failed to allege “with ‘reasonable particularity’ the 22 facts surrounding any purportedly fraudulent statements made by defendants-i.e., the who, what, 23 where, and when of such statements”). Accordingly, the Court GRANTS the motion to dismiss in this 24 regard and DISMISSES WITH LEAVE TO AMEND Plaintiff’s eighth cause of action. 25 26 G. 27 Plaintiff’s ninth, tenth, eleventh and twelfth causes of action arise under the Racketeering 28 Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961 et seq. Plaintiff alleges that Violation of RICO Defendants “conducted and participated, directly or indirectly, in the conduct of the affairs of said 10cv1407 - 10 - 1 enterprise through a pattern of racketeering activity” and that the “predicate acts which constitute this 2 pattern of racketeering activity were part of a scheme to wrongfully foreclose upon the Property 3 without legal right[.]” See Compl. ¶¶ 105, 106, 112, 113, 119, 120, 126, 127. Defendants assert that, 4 “like the previous claims,” Plaintiff RICO claims are based on mere conclusory allegations. See Def.’s 5 Mot. at 16. Defendants argue that Plaintiff has not set forth specific facts regarding the alleged 6 “predicate acts” Defendants committed or the “enterprise” they are alleged to comprise. See id. at 16- 7 17. 8 To state a civil claim under RICO (18 U.S.C. § 1964), a complaint must allege (1) conduct (2) 9 of an enterprise (3) through a pattern (4) of racketeering activity (known as “predicate acts”) (5) 10 causing injury to plaintiff’s business or property. Living Designs, Inc. v. E.I. DuPont de Nemours & 11 Co., 431 F.3d 353, 361 (9th Cir. 2005). Here, Plaintiff has insufficiently pled the predicate acts 12 constituting the alleged RICO violations. Plaintiff merely incorporates the preceding allegations in 13 the Complaint and alleges, in conclusory fashion, that “[t]he predicate acts which constitute a pattern 14 of racketeering activity were part of a scheme to wrongfully foreclose upon the Property without legal 15 right, and therefore acquire title to the property through deception and fraud, for the profit of the 16 enterprise described herein.” See Compl. ¶¶ 106, 113, 120, 127. He has pled no facts to demonstrate 17 how Defendants committed these offenses. See Savage v. Council on American-Islamic Rels., Inc., 18 2008 WL 2951281, at *14 (N.D. Cal. July 25, 2008) (finding a RICO claim was insufficient wherein 19 plaintiff set forth “a redundant narrative of allegations and conclusions of law, but makes no attempt 20 to allege what facts are material to his claims under the RICO statute, or which facts are used to 21 support what claims under particular subsections of RICO”). Accordingly, the Court DISMISSES 22 WITH LEAVE TO AMEND Plaintiff’s ninth, tenth, eleventh and twelfth causes of action. 23 24 H. 25 In his thirteenth cause of action, Plaintiff alleges a violation of California Civil Code § 2923.5 26 against Defendants WaMu, JPMorgan, and CRC. Plaintiff alleges Defendants did not attempt to 27 contact him by phone prior to filing the notice of default (“NOD”), and therefore failed to exercise due Violation of Cal. Civ. Code § 2923.5 28 - 11 - 10cv1407 1 diligence.3 See id. ¶¶ 134, 135. Defendants offer a declaration of compliance that accompanies the 2 NOD, and they contend the declaration shows conclusively that Defendants complied with Section 3 2923.5. See Def.’s Mot. at 18. 4 A notice of default (“NOD”) filed pursuant to Section 2924 “shall include a declaration that 5 the mortgagee, trustee, beneficiary, or authorized agent has contacted the borrower, has tried with due 6 diligence to contact the borrower as required by this section, or that no contact was required pursuant 7 to subdivision (h).” Cal. Civ. Code § 2923.5(b). The question here is whether Defendants tried with 8 due diligence to contact the borrower. Among other requirements, the exercise of “due diligence” 9 pursuant to subdivision (g) requires the lender to send a first-class letter, to attempt to contact the 10 borrower by telephone at least three times at different hours and on different days and, if the foregoing 11 is unsuccessful, to send a certified letter, with return receipt requested. See Cal Civ. Code § 2923.5(g). 12 The declaration of compliance attached to the NOD recites that “[t]he mortgagee, beneficiary 13 or authorized agent tried with due diligence but was unable to discuss the borrower’s financial 14 situation and to explore options for the borrower to avoid foreclosure in compliance with Cal. Civ. 15 Code Section 2923.5.” See RJN, Ex. 3. As Defendants note, “the court may disregard allegations in 16 the complaint if contradicted by facts established by exhibits attached to the complaint.” Sumner Peck 17 Ranch, Inc. v. Bureau of Reclamation, 823 F. Supp. 715, 720 (E.D. Cal. 1993) (citing Durning v. First 18 Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987)). 19 In the present case, however, the parties dispute the accuracy of the declaration. Where factual 20 findings or the contents of the documents are in dispute, those matters of dispute are not appropriate 21 for judicial notice. See Darensburg v. Metropolitan Transp. Comm’n, 2006 WL 167657, at *2 (N.D. 22 Cal. Jan. 20, 2006) (citing Del Puerto Water Dist. v. U.S. Bureau of Reclamation, 271 F. Supp. 2d 23 1224, 1234 (E.D. Cal. 2003); United States v. Southern California Edison Co., 300 F. Supp. 2d 964, 24 974 (E.D. Cal. 2004)). In reference to the declaration, Plaintiff objects that his Complaint “clearly 25 states the declaration was false and that he was never contacted by anyone . . .” Pl.’s Opp’n at 3. 26 3 27 28 Plaintiff also alleges the declaration of the Notice of Default was signed by Defendant Durkin for JPMorgan, and that JPMorgan is not the beneficiary as described in the Notice of Default (“NOD”). See Compl. ¶ 133. Defendants maintain that the NOD is not invalid based on the mere fact that a representative of JPMorgan executed the declaration. Def.’s Mot. at 18. The Court addresses this issue in its analysis of Plaintiff’s fifteenth cause of action for violation of Cal. Comm. Code §§ 3301 et seq., in Part II-J of this Discussion. 10cv1407 - 12 - 1 Notwithstanding the contents of the declaration, Plaintiff alleges Defendants did not attempt to contact 2 him by phone prior to filing the NOD. See Compl. ¶¶ 134, 135. Accordingly, because the parties 3 dispute the validity of the declaration of compliance, the Court concludes Plaintiff’s allegations are 4 sufficient at this stage and DENIES Defendant’s motion to dismiss Plaintiff’s thirteenth cause of 5 action. 6 7 I. 8 Plaintiff’s fourteenth cause of action is for violation of California Civil Code § 2923.54 against 9 Defendants WaMu, JPMorgan, and CRC. Plaintiff alleges Defendants’ Section 2923.54 declaration 10 is invalid because it was neither signed nor dated by Defendant Thorn for Defendant JPMorgan. See 11 Compl. ¶ 139. Defendant argues that its declaration fully complies with the requirements of Section 12 2923.54. See Def.’s Mot. at 19 (referencing RJN, Ex. 3). Violation of Cal. Civ. Code § 2923.54 13 Section 2923.54 requires a Notice of Sale to include a declaration from the loan servicer stating 14 whether it “has obtained from the commissioner a final or temporary order of exemption pursuant to 15 Section 2923.53 that is current and valid on the date the notice of sale is filed,” and whether the longer 16 timeframe for giving notice specified in Section 2923.52(a) does not apply pursuant to Section 2923.52 17 or 2923.55. Cal. Civ. Code § 2923.54(a). 18 Here, in contrast with the NOD Declaration under Section 2923.5, Plaintiff does not dispute 19 the accuracy of the Notice of Sale declaration. See Pl.’s Opp’n at 3. Rather, Plaintiff objects to its 20 form, in effect suggesting it must adhere to California Civil Procedure Code § 2015.5, which contains 21 certain requirements for unsworn declarations whenever the law prescribes that matters are required 22 to be evidenced by a sworn declaration.4 By its terms, however, Section 2923.54 does not require a 23 sworn declaration, cf. Mabry v. Super. Ct., 185 Cal. App. 4th 208, 234 (Cal. Ct. App. 2010) 24 (concluding that Section 2015.5's definition did not apply to the use of the word “declaration” in 25 California Civil Code § 2923.5). As Defendants maintain, the Notice of Sale included a statement 26 4 27 28 Under that provision, whenever any law requires something to be supported by a sworn declaration, such matter may instead be supported by an unsworn declaration if it recites that it is certified or declared “to be true under penalty of perjury,” is “subscribed” by the declarant, and “(1), if executed within this state, states the date and place of execution, or (2), if executed at any place, within or without this state, states the date of execution and that it is so certified or declared under the laws of the State of California.” See Cal. Civ. Proc. Code. § 2015.5. 10cv1407 - 13 - 1 titled “Declaration Pursuant to California Civil Code Section 2923.54” from Ann Thorn on behalf of 2 Defendant JPMorgan that appears to comply with Section 2923.54. See RJN, Ex. 3. Accordingly, the 3 Court DISMISSES WITH LEAVE TO AMEND Plaintiff’s fourteenth cause of action. 4 5 J. 6 Plaintiff’s fifteenth cause of action is for violation of California Civil Code §§ 3301 et seq. 7 against Defendant JPMorgan. Plaintiff alleges Defendant JPMorgan is not the “person entitled to 8 enforce” the security interest on the property. See Compl. ¶ 145. Defendants argue that, as the loan 9 servicer under the deed of trust, JPMorgan was authorized to enforce the deed of trust. See Def.’s 10 Violation of Cal. Comm. Code §§ 3301 et seq. Opp’n at 19. 11 California Commercial Code § 3301 provides that a “person entitled to enforce” an instrument 12 includes “the holder of the instrument” as well as “a nonholder in possession of the instrument who 13 has the rights of a holder.” In California, the instrument most commonly used to secure a promissory 14 note given for a real property loan is a deed of trust, which effectively gives the creditor a lien on the 15 secured property to satisfy the obligation under the note if it is not paid. Alliance Mortg. Co. v. 16 Rothwell, 10 Cal. 4th 1226, 1235 (Cal. 1995). California law specifically authorizes the trustee, 17 beneficiary, or any of their authorized agents to record the notice of default or the notice of sale under 18 a deed of trust. Cal. Civ. Code §§ 2924(a)(1), 2924b(b)(4). Accordingly, as a servicer of the subject 19 loan in this case, JPMorgan had the authority to record the Notice of Default and to enforce the power 20 of sale under the Deed of Trust. Accordingly, the Court GRANTS the motion to dismiss in this regard 21 and DISMISSES WITH PREJUDICE Plaintiff’s fifteen cause of action. 22 // 23 // 24 // 25 // 26 // 27 // 28 // - 14 - 10cv1407 1 CONCLUSION 2 3 For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART the moving Defendants’ motion to dismiss. Specifically, the Court ORDERS as follows: 4 - The following causes of action are DISMISSED WITH PREJUDICE: (1) the first, third 5 fifteenth and sixteenth causes of action as to Defendant JPMorgan; (2) the second cause of action as 6 to Defendant JPMorgan, insofar as it derives from the loan origination; (3) the fourth, fifth, and sixth 7 causes of action as to all moving Defendants. 8 - The following causes of action are DISMISSED WITH LEAVE TO AMEND: (1) the 9 second cause of action for violation of RESPA as to all moving Defendants, insofar as it does not 10 derive from the loan origination; (2) the seventh and eighth causes of action for civil conspiracy and 11 unfair business practices, respectively; (3) the ninth, tenth, eleventh, and twelfth causes of action for 12 violations of RICO; (4) the fourteenth cause of action for violation of Cal. Civ. Code § 2923.54. 13 14 - The motion to dismiss is DENIED as to the thirteenth cause of action for violation of Cal. Civ. Code § 2923.5. 15 16 If Plaintiff wishes to file an amended complaint, he should do so within 21 days of the filing 17 of this Order. The amended complaint should only make the revisions discussed above, should omit 18 any claims against Defendant JPMorgan that stem from the origination of the subject loan, should be 19 a complete document without reference to any prior pleading, and should not add any new causes of 20 action. 21 IT IS SO ORDERED. 22 23 DATED: October 14, 2010 24 25 IRMA E. GONZALEZ, Chief Judge United States District Court 26 27 28 - 15 - 10cv1407

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