Mace v. Ocwen Loan Servicing, LLC

252 F.Supp.3d 941

Larry MACE, Individually as Trustee of the Larry Mace Family Trust Dated May 31, 2006, et al., Plaintiffs,

v.OCWEN LOAN SERVICING, LLC, a California Limited Liability Company, et al., Defendants.

No. C 16-5840 CW.

United States District Court, N.D. California.

Signed May 16, 2017

Brian Kelly Ross, Law Offices of Brian K. Ross, Dublin, CA, for Plaintiffs.

Yaron Shaham, Brian Andrew Paino, Dhruv Mohan Sharma, McGlinchey Stafford, Irvine, CA, for Defendants.

ORDER DENYING MOTION FOR SUMMARY JUDGMENT AND DENYING EXTENSION OF TIME

CLAUDIA WILKEN, United States District Judge

Defendant Ocwen Loan Servicing, LLC, has filed a motion for summary judgment, or, alternatively, partial summary judgment. Defendant Western Progressive, LLC has not joined the motion. Plaintiffs Larry Mace and Sharon Mace oppose the motion. After considering the parties' papers, the Court denies Ocwen's motion for summary judgment. The Court also rules on the parties' evidentiary objections, requests for extension of time and requests for judicial notice as set forth below.

BACKGROUND

I. Factual Background

Plaintiffs Sharon Mace and Larry Mace, as trustees of the Larry Mace Family Trust, own a personal residence located at 247 Poplar Avenue in Hayward, California. Mace Decl. ¶ 2.¹ On or about April 25, 2006, Plaintiffs obtained a mortgage loan from Argent Mortgage Company, LLC in the original principal sum of $688,500, which was reflected in a promissory note secured by a deed of trust encumbering the property. Mace Decl. ¶ 3; Ocwen's Request for Judicial Notice (Ocwen RJN) Ex. 1. The note was thereafter assigned to the current holder, Deutsche Bank National Trust Company. Ocwen RJN Exs. 2 & 3. Ocwen acts as mortgage servicer. Complaint ¶ 2; see generally Declaration of Gina Feezer.

On October 28, 2015, Plaintiffs submitted their first loan modification application to Ocwen. Mace Decl. ¶ 5. Ocwen acknowledged receipt of the application on November 2, 2015. Feezer Decl. ¶ 5 & Ex. A. By separate letter on the same day, Ocwen informed Plaintiffs that it was not able to complete its evaluation because Plaintiffs had not submitted all the required documents. Id.¶ 5 & Ex. B at 1–2. Ocwen provided a list of eight items of additional information that Plaintiffs should submit, including a three-month profit and loss statement for business income reflected in Mr. Mace's tax returns. Id. Plaintiffs provided Ocwen with at least some of the requested documents. Id.¶ 6.

On December 3, 2015, Ocwen sent Plaintiffs a letter notifying them that it needed additional information regarding the profit and loss statement that Plaintiffs had provided. Id.¶ 6 & Ex. C at 2. Plaintiffs submitted additional documents on or about March 4, 2016. Id.¶ 7.

On March 9, 2016, Ocwen sent Plaintiffs a letter requesting yet more information, listing five items that appear to differ, at least in part, from those requested in the prior letters. Id.¶ 7 & Ex. D at 3. Some of the items listed in the March 9 letter are conditional, for example, "Any other documentation requested during our review of your loan based on investor or program guidelines." Id. Plaintiffs submitted some additional documents. Id.¶ 8.

On March 23, 2016, Ocwen again wrote to Plaintiffs to require additional information.

Id.¶ 8 & Ex. E. The list of required documents differed from that sent on March 9, 2016. Plaintiffs submitted additional information to Ocwen on April 26, 2016. Mace Decl. ¶ 5 & Ex. 10.

Meanwhile, on April 8, 2016, Defendants recorded a notice of default in Alameda County, California, alleging that Plaintiffs had failed to make the payments required by the deed of trust. Id.¶ 4 & Ex. 1.

On August 25, 2016, Defendants recorded a notice of trustee's sale in Alameda, California based upon the unpaid mortgage obligation balance. Id.¶ 6 & Ex. 2.

During a September 2, 2016 telephone call, an Escalation Manager for Ocwen told Plaintiffs' counsel that if Plaintiffs submitted an updated loan modification application before the date of the scheduled foreclosure sale, the sale would be postponed while the application was pending. Declaration of Brian K. Ross ¶ 2.

On or around September 8, 2016, Ocwen sent Plaintiffs a letter notifying them that their October 28, 2015 loan modification application was complete and denying the application. Mace Decl. ¶¶ 5, 8 & Ex. 4; Feezer Decl. ¶ 11 & Ex. F.

As suggested by Ocwen's Escalation Manager, Plaintiffs also submitted a second loan modification application on September 9, 2016. Mace Decl. ¶ 7; Feezer Decl. ¶ 12. On September 16, 2016, Ocwen acknowledged receipt of the September 9, 2016 application. Mace Decl. ¶ 9 & Ex. 5; Feezer Decl. ¶ 13 & Ex. G. On September 20, 2016, Ocwen sent Plaintiffs a letter stating that the September 16, 2016 loan modification application was complete and that Ocwen was not able to offer Plaintiffs a loan modification. Mace Decl. ¶ 9 & Ex. 6; Feezer Decl. ¶ 14 & Ex. H.

II. Procedural Background

On September 14, 2016, Plaintiffs filed the Complaint in this case in Alameda County Superior Court, alleging a claim for violation of the California Homeowner Bill of Rights (HBOR), California Civil Code section 2920, et seq., and seeking declaratory and injunctive relief. On September 20, 2016, the superior court granted Plaintiffs' ex parte application for a temporary restraining order. On September 27, 2016, Plaintiffs filed a motion for preliminary injunction. On September 28, 2016, Defendants were served with the Complaint. On October 5, 2016, Defendant Western Progressive filed a declaration of nonmonetary status pursuant to California Civil Code section 2924l. On October 11, 2016, Defendants removed the case to this Court.

On October 13, 2016, Ocwen answered the Complaint. On December 29, 2016, this Court denied Ocwen's motion for judgment on the pleadings and granted Plaintiffs' motion for a preliminary injunction. The Court enjoined Defendants and anyone acting in concert with them "from taking any further action in pursuit of a foreclosure sale of" the subject property. Order at 10–11. The Court conditioned this order upon Plaintiffs making monthly payments of $2500 per month, an amount similar to their most recent monthly payment on their mortgage. Id. Plaintiffs have complied with the Court's order to make these monthly payments. Mace Decl. ¶ 13.

Following entry of the preliminary injunction, Defendants have continued to notice (and repeatedly postpone) the foreclosure sale of the subject property, with the result that Plaintiffs allegedly have been "badgered and harassed by realtors and other potential purchasers" of their home despite the preliminary injunction. Id.¶ 12 & Ex. 9. Ocwen has not, however, foreclosed on the home or sold the home at a trustee's sale. Feezer Decl. ¶ 15.

LEGAL STANDARD

Summary judgment is properly granted when no genuine and disputed issues of material fact remain, and when, viewing the evidence most favorably to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288–89 (9th Cir. 1987).

The moving party bears the burden of showing that there is no material factual dispute. Therefore, the court must regard as true the opposing party's evidence, if supported by affidavits or other evidentiary material. Celotex, 477 U.S. at 324, 106 S.Ct. 2548 ; Eisenberg, 815 F.2d at 1289. The court must draw all reasonable inferences in favor of the party against whom summary judgment is sought. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991).

Material facts which would preclude entry of summary judgment are those which, under applicable substantive law, may affect the outcome of the case. The substantive law will identify which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Where the moving party does not bear the burden of proof on an issue at trial, the moving party may discharge its burden of production by either of two methods:

The moving party may produce evidence negating an essential element of the nonmoving party's case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial.

Nissan Fire & Marine Ins. Co., Ltd., v. Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir. 2000).

If the moving party discharges its burden by showing an absence of evidence to support an essential element of a claim or defense, it is not required to produce evidence showing the absence of a material fact on such issues, or to support its motion with evidence negating the non-moving party's claim. Id.; see also Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 885, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) ; Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). If the moving party shows an absence of evidence to support the non-moving party's case, the burden then shifts to the non-moving party to produce "specific evidence, through affidavits or admissible discovery material, to show that the dispute exists." Bhan, 929 F.2d at 1409.

If the moving party discharges its burden by negating an essential element of the non-moving party's claim or defense, it must produce affirmative evidence of such negation. Nissan, 210 F.3d at 1105. If the moving party produces such evidence, the burden then shifts to the non-moving party to produce specific evidence to show that a dispute of material fact exists. Id.

If the moving party does not meet its initial burden of production by either method, the non-moving party is under no obligation to offer any evidence in support of its opposition. Id. This is true even...