Necer v. PHH Mortg. Corp.

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AMALIA NECER, Plaintiff, v. PHH MORTGAGE CORPORATION, et al., Defendants.

No. 1:21-cv-01730-JLT-CDB

United States District Court, E.D. California

June 10, 2024

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

(Doc. 20)

ORDER GRANTING DEFENDANTS' UNOPPOSED REQUEST TO TAKE JUDICIAL NOTICE

(Doc. 27)

Pending before the Court is the motion by Defendants PHH Mortgage Corporation and Western Progressive LLC (“Defendants”), filed January 19, 2022, to dismiss the complaint of Plaintiff Amalia Necer (“Plaintiff”). (Doc. 20). On February 14, 2022 Plaintiff filed an opposition to the motion to dismiss and Defendants filed a reply and request for judicial notice in support thereof on May 23, 2022. (Docs. 22, 26, 27).^[1] For the foregoing reasons, the Court will grant Defendants' motion to dismiss.

Factual Background

On October 31, 2005, Plaintiff obtained title to real property located at 13608 Providence Place, Bakersfield, California (“Providence Place”) with a purchase money first and second mortgage loan from IndyMac Bank FSB in the amount of $498,000.00 (the “Loan”). (Docs. 1 at ¶¶ 2, 10; 1-13).

The Loan was secured by a Deed of Trust, which was recorded against Providence Place. (Doc. 113). The Deed of Trust required Plaintiff to make regular periodic payments and to pay the Loan in full no later than November 1, 2035. Id. at 2. Section 20 of the Deed of Trust states:

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period, which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph.

Id. at 10. Section 15 provides:

All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.

Id. at 9. Further, the Deed of Trust provides “[t]he covenants and agreements of this Security Instrument shall bind (except as provided in Section 20) and benefit the successors and assigns of Lender.” Id. at 8.

In 2011, Plaintiff filed for Chapter 7 bankruptcy. (Docs. 1 at ¶ 25; 2-4 at ¶ 7). At some point, Plaintiff “had a break in [her mortgage] payments because of the pandemic.” (Docs. 22 at 10; 1-3 at 4). A notice of default and election to sell Providence Place was recorded by the Kern County recorder's office on March 23, 2020. (Doc. 27 at 4). Plaintiff thereafter requested a modification of her mortgage from the servicer of the Loan - Defendant PHH Mortgage Corporation (“PHH”), formerly Ocwen Financial Corporation (“Ocwen”). (Docs. 1 at ¶¶ 5, 11; 1-3).

On March 15, 2021, PHH approved Plaintiff's account to enter into a Trial Period Plan (“TPP”) under a PHH Mortgage Service Modification Plan. (Docs. 1 at ¶ 11; Doc. 1-3). To accept the TPP, “a Mortgage Assistance Acceptance Form” needed to be completed and returned to PHH by May 1, 2021. (Doc. 1-3). The TPP required Plaintiff to make three trial payments of $2,129.21 on May 1, 2021, June 1, 2021, and July 1, 2021. (Docs. 1 at ¶ 11; 1-3 at 2-3). Plaintiff alleges she made all three TPP payments by cashier's check on April 14, 2021, May 21, 2021, and June 24, 2021. (Docs. 1 at ¶ 11; 1-4; 1-5; 1-6). Around July 1, 2021, Plaintiff “began calling [PHH] to find out what she was to do next, and [PHH's] agent told her that the [c]ashier's check ‘had not cleared.'” (Doc. 1 at ¶ 12). Plaintiff alleges when she checked with Chase Bank, she learned that the check had cleared. Id. Around July 11, 2021, Plaintiff received a letter from PHH stating that her “recent payment has been returned from [her] banking authority” and to “refer to [her] banking institution.” (Docs. 1 at ¶ 12; 17). In its letter, PHH advised Plaintiff “[i]f these funds represent your mortgage payment, please forward replacement funds” by mailing a replacement check, phone, or online. (Doc. 1-7). Thereafter, Plaintiff went to a Chase Bank branch in person and spoke to a teller who “told her again that the check had not been returned.” (Doc. 1 at ¶ 12).

On October 12, 2021, a Notice of Trustee's Sale was recorded by the Kern County Recorder. (Docs. 1 at 7; 1-11). The Notice of Trustee's Sale lists Defendant Western Progressive, LLC (“Western Progressive”) as the appointed trustee. (Doc. 1-11). The date of sale was set for November 24, 2021, at 10:00 AM. Id. at 1. Around October 20, 2021, Plaintiff alleges she received a version of the Notice that did not contain the recorders' stamp. (Docs. 1 at 7 [misnumbered ¶ 2]; 1-12).

On November 2, 2021, PHH sent Plaintiff a response letter regarding Plaintiff's apparent request for PHH to “reverse the modification denial.” (Docs. 1 at ¶ 13; 1-8). The letter told Plaintiff that her July TPP payment was returned unpaid by the banking institution with the reason “Account not Recorded.” Id. PHH's letter explained, “[t]o reverse the modification denial, we would require a payment of $10,646.05 before the end of the month.” Id. In its letter, PHH noted, “[o]nce the required funds are received, the request to reverse the modification denial will be reviewed.” Id.

Plaintiff called PHH on November 3, 2021. (Doc. 1 at ¶ 14). Plaintiff alleges she spoke with PHH's agent “Gerald” who told Plaintiff that the sale date was “suspended.” Id. On November 17, Plaintiff called PHH and spoke to PHH's agent “Akilla” purportedly about “the sale date.” Id. ¶ 15. Akilla told Plaintiff “everything was ‘okay'” and to send a check to an address she provided to Plaintiff. Id. at ¶ 15. That same day, Plaintiff mailed a cashier's check for $10,646.05 to PHH by overnight delivery. Id. at ¶¶ 15-16. The check was received by PHH on November 20, 2021. Id. at ¶ 16.

Plaintiff alleges over the next two days, she made multiple calls to PHH to find out the status of her payment. Id. Plaintiff asserts she “also made calls to bankruptcy attorneys in case she needed to stop the sale with a chapter thirteen bankruptcy to give her a chance to sell the property and save her equity.” Id. On November 24, 2021, Plaintiff received a call from PHH's agent “Phillip.” Id. at ¶ 17. Plaintiff alleges Phillip “told her not to worry, that her cashier's check was being ‘processed' so Plaintiff did not file for bankruptcy.” Id. Later that day, Plaintiff called PHH to find out the status of her payment, and another agent (name not provided), told her that Providence Place had been sold to Jamal Abed (Plaintiff's neighbor) at a foreclosure sale. Id. Plaintiff alleges the agent told her it looked like the sale date was “suspended” but that the “suspension” got released the next day. Id.

Procedural Background

Plaintiff initiated this action with the filing of a complaint against Defendants on December 6, 2021, in which she raises causes of action for: (1) wrongful foreclosure, (2) promissory estoppel, (3) breach of contract, (4) fraud, and (5) violation of the Business and Professions Code §17200 et al. (“UCL”). (Doc. 1 at 1, 8-17). That same day, Plaintiff filed an ex parte application for a temporary restraining order (“TRO”) and for an order to show cause why a preliminary injunction should not issue. (Doc. 2). Plaintiff requested the Court enjoin Defendants and their successors, agents, officers, servants employees, attorneys, and/or representatives from transferring title or taking any further action in reliance of the November 24, 2021, foreclosure sale until a hearing on a permanent injunction could be held. Id. at 2.

On December 10, 2021, the Court granted the parties' stipulated request to withdraw Plaintiff's motion for a TRO on the grounds that PHH had instructed Western Progressive to rescind the foreclosure sale. (Docs. 9, 10). In a joint report filed December 28, 2021, the parties represented that the foreclosure sale was rescinded and the buyer's funds were returned to him on December 22, 2021. (Doc. 12).

Defendants filed the instant motion to dismiss on January 19, 2022. (Doc. 20). Defendants argue Western Progressive...