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Fung v. BSI Financial Services

United States District Court, N.D. California

March 30, 2018

STERLYNG EDWARD FUNG, et al., Plaintiffs,
v.
BSI FINANCIAL SERVICES, et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT Re Dkt., 42

          Jeffrey S. White, United States District Judge

         Now before the Court is the motion for summary judgment filed by Defendants BSI Financial Services and U.S. Bank National Association as Trustee for the DRRF Trust 2015-1. The Court has considered the parties' papers, relevant legal authority, and the record in this case, and the Court finds the motion suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). Accordingly, the April 13, 2018 hearing is VACATED. For the reasons set forth below, the Court HEREBY GRANTS Defendants' motion for summary judgment.

         BACKGROUND

         On October 25, 2007, Plaintiff Sterlyng Fung executed a deed of trust securing a $728, 000 loan. (Dkt. No. 43-1, RJN Ex. A.)[1] The deed of trust encumbered a piece of property on Harrison Street in Oakland, California. (Id.) In 2010, Plaintiff stopped making his monthly loan payments, and on December 4, 2013, Quality Loan Service Corporation (“Quality Loan Service”), acting as trustee under the deed of trust, recorded a notice of default. The notice of default indicated that Plaintiff was $302, 938.72 in default. (Dkt. No. 44, Spangler Decl. ¶ 7; Dkt. No. 43-1, RJN Ex. C.) On February 5, 2016, Quality Loan Service recorded a Notice of Trustee's Sale. (Dkt. No. 43-1, RJN Ex. D.) This Notice established a sale date of March 2, 2016. (Id.)

         On March 1, 2016, Plaintiff filed for Chapter 13 bankruptcy, thus resulting in the March 2, 2016 sale date being postponed. (Spangler Decl. ¶ 10; see also Dkt. No. 43-1, RJN Ex. F.) On April 14, 2016, Defendant U.S. Bank obtained relief from the bankruptcy automatic stay. See In re Fung, No. 16-40556, Dkt. No. 48 (Bankr. N.D. Cal. Apr. 14, 2017). After this, the foreclosure sale was postponed to April 29, 2016. (Spangler Decl. ¶ 10.)

         On April 26, 2016, Plaintiff submitted a loan modification application to Defendant BSI Financial Services (“BSI”). (Spangler Decl. ¶ 11; see also Dkt. No. 48-1, Fung Decl. ¶ 3.) Plaintiff concedes that he had previously submitted loan modification applications which had been denied. (Fung Decl. ¶ 3.) He asserts, however that his “financial situation had materially improved.” (Id.) Plaintiff previously attached his April 26, 2016 loan modification application as Exhibit O. (See Dkt. No. 40, First Amended Complaint (“FAC”), Ex. O.) This application stated:

The enclosed loan modification application is materially different from the one previously submitted on February 26, 2016. Mr. Fung's earnings has [sic] increased during the last three months as reflected in his bank statements. His son also lives with him and is employed full time and is willing to contribute his earnings if necessary.

(Id.) After submitting his April 26, 2016 application, Plaintiff states he was informed by a BSI representative that his application would not be reviewed because it was submitted within 30 days of the “originally scheduled trustee's sale.” (Fung Decl. ¶ 4.)

         On April 28, 2016, again the day before the Trustee's sale, Plaintiff Claire Fung filed for Chapter 13 bankruptcy protection. (Spangler Decl. ¶ 12; see also Dkt. No. 43-1, RJN Ex. H.) On June 9, 2016, U.S. Bank obtained relief from the bankruptcy automatic stay. See In re Fung, No. 16-41149, Dkt. No. 19 (Bankr. N.D. Cal. June 9, 2016). This second bankruptcy filing resulted in the foreclosure sale being postponed. (Spangler Decl. ¶ 12.)

         According to the FAC and its attached exhibits, on June 2, 2016, Plaintiffs obtained a temporary restraining order from the Superior Court of California for the County of Alameda prohibiting any foreclosure sale from occurring. (FAC ¶ 16 & Ex. K.) Plaintiffs have alleged (and Defendants do not dispute) that this temporary restraining order was dissolved (and Plaintiffs' motion for a preliminary injunction was denied) on June 21, 2016. (FAC ¶ 17.) The following day, June 22, 2016, the Harrison Street property was sold at public auction. (Spangler Decl. ¶ 13; see also Dkt. No. 43-1, RJN Ex. E.)

         Plaintiffs filed the instant action in December 2016 and alleged a number of causes of action, including wrongful foreclosure and violations of California Civil Code §§ 2923.6, 2923.55, 2924g(d). This Court previously dismissed Plaintiffs' wrongful foreclosure cause of action with prejudice. The Court also dismissed Plaintiffs' claims brought under the California Civil Code, but afforded Plaintiffs leave to amend. Plaintiffs filed the FAC on December 11, 2017. Defendants BSI and U.S. Bank have now moved for summary judgment on all of Plaintiffs' claims.[2]

         ANALYSIS

         A. Applicable Legal Standard.

         A principal purpose of the summary judgment procedure is to identify and dispose of factually unsupported claims. Celotex Corp. v. Cattrett, 477 U.S. 317, 323-24 (1986). Summary judgment, or partial summary judgment, is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “In considering a motion for summary judgment, the court may not weigh the evidence or make credibility determinations, and is ...


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