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Dejong v. Nationstar Mortgage LLC

United States District Court, N.D. California

September 7, 2017

Mark Dejong, Plaintiff,
Nationstar Mortgage LLC, et al., Defendants.


          Yvonne Gonzalez Rogers United States District Court Judge.

         Plaintiff brings the above-captioned action alleging that defendants Nationstar Mortgage LLC, U.S. Bank, N.A., and Barrett Daffin Frappier Treder & Weiss, LLP (“Barret Daffin” or “BDFT&W”) violated certain laws, in connection with their attempt to foreclose on his residence located at 29 Old Creek Rd., Petaluma, California 94952 (the “Subject Property”). Specifically, plaintiff alleges the following causes of action: (i) Count One, violation of the Fair Debt Collection Practices Act, 15 U.S.C. sections 1692, et seq. (the “FDCPA”); (ii) Count Two, cancellation of instruments, pursuant to California Civil Code section 3413; (iii) Count Three, violation of the California Homeowner's Bill of Rights, Cal. Civ. Code sections 2923, et seq. (the “HBOR”); (iv) Count Four, declaratory relief; and (v) Count Five, violation of California's Unjust Competition Law, Cal. Bus. & Profs. Code sections 17200, et seq. (the “UCL”).

         Now before the Court is defendants' motion to dismiss the complaint in its entirety, pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (Dkt. No. 19.) Plaintiff has opposed, and defendants have filed a reply in support of their motion to dismiss.

         Having carefully reviewed the pleadings and the papers submitted on defendants' motion to dismiss, and for the reasons set forth more fully below, the Court Grants defendants' motion to dismiss as follows: The Court Dismisses with Prejudice Count Three of the complaint, and Dismisses without Prejudice Counts One, Two, Four, and Five.[1]

         I. Background

         On June 13, 2007, plaintiff executed a Deed of Trust to borrow $668, 000.00 for the purchase of the Subject Property from Citimutual Corporation, doing business as Citymutual Financial. (Dkt. No. 24-1, Compl. Exhibit A at 2.) On May 16, 2012, an assignment of the Deed of Trust was recorded, transferring the same to U.S. Bank, N.A. (Dkt. No. 24-4, Compl. Exhibit D at 2.) Another assignment of the Deed of Trust was recorded on August 30, 2013, appearing to assign all beneficial interests to Nationstar Mortgage, LLC. (Dkt. No. 24-5, Compl. Exhibit E at 2.) However, on December 21, 2015, a corrective assignment was filed explaining that “Bank of America, N.A., the then-servicer of the loan secured by the deed of trust, ” had inadvertently assigned the Deed of Trust to Nationstar. (Dkt. No. 24-6, Compl. Exhibit F at 2.) Rather, the corrective assignment explained that U.S. Bank, N.A. continued to hold all beneficial interests under the Deed of Trust. (Id.) Instead, defendant Nationstar was the servicer for plaintiff's loan. (Compl. at 3:6-11; see also Dkt. No. 24-7, Compl. Exhibit G at 2-3.) On May 31, 2016, Barrett Daffin substituted in as a trustee, for U.S. Bank, the current beneficiary under the deed of trust. (Dkt. No. 24-7, Compl. Exhibit G at 2-3.)

         Plaintiff alleges the following regarding the servicing of his loan: After the execution of the Deed of Trust, plaintiff alleges that he experienced unforeseen hardships, and was able to secure a loan modification on May 1, 2010. (Compl. at 8:9-13.) Plaintiff defaulted again in 2011, and secured another loan modification with Nationstar on September 1, 2013. (Id. at 8:14-23.) Plaintiff alleges that in November 2014, defendant Nationstar “increased [his] mortgage payment by 100%, ” and in June 2014, plaintiff attempted to obtain another loan modification from defendants. (Id. at 8:24-28.) On June 16, 2016, defendant Barrett Daffin executed and recorded a Notice of Default on the Subject Property. (Id. at 10:20-22; Dkt. No. 24-8, Compl. Exhibit H.) On September 20, 2016, defendants recorded a Notice of Trustee's Sale of the Subject Property. (Dkt. No. 24-9, Compl. Exhibit I; Compl. at 11:3-6.) Subsequent to the Notice of Trustee's Sale, defendant Nationstar informed plaintiff that they could not approve his request for a subsequent loan modification. (Dkt. No. 24-3, Compl. Exhibit C.)

         The Court understands that no sale of the Subject Property has yet taken place.

         II. Legal Framework

         Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief may be granted. Dismissal for failure on this ground 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.” Twombly, 550 U.S. 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

         A. Count One: FDCPA Claim

         Plaintiff claims that defendants have “violated the FDCPA by attempting to collect on an alleged debt” as a debt collector. (Compl. ¶ 14.) Specifically, plaintiff complains that the initiation of foreclosure proceedings without evidence that defendants have a legal right to initiate the same constitutes a violation of the FDCPA. On that basis, plaintiff alleges that defendants violated several sections of the FDCPA, including sections 1692e(5) (using the “threat to take any action that cannot legally be taken or that is not intended to be taken”); 1692e(6) (use of a “false representation” regarding a sale, referral, or other transfer of any interest); 1692i (describing legal actions that debt collectors may take); 1692j ...

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