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Morales v. Select Portfolio Servicing, Inc.

United States District Court, C.D. California

December 2, 2014

Jose Carlos Morales
Select Portfolio Servicing, Inc., et al

For Jose Carlos Morales, Plaintiff: John Earl Mortimer, LEAD ATTORNEY, Law Offices of John E Mortimer, Temecula, CA.

For Select Portfolio Servicing, Inc., Defendant: Conrad V Sison, Mark Russell Townsend, Jr, LEAD ATTORNEYS, Locke Lord LLP, Los Angeles, CA.

For Bank of America, N.A., Defendant: Aaron Robert Marienthal, David C Powell, LEAD ATTORNEYS, Tyler M Layton, Reed Smith LLP, San Francisco, CA.



Proceedings: (In Chambers) Order re: Plaintiff's Motion to Remand [Dkt. 12]

This matter is before us on the above-captioned Motion. We have considered the papers filed in support of and in opposition to this Motion and deem this matter appropriate for resolution without oral argument. L.R. 7-15. As the Parties are familiar with the facts, we will repeat them only as necessary. Accordingly, we rule as follows:

I. Procedural and Factual Background

On December 8, 2006, Plaintiff Jose Carlos Morales (" Plaintiff") obtained a $380, 000 loan secured by a Deed of Trust (" DOT") on real property located at 1810 E. Poinsettia Street, Long Beach, California 90805 (the " Property"). (Compl. at ¶ ¶ 9-10; RJN, Exh. A.) Defendant Bank of America, N.A. (" BANA") acted as the servicer of Plaintiff's loan until late 2013, when it transferred its servicing rights to Select Portfolio Servicing, Inc. (" SPS"). (Id. at ¶ 32.) In January 2013, Plaintiff contacted BANA to obtain a loan modification due to financial hardship. (Id. at ¶ 12.) BANA informed Plaintiff it would send the application in the mail, but he did not receive it for several weeks and had to call several times to inquire about its whereabouts. (Id.)

Plaintiff sought assistance with his application efforts from a non-profit organization and, with its help, submitted a loan modification application on February 6, 2013. (Id. at ¶ 14.) Over the next month and a half, Plaintiff submitted all requested documents and information. (Id. at ¶ ¶ 16-17.) On March 15, 2013, BANA confirmed his file was under review and no additional documents were needed. (Id. at ¶ 18.) On March 30, 2013, Plaintiff received a letter from BANA informing him his application was denied. (Id. at ¶ 19.) The letter provided no reasons for the denial. (Id.) On April 23, 2013, Plaintiff received another letter from BANA that informed him his application was denied because he failed to submit all requested documents. (Id. at ¶ 20.)

On April 30, 2013, an agent of the non-profit organization followed-up with BANA, and BANA informed the agent Plaintiff's file was closed. (Id. at ¶ 21.) The non-profit agent asked to reopen the file and that a single point of contact (" SPOC") be assigned. (Id.) On June 6, 2013, the non-profit agent called BANA for an update and was informed Plaintiff's May 18, 2013 application had been denied. (Id. at ¶ 22.) Plaintiff did not submit an application on that date. (Id.)

On July 5, 2013, Plaintiff received a letter from BANA regarding its intent to foreclose his property. (Id. at ¶ 23.) Plaintiff faxed BANA a new loan modification application on July 16, 2013. (Id. at ¶ 24.) On July 26, 2013, an agent of the non-profit organization called BANA to confirm receipt and a BANA representative stated it had not received his application. (Id.) The agent refaxed the application. (Id.) BANA confirmed receipt on August 5, 2013, and Plaintiff submitted his 2012 tax returns and updated paystubs and bank statements. (Id. at ¶ ¶ 28-30.)

On December 17, 2013, the non-profit organization received a letter from SPS stating that it was Plaintiff's new servicer. (Id. at ¶ 32.) BANA never notified Plaintiff that it transferred its servicing rights to SPS. At SPS's request, Plaintiff submitted additional financial documents in support of his loan modification application in January 2014 and again in April 2014. (Id. at ¶ ¶ 33-34.) On May 19, 2014, Plaintiff received a letter from SPS notifying him that his loan was in default. (Id. at ¶ 35.) Plaintiff still has not received a determination on this loan modification application. (Id. at ¶ 36.)

On August 29, 2014, Plaintiff filed this action in California Superior Court. [Dkt. 1.] Based on the foregoing allegations, Plaintiff's Complaint asserts the following claims: (1) violation of the California Homeowner Bill of Rights (" HOBR"), which requires loan servicers to provide a SPOC; [1] (2) negligent misrepresentation; (3) violation of California Unfair Competition Law (" UCL"), Cal. Bus. & Prof. Code § § 17200, et seq .; and (4) breach of the implied covenant of good faith and fair dealing. Plaintiff seeks " compensatory, special and general damages in an amount [subject] to proof at trial"; " civil penalties pursuant to statute and restitution"; and the award of " reasonable attorney's fees [and] reasonable costs of suit." (Compl. at 11.) Although not mentioned in Plaintiff's prayer for relief, Plaintiff's Complaint also states that his claims " present[] a ripe and justiciable controversy for this court's immediate equitable adjudication for which money damages would not be appropriate and without which the Plaintiff will suffer irreparable injury in the loss of his home and his family's resultant homelessness." (Id. at ¶ 47.) Plaintiff's UCL claim also includes a demand for Defendants' " illicit profits, " including late fees they charged and costs associated with " instituting wrongful foreclosure against the subject property." (Id. at ¶ 64.)

SPS removed this action on October 15, 2014, asserting we have diversity jurisdiction under 28 U.S.C. Section 1332.[2] [Dkt. 1.] Plaintiff now moves to remand this case to state court, claiming that the amount in controversy ...

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