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Rahbarian v. JP Morgan Chase

United States District Court, Eastern District of California.

November 10, 2014

JP MORGAN CHASE; and DOES 1 through 20 inclusive, Defendant.



Before the Court is Defendant JPMorgan Chase Bank’s (“Defendant”) motion to dismiss Plaintiff Paiman Rahbarian’s (“Plaintiff”) complaint that alleges chain-of-title defects and procedural irregularities in Defendant’s servicing of the mortgage on his home. For the following reasons, Defendant’s motion is GRANTED in part and DENIED in part.[1]


Attar Fakhri, Plaintiff’s mother, took out a mortgage on her home in 2007. Compl. ¶¶ 14, 19. The Deed of Trust named California Reconveyance (“CRC”) as trustee and Washington Mutual as lender and beneficiary. Compl. ¶ 14. Plaintiff states, “on information and belief, ” that Washington Mutual transferred the mortgage to “WaMu Mortgage Pass-Through Certificate Series 2007-OA4.” Compl. ¶ 15. This entity then “filed a Form 10-K with the SEC and was dissolved.” Compl. ¶ 16. Dissolution caused “the assets, ” including Plaintiff’s mother’s mortgage, to be distributed to the certificate holders. Id. Washington Mutual then itself dissolved, conveying its assets to Defendant. Compl. ¶ 17. Plaintiff alleges that his mother’s mortgage was not among these assets now owned by Defendant, because it was previously transferred to the certificate holders. Compl. ¶ 38.

Following his mother’s death in 2011, Plaintiff took possession of the mortgaged home. Compl. ¶¶ 4, 19-20. Plaintiff soon defaulted on the mortgage, and CRC issued a Notice of Default and Election to sell, dated March 12, 2013. Compl. ¶ 22. On that same day, CRC recorded a “Corporate Assignment of Deed of Trust, ” signed by Colleen Irby as Vice President of JPMorgan Chase. Compl. ¶ 21. Plaintiff “alleges on information and belief that Colleen Irby is an employee of CRC, not JP Morgan Chase and is, in face [sic], a ‘robo-signer.’” Compl. ¶ 21. CRC later sent to Plaintiff a Notice of Trustee Sale. Compl. ¶ 26. But as of the date of filing the complaint, no sale had occurred. See Compl. ¶ 27; id. at 9 ¶ 1.

Plaintiff brought this action in Placer County Superior Court on May 16, 2014, alleging (1) violations of the California Homeowner Bill of Rights (“HBOR”), (2) wrongful foreclosure, and (3) violations of California’s Unfair Competition Law (“UCL”) (Cal. Bus. & Prof. Code § 17200 et seq.). Plaintiff then filed a motion for a temporary restraining order, which the state court tentatively denied on the basis that Plaintiff failed to file proof of service. RJN Exh. 10, at 7. He also filed a Notice of Pendency of Action (lis pendens). See RJN Exh. 11. After removing the case to this Court, Defendant now moves to dismiss all causes of action for failure to state a claim (Doc. #5). Plaintiff opposes the motion (Doc. #14) and Defendant has replied (Doc. #15).


A. Legal Standard

To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007). In considering a motion to dismiss, a district court must accept all the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). “[T]he factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). Assertions that are mere “legal conclusions” are therefore not entitled to the presumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555).

Upon granting a motion to dismiss for failure to state a claim, a district court has discretion to allow leave to amend the complaint pursuant to Federal Rule of Civil Procedure 15(a). A court should freely grant leave to amend. Fed. R. Civ. Proc. 15(a)(2). A court “is generally required to grant the plaintiff leave to amend, even if no request to amend the pleading was made, unless amendment would be futile.” Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 246-47 (9th Cir. 1990). Amendment is not futile if the plaintiff could “cure the defect requiring dismissal ‘without contradicting any of the allegations of [the] original complaint.’” Plascencia v. Lending 1st Mortgage, 583 F.Supp.2d 1090, 1095 (N.D. Cal. 2008) (quoting Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990)) (alteration in original).

B. Judicial Notice

Generally, the Court may not consider material beyond the pleadings in ruling on a motion to dismiss. However, the Court may take judicial notice of matters of public record, provided that they are not subject to reasonable dispute. Fed.R.Evid. 201; see Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 n.2 (9th Cir. 2006); Lee v. City of Los Angeles, 250 F.3d 662, 689 (9th Cir. 2001).

Defendant here requests that the Court judicially notice eleven documents, to which Plaintiff makes no objection. Of the eleven, six were recorded with the Placer County Recorder and four were filed in state court: (1) Deed of Trust (RJN Exh. 1); (2) Assignment of the Deed of Trust (RJN Exh. 2); (3) Notice of Default (RJN Exh. 4); (4) Notice of Trustee’s Sale recorded on August 23, 2013 (RJN Exh. 5); (5) Substitution of Trustee (RJN Exh. 6); (6) Notice of Trustee’s Sale recorded on February 26, 2014 (RJN Exh. 7); (7) Plaintiff’s application for a temporary restraining order (RJN Exh. 8); (8) Plaintiff’s declaration filed as part of his application for a temporary restraining order (RJN Exh. 9); (9) Tentative ruling of the Placer County Superior Court regarding the temporary restraining order (RJN Exh. 10); and (10) Notice of pendency of action filed by plaintiff in Superior Court (RJN Exh. 11). Since these documents are in the public record, the Court takes judicial notice of them. However, as to the four documents filed in state court, this Court only takes judicial notice of the fact that they were filed and any facts contained in these court filings which are disputed may not be judicially noticed.

The final document, a Purchase and Assumption Agreement between Defendant and the Federal Deposit Insurance Corporation (“FDIC”) is publicly available on a government website (, so it too is the proper subject of judicial notice. See Mitchell v. Wells Fargo Bank, N.A., 2014 U.S. Dist. LEXIS 7803, at *9 (N.D. Cal. Jan. 21, 2014) (noticing a document on the same website); Paralyzed Veterans of Am. v. McPherson, 2008 U.S. Dist. LEXIS 69542, at *7 (N.D. Cal. Sept. 9, 2008) (collecting cases in which a court judicially noticed material on government websites).

C. Discussion

1. First Cause of Action: Homeowner Bill of Rights

Plaintiff’s first cause of action alleges violations of the Homeowner Bill of Rights (“HBOR”) on the grounds that Defendant (1) failed to “provide notice to Plaintiff that he could request certain information from Defendant”; (2) failed to establish a single point of contact and “[i]nstead[] [] used multiple points of contact”; and (3) “ha[d] Colleen Irby, a CRC employee, robosign the Corporate Assignment of the Deed of Trust.” Compl. ¶¶ 32-34.

a. Failure to provide notice under California Civil Code § 2923.55

Defendant argues that Plaintiff’s allegation that it failed to provide notice is insufficient, because the Notice of Default “[was] accompanied by a declaration of compliance[, ] which demonstrates that Chase did in fact comply with the requirements of § 2923.55.” Mot. at 6:20-21. That declaration, submitted by Defendant as RJN Exhibit 4, states, “The mortgagee, beneficiary or authorized agent was not required to comply with Cal. Civ. Code Section 2923.55 because: The real property is not owner-occupied residential property as defined by the statute.” RJN Exh. 4, at 4.

Defendant relies on Maguca v. Aurora Loan Servs., 2009 U.S. Dist. LEXIS 104251 (C.D. Cal. Oct. 28, 2009) and Dorado v. Shea Homes Ltd. P’ship, 2011 U.S. Dist. LEXIS 97672 (E.D. Cal. Aug. 31, 2011), holding them out as examples of cases in which “allegations of non-compliance fail[ed] in the presence of [] a declaration [of compliance].” Mot. at 6:21-27. But neither case is relevant here. Maguca and Dorado, which were both decided before HBOR’s effective date (January 1, 2013), considered California Civil Code section 2923.5 - a different statutory provision from the one at issue here: California Civil Code section 2923.55. Dorado, 2011 U.S. Dist. LEXIS 97672, at *49; Maguca, 2009 U.S. Dist. LEXIS 104251, at *5.

Section 2923.5 requires merely that a notice of default “include a declaration” stating that an authorized agent has contacted (or attempted to contact) the borrower. Cal. Civ. Code § 2923.5(b). Therefore, a defendant may defeat allegations that it failed to comply with that section by submitting a judicially noticed notice of default showing that the required declaration was attached. See Dorado, 2011 U.S. Dist. LEXIS 97672, at *49; Maguca, 2009 U.S. Dist. LEXIS 104251, at *5.

In contrast, section 2923.55 requires that the loan servicer provide “[a] statement that the borrower may request” certain information, including a copies of the promissory note, the deed of trust, “any assignment . . . demonstrat[ing] the right of the mortgage servicer to foreclose[, ]” and the borrower’s payment history. Cal. Civ. Code § 2923.55(b). This provision is not satisfied by a “declaration”; it is only satisfied by a writing containing the proper information. Id.

The “declaration of compliance” Defendant submitted does not contain any such writing. Nor does it even state that such a writing was provided to Plaintiff. Instead, it proclaims that Defendant “was not required to comply with [] Section 2923.55[.]” RJN Exh. 4, at 4. Whether Defendant was required to comply is a legal question that is not resolved by Defendant’s own determination that it was exempt from the terms of the statute. Whatever evidentiary value this declaration has - if any - it does not preclude Plaintiff’s claim that Defendant never provided the written notice required by section 2923.55. In fact, it corroborates Plaintiff’s claim that he did not receive notice, since Defendant apparently considered itself exempt.

To the extent that Defendant urges dismissal based on a theory that it was exempt, [2] the Court also rejects that argument. Defendant states, “§ 2923.55 only applies to mortgages . . . as described in § 2924.15. [citation omitted] In relevant part, § 2924.15 defines ‘owner-occupied’ property as property that is ‘the principal residence of the borrower and is security for a loan . . . .’” Mot. at 6:16-19. Defendant appears to suggest that Plaintiff’s property was not “owner-occupied.” See RJN Exh. 4, at 4. However, the complaint directly contradicts this contention. See Compl. ¶ 4 (stating that the property is “Plaintiff’s principal and family residence”). Because the Court must take ...

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