United States District Court, N.D. California, San Jose Division
ORDER GRANTING UNOPPOSED MOTION FOR LEAVE TO FILE A
FIRST AMENDED COMPLAINT Re Dkt., 26
H. KOH United States District Judge
Cesar Galindo (“Galindo”) and Maria Rivera
“Plaintiffs”), bring suit against Defendant BSI
Financial Services, Inc. (“BSI”) for negligence,
violation of the implied covenant of good faith and fair
dealing, violation of California Civil Code § 2923.6(c),
and violation of California's Unfair Competition Law
(“UCL”). Currently before the Court is
Plaintiffs' motion for leave to file a First Amended
Complaint (“FAC”), which seeks leave to add Ocwen
Loan Servicing LLC (“Ocwen”) as a defendant. ECF
No. 26 (“Mot.”). BSI does not oppose the motion.
ECF No. 28. The Court finds this matter suitable for
resolution without oral argument and accordingly VACATES the
motion hearing set for June 1, 2017, at 1:30 p.m.
See Civil L.R. 7-1(b). Having considered the
parties' submissions, the relevant law, and the record in
this case, the Court hereby GRANTS Plaintiffs' motion for
leave to amend.
September 26, 2006, Galindo borrowed $436, 000 from Bank of
America, N.A. (“BOA”), secured by a deed of trust
encumbering property located at 3146 Barletta Lane in San
Jose, CA (hereinafter, “the Property”). ECF No. 1
(“Compl.”), Ex. 1. Plaintiffs defaulted on the
loan on March 1, 2009.
September 1, 2012, Ocwen acquired from BOA the servicing
rights for Plaintiffs' loan. Compl., Ex. 2. On January
23, 2014, Ocwen recorded a Notice of Default and Election to
Sell under Deed of Trust against the Property. Plaintiffs
“began applying for a [Home Affordable Modification
Program (“HAMP”)] loan modification.”
Id. ¶ 14. In 2015, “after years of
applications [for home loan modifications] that resulted in
bad faith denials, Plaintiffs' filed an administrative
complaint” with Ocwen. Compl. ¶ 14-15.
29, 2015, Plaintiffs received a letter from Ocwen in response
to Plaintiffs' administrative complaint. Id. Ex.
2. Ocwen informed Plaintiffs that Plaintiffs had been
approved for a Trial Period Plan (“TPP”) Offer on
September 14, 2012, but Ocwen ultimately denied Plaintiffs a
loan modification on December 13, 2012 because Plaintiffs
failed to make the TPP payments. See Id. Further,
Ocwen had approved Plaintiffs “for a Proprietary
Modification” on December 14, 2014, but Plaintiff
failed to make the initial payments by the due date and
accordingly Ocwen denied Plaintiff a Proprietary Modification
on February 11, 2015. See Id. Ocwen's May 29,
2015 letter to Plaintiffs also informed Plaintiffs that Ocwen
received “[a] second HAMP request” from
Plaintiffs on April 8, 2015.” Id. However,
Ocwen again denied Plaintiffs a HAMP modification
“because the owner of the account either does not allow
principal reduction or does not participate in the
HAMP” program. Id.
about September 2015, BSI acquired from Ocwen the servicing
rights to Plaintiffs' loan. Thereafter, Plaintiffs sent a
loan modification request to BSI. Id. ¶ 18. On
September 22, 2015, Galindo emailed documents to Daniel
McAteer (“McAteer”), senior loss mitigation
specialist for BSI. Id. Ex. 3. On September 23,
2015, McAteer replied to Galindo and told Galindo that he
would “forward these [documents to] our Loan Processor
to review to determine if any additional documentation is
September 28, 2015, BSI filed a Notice of Trustee's Sale
(hereinafter, “Notice of Sale”) with the Santa
Clara County Recorder's Office. Compl. ¶ 20. The
Notice of Sale scheduled sale for October 30, 2015.
Id. Plaintiff alleges that at the time that BSI
recorded the Notice of Sale on September 28, 2015,
“[n]o decision had been made on Plaintiffs' loan
modification application.” Id.
emailed McAteer again on October 6, 2017 and told McAteer
that Galindo was “re sending the Email” that
Galindo originally sent to McAteer on September 22, 2015.
Id., Ex. 3. On October 7, 2015, McAteer emailed
Galindo and informed Galindo that “[p]er the letter
provided out to you via FedEx (tracking#774579202934) and
delivered [September 24, 2015] the following items are still
needed:  July to August Bank Statements” and
“ 2013 & 2014 Tax Returns (signed).”
Id. McAteer informed Galindo that he had
“re-reviewed the items provided” by Galindo and
that the documents did “NOT include”
Galindo's July to August bank statements or signed 2013
and 2014 tax returns. Id.
January 4, 2017, Plaintiffs filed suit against BSI in this
Court. ECF No. 1. Plaintiffs alleged four causes of action
against BSI: (1) negligence; (2) breach of the implied
covenant of good faith and fair dealing; (3) violation of
California Civil Code Section 2923.6(c); and (4) violation of
the UCL. See id.
January 26, 2017, BSI moved to dismiss all four causes of
action. See Def. Mot. On February 2, 2017,
Plaintiffs opposed BSI's motion to dismiss. ECF No. 14
(“Pl. Opp.”). On February 9, 2017, BSI filed a
Reply. ECF No. 15 (“Reply”).
March 17, 2017, the Court granted BSI's motion to
dismiss. ECF No. 23. As relevant here, the Court held that
Plaintiffs had failed to state a claim for negligence against
BSI because Plaintiffs based their negligence claim, in part,
on conduct that was committed by Ocwen, not BSI.
Id. at 10-11. The Court held that Plaintiff had
failed to allege that BSI had assumed Ocwen's
liabilities, and thus BSI could not be held liable for
Ocwen's alleged misconduct. Id. at 10-11. For
similar reasons, the Court held that Plaintiffs could not
state a claim for implied covenant of good faith and fair
dealing against BSI for Ocwen's conduct. Id. at
14. The Court granted Plaintiffs leave to amend the complaint
within thirty days, ...