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Bingham v. Ocwen Loan Servicing, LLC

United States District Court, N.D. California, San Jose Division

April 16, 2014

MARK BINGHAM, an individual, Plaintiff,
OCWEN LOAN SERVICING, LLC, a Delaware Limited Liability Company; TD SERVICE FINANCIAL CORPORATION, a California Corporation; and DOES 1 through 100, inclusive, Defendants.


LUCY H. KOH, District Judge.

Ocwen Loan Servicing, LLC, ("Ocwen") and TD Service Financial Corporation ("TD") (collectively, "Defendants") move to dismiss Plaintiff Mark Bingham's Complaint. ECF No. 10. Plaintiff opposes the motion, ECF No. 13, and Defendant has filed a reply, ECF No. 14. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for decision without oral argument and accordingly VACATES the hearing on this motion set for May 22, 2014, at 1:30 p.m. The Case Management Conference scheduled for May 22, 2014 remains as set. Having considered the submissions of the parties and the relevant law, the Court for the reasons stated below DENIES Defendants' motion to dismiss.


A. Factual Allegations

On or about December 8, 2006, Plaintiff received a $500, 000 loan from American Home Mortgage ("AHM") secured by a Deed of Trust encumbering the real property located at 185 Aquila Way, Boulder Creek, CA 95006 ("Subject Property"). See Complaint ¶ 12; Request for Judicial Notice ("RJN") Ex. 1, at 2. Plaintiff failed to make payments under the terms of the Note and Deed of Trust, and on August 21, 2012, with the loan at $47, 415.36 in arrears, foreclosure proceedings were initiated with the recordation of a Notice of Default ("NOD"). RJN Ex. 2, at 1-2. The following day, August 22, 2012, the Deed of Trust was assigned and all beneficial interest under the Deed was transferred to Deutsche Bank National Trust Company ("Deutsche Bank"), as Trustee for American Mortgage Assets Trust 2007-2, Mortgage-Backed Pass-Through Certificates Series 2007-2. RJN Ex. 3, at 1. Plaintiff alleges that in approximately February 2013, Defendant Ocwen acquired Plaintiff's loan and the Deed of Trust to the Subject Property. Complaint ¶ 12.

In February 2013, Plaintiff was notified that Ocwen would be Plaintiff's loan servicer as of March 1, 2013. Id. ¶ 13. On May 17, 2013, a Substitution of Trustee was recorded wherein Homeward Residential, Inc., acting as attorney-in-fact for Deutsche Bank, named Power Default Services, Inc. as the substitute trustee under the Deed of Trust. RJN Ex. 4, at 1-2. Sometime in May of 2013, Plaintiff received notice that Ocwen had scheduled a trustee's sale to take place on June 12, 2013. Id. ; RJN Ex. 5, at 2.

Plaintiff alleges that he visited Ocwen's website in May 2013. Complaint ¶ 14. Ocwen solicited loan modifications on its website with a link ("Click here and you can start a loan mod") that directed users to forms which the user could fill out and fax to Ocwen to apply for a loan modification. Id. Plaintiff filled out and printed the forms, and attempted to fax them to Ocwen. Id. Despite Plaintiff's repeated attempts, the fax contact listed on the website did not work. Id.

On approximately June 5, 2013, Plaintiff again attempted to fax the documents, but after his attempt once again failed, Plaintiff scanned and emailed the documents to Id. ¶ 15. Plaintiff thereafter received no requests for documents from Ocwen, and seven days later on June 12, 2013, Plaintiff's property sold at a trustee's sale conducted by Defendant TD, acting as trustee for Ocwen. Id. Plaintiff alleges that Ocwen reacquired the property at the sale. Id. No trustee's deed upon sale was or has been recorded. Defendants' Motion to Dismiss ("Mot.") at 7, ECF No. 10.

On or about June 14, 2013, Plaintiff received a letter dated June 11, 2013, informing him that Ocwen had received Plaintiff's application for loan modification, but that Ocwen had denied the application because a foreclosure sale date was scheduled within seven days of Ocwen's receipt of the application. Id. ¶ 16.

B. Procedural History

Plaintiff filed his Complaint against Defendants in Santa Cruz County Superior Court on July 17, 2013 ("Complaint"), and Defendants removed the case to this Court on August 30, 2013. ECF No. 1. After the parties declined to proceed before a Magistrate Judge, the case was reassigned to the undersigned judge on September 17, 2013. ECF No. 8. After reassignment, Defendants moved to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. ECF No. 10.[1] On October 3, 2013, Plaintiff filed an opposition to Defendants' motion to dismiss, ("Opp'n"), ECF No. 13, and Defendants filed a reply on October 10, 2013 ("Reply"), ECF No. 14.

Defendants accompanied their motion to dismiss with a request that the Court take judicial notice of the following documents relating to the Subject Property: (1) a Deed of Trust recorded on December 16, 2006; (2) a Notice of Default and Election to Sell Under Deed of Trust recorded on August 21, 2012; (3) an Assignment of Deed of Trust recorded on August 22, 2012; (4) a Substitution of Trustee recorded on May 17, 2013; and (5) a Notice of Trustee's Sale recorded on May 17, 2013. ECF No. 11. The Court GRANTS Defendants' unopposed request, and has taken notice of the attached undisputed public documents, on which both parties rely in their briefs. See Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866 n.1 (9th Cir. 2004) (granting judicial notice over "undisputed matters of public record"); see also Fed.R.Evid. 201(d) (providing that upon request a court shall take notice of adjudicative facts if such facts "are not subject to reasonable dispute").


Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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. The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citation omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

However, a court need not accept as true allegations contradicted by judicially noticeable facts, Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and a "court may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into one for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor is a court required to "assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'" Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (quoting W. Min. Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Iqbal, 556 U.S. at 678. Furthermore, "a plaintiff may ...

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