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Zuniga v. Bank of America, NA

United States District Court, C.D. California

December 9, 2014

Deborah Zuniga
Bank of America NA

For Deborah Zuniga, Plaintiff: Leslie Alexis McAdam, Ferguson Case Orr Paterson LLP, Ventura, CA.

For Bank of America, N.A., Erroneously Sued As Bank of America, Defendant: Tracy Evans-Moyer, LEAD ATTORNEY, McGuireWoods LLP, Los Angeles, CA.




Before the Court is the Motion to Dismiss Plaintiff's First Amended Complaint (the " Motion") filed by Defendant Bank of America N.A. (" BANA") on November 3, 2014. (Docket No. 10). Plaintiff Deborah Zuniga filed her Opposition to Motion to Dismiss Plaintiff's First Amended Complaint (the " Opposition") on November 17, 2014. (Docket No. 11). BANA filed a Reply in Support of Defendant's Motion to Dismiss Plaintiff's First Amended Complaint (the " Reply) on November 24, 2014. (Docket No. 12).

The Court has read and considered the papers filed on this Motion and held a hearing on December 8, 2014. For the reasons stated below, the Court DENIES BANA's Motion as to Plaintiff's first claim for relief, and GRANTS BANA's Motion as to Plaintiff's second claim for relief.


On April 22, 2014, Plaintiff initiated this action by filing a Complaint in Ventura County Superior Court pro se (" Complaint"). (Docket No. 1, Ex. A). Plaintiff articulated three claims for relief using the standard forms authorized by the Judicial Council of California: First, breach of contract; second, fraud based on intentional misrepresentation, concealment, and a promise without intent to perform; and third, negligence. (Id.).

BANA moved to dismiss this action for failure to state a claim, primarily because the statute of limitations had run on Plaintiff's claims. (Docket No. 5). Plaintiff did not oppose the motion. The Court dismissed the claims, finding that they were barred by the various applicable statutes of limitations, but granted Plaintiff leave to file an amended complaint. (Docket No. 8). On November 3, 2014, Plaintiff filed a First Amended Complaint (" FAC"). (Docket No. 9).

Plaintiff's claims in the FAC rest on BANA's alleged representations to her in April 2010. In April 2010, BANA allegedly offered Plaintiff a modification of her mortgage and told her she would receive the appropriate documentation in the mail. (FAC ¶ 8). Despite the modification offer BANA foreclosed on Plaintiff's home. (Id.) On April 15, 2014, Plaintiff allegedly spoke with Tim Edwards, a representative of BANA, who said that the foreclosure was wrongful because of the modification offer and would be reversed because BANA had been notified within 24 hours. (Id.) However, on April 23, 2014, BANA recorded a Trustee's Deed upon Sale and refused to honor the offer of a modification or to reverse the foreclosure.

In her FAC, Plaintiff alleges two claims for relief. First, violation of California's Unfair Competition Law, California Business and Professions Code sections 17200 et seq. (" UCL"), and second, fraud. (FAC). Plaintiff also argues that the statute of limitations for her fraud claim should be tolled because she became ill and underwent surgery in February 2012. (FAC ¶ 6). Her surgery went badly and she has been suffering serious medical setbacks since which have meant that she was unable to file this action until April 22, 2014. (FAC ¶ 6).

Motion to Dismiss

In ruling on a Motion to Dismiss under Rule 12(b)(6), the Court follows Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). " To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). " All allegations of material fact in the complaint are taken as true and construed in the light most favorable to the plaintiff." Williams v. Gerber Prods. Co., 552 F.3d 934, 937 (9th Cir. 2008) (holding that a plaintiff had plausibly stated that a label referring to a product containing no fruit juice as " fruit juice snacks" may be misleading to a reasonable consumer).

In answering questions of state law, this Court is bound by the decisions of a state supreme court. Muniz v. United Parcel Serv., Inc., 738 F.3d 214, 219 (9th Cir. 2013). When a state supreme court has not spoken on a particular issue, the Court must determine what result that supreme court would reach based on state appellate court opinions, statutes, and treatises. Id.

Plaintiff filed the Complaint pro se. Because it was filed pro se, it is " to be liberally construed . . . and however inartfully pleaded, must be held to less stringent standards than formal pleadings drafter by lawyers." Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (citations omitted); Cf . Fed. Rule Civ. Proc. 8(f) (" All pleadings shall be so construed as to do substantial justice.").

In its Motion, BANA argues that Plaintiff's fraud claim is barred because it was filed beyond the statute of limitations, and Plaintiff fails to state a claim for relief for both her fraud claim and her claim under the UCL. (Mot. at 4-7).

Plaintiff's Claim for Fraud

BANA argues that Plaintiff's fraud claim accrued on April 23, 2010, when BANA recorded the Deed upon Sale and Plaintiff was aware that BANA would not reverse the foreclosure as allegedly promised by Tim Edwards. Plaintiff filed this action on April 22, 2014, and therefore filed it beyond the three-year statute of limitations for fraud under California law. (Mot. at 4). BANA contends that Plaintiff's FAC fails to establish any basis for tolling the statute of limitations and so the claim must be dismissed. (Id.)

In diversity cases, federal courts apply whatever tolling provisions are recognized under state law. Emrich v. Touche Ross & Co . 846 F.2d 1190, 1199 (9th Cir. 1988) (holding that dismissal of the complaint was improper were complaint adequately alleged equitable tolling under California because of pendency of related case). Under California law a claim for fraud or misrepresentation must be brought within three years. Cal. Code Civ. Proc. § 338(d). Section 338(d) also states that " [t]he cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake." As the Court previously concluded, the date on which the fraud was discovered, construed most generously to Plaintiff, is April 23, 2010, when she became aware BANA was not going to reverse her foreclosure; instead, BANA filed a Trustee's Deed upon Sale. (Docket No. 8 at 3). Plaintiff filed her first Complaint on April 22, 2014, more than three years before her claim accrued.

Plaintiff argues that the statute of limitations should be tolled because of her surgery and ongoing medical problems. (FAC ¶ 6). There are two forms of tolling, statutory tolling, and equitable tolling. Plaintiff does not indicate whether she is relying on statutory or equitable tolling. Construing the FAC liberally in her favor, the Court considers both.

The California Code of Civil Procedure provides for tolling of the statute of limitations where a plaintiff suffers from one of a number of specified legal disabilities. These are minority (Cal. Code Civ. Proc. § 352); insanity (Id.); imprisonment, (Cal. Code Civ. Proc. § 352.1); and that defendant is under an order of restitution (Cal. Code Civ. Proc. § 352.5). Plaintiff does not plead any statutory disability.

More significantly, Plaintiff may only claim disability where such disability exists at the time the claim for relief accrued. Cal. Code Civ. Proc. § 357 (" No person can avail himself of a disability, unless it existed when his right of action accrued."). Once the cause of action has accrued and the statute commences, no subsequent disability will suspend it. Therefore, even were Plaintiff's medical issues sufficient to allege a legal disability to toll the statute of limitations they did not exist at the time her claim accrued and so would not toll the statute of limitations.

Equitable tolling is a judge-made doctrine " which operates independently of the literal wording of the Code of Civil Procedure to suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness." Lantzy v. Centex Homes, 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517 (2003) (holding that ten-year limitations period to bring action for latent defect in construction involving real property is not subject to equitable tolling while potential defendant's promises or attempts to repair defect are pending). Equitable tolling serves to " toll the statute of limitations on a claim during the period in which a plaintiff pursues another remedy for the harm that the plaintiff suffered." Hopkins v. Kedzierski, 225 Cal.App.4th 736, 746, 170 Cal.Rptr.3d 551 (2014) (citing to Elkins v. Derby, 12 Cal.3d 410, 414, 115 Cal.Rptr. 641, 525 P.2d 81 (1974)) (affirming plaintiff need not have been unsuccessful in workers compensation claim before filing suit for equitable tolling to apply). As such, the elements to be met by a plaintiff to invoke the doctrine are " timely notice, and lack of prejudice, to the defendant, and reasonable and good faith conduct on the part of the plaintiff." McDonald v. Antelope Valley Community College Dist., 45 Cal.4th 88, 102, 84 Cal.Rptr.3d 734, 194 P.3d 1026 (2008) (citations omitted) (holding that proceeding with internal grievance proceeding may subject equitable tolling as to FEHA statute of limitations). " The timely notice requirement essentially means that the first claim must have been filed within the statutory period." Id. at 102, n. 2.

Plaintiff establishes none of the requirements for equitable tolling. This suit is the first attempt to pursue a remedy for the alleged harm and Defendant was notified well after the statute of limitations had run. Therefore, Plaintiff's claim for fraud is barred by the statute of limitations as it was filed more than three years after her claim accrued.

At the hearing the Court inquired of Plaintiff what additional facts she would allege to show why the statute of limitations should be tolled. Plaintiff further explained the extent of her medical problems, which the Court admits were serious. However, these further facts are simply more of the same sort alleged in her FAC and under California law do not allow for tolling.

The Court expresses sympathy to Ms. Zuniga for her medical issues, but California law simply does not view her situation, regrettable as it is, as a basis for equitable tolling.

The Court also concludes that Plaintiff fails to allege any reliance on BANA's alleged representations. In order to state a claim for fraud Plaintiff needs to allege (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity; (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. 5 B.E. Witkin, Summary of California Law, Torts § 772 (10th ed. 2005). Plaintiff does not allege that she took any action, or refrained from taking action because of BANA's alleged misrepresentations such that she suffered harm. Therefore she fails to allege an element of fraud and so fails to state a claim.

The Court therefore GRANTS BANA's Motion as to Plaintiff's second claim. The Court also does not see how further opportunities to amend will cure these defects and so grants BANA's motion without leave to amend .

Plaintiff's UCL Claim

BANA argues that Plaintiff's UCL claim fails for two reasons. First, BANA argues that the failure of Plaintiff's fraud claim means that her UCL claim must fail as well; according to BANA, Plaintiff's UCL claim is " predicated entirely upon a violation of other statutory or common law claims." (Id. at 8). Second, Plaintiff fails to allege a particularized injury sufficient to give her standing. (Mot. at 8). Neither argument is persuasive, primarily because BANA's Motion is premised on a mischaracterization of Plaintiff's UCL claim and an incorrect assertion that Plaintiff needs to assert a viable fraud claim to proceed with her UCL claim.

The UCL is a broad statutory scheme for protecting consumers and promoting competition. It is " not confined to anticompetitive business practices, but is also directed toward the public's right to protection from fraud, deceit, and unlawful conduct." Hewlett v. Squaw Valley Ski Corp., 54 Cal.App.4th 499, 519-520, 63 Cal.Rptr.2d 118 (1997). The statutory language referring to " any unlawful, unfair or fraudulent" practice makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law. Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999) (holding that, in competitor cases, allegations of unfair business practices must be tethered to antitrust legislation and policy).

The California Supreme Court has held that " [t]he UCL's purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services." Kasky v. Nike, Inc., 27 Cal.4th 939, 949, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002), as modified (May 22, 2002) (citing Barquis v. Merchants Collection Ass'n, 7 Cal.3d 94, 110, 101 Cal.Rptr. 745, 496 P.2d 817 (1972)). Plaintiff alleges a claim under the second prong of the UCL definition, namely that BANA engaged in an " unfair business act or practice." (FAC ¶ 9). Specifically, Plaintiff alleges that BANA promised her a loan modification but nonetheless foreclosed on her house. Further, BANA promised to reverse the foreclosure but failed to do so. (Id.).

The test for unfair business practices as it relates to consumer actions is unsettled. See Lozano v. AT & T Wireless Services, Inc., 504 F.3d 718, 735 (9th Cir. 2007) (" California's unfair competition law, as it applies to consumer suits, is currently in flux."); see also Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1169 (9th Cir. 2012) (" The UCL does not define the term 'unfair.' In fact, the proper definition of 'unfair' conduct against consumers 'is currently in flux' among California courts.").

The California Supreme Court has adopted an express rule as to what constitutes " unfair" conduct in the context of business competitor UCL cases:

When a [party] who claims to have suffered injury from a direct competitor's " unfair" act or practice invokes section 17200, the word " unfair" in that section means conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.

Cel-Tech, 20 Cal.4th at 187.

However, the Cel-Tech court expressly limited its analysis to suits brought by competitors. Id. at 187 n. 12 (" This case involves an action by a competitor alleging anticompetitive practices. Our discussion and this test are limited to that context. Nothing we say relates to actions by consumers or by competitors alleging other kinds of violations of the unfair competition law such as 'fraudulent' or 'unlawful' business practices or 'unfair, deceptive, untrue or misleading advertising.'"). In the wake of Cel-Tech, the California Court of Appeal diverges as to the appropriate test to apply to consumer UCL cases.

Three strains have emerged. Some courts have applied the Cel-Tech test noting the Cel-Tech court's disapproval of the amorphous nature of the earlier tests. See e.g. Gregory v. Albertson's Inc . 104 Cal.App.4th 845, 851, 128 Cal.Rptr.2d 389 (2002) (holding that allegations that grocery store was deliberating kept closed failed to allege a claim under UCL because it was insufficiently " tethered" to statutory or regulatory scheme). Others utilize the pre- Cel-Tech balancing analysis that weighs the utility of conduct against the alleged harm. See e.g. Smith v. State Farm Mutual Automobile Ins. Co., 93 Cal.App.4th 700, 113 Cal.Rptr.2d 399 (2001) (holding that practice of issuing separate policies to cover each of an insured's vehicles, but prohibiting waiver of uninsured motorist coverage on anything but all the claims constituted an unfair business practice).

A third strand applies the three-pronged test articulated in section 5 of the FTC Act. See Camacho v. Auto. Club of S. California, 142 Cal.App.4th 1394, 1401, 48 Cal.Rptr.3d 770 (2006) (discussing various analyses under the " unfair" prong in the wake of Cel-Tech and adopting the three-prong FTC Act test); Davis v. Ford Motor Credit Co., 179 Cal.App.4th 581, 101 Cal.Rptr.3d 697 (2009) (adopting the reasoning and test of Camacho ).

Having reviewed the disparate case law, the Court believes that Camacho provides the best guidance on the issue and the adapted three-prong FTC Act test should be applied to determine whether a business practice is unfair under the UCL. The cases applying the Cel-Tech test are unpersuasive in explaining why Cel-Tech 's competitor test should apply to consumer actions given the court's specific instruction that its holding was limited to competitor cases and appear to be unnecessary restrictive in requiring a specific statutory basis for claims of unfair business practices. See Cel-Tech, 20 Cal.4th at 187 n. 12. The cases which continue to apply the old balancing test, however, are similarly unpersuasive in explaining why the California Supreme Court's concerns over ambiguous and broad definitions of " unfair" would also not apply to unfair business practices as they relate to consumers.

By contrast, the Camacho court thoroughly analyzed the implications of Cel-Tech on consumer actions and benefitted from extensive briefing on the matter, including amicus briefing by the California Attorney General. The court first determined that Cel-Tech overruled earlier consumer tests for unfairness. It concluded that " [d]efinitions that are too amorphous in the context of anticompetitive practices are not converted into satisfactorily precise tests in consumer cases." Camacho, 142 Cal.App.4th at 1401.

The court also explained that the Cel-Tech definition for competitor cases was not appropriate for consumer cases for two reasons. First, the requirement that the unfair practice be " tethered" to a statutory or regulatory scheme " does not comport with the broad scope of section 17200" and " in the context of consumer cases, 'tethering' to positive law undercuts the ability of the courts to deal with new situations, and new abuses" as intended by the legislature in passing the UCL in such broad and flexible terms. 142 Cal.App.4th at 1402-03; Flamingo Industries (USA) Ltd. v. United States Postal Service, 302 F.3d 985, 996 (9th Cir. 2002) rev'd on other grounds in United States Postal Service v. Flamingo Industries (USA) Ltd., 540 U.S. 736, 124 S.Ct. 1321, 158 L.Ed.2d 19 (2004)) (the UCL " is a notoriously broad statute.") Second, while anticompetitive conduct is appropriately defined in terms of the " policy and spirit of antitrust laws; the same cannot be said of a business practice that is 'unfair' . . . in the terms of section 17200." Camacho, 142 Cal.App. 4th. at 1403. In the context of consumer actions, " it is not possible to achieve a consensus which of [the varied universe of laws and regulations that bear on unfair practices] might apply to define an unfair practice." Id., at 1404.

The court then followed Cel-Tech 's instruction to look at section 5 of the Federal Trade Commission Act for guidance. Id.; Cel-Tech, 20 Cal.4th at 185. The court held that the judicially created test for unfairness, now codified in 15 U.S.C. § 45(n), is " on its face geared to consumers . . . suitably broad and is therefore in keeping with the 'sweeping' nature of section 17200." Id. The Court of Appeal has also adopted Camacho 's reasoning enthusiastically in other instances. Davis, 179 Cal.App.4th at 596 (" Camacho . . . contains an excellent analysis of the issue and we adopt its definition of 'unfair' in consumer cases."); see also 3 William L. Stern, The Rutter Group Civil Litigation Series: Business & Professional Code § 17200, § 3.121.1 (2014) (" Trend seems in favor of FTC test").

The factors that define unfairness under the test adopted in Camacho are: (1) the consumer injury must be substantial; (2) the injury must not be outweighed by any countervailing benefits to consumers or competition; and (3) it must be an injury that consumers themselves could not reasonably have avoided. Camacho, 142 Cal.App.4th at 1403.

The parties do not address the question of whether Plaintiff's FAC meets the requirements of the Camacho test. As noted above, BANA contends that Plaintiff's UCL claims fail because the supposed underlying fraud claim fails. (Id. at 8). Second, Plaintiff fails to allege a particularized injury sufficient to give her standing. (Mot. at 8).

Neither argument is persuasive:

As to dependence on fraud, Cel-Tech and Camacho make clear that a plaintiff may state a claim for an unfair practice without relying on that practice being unlawful. BANA's statement that " a UCL claim stands or falls depending on the fate of antecedent substantive causes of action" misstates the law. While a UCL claim against an " unlawful" practice may require a statutory or regulatory violation, an unfair practice does not. Cel-Tech, 20 Cal.4th at 180. The case to which BANA cites for the proposition does not make clear what form of UCL claim the plaintiff was alleging. As BANA quoted in its Motion, the Krantz court said that " these claims [including a UCL claim] stand or fall depending on the fate of the antecedent substantive causes of action." Krantz v. BT Visual Images, L.L.C., 89 Cal.App.4th 164, 178, 107 Cal.Rptr.2d 209 (2001) (reversing grant of summary judgment where trial court improperly shifted burden of proof to defendant). Krantz does not present a general statement as to all UCL claim but refers to specific claims, the nature of which is not apparent from the partially published opinion.

Indeed, courts have specifically held that the UCL provides an independent basis for relief. Smith, 93 Cal.App.4th at 718. It would be nonsensical if a UCL claim alleging an unfair business practice did not require that the alleged practice be unlawful, but nonetheless required an antecedent statutory or common law claim to support it. Further, both Camacho and Davis rejected the requirement that an unfair practice be even " tethered" to a statutory or regulatory scheme to state a claim under the UCL.

The question is whether the alleged unfair practice satisfies Camacho 's three-prong test articulated above. The Court determines that, especially in construing Plaintiff's claims liberally as it must for a pro se litigant, the Camacho test is satisfied, which also means that Plaintiff has adequately alleged standing.

The Court determines that the Camacho standard is met for these reasons:

First, Plaintiff's injury is substantial. This analysis is also relevant to BANA's argument as to Plaintiff's lack of standing for failure to articulate a specific injury as required by the UCL. (Mot. at 7). BANA argues that Plaintiff fails to articulate a concrete and particularized injury as a result of the alleged unfair practice. BANA contends that because the foreclosure occurred before any of the alleged facts took place there can be no harm.

This argument misconstrues what the Court believes to be a significant aspect of Plaintiff's claim. BANA is right that the promise by Tim Edwards to revert the foreclosure was after the foreclosure and so could have caused no damage for which Plaintiff would be owed restitution. However, that is not the only allegation against BANA of unfair conduct. Plaintiff also alleges that BANA told her she was being offered a modification and would receive documentation in the mail shortly. (FAC ¶ 6). However, BANA foreclosed on Plaintiff anyway. This is a process commonly known as " dual tracking." See, e.g., Jolley v. Chase Home Finance, LLC 213 Cal.App.4th 872, 904, 153 Cal.Rptr.3d 546 (2013) (describing " recent California legislation attempts over time to eliminate the practice of dual tracking and to ameliorate its effects")

This action by BANA hurt Plaintiff because it resulted in her not having an opportunity to obtain a modification that would have enabled her to keep her house. Such an injury is clearly substantial. Plaintiff has lost her home and the opportunity for lower monthly payments.

BANA argues that Plaintiff suffered no injury. However, a look at the California Supreme Court's case law regarding the standing requirement that a party suffer an economic injury after the passage of Proposition 64 shows that Plaintiff suffered an economic injury, and examining that injury it is clearly significant, thereby satisfying both the standing requirement of section 17204 and the second prong of the FTC test.

In Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011), the California Supreme Court elaborated on the economic injury requirement after Proposition 64. The supreme court explained that " [t]he plain import [of the lost money or property requirement] is that a plaintiff now must demonstrate some form of economic injury." Id. at 323. " There are innumerable ways in which economic injury from unfair competition may be shown [including having] a present or future property interest diminished." Id. The supreme court has also been careful to explain that Proposition 64 " plainly preserved standing for those who had had business dealings with a defendant and had lost money or property as a result of the defendant's unfair business practices." Clayworth v. Pfizer, Inc., 49 Cal.4th 758, 788, 111 Cal.Rptr.3d 666, 233 P.3d 1066 (2010) (holding that pharmacies sufficiently alleged standing where they had indirect dealings with manufactures as retailers for drugs and lost money in the form of overcharges caused by unfair business practice).

Plaintiff plainly alleges a substantial injury that affected a property interest, both in her home and in lower monthly mortgage payments through a modification which was offered but for which she was apparently not considered.

Second, Plaintiff's injury is not outweighed by countervailing benefits to consumers or competition created by BANA alleged actions. The Court can see no countervailing benefits to consumers or competition created by BANA engaging in dual-tracking. Indeed, the significant problems with dual-tracking have been recognized by the California legislature which passed legislation requiring mortgage servicers to contact borrowers in default about foreclosure prevention alternatives in 2012. See, Cal. Civ. Code § 2923.6(c) (prohibiting proceeding with foreclosure procedures until consideration of a loan medication is made); § 2923.7 (requiring assignment of representative to assist borrower to explore foreclosure prevention alternatives); see also, Jolley, 213 Cal.App.4th at 907-08 (" And while dual tracking may not have been forbidden by statute at the time, the new legislation and its legislative history may still contribute to its being considered 'unfair' for purposes of the UCL.")

Third, the injury was not one that a consumer could have reasonably avoided. While it is true that Plaintiff might be responsible for her default on the loan, once she was in default, she could not avoid BANA's practice of dual tracking. Plaintiff may be barred from complaining of BANA's actions in foreclosing upon her as a result of her default. However, Plaintiff complains of BANA dual-tracking practice, a practice, which as the Court has noted above, has been condemned by the California legislature and California courts. As recognized by the Court of Appeal in Jolley the subsequent passage of legislation specifically targeting dual tracking adds support to the Court's determination that the practice is unfair. Jolley, 213 Cal.App.4th at 907-08.

The courts in Davis and Camacho both determined that the plaintiffs failed to satisfy the third prong. In Davis, Plaintiff alleged unfair practices in charging successive fees for successive late payments. In Camacho, Plaintiff was an insured motorist who alleged unfair practices in collecting a judgment against him after an accident for which he was responsible. As the Camacho court explained, " consumers cannot have reasonably avoided the injury if they could not have reasonably anticipated the injury, if they did not have the means to avoid the injury, or if their free market decisions were unjustifiably hampered by the conduct of the seller." Id. 142 Cal.App.4th at 1405.

In both cases plaintiffs committed some form of wrong and could have avoided the injury either by following the law and carrying insurance, or by not making late payments. Here, however, Plaintiff could not have reasonably expected that BANA would not honor its promise to consider her for a modification given its explicit promise to do so. Unlike in Davis where Plaintiff should have been aware of the late fees, Plaintiff could not have been aware of BANA's unfair practice once she was in default. Indeed, the practice is well-recognized now as highly problematic despite the fact that borrowers could avoid it by simply not defaulting on their mortgages.

The Court determines that Plaintiff sufficiently alleges a claim for relief under the UCL arising out of her allegations of BANA's dual tracking. BANA's Motion is therefore DENIED as to Plaintiff's first claim for relief.

At the hearing counsel for BANA submitted to the Court's interpretation and application of Camacho to Plaintiff's UCL claim. Counsel, however, requested that the Court make clear that a claim under the UCL is limited to restitution of loss as a result of the unfair practice and injunctive relief. The Court noted from the bench, and does so again here, that this is an accurate statement of the limited remedies available under the UCL.


Accordingly, the Court GRANTS BANA's Motion as to Plaintiff's second claim for relief without leave to amend, but DENIES BANA's Motion as to Plaintiff's first claim for relief. BANA shall file an Answer to Plaintiff's FAC within 14 days of the filing of this Order.

The Court also notes that it may not provide advice to any party, including persons who are not represented by a lawyer. (Such persons are known as " pro se litigants.") However, this District does have a " Pro Se Clinic" that can provide information and assistance about many aspects of civil litigation in this Court. The Clinic is administered by Public Counsel, a public interest law firm, and it is staffed by lawyers and a paralegal. In order to benefit from the guidance that the Clinic may be in a position to provide, a pro se litigant has to go there directly. The Pro Se Clinic is open to members of the public on Mondays, Wednesdays, and Fridays, and is open from 9:30 a.m. to 12:00 p.m. (noon) and from 2:00 p.m. to 4:00 p.m. Individuals seeking assistance are seen on a first-come, first-served basis. The clinic is located in Room G-19 on the Main Street level of the United States Courthouse, 312 North Spring Street, Los Angeles, California.

Although the Clinic does not provide assistance telephonically, a pro se litigant may call the Clinic to obtain further information. The telephone number is (213) 385-2977, ext. 270. Again, the Clinic does not provide any assistance over the telephone; the purpose of a telephone call would be only to get more information about the Clinic. In addition, the Court has information of importance to pro se litigants at the " Pro Se" link on its website,


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