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Taylor v. Bosco Credit, LLC

United States District Court, N.D. California

June 27, 2019

BRIGETTE TAYLOR, Plaintiff,
v.
BOSCO CREDIT, LLC, et al., Defendants.

          ORDER RE: MOTION TO DISMISS RE: DKT. NO. 55

          JACQUELINE SCOTT CORLEY UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Brigette Taylor brings this action challenging the wrongful foreclosure of her home. Defendants Bosco Credit, LLC and Franklin Credit moved to dismiss the action for failure to state a claim upon which relief can be granted.[1] The Court previously held that Plaintiff's claims were inadequately pled and dismissed them with leave to amend. Following amendment of the complaint, Defendants again moved to dismiss. (Dk. No. 55.) Having reviewed the parties' briefing and having had the benefit of oral argument on June 13, 2019, the Court GRANTS the motion to dismiss the TILA claim without leave to amend. As the case was removed on federal question grounds, and the sole remaining federal claim has been dismissed, the Court will not address the state law claims unless and until Defendants establish that there is diversity jurisdiction.

         BACKGROUND

         A. Second Amended Complaint Allegations[2]

         Plaintiff was the owner of real property at 2448 Covelite Way, Antioch, CA 94531 (“the Property”). (Second Amended Complaint (“SAC”) at ¶ 7.) Plaintiff purchased the Property in December 2005. (Id. at ¶ 8.) To secure the purchase, Plaintiff obtained a first lien loan from World Savings in the amount of $567, 000 (“First Lien Loan”). (Id.) A year later Plaintiff obtained a second lien loan from Cal State 9 Credit Union in the amount of $150, 000 (“Second Lien Loan”). (Id.)

         On or around June 30, 2008, Bosco Credit LLC became the beneficiary of the Second Lien Loan. (Id. at ¶ 9.) Around the same time, Plaintiff was notified that Franklin Credit Management Corporation was taking over the management of her Second Lien Loan. (Id.) Plaintiff thereafter received monthly statements from Franklin from approximately June 2008 to April 2010. (Id. at ¶ 10.) In April 2010, however, Plaintiff stopped receiving any communications from Franklin, including the monthly statements. (Id.) Her last statement indicated that her principal balance was $150, 859.51 and the total amount of past due payments was $35, 595.84. (Id.)

         In September 2011, Plaintiff received a Home Affordable Modification Agreement through Wells Fargo Bank on the First Lien Loan. (Id. at ¶ 11.) The HAMP modification stated that Plaintiff's First Lien Loan had been permanently modified and that after three years of payment under the modification, Wells Fargo would forgive $266, 581.31 of the principal balance owed to it. (Id.) Franklin “was also a participant in the HAMP Program” and “[u]nder the HAMP Second Lien Modification Program (2MP) which Franklin was a participant in, after Plaintiff accepted the modification offer on the First Lien, Franklin was required to either (1) offer to modify the Second Line or (2) extinguish the Second Lien.” (Id.) Because Plaintiff received no further statements or correspondence from Franklin following her modification with Wells Fargo she believed that Franklin “had extinguished the Second Lien as required under HAMP.” (Id.)

         On June 1, 2014, Plaintiff received a notice from Wells Fargo stating that because of her good standing and in accordance with the terms of the modification, $266, 581.31 of her principal balance on the First Lien Loan had been forgiven. (Id. at ¶ 12.) Plaintiff's principal balance on this First Lien Loan was therefore $390, 000 as of June 1, 2014. (Id.)

         A little over a year later, in August 2015, Plaintiff received a Notice of Default saying that Plaintiff's Second Lien Loan was approximately $110, 000 in arrears. (Id. at ¶ 13.) Nearly six months later, on March 1, 2016, a Notice of Trustee's Sale was recorded stating that Plaintiff owed $270, 000 on the Second Lien Loan. (Id. at ¶ 14.) The following month, another Notice of Trustee's Sale was recorded stating that Plaintiff owed $272, 000 on the Second Lien Loan. (Id. at ¶ 15.) In January 2018, Defendants recorded another Notice of Trustee's Sale stating that Plaintiff owed $276, 028.71 on the Second Lien Loan. (Id. at ¶ 16.) On January 31, 2018, the day the Trustee's Sale was to take place, Bosco “purported to take title of Plaintiff's property by paying $145, 209.00 despite the fact that the property was worth at least $600, 000 at this time.” (Id. at ¶ 16.) A Trustee's Deed Upon Sale was thereafter recorded with the Contra Costa County Recorder purporting to transfer title of the Property to Bosco. (Id. at ¶ 17.)

         B. Procedural Background

         Plaintiff filed this action in the Contra Costa Superior Court on March 27, 2018. She initially pled claims only as to Bosco/Franklin, but then on September 13, 2018, Plaintiff filed her First Amended Complaint (“FAC”) adding a claim as to Wells Fargo. (Dkt. No. 1-1.) The FAC pled six claims for relief. The first five as to Bosco/Franklin were for: (1) violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 C.F.R. § 1026.41; (2) breach of contract; (3) negligence; (4) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200; and (5) cancellation of instrument. Her sixth claim, for declaratory relief, was brought only against Wells Fargo. Wells Fargo removed the action to this Court following service asserting federal question jurisdiction based on Plaintiff's RESPA claim. (Dkt. No. 1.) Defendants thereafter separately moved to dismiss. All claims were dismissed with leave to amend. (Dkt. No. 23.)

         Plaintiff filed her SAC on January 3, 2019. (Dkt. No. 25.) The SAC pleads five claims for relief: (1) violation of the Truth in Lending Act (“TILA”), 12 C.F.R. § 1026.7 as to Franklin; (2) breach of contract as to Franklin and Bosco; (3) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200 as to Franklin and Bosco; (4) cancellation of instrument as to Franklin and Bosco, and (5) declaratory relief as to Wells Fargo and Bosco. Defendants again separately moved to dismiss. (Dkt. Nos. 55 & 57.) While the motions were pending, Plaintiff voluntarily dismissed her claim against Wells Fargo. (Dkt. No. 61.)

         DISCUSSION

         Defendants Franklin and Bosco (hereafter “Defendants”) jointly move to dismiss Plaintiff's claims for failure to state a claim upon which relief can be granted. In addition, Defendants move to dismiss Plaintiff's TILA claim and her ...


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