Derusseau v. Bank of America, N.A. et al, No. 3:2011cv01766 - Document 37 (S.D. Cal. 2012)
Court Description: ORDER Granting 30 Motion to Dismiss. For the reasons stated herein, the Court Grants Defendants' motion to dismiss 30 , and Dismisses Plaintiff's action With Prejudice. The Clerk of Court is instructed to enter judgment in favor of Def endants Bank of America, N.A., as successor by merger to BAC Home Loans Servicing, L.P., and Federal Home Loan Mortgage Corporation, and against Plaintiff Audrey Derusseau, and close the case file. Signed by Judge Michael M. Anello on 3/28/2012. (leh)
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Derusseau v. Bank of America, N.A. et al Doc. 37 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 AUDREY DERUSSEAU, CASE NO. 11 CV 1766 MMA (JMA) Plaintiff, 12 vs. 13 14 BANK OF AMERICA, N.A.; et al., [Doc. No. 30] Defendants. 15 16 ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS Currently pending before the Court is Defendants Bank of America, N.A., as successor by 17 merger to BAC Home Loans Servicing, L.P. (“BAC” or “BAC Servicing”) and Federal Home 18 Loan Mortgage Corporation’s (“Freddie Mac”) motion to dismiss Plaintiff Audrey Derusseau’s 19 second amended complaint (“SAC”) for failure to state a claim upon which relief can be granted. 20 [Doc. No. 30.] Plaintiff opposed the motion [Doc. No. 33], and Defendants submitted a reply 21 [Doc. No. 34]. Plaintiff is represented by counsel. On February 1, 2012, the Court deemed the 22 matter suitable for decision on the papers and without oral argument pursuant to Civil Local Rule 23 7.1(d)(1). For the reasons set forth below, the Court GRANTS Defendants’ motion to dismiss. BACKGROUND 24 25 This action arises out of foreclosure-related events with respect to Plaintiff’s real property, 26 located at 2235 Cliff Street, San Diego, California 92116 (the “Property”). [SAC, Doc. No. 28 27 ¶1.]1 On or about April 2, 2007, Plaintiff executed a promissory note (“Note”) to obtain a loan 28 1 Because this matter is before the Court on a motion to dismiss, the Court accepts the allegations in the SAC as true. Hospital Bldg. Co. v. Rex Hospital Trustees, 425 U.S. 738, 740 (1976). 11cv1766 -1Dockets.Justia.com 1 from Bank of America, secured by a Deed of Trust, to purchase the Property. [Id.] The Deed of 2 Trust names PRLAP, Inc. as the trustee. [Id. ¶15; Exh. D, p.2.] In March 2009, Plaintiff was 3 “experiencing financial hardship” and contacted BAC to apply for a loan modification to lower her 4 monthly payments. [SAC ¶19.] Plaintiff alleges BAC offered her a forbearance plan in April 5 2009, but abruptly cancelled it without explanation in November 2009. [Id. ¶20.] Notably, 6 however, Plaintiff defaulted on her loan on July 1, 2009. [Doc. No. 15-1, Exh. A, p.6.] From 7 November 2009 through March 2011, BAC represented that Plaintiff’s loan was in “review 8 status.” [SAC ¶20.] In April 2011, BAC cancelled its review of her loan. [Id. ¶21.] Ultimately, 9 BAC foreclosed on Plaintiff’s Property. [Id. ¶23.] Plaintiff “felt she had been treated unfairly and 10 sought counsel to investigate why BAC” forced her into foreclosure. [Id.] 11 Plaintiff asserts her “initial investigation has confirmed that there was an attempt to 12 securitize the Mortgage by assigning and transferring the Mortgage into the Securitized Trust, but 13 the mortgage loan was never actually assigned and transferred to the Securitized trust.” [Id. ¶24 14 (bold in original).] Stated another way, “Freddie Mac attempted but failed to become a party to 15 the Note and Deed of Trust when it was purportedly assigned Bank of America’s interest in 16 Plaintiff’s Note and Deed of Trust, thereby becoming purported owner of Plaintiff’s Note and 17 Deed of Trust.” [Id. ¶54.] Therefore, according to Plaintiff, Freddie Mac never acquired an 18 interest in Plaintiff’s Note. “Despite this failure to assign, transfer, and grant Plaintiff’s Mortgage 19 to Freddie Mac, Defendants have made numerous attempts to collect on Plaintiff’s Mortgage.” 20 [Id. ¶¶33, 54.] Further, although Plaintiff defaulted on her mortgage on July 1, 2009, she alleges 21 that she “has been paying the wrong creditor and all payments to the Securitized trust must be 22 disgorged and refunded.” [Id. ¶¶35, 55.] In the alternative, Plaintiff asserts that if Freddie Mac 23 did acquire an interest in her Note, Freddie Mac failed to comply with the Truth in Lending Act’s 24 notice of new creditor requirements under 15 U.S.C. § 131(g). 25 Plaintiff also alleges Freddie Mac violated the Fair Debt Collection Practices Act by 26 fraudulently representing the status of her loan and “attempt[ing] to collect on the Note under false 27 pretenses, namely that they [sic] were assigned Plaintiff’s debt when in fact they [sic] were not.” 28 [Id. ¶¶62, 66.] As a result of Defendants’ alleged conduct, Plaintiff initiated this action on August -2- 11cv1766 1 8, 2011, and filed her SAC on December 14, 2011. Plaintiff’s SAC alleges nine causes of action 2 for: (1) Declaratory Relief under 28 U.S.C. §§ 2201 and 2202; (2) Quasi Contract; (3) Violation of 3 the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e; (4) Violation of the Truth in Lending 4 Act, 15 U.S.C. § 1641(g); (5) Violation of California Business and Professions Code §§ 17200 et 5 seq.; (6) Accounting; (7) Breach of Contract; (8) Breach of the Implied Covenant of Good Faith 6 and Fair Dealing; and (10) Violation of California Civil Sections 2923.5 and 2924 et seq.2 7 Defendants move to dismiss Plaintiff’s entire SAC under Federal Rule of Civil Procedure 12(b)(6) 8 for failure to state a claim upon which relief can be granted. 9 LEGAL STANDARD 10 A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 11 250 F.3d 729, 732 (9th Cir. 2001). “While a complaint attacked by a Rule 12(b)(6) motion to 12 dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of 13 [her] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of 14 the elements of a cause of action will not do. Factual allegations must be enough to raise a right to 15 relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) 16 (internal quotation marks, brackets and citations omitted). 17 In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of 18 all factual allegations and must construe them in the light most favorable to the nonmoving party. 19 Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions need not 20 be taken as true merely because they are cast in the form of factual allegations. Roberts v. 21 Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618, 624 22 (9th Cir. 1981). Similarly, “conclusory allegations of law and unwarranted inferences are not 23 sufficient to defeat a motion to dismiss.” Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 24 (9th Cir. 1998). 25 26 In determining the propriety of a Rule 12(b)(6) dismissal, generally, a court may not look beyond the complaint for additional facts. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 27 2 28 The Court notes this action is nearly identical to Brown v. U.S. Bancorp, 2012 U.S. Dist. LEXIS 26226 (C.D. Cal. Feb. 27, 2012), in which Ms. Derusseau’s counsel represented the plaintiff Todd Brown. -3- 11cv1766 1 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998). Despite Plaintiff’s argument to 2 the contrary [Doc. No. 33, p.4-6], a court may however consider items of which it can take judicial 3 notice without converting the motion to dismiss into one for summary judgment. Barron v. Reich, 4 13 F.3d 1370, 1377 (9th Cir. 1994). 5 Under Federal Rule of Evidence 201(b), judicial notice may be taken of facts that are “not 6 subject to reasonable dispute” because they are “capable of accurate and ready determination by 7 resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). 8 Applying Rule 201(b), federal courts routinely take judicial notice of facts contained in publically 9 recorded documents, including Deeds of Trust, Substitutions of Trustee, and Notices of Defaults, 10 because they are matters of public record, and are not reasonably in dispute. See, e.g., Lee v. City 11 of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quoting MGIC Indem. Corp. v. Weisman, 803 12 F.2d 500, 504 (9th Cir. 1986)); Lingad v. IndyMac Fed. Bank, 682 F. Supp. 2d 1142, 1146 (E.D. 13 Cal. 2010); Vogan v. Wells Fargo Bank, N.A., 2011 U.S. Dist. LEXIS 132944 *6-8 (E.D. Cal. 14 Nov. 17, 2011); Tiqui v. First Nat’l Bank of Arizona, 2010 U.S. Dist. LEXIS 33326 *2 n.2 (S.D. 15 Cal. April 5, 2010). 16 Defendants request the Court take judicial notice of: (1) the Notice of Default, dated June 17 28, 2011 and recorded in the San Diego Recorder’s Office on July 1, 2011; and (2) the 18 Substitution of Trustee, dated June 16, 2011, and recorded in the San Diego Recorder’s Office on 19 July 1, 2011. [Doc. No. 31.] Because the Court already granted judicial notice of these 20 documents [Doc. No. 27, p.4-5; see also Doc. No. 15], the Court denies Defendants’ pending, 21 duplicative request for judicial notice as moot. 22 Plaintiff requests the Court take judicial notice of a report published by the Office of the 23 Assessor-Recorder in San Francisco entitled, “Foreclosure in California A Crisis of Compliance.” 24 [Doc. No. 36.] The Court declines to do so for two reasons. First, Plaintiff’s request is untimely, 25 as it was filed roughly three weeks after briefing on Defendants’ motion to dismiss was complete 26 and the motion was taken under submission. Second, regardless of whether judicial notice of the 27 document might be proper, the content is entirely irrelevant to the pending motion. To survive a 28 motion to dismiss, Plaintiff must allege facts that demonstrate she is entitled to relief. Documents -4- 11cv1766 1 such as the Deed of Trust and Notice of Default on Plaintiff’s Property are judicially noticeable 2 and relevant, because they provide facts relevant to the specific transactions at issue. Conversely, 3 a general report on the mortgage industry’s compliance with various statutes provides no facts 4 regarding Plaintiff’s circumstances and purported injuries, and is therefore unhelpful at this stage 5 of the proceedings. 6 DISCUSSION 7 In her SAC, Plaintiff alleges this Court has jurisdiction because her allegations present a 8 federal question. [SAC, ¶3.] Plaintiff no longer alleges diversity jurisdiction exists. [Compare 9 Doc. No. 11, FAC, ¶4 with Doc. No. 28, SAC ¶¶3-14.] The Court therefore addresses Plaintiff’s 10 federal causes of action before turning to her state-based claims. 11 I. 12 TRUTH IN LENDING ACT, 15 U.S.C. § 1641(g) Plaintiff’s fourth cause of action alleges Freddie Mac violated section 131(g) of the Truth 13 in Lending Act (“TILA”) because it did not timely notify Plaintiff that her Note and Deed of Trust 14 had been transferred. According to Plaintiff, Freddie Mac purports to be her creditor, but failed to 15 comply with TILA’s notice requirements upon transfer. [SAC, ¶¶75-83.] Defendants move to 16 dismiss Plaintiff’s TILA claim on the grounds that Plaintiff does not allege any facts that 17 demonstrate section 131(g) applies, and she fails to assert detrimental alliance. The Court agrees. 18 “Section 131(g), codified at 15 U.S.C. § 1614(g), states that if a mortgage loan is sold or 19 otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of 20 the debt shall notify the borrower in writing of such transfer within thirty days.” Conley v. The 21 Bank of New York Mellon Corp., 2012 U.S. Dist. 14555 *8 (D. Haw. Feb. 7, 2012) (quoting 15 22 U.S.C. § 1641(g)) (internal marks omitted). In addition, the plaintiff must assert “detrimental 23 reliance upon an inaccurate or incomplete disclosure.” Id. at *9 (citing Gold Country Lenders v. 24 Smith, 289 F.3d 1155, 1157 (9th Cir. 2002)). Plaintiff’s TILA claim fails on both accounts. 25 First, under the statute, the new creditor has thirty days to notify the borrower of the 26 transfer. Therefore, to state a cognizable claim, Plaintiff must allege when her loan was 27 transferred to Freddie Mac. The SAC does not contain any allegations regarding the timing of the 28 purported transfer. [See, e.g., SAC, ¶83.] Instead, Plaintiff merely speculates that at some point in -5- 11cv1766 1 time “Defendants” attempted to securitize her loan by placing it in a trust. [Id. ¶17.] According to 2 Plaintiff, because the securitization failed her loan never became part of the trust res and Freddie 3 Mac never obtained an interest in the Property. [Id. ¶¶17-18.] 4 Plaintiff’s securitization theory cannot support a TILA violation, however, because it is not 5 grounded in any facts. Plaintiff does not identify a single discrete act or event that suggests 6 anyone tried to securitize her loan. Despite three attempts to articulate her case, Plaintiff’s 7 underlying theory remains entirely speculative and unsupported. Thus, although Plaintiff might 8 reasonably assert she does not know when her loan was transferred because she never received 9 notice as required under TILA, her lack of knowledge does not save her claim because she must 10 identify some reason why she “is informed and believes” that Defendants attempted to securitize 11 her loan. Because Plaintiff’s securitization theory is pure conjecture it is insufficient to state a 12 cognizable claim for relief.3 13 Second, Plaintiff provides no allegations that she detrimentally relied on misinformation 14 caused by Freddie Mac’s alleged failure to promptly notify her of the transfer. Instead, Plaintiff 15 vaguely avers that she was harmed in the following ways: (1) multiple parties “may” seek to 16 enforce Plaintiff’s debt obligation; (2) title to the Property has been clouded and rendered 17 unsalable; (3) Plaintiff has made payments to the wrong party and overpaid the interest owed; (4) 18 Plaintiff does not know who she should send her payments to; (5) her credit and credit score have 19 been impacted; and (6) she has incurred significant costs and attorneys’ fees. [Id. ¶90.] On their 20 face, Plaintiff’s allegations do not demonstrate reliance on misinformation, nor do they support an 21 inference that Plaintiff actually suffered any injury. The allegations are so generalized they 22 amount to no more than a laundry list of typical grievances raised in this type of foreclosure- 23 related action. 24 25 In its November 29, 2011 Order, the Court dismissed Plaintiff’s TILA cause of action against Freddie Mac, with leave to amend, because she failed to plead sufficient facts to trigger 26 27 28 3 Alternatively, Plaintiff alleges Freddie Mac did not properly acquire an interest in her loan, and therefore has no right to foreclose on her Property. TILA clearly has no application under this theory because section 131(g) only requires new creditors to provide notice. If Plaintiff’s loan was not transferred to Freddie Mac, it is not a “new creditor.” -6- 11cv1766 1 protection under the statute and demonstrate detrimental reliance. [Doc. No. 27, p.7-8.] Plaintiff 2 makes no effort to cure these deficiencies in her SAC. Accordingly, because Plaintiff has had 3 three opportunities to state a valid TILA claim against Defendant Freddie Mac and has failed to do 4 so, the Court concludes further amendment would be futile, and dismisses Plaintiff’s fourth cause 5 of action with prejudice. 6 II. 7 FAIR DEBT COLLECTION PRACTICES ACT, 15 U.S.C. § 1692 et seq. Plaintiff’s third cause of action for violations of the Fair Debt Collection Practices Act 8 (“FDCPA”) alleges Freddie Mac attempted to collect on Plaintiff’s loan obligation “under false 9 pretenses, namely that they [sic] were assigned Plaintiff’s debt when in fact they [sic] were not.” 10 [SAC ¶62.] As the Court previously explained, Congress enacted the FDCPA “to eliminate 11 abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e). It is well-established 12 the FDCPA only applies to “debt collectors,” defined as either: (1) a person whose principal 13 business is the collection of debts “(whether on behalf of himself or others); or (2) a person who 14 regularly collects debts on behalf of others (whether or not it is the principal purpose of his 15 business).” Izenburg v. ETS Servs., 589 F. Supp. 1193, 1999 (C.D. Cal. 2008) (internal marks 16 omitted). Plaintiffs must also allege the defendants engaged in debt collection activities. 17 The Court dismissed the FDCPA claim in Plaintiff’s FAC because she failed to allege 18 Freddie Mac is a debt collector within the meaning of the statute, and she did not identify any 19 specific debt collection activities taken by Defendants. Defendants argue Plaintiff’s FDCPA claim 20 should now be dismissed without leave to amend because the operative complaint still relies on 21 nothing more than conclusory statements. [See Doc. No. 30, p.9.] The Court agrees. Plaintiff’s 22 SAC fairs no better than her earlier pleadings, as her amended complaint does not remedy the 23 numerous discrepancies highlighted in the Court’s November 29 Order. Rather, Plaintiff simply 24 includes additional conclusory, legal conclusions, without adding any facts to support her position. 25 [See, e.g., SAC ¶60.] Because Plaintiff has had ample opportunity to amend her FDCPA claim, 26 and her successive pleadings show no meaningful improvement, the Court concludes amendment 27 would be futile and dismisses Plaintiff’s third cause of action for violations of the FDCPA with 28 prejudice. -7- 11cv1766 1 Although the Court concludes neither of Plaintiff’s substantive federal claims survive, in 2 the interests of efficiency the Court retains supplemental jurisdiction over the state-based causes of 3 action and discusses them in turn below. 28 U.S.C. § 1367. 4 III. 5 QUASI CONTRACT Plaintiff’s second cause of action re-alleges her quasi-contract claim premised on “Freddie 6 Mac and/or BAC Servicing’s” alleged unjust enrichment. [SAC ¶¶54-55.] Plaintiff asserts 7 Defendants were unjustly enriched because they erroneously demanded and collected her monthly 8 mortgage payments for over two and one half years. [Id.] According to Plaintiff, her original 9 lender, Bank of America, sold her loan to an unknown entity. [Id. ¶57.] Thus, preventing Bank of 10 America from effectively transferring her loan to Freddie Mac or BAC Servicing, because the 11 proceeds of the sale fulfilled the balance due on the Note. [Id.] Plaintiff seeks restitution for the 12 mortgage payments she allegedly paid to Freddie Mac and/or BAC. See Otworth v. So. Pac. 13 Trans. Co., 166 Cal. App. 3d 452, 460 (1985) (“[t]he theory of unjust enrichment requires one who 14 acquires a benefit which may not justly be retained, to return either the thing or its equivalent to 15 the aggrieved party so as not to be unjustly enriched”). 16 The premise of Plaintiff’s quasi-contract claim remains unchanged from her FAC. Plaintiff 17 summarily asserts Freddie Mac or BAC Servicing (or both), demanded she make loan payments to 18 them from April 2007 until November 2009, even though they lacked authority to do so. [SAC 19 ¶55.] Plaintiff’s conclusory allegations do not demonstrate she is entitled to restitution. In 20 addition, Defendants correctly note that the minimal facts advanced in Plaintiff’s compliant 21 actually undermine her unjust enrichment theory. 22 Plaintiff alleges she obtained a $360,000 loan from Bank of America to purchase her 23 Property in April 2007; Bank of America later sold the loan to an unknown entity at some 24 unknown point in time. [SAC ¶¶1, 16.] In March 2009, Plaintiff contacted BAC Servicing to 25 apply for a loan modification, and in April 2009, BAC offered her a forbearance plan. [Id. ¶¶19- 26 20.] On July 1, 2009, Plaintiff defaulted on her loan. [Doc. No. 15-1, Exh. A, p.6.] In November 27 2009, BAC cancelled the forbearance plan and refused to accept further payment. [SAC ¶20.] 28 Based on the above chain of events, it appears Plaintiff made her loan payments to BAC Servicing -8- 11cv1766 1 without incident from April 2007, through March 2009 when Plaintiff began experiencing 2 financial difficulties. Two months after contacting BAC regarding a loan modification, Plaintiff 3 defaulted on her loan—i.e. she failed to make the required payments. Therefore, Plaintiff’s own 4 allegations belie her theory that she was paying the wrong entity for two and one half years. 5 In addition, Plaintiff’s complaint still fails to provide any factual allegations regarding 6 BAC Servicing’s and Freddie Mac’s demands and resulting unjust enrichment. According to the 7 undisputed facts in the record, Plaintiff took out a thirty-year loan to purchase the Property, and 8 then ceased making payments approximately fourteen months later. [Doc. No. 28, Exh. D.] Aside 9 from Plaintiff’s conclusory, speculative averments, there is nothing in the record that suggests she 10 made loan payments to the wrong entity, nor that multiple entities have sought (or are likely to 11 seek) recovery on the loan. By all accounts, Plaintiff has not made any payments in nearly three 12 years and is not entitled to restitution.4 Accordingly, for each of the reasons stated above, the 13 Court concludes amendment would be futile, and dismisses Plaintiff’s quasi contract cause of 14 action with prejudice. 15 IV. 16 17 BREACH OF CONTRACT In its November 29 Order, the Court dismissed Plaintiff’s breach of contract claim without prejudice because: 18 Plaintiff does not . . . allege any identifiable conduct by Defendants. Plaintiff fails to assert which payments Defendants improperly allocated, when the incorrect application occurred, how many times payments were not credited properly, or even generally why she believes her account is in error. Although Plaintiff need not provide detailed allegations of every error Defendants allegedly made, she must do more than provide a formulaic recitation of the elements to state a breach of contract claim. Twombly, 550 U.S. at 555. 19 20 21 22 23 [Doc. No. 27, p.11.] Plaintiff’s SAC makes no meaningful effort to remedy the noted deficiencies. 24 [See SAC ¶¶126-136.] Accordingly, it is apparent amendment is futile and Plaintiff’s seventh 25 cause of action for breach of contract claim is dismissed with prejudice. 26 /// 27 28 4 To the extent Plaintiff alleges Defendants owe restitution to a third party, she lacks standing to assert such a claim. -9- 11cv1766 1 V. BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING As in her FAC, Plaintiff’s eighth claim for breach of the implied covenant of good faith 2 3 and fair dealing in her SAC is premised on Plaintiff’s alleged contractual relationship with 4 Defendants embodied in the Deed of Trust. [SAC ¶¶140-144.] The Court previously dismissed 5 this cause of action because, “Plaintiff’s claims [we]re conclusory and unsubstantiated by factual 6 allegations that describe the conduct at issue.” [Doc. No. 27, p.12 (citing Gomez v. Wells Fargo 7 Home Mortg., 2011 U.S. Dist. LEXIS 134092 *28 (N.D. Cal. Nov. 21, 2011) (To survive a motion 8 to dismiss plaintiff must identify the conduct that has frustrated her right to enjoy the benefit of the 9 contract.).] The Court granted Plaintiff an opportunity to amend this cause of action, but her SAC 10 fails to remedy the noted deficiencies. Accordingly, the Court finds further amendment would be 11 futile, and dismisses Plaintiff’s eighth cause of action with prejudice. 12 VI. 13 VIOLATIONS OF CALIFORNIA CIVIL CODE SECTIONS 2923.5 AND 2924 ET SEQ. Plaintiff’s SAC adds a new claim for violations of California Civil Code sections 2923.5 14 and 2924 et seq. that was not present in the FAC. Plaintiff did not obtain leave to include this 15 additional claim, as the Court’s November 29 Order did not grant her leave to allege new causes of 16 action in her SAC. “The absence of such leave provides an independent basis for dismissal of 17 [her] claims for violations of §§ 2924 and 2923.5.” Brown v. U.S. Bancorp, 2012 U.S. Dist. 18 LEXIS 26226 *16-18 (C.D. Cal. Feb. 27, 2012) (citing Fed. R. Civ. P. 15(a)(2) (Where a party is 19 not amending as a matter of right, “the party may amend its pleading only with the opposing 20 party’s written consent or the court’s leave”); Hoover v. Blue Cross and Blue Shield of Alabama, 21 855 F.2d 1538, 1544 (11th Cir. 1988) (holding that a court need not consider additional claims in 22 an amended complaint when leave to amend has not been granted for those claims; without leave 23 to amend, an amendment is without legal effect)). Nevertheless, because the remainder of 24 Plaintiff’s claims are subject to dismissal with prejudice, the Court considers the merits of her 25 newly asserted causes of action. 26 California Civil Code sections 2923.5 and 2924 et seq. govern the non-judicial foreclosure 27 process in this State. Plaintiff alleges the Notice of Default and Notice of Trustee’s Sale recorded 28 on her Property are invalid, as they do not comply with the requirements set forth in 2923.5 and - 10 - 11cv1766 1 2924. [SAC ¶¶153-154.] Plaintiff contends Freddie Mac and BAC Servicing did not perfect their 2 interest in the Property, and therefore, they are not authorized to use the non-judicial foreclosure 3 process contemplated under sections 2923.5 and 2924. [Id. ¶¶150-154.] Plaintiff’s allegations fail 4 as a matter of law. 5 Section 2923.5(a)(1) provides in relevant part, “[a] mortgagee, trustee, beneficiary, or 6 authorized agent may not file a notice of default pursuant to Section 2924 until 30 days after initial 7 contact is made as required by paragraph (2) or 30 days after satisfying the due diligence 8 requirements as described in subdivision (g).” The record establishes Defendants complied with 9 section 2923.5’s notice and due diligence requirements. First, Plaintiff asserts she contacted BAC 10 Servicing in March 2009 to discuss a forbearance plan. Plaintiff also admits she worked with 11 BAC to modify her loan until at least November 2009 when BAC cancelled her forbearance 12 agreement; BAC later cancelled the “review” of Plaintiff’s loan in April 2011. Importantly, the 13 Notice of Default was not filed until July 1, 2011, and includes a statement of due diligence. 14 Because Plaintiff and BAC engaged in lengthy loan modification efforts from March 2009 through 15 April 2011 and the Notice of Default was not filed until July 2011, the Court concludes 16 Defendants complied with the thirty-day “grace” period required under section 2923.5. Brown, 17 2012 U.S. Dist. LEXIS 26226 at *18-19 (citing Davenport v. Litton Loan Servicing LP, 725 F. 18 Supp. 2d 862, 877 (N.D. Cal. 2010) (“dismissing § 2923.5 claim because plaintiffs’ allegation of 19 loan modification talks negated a claim that § 2923.5 was violated)). 20 Section 2924 indicates only certain parties can initiate the non-judicial foreclosure process 21 by filing a notice of default. Plaintiff asserts Defendants violated section 2924 because “there is 22 no evidence, recorded or otherwise, of a Substitution of Trustee which purports [to] substitute 23 PRLAP, Inc., the Trustee explicitly named in the Deed of Trust.” [SAC ¶150.] Again, the record 24 belies Plaintiff’s unsupported allegations. According to the County Recorder’s records, a 25 Substitution of Trustee was filed and recorded on July 1, 2011, substituting Quality Loan Service 26 Corporation in place of PRLAP as trustee. The same day, Quality Loan Service filed the Notice of 27 Default on behalf of beneficiary Bank of America. The record therefore shows compliance with 28 section 2924. See also Brown, 2012 U.S. Dist. LEXIS 26226 at *18. Because Plaintiff’s - 11 - 11cv1766 1 allegations coupled with the records on file establish amendment would be futile, the Court 2 dismisses Plaintiff’s ninth cause of action with prejudice. 3 VII. 4 ACCOUNTING As previously explained, “[a] request for a legal accounting must be tethered to relevant 5 actionable claims.” Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d 1039, 1043 (N.D. 6 Cal. 2009). Because each of Plaintiff’s claims is subject to dismissal she has not “anchored her 7 request to any viable claims” and her accounting claim cannot survive. Id. Accordingly, 8 Plaintiff’s sixth cause of action is subject to dismissal with prejudice. 9 VIII. CALIFORNIA BUSINESS AND PROFESSIONS CODE 10 Likewise, Plaintiff’s fifth cause of action for violation of California Business and 11 Professions Code sections 17200 et seq. is premised on Defendants’ conduct described in Sections 12 I-VI, supra. [See SAC ¶¶93-121.] California’s unfair competition law (“UCL”) defines “unfair 13 competition . . . [as] any unlawful, unfair, or fraudulent business act or practice.” Cal. Bus. & 14 Prof. Code § 17200. “The UCL incorporates other laws and treats violations of those laws as 15 unlawful business practices independently actionable under state law. Violation of almost any 16 federal, state, or local law may serve as the basis for a UCL claim. In addition, a business practice 17 may be unfair or fraudulent in violation of the UCL even if the practice does not violate any law.” 18 Bertolina v. Wachovia Mortg., 2011 U.S. Dist. LEXIS 87937 *13 (N.D. Cal. Aug. 9, 2011) 19 (internal marks and citations omitted). 20 As before, to the extent Plaintiff’s UCL claim is based on purported violations of state or 21 federal law, her claim is subject to dismissal because Plaintiff has failed to adequately allege any 22 underlying predicate violations. In addition, Plaintiff did not remedy the defects in her FAC to 23 state an independent UCL claim for unfair or fraudulent business practices because the SAC fails 24 to allege sufficient facts to support any identifiable wrongdoing by specific Defendants. Because 25 Plaintiff has had three opportunities to state a viable claim under California’s UCL, the Court 26 concludes further amendment would be futile and dismisses her fifth cause of action with 27 prejudice. 28 /// - 12 - 11cv1766 1 2 IX. DECLARATORY RELIEF Similarly, Plaintiff’s first cause of action for declaratory relief under 28 U.S.C. sections 3 2201 and 2202 is subject to dismissal because Plaintiff has not sufficiently pled an underlying 4 controversy between the parties. See American States Ins. Co. v. Kearns, 15 F.3d 142, 143-144 5 (9th Cir. 1994). The Declaratory Judgment Act (“DJA”) is merely a procedural statute and does 6 not provide an independent theory for recovery. Team Enterprises, LLC v. Western Inv. Real 7 Estate Trust, 721 F. Supp. 2d 898, 911 (E.D. Cal. 2010) (citations omitted). Rather, where the 8 plaintiff has stated an underlying claim for relief, the DJA merely offers the plaintiff an additional 9 remedy. Id. Accordingly, where as here, the plaintiff has not adequately pled an underlying 10 claim for relief, her declaratory relief claim cannot stand alone, and is therefore subject to 11 dismissal. See id. (“declaratory relief claim falls with the demise of . . . other claims and the 12 absence of a cognizable justiciable controversy”); see also Brown, 2012 U.S. Dist. LEXIS 26226 13 at *7-11 (dismissing declaratory relief claim challenging foreclosure). Given Plaintiff’s prior 14 opportunities to amend and the allegations contained in the SAC, the Court concludes amendment 15 would be futile and dismisses Plaintiff’s first cause of action with prejudice. 16 17 CONCLUSION For the reasons set forth above, the Court GRANTS Defendants’ motion to dismiss [Doc. 18 No. 30], and DISMISSES Plaintiff’s action WITH PREJUDICE. The Clerk of Court is 19 instructed to enter judgment in favor of Defendants Bank of America, N.A., as successor by 20 merger to BAC Home Loans Servicing, L.P., and Federal Home Loan Mortgage Corporation, and 21 against Plaintiff Audrey Derusseau, and close the case file. 22 23 24 25 IT IS SO ORDERED. DATED: March 28, 2012 Hon. Michael M. Anello United States District Judge 26 27 28 - 13 - 11cv1766
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