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Rizk v. Residential Credit Solutions, Inc.

United States District Court, C.D. California

February 10, 2015

Mohamed Rizk
v.
Residential Credit Solutions, Inc. et al

Attorneys for Plaintiff: Not Present.

Attorneys for Defendant: Not Present.

Honorable MICHAEL W. FITZGERALD, United States District Judge.

CIVIL MINUTES--GENERAL

Proceedings (In Chambers): ORDER RE MOTIONS TO DISMISS [7, 9]

Before the Court are two Motions to Dismiss filed by Defendants Bank of American, N.A. (" BANA") and Residential Credit Solutions, Inc. (" Residential"). Residential filed its Motion to Dismiss Complaint for Failure to State a Claim for Relief (the " Residential Motion") on December 11, 2014. (Docket No. 7). BANA filed its Motion to Dismiss Plaintiff's Complaint (the " BANA Motion") on December 12, 2014. (Docket No. 9). Plaintiff filed an Opposition to Defendant Bank of America, N.A.'s Motion to Dismiss Plaintiff's Complaint (the " BANA Opposition") and an Opposition to Defendant Residential Credit Solutions, Inc.'s Motion to Dismiss Plaintiff's Complaint (the " Residential Opposition") on January 16, 2015. (Docket Nos. 15, 16). Residential filed a Reply to Plaintiff's Opposition on January 26, 2015. (Docket No. 19). BANA filed a Reply in Support of Defendant's Motion to Dismiss Plaintiff's Complaint on January 26, 2015. (Docket No. 18).

The Court considered the papers submitted on the two motions and held a hearing on February 9, 2015. For the foregoing reasons, the Court GRANTS BANA's Motion without leave to amend, and GRANTS in part and DENIES in part Residential's Motion with leave to amend .

Background

Plaintiff filed a Complaint in the Ventura County Superior Court on October 31, 2014. (Docket No. 1-1). On December 5, 2014, Residential removed the action to this Court with the consent of BANA. (Docket No. 1). Plaintiff asserts four claims for relief based on Residential and BANA's actions while servicing his mortgage. They are: (1) violation of the Real Estate Procedures Act, 12 U.S.C. 2605 (" RESPA"); (2) violation of California Business and Professions Code section 17200 et seq. (" UCL"); (3) violations of California's Homeowners Bill of Rights, California Civil Code section 2910 (" HBOR"); and (4) Declaratory and Injunctive Relief.

Plaintiff's claims all arise out of Defendants' actions in servicing his mortgage. In February 2007 Plaintiff executed a promissory note (the " Note") in favor of BANA for the amount of $900, 000 secured by a Deed of Trust to finance his purchase of property in Moorpark, Cal. (the " Property") with his wife. (Complaint ¶ 12). BANA serviced his loan until it was transferred to Residential in March 2013.

The following facts are alleged in the Complaint when viewed in the light most favorable to Plaintiff:

Plaintiff and his wife separated in November 2012 and Plaintiff became concerned that he would not be able to make payments without her assistance. (Id.¶ 13). He contacted BANA and requested a modification. He was informed that he could only apply for a modification once he was in default and so was advised to stop making payments. (Id.). On January 20, 2013, Plaintiff filed for divorce. A few days later he applied for a modification from BANA. (Id.¶ 14).

According to the Complaint, Plaintiff followed up with BANA on May 5, 2013, but this date is probably a typographical error and Plaintiff meant March. (Id.) The subject of the follow-up was Plaintiff's modification; BANA reassured him that its approval was " only days away." (Id.). However, a few days later BANA told him that Residential would now be servicing of loan. (Id.). Residential informed him that it would not consider his BANA loan modification application and he should reapply. In April 2013, Plaintiff applied for a modification from Residential. In July 2013, he was approved for a modification based on both his and his wife's income. (Id.¶ 16). Plaintiff told Residential that he could not use his wife's income to pay his mortgage; he was then told to reject the modification and reapply, which he did in September 2013. (Id.).

On November 6, 2013, Plaintiff received a Notice of Default and Intent to Accelerate on the Loan. However, he was told by Residential that this was sent in error, that he should ignore it, and that he was presently being considered for a loan modification. (Id.¶ 17). On November 11, 2013, Residential requested additional income verification information, which he provided. (Id.).

On January 5, 2014, Residential denied Plaintiff's loan modification application because he had insufficient income. (Id.¶ 18). Plaintiff appealed the decision on January 23, 2014, and requested information as to the calculations used by Residential. (Id.). Plaintiff alleges that Residential did not respond to his appeal, but told him, on February 5, 2014, to reapply because his divorce constituted a material change and Residential would reconsider his income. (Id.).

In April, March, and May 2014, Residential asked Plaintiff to provide additional information such as pay stubs and his divorce decree which he submitted. (Id.¶ 19). However, on May 20, 2014 Residential again declined Plaintiff's modification request. In response, Plaintiff hired counsel who sent a letter appealing Residential decision. (Id.¶ 20). On June 10, 2014 Plaintiff, again through counsel, sent a qualified written request (" QWR") under RESPA to both BANA and Residential. (Id.¶ 21). Plaintiff did not receive a response from either and sent a second set of QWRs to BANA and Residential on July 24, 2014.

On July 29, 2014, Plaintiff received notice from Residential that a trustee's sale was scheduled for August 25, 2014. (Id.¶ 23). Plaintiff and his counsel made numerous phone calls to Residential and the firm handling the trustee's sale in August attempting to ascertain the status of his modification appeal and QWRs. On August 6, 2014, Residential called Plaintiff and asked him to reapply for a loan modification while it processed his QWR, which Plaintiff did. (Id.¶ 24). On August 13, 2014, however, Residential told Plaintiff that it had not received a QWR or a new loan modification application. However, on August 18, 2014 Residential acknowledged receipt of the loan modification, but noted that it was missing signatures. Plaintiff denies that any signatures were missing. (Id.¶ 24).

On August 19, 2014, Plaintiff sent a demand letter to Residential and BANA demanding postponement of the foreclosure, a response to his QWRs and notified Defendants of their alleged violations of RESPA. (Id.¶ 25). Plaintiff then filed the instant action.

Plaintiff alleges four claims for relief in his Complaint. In his first claim for relief, Plaintiff alleges Defendants violated RESPA by failing to acknowledge receipt of, or respond to his QWRs, for failing to make corrections to Plaintiff's account as requested in his QWRs, and for furnishing adverse information to credit reporting agencies. (Id.¶ 40). In his second claim for relief, Plaintiff alleges Defendants engaged in unlawful, unfair and deceptive business practices in violation of the UCL by their violations of RESPA, losing his documents, and violating the dual-tracking provisions of HBOR. (Id. ¶ ¶ 49-50). In his third claim for relief, Plaintiff alleges Defendants violated HBOR by noticing a trustee's sale while a modification decision was pending, and for failing to provide Plaintiff with a single point of contact. (Id. ¶ ¶ 45-49). In Plaintiff's fourth claim he requests injunctive and declaratory relief.

Requests for Judicial Notice

As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion to dismiss for failure to state a claim. Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1016, n. 9 (9th Cir. 2012) (affirming decision to dismiss putative class where objector to Massachusetts's district court's certification of nationwide class and approval of settlement brought suit in California seeking damages based on same facts alleged in Massachusetts's action). The Court may, however, take judicial notice of matters of public record outside the pleadings that are not subject to reasonable dispute. Id.; Fed.R.Evid. 201(b).

Residential filed a Request for Judicial Notice (" Residential RJN") and a Notice of Errata to Request for Judicial Notice with its Motion to Dismiss, asking the Court to take judicial notice of the Assignment of Deed of Trust recorded on March 18, 2014, as document number 20130318-00050232-0 in the Official Records of Ventura County; the Substitution of Trustee recorded on March 31, 2014 as document number 20140331-00039793-0 in the Official Records of Ventura; and the Notice of Default recorded on April 14, 2014 as document number 20140414-00046149-0 in the Official Records of Ventura County. (Docket Nos. 8, 12). This request is unopposed. The Request is GRANTED, and the Court takes judicial notice of the documents submitted by Residential because they are not subject to reasonable dispute and are the proper subjects of judicial notice. See, e.g., W. Fed. Sav. & Loan Ass'n v. Heflin Corp., 797 F.Supp. 790, 792 (N.D. Cal. 1992) (taking judicial notice of documents in a county public record, including deeds of trust).

BANA filed a Request for Judicial Notice (" BANA RJN") with its Motion to Dismiss, asking the Court to take judicial notice of the Deed of Trust dated February 20, 2007 and recorded in the official records of the Ventura County; the Assignment of Deed of Trust dated March 6, 2013 and recorded in the official records of the Ventura County; the Substitution of Trustee, dated march 25, 2014 and recorded in the official records of the Ventura County; the Notice of Default and Election to Sell Under Deed of Trust, dated April 9, 2014 and recorded in the official records of the Ventura County; and the Notice of Trustee Sale, dated July 29, 2014 and recorded in the official records of the Ventura County. (Docket Nos. 10). This request is unopposed. The Request is GRANTED, and the Court takes judicial notice of the documents submitted by BANA because they are not subject to reasonable dispute and are the proper subjects of judicial notice. See, e.g., Heflin Corp., 797 F.Supp. at 792.

Plaintiff also filed a Request for Judicial Notice (" Plaintiff's RJN") with his Oppositions, asking the Court to take judicial notice of the Notice of Default and Intent to Accelerate sent by Residential to Plaintiff on November 6, 2013. (Docket No. 17). This request is unopposed. The Request, however, is DENIED. Such a document is not the proper subject of judicial notice. Unlike the documents contained in Defendants' requests, which were recorded in the official records of the County of Ventura, this is only a document that Plaintiff claims he was sent by Residential. As the Court explains below, however, the ...


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