United States District Court, E.D. California
ORDER GRANTING DEFENDANT JPMORGAN CHASE BANK'S
MOTION TO DISMISS
A. MENDEZ JUDGE
Gordon McMahon (“McMahon”) sued Defendants Select
Portfolio Servicing (“SPS”) and JPMorgan Chase
Bank (“Chase”) seeking to save his home from
foreclosure. ECF No. 1. Chase moves to dismiss McMahon's
First Amended Complaint (“FAC”) with prejudice.
ECF No. 43. McMahon opposes the motion. ECF No.
Court takes the facts alleged by McMahon as true for purposes
of this motion.
obtained a mortgage loan in 2005. FAC ¶ 1. The interest
rate and monthly payment increased about two years later.
Id. By late 2007, McMahon could not pay his
began servicing McMahon's loan in September 2011. FAC
¶ 38. Chase scheduled a foreclosure for April 2013. FAC
¶ 42. To explore options to avoid the foreclosure,
McMahon called Karen Hyman-his “Customer Assistance
Specialist” at Chase-several times in January 2013, but
she never returned his calls. FAC ¶ 43. McMahon then
sent Chase a Qualified Written Request (“QWR”).
FAC ¶ 44. Chase “provided an incomplete
response” to the QWR two months later. FAC ¶ 45.
McMahon then filed a Request for Mortgage Assistance
(“RMA”) with Chase in March 2013. FAC ¶ 46.
Chase did not respond to McMahon's application.
months later, Chase informed McMahon it would transfer
servicing of the loan to SPS effective June 1, 2013. FAC
¶ 49. According to McMahon, SPS was Chase's
“subservicer” on McMahon's account. FAC
brings seven claims against Chase: (1) violation of the
Homeowners Bill of Rights (“HBOR”) at California
Civil Code Section 2924.12, (2) violation of the Equal Credit
Opportunity Act (“ECOA”) at 15 U.S.C. §
1691(d)(1), (3) violation of the Real Estate Settlement
Procedures Act (“RESPA”) at 12 U.S.C. §
2605(e), (4) violation of Regulation X at 12 C.F.R.
1024.41, (5) violation of Regulation X at 12 C.F.R. Sections
1024.35, 1024.36, (6) negligence, and (7) violation of
California Business and Professions Code Section 17200.
First Claim: HBOR
asks the Court to grant him “injunctive relief for
material violations of California Civil Code sections
2923.55, 2923.6, and 2924.17.” FAC ¶ 118.
Civil Code Section 2924.12 permits a borrower to “bring
an action for injunctive relief to enjoin a material
violation of Section 2923.55, 2923.6, . . . or 2924.17”
if “a trustee's deed of sale has not been
recorded.” Cal. Civ. 2924.12(a)(1).
argues McMahon cannot seek injunctive relief against it
because Chase no longer services McMahon's loan. Mot. at
3. McMahon counters that he can seek injunctive relief
against Chase because “Chase remains directly involved
as a master servicer.” Opp'n at 6. McMahon contends
Chase has “direct liability” or “secondary
liability under . . . agency, joint venture, and/or aiding
and abetting.” Id. at 5.
same “master servicer” argument was at issue in
Cooksey v. Select Portfolio Servicing, 2014 WL
4662015, at *6 (E.D. Cal Sept. 8, 2014). In Cooksey,
the court stated the plaintiffs needed to plead facts to
support their allegations that Bank of America-the alleged
master servicer-aided and abetted or was in a joint venture
with SPS. Id. The Cookseys' allegations against
Bank of America as to aiding and abetting of SPS closely
resemble McMahon's allegations against Chase here.
Compare id. (citing Complaint ¶¶ 9-10)
with FAC ¶¶ 11-12. The Cooksey
In California, “liability for aiding and abetting
depends on proof the defendant had actual knowledge of the
specific primary wrong the defendant assisted.”
Casey v. U.S. Bank Nat'l Ass'n, 127
Cal.App.4th 1138, 1145 (2005). In addition,
“‘[t]here are three basic elements of a joint
venture: the members must have joint control over the venture
(even though they may delegate it), they must share the
profits of the undertaking, and the members must each have an
ownership interest in the enterprise.'”
Jeld-Wen, Inc. v. Sup. Ct.,131 Cal.App.4th 853, 872
(2005) (quoting Orosco v. Sun-Diamond Corp., 51
Cal.App.4th 1659, 1666 (1997)). Each of these theories must
be supported by sufficient facts to show either BANA's
knowledge of SPS's HBOR violations or BANA's
profit-sharing, joint control and ownership of the
undertaking. Fields v. Wise Media, LLC, No. C
12-05160-WHA, 2013 WL 5340490, at *3-4 (N.D. Cal. Sep.24,
2013); Uecker v. Wells Fargo Capital Fin. (In re