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Walters v. Fidelity Mortgage of California

August 4, 2010


The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge


This matter is before the court on motions by defendants Ocwen Loan Servicing, LLC ("Ocwen") and HSBC Bank U.S.A., N.A. ("HSBC") (collectively, "defendants"), pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f), to dismiss and to strike certain claims alleged in plaintiff Deanna Walters' ("plaintiff") second amended complaint ("SAC"). In conjunction with their motion to dismiss, defendants request that the court take judicial notice of eight exhibits. Plaintiff opposes defendants' motions. For the reasons set forth below,*fn1 defendants' motion to dismiss is GRANTED in part and DENIED in part, and their motion to strike is DENIED.


Plaintiff's claims arise out of conduct related to a residential mortgage loan transaction. (SAC, filed May 6, 2010, ¶ 10.)*fn2 On or around October 22, 2004, plaintiff obtained a loan in the amount of $159,000 from Fidelity Mortgage of California, Inc. ("Fidelity") on property located at 3602 Portage Circle South, Stockton, California (the "Property"). (Id. ¶¶ 10-12.) The loan was evidenced by a written promissory note and secured by a deed of trust, which named Cal-Western ReConveyance Corp. ("Cal-Western") as trustee and Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for Fidelity and beneficiary. (Id. ¶ 11-12.)

After the closing of the loan transaction, the servicing rights to plaintiff's loan were transferred to Ocwen. (Id. ¶ 14.) Plaintiff alleges that Ocwen acted as an agent of Fidelity, or alternatively, that Ocwen directly assumed by assignment or transfer all of Fidelity's rights and obligations under the promissory note and deed of trust. (Id. ¶ 15.) From December 2004 through January 2009, plaintiff dealt only with Ocwen in connection with the promissory note and deed of trust.

(Id. ¶ 17.) Plaintiff asserts that Ocwen acted "on its own behalf, without advising her or suggesting in any way that it was acting as an agent for any other party or entity." (Id.)

Plaintiff alleges that after Ocwen acquired rights in or began servicing the loan, it began to engage in a pattern of unlawful and fraudulent conduct. (Id. ¶ 21.) Plaintiff claims, inter alia, that Ocwen (1) failed to credit and misapplied timely payments; (2) failed to provide timely or clear payment information; (3) prematurely referred plaintiff's loan to collections; (4) increased monthly payment amounts and added costs, fees, and interest charges in violation of the terms of the original mortgage note; (5) charged plaintiff's account for hazard insurance for the Property when it was already insured; and (6) inaccurately claimed plaintiff was in default and threatened foreclosure when plaintiff was not in default. (Id.)

Plaintiff alleges that from January 2005 through January 2009, Ocwen mailed her "monthly statements, reminder notices, past due notices, notices of default and other written communications, as well as communications via the internet and through electronic mail and by telephone that were materially false and misleading and known by Ocwen to be false." (Id. ¶ 22.)

On December 28, 2004, plaintiff paid a monthly installment on her loan that was due on January 1, 2005, but Ocwen failed to apply the payment correctly and instead applied it to a payment due December 1, 2004 that plaintiff had already paid. (Id. ¶ 26.) On or about January 21, 2005, Ocwen sent plaintiff a notice stating that her current payment had not been received and was past due. (Id. ¶ 28.) Ocwen listed late charges of $77.72 in monthly statements mailed to plaintiff for the months of January, February, and March 2005, when it knew or should have known that plaintiff's payments had not been late. (Id.) Plaintiff states that in "virtually every written monthly account statement" that Ocwen sent her between 2005 and 2007, Ocwen falsely claimed that plaintiff owed additional late fees, even though her payments were not late. (Id. ¶ 38.)

On or around January 1, 2005, Ocwen falsely claimed in a written notice mailed to plaintiff that it had not received proof of hazard insurance on the Property, despite the fact that Ocwen was or should have been aware that the premium for the insurance had been paid in October 2004. (Id. ¶ 30.) In a written notice mailed to plaintiff, dated February 6, 2005, Ocwen stated that it had procured hazard insurance because, it asserted, plaintiff had failed to do so. (Id.) On or around April 18, 2005, Ocwen charged plaintiff $1,068.00 for the insurance. (Id.) Ocwen then reversed the charge on May 5, 2005. (Id.)

In April 2005, Ocwen sent plaintiff a written notice of default even though all the amounts allegedly outstanding were the result of charges improperly posted to plaintiff's account. (Id. ¶ 29.) Ocwen reflected additional late charges to plaintiff's account in monthly statements dated June 17, 2005, July 5, 2005, and August 3, 2005, although plaintiff had not been late in making her payments. (Id. ¶ 31.) On August 1, 2005, plaintiff telephoned Ocwen and spoke to an employee named Mary, who told plaintiff that the late charges were the result of errors by the "old" Ocwen and that these errors would be corrected. (Id. ¶ 32.) Despite these assurances, and subsequent telephone requests by plaintiff in September and October 2005, the account was not corrected. (Id. ¶ 33.)

In October 2005, an unidentified Ocwen employee told plaintiff by telephone that Ocwen would not accept plaintiff's payments because she was in default. (Id. ¶ 34.) On or around November 29, 2005, plaintiff spoke by telephone to an Ocwen employee who identified herself as "J. Roberson" and who allowed plaintiff to make three payments that Ocwen had previously refused to accept. (Id.) Plaintiff made a payment on November 29, 2005. (Id.) J. Roberson told plaintiff that the payment would bring her loan current, including all disputed late charges. (Id.)

In January 2006, plaintiff learned that the payment she made on November 29, 2005 had not been credited, and Ocwen returned the check for plaintiff's January 2006 payment, falsely claiming that the check was insufficient. (Id. ¶ 35.)

On or around February 10, 2006, Ocwen caused Cal-Western to issue a notice of default and election to sell. (Id. ¶ 36.) Plaintiff spoke to an Ocwen representative who told plaintiff that she needed to pay $7,772.00 to bring her loan current through March 2006. (Id. ¶ 37.) Although plaintiff paid this amount by wire transfer on February 22, 2006, she received a reinstatement quote dated February 28, 2006, falsely stating that she owed additional money. (Id.)

In June 2006, plaintiff was falsely informed that she owed a monthly payment of $1,660.29, when the actual amount owed was $1,295.00. (Id. ¶ 39.) Plaintiff paid $1,660.29 in the expectation that she would receive a credit toward the following month's payment. (Id.) In or around June 2006, plaintiff's online account statement reflected that her next payment due would be in the amount of $807.50, but a written account statement mailed to plaintiff, dated June 26, 2006, falsely stated that she owed more than $6,000, including late charges and fees that plaintiff did not owe and that Ocwen had repeatedly refused to correct. (Id. ¶ 40.)

In October 2006, Ocwen issued another notice of default in which it falsely claimed that no payments had been made, when in fact Ocwen was holding plaintiff's payments in a suspense account or escrow account. (Id. ¶ 41.) Ocwen also falsely claimed that plaintiff had not maintained insurance on the Property. (Id.)

Throughout 2006, plaintiff repeatedly telephoned Ocwen and was told by Ocwen representatives that Ocwen's errors would be corrected, but despite these assurances, Ocwen failed to correct its errors. (Id. ¶ 42.) Plaintiff alleges that Ocwen never intended to correct its errors, but "sought deliberately to cause [plaintiff] to appear to be in default so that it could continue to charge improper and inflated fees." (Id. ¶ 43.) Plaintiff further alleges that Ocwen falsely informed credit reporting agencies that plaintiff "was in default on her loan when Ocwen knew and should have known that any defaults were the result of Ocwen's inaccurate and fraudulent accounting." (Id. ¶ 44.)

In December 2006, Ocwen and/or HSBC caused Cal-Western to issue a "Notice of Default and Election to Sell." (Id. ¶ 46.) Ocwen returned plaintiff's payment checks for December 2006 and January 2007, claiming falsely that the payments were not sufficient when it knew or should have known that the payments were sufficient. (Id. ¶ 45.)

In or around March 2007, Ocwen informed plaintiff both orally and in writing that the only way for her to prevent the foreclosure of her home was to sign a "forbearance agreement" that required plaintiff to acknowledge owing additional fees and charges, to make an immediate "down payment" of $1,661.00, and to accept an increase in monthly payments from $1,295.00 to $1,700.00 per month. (Id. ¶ 47.) Faced with Ocwen's false claims of default and believing she had no choice, plaintiff signed the agreement and made payments of $1,700.00 per month according to its terms until approximately October 2008. (Id.)

In February 2008, Ocwen sent plaintiff a letter offering her a "loan modification" that would increase plaintiff's balance to more than $166,000.00, even though according to a February 18, 2008 monthly statement, plaintiff's outstanding balance was about $155,000.00 and the disputed additional fees and charges totaled only $4,755.00. (Id. ¶ 51.) In or around October 2008, Ocwen refused to accept additional payments under the forbearance agreement and informed plaintiff that the only way to avoid foreclosure was to sign the loan modification agreement. (Id. ¶ 53.) Plaintiff furnished information that Ocwen requested to process the modification. (Id. ¶¶ 52-53.) In or around November 2008, an Ocwen representative told plaintiff by telephone that Ocwen could not accept additional payments until the loan modification had been approved and that the process would take thirty days. (Id. ¶ 54.)

In a written communication dated December 12, 2008, Ocwen falsely claimed that the Property was unoccupied -- even though Ocwen knew or should have known that plaintiff and her family had continuously occupied the Property -- and charged plaintiff for the inspection and maintenance of her Property. (Id. ¶ 55.)

Plaintiff repeatedly called Ocwen to try to determine the status of her loan modification and to process her December 2008 payment, but Ocwen refused to process any payments or to provide plaintiff with any information. (Id. ¶ 58.) In late December 2008 or early January 2009, plaintiff again contacted Ocwen to obtain a payoff amount in order to cure Ocwen's claim that plaintiff had defaulted on her loan. (Id. ¶ 59.) Plaintiff spoke to an Ocwen representative who agreed to process a request for a "reinstatement quote" in the amount of $8,258.60. (Id.)

When plaintiff contacted Ocwen to obtain the status of her modification agreement on January 6, 2009, Ocwen told plaintiff that her Property was scheduled to be sold at foreclosure on January 15, 2009. (Id. ¶ 60.) Between January 6 and January 14, 2009, plaintiff contacted Ocwen several times to make a payment, but Ocwen declined her attempts "pending completion of the loan modification." (Id. ¶ 62.) On January 14, 2009, plaintiff spoke with an Ocwen representative named Evelyn, who informed plaintiff that her loan would be cured and the foreclosure sale would not proceed if plaintiff agreed to transmit the amount on the "reinstatement quote" to Ocwen. (Id. ¶ 63.) Plaintiff immediately ordered the wire transfer of $8,258.60 to J.P. Morgan, as provided for by written agreement, and confirmed placement of the wire transfer with Ocwen by fax on the same day.

(Id. ¶ 64.)

On January 16, 2009, Ocwen sent plaintiff a loan payoff quote that included a breakdown of the payoff funds with an expiration date of January 26, 2009. (Id. ¶ 65.) Plaintiff understood this payoff quote to be confirmation that a foreclosure sale did not take place. (Id.) However, Cal-Western had conducted a trustee's sale on January 15, and title to the Property was transferred to defendant James York ("York") by a deed executed on January 17, 2009. (Id. ¶ 66.)

Around January 30, 2009, plaintiff received a three day notice to quit from York.*fn3 (Id. ¶ 69.) Thereafter, around January 31, Evelyn informed plaintiff that Ocwen had received plaintiff's wire transfer but that the house was sold in foreclosure because the money had not been received "in time." (Id. ¶ 70.) Evelyn told plaintiff that she (Evelyn) had contacted York and advised him that the sale was a mistake, but that York had refused Ocwen's request to rescind the sale. (Id.) When plaintiff contacted York directly and asked him to rescind the sale, York claimed he told Ocwen that he would agree to rescind upon receipt of proof from Ocwen that plaintiff made the January 14 wire payment. (Id. ¶ 71.) York claimed, however, that Ocwen never sent him proof.*fn4 (Id.)

Plaintiff alleges that between 2005 and 2009, Ocwen provided services to plaintiff in addition to billing and collecting payments. (Id. ¶¶ 48-57.) Plaintiff alleges that Ocwen "repeatedly offered (or pretended) to counsel and advise [plaintiff] on the best way to avoid foreclosure and to keep her home." (Id. ¶ 48.) In a purported effort to guide and assist plaintiff, Ocwen requested detailed financial information from plaintiff which it directed her to return to her "Loan Resolution Consultant." (Id. ¶ 50.) Plaintiff asserts that "Ocwen's conduct was designed to and did create a relationship different from the usual borrower/lender relationship," arguing that this unusual relationship gave rise to a fiduciary duty and a duty of care on the part of Ocwen. (Id. ¶ 57.)

On May 29, 2009, plaintiff filed this action against defendants Ocwen, Fidelity, Cal-Western, and York, as well as MERS, in the California Superior Court, San Joaquin County. (Docket No. 1.) On October 28, 2009, plaintiff filed her first amended complaint ("FAC"), adding defendants J.P. Morgan Chase & Co. ("J.P. Morgan") and J.P. Morgan Chase Bank, N.A. ("Chase Bank"). (Id.) Ocwen and MERS removed the FAC to this court on November 27, 2009, on the basis of federal question jurisdiction, 28 U.S.C. § 1331. On December 10, 2009, Ocwen and MERS filed a motion to dismiss the FAC pursuant to Rule 12(b)(6). The court on April 14, 2010 issued a Memorandum and Order ("the Order") granting in part and denying in part the motion. Plaintiff filed her SAC on May 6, 2010. Plaintiff voluntarily dismissed her claims against J.P. Morgan and Chase Bank and added HSBC as a defendant. In her SAC, plaintiff pleads fourteen claims for relief: (1) cancellation of trustee's deed; (2) quiet title; (3) injunctive relief; (4) breach of contract; (5) breach of third party beneficiary obligations; (6) fraud and deception; (7) fraudulent business practices in violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; (8) violation of California's Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), Cal. Civ. Code §§ 1788 et seq.; (9) unjust enrichment; (10) breach of fiduciary duty; (11) negligence; (12) violation of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962(c),(d); (13) intentional interference with contractual relations; and (14) negligent interference with contractual relations.


I. Rule 12(b)(6)

Under Federal Rule of Civil Procedure 8(a), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Twombly, 550 U.S. at 570. "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." Iqbal, 129 S.Ct. at 1949.

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Id. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."); Twombly, 550 U.S. at 555. Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 570). Only where plaintiffs have failed to "nudge[] their claims across the line from conceivable to plausible" is the complaint properly dismissed. Twombly, 550 U.S. at 570. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Iqbal, 129 S.Ct. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.

II. Rule 12(f)

Federal Rule of Civil Procedure 12(f) enables the court on a motion by a party or by its own initiative to "order stricken from any pleading . . . any redundant, immaterial, impertinent, or scandalous matter." The function of a Rule 12(f) motion is to avoid the time and expense of litigating spurious issues. Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517 (1994); see also 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1380 (2d ed. 1990).

Rule 12(f) motions are generally viewed with disfavor and not ordinarily granted because they are often used to delay and because of the limited importance of the pleadings in federal practice. Bureerong v. Uvawas, 922 F. Supp. 1450, 1478 (C.D. Cal. 1996). A motion to strike should not be granted unless it is absolutely clear that the matter to be stricken could have no possible bearing on the litigation. Lilley v. Charren, 936 F. Supp. 708, 713 (N.D. Cal. 1996).


I. Motion to Dismiss

Defendants move to dismiss plaintiff's claims for quiet title, breach of contract, breach of third-party beneficiary obligations, fraud, fraudulent business practices, violation of the RFDCPA, unjust enrichment, breach of fiduciary duty, negligence, violation of RICO, intentional interference with contractual relations, and negligent interference with contractual relations. (Defs.' Mot. to Dismiss SAC ("Defs.' Mot.") at 2.) In connection with their motion, defendants ask the court to take judicial notice of eight exhibits, including, among other documents, a Deed of Trust and Rider To Security Instrument executed by plaintiff on October 22, 2004, in favor of Fidelity, (Request Judicial Notice Supp. Defs.' Mot. to Dismiss Pls.' SAC ("RFJN"), Ex. 1); an Assignment of Deed of Trust executed by MERS on November 27, 2006, (RFJN, Ex. 5); and a Trustee's Deed Upon Sale, dated January 17, 2009, conveying the Property to defendant York, (RFJN, Ex. 8). Plaintiff objects to defendants' request. (Docket No. 35.)

A. Defendants' Exhibits

In ruling upon a motion to dismiss, the court may consider matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998). Rule 201 permits a court to take judicial notice of an adjudicative fact "not subject to reasonable dispute" because the fact is either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). The court can take judicial notice of matters of public record, such as pleadings in another action and records and reports of administrative bodies. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988).

"Even if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). "The defendant may offer such a document, and the district court may treat such a document as part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." Id. The policy concern underlying the rule is to prevent plaintiffs "from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based." Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998), superceded by statute on other grounds as recognized in Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006).

Here, several of plaintiff's claims for relief are dependent upon, and plaintiff's complaint repeatedly refers to, information contained in the deed of trust (RFJN, Ex. 1), the assignment of the deed of trust (RFJN, Ex. 5), and the trustee's deed upon sale (RFJN, Ex. 8). (See SAC ¶¶ 11-15, 17-20, 66-68.) Because they form the basis of several of plaintiff's claims for relief, the court takes judicial notice of these documents. Accordingly, the court will treat exhibits 1, 5, and 8 as part of the complaint and will assume that their contents are true for purposes of the motion to dismiss. See Ritchie, 342 F.3d at 908.*fn5

B. Quiet Title

In her second claim for relief, plaintiff seeks to quiet title to the Property against the claims of Fidelity, HSBC, and York, pursuant to California Civil Procedure Code §§ 760.010-764.080. (SAC ¶¶ 85-90.) Plaintiff asserts she is the rightful owner in fee simple and that the trustee's deed "is void and subject to cancellation and rescission." (Id. ¶¶ 86-87.)

The purpose of a quiet title action is to determine "'all conflicting claims to the property in controversy, and to decree to each such interest or estate therein as he may be entitled to.'" Newman v. Cornelius, 3 Cal. App. 3d 279, 284 (1970) (quoting Peterson v. Gibbs, 147 Cal. 1, 5 (1905)); see also Garcia v. Wachovia Mortgage Corp., 676 F. Supp. 2d 895, 913 (C.D. Cal. 2009). A plaintiff may bring a quiet title claim "to establish title against adverse claims to real or personal property or any interest therein." Cal. Civ. Proc. Code § 760.020.

In order to state a claim for quiet title, the complaint must be verified and include (1) a legal description of the property and its street address or common designation; (2) the title of the plaintiff and the basis of the title; (3) the adverse claims to the title of the plaintiff; (4) the date as of which the determination is sought; and (5) a prayer for the determination of the title of the plaintiff against the adverse claims. Id. § 761.020. Further, a plaintiff "shall name as defendants in the action the persons having adverse claims to the title of the plaintiff against which a determination is sought." Id. § 762.010. "If the claim or the share or quantity of the claim of a person required to be named as a defendant is unknown, uncertain, or contingent, the plaintiff shall so state in the complaint." Id. § 762.020(b).

California courts have generally held that "the owner of an equitable interest cannot maintain an action to quiet title against the owner of the legal title." Stafford v. Ballinger, 199 Cal. App. 2d 289, 294-95 (1962); see also De Leonis v. Hammel, 1 Cal. App. 390, 394 (1905). The rationale underlying this rule is that "'if the owner of equities could sue to quiet title he might obtain a judgment based upon his adversary's fraud without setting up, in his pleadings[,] the facts constituting such fraud. This would be manifestly unfair.'" Kennedy v. Scally, 62 Cal. App. 367, 371 (1923) (quoting Aalyn's Law Inst. v. Martin, 173 Cal. 21, 26 (1916)). Consequently, where the pleadings in an action "set up the facts" upon which a claim of title is based, plaintiffs may be "entitled to a decree determining their interest in the land." Kennedy, 62 Cal. App. at 371; see also Leeper v. Beltrami, 53 Cal. 2d 195, 214 (1959) (noting that "where the legal title is in the defendant, and the plaintiff seeks to quiet title on the ground defendant's title was secured from plaintiff by fraud, the plaintiff must plead and prove facts constituting the fraud."). Indeed, when the legal title to property has been acquired by fraud, the available remedies include "quieting title in the defrauded equitable title holder's name and making the legal title holder the constructive trustee of the property for the benefit of the defrauded equitable titleholder." Warren v. Merrill, 143 Cal. App. 4th 96, 114 (2006); see also De Leonis, 1 Cal. App. at 394 (explaining that where "the facts upon which plaintiff's claim is based, are alleged, there is authority to grant any proper relief" permitted under the California Code of Civil Procedure).

Here, defendants argue that (1) plaintiff fails to state a claim because "California does not recognize a challenge to the title by an owner of a merely equitable interest in the property"; (2) plaintiff fails to allege a valid offer of tender of the amount of indebtedness to defendants; and (3) HSBC is not a proper defendant because HSBC has no adverse claim to plaintiff's title. (Defs.' Mem. P. & A. Supp. Mot. Dismiss SAC ("Defs.' Mem.") at 2-3.)

1. Quiet Title Claim Against Legal Title Holder

Defendants assert that plaintiff fails to state a claim to quiet title because the legal title to the Property is held by defendant York. (Defs.' Mem. at 3.) However, plaintiff alleges that any defaults on her loan leading to the foreclosure sale of the Property were "the result of Ocwen's inaccurate and fraudulent accounting" (SAC ¶ 44), and thus, that the trustee's deed to York should be set aside as unauthorized and void. (Id. ¶ 87.) Plaintiff alleges a pattern of fraudulent conduct culminating in the foreclosure sale. (Id. ¶ 21.) Because plaintiff asserts that the legal title to the Property was acquired through fraud and alleges a factual basis for her assertion, ...

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