United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTIONS TO DISMISS PLAINTIFFS' SECOND AMENDED COMPLAINT WITH PREJUDICE
LUCY H. KOH, District Judge.
Plaintiffs Lorenso and Amelia Pasillas ("Plaintiffs") bring this action based on a loan obtained in 2002 and on the subsequent foreclosure proceedings instituted against them. Second Am. Compl. ("SAC") ECF No. 91.
Defendants Deutsche Bank National Trust Company ("Deutsche Bank"), Ocwen Loan Servicing, LLC ("Ocwen"), Leticia N. Arias, and Denise A. Marvel (collectively, "Deutsche Bank Defendants") jointly move to dismiss the SAC pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) and/or move to strike the SAC pursuant to Rule 12(f). ECF No. 92.
Defendants Aztec Foreclosure Corporation ("Aztec"), Robbie "Roberta" L. Weaver, Elaine Malone, and Tianna Alvarado (collectively, "Aztec Defendants"), jointly move to dismiss the SAC pursuant to Rule 12(b)(6). ECF No. 94.
Defendant Remington Duque ("Duque") also moves to dismiss the SAC pursuant to Rule 12(b)(6). ECF No. 95.
Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument and hereby VACATES the hearing and Case Management Conference scheduled for March 13, 2014. Having considered the parties' arguments, the relevant law, and the record in this case, the Court hereby GRANTS Defendants' Motions to Dismiss Plaintiffs' SAC with prejudice.
A. Factual Allegations
This case arises out of a mortgage Plaintiffs obtained in 2002 in order to purchase a farm in Hollister, California. See SAC ¶¶ 19, 22, 25. On March 13, 2009, Plaintiffs received a notice that they were in default on this mortgage based on a failure to make payments beginning on December 1, 2008. SAC ¶¶ 28-29. Plaintiffs claim that this notice was erroneous, because they had, in fact, made timely payments at least through the end of 2008. SAC ¶ 31 (chart displaying payments made by Plaintiffs in 2008). Notwithstanding the error in the notice, Plaintiffs allege that Defendants proceeded to foreclose on Plaintiffs' farm, and that the property was sold to Deutsche Bank, the beneficiary on the deed of trust, at an auction on October 30, 2009. SAC ¶¶ 30, 61. Plaintiffs allege that the incorrect notice of default caused Plaintiffs to lose their home to foreclosure. See SAC ¶¶ 31-35.
On June 27, 2012, Plaintiffs sent Ocwen a qualified written request ("QWR") pursuant to the Real Estate Settlement Procedures Act ("RESPA") regarding the crediting of payments on their mortgage account. SAC ¶¶ 70, 109. In the QWR, Plaintiffs specified their reasons for their belief that the account was not in default and requested that Ocwen correct the error. SAC ¶ 109. Plaintiffs also requested that Ocwen provide them with information and documentation supporting Ocwen's claim that Plaintiffs' account was in default. Id. On July 27, 2012, Plaintiffs sent the QWR to Deutsche Bank. SAC ¶ 71, Ex. A. On August 13, 2012, Ocwen responded to the QWR. SAC ¶ 73. Plaintiffs allege that Ocwen failed to make appropriate corrections to Plaintiffs' account in response to the QWR, including the crediting of any late charges or penalties, and failing to transmit written notice of such corrections to Plaintiffs no later than 60 days after receipt of Plaintiffs' QWR. SAC ¶ 111. Plaintiffs allege that Ocwen was acting as Deutsche Bank's agent with regard to complying with RESPA. SAC ¶ 112. Plaintiffs further allege that the Aztec Defendants, Denise A. Marvel, Leticia N. Arias, and Duque were acting as Ocwen's agents and were tasked with providing information relevant for RESPA on behalf of Ocwen. SAC ¶ 113. As a result of Defendants' actions, Plaintiffs allege that Plaintiffs have "incurred unnecessary overcharges, credit damage, and were not given a meaningful opportunity to modify their loan [in] 2012..." SAC ¶ 120. As relief for Defendants' RESPA violation, Plaintiffs ask the Court to set aside the sale of their farm and also request damages, attorney's fees, and costs. SAC at 17-18.
B. Procedural History
Plaintiffs filed their Original Complaint on August 6, 2012. ECF No. 1. Deutsche Bank Defendants filed a Motion to Dismiss the Original Complaint on October 24, 2012. ECF No. 15. Plaintiffs did not respond to the Motion, but instead filed the FAC on April 11, 2013. ECF No. 27. In the FAC, Plaintiffs asserted eleven state law claims and one federal claim, violation of RESPA. See id. In light of Plaintiffs having filed the FAC, Defendants withdrew their Original Motion to Dismiss. ECF No. 38.
On May 15, 2013, the Deutsche Bank Defendants filed a Motion to Dismiss the FAC. ECF No. 36. One of the bases for the motion was that Plaintiffs' RESPA claim fails as a matter of law because Plaintiffs did not demonstrate a causal relationship between the alleged damages and the RESPA violation. See id. at 14-15. Plaintiffs did not respond to this Motion.
Duque filed a separate Motion to Dismiss the FAC on June 11, 2013. ECF No. 48. One of the bases for the motion was that Plaintiffs' RESPA claim fails as to Duque because Duque was not a loan servicer. See id. at 11. Plaintiffs filed their response to this Motion on July 10, 2013, well past the 14-day deadline imposed by Civil Local Rule 7-3(a). ECF No. 59. Duque filed a ...