United States District Court, E.D. California
ELIZABETH A. WILLIS, Plaintiff,
JPMORGAN CHASE BANK, N.A.; and DOES 1-20 inclusive, Defendants.
MEMORANDUM AND ORDER RE: MOTION TO DISMISS
WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE.
Elizabeth A. Willis brought this action against JPMorgan
Chase Bank, N.A. (“Chase”) for violation of the
California Homeowner's Bill of Rights
(“HBOR”) and negligence arising out
defendant's alleged mishandling of plaintiff's loan
modification requests. The matter is now before the court on
defendant's Motion to dismiss for failure to state a
claim upon which relief can be granted pursuant to Federal
Rule of Civil Procedure 12(b)(6). (Def.'s Mot. (Docket
Factual and Procedural Background
refinanced her residential mortgage loan with Chase in 2006.
(Compl. ¶ 7 (Docket No. 1-1).) She refinanced her home
mortgage with a first lien mortgage loan and also obtained a
home equity line of credit (“HELOC”). (Def.'s
Request for Judicial Notice (“RJN”) Exs. 1-2
(Docket Nos. 3-2, 3-3).)
alleges that she requested a loan modification application in
May 2016 and submitted a completed loan modification
application on July 8, 2016. (Compl. ¶¶ 8-9, 12.)
Chase allegedly lost plaintiff's documents on several
occasions and required plaintiff to resubmit several
documents. (Id. ¶¶ 13-14.)
allegedly denied plaintiff's loan modification on the
HELOC but did not make a decision on the first lien loan.
(Id. ¶ 14.) Shortly thereafter, plaintiff
allegedly “received correspondence that foreclosure
proceedings were being initiated” against her.
(Id. ¶ 15.) Plaintiff allegedly resubmitted her
application on October 24, 2016, but never received any
information regarding her first lien loan modification
application. (Id. ¶¶ 17-18.)
initiated this action in state court against Chase on January
12, 2017, alleging (1) violation of the HBOR, Cal. Civ. Code
§ 2923.6(c)-(d); and (2) negligence. Defendant
subsequently removed this case to federal court. (Docket No.
motion to dismiss under Rule 12(b)(6), the court must accept
the allegations in the complaint as true and draw all
reasonable inferences in favor of the plaintiff. Scheuer
v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other
grounds by Davis v. Scherer, 468 U.S. 183 (1984);
Cruz v. Beto, 405 U.S. 319, 322 (1972). To survive a
motion to dismiss, a plaintiff must plead “only enough
facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). “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. Under this
standard, “a well-pleaded complaint may proceed even if
it strikes a savvy judge that actual proof of those facts is
improbable.” Twombly, 550 U.S. at 556.
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Iqbal, 556
U.S. at 678; see also Iqbal, 556 U.S. at 679 (“While
legal conclusions can provide the framework of a complaint,
they must be supported by factual allegations.”).
California Civil Code § 2923.6(c)-(d)
first cause of action, plaintiff alleges defendant violated
California Civil Code § 2923.6(c)-(d) by failing to
provide a determination on her first lien mortgage
modification application prior to initiating foreclosure
proceedings. Defendant argues the court must dismiss
plaintiff's claim because plaintiff does not allege that
defendant recorded a notice of default.
2923.6 prohibits “dual tracking, ” in which a
lender proceeds with the foreclosure process while reviewing
a loan modification application. See Cal. Civ. Code §
2923.6(c). “If a borrower submits a complete
application for a first lien loan modification offered by, or
through, the borrower's mortgage servicer, a mortgage
servicer . . . shall not record a notice of default, or
conduct a trustee's sale, while the complete first lien
loan modification application is pending.” Id.
(emphasis added). Section 2923.6(d) further provides that the
“borrower shall have at least 30 days from the date of
the written denial to appeal the denial and to provide
evidence that the mortgage servicer's determination was
in error.” Id. § 2923.6(d). Section
2923.6(c)-(d) thus “prohibits recording a notice of
default or sale and conducting that sale” while a loan
modification application is pending. Marquez v. U.S.
Bank, N.A., Case No. CV16-06658 JAK (Ex), 2016 WL
2885857, at *7 (N.D. Cal. May 16, 2016); see Shupe v.
Nationstar Mortg. LLC, Civ. No. 2:16-1221 MCE CMK, 2017
WL 431083, at *2 (E.D. Cal. Jan. 31, 2017) (“California
Civil Code § 2923.6 places restrictions on the recording
of Notices of Default or Notices of Trustee's Sale while
a loan modification application is pending.”).
allegedly submitted a complete loan modification application
for her first lien mortgage loan and HELOC on July 8, 2016.
(Compl. ¶ 20.) Chase allegedly “commenc[ed]
foreclosure before it gave Plaintiff a fair opportunity to be
reviewed for a loan modification” and “fail[ed]
to provide Plaintiff a determination in writing (or
otherwise) on the first lien mortgage modification
application before starting foreclosure proceedings.”
(Id. ¶ 23.) Plaintiff further alleges that
defendant told her in September 2016 “that she did not
qualify for a modification on the HELOC,
” she “was not advised that ...