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Glaser v. Nationstar Mortgage LLC

United States District Court, N.D. California, San Francisco Division

May 9, 2016

FRANKLIN GLASER, et al., Plaintiffs,
v.
NATIONSTAR MORTGAGE, LLC, et al., Defendants.

          ORDER GRANTING IN PART THE DEFENDANTS' MOTION TO DISMISS Re: ECF No. 40, 43, 63

          LAUREL BEELER United States Magistrate Judge

         INTRODUCTION

         The plaintiffs and borrowers, Franklin and Victoria Glaser, brought this mortgage-related case after their home was sold in foreclosure.[1] They assert ten claims for relief against Nationstar Mortgage (the loan servicer), Mortgage Electronic Registration Systems (the original mortgage-trust beneficiary), U.S. Bank (the trustee), NBS Default Services (the foreclosing trustee), and Viet Nguyen (the third-party homebuyer).[2] The defendants move to dismiss the Glasers' First Amended Complaint (“FAC”) under Federal Rule of Civil Procedure 12(b)(6).[3]

         The court can decide the matter without oral argument and vacates the May 18, 2017 hearing. Civil L.R. 7-1(b). The court grants in part the defendants' motion and dismisses many of the Glasers' claims. The court does, however, grant them leave to amend.

         STATEMENT

         1. The Glasers Take Out a $560, 000 Loan

         In December 2004, Franklin and Victoria Glaser got a $560, 000 loan from America's Wholesale Lender.[4] The loan was secured by a deed of trust on the Glasers' property in San Ramon, California.[5] The deed of trust named as trustee CTC Real Estate Services and named as beneficiary (as nominee for America's Wholesale) Mortgage Electronic Registration Systems (“MERS”).[6]

         On January 11, 2011, MERS recorded an assignment of the deed of trust that transferred its interest to U.S. Bank as trustee for the Harborview 2005-1 Trust Fund.[7] Ten months later, MERS recorded a second assignment of the deed of trust, again to U.S. Bank as trustee for the Harborview trust.[8] And nearly two years after the second assignment, Bank of America recorded an assignment of the deed of trust to Nationstar.[9] (The Glasers allege “that there is no evidence of [a] transfer to [Bank of America] recorded in the public record.”[10])

         Several years later, in April 2016, NBS Default Services was substituted as trustee for U.S. Bank.[11]

         2. The Glasers Attempt to Modify Their Loan and NBS Records a Notice of Default

         The Glasers' mortgage was affordable, but Mr. Glaser had a stroke in March 2013 and “they found themselves behind in payments.”[12] So in 2014 the Glasers began loan-modification efforts with Nationstar.[13] That year they submitted a loan-modification application that was denied because their “documents were not provided in writing.”[14] But they submitted a complete application, qualified for a three-month modification trial period, and then converted to a permanent modification.[15] The Glasers made three payments during the trial period and another six payments after the modification became permanent.[16] But the modification was not recorded and “Nationstar did not follow through with . . . [its] promise to permanently modify [the loan] in writing.”[17]

         In January 2016, a month after Mr. Glaser retired, the Glasers “submitted another complete” loan-modification application because of the change in their income.[18] Nationstar acknowledged receipt of the application the next month.[19] Nationstar denied the Glasers' application because (according to it and disputed by the Glasers) the application was ineligible under the Home Affordable Modification Program and the Glasers had a negative disposable income.[20] In its denial letter, Nationstar appointed Silvia Ochoa-Araujo as the Glasers' single point of contact - the Glasers allege that this appointment was too late, that Ms. Ochoa-Araujo was never available, and that they never spoke to her.[21]

         The Glasers disputed Nationstar's denial of their application “on the grounds that Mr. Glaser had retired in December 2015 and . . . he had started receiving Public Employee Retirement System payments.”[22] On Nationstar's advice, they submitted a new application (instead of appealing the denial) based on their changed financial circumstances.[23] They submitted the new application before April 18, 2016, when NBS recorded a Notice of Default and Election to Sell.[24]

         The Notice of Default “instruct[ed] [the Glasers] to contact Nationstar for foreclosure avoidance options” and “stated an amount in arrearage of $33, 723.02.”[25] The Glasers assert that this amount is inaccurate because Nationstar “refused partial payments which should have been credited toward their loan.”[26]

         3. The Glasers Dispute Nationstar's Denial of Their Loan-Modification Applications

         After NBS recorded the Notice of Default, in June 2016, Nationstar denied the Glasers' second loan-modification application because of a negative net present value (“NPV”).[27] Nationstar twice advised the Glasers that they could dispute the decision by providing “written evidence that one or more of the NPV input values [was] inaccurate.”[28] Nationstar also advised the Glasers about “the proper process for appealing the property value, ” which included (among other things) (1) the Glasers' alleged value of the home, along with documents to support that amount, and (2) if the NPV was found to be positive, a third-party appraisal.[29] The Glasers disputed Nationstar's NPV calculation but they did not “provide a payment for another appraisal or[, ] in the alternative, their own appraisal report.”[30]

         They also appealed Nationstar's calculation of their income.[31] Nationstar had calculated the Glasers' monthly gross income to be $5, 496.79.[32] This included (1) $2, 423.05 in Mr. Glaser's retirement income; (2) $2, 623.74 in Mrs. Glaser's average wages;[33] and (3) $450 in property rental income.[34] The Glasers assert that the income calculation was inaccurate because it did not include Mr. Glaser's $868 monthly insurance payment.[35] They also appear to allege that Nationstar failed to account for Mrs. Glaser's increased monthly salary.[36]

         On September 10, 2016, in addition to appealing Nationstar's decision, the Glasers “submitted another written application.”[37] The Glasers allege that this September application included the $868 monthly insurance payments, but that income is not separately delineated in the application.[38] Instead, the application reflected $5, 344.14 in monthly gross wages, $2, 423.05 in retirement income, and $600 in rental income for a total gross income of $8, 367.19.[39] Nationstar did not acknowledge receipt of the application.[40]

         4. NBS Records a Notice of Trustee's Sale; the Glasers Continue to Talk with Nationstar

         Two days after the Glasers submitted the September 2016 modification application, NBS recorded a Notice of Trustee's Sale.[41] The Glasers “were in regular contact with Nationstar, ” though, “and were told their application including the $868 per month [insurance] income was under consideration and” the sale was stayed.[42] The Glasers “relied on this representation” and did not seek bankruptcy or other emergency court protection.[43] They instead wrote a letter to Nationstar again explaining the $868 monthly insurance income.[44]

         A week after the Glasers wrote to Nationstar, on October 11, 2016, NBS conducted the trustee's sale.[45] U.S. Bank (as trustee for the Harborview Trust) bought the property and later “attempted to transfer its interest to Viet Nguyen.”[46] U.S. Bank recorded a grant deed conveying the property to Ms. Nguyen.[47]

         The Glasers challenge the trustee's sale (and the eventual transfer to Ms. Nguyen) because it “was initiated and conducted by parties with no lawful interest in” their deed of trust.[48] They assert that chain of title in the deed of trust was broken when the lender “fail[ed] to transfer assets to the trust prior to the trust closing date” in violation of the trust's Pooling and Servicing Agreement (“PSA”).[49] They also assert that the chain of title was broken by the three recorded assignments (the first two from MERS to U.S. Bank and the third from Bank of America to Nationstar) and Bank of America's purchase of Countrywide.[50]

         The Glasers therefore brought this case to challenge the foreclosure and assert ten claims for relief: (1) wrongful foreclosure; (2) promissory estoppel; (3) violation of California Civil Code section 2924.11; (4) violation of California Civil code section 2923.7; (5) violation of California Civil Code section 2923.55; (6) slander of title; (7) violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962; (8) violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692; (9) violation of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601; and (10) violation of the Real Estate Settlement Practices Act (“RESPA”), 12 U.S.C. § 2605.

         MERS, U.S. Bank, and Nationstar move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6).[51] NBS and Ms. Nguyen joined in the motion.[52]

         RULE 12(B)(6) LEGAL STANDARD

         Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of a “failure to state a claim upon which relief can be granted.” A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).

         A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief” to give the defendant “fair notice” of what the claims are and the grounds upon which they rest. See Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not need detailed factual allegations, but “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. Factual allegations must be enough to raise a claim for relief above the speculative level . . . .” Twombly, 550 U.S. at 555 (internal citations omitted).

         To survive a motion to dismiss, a complaint must contain sufficient factual allegations, accepted as true, “‘to state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “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.” Id. (quoting Twombly, 550 U.S. at 556). “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.''” Id. (quoting Twombly, 550 U.S. at 557).

         If a court dismisses a complaint, it should give leave to amend unless the “the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990).

         ANALYSIS

         1. Wrongful Foreclosure

         The Glasers assert a wrongful-foreclosure claim against all defendants.[53] They allege that “[t]he foreclosure proceedings [that] Defendants Nationstar and NBS initiated . . . were invalid and wrongful because no Defendant was the true holder of beneficial interest under” the deed of trust.[54] Thus, they say, the trustee's sale was illegal.[55]

         Under California law, “[t]he elements of an equitable cause of action to set aside a foreclosure sale are as follows: (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.” Lona v. Citibank, N.A., 202 Cal.App.4th 89, 104 (2011). “Justifications for setting aside a trustee's sale . . . which satisfy the first element, include the trustee's or the beneficiary's failure to comply with the statutory procedural requirements for the notice or conduct of the sale.” Id. “Other grounds include proof that: (1) the trustee did not have the power to foreclose, (2) the trustor was not in default, no breach had occurred, or the lender had waived the breach, or (3) the deed of trust was void.” Id.at 104-05 (citations omitted).

         Here, the Glasers “allege a wrongful foreclosure due to [a] broken chain of title and on equitable principles” based on the defendants' alleged misconduct.[56] They base their chain-of-title theory on multiple grounds, including the defendants' use of robo-signers, “a late assignment and faulty securitization, ” foreign and duplicate assignments, dual-tracking and single-point-of-contact violations, and others.[57] Their principal theory, though - and the only one they substantively address in their opposition - is that the original assignment to U.S. Bank “was recorded late . . . in violation of the” securitization trust's PSA, thus voiding that (and all subsequent) assignments.[58] The issue is whether they have standing to challenge that alleged breach of the PSA.

         “A borrower [has] . . . standing to challenge an assignment of her note and deed of trust on the basis of defects allegedly rendering the assignment void.” Morgan v. Aurora Loan Servs., LLC, 646 F. App'x 546, 550 (9th Cir. 2016) (citing Yvanova v. New Century Motrg. Corp., 62 Cal.4th 919 (2016)) (emphasis added). “Borrowers who challenge the foreclosing party's authority on the grounds of a void assignment ‘are not attempting to enforce the terms of the instruments of assignment; to the contrary, they urge that the assignments are void ab initio.” Yvanova, 62 Cal.4th at 936 (quoting Reinagel v. Deutsche Bank Nat'l Trust Co., 735 F.3d 220, 225 (5th Cir. 2013)). But “[w]hen an assignment is merely voidable, the power to ratify or avoid the transaction lies solely with the parties to the assignment; the transaction is not void unless and until one of the parties takes steps to make it so.” Id. And so borrowers do not have standing to challenge an assignment as voidable, see Id. 942-43; for example, based on an act in violation of a trust agreement governed by New York law. See Morgan, 646 F. App'x at 550 (holding that “because an act in violation of a trust agreement is voidable - not void - under New York law, which governs the . . . [PSA] at issue, [the plaintiff] lack[ed] standing”).

         Here, the Glasers' deed of trust is governed by New York law.[59] They allege that the PSA required the deed of trust be transferred in 2004 or 2005 (before the trust's closing date), but that MERS did not assign its interest to U.S. Bank until 2011.[60] They assert that this “attempted transfer of the Deed of Trust into the securitized trust rendered the attempted transfer void and not merely voidable.”[61] But “an assignment to a securitized trust that is made after the closing date is ‘merely voidable, '” not void, under New York law. Reed v. Wilmington Trust, N.A., No. 16-cv-01933-JSW, 2016 WL 3124611, at *4 (N.D. Cal. June 3, 2016) (citing Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal.App.4th 808, 815 (2016)); Zeppeiro v. GMAC Mortg., LLC, 662 F. App'x 500, 501 (9th Cir. 2016) (“[A]n untimely assignment into a securitized trust is not void, but merely voidable, and . . . borrowers lack standing to challenge such assignments.”). Because the allegedly improper assignment of the deed of trust is merely voidable, then, the Glasers lack standing to “challenge such alleged deficiencies in a wrongful foreclosure action.” Suruki v. Ocwen Loan Serv., LLC, No. 15-cv-00773-JST, 2016 WL 7741734, at *3 (N.D. Cal. July 22, 2014).

         As mentioned above, the Glasers appear to assert several other reasons why the assignment is void instead of voidable- for example, “violations of the California Civil Code and federal law, and use of robo-signers.”[62] For three reasons, the court does not address these general assertions now: (1) the Glasers do not provide legal support for their argument; (2) the court dismisses below many of their claims for California and federal violations; and (3) the one specific (alleged) violation that they identify - the use of robo-signers - renders the assignment voidable, not void. See Mendoza v. JPMorgan Chase Bank, N.A., 6 Cal.App. 5th 802, 820 (2016) (“To the extent that an assignment was in fact robo-signed, it would be voidable, not void, at the injured party's option. The bank, not the borrower[, ] would be the injured party.”) (citing Pratap v. Wells Fargo Bank, N.A., 63 F.Supp.3d 1101, 1109 (N.D. Cal. 2014)).

         The court dismisses the Glasers' wrongful-foreclosure claim but grants them leave to amend.

         2. Promissory Estoppel Claim

         The Glasers assert a claim for promissory estoppel.[63]

         Under California law, “[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.” Kajima/Ray Wilson v. Los Angeles Cnty. Metro. Transp. Auth., 23 Cal.4th 305, 310 (2000). Promissory estoppel is an equitable doctrine whose remedy may be limited “as justice so requires.” See Id. Where equity requires, promissory estoppel is invoked “to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.” Id. The elements of promissory estoppel are: (1) a clear promise; (2) reasonable and foreseeable reliance by the party to whom the promise is made; (3) injury (meaning, substantial detriment); and (4) damages “‘measured by the extent of the obligation assumed and not performed.'” See Errico v. Pacific Capital Bank, N.A., 753 F.Supp.2d 1034, 1048 (N.D. Cal. 2010) (quoting Poway Royal Mobilehome Owners Ass'n. v. City of Poway, 149 Cal.App.4th 1460, 1470 (2007)).

         Here, the Glasers base their promissory-estoppel claim on two promises.

         First, they allege that “Nationstar and/or NBS on behalf of themselves or as agents or robosigners of one or more other Defendants made a promise through oral and written representations[] that they would not foreclose” on the property while the Glasers' modification application was being considered.[64] This is not a “clear promise” because it is not clear who made it (Nationstar or NBS) and, under Rule 8(a)'s pleading requirements, grouping multiple defendants together in a broad allegation is insufficient to provide the defendants with fair notice of the claims against them and the grounds for relief.

         Second, they assert that Nationstar “promise[d] to convert [their] trial period plan to permanent in 2014 which never occurred.”[65] The problem with this promise, however, is that the Glasers also allege that “they were told their trial plan had converted to permanent.”[66] These two allegations are contradictory in that it appears Nationstar actually converted the Glasers' trial plan to a permanent modification, satisfying its promise. The Glasers also assert that that Nationstar did not “follow through with” the promise to permanently modify the loan “in writing.” But it is unclear if it is the promise to modify the loan in writing on which they allegedly relied, and, if so, how they detrimentally relied on it.

         The court therefore dismisses the promissory-estoppel claim without prejudice.

         3. Violation of California Civil Code Section 2924.11

         The Glasers assert that the defendants violated California's Homeowner Bill of Rights (“HBOR”) by continuing with the foreclosure proceedings “without providing a determination on the loan modification applications or acknowledging Mr. Glaser's additional income.”[67] They assert this dual-tracking claim under section 2924.11, which describes requirements (and prohibitions) after a loan modification has been approved. But based on the Glasers' allegations - that the defendants proceeded without making a determination on their modification applications - the defendants construe this claim under section 2923.6.[68] The court considers the claim under that section, too. (The Glasers did not address the issue - or the claim at all - in their opposition brief.)

         “Dual tracking” is the practice of pursuing foreclosure proceedings while a borrower's loan modification application is still pending. See Jolley v. Chase Home Finance, LLC, 213 Cal.App.4th 872, 904 (2013). Under section 2923.6(c), if a borrower submits a complete loan modification application, the mortgage servicer must first make a written determination that the borrower is not eligible for a loan modification before recording a notice of default or conducting a trustee's sale. A servicer, trustee, beneficiary, or other authorized agent may not “record a notice of default or notice of sale or conduct a trustee's sale” until one of the following occurs:

(1) The mortgage servicer makes a written determination that the borrower is not eligible for a first lien loan modification, and any appeal period pursuant to subdivision (d) has expired.
(2) The borrower does not accept an offered first lien loan modification within 14 days of the offer.
(3) The borrower accepts a written first lien loan modification, but defaults on, or otherwise breaches the borrower's obligations under, the first lien loan modification.

Cal. Civ. Code § 2923.6(c). A modification application is “‘complete' when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer.” Id. § 2923.6(h). “In order to minimize the risk of borrowers submitting multiple applications . . . for the purpose of delay, ” a servicer is not required to evaluate a borrower's application that it has already reviewed “unless there has been a material change in the borrower's financial circumstances . . . and that change is documented by the borrower and submitted” to the servicer. Id. § 2923.6(g).

         Here, the Glasers allege that they submitted a complete loan-modification application in January 2016.[69] Nationstar denied that application on February 27, 2016.[70] Nationstar denied the application because it was ineligible under the Home Affordable Modification Program and the Glasers had a negative disposable income.[71] The Glasers disputed the denial within thirty days.[72]“Nationstar advised [them] to submit another application based upon changed financial circumstances, which they did.”[73] They allege that they submitted that application before the Notice of Default was recorded on April 18, 2016.[74] They also assert that it was not until after the Notice of Default was recorded, in June 2016, that Nationstar denied their second application.[75]

         That may qualify as a violation of California's dual-tracking prohibition, but the Glasers plead themselves out of it: later in the complaint (under their dual-tracking claim), they assert that they submitted loan-modification applications in January 2016 (the original application), September 2016, and October 2016.[76] They skip over the above second application submitted sometime between February 27 and April 18. Because the pleading is contradictory and ambiguous, and because it does not give sufficient notice to the defendants, that application does not support a dual-tracking violation.

         And neither do the Glasers' other applications, allegedly submitted on September 10 and October 4, 2016, because those applications were not “complete.”[77] In both of those applications, the Glasers asserted that Nationstar improperly calculated their income because it excluded Mr. Glaser's $868 monthly insurance payment.[78] But they do not allege that they submitted complete applications. For example, the September application (a standard Request for Mortgage Assistance) requires applicants to “[p]rovide documentation showing the amount and frequency of the benefits, such as letters, exhibits, disability policy or benefits statement from the provider and receipt of payment (such as two most recent bank statements or deposit advices).”[79] The Glasers attach to the complaint a check from San Mateo County Schools for the $868.[80] But that check does not indicate the frequency of the payment, and the Glasers do not clearly assert that they submitted it to Nationstar - the September application does not indicate the $868 payment and the check is not attached to it.[81]

         In the September application, the Glasers also “disputed the [property's] valuation.”[82] In Nationstar's August letter to the Glasers, it explained “[t]he proper process for appealing the property value, ” which required the Glasers to “state the alleged value of the home, and provide documents to support this amount, such as a tax appraisal or Zillow report.”[83] But the Glasers “did not provide a payment for another appraisal or[, ] in the alternative, their own appraisal report.”[84]And so they did not supply the required documentation to complete their application challenging the property's value.

         They also appear to have challenged Nationstar's calculation of Mrs. Glaser's monthly income.[85] They assert that her wages “increased from the $2, 775 gross monthly pay which was listed in their January 2016 application, ”[86] but they do not specify the amount of the increase or allege that they provided the documentation to support it. They instead attach a paystub to the complaint for the original $2, 775.81 monthly wages, which Nationstar had already considered.[87]

         Although the Glasers allege that Nationstar did not respond to their September and October applications before the Notice of Trustee's Sale was filed and before the property was sold, their applications were not “complete, ” and so, as pled, their dual-tracking claim fails. The court dismisses it without prejudice.

         4. Violation of California Civil Code Section 2923.7

         The Glasers assert a second HBOR claim under section 2923.7.[88] This claim is based on the defendants' failure to appoint a single point of contact before the denial of their initial modification application, and their point of contact's failure to communicate with them.[89]

         Section 2923.7 provides that, when a borrower requests a foreclosure-prevention alternative, such as a loan modification, the servicer must promptly designate a “single point of contact” (“SPOC”) to communicate directly with the borrower. Cal. Civ. Code § 2923.7(a). The SPOC can be an individual or a team, but must (among other things) possess sufficient knowledge about foreclosure alternatives and have access to individuals who have the ability and authority to stop foreclosure proceedings. See Id. § 2923.7(b)-(d). Moreover, “[t]he mortgage servicer shall ensure that each member of the [SPOC] team is knowledgeable about the borrower's situation and current status in the alternatives to foreclosure process.” Id. § 2923.7(e).

         As an initial matter, the court dismisses the claim with prejudice against all defendants except Nationstar (the loan servicer), because section 2923.7 applies only to servicers. See Rockridge Trust v. Wells Fargo, N.A., 985 F.Supp.2d 1110, 1152 (N.D. Cal. 2013) (finding that section 2923.7 “imposes duties only on the loan servicer”).

         With respect to Nationstar, it appointed a single point of contact (Ms. Ochoa-Araujo), when it denied the Glasers' 2016 loan-modification application.[90] The Glasers allege that this appointment was “too late” and that Ms. Ochoa-Araujo was “never available.”[91]

         Section 2923.7 requires a loan servicer to appoint a SPOC upon the borrower's request for a foreclosure prevention alternative. See Green v. Cent. Mortg. Co., 148 F.Supp.3d 852, 874 (N.D. Cal. 2015) (collecting cases). The Glasers assert that they first began loan-modification efforts in 2014, when they submitted their first modification application.[92] They also allege that Nationstar did not appoint Ms. Ochoa-Araujo until February 2016, when it denied their January 2016 modification application.[93] So, as pled, the Glasers requested a foreclosure prevention alternative (i.e. a loan modification) in 2014, but Nationstar did not appoint a single point of contact until February 2016.

         For now, the claim survives against Nationstar. On this record, the court defers ruling on its defenses under sections 2924.12(c) and 2923.4(a).

         5. Violation of California Civil Code Section 2923.55

         The Glasers' final HBOR claim arises under section 2923.55.[94] In that claim, they challenge the defendants' rights under the deed of trust (based on improper assignments) and seek a declaration determining the parties' rights with respect to the property, the note, and the deed of trust.[95] They urge that “Nationstar cannot comply with” section 2923.55 “which requires that any beneficiary causing the recordation of a Notice of Default . . . prove first that they are the Noteholder.”[96]

         The claim as pled is poorly constructed. The Glasers do not identify where section 2923.55 requires a beneficiary to prove that it is the noteholder. The defendants point to section 2924(a)(6), which states that “[n]o entity shall record or cause a notice of default to be recorded . . . unless it is the holder of the beneficial interest under the mortgage or deed of trust, the original trustee or the substituted trustee under the deed of trust, or the designated agent of the holder of the beneficial interest.” Cal. Civ. Code § 2924(a)(6). Here, NBS - which U.S. Bank substituted as trustee - recorded the Notice of Default. And to the extent this is a challenge to U.S. Bank's interest in the deed of trust (and the defendants' chain of title), the court denies that argument for the same reasons as discussed above: the Glasers do not have standing to challenge the loan's securitization based on the alleged breach of the PSA. The court dismisses the claim without prejudice.

         6. Slander of Title

         The Glasers allege a slander-of-title claim based on the defendants' recording of the assignments and other notices.

         Slander of title “occurs when a person, without privilege to do so, publishes a false statement that disparages title to property and causes pecuniary loss.” Truck Ins. Exchange v. Bennett, 53 Cal.App.4th 75, 84 (1997). The required elements of a claim for slander of title are “(1) a publication, (2) without privilege or justification, (3) falsity, and (4) direct pecuniary loss.” Sumner Hill Homeowners' Ass'n, Inc. v. Rio Mesa Holdings, LLC, 205 Cal.App.4th 999, 1030 (2012).

         A “privileged” publication is one made “[i]n a communication, without malice, to a person interested therein [ ] by one who is also interested.” Cal. Civ. Code § 47(c)(1). Nonjudicial foreclosure documents are subject to this privilege. See Cal. Civ. Code § 2924(d); see also Ogilvie v. Select Portfolio Serv'g, No. 12-CV-001654-DMR, 2012 WL 3010986, at *3 (N.D. Cal. July 23, 2012) (collecting cases). Malice is defined as actual malice, meaning “that the publication was motivated by hatred or ill will towards the plaintiff or by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff's rights.” Kachlon v. Markowitz, 168 Cal.App.4th 316, 336 (2008).

         Here, the Glasers' theory is that the defendants “disparaged [their] title to the Subject Property when, based on [the] invalid and void assignment[s], they recorded” the assignments, substitution of trustee, notice of default, and notice of trustee's sale, with “knowledge of [the documents'] falsity.”[97] The claim fails for two reasons. First, as discussed above, they do not have standing to challenge the assignments based on improper securitization under the PSA, and thus cannot say that the assignments or the subsequent documents are “invalid” or “false.” Second, at least the notice of default and sale are privileged as non-judicial foreclosure documents, see Cal. Civ. Code § 2924(a)(1) & (3), (d)(1); and the Glasers do not plead facts plausibly demonstrating malice.

         The Glasers also indicate, in passing only, that the recorded documents contained “a false amount in default.”[98] For example, the Notice of Default reflected an amount in default of $33, 723.02.[99] They assert that “this amount is inaccurate on the grounds that Nationstar refused partial payments which should have been credited toward their loan on or around December of 2015.”[100] According to a letter written by Mr. Glaser, Nationstar refused to accept a partial payment ($1, 500) when the Glasers could not afford the full mortgage payment ($3, 260).[101] But the deed of trust expressly authorizes this: “Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current.”[102] So, Nationstar's refusal to accept a partial payment (which it is authorized to do) cannot alone render the amount in default “false.”

         The court dismisses the Glasers' slander-of-title claim without prejudice.

         7. RICO Claim

         The Glasers next assert a RICO claim against the defendants.

         Under RICO, it is “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). It is similarly unlawful for “any person to conspire” to do so. Id. § 1962(d). A private plaintiff “injured in his business or property” may sue for violations of § 1962 and “shall recover threefold the damages he sustains” plus costs and fees. Id. § 1964(c).

         To state a successful RICO claim, a plaintiff must allege “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering (known as ‘predicate acts') (5) causing injury to the plaintiff's ‘business or property.'” Grimmet v. Brown, 75 F.3d 506, 510 (9th Cir. 1996); see also Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir. 2007).

         The “enterprise” is “a group of persons associated together for a common purpose of engaging in a course of conduct.” Odom, 486 F.3d at 549. “The ‘enterprise' is not the ‘pattern of racketeering activity'; it is an entity separate and apart from the pattern of activity in which it engages.” Id. And “‘the person named as the defendant cannot also be the entity identified as the enterprise.'” Madlaing v. JPMorgan Chase Bank, N.A., No. CV F 12-2069 LJO SMS, 2013 WL 2403379, at *21 (E.D. Cal. May 31, 2013) (quoting Atlas Pile Driving Co. v. DiCon Financial Co., 886 F.2d 986, 995 (8th Cir. 1989)).

         “To show a pattern of racketeering activity, the plaintiff must allege more than the existence of one scheme with a ‘single purpose which happen[s] to involve more than one act taken to achieve that purpose.'” Lee v. Bank of New York Mellon, No. 16-cv-05094-JST, 2016 WL 8729924, at *8 (N.D. Cal. Dec. 9, 2016) (quoting Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1535 (9th Cir. 1992)) (alteration in original). “The plaintiff also must show that the activities ‘amount to or pose a threat of continued criminal activity.'” Id. (quoting Sever, 978 F.2d at 1534).

         “An ‘injury' is cognizable under RICO only if the plaintiff can show that injury was proximately caused by the conduct, and that he has suffered a concrete financial loss.” Bergman v. Bank of America, No. C-13-00741 JCS, 2013 WL 5863057, at *29 (N.D. Cal. Oct. 23, 2013) (citing Chaset v. Fleer/Skybox Int'l, LP, 300 F.3d 1083, 1086 (9th Cir. 2002)).

         When a civil RICO claim is based in fraud, Rule 9(b)'s heightened pleading standard applies. See Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065-66 (9th Cir. 2004). So, a plaintiff alleging fraudulent predicate acts must “‘state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation.'” Id. at 1066 (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)).

         In Bergman v. Bank of America, the plaintiff-borrowers alleged that the defendant-lenders engaged in a “scheme to defraud everyone.” 2013 WL 5863057 at *29. The Bergman court summarized the alleged scheme:

Plaintiffs allege that Defendants concealed the securitization of Plaintiff's loans, “br[ought] suit on behalf of entities that were not the real parties in interest, ” “conceal[ed] the parties' lack of standing, ” “draft[ed] . . . fraudulent affidavits and documents, ” including documents executed by robo-signers, and conveyed foreclosure-related documents using the U.S. Mail and the internet. ...

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