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Hild v. Bank of America, N.A.

United States District Court, C.D. California

January 29, 2015

Stephen Hild, et al.
Bank of America, N.A., et al

For Stephen Hild, an individual, Lois Hild, an individual, Plaintiffs: Stephen R Golden, Te Aira L Law, Stephen R Golden and Associates, Pasadena, CA.

For Bank of America, N.A., Defendant: Sharon K Brown, Bryan Cave LLP, Santa Monica, CA.

For Nationstar Mortgage, LLC, Defendant: Adam F Summerfield, LEAD ATTORNEY, McGuireWoods LLP, Los Angeles, CA; Carlo Luis Rodes, McGuireWoods LLP, Charlotte, NC.



Proceedings: Order (1) GRANTING IN PART Defendant Nationstar Mortgage's Motion to Dismiss (Doc. No. 22); (2) GRANTING Defendant Bank of America's Motion to Dismiss (Doc. No. 24); and (3) VACATING the February 2, 2015, Hearing (IN CHAMBERS)

Before the Court are two motions to dismiss Plaintiffs' First Amended Complaint from Defendant Nationstar Mortgage LLC (" Nationstar"), (Doc. No. 22), and Bank of America, N.A. (" Bank of America" or " BOA"), (Doc. No. 24). The Court finds this matter appropriate for resolution without a hearing. See Local Rule 7-15; Fed.R.Civ.P. 78. After considering all papers timely filed in support of and in opposition to the Motion, the Court GRANTS IN PART Nationstar's motion and GRANTS Bank of America's motion. The Court VACATES the February 2, 2015, hearing.


A. Procedural History

On September 10, 2014, Plaintiffs Stephen Hild and Lois Hild (" Plaintiffs") filed a Complaint in California Superior Court for the County of Riverside against Defendants Bank of America and Nationstar Mortgage, LLC (collectively, " Defendants"). (Complaint, Doc. No. 1, Ex. A.) Defendants removed the case to this Court on October 15, 2014. (Not. of Removal, Doc. No. 1.)

Plaintiffs filed their First Amended Complaint on December 3, 2014. (" FAC, " Doc. No. 19.) On December 17, 2014, Defendant Nationstar filed a motion to dismiss the FAC. (" Nationstar Mot., " Doc. No. 22.) Defendant Bank of America also filed a motion to dismiss the FAC on December 22, 2014. (" BOA Mot., " Doc. No. 24.) Plaintiffs opposed BOA's motion on January 13, 2015. (" BOA Opp'n, " Doc. No. 26.) They opposed Nationstar's motion on January 15, 2015. (" Nationstar Opp'n, " Doc. No. 27.) BOA filed its reply brief on January 16, 2015. (" BOA Reply, " Doc. No. 28.) Nationstar replied on January 22, 2015. (" Nationstar Reply, " Doc. No. 29.)[1]

B. Allegations in the FAC

On November 1, 2005, Plaintiffs obtained a $1, 000, 000 loan from America's Wholesale Lender, (FAC ¶ 11), and purchased real property located at 24310 Three Springs Road, Hemet, California 92545 (" Hemet Property"), (FAC ¶ 10). Plaintiffs state that BOA is the " purported servicer of the loan" and that Nationstar is the " purported current servicer of the loan." (FAC ¶ ¶ 2-3.) Plaintiffs allege that the servicing of Plaintiffs' loan transferred from BOA to Nationstar on or about June 29, 2013. (FAC ¶ 19.)

Plaintiffs assert that, in 2009 and 2010, while BOA remained the servicer of Plaintiffs' loan, they attempted to refinance their home because the balance of their loan exceeded the value of their home. (FAC ¶ ¶ 15-16.) Plaintiffs allege that they approached BOA in 2009 and requested a list of approved real estate appraisers but the BOA representative told her that it was against the law to provide such a list. (FAC ¶ 15.) Plaintiffs allege that, in 2010, they again approached BOA for an appraisal but that BOA " refused to return Plaintiffs' calls or provide them their needed appraisal." (FAC ¶ ¶ 16-17.)

After Nationstar became the servicer of Plaintiffs' loan, Plaintiffs submitted a loan modification application to Nationstar on November 1, 2013. (FAC ¶ 21.) Plaintiffs were informed on November 5, 2013, that they were not eligible for the Home Affordable Modification Program (" HAMP"). (FAC ¶ 23.) Plaintiffs submitted an income and expense sheet on January 29, 2014, and submitted a complete first lien loan modification application on March 14, 2014, so that they could be reviewed for an in-house modification. (FAC ¶ ¶ 24-25.) Plaintiffs allege that they were denied in April 2014 but never received a letter of denial. (FAC ¶ 30.) On April 23, 2014, Plaintiffs' counsel contacted Nationstar, inquired about the Home Affordable Refinance Program (" HARP") and in-house modifications, and a Nationstar representative stated that Plaintiffs would be reviewed. (FAC ¶ 31.) Plaintiffs were told that they would be reviewed for a 12 to 24 month modification program. (FAC ¶ ¶ 31-32.) Plaintiffs did not receive any further information regarding the review for that program during the following four months; Nationstar did not request additional documents or inform Plaintiffs that their previously submitted documents had become stale. (FAC ¶ ¶ 33-34.) Plaintiffs' representative contacted Nationstar for an update in August 2013[2] and was informed that Plaintiffs' application for an in-house modification was under review but that all of Plaintiffs' documents had expired and submission of a new application package was required. (FAC ¶ 34.) Plaintiffs also allege that a single point of contact was appointed in November 2013 but the point of contact was changed three times thereafter, in March 2014, April 2014, and May 2014. (FAC ¶ ¶ 22, 26-28.)

The FAC alleges nine causes of action against Defendants: (1) lack of standing and quantum meruit related to the defective securitization of Plaintiff's mortgage; (2) negligent loan administration; (3) quiet title; (4) declaratory relief; (5) violation of California Civil Code § 2923.7; (6) intentional interference with contractual relations; (7) intentional interference with prospective economic relations; (8) negligent interference with prospective economic relations; and (9) violation of California Business and Professions Code § 17200, et seq. (FAC ¶ ¶ 35-93.) The sixth, seventh, and eighth claims are alleged against only BOA, and the remaining six claims are raised against both Defendants. (Id.)


Federal Rule of Civil Procedure 12(b)(6) allows a party to bring a motion to dismiss for failure to state a claim upon which relief can be granted. Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires only a short and plain statement of the claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a)(2); Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) (holding that the Federal Rules require that a plaintiff provide " 'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests") (quoting Fed.R.Civ.P. 8(a)(2)); Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). When evaluating a Rule 12(b)(6) motion, a court must accept all material allegations in the complaint -- as well as any reasonable inferences to be drawn from them -- as true and construe them in the light most favorable to the non-moving party. See Doe v. United States, 419 F.3d 1058, 1062 (9th Cir. 2005); ARC Ecology v. U.S. Dep't of Air Force, 411 F.3d 1092, 1096 (9th Cir. 2005); Moyo v. Gomez, 32 F.3d 1382, 1384 (9th Cir. 1994).

" While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations omitted). Rather, the allegations in the complaint " must be enough to raise a right to relief above the speculative level." Id.

Surviving a motion to dismiss requires a plaintiff to allege " enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; Ashcroft v. Iqbal, 556 U.S. 662, 697, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). " 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. Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of 'entitlement to relief.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). The Ninth Circuit has clarified that (1) a complaint must " contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively, " and (2) " the 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).

Although the scope of review is limited to the contents of the complaint, the Court may also consider exhibits submitted with the complaint, Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990), and " take judicial notice of matters of public record outside the pleadings, " Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988).


Defendants move separately to dismiss all of the claims alleged against them. As noted below, Plaintiffs agree to dismiss claims six through eight but oppose Defendants' motions with regard to the other causes of action.

A. Claim One: Lack of Standing & Quantum Meruit

1. Lack of Standing or Defective Securitization

Plaintiffs' first cause of action is termed one for " lack of standing" or " defective securitization." (FAC at 8.) The FAC asserts that Defendants do not have an interest in the deed of trust on Plaintiffs' Hemet Property because of the " defective securitization" of Plaintiffs' mortgage loan on that property, and thus " Defendants do not have authority to continue to request payments from Plaintiffs." (FAC ¶ ¶ 35-39.) More specifically, Plaintiffs contend that the deed of trust was " not transferred into the investment trust within the time period required by law" and that the interest was therefore " not legally transferred into the securitized trust." (FAC ¶ 36.)

Defendants move to dismiss Plaintiffs' first claim, arguing that a borrower lacks standing to assert defects in the securitization of the deed of trust on the borrower's property. (BOA Mot. at 5; Nationstar Mot. at 5.) This Court recently explained that it " follow[s] the rule [expressed] in Jenkins[ v. JPMorgan Chase Bank, N.A., 216 Cal.App.4th 497, 515, 156 Cal.Rptr.3d 912 (Cal.Ct.App. 2013), ] that '[a]n impropriety in the transfer of a promissory note would . . . affect only the parties to the transaction, not the borrower [and therefore, a] borrower thus lacks standing to enforce any agreements relating to such transactions.'" Contreras v. JPMorgan Chase, No. EDCV 14-01145 JGB (DTBx), 2014 WL 4247732, at *7 (C.D. Cal. Aug. 28, 2014) (fourth and fifth alterations in original) (quoting Yvanova v. New Century Mortgage Corp., 226 Cal.App.4th 495, 501, 172 Cal.Rptr.3d 104 (Cal.Ct.App. 2014)).

Plaintiffs argue that the Court should instead follow Glaski v. Bank of America, N.A., 218 Cal.App.4th 1079, 160 Cal.Rptr.3d 449 (Cal.Ct.App. 2013), which stands for the proposition that borrowers do indeed possess " standing to challenge the securitization process." (FAC ¶ 39.) This Court previously declined to follow Glaski and continues to do so until the Supreme Court of California rules on that issue of California law. See Contreras, 2014 WL 4247732, at *7. The Court recognizes that several cases related to this issue, including Yvanova, will soon be reviewed by the Supreme Court of California, see, e.g., Yvanova v. New Century Mortgage Corporation, 176 Cal.Rptr.3d 266, 331 P.3d 1275 (Cal. 2014) (granting petition for review), but the Court will await the outcome of that case before it reconsiders its views on the issue.

Accordingly, the Court concludes that Plaintiffs have not alleged a valid cause of action for Defendants' lack of standing to collect payments from Plaintiffs. Defendants' motions to dismiss are GRANTED with respect to the first cause of action.

2. Quantum Meruit

Plaintiffs claim for relief based on quantum meruit, also called " quasi-contract, " is " an equitable remedy implied by [California] law under which a plaintiff who has rendered services benefiting the defendant may recover the reasonable value of those services when necessary to prevent unjust enrichment of the defendant." In re De Laurentiis Entertainment Group Inc., 963 F.2d 1269, 1272 (9th Cir. 1992). Plaintiffs assert that they are entitled to a return of the mortgage payments that they transferred to Defendants. (FAC ¶ ¶ 40-41.) Plaintiffs assert that those payments have unjustly enriched Defendants because Defendants had no right to collect such payments from Plaintiffs because the deed of trust was not transferred into the investment trust within the required time period. (Id.) However, because Plaintiffs' claim for " lack of standing" or " defective securitization" fails (as discussed above), Plaintiffs fail to allege any valid theory for why Defendants' collection of Plaintiffs' mortgage payments was improper and thus they fail to establish that Defendants have been unjustly enriched.

Accordingly, the Court GRANTS Defendants' motions to dismiss with respect to Plaintiffs' claim for quantum meruit.

B. Claim Two: Negligent Loan Administration

1. Nationstar

Plaintiffs allege a claim for negligence against Nationstar for failing to exercise proper care when processing and reviewing their loan modification application. (FAC ¶ ¶ 42-52.) Nationstar moves to dismiss Plaintiffs' negligence claims on a single basis -- that Nationstar owed Plaintiffs no duty of care with respect to the review of their loan modification application. (Nationstar Mot. at 4-7.)

The elements of a cause of action for negligence are (1) duty, (2) breach of duty, (3) causation, and (4) damages. Merrill v. Navegar, Inc., 26 Cal.4th 465, 500, 110 Cal.Rptr.2d 370, 28 P.3d 116 (2001). Nationstar argues that it does not owe Plaintiffs a duty and that Plaintiffs' negligence claim therefore must fail. (Nationstar Mot. at 4-7.)

" [A]s a general rule, a financial institution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money." Nymark v. Heart Fed. Sav. & Loan Ass'n, 231 Cal.App.3d 1089, 1096, 283 Cal.Rptr. 53 (Cal.Ct.App. 1991). However, that statement is merely a " general rule"; " Nymark does not support the sweeping conclusion that a lender never owes a duty of care to a borrower." Jolley v. Chase Home Fin., LLC, 213 Cal.App.4th 872, 901, 153 Cal.Rptr.3d 546 (Cal.Ct.App. 2013) (internal quotations omitted). Instead, determining whether a duty is owed depends on the balancing of several factors set forth in Biakanja v. Irving, 49 Cal.2d 647, 320 P.2d 16 (Cal. 1958). Jolley, 213 Cal.App.4th at 901. Specifically, those factors include: " (1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to him, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendant's conduct and the injury suffered, (5) the moral blame attached to the defendant's conduct, and (6) the policy of preventing future harm." Nymark, 231 Cal.App.3d at 1098 (internal quotations omitted).

The recent California Court of Appeal decision in Alvarez v. BAC Home Loans Servicing, L.P., 228 Cal.App.4th 941, 176 Cal.Rptr.3d 304 (Cal.Ct.App. 2014), analyzed the relevant six factors and concluded that " because [the] defendants allegedly agreed to consider modification of the plaintiffs' loan, the Biakanja factors clearly weigh in favor of a duty." Id. at 948.

The Alvarez court's examination of those factors is fairly analogous to the facts of this case, and the Court finds that analysis persuasive. The Alvarez court first explained that a transaction involving a loan modification application was certainly " intended to affect the plaintiffs, " id., which is also the case here. Second, as in Alvarez, " it was entirely foreseeable that failing to timely and carefully process the loan modification applications could result in significant harm to the applicants." Id.

With respect to the third factor, the facts in Alvarez were somewhat different. The plaintiffs alleged that, as a result of the mishandling of their modification application, they eventually lost their home, failed to seek other remedies, faced worsening credit, and incurred costs and expenses. Id. at 948-49. Here, Plaintiffs have not yet lost their home, but they allege that they have incurred costs and expenses, " have continued to make exorbitant [mortgage] payments, and have suffered severe emotional distress." (FAC ¶ ¶ 45, 49-50.) Although Plaintiffs do not allege injuries as dramatic as those set forth by the plaintiffs in Alvarez, Plaintiffs allege that some injury has already resulted from Nationstar's behavior. Especially considering that the other five Biakanja factors are easily satisfied in this case, the Court concludes that Plaintiffs' less than robust allegations of injury are not so weak as to tip the balance away from finding the existence of a duty of care.

Regarding the fourth factor, the Alvarez court correctly recognized that, " '[a]lthough there was no guarantee the modification would be granted had the loan been properly processed, the mishandling of the documents deprived Plaintiff of the possibility of obtaining the requested relief.'" Id. at 949 (quoting Garcia v. Ocwen Loan Servicing, LLC, No. C 10-0290 PVT, 2010 WL 1881098 (N.D. Cal. May 10, 2010)). Fifth, the Alvarez court persuasively concluded that " [t]he borrower's lack of bargaining power coupled with conflicts of interest that exist in the modern loan servicing industry provide a moral imperative that those with the controlling hand be required to exercise reasonable care in their dealings with borrowers seeking a loan modification." Alvarez, 228 Cal.App.4th at 949. Also important, the court recognized that moral blame was further increased because the plaintiffs alleged that the defendants had violated certain prohibitions of HBOR, id. at 949-50; as discussed below, Plaintiffs also allege that Nationstar violated certain provisions of HBOR. (FAC ¶ ¶ 62-69.) Last, the court correctly acknowledged the a trend, as expressed by the California legislature through HBOR, toward requiring lenders and servicers to " deal reasonably" with borrowers to attempt to achieve " a workable loan modification." Alvarez, 228 Cal.App.4th at 950 (quoting Jolley, 213 Cal.App.4th at 901).

In sum, the Court considers Alvarez to be instructive, especially considering the closely analogous facts, and concludes that the above factors indicate that a duty of care is appropriate. Nationstar owed Plaintiffs a duty to exercise reasonable care in reviewing their loan modification application. As discussed in more detail below, Plaintiffs allege that Nationstar breached that duty by failing to abide by the requirements of HBOR and have thus properly alleged a breach of Nationstar's duty of care. Satisfying the third and fourth elements of a negligence claim, Plaintiffs allege that, as a result of Nationstar's breach of its duty of care, Plaintiffs have incurred costs and expenses, " have continued to make exhorbitant [mortgage] payments, and have suffered severe emotional distress." (FAC ¶ ¶ 45, 49-50.)

Accordingly, Plaintiffs have successfully alleged a prima facie claim for negligence, and the Court DENIES Nationstar's motion to dismiss Plaintiffs' second cause of action.

2. BOA

The FAC's second claim for negligence is also alleged against BOA. (FAC at 9.) The allegations contained within that claim state that Defendants possessed a " duty to keep track of [Plaintiffs'] paperwork and document submissions, and additionally, to keep Plaintiffs informed of the status of their document submissions." (FAC ¶ 44.) Moreover, the claim is based on Defendants' failure to communicate the status of paperwork related to Plaintiffs' loan modification application and that Defendants' breach of their duty of care resulted in Plaintiffs's injury, which consisted of them not being reviewed for an in-house modification and incurring legal fees as a result. (FAC ¶ 45.)

Plaintiffs' negligence claim thus centers on Defendants' breach of their duty of care related to applications for loan modifications. (FAC ¶ ¶ 44-52.) The FAC, however, lacks any allegation that Plaintiffs ever applied for a loan modification from BOA. Instead, the FAC alleges that Plaintiffs first submitted a loan modification application to Nationstar on or about November 1, 2013. (FAC ¶ 21.) That application was thus submitted approximately four months after BOA ceased to be the servicer of Plaintiffs' loan. (FAC ¶ ¶ 19-21.)

Because Plaintiffs' negligence claim is based upon their attempts to modify their loan, and Plaintiffs appear not to have ever submitted a loan modification application to BOA, the negligence claim against BOA must fail. Accordingly, the Court GRANTS BOA's motion to dismiss Plaintiffs' second cause of action and DISMISSES WITHOUT PREJUDICE the second cause of action as against BOA.

C. Claims Three & Four: Quiet Title and Declaratory Relief

Plaintiffs' third and fourth causes of action are closely related to one another and Plaintiffs' first cause of action. The third claim seeks to establish that " Defendants have no right, title, estate, lien, or interest in the [Helmet Property], " (FAC ¶ 54), and the fourth claim seeks " a declaratory judgment that Defendants do not have any estate, right, title, lien or interest in the [Helmet Property] and as such do not have and have never had any authority to foreclose on the [Helmet Property], and further, that Plaintiffs are the sole interest holders in the [Helmet Property], " (FAC ¶ 61). Both of these claims are apparently dependent on the success of Plaintiffs' first claim, specifically their theory that Defendants lack standing to collect mortgage payments because the deed of trust was transferred into the securitized trust after the trust's closing date. Because the court dismisses Plaintiffs' first claim, Plaintiffs' third and fourth claims also fail.[3] Accordingly, the Court GRANTS Defendants' motions to dismiss the third and fourth causes of action and DISMISSES Plaintiffs' third and fourth claims.

D. Claim Five: Violation of HBOR

1. Nationstar

Plaintiffs allege that Nationstar violated California Civil Code § 2923.7, which requires that a mortgage servicer provide a single point of contact (" SPOC") to borrowers who seek foreclosure prevention alternatives. (FAC ¶ 64.) Plaintiffs allege that the SPOC was repeatedly changed and failed to provide the information a SPOC is required to provide to a borrower. (FAC ¶ 64.) Nationstar moves to dismiss Plaintiffs' claim for various reasons.

First, Nationstar argues that a loan servicer has no duty to appoint a SPOC until the borrower requests one, and Plaintiffs fail to allege that they made such a request. (Nationstar Mot. at 9.) However, Nationstar's interpretation is clearly at odds with the statutory language. California Civil Code § 2923.7(a) does not condition the appointment of a SPOC on a borrower's specific request for such a contact; instead the statutory provision requires a SPOC to be appointed when a borrower " requests a foreclosure prevention alternative, " such as a loan modification. Cal. Civ. Code § 2923.7(a); see also Penermon v. Wells Fargo Bank, N.A., Case No. 14-cv-00065-KAW, 2014 WL 2754596, at *12 (June 11, 2014).

Second, Nationstar asserts that a loan servicer does not violate California Civil Code § 2923.7 by changing the SPOC while the review of Plaintiffs' request for foreclosure prevention alternatives was ongoing. (Nationstar Mot. at 9.) In support, Nationstar points to Section 2923.7(e), which provides that a " 'single point of contact' means an individual or team of personnel." Plaintiffs fail to respond to this argument or cite any authority supporting their assertion that periodically changing the SPOC is improper. Accordingly, that allegation fails to support a violation of Section 2923.7.

Third, Nationstar contends that the allegations in the FAC demonstrate that Nationstar did not fail to communicate that application documents had become stale, provide updates and requests for documents, and review Plaintiffs for modification programs other than HAMP. (Nationstar Mot. at 9-10.) The Court disagrees with Nationstar's reading of the FAC.

Plaintiffs have asserted that they submitted a loan modification application in November 2013 and again in March 2014. (FAC ¶ ¶ 21, 25.) Although they were denied a HAMP modification, they appear to allege that they were not considered for an in-house 12 to 24 month modification until April 2014, (FAC ¶ 31); thus they at least facially allege a claim for Nationstar's initial failure to " [e]nsur[e] that a borrower is considered for all foreclosure prevention alternatives offered by, or through, the mortgage servicer, if any." Cal. Civ. Code § 2923.7(b)(4). Moreover, Plaintiffs appear to assert that, despite a Nationstar representative's assertion that Plaintiffs were being reviewed for a 12 to 24 month in-house modification, (FAC ¶ ¶ 31-32), as of the date of filing the FAC on December 3, 2014, they had not yet been reviewed for any program other than HAMP, (FAC ¶ 64). Plaintiffs further assert that, after a Nationstar representative told them, in April 2014, that " he would open a loan review based on the documents that were submitted, " they received no information regarding required documents or stale documents until they were informed, in August 2014, [4] that their documents had expired and new documents were required. (FAC ¶ ¶ 31-34, 64.) Thus Plaintiffs satisfactorily allege that Nationstar's SPOC failed to " notify [Plaintiffs] of any missing documents necessary to complete the application, " contrary to the requirements of Section 2923.7(b)(2).

Because Plaintiffs have alleged violations of California Civil Code § 2923.7, the Court DENIES Nationstar's motion to dismiss Plaintiffs' fifth cause of action.

2. BOA

In their opposition to BOA's motion, Plaintiffs acknowledge that their fifth cause of action should have been brought against Nationstar alone. (BOA Opp'n at 15 (" This cause of action is solely against Nationstar.").) Accordingly, the Court GRANTS BOA's motion to dismiss Plaintiffs' fifth cause of action and DISMISSES WITHOUT PREJUDICE the fifth cause of action as against BOA.

E. Claims Six, Seven, and Eight

Plaintiffs' sixth, seventh, and eighth causes of action were brought against only Defendant BOA. (FAC ¶ ¶ 67-89.) After BOA moved to dismiss those claims, (BOA Mot. at 10-15), Plaintiffs consented to the dismissal of their sixth, seventh, and eighth causes of action, (BOA Opp'n at 16). Accordingly, the Court GRANTS BOA's motion to dismiss Plaintiffs' sixth, seventh, and eighth causes of action and DISMISSES those claims from the Complaint WITHOUT PREJUDICE.

F. Claim Nine: Violation of UCL

1. Nationstar

Plaintiffs claim that Nationstar's behavior in reviewing their loan modification application violates California's Unfair Competition Law (" UCL"), Cal. Bus. & Prof. Code § 17200, et seq. (FAC ¶ ¶ 90-93.) In contrast, Nationstar asserts that Plaintiffs fail to adequately plead any unlawful or unfair conduct by Nationstar. (Nationstar Mot. at 11-12.)

The UCL prohibits any " unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. Violations of other laws satisfy the " unlawful" prong and thus may be treated as unfair competition pursuant to the UCL. See Kasky v. Nike, Inc., 27 Cal.4th 939, 949, 119 Cal.Rptr.2d 296, 45 P.3d 243 (Cal. 2002). The FAC essentially alleges, albeit awkwardly, that each of the other violations of law contained in the FAC constitute unlawful practices pursuant to the UCL. (FAC ¶ 91.) As discussed above, Plaintiffs allege a violation of California Civil Code 2923.7. (FAC ¶ ¶ 62-69.) That allegation may thus be treated as unfair competition pursuant to the UCL. See Kasky, 27 Cal.4th at 949. Accordingly, the Court disagrees with Nationstar's criticism of Plaintiffs' UCL claim and DENIES Nationstar's motion to dismiss Plaintiffs' ninth cause of action.

2. BOA

Plaintiffs' ninth cause of action for violation of the UCL is predicated on the alleged violations described in the other causes of action. (FAC ¶ 91.) The Court addressed those claims above. Plaintiffs' ability to " plead a viable claim under [Section] 17200 depends on [their] being able to plead some underlying fraud or unfair practice . . ." Ortiz v. Wells Fargo Bank, N.A., No. C 10-4812 RS, 2011 WL 4952979, at *8 (N.D. Cal. May 27, 2011). As discussed above, the Court dismisses all other claims against BOA, and therefore, Plaintiffs' ninth cause of action against BOA must also fail because Plaintiffs have failed to allege any unlawful, unfair, or fraudulent business act or practice by BOA. See Williams v. Wells Fargo Bank, NA, No. SA CV 13-0303-DOC, 2013 WL 2047000, at *4 (C.D. Cal. May 13, 2013) (stating that to the extent plaintiff's Section 17200 claim is " rooted in his underlying claim for violation of Section 2923.5, " and that underlying claim is dismissed, " this claim too must be dismissed").

Accordingly, the Court DISMISSES Plaintiffs' ninth cause of action as against BOA.


For the foregoing reasons, the Court GRANTS IN PART Nationstar's motion and GRANTS Bank of America's motion. The FAC is DISMISSED WITH LEAVE TO AMEND. Plaintiffs shall file a second amended pleading, if any, by February 23, 2015. The Court VACATES the February 2, 2015, hearing.


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