Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Palma v. Select Portfolio Servicing, Inc.

United States District Court, E.D. California

April 13, 2017

RAY PALMA, Plaintiff,
v.
SELECT PORTFOLIO SERVICING, INC.; COUNTRYWIDE HOME LOANS, INC.; NATIONAL DEFAULT SERVICING CORPORATION, and DOES 1 through 20, Defendants.

          ORDER

         Plaintiff Ray Palma attempted to modify the terms of the mortgage loan he had with his lender to prevent losing his home. He did not succeed and then brought suit against defendants, alleging they acted improperly during the loan modification application process, and as a result, he now faces foreclosure. This matter is before the court on defendants' motion to dismiss Mr. Palma's First Amended Complaint. Mot., ECF No. 19. Mr. Palma opposed the motion, Opp'n, ECF No. 24, and defendants replied, Reply, ECF No. 30. At hearing, Stanley Berman appeared for Mr. Palma and Bryan Hawkins appeared for defendants. ECF No. 32. As discussed below, defendants' motion is DENIED IN PART and GRANTED IN PART.

         I. PROCEDURAL HISTORY

         On February 22, 2016, Mr. Palma filed suit in the Superior Court for the County of Sacramento. ECF No. 2. After defendants removed the case to this court, id, Mr. Palma filed the operative First Amended Complaint, FAC, ECF No. 16, naming as defendants Select Portfolio Services, Inc. (SPS) and National Default Servicing Corporation (National Default), Wells Fargo Bank (Wells Fargo). FAC¶¶2-5.[1]

         Mr. Palma alleges defendants (1) violated California Civil Code § 2923.6 (prohibiting "dual tracking"); (2) violated California Civil Code § 2923.7 (requiring a "single point of contact"); (3) were negligent in servicing Mr. Palma's loan modification application; and (4) violated California Business and Professions Code § 17200, et seq., by engaging in unfair business practices. FAC ¶¶ 27-56. Mr. Palma also files claims to (5) quiet title on the subject Property, id. ¶¶ 57-62, and (6) to cancel the trustee's deed upon sale on the subject Property, id. ¶¶ 63-68.

         II. FACTUAL ALLEGATIONS

         Mr. Palma lives on Riding Trail Drive in the County of Sacramento (the "Property"). FAC ¶ 1. On or about July 18, 2006, he refinanced his home, and as evidence of this loan, executed a promissory note and a deed of trust as security for the note. Id. ¶ 17. The deed of trust was recorded in the "Official Records" of the Sacramento County Recorder's Office. Id. The named trustee in the deed of trust was "American General Financial Services, " and the named lender in the deed of trust was "Countrywide Financial Corporation." Id. SPS was the servicer of Mr. Palma's loan, Wells Fargo was the beneficiary, and National Default was the foreclosure trustee. Id. ¶ 19.

         In 2013, Mr. Palma found himself in financial distress. Id. ¶ 20. As a result, he submitted a complete first lien loan modification application to SPS in or about October 2013. Id. ¶ 21. SPS remained in contact with Mr. Palma to service his loan modification application by informing him of the supplemental documents needed to review the application. Id. ¶ 24. However, when Mr. Palma contacted SPS to inquire about the status of the loan modification application, Mr. Palma did not speak with the same person, or team of persons, as to the application's status. Id. ¶ 38.

         On April 1, 2014, without issuing a written letter either approving or denying Mr. Palma's loan modification application, defendants[2] recorded a Notice of Default (NOD) against the Property. Id. ¶ 21. Defendants then recorded a Notice of Trustee's Sale on November 12, 2014. Id. ¶ 22. On or about September 2, 2015, defendants foreclosed on the Property. Id. ¶23.

         At the foreclosure auction, after nobody appeared to purchase the Property, the Property reverted to the loan's beneficiary, Wells Fargo, and a Trustee's Deed upon Sale was recorded. Id. Mr. Palma alleges Wells Fargo then "moved" to evict him, but does not clarify how. Id. ¶ 25. In any event, Mr. Palma alleges he now faces the loss of possession of the Property, which he considers his home. Id.

         Mr. Palma alleges, because of defendants' conduct, he did not get the benefit of a permanent modification and his loan balance has increased with arrears, penalties, and fees. Id. ¶ 26.

         III. JUDICIAL NOTICE

         Defendants request the court take judicial notice of Mr. Palma's Complaint, First Amended Complaint, and Summons filed in Ray Palma v. Bank of America, N.A., et al, No. 34- 2015-00180154 (Cal. Super. Ct. Sacramento filed June 5, 2015). Defs.' Req. J. Notice (RJN), ECF No. 20. In the state case, Mr. Palma filed suit against Bank of America and SPS. See Defs.' RJN Ex. A at 4 (Complaint), ECF No. 20-1. On February 2, 2016, the state court dismissed Mr. Palma's suit against SPS with prejudice. Ray Palma v. Bank of America, N.A., et al, No. 34-2015-00180154 (Dkt. Nos. 33-36), and Mr. Palma has otherwise requested dismissal of the entire state suit. Id. (Dkt. No. 47).

         Defendants also request the court judicially notice the following statements made in Mr. Palma's state court complaint:

• On or about November 27, 2012, SPS offered Plaintiff a loan modification with respect to the Loan. State Court Compl. ¶ 11.
• On or about March 3, 2014, SPS contacted Plaintiff and informed him that he prequalified for a repayment plan that would enable him to become current on the Loan. SPS's approval of the repayment was contingent upon Plaintiff submitting certain financial-related documents. Id. ¶ 17.
• On or about September 2014, SPS informed Plaintiff that his repayment plan was being dissolved and that Plaintiff would instead be reviewed for another loan modification. Plaintiff submitted the necessary documents in order to be reviewed for SPS' proposed loan modification. Id. ¶ 24.
• On or about October 21, 2014, SPS advised Plaintiff that it had not received the documentation needed for SPS to review Plaintiff for its proposed loan modification. Id. ¶ 25.
• On or about November 7, 2014, Plaintiff resent all of the documentation needed for SPS to review Plaintiff for its proposed loan modification. Id. ¶ 26.
• On or about November 11, 2014, SPS denied Plaintiffs request for a loan modification without providing a reason. Id. ¶ 27.

Defs.' RJN Ex. A at 4-8; Mot. at 8.

         The court generally confines itself to the four corners of a complaint in ruling on a Rule 12(b)(6) motion. See Swartz v. KPMGLLP, 476 F.3d 756, 763 (9th Cir. 2007) ("[A] court may generally consider only allegations contained in the pleadings."). However, the court can consider documents incorporated into the complaint by reference, as well as any relevant matters subject to judicial notice. Perkins v. Linked In Corp., 53 F.Supp.3d 1190, 1203-04 (N.D. Cal. 2014). A court may take judicial notice of an adjudicative fact if requested by a party and "supplied with the necessary information." Fed.R.Evid. 201(c)(2).

         A court "may take judicial notice of matters of public record, including duly recorded documents, and court records available to the public through the PACER system[3] via the internet." Peviani v. Hostess Brands, Inc., 750 F.Supp.2d 1111, 1116 (CD. Cal. 2010) (citing C.B. v. Sonora Sch. Dist., 691 F.Supp.2d 1123, 1138 (E.D. Cal. 2009) (internal citations omitted)). Documents are judicially noticeable, however, only for the purpose of determining what statements are contained therein, not to prove the truth of the contents or any party's assertion of what the contents mean. United States v. S. Cal. Edison Co., 300 F.Supp.2d 964, 975 (E.D. Cal. 2004).

         Where a party requests judicial notice of the existence of certain statements, and not the accuracy of such statements, judicial notice of the statements' existence is appropriate. In re Seracare Life Scis., Inc., No. 05-2335, 2007 WL 935583, at *3 (S.D. Cal. Mar. 19, 2007). To the extent defendants seek judicial notice of the veracity or authenticity of any arguments or conclusions of fact or law contained in documents, the request should be denied. See S. Cal. Edison Co., 300 F.Supp.2d at 976 (judicially noticing the existence of a document entitled "Forest Service Handbook" but not conclusions of fact or law within it).

         Here, to the extent defendants seek judicial notice of the veracity or authenticity of any arguments or conclusions of fact or law contained in the state court documents, the request is denied. See Id. However, the fact that the state court complaint, First Amended Complaint and summons exist, and that plaintiff made certain statements in the complaint, can and will be judicially noticed. See id.

         IV. LEGAL STANDARD

         A party may move to dismiss for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). The motion may be granted only if the complaint lacks a "cognizable legal theory" or if its factual allegations do not support a cognizable legal theory. Hartmann v. Cal. Dep 't o/Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013). The court assumes these factual allegations are true and draws reasonable inferences from them. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         A complaint need contain only a "short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), not "detailed factual allegations, " BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). But this rule demands more than unadorned accusations; "sufficient factual matter" must make the claim at least plausible. Iqbal, 556 U.S. at 678. Accordingly, conclusory or formulaic recitations of a cause's elements do not alone suffice. Id. (quoting Twombly, 550 U.S. at 555).

         Evaluation under Rule 12(b)(6) is a context-specific task drawing on "judicial experience and common sense." Id. at 679. Aside from the complaint, and information judicially noticed, district courts have discretion to examine documents incorporated by reference. Davis v. HSBC Bank Nevada, N.A.,691 F.3d 1152, 1160 (9th Cir. 2012); W. Radio Servs. Co. v. Qwest Corp.,678 F.3d 970, 976 (9th Cir. 2012). The court need not accept as true allegations that contradict matters properly ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.