Green v. Cent. Mortg. Co.

ANGELIA GREEN, Plaintiff, v. CENTRAL MORTGAGE COMPANY, et al., Defendants.

Case No. 14-cv-04281-LB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA San Francisco Division

September 2, 2015

ORDER GRANTING THE DEFENDANTS' MOTION TO DISMISS

[Re: ECF No. 35]

INTRODUCTION

The plaintiff Angelia Green sued three defendants—Central Mortgage Company ("CMC"), PLM Loan Management Services, Inc. ("PLM"), and Deutsche Bank National Trust Company as Trustee for Harborview Mortgage Loan Trust 2007-2 ("Deutsche Bank")—for violating federal and California law in relation to the denial of her loan modification application and the foreclosure on her home. (First Amended Complaint ("FAC"), ECF No. 22.¹) The court approved the parties' stipulation that PLM has non-monetary status pursuant to California Civil Code § 2924l and does not have to participate as a party to this action at this time. (Stipulation and Order, ECF No. 45.) CMC and Deutsche Bank, though, moved to dismiss Ms. Green's First Amended Complaint (Motion, ECF No. 35.) Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument. The court grants their motion. Ms. Green may file a Second Amended Complaint by September 23, 2015.

STATEMENT

I. MS. GREEN'S ALLEGATIONS

In 1977, Ms. Green's parents, Robert Tregre and Rosia Tregre (the "Tregres"), purchased property at 823 Templeton Avenue, Daly City, California 94104 (the "Property"). (FAC ¶¶ 3, 11, 21, 25.) On September 15, 2006, the Tregres created the Robert J. Tregre & Rosia L. Tregre Family Revocable Living Trust (the "Trust"), and they placed the Property into it. (Id. ¶¶ 24, 25.) Upon the death of the Tregres, all of the Trust's assets—including the Property—were to be distributed to Ms. Green, the Trust's beneficiary. (Id. ¶ 26.) Ms. Green is the trustee under the Trust. (Id. ¶ 27.)

On January 11, 2007, the Trust entered into a refinance loan transaction (the "Loan") and secured the Loan with the Property through a deed of trust (the "Deed of Trust"). (Id. ¶ 28; Request for Judicial Notice ("RJN"), ECF No. 36, Ex. 1.²) The Trust was listed as the "borrower"on the Deed of Trust. (RJN, ECF No. 36, Ex. 1.) And Paragraph 13 of the Deed of Trust states in relevant part: "[A]ny Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument." (Id.)

Sometime thereafter, CMC became the servicer of the loan, and Deutsche Bank became the beneficiary under the Deed of Trust. (FAC ¶ 28.)

Then, in June 2013, the Tregres each died. (Id. ¶ 29.) As a result, pursuant to the terms of the Trust, title to the Property was conveyed to Ms. Green. (Id. ¶ 30.) She alleges that "[b]y virtue of her parent[s'] death[s], [she] received title to the [P]roperty and assumed the [L]oan." (Id. ¶ 34.) She also alleges that she "became the trustor under the Deed of Trust by virtue of her parent[s'] death[s]." (Id. ¶ 35.)

Ms. Green made payments on the loan from July 2013 to September 2013, but thereafter the loan fell into default after Ms. Green's daycare business closed that summer and she suffered a loss of income. (Id. ¶ 31.) In September 2013, Ms. Green contacted CMC. She told CMC that her parents had died and that she had obtained title to the Property. (Id. ¶ 32, 33.) She also told CMC that she wished to inquire about a loan modification. (Id. ¶ 32.)

CMC never questioned Ms. Green's ability to apply for a loan modification, and it asked her to send various documents to be considered for one. (Id. ¶¶ 39, 40.) No one at CMC, however, discussed loss mitigation options with her, whether in person or by telephone, about how to save her home. (Id. ¶ 40.)

In December 2013 and early January 2014, Ms. Green sent to CMC all of the documents it requested so she could be considered for a loan modification. (Id. ¶ 42.) CMC acknowledgedreceiving the documents and that her application was under review. (Id. ¶ 41.) CMC subsequently denied her application on the basis that it had not received all of the documents it requested. (Id. ¶ 42. ) Even though Ms. Green sent her bank statements in, CMC claimed that it had not received them. (Id.) CMC denied Ms. Green's loan modification application on this basis. (Id.)

In mid-March 2014, Ms. Green received a notice of default in the mail at the Property. (Id. ¶ 43. ) She had not previously received written denial of her loan modification application on the merits. (Id.) Prior to the notice of default being recorded, Ms. Ms. Green also had never been able to speak with a CMC representative, whether in person or by telephone, regarding her options to avoid foreclosure. (Id.)

In late June 2014, CMC acknowledged that they received all necessary documents to consider Ms. Green for a loan modification. (Id. ¶ 44.) CMC subsequently denied her loan modification application because she had insufficient income. (Id. ¶ 45.) CMC's denial letter, however, made no mention of what her gross income was. (Id.) Ms. Green alleges that this denial was improper because she had sufficient income pursuant to federal guidelines and thus should have been approved for a loan modification. (Id.) Her income was approximately $3,400 per month, and her children pledged to contribute $2,300 toward the payments. (Id.)

Ms. Green then sent CMC documentation showing that the amount it calculated for her gross income was "significantly inaccurate." (Id. ¶ 46.) She also spoke with CMC's representatives regarding her income. (Id.) CMC then sent a letter stating that Ms. Green's appeal was denied because she had not provided it with updated income information. (Id. ¶ 47.) But she had in fact sent them documents showing additional income. (Id.)

On September 12, 2014, Ms. Green filed a voluntary Chapter 13 bankruptcy petition. (Id. ¶ 48.) It turns out that the Property was scheduled to be sold at a trustee's sale that same day. (Id.) Ms. Green was not aware of this at the time. (Id.) Although she knew a sale date was coming up, she did not know that it was September 12. (Id.)

Several weeks later, Ms. Green received a trustee's deed upon sale in the mail and learned that Deutsche Bank had purchased her Property. (Id. ¶ 49; RJN, ECF No. 36, Ex. 7.)

II. PROCEDURAL HISTORY

Ms. Green, proceeding pro se, filed her original complaint in this action on September 23, 2014. (Complaint, ECF No. 1.) After several extensions of time to serve the defendants, Ms. Green retained counsel and filed a First Amended Complaint on June 24, 2015. (FAC, ECF No. 22.) She brings the following 12 claims: (1) violation of California's Homeowners Bill of Rights ("HBOR"), Cal. Civ. Code § 2923.55; (2) violation of HBOR, Cal. Civ. Code § 2923.6; (3) violation of HBOR, Cal. Civ. Code § 2923.7; (4) violation of HBOR, Cal. Civ. Code § 2924.17; (5) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605(f); (6) violation of the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691(d)(1); (7) negligent misrepresentation; (8) fraud; (9) wrongful foreclosure; (10) unfair business practices in violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq.; (11) cancellation of deed; and (12) declaratory relief. (Id. ¶¶ 63-130.)

PLM was declared to have nonmonetary status, and the remaining defendants CMC and Deutsche Bank filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). (Motion, ECF No. 35; Stipulation and Order, ECF No. 45.) Ms. Green filed an opposition, and the defendants filed a reply. (Opposition, ECF No. 43; Reply, ECF No. 48.)

ANALYSIS

As a threshold matter, the defendants argue that Ms. Green does not have standing to assert any of her claims. (Motion, ECF No. 35 at 12-15.) Technically, the defendants—who bring a motion under Rule 12(b)(6)—must raise the standing issue under Rule 12(b)(1). See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011). The court nonetheless must address jurisdictional issues such as standing sua sponte. D'Lil v. Best Western, 538 F.3d 1031, 1035 (9th Cir. 2008).

A defendant may mount either a facial or a factual challenge to the court's jurisdiction. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). "A 'facial' attack asserts that a complaint's allegations are themselves insufficient to invoke jurisdiction, while a 'factual' attack asserts that the complaint's allegations, though adequate on their face to invoke jurisdiction, are untrue." Courthouse News Serv. v. Planet, 750 F.3d 776, 780 n. 3 (9th Cir. 2014) (citing Safe Air forEveryone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). When a defendant mounts a facial attack, the court must "accept all allegations of fact in the complaint as true and construe them in the light most favorable to the plaintiffs." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). In contrast, when presented with a factual challenge to subject matter jurisdiction, the court may evaluate extrinsic evidence and resolve factual disputes when necessary. See Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (quoting Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983)). In a factual challenge, the plaintiff "bears the burden of proving by a preponderance of the evidence that each of the requirements for subject-matter jurisdiction has been met." Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (citing Harris v. Rand, 682 F.3d 846, 850-51 (9th Cir. 2012)). Dismissal of a complaint without leave to amend should be granted only where the jurisdictional defect cannot be cured by amendment. See Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

Ms. Green has the burden of establishing Article III standing. Colwell v. Dep't of Health and Human Servs., 558 F.3d 1112, 1121 (9th Cir. 2009). To meet that burden, she ...