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Saji v. Residential Credit Solutions

United States District Court, N.D. California

April 20, 2017

Daisy Saji, Plaintiff,
Residential Credit Solutions, et al., Defendants.


          Yvonne Gonzalez Rogers United States District Court Judge.

         Plaintiff brings this action alleging that defendants Bank of New York Mellon (“BONY”), Residential Credit Solutions (“RCS”), and Ditech Financial LLC (“Ditech”) committed wrongful acts and omissions with regard to her loan modification application, resulting in the imminent loss of her home. (Dkt. No. 15, First Amended Complaint “FAC” ¶ 1.) Specifically, plaintiff raises the following causes of action: (i) Count One, wrongful foreclosure pursuant to California Civil Code section 2923.6; (ii) Count Two, failure to provide a single point of contact (“SPOC”) in foreclosure proceedings pursuant to California Civil Code section 2923.7; (iii) Count Three, failure to provide written acknowledgement of loan modification application pursuant to California Civil Code section 2924.10; and (iv) Count Four, negligence in loan servicing.

         Defendants have moved to dismiss the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (Dkt. No. 17.)[1] Having carefully considered the pleadings and the papers submitted on this motion, and for the reasons set forth below, the Court Grants in Part defendants' motion to dismiss as follows: Count Three is Dismissed with leave to amend, and Count Four is Dismissed with Prejudice.[2]

         I. Background

         Plaintiff's claims against defendants relate to foreclosure and loan modification proceedings on plaintiff's property located at 736 Bridge Creek Drive, San Ramon, California 94582 (the “Subject Property”). (FAC ¶ 10.)

         On March 7, 2006, plaintiff executed a first-lien Deed of Trust and Promissory Note in favor of America's Wholesale Lender to secure financing for the Subject Property in the amount of $752, 000. (Id.; RJN Ex. 1.) On July 12, 2011, America's Wholesale Lender assigned its beneficial interest under the Deed of Trust to defendant BONY. (FAC ¶ 11; RJN Ex. 2.) Plaintiff filed for a voluntary Chapter 13 bankruptcy on February 22, 2012 (FAC at ¶ 13; RJN Ex. 3), and on October 2, 2014, plaintiff filed a Motion for Approval of Sale of Real Property for the Subject Property in bankruptcy court (id. at ¶ 14). Plaintiff and defendant BONY then entered into a stipulation approving the sale of the Subject Property, which the bankruptcy court approved on October 29, 2014. (Id. at ¶ 15.)

         However, on May 26, 2015, defendants informed plaintiff that they were not accepting plaintiff's short sale offer. (Id. at ¶ 17.) Subsequent to such notice, plaintiff submitted a loan Notice of Default. (Dkt. No. 18, “DRJN.”) Plaintiff has also filed a request for judicial notice of the following exhibits: (1) Exhibit A, Amended Schedule B, In re Saji, Bankr. No. 12-41580 (N.D. Cal. Bankr. Feb. 23, 2017); and (2) Second Amended Claim, In re Saji, Bankr. No. 12-41580 (N.D. Cal. Bankr. May 22, 2013). (Dkt. No. 19-1, “PRJN.”) “Generally, a district court may not consider any material beyond the pleadings in ruling on Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989). However, a court may take judicial notice of matters of public records and documents whose authenticity is not contested and upon which the plaintiff's complaint relies. Lee v. Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001), overruled on other grounds by Galbraith v. Santa Clara, 307 F.2d 1119, 1125 (9th Cir. 2002); see also Fed. R. Evid. 201(b)(2). Here, the parties do not object to the each other's requests for judicial notice, and the documents attached to the DRJN and PRJN are appropriate for judicial notice. Accordingly, the Court Grants the parties' requests for judicial notice at Docket Numbers 18 and 19-1. modification application in June 2015. (Id. at ¶ 19.) Plaintiff then alleges that on January 28, 2016, defendant RCS sent plaintiff a letter indicating that defendants have received a “complete loan modification application and were now able to move forward with underwriting a final decision.” (Id. at ¶ 24.) In or around March 2016, during the pendency of such loan modification application, the servicing of plaintiff's loan was transferred from defendant RCS to defendant Ditech. (Id. at ¶ 25.) Finally, on or around September 6, 2016, defendants Ditech and BONY recorded a Notice of Default regarding the Subject Property. ( ¶ 28.)

         To date, plaintiff has yet to receive a determination on her loan modification application, or her most recent short sale offer of $850, 000. (Id. at ¶ 27.)

         II. Legal Standard

         Pursuant to Rule 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief may be granted. Dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is a “lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)). The complaint must plead “enough facts to state a claim [for] relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If the facts alleged do not support a reasonable inference of liability, stronger than a mere possibility, the claim must be dismissed. Id. at 678-79; see also In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (stating that a court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences”).

         “Federal Rule of Civil Procedure 8(a)(2) requires only a ‘short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Twombly, 550 U.S. at 554-55 (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original). Even under the liberal pleading standard of Rule 8(a)(2), “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.” Id. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986) (internal brackets and quotation marks omitted)). The Court will not assume facts not alleged, nor will it draw unwarranted inferences. Iqbal, 556 U.S. at 679 (“Determining whether a complaint states a plausible claim for relief [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”).

         III. Discussion

         Defendants raise the following arguments in support of their motion to dismiss: (i) plaintiff's claims are barred by the doctrine of judicial estoppel for her failure to include such claims in her bankruptcy schedule; and plaintiff has failed to state a claim as to her causes of action under (ii) section 2924.10 for failure to provide written acknowledgment and (iii) common law negligence.[3] The Court addresses each, in turn.

         A. Doctrine of Judicial ...

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