United States District Court, E.D. California
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS (ECF
NOS. 7, 12, 13)
LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE
PRELIMINARY STATEMENT TO PARTIES AND
in the Eastern District of California carry the heaviest
caseloads in the nation, and this Court is unable to devote
inordinate time and resources to individual cases and
matters. Given the shortage of district judges and staff,
this Court addresses only the arguments, evidence, and
matters necessary to reach the decision in this order. The
parties and counsel are encouraged to contact the offices of
United States Senators Feinstein and Harris to address this
Court's inability to accommodate the parties and this
action. The parties are required to reconsider consent to
conduct all further proceedings before a Magistrate Judge,
whose schedules are far more realistic and accommodating to
parties than that of U.S. Chief District Judge Lawrence J.
O'Neill, who must prioritize criminal and older civil
trials set before Chief Judge O'Neill trail until he
becomes available and are subject to suspension mid-trial to
accommodate criminal matters. Civil trials are no longer
reset to a later date if Chief Judge O'Neill is
unavailable on the original date set for trial. Moreover,
this Court's Fresno Division randomly and without advance
notice reassigns civil actions to U.S. District Judges
throughout the Nation to serve as visiting judges. In the
absence of Magistrate Judge consent, this action is subject
to reassignment to a U.S. District Judge from inside or
outside the Eastern District of California.
January 9, 2018, Plaintiff Narcissa Thomas
(“Plaintiff” or “Thomas”) filed suit
against Defendants Select Portfolio Servicing, Inc.
(“SPS”) and Citibank, N.A.
in the Superior Court of California, County of Stanislaus.
ECF No. 1. On February 9, 2018, Defendants removed the action
to the Eastern District of California. On February 16, 2018,
Defendants moved to dismiss the complaint and Plaintiff
responded by filing a first amended complaint
(“FAC”) on March 2, 2018. ECF Nos. 4-5.
Plaintiff's FAC alleges three causes of action: (1)
violation of the Fair Debt Collection Practices Act
(“FDCPA”), specifically 15 U.S.C. § 1692e;
(2) violation of California Civil Code § 2966
(“CCP § 2966”); and (3) violation of
California Business and Professions Code §10241.4
(“CBPC §10241.4”). ECF No. 5.
again moved to dismiss all claims in the FAC on March 16,
2018. ECF No. 7. On April 16, 2018, Plaintiff filed an
opposition, ECF No. 12, and Defendants replied on April 23,
2018. ECF No. 13. The matter was taken under submission on
the papers pursuant to Local Rule 230(g). For reasons set
forth below, Defendants' motion to dismiss is GRANTED
WITH LEAVE TO AMEND.
FACTUAL BACKGROUND 
November 2001, Thomas purchased a property located at 4725 E.
Via Fiori, Modesto, California and obtained a loan to finance
the purchase. FAC ¶¶ 8-9. On or around February 16,
2007, Plaintiff refinanced the loan on the property and
obtained a 30-year fixed rate loan from Washington Mutual
Bank for $340, 000. FAC ¶ 10. In or around May 2009,
Washington Mutual assigned the beneficial interest in the
deed of trust and the promissory note to Defendant Citibank
and Chase Home Finance, LLC began servicing the loan at that
time. FAC ¶ 12. On or around April 2010, Plaintiff
entered into a loan modification agreement with Chase Home
Finance, LLC. FAC ¶ 13. The modification provided a new
principal balance of $380, 329.65, deferred a portion of the
principal balance as non-interest bearing, varied the
interest rate and payments, waived unpaid late charges, and
suspended foreclosure activities. Id.; ECF No. 1-1
at 18-22. The maturity date under the loan modification is
March 1, 2037. ECF No. 1-1 at 18. Additionally, the loan
modification agreement states the following:
If the Loan Documents currently provide for a balloon, the
Balloon Amount resulting from this modification may be
different. The balloon payment of $206, 381.36 will be due on
the maturity date unless due earlier in accordance with
ECF No. 1-1 at 19-20. Plaintiff alleges that the modification
“did not include any clear and conspicious
[sic] language informing Plaintiff that there would
be an additional balloon payment of $206, 381.36 due on the
maturity” and did not provide Plaintiff with an
amortization schedule. FAC ¶ 14. Furthermore, Plaintiff
alleges “since Plaintiff's Loan Documents did not
provide for a Balloon Payment, Plaintiff did not believe that
this [balloon payment] provision applied to her” and
that she “accepted the modification agreement because
she was unaware of the Balloon Payment.” Id.
approximately 2015, the servicing of Plaintiff's loan
transferred to Defendant SPS and SPS allegedly assumed all
the liabilities of the prior servicer, Chase Home Finance.
FAC ¶ 15. Plaintiff alleges that both Defendants SPS and
Citibank are “diversified financial marketing . . .
corporation[s] engaged primarily in residential mortgage
banking and/or related business[es], ” and that SPS is
currently the servicer of Plaintiff's loan and Citibank
is the beneficiary of the loan. FAC ¶¶ 5-6.
claims that Defendants “are attempting to enforce a
balloon payment provision in a Note that was never disclosed
to Plaintiff, ” that the loan modification was
misleading and deceptive in that it changed a key term - the
time period of amortization for her loan, and that Defendants
failed to provide Plaintiff with statutorily required
disclosure language of the balloon payment. FAC ¶ 1.
Plaintiff further alleges that she did not learn of the
allegedly deceptive balloon payment provision until November
2017 when she sought the assistance of an attorney to review
Plaintiff's loan and that she could not have discovered
the provision sooner because the loan documents were unclear.
FAC ¶ 16.