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Henrietta J. Monday, An Individual v. Saxon Mortgage Services

September 16, 2011

HENRIETTA J. MONDAY, AN INDIVIDUAL, PLAINTIFF,
v.
SAXON MORTGAGE SERVICES, INC, A TEXAS CORPORATION; OCWEN LOAN SERVICING, LLC, A DELAWARE LIMITED LIABILITY COMPANY; U.S. BANK, N.A., AS TRUSTEE FOR THE REGISTERED HOLDERS OF ABFC 2007-WMC1 TRUST ASSET BACKED FUNDING CORPORATION ASSET BACKED CERTIFICATED, SERIES 2007-WMC1, AN OHIO BUSINESS ENTITY; T.D. SERVICE COMPANY, A CALIFORNIA CORPORATION; AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.



MEMORANDUM AND ORDER RE: MOTIONS TO DISMISS, TO STRIKE, AND FOR SUMMARY JUDGMENT

Plaintiff Henrietta J. Monday brought this action against defendants Saxon Mortgage Services, Inc. ("Saxon"), Ocwen Loan Servicing, LLC ("Ocwen"), U.S. Bank, N.A., as Trustee for the registered holders of ABFC 2007-WMC1 Trust Asset Backed Funding Corporation Asset Backed Certificated, Series 2007-WMC1 ("U.S. Bank"), and T.D. Service Company ("TDS"), arising out defendants' allegedly wrongful foreclosure on plaintiff's home. Presently before the court are Saxon's motion to dismiss portions of plaintiff's Second Amended Complaint ("SAC") pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, Saxon's motion to strike portions of plaintiff's SAC pursuant to Rule 12(f), Saxon's motion for summary judgment pursuant to Rule 56, and Ocwen and U.S. Bank's joint motion for summary judgment.

I. Factual and Procedural Background

On March 20, 2007, plaintiff obtained a loan from GE Money Bank for $255,000 secured by a Deed of Trust against her home at 1780 Edwin Drive in Yuba City, California. (Saxon's Req. for Judicial Notice Ex. B at 1-3 (Docket No. 90).) Under the terms of the Deed of Trust, plaintiff was required to carry hazard insurance on her home. (Id. Ex. B at 5.) As of December 7, 2007, plaintiff had not provided Saxon with evidence of renewed hazard insurance. (Bryan Decl. Ex. B. ("Saxon Alexander Dep.") at 104:25-106:19 (Docket No. 89).) Over a period of several months, Saxon sent letters to plaintiff informing her that it did not have proof of her insurance and that it would force-place insurance on her home. (Bryan Decl. Ex. A at Sax 238-42.) Plaintiff never actually let her insurance lapse. (Molinaro Decl. ¶¶ 4-5, Ex. A (Docket No. 104).)

On February 20, 2008, Saxon sent plaintiff a letter indicating that it had issued an insurance policy on the property. (Broersma Decl. Notice of Errata Ex. A ("Ocwen/U.S. Bank Monday Dep.") at 38:5-13 (Docket No. 97); Broersma Decl. Ex. C ("Ocwen/U.S. Bank Alexander Dep.") at 108:17-109:2 (Docket No. 92).) The policy resulted in an increased monthly payment on plaintiff's loan starting in June of 2008. (Ocwen/U.S. Bank Monday Dep. at 54:10-18; Ocwen/U.S. Bank Alexander Dep. at 107:1-8.) Saxon never actually purchased insurance for plaintiff's home, (Molinaro Decl. ¶¶ 6-7, Exs. B, C), but plaintiff states that she believed Saxon had force-placed insurance on her home. (Monday Decl. ¶ 8 (Docket No. 104-14).) Plaintiff states that she tried calling Saxon to resolve the issue. (Molinaro Decl. Ex. D ("Pl. Monday Dep.") at 55:14-16.)

After receiving her bill with the extra charge for insurance, plaintiff continued making her regular payments without including the extra charge. (Ocwen/U.S. Bank Monday Dep. at 51:5-9.) Plaintiff made every mortgage payment until November of 2009. (Pl. Monday Dep. at 57:15-58:5; Molinaro Decl. Ex. E ("Pl. Alexander Dep.") at 29:19-25, 30:21-24, 31:7-13, 32:12-24, 33:5-15, 34:12-13.)

Once Saxon became aware of plaintiff's other insurance in November of 2008, it applied a refund to her escrow account. (Saxon Alexander Dep. at 112:9-113:25; Bryan Decl. Ex. C at Ex. 29.) Apparently because the refund was applied to the escrow account and not to the outstanding balance reflecting the extra monthly charges, Saxon's actions made plaintiff's account appear to be in default when in fact it was not. (See Pl. Alexander Dep. at 36:13-24, Exs. 15, 17.)

Saxon states that on December 2, 2008, it disbursed $1,572.43 from the escrow account to pay for property taxes. (Saxon Alexander Dep. at 39:3-11.) However, plaintiff disputes this fact, stating that she always paid her own property taxes, which were not due until December 14 of each year, so that if Saxon paid the property taxes, it was against her wishes. (Monday Decl. ¶¶ 6-7.)

On January 9, 2009, a Notice of Default was recorded on plaintiff's property. (Comstock Decl. Ex. 3 (Docket No. 91).) On April 13, 2009, a Notice of Trustee's Sale was recorded. (Comstock Decl. Ex. 4.)

Plaintiff started a trial loan modification in June of 2009. (Pl. Monday Dep. at 70:2-4.) Saxon denied a permanent modification because it required further documentation. (Pl. Alexander Dep. at 130:6-21.) Saxon then offered a second trial loan modification beginning in September of 2009. (Id. at 131:1-132:15.)

The servicing of the loan was transferred from Saxon to Ocwen in October or November of 2009. (Comstock Decl. ¶ 4, Exs. 5, 6.) The property was eventually sold at a trustee's sale on December 16, 2009, and a Trustee's Deed Upon Sale was recorded on December 28, 2009, naming U.S. Bank as grantee. (Comstock Decl. Ex. 9.)

On January 28, 2010, plaintiff received a three-day Notice to Quit. (Monday Decl. ¶ 3.) In February of 2010, U.S. Bank filed an unlawful detainer action against plaintiff. (Id. ¶ 4.) Plaintiff states that, because of defendants' actions, her credit limit has been dropped on one of her credit cards and she was denied when applying for a new credit card. (Pl. Monday Dep. at 97:6-21.)

On November 29, 2010, the court granted in part and denied in part defendants' motions to dismiss plaintiff's First Amended Complaint ("FAC") pursuant to Federal Rule of Civil Procedure 12(b)(6) and Saxon's motion to strike portions of plaintiff's FAC pursuant to Rule 12(f). (Docket No. 46.) After the court granted plaintiff leave to amend, (Docket No. 80), plaintiff filed the SAC, alleging claims for fraud, negligent misrepresentation, negligence, and statutory punitive damages against Saxon, claims for violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200-17210, against Saxon and U.S. Bank, and claims for cancellation of instrument and to set aside the trustee's sale against all defendants.*fn1 (Docket No. 81.)

II. Evidentiary Objections

"A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed. R. Civ. P. 56(c)(2). "[T]o survive summary judgment, a party does not necessarily have to produce evidence in a form that would be admissible at trial, as long as the party satisfies the requirements of Federal Rules of Civil Procedure 56." Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003) (quoting Block v. City of Los Angeles, 253 F.3d 410, 418-19 (9th Cir. 2001)) (internal quotation marks omitted). Even if the non-moving party's evidence is presented in a form that is currently inadmissible, such evidence may be evaluated on a motion for summary judgment so long as the moving party's objections could be cured at trial. See Burch v. Regents of the Univ. of Cal., 433 F. Supp. 2d 1110, 1119-20 (E.D. Cal. 2006).

Saxon has raised seven objections (Docket No. 113), objecting to portions of two declarations submitted by plaintiff on grounds of relevance, personal knowledge, speculation, prejudice, and improper expert testimony. Ocwen and U.S. Bank have raised five objections (Docket No. 109), objecting to portions of two declarations submitted by ...


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