case file california fdcpa respa ucl quasi contract decl relief m-t-d denied naranjo v....

Edward J. Schwartz U.S. CourthouseU.S. District Court

Southern District of California 940 Front Street

San Diego, CA 92101-8900

_______________________________________________________________

CARMEN R. NARANJO,Plaintiff,

v.SBMC MORTGAGE, et al.,

Defendants.

---------------------------

All Opposing Motions

and ORDERJuly 24, 2012

CA Trial Court Upholds Claims for Improper Assignment, Accounting, Unfair PracticesPosted on August 2, 2012 by Neil Garfield

Editors Note: In an extremely well-written and well reasoned decision Federal District Court Judge M. JamesLorenz denied the Motion to dismiss of US Bank on an alleged WAMU securitization that for the first timerecognizes that the securitization scheme could be a sham, with no basis in fact.

Although the Plaintiff chose not to make allegations regarding false origination of loan documents, which Ithink is important, the rest of the decision breaks the illusion created by the banks and servicers through theuse of documents that look good but do not meet the standards of proof required in a foreclosure.

1. I would suggest that lawyers look at the claim and allegations that the origination documents were false andwere procured by fraud.

2. Since no such allegation was made, the court naturally assumed the loan was validly portrayed in the loandocuments and that the note was evidence of the loan transaction, presuming that SBMC actually loaned themoney to the Plaintiff, which does not appear to be the case.

3. This Judge actually read everything and obvious questions in his mind led him to conclude that there wereirregularities in the assignment process that could lead to a verdict in favor of the Plaintiff for quiet title,accounting, unfair practices and other claims.

4. The court recites the fact that the loan was sold to currently unknown entity or entities. This implicitlyraises the question of whether the loan was in fact actually sold more than once, and if so, to whom, for howmuch, and raises the issues of whom Plaintiff was to direct her payments and whether the actual creditorwas receiving the money that Plaintiff paid. a point hammered on, among others, at the Garfield Seminarscoming up in Emeryville (San Francisco), 8/25 and Anaheim, 8/29-30. If you really want to understand whatwent on in the mortgage meltdown and the tactics and strategies that are getting traction in the courts, youare invited to attend. Anaheim has a 1/2 day seminar for homeowners. Call customer service 520-405-1688 toattend.

5. For the first time, this Court uses the words (attempt to securitize a loan as opposed to assuming it wasdone just based upon the paperwork and the presence of the the parties claiming rights through theassignments and securitization.

6. AFTER the Notice of Sale was recorded, the Plaintiff sent a RESPA 6 Qualified Written request. Thedefendants used the time-honored defense that this was not a real QWR, but eh court disagreed, stating thatthe Plaintiff not only requested information but gave her reasons in some details for thinking that somethingmight be wrong.

7. Plaintiff did not specifically mention that the information requested should come from BOTH the subservicerclaiming rights to service the loan and the Master Servicer claiming rights to administer the payments fromall parties and the disbursements to those investor lenders that had contributed the money that was used tofund the loan. I would suggest that attorneys be aware of this distinction inasmuch as the subservicer onlyhas a small snapshot of transactions solely between the borrower and the subservicer whereas the theinformation from the Master Servicer would require a complete set of records on all financial transactions andall documents relating to their claims regarding the loan.

8. The court carefully applied the law on Motions to Dismiss instead of inserting the opinion of the Judge as towhether the Plaintiff would win stating that material allegations, even if doubtful in fact, are assumed to betrue, which is another point we have been pounding on since 2007. The court went on to say that it was

AdministratorRectangle




obligated to accept any claim that was plausible on its face.9. The primary claim of Plaintiffs was that the Defendants were not her true creditors and as such have no

legal, equitable, or pecuniary right in this debt obligation in the loan, which we presume to mean that thecourt was recognizing the distinction, for the first time, between the legal obligation to pay and the loandocuments.

10. Plaintiff contended that there was not a proper assignment to anyone because the assignment took placeafter the cutoff date in 2006 (assignment in 2010) and that the person executing the documents, was not aduly constituted authorized signor. The Judges decision weighed more heavily that allegation that theassignment was not properly made according to the trust Document, thus taking Defendants word for it thata trust was created and existing at the time of the assignment, but also saying in effect that they cant pickup one end of the stick without picking up the other. The assignment, after the Notice of Default, violated theterms of the trust document thus removing the authority of the trustee or the trust to accept it, which as anyreasonable person would know, they wouldnt want to accept having been sold on the idea that they werebuying performing loans. More on this can be read in whose Lien Is It Anyway?, which I just published and isavailable on www.livinglies-store.com

11. The Court states without any caveats that the failure to assign the loan in the manner and timing set forth inthe trust document (presumably the Pooling and Servicing Agreement) that the note and Deed of trust arenot part of the trust and that therefore the trustee had no basis for asserting ownership, much less the rightto enforce.

12. THEN this Judge uses simple logic and applies existing law: if the assignment was void, then the notices ofdefault, sale, substitution of trustee and any foreclosure would have been totally void.

13. I would add that lawyers should consider the allegation that none of the transfers were supported by anyfinancial transaction or other consideration because consideration passed at origination from the investorsdirectly tot he borrower, due to the defendants ignoring the provisions of the prospectus and PSA shown tothe investor-lender. In discovery what you want is the identity of each entity that ever showed this loan is aloan receivable on any regular business or record or set of accounting forms. It might surprise you thatNOBODY has the loan posted as loan receivable and as such, the argument can be made that NOBODY cansubmit a CREDIT BID at auction even if the auction was otherwise a valid auction.




FW: Naranjo v. SBMC Mtg: So Dist Cally - aom to WAMU trust not PSA timely; borrower challenge to f/c OK on this basis

Posted By admin On 30. July 2012 @ 17:30 In Unlawful Beneficiary, assignment, California, case law, wrongful foreclosure, Bank fraud | No Comments

Posted by April Charney:

lots of helpful statements in this decision, including:

The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30, 2006 as required by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent assignment, substitution, and notice of default and election to sell may also be improper. Defendants wholly fail to address that issue. ( See Defs. Mot. 3:166:2; Defs. Reply 2:134:4.) This reason alone is sufficient to deny Defendants motion with respect to this issue.

Naranjo v. SBMC Mortg., 2012 WL 3030370 (S.D. Cal. July 24, 2012).


re: Naranjo v. SBMC MORTGAGE, Dist. Court, SD California 2012

III. DISCUSSIONPlaintiff's primary contention here is that Defendants "are not her true creditors and as such have no legal, equitable, or pecuniary right in this debtobligation" in the loan. (Pl.'s Opp'n 1:5-11.) She contends that her promissory note and DOT were never properly assigned to the WAMU Trust becausethe entities involved in the attempted transfer failed to adhere to the requirements set forth in the Trust Agreement and thus the note and DOT are not apart of the trust res. (FAC 17, 20.) Defendants moves to dismiss the FAC in its entirety with prejudice

. . .

Shortly thereafter, SBMC sold her loan to a currently unknown entity or entities. (FAC 15.) Plaintiff alleges that these unknown entities and Defendantswere involved in an attempt to securitize the loan into the WAMU Mortgage Pass-through Certificates WMALT Series 2006-AR4 Trust ("WAMU Trust").(Id. 17.) However, these entities involved in the attempted securitization of the loan "failed to adhere to the requirements of the Trust Agreementnecessary to properly assign the mortgage loan into the Trust." [4] ( Id.) Specifically, Plaintiff alleges that her loan "was not properlyassigned to the WAMU Trust on or before May 30, 2006, the `Closing Date' as set forth in the Trust Agreement." ( Id. 17, 21.)"The Closing Date is the date by which all of the notes and mortgages had to be transferred into the WAMU Trust in order for the mortgage loan to be apart of the trust res." ( Id. 21.)

. . .

Therefore, the Court DENIES Defendants' motion as to Plaintiff's claim for declaratory relief.

. . .

Therefore, the Court DENIES Defendants' motion as to Plaintiff's quasi-contract claim.

. . .

Accordingly, the Court DENIES Defendants' motion as to Plaintiff's FDCPA claim.

. . .

Accordingly, the Court DENIES Defendants' motion as to Plaintiff's RESPA claim.

. . .

Plaintiff alleges that Defendants violated the UCL by collecting payments that they lacked the right to collect , and engaging inunlawful business practices by violating the FDCPA and RESPA. As discussed above, Plaintiff alleges cognizable theories of liability, including, amongothers, violations of the FDCPA and RESPA. Thus, Plaintiff may proceed with her UCL claim under the unlawful prong.

. . .

Therefore, the Court DENIES Defendants' motion as to Plaintiff's accounting claim.

______________________________________________________________




Naranjo v. SBMC MORTGAGE, Dist. Court, SD California 2012

CARMEN R. NARANJO, Plaintiff,v.

SBMC MORTGAGE, et al., Defendants.

No. 11-cv-2229-L(WVG).

United States District Court, S.D. California.

July 24, 2012.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS'MOTION TO DISMISS [DOC. 12]

M. JAMES LORENZ, District Judge.

On September 29, 2011, Plaintiff Carmen R. Naranjo commenced this action against Defendants SBMC Mortgage("SBMC"),[1] JPMorgan Chase ("JPMorgan"), and U.S. Bank N.A. After defaulting on her home loan, Plaintiff now sues Defendantsin an attempt to prevent foreclosure of the property securing the loan. Defendants now moves to dismiss the First AmendedComplaint ("FAC"). Plaintiff opposes.

The Court found this motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1).(Doc. 15.) For the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss.

I. BACKGROUND[2]

On or about February 21, 2006, Plaintiff executed a promissory note in favor of SBMC Mortgage ("SBMC") in the amount of$825,000.00, secured by a deed of trust ("DOT"), to finance real property located in La Jolla, California. (FAC 1, 15 [Doc. 10].[3])The DOT, attached as Exhibit E to the FAC, identified Plaintiff as Borrower, SBMC Mortgage as Lender, T.D. Service Co. asTrustee, and Mortgage Electronic Registration Systems, Inc. ("MERS") as both nominee and beneficiary under the securityinstrument. (DOT 1.)

Shortly thereafter, SBMC sold her loan to a currently unknown entity or entities. (FAC 15.) Plaintiff alleges that these unknownentities and Defendants were involved in an attempt to securitize the loan into the WAMU Mortgage Pass-through CertificatesWMALT Series 2006-AR4 Trust ("WAMU Trust"). (Id. 17.) However, these entities involved in the attempted securitization of theloan "failed to adhere to the requirements of the Trust Agreement necessary to properly assign the mortgage loan into theTrust."[4] (Id.) Specifically, Plaintiff alleges that her loan "was not properly assigned to the WAMU Trust on or before May 30, 2006,the `Closing Date' as set forth in the Trust Agreement." (Id. 17, 21.) "The Closing Date is the date by which all of the notes andmortgages had to be transferred into the WAMU Trust in order for the mortgage loan to be a part of the trust res." (Id. 21.)

In May 2009, Plaintiff sought to modify her loan with JPMorgan Chase Bank, N.A. ("JPMorgan") under the belief that it had theauthority to negotiate her loan. (FAC 22-24.) However, she made little progress. (Id.) She continued to follow-up and submitloan-modification applications for over 19 months. (Id. 27.)

In August 2009, Plaintiff was hospitalized, resulting in unforeseen financial hardship. (FAC 25.) As a result, she defaulted on herloan. (See id. 26.)

On May 26, 2010, Defendants recorded an Assignment of Deed of Trust, which states that MERS assigned and transferred to U.S.Bank as trustee for the WAMU Trust under the DOT. (RJN Ex. B.) Colleen Irby executed the Assignment as Officer for MERS. (Id.)On the same day, Defendants also recorded a Substitution of Trustee, which states that the U.S. Bank as trustee, by JP Morgan,as attorney-in-fact substituted its rights under the DOT to the California Reconveyance Company ("CRC"). (RJN Ex. C.) Colleen


Irby also executed the Substitution as Officer of "U.S. Bank, National Association as trustee for the WAMU Trust." (Id.) And again,on the same day, CRC, as trustee, recorded a Notice of Default and Election to Sell. (RJN Ex. D.)

A Notice of Trustee's sale was recorded, stating that the estimated unpaid balance on the note was $989,468.00 on July 1, 2011.(RJN Ex. E.)

On August 8, 2011, Plaintiff sent JPMorgan a Qualified Written Request ("QWR") letter in an effort to verify and validate her debt.(FAC 35 & Ex. C.) In the letter, she requested that JPMorgan provide, among other things, a true and correct copy of the originalnote and a complete life of the loan transactional history. (Id.) Although JPMorgan acknowledged the QWR within five days ofreceipt, Plaintiff alleges that it "failed to provide a substantive response." (Id. 35.) Specifically, even though the QWR containedthe borrow's name, loan number, and property address, Plaintiff alleges that "JPMorgan's substantive response concerned thesame borrower, but instead supplied information regarding an entirely different loan and property." (Id.)

On September 26, 2011, Plaintiff commenced this action. Thereafter, Plaintiff filed her FAC asserting nine claims: (1) declaratoryrelief; (2) negligence; (3) quasi contract; (4) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. 1692; (5)violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. 2605; (6) violation of California Business andProfessions Code 17200; (7) accounting; (8) breach of contract; and (9) breach of implied covenant of good faith and fair dealing.Defendants now moves to dismiss the FAC in its entirety with prejudice. Plaintiff opposes. (Doc. 14.)

II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Amotion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). The court must accept all allegations of material fact as true and construe them in light most favorable to the nonmovingparty. Cedars-Sanai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). Material allegations, evenif doubtful in fact, are assumed to be true.Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not"necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. FoxFamily Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003)(internal quotation marks omitted). In fact, the court does not need toaccept any legal conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, ___, 129 S. Ct. 1937, 1949 (2009)

"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligationto provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of theelements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the allegations in thecomplaint "must be enough to raise a right to relief above the speculative level." Id. Thus, "[t]o survive a motion to dismiss, acomplaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Iqbal, 129S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allowsthe court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "The plausibility standard isnot akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. Acomplaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under acognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v.Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the complaint whoseauthenticity is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir.1995) (superceded by statutes on other grounds). Moreover, the court may consider the full text of those documents, even whenthe complaint quotes only selected portions. Id. It may also consider material properly subject to judicial notice without convertingthe motion into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

III. DISCUSSION

Plaintiff's primary contention here is that Defendants "are not her true creditors and as such have no legal, equitable, or pecuniaryright in this debt obligation" in the loan. (Pl.'s Opp'n 1:5-11.) She contends that her promissory note and DOT were never properlyassigned to the WAMU Trust because the entities involved in the attempted transfer failed to adhere to the requirements set forthin the Trust Agreement and thus the note and DOT are not a part of the trust res. (FAC 17, 20.) Defendants moves to dismissthe FAC in its entirety with prejudice.

A. Applicability of Gomes

Plaintiff alleges that the May 2010 assignments are improper for two primary reasons: (1) the assignment of her loan into theWAMU Trust is improper because it was not assigned before the end of May 2006 as required by the Trust Agreement, and (2) the


May 2010 assignments are improper because Collen Irby lacked the authority to execute the assignments. Defendants argue thatlike the borrower in Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149 (2011), Plaintiff seeks to "`test whether theperson initiating the foreclosure has the authority to do so' without presenting any competent, particularized factual allegations orevidence Defendants `lack[] authority to proceed with the foreclosure.'" (Defs.' Mot. 4:13-18.) They go on to explain that theassignments and notice of default and election to sell executed in May 2010 are proper. (Defs.' Reply 3:26-4:4.) However,Defendants put the cart before the horse.

The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30, 2006 asrequired by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent assignment, substitution,and notice of default and election to sell may also be improper. Defendants wholly fail to address that issue. (See Defs.' Mot. 3:16-6:2; Defs.' Reply 2:13-4:4.) This reason alone is sufficient to deny Defendants' motion with respect to this issue.

Moving on, Defendants' reliance on Gomes is misguided. In Gomes, the California Court of Appeal held that a plaintiff does nothave a right to bring an action to determine a nominee's authorization to proceed with a nonjudicial foreclosure on behalf of anoteholder. 192 Cal. App. 4th at 1155. The nominee in Gomes was MERS. Id. at 1151. Here, Plaintiff is not seeking such adetermination. The role of the nominee is not central to this action as it was in Gomes.Rather, Plaintiff alleges that the transfer ofrights to the WAMU Trust is improper, thus Defendants consequently lack the legal right to either collect on the debt or enforce theunderlying security interest.

B. Declaratory Relief

Declaratory relief is not an independent cause of action or theory of recovery, only a remedy. 28 U.S.C. 2201, 2202. Where asubstantive cause of action already exists in the complaint, a plaintiff cannot assert a declaratory-relief claim as a "superfluoussecond cause of action for the determination of identical issues." Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1189(E.D. Cal. 2010) (internal quotation marks omitted). To grant declaratory relief, a district court must find an "actual controversy,"which is "definite and concrete . . . [and] real and substantial." Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227,240-41 (1937).

Plaintiff requests that the Court "make a finding and issue appropriate orders stating that none of the named Defendants . . . haveany right or interest in Plaintiff's Note, Deed of Trust, or the Property which authorizes them . . . to collect Plaintiff's mortgagepayments or enforce the terms of the Note or Deed of Trust in any manner whatsoever." (FAC 50.) Defendant simplifies this as arequest for "a determination of the ownership of [the] Note and Deed of Trust," which they argue is "addressed in her other causesof action." (Defs.' Mot. 6:16-20.) The Court disagrees with Defendants. As discussed above and below, there is an actualcontroversy that is not superfluous. Therefore, the Court DENIES Defendants' motion as to Plaintiff's claim for declaratory relief.

C. Negligence

"[T]o recover on a theory of negligence, [p]laintiffs must prove duty, breach, causation, and damages." Truong v. Nguyen, 156 Cal.App. 4th 865, 875 (2007). "The existence of a duty of care owed by defendant to a plaintiff is a prerequisite to establishing a claimfor negligence."Nymark v. Heart Fed. Sav. & Loan Ass'n, 231 Cal. App. 3d 1089, 1095 (1991). "[A]s a general rule, a financialinstitution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not exceed the scopeof its conventional role as a mere lender of money." Id. at 1096. "Liability to a borrower for negligence arises only when the lender`actively participates' in the financed enterprise `beyond the domain of the usual money lender.'" Wagner v. Benson, 101 Cal. App.3d 27, 35 (1980) (quoting Connor v. Great W. Sav. & Loan Ass'n, 69 Cal. 2d 850, 864 (1968)).

Plaintiff alleges that Defendants "have a duty to exercise reasonable care and skill to follow California law with regard toenforcement of monetary obligations, and to refrain from taking or failing to take any action against Plaintiff that they did not havelegal authority to do." (FAC 56.) Defendants argue that they are the mortgage servicer and that Plaintiff fails to "plead factssupporting a finding that Defendants' conduct exceeded the scope of a conventional mortgage servicer." (Defs.' Mot. 7:5-7.) Plaintiffresponds that JPMorgan's mishandling of the loan-modification applications and failure to afford a loan modification is "beyond thedomain of a usual money lender." (Pl.'s Opp'n 17:24-18:19.) However, there is no common-law duty to modify a contract. Vella v.Hudgins, 151 Cal. App. 3d 515, 519 (1984). Thus, Plaintiff fails to allege facts as to the loan-modification process that maintain herclaim for negligence.

Defendants also argue that they have "clearly established they had such authority" to collect payments. (Defs.' Reply 5:28-6:5.)However, as discussed above, they have not.

Accordingly, the Court GRANTS IN PART and DENIES IN PART Defendants' motion as to Plaintiff's negligence claim. Given thatthe legal authority of Defendants that derive from the allegedly improper assignment of rights to the WAMU Trust is central to thisaction, Plaintiff may pursue her claim on that ground. However, that said, the Court DISMISSES WITHOUT PREJUDICE Plaintiff'snegligence claim insofar as it relies on facts alleged regarding the loan-modification process, which are insufficient to maintain her




negligence claim.

D. Quasi-Contract

A claim for quasi-contract is synonymous with one for unjust enrichment. FDIC v. Dintino, 167 Cal. App. 4th 333, 346 (2008).Unjust enrichment requires the receipt of a benefit and the unjust retention of that benefit at the expense of another. Peterson v.Cellco P'ship, 164 Cal. App. 4th 1583, 1593 (2008). However, "California courts appear to be split on whether unjust enrichmentcan be an independent claim or merely an equitable remedy." Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088, 1099 (N.D. Cal.2007); see Bernardi v. JPMorgan Chase Bank, N.A., No. 11-cv-4212, 2012 WL 2343679, at *3 (N.D. Cal. June 20, 2012) (notingthat quasi-contract is not an independent cause of action under California law, and thus the claim is subject to dismissal for thatreason alone).

Defendants argue that Plaintiff's quasi-contract claim fails because "[t]he Deed of Trust is an express binding agreement thatdefines the parties' rights." (Defs.' Mot. 7:8-16.) Plaintiff responds that she "was not paying her true creditor because there was novalid assignment that allowed [Defendants] to collect on her debt obligation." (Pl.'s Opp'n 19:3-13.) As discussed above,Plaintiff sufficiently alleges facts that put Defendants' legal rights that derive from the Trust Agreement inquestion. Consequently, Plaintiff adequately alleges facts that show Defendants were unjustly enriched in collectingpayments based on those presumed rights. Therefore, the Court DENIES Defendants' motion as to Plaintiff's quasi-contract claim.

E. FDCPA

"The [FDCPA] prohibits debt collector[s] from making false or misleading representations and from engaging in various abusive andunfair practices." Heintz v. Jenkins, 514 U.S. 291, 292 (1995). To be liable for an FDCPA violation, a defendant must, as athreshold matter, be a "debt collector" within the meaning of those acts. Id. at 294.

Under the FDCPA, a debt collector is "any person who uses any instrumentality of interstate commerce or the mails in anybusiness the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly orindirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. 1692a(6). This definition includes "any creditorwho, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person iscollecting or attempting to collect such debts." Id. 1692a(6). The FDCPA does not, however, cover "the consumer's creditors, amortgage servicing company, or any assignee of the debt, so long as the debt was not in default at the time it was assigned." Noolv. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009)(quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5thCir. 1985)); see also 15 U.S.C. 1692a(4) (defining "creditor"). Consequently, a loan servicer is not a debt collector if it acquiredthe loan before the borrower was in default. See Schlegel v. Wells Fargo Bank, N.A., 799 F. Supp. 2d 1100, 1103-04 (N.D. Cal.2011).

Defendants argue that they are not "debt collectors" within the meaning of the FDCPA. (Defs.' Mot. 9:13-15.) That argument ispredicated on the presumption that all of the legal rights attached to the loan were properly assigned. Plaintiff responds thatDefendants are debt collectors because U.S. Bank's principal purpose is to collect debt and it also attempted to collect payments.(Pl.'s Opp'n 19:23-27.) She explicitly alleges in the FAC that U.S. Bank has attempted to collect her debt obligation and that U.S.Bank is a debt collector. Consequently, Plaintiff sufficiently alleges a claim under the FDCPA.

Defendants also argue that the FDCPA claim is time barred. (Defs.' Mot. 7:18-27.) A FDCPA claim must be brought "within oneyear from the date on which the violation occurs." 15 U.S.C. 1692k(d). Defendants contend that the violation occurred when theallegedly false assignment occurred on May 26, 2010. (Defs.' Mot. 7:22-27.) However, Plaintiff alleges that U.S. Bank violated theFDCPA when it attempted to enforce Plaintiff's debt obligation and collect mortgage payments when it allegedly had no legalauthority to do so. (FAC 72.) Defendants wholly overlook those allegations in the FAC. Thus, Defendants fail to show thatPlaintiff's FDCPA claim is time barred.

Accordingly, the Court DENIES Defendants' motion as to Plaintiff's FDCPA claim.

F. RESPA

"RESPA imposes certain disclosure obligations on loan servicers who transfer or assume the servicing of a federally relatedmortgage loan." Morris v. Bank of America, No. C 09-02849, 2011 WL 250325, at *4 (N.D. Cal. Jan. 26, 2011) (citing 12 U.S.C. 2605(b)). Under RESPA, a Qualified Written Response ("QWR") is "written request from the borrower (or an agent of the borrower)for information relating to the servicing of such loan." 12 U.S.C. 2605(e)(1)(A). "The term `servicing' means receiving anyscheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making the payments of principal andinterest and such other payments with respect to the amounts received from the borrower as may be required pursuant to theterms of the loan." 12 U.S.C. 2603(i)(3). Among other things, a QWR must include a "statement of the reasons for the belief of



the borrower, to the extent applicable, that the account is in error or provide[] sufficient detail to the servicer regarding otherinformation sought by the borrower." Id. 2605(e)(1)(B). It must also include the name and account of the borrower. Id.

Defendants argue that Plaintiff's letter does not constitute a QWR because it requests a list of unsupported demands rather thanspecific particular errors or omissions in the account along with an explanation from the borrower why she believes an error exists.(Defs.' Mot. 10:4-13.) However, the letter explains that it "concerns sales and transfers of mortgage servicing rights; deceptive andfraudulent servicing practices to enhance balance sheets; deceptive, abusive, and fraudulent accounting tricks and practices thatmay have also negatively affected any credit rating, mortgage account and/or the debt or payments that [Plaintiff] may be obligatedto." (FAC Ex. C.) The letter goes on to put JPMorgan on notice of

potential abuses of J.P. Morgan Chase or previous servicing companies or previous servicing companies [that] couldhave deceptively, wrongfully, unlawfully, and/or illegally: Increased the amounts of monthly payments; Increased theprincipal balance Ms. Naranjo owes; Increased the escrow payments; Increased the amounts applied and attributedtoward interest on this account; Decreased the proper amounts applied and attributed toward the principal on thisaccount; and/or[] Assessed, charged and/or collected fees, expenses and miscellaneous charges Ms. Naranjo is notlegally obligated to pay under this mortgage, note and/or deed of trust.

(Id.) Based on the substance of letter, the Court cannot find as a matter of law that the letter is not a QWR.

Defendants also argue that the RESPA claim fails because Plaintiff fails to plead actual damages arising from JPMorgan's allegedfailure to respond. (Defs.' Mot. 10:14-19.) To state a claim for relief under RESPA, a plaintiff must allege either a purported patternor practice of violating the statute or actual damages caused by the asserted violation. 12 U.S.C. 2605(f);Fonua v. First AlliedFunding, No. C 09-497, 2009 WL 816291, at *3 (N.D. Cal. Mar. 27, 2009). Here, Plaintiff alleges "actual pecuniary damages" thatinclude costs related to damage to her credit. (FAC 91.) That is a sufficient allegation of actual damages. See Wise v. WellsFargo Bank, N.A., ___ F. Supp. 2d ___, 2012 WL 105887, at *6 (C.D. Cal. 2012).

Accordingly, the Court DENIES Defendants' motion as to Plaintiff's RESPA claim.

G. California Business and Professions Code 17200 (UnfairCompetition Law)

California's Unfair Competition Law ("UCL") prohibits "any unlawful, unfair or fraudulent business act or practice. . . ." Cal. Bus. &Prof. Code 17200. This cause of action is generally derivative of some other illegal conduct or fraud committed by adefendant. Khoury v. Maly's of Cal., Inc., 14 Cal. App. 4th 612, 619 (1993). Plaintiff alleges that Defendants violated the UCL bycollecting payments that they lacked the right to collect, and engaging in unlawful business practices by violating the FDCPA andRESPA.

1. Standing

Standing to bring a UCL claim requires "a person who has suffered injury in fact and has lost money or property as a result of theunfair competition." Cal. Bus. & Prof. Code 17204. To have standing under the UCL, a plaintiff must sufficiently allege that (1)she has lost "money or property" sufficient to constitute an "injury in fact" under Article III of the Constitution, and (2) there is a"causal connection" between the defendant's alleged UCL violation and the plaintiff's injury in fact. Rubio v. Capital One Bank, 613F.3d 1195, 1203-04 (9th Cir. 2010) (citingBirdsong v. Apple, Inc., 590 F.3d 959-60 (9th Cir. 2009); Hall v. Time Inc., 158 Cal. App.4th 847, 855-56 (2008)).

Defendants argue that Plaintiff's allegation regarding a cloud on her title does not constitute an allegation of loss of money orproperty, and even if Plaintiff were to lose her property, she cannot show it was a result of Defendants' actions. (Defs.' Mot. 12:22-13:4.) The Court disagrees. As discussed above, Plaintiff alleges damages resulting from Defendants' collection of paymentsthat they purportedly did not have the legal right to collect. These injuries are monetary, but also may result in the loss of Plaintiff'sproperty. Furthermore, these injuries are causally connected to Defendants' conduct. Thus, Plaintiff has standing to pursue a UCLclaim against Defendants.

2. Unlawful, Unfair or Fraudulent Conduct

Under the UCL, there are three varieties of unfair competitionbusiness acts or practices that are unlawful, unfair, or fraudulent.Cal. Bus. & Prof. Code 17200. "Each prong of the UCL is a separate and distinct theory of liability," each offering "anindependent basis for relief." Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). Furthermore, a claim under 17200is "derivative of some other illegal conduct or fraud committed by a defendant, and `[a] plaintiff must state with reasonableparticularity the facts supporting the statutory elements of the violation.'" Benham v. Aurora Loan Servs., No. C-09-2059, 2009 WL





2880232, at *4 (N.D. Cal. Sept. 1, 2009) (quoting Khoury, 14 Cal. App. 4th at 619).

Defendants argue that Plaintiff fails to plead an unlawful, fraudulent, and unfair act. (Defs.' Mot. 13:5-15:3.) Specifically, withrespect to pleading a fraudulent act, Defendants contend that Plaintiff fails to meet the heightened pleading standard required toallege fraud against a corporation. (Id. at 14:4-20.) Plaintiff responds that she satisfies the unlawful prong through her allegationsthat Defendants' business practices violated the FDCPA and RESPA, and the fraudulent prong because "Defendants' businesspattern, collecting debt they have no right to, is extremely likely to deceive both Plaintiff[] and the public." (Pl.'s Opp'n 22:5-18.)

As discussed above, Plaintiff alleges cognizable theories of liability, including, among others, violations of the FDCPA and RESPA.Thus, Plaintiff may proceed with her UCL claim under the unlawful prong.

The fraudulent prong requires a plaintiff to have "actually relied" on the alleged misrepresentation to her detriment. In re Tobacco IICases, 46 Cal. 4th 326, 330 (2009). Moreover, under Federal Rule of Civil Procedure 9(b), the "circumstances constituting fraud" orany other claim that "sounds in fraud" must be stated "with particularity." Fed. R. Civ. P. 9(b);Vess v. Ciba-Geigy Corp. USA, 317F.3d 1097, 1103-04 (9th Cir. 2003). This standard requires, at a minimum, that a plaintiff plead evidentiary facts, such as time,place, persons, statements, and explanations of why the statements are misleading. See In re GlenFed, Inc. Sec. Litig., 42 F.3d1541, 1547-48 (9th Cir. 1994) (en banc). Plaintiff fails allege facts that satisfy these heightened requirements. (See FAC 95-123.)

Finally, Plaintiff fails to respond to Defendants' argument that she fails to allege facts to satisfy the unfairness prong. (See Pl.'sOpp'n 22:5-18.) The only mention of the unfairness prong in Plaintiff's opposition is a conclusory assertion that Defendantsengaged in unfair practices. (Id.at 22:5-6.) Thus, it appears that Plaintiff has abandoned this ground of her UCL claim.

In sum, Plaintiff has standing to pursue her UCL claim. Furthermore, the Court GRANTS IN PART and DENIES IN PARTDefendants' motion as to the UCL claim. Plaintiff may pursue her UCL claim under the unlawful prong, but the Court DISMISSESWITHOUT PREJUDICE the UCL claim under the fraudulent and unfairness prongs.

H. Accounting

Accounting "is not an independent cause of action but merely a type of remedy and an equitable remedy at that." Batt v. City &Cnty. of San Francisco, 155 Cal. App. 4th 65, 82 (2007). An accounting may be brought to compel a defendant to account to aplaintiff for money where (1) a fiduciary duty exists, or (2) where no fiduciary duty exists, "the accounts are so complicated that anordinary legal action demanding a fixed sum is impracticable." Civic W. Corp. v. Zila Indus., Inc., 66 Cal. App. 3d 1, 14 (1977).

Plaintiff alleges that Defendants owe a fiduciary duty in their capacities as creditor and mortgage servicer. (FAC 125.) Shepursues this claim on the grounds that Defendants collected payments from her that they had no right to do. Defendants argue thatvarious documents recorded in the Official Records of San Diego County from May 2010 show that Plaintiff fails to allege factssufficient to state a claim for accounting. (Defs.' Mot. 16:1-3.) Defendants are mistaken. As discussed above, a fundamentalissue in this action is whether Defendants' rights were properly assigned in accordance with the Trust Agreement in 2006. Plaintiffalleges facts that allows the Court to draw a reasonable inference that Defendants may be liable for various misconductalleged. See Iqbal, 129 S. Ct. at 1949.

Therefore, the Court DENIES Defendants' motion as to Plaintiff's accounting claim.

I. Breach of Contract, and Breach of the Implied Covenant of GoodFaith and Fair Dealing[5]

A claim for breach of contract requires that a plaintiff plead: (1) the existence of a contract, (2) a breach of the contract bydefendant, (3) performance or excuse of non-performance on behalf of the plaintiff, and (4) damages suffered by the plaintiff as aresult of the defendant's breach.McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100, 104 (1989). Every contract alsocontains an implied covenant of good faith and fair dealing that "neither party will do anything which will injure the right of the otherto receive the benefits of the agreement."Kransco v. Am. Empire Surplus Lines Ins. Co., 23 Cal. 4th 390, 400 (2000) (internalquotation marks omitted). Thus, "the implied covenant of good faith and fair dealing protects only the parties' right to receive thebenefit of their agreement." Foley v. Interactive Data Corp., 47 Cal. 3d 654, 698 n.39 (1988). "[T]he implied covenant will only berecognized to further the contract's purpose; it will not be read into a contract to prohibit a party from doing that which is expresslypermitted by the agreement itself." Wolf v. Walt Disney Pictures & Television, 162 Cal. App. 4th 1107, 1120 (2008).

Defendants argue that Plaintiff fails to allege facts that constitute a breach of contract or a breach of the implied covenant of goodfaith and fair dealing. (Defs.' Reply 8:21-27.) The Court agrees. Plaintiff alleges that Defendants breached the contract by failing tofollow Section 2 of the DOT, which in turn "resulted in improper fees and taxes being added to the balance of the Loan," but fails




to allege detailed facts demonstrating that Defendants indeed failed to comply with the DOT. (See FAC 133-36.) For example,she does not identify which payments were misapplied, when they were misapplied, and for how much.

Therefore, the Court GRANTS Defendants' motion as to Plaintiff's claim for breach of contract and breach of the implied covenantof good faith and fair dealing.[6] Accordingly, the Court DISMISSES WITHOUT PREJUDICE both of these claims.

IV. CONCLUSION & ORDER

In light of the foregoing, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss. The Court alsoDENIES Defendants' motion to strike Plaintiff's request for attorneys' fees on the grounds that they fail to make the request underthe appropriate Federal Rule of Civil Procedure. If Plaintiff decides to file a Second Amended Complaint, she must do so by August7, 2012.

IT IS SO ORDERED.

[1] Plaintiff has since voluntarily dismissed SBMC Mortgage from this action. (Doc. 8.)

[2] Defendants also request judicial notice for five documents, all of which are documents recorded in the Official Records of San Diego County. (Request forJudicial Notice ("RJN") 1:1-2:1 [Doc. 12-2].) These documents are central to Plaintiff's claims, and there is no question concerning the authenticity of thesedocuments. Moreover, Plaintiff has not opposed the request. Accordingly, the Court GRANTS the request. See Branch v. Tunnell, 14 F.3d 449, 453-54 (9thCir. 1994).

[3] Paragraph 1 in the FAC states that Plaintiff executed the note with Countrywide. After reviewing the moving papers, this appears to be a misidentificationthat will be treated as such.

[4] Plaintiff's references to the Trust Agreement and Pooling Services Agreement ("PSA") appear to be interchangeable. (See Compl. 20.)

[5] Plaintiff pleads her claims for breach of contract and breach of the implied covenant of good faith and fair dealing "[i]n the alternative, if the Court findsthat U.S. Bank is a successor in interest to the Deed of Trust." (FAC 129, 140.) Though the Court has not found that U.S. Bank is the successor ininterest, the Court will address the sufficiency of these claims for the sake of completion.

[6] In the absence of a breach-of-contract claim, the Court also dismisses Plaintiff's claim for breach of the implied covenant of good faith and fair dealing.

U.S. District CourtSouthern District of California (San Diego)CIVIL DOCKET FOR CASE #: 3:11-cv-02229-L-WVG

Naranjo v. SBMC Mortgage et alAssigned to: Judge M. James LorenzReferred to: Magistrate Judge William V. GalloDemand: $5,000,000Cause: 28:2201 Injunction

Date Filed: 09/26/2011Jury Demand: PlaintiffNature of Suit: 480 Consumer CreditJurisdiction: Federal Question

PlaintiffCarmen R. Naranjo represented by Deborah P. Gutierrez

Bergman & Gutierrez LLP 6100 Center Drive Suite 1050 Los Angeles, CA 90045 (310) 893-6200 Fax: (310) 988-2930 Email: [email protected] TERMINATED: 07/12/2012 LEAD ATTORNEY ATTORNEY TO BE NOTICED

Penelope P Bergman Bergman & Gutierrez LLP 6100 Center Drive Suite 1050 Los Angeles, CA 90045 310-893-6213 Fax: 310-988-2930 Email: [email protected] ATTORNEY TO BE NOTICED

V.DefendantSBMC Mortgage TERMINATED: 11/04/2011

DefendantJPMorgan Chase represented by Alexia Marie Norge

Bryan Cave LLP 3161 Michelson Drive Suite 1500 Irvine, CA 92612 (949) 223-7000 Fax: (949) 223-7100

Email: [email protected] LEAD ATTORNEY ATTORNEY TO BE NOTICED

DefendantU.S. Bank N.A. as Trustee for WAMU Mortgage Pass-Through Certificates WMALT Series 2006-AR4 Trust

represented by Alexia Marie Norge (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

DefendantDOES 1-10 inclusive

Date Filed # Docket Text

09/26/2011 1 COMPLAINT with Jury Demand against All Defendants ( Filing fee $ 350 receipt number 0974-4001573.), filed by Carmen R. Naranjo. (Attachments: # 1 Info Sheet, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D)

The new case number is 3:11-cv-2229-L-WVG. Judge M. James Lorenz and Magistrate Judge William V. Gallo are assigned to the case. (Deborah P. Gutierrez)(pvm) (cap). (Entered: 09/26/2011)

09/26/2011 2 Summons Issued. Counsel receiving this notice electronically should print this summons and serve it in accordance with Rule 4, Fed.R.Civ.P and LR 4.1. (pvm) (cap). (Entered: 09/26/2011)

10/24/2011 3 SUMMONS RETURNED EXECUTED by Carmen R. Naranjo, JP Morgan Chase served on 10/5/2011, Answer due 10/26/2011 (Gutierrez, Deborah) Modified docket text on 10/25/2011 (mtb). (Entered: 10/24/2011)

10/26/2011 4 MOTION to Dismiss Plaintiff's Verified Complaint by JPMorgan Chase. (Attachments: # 1 Request for Judicial Notice)(Norge, Alexia) Contacted attorney re separate Memo of Points and Authorities on 10/27/2011 (knb). (Entered: 10/26/2011)

10/31/2011 5 Amended MOTION to Dismiss Plaintiff's Verified Complaint by JPMorgan Chase, U.S. Bank N.A.. (Attachments: # 1 Memo of Points and Authorities, # 2 Request for Judicial Notice)(Norge, Alexia) (mtb). (Entered: 10/31/2011)

11/01/2011 6 Notice of Document Discrepancies and Order Thereon by Judge M. James Lorenz Accepting Document: 4 Motion to Dismiss from Defendants JPMorgan Chase, U.S. Bank N.A. Non-compliance with local rule(s), ECF 2(f): Lacking proper signature, Civ. L. Rule 7.1 or 47.1: Lacking memorandum of points and authorities in support as a separate document. IT IS HEREBY ORDERED: The document is accepted despite the discrepancy noted above. Any further non-compliant documents may be stricken from the record. Signed by Judge M.

James Lorenz on 11/1/2011.(mtb)(jrd) (Entered: 11/01/2011)

11/01/2011 7 Notice of Document Discrepancies and Order Thereon by Judge M. James Lorenz Accepting Document: 5 Amended Motion to Dismiss from Defendants JPMorgan Chase, U.S. Bank N.A. Non-compliance with local rule(s), ECF 2(f): Lacking proper signature. IT IS HEREBY ORDERED: The document is accepted despite the discrepancy noted above. Any further non-compliant documents may be stricken from the record. Signed by Judge M. James Lorenz on 11/1/2011.(mtb)(jrd) (Entered: 11/01/2011)

11/04/2011 8 NOTICE of Voluntary Dismissal by Carmen R. Naranjo of Defendant SBMC Mortgage Without Prejudice (Attachments: # 1 Order)(Gutierrez, Deborah) (mtb). (Entered: 11/04/2011)

11/10/2011 9 Notice of Document Discrepancies and Order Thereon by Judge M. James Lorenz Accepting Document: 8 Request for dismissal from Plaintiff Carmen R. Naranjo. Non-compliance with local rule(s), ECF 2(h): Includes a proposed order or requires judges signature, ECF 2(f): Lacking proper signature. IT IS HEREBY ORDERED: The document is accepted despite the discrepancy noted above. Any further non-compliant documents may be stricken from the record. Signed by Judge M. James Lorenz on 11/7/2011.(mtb)(jrd) (Entered: 11/10/2011)

11/16/2011 10 AMENDED COMPLAINT with Jury Demand against JPMorgan Chase, SBMC Mortgage, U.S. Bank N.A., filed by Carmen R. Naranjo. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E) (Gutierrez, Deborah) (mtb). (Entered: 11/16/2011)

11/17/2011 11 ORDER Terminating 5 Defendants' Motion to Dismiss As Moot. Signed by Judge M. James Lorenz on 11/17/2011. (mtb)(jrd) (Entered: 11/17/2011)

12/05/2011 12 MOTION to Dismiss Plaintiff's First Amended Complaint by JPMorgan Chase, U.S. Bank N.A.. (Attachments: # 1 Memo of Points and Authorities, # 2 Request for Judicial Notice)(Norge, Alexia) (mtb). (Entered: 12/05/2011)

12/08/2011 13 Notice of Document Discrepancies and Order Thereon by Judge M. James Lorenz Accepting Document: 12 Motion to dismiss from Defendants JPMorgan Chase, SBMC Mortgage, U.S. Bank N.A. Non-compliance with local rule(s), Civ. L. Rule 5.1: Wrong time and date on motion and/or supporting documentation. The parties shall note that the hearing date for this motion is on April 2, 2012 at 10:30 a.m. in Courtroom 14. IT IS HEREBY ORDERED: The document is accepted despite the discrepancy noted above. Any further non-compliant documents may be stricken from the record. Signed by Judge M. James Lorenz on 12/6/2011.(mtb)(jrd) (Entered: 12/08/2011)

03/12/2012 14 RESPONSE in Opposition re 12 MOTION to Dismiss Plaintiff's First Amended Complaint filed by Carmen R. Naranjo. (Attachments: #1 Exhibit A)(Gutierrez, Deborah) (mtb). (Entered: 03/12/2012)

03/20/2012 15 ORDER Re: Oral Argument. The Court finds the 12 MOTION to Dismiss Plaintiff's First Amended Complaint suitable for determination on the




papers and without oral argument. Accordingly, no appearances are required on April 2, 2012, and the motion will be deemed submitted as of that date. Signed by Judge M. James Lorenz on 3/19/2012.(mtb)(jrd) (Entered: 03/20/2012)

03/26/2012 16 REPLY - Other re 14 Response in Opposition to Motion to Dismiss Plaintiff's First Amended Complaint filed by JPMorgan Chase. (Marutzky, Amanda) (mtb). (Entered: 03/26/2012)

07/11/2012 17 MOTION to Substitute Attorney /Request for Substitution of Bergman & Gutierrez LLP in place of Prosper Law Group, LLP by Carmen R. Naranjo. (Bergman, Penelope) (mtb). (Entered: 07/11/2012)

07/12/2012 18 Notice of Document Discrepancies and Order Thereon by Judge M. James Lorenz: Accepting Document, from Plaintiff Carmen R. Naranjo, re 17 MOTION to Substitute Attorney /Request for Substitution of Bergman & Gutierrez LLP in place of Prosper Law Group, LLP. Non-compliance with local rule(s), ECF 2(f): Lacking proper signature. IT IS HEREBY ORDERED: The document is accepted despite the discrepancy noted above. Any further non-compliant documents may be stricken from the record. Signed by Judge M. James Lorenz on 7/12/2012.(mtb)(jrd) (Entered: 07/12/2012)

07/12/2012 19 ORDER granting 17 Motion to Substitute Attorney. Attorney Penelope P. Bergman is substituted in place of Deborah P. Gutierrez. Signed by Judge M. James Lorenz on 7/11/2012. (mtb) (Entered: 07/12/2012)

07/24/2012 20 ORDER granting in part and denying in part 12 Motion to Dismiss. The Court also DENIES Defendants motion to strike Plaintiffs request for attorneys fees on the grounds that they fail to make the request under the appropriate Federal Rule of Civil Procedure. If Plaintiff decides to file a Second Amended Complaint, she must do so by August 7, 2012. Signed by Judge M. James Lorenz on 7/24/2012. (mtb) Modified to change to an opinion on 7/25/2012 (mtb). (Entered: 07/24/2012)

PACER Service CenterTransaction Receipt

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CARMEN R. NARANJO,

Plaintiff,

v.

SBMC MORTGAGE, et al.,

Defendants.

)))))))))))

Case No. 11-cv-2229-L(WVG)

ORDER GRANTING IN PART ANDDENYING IN PART DEFENDANTSMOTION TO DISMISS [DOC. 12]

On September 29, 2011, Plaintiff Carmen R. Naranjo commenced this action against

Defendants SBMC Mortgage (SBMC), JPMorgan Chase (JPMorgan), and U.S. Bank N.A. 1

After defaulting on her home loan, Plaintiff now sues Defendants in an attempt to prevent

foreclosure of the property securing the loan. Defendants now moves to dismiss the First

Amended Complaint (FAC). Plaintiff opposes.

The Court found this motion suitable for determination on the papers submitted and

without oral argument. See Civ. L.R. 7.1(d.1). (Doc. 15.) For the following reasons, the Court

GRANTS IN PART and DENIES IN PART Defendants motion to dismiss.

Plaintiff has since voluntarily dismissed SBMC Mortgage from this action. (Doc. 8.)1

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Case 3:11-cv-02229-L-WVG Document 20 Filed 07/24/12 Page 1 of 16

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I. BACKGROUND2

On or about February 21, 2006, Plaintiff executed a promissory note in favor of SBMC

Mortgage (SBMC) in the amount of $825,000.00, secured by a deed of trust (DOT), to

finance real property located in La Jolla, California. (FAC 1, 15 [Doc. 10]. ) The DOT,3

attached as Exhibit E to the FAC, identified Plaintiff as Borrower, SBMC Mortgage as Lender,

T.D. Service Co. as Trustee, and Mortgage Electronic Registration Systems, Inc. (MERS) as

both nominee and beneficiary under the security instrument. (DOT 1.)

Shortly thereafter, SBMC sold her loan to a currently unknown entity or entities. (FAC

15.) Plaintiff alleges that these unknown entities and Defendants were involved in an attempt to

securitize the loan into the WAMU Mortgage Pass-through Certificates WMALT Series 2006-

AR4 Trust (WAMU Trust). (Id. 17.) However, these entities involved in the attempted

securitization of the loan failed to adhere to the requirements of the Trust Agreement necessary

to properly assign the mortgage loan into the Trust. (Id.) Specifically, Plaintiff alleges that her4

loan was not properly assigned to the WAMU Trust on or before May 30, 2006, the Closing

Date as set forth in the Trust Agreement. (Id. 17, 21.) The Closing Date is the date by

which all of the notes and mortgages had to be transferred into the WAMU Trust in order for the

mortgage loan to be a part of the trust res. (Id. 21.)

In May 2009, Plaintiff sought to modify her loan with JPMorgan Chase Bank, N.A.

(JPMorgan) under the belief that it had the authority to negotiate her loan. (FAC 2224.)

However, she made little progress. (Id.) She continued to follow-up and submit loan-

Defendants also request judicial notice for five documents, all of which are documents2recorded in the Official Records of San Diego County. (Request for Judicial Notice (RJN)1:12:1 [Doc. 12-2].) These documents are central to Plaintiffs claims, and there is no questionconcerning the authenticity of these documents. Moreover, Plaintiff has not opposed the request. Accordingly, the Court GRANTS the request. See Branch v. Tunnell, 14 F.3d 449, 453-54 (9thCir. 1994).

Paragraph 1 in the FAC states that Plaintiff executed the note with Countrywide. After3reviewing the moving papers, this appears to be a misidentification that will be treated as such.

Plaintiffs references to the Trust Agreement and Pooling Services Agreement (PSA)4appear to be interchangeable. (See Compl. 20.)

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modification applications for over 19 months. (Id. 27.)

In August 2009, Plaintiff was hospitalized, resulting in unforeseen financial hardship.

(FAC 25.) As a result, she defaulted on her loan. (See id. 26.)

On May 26, 2010, Defendants recorded an Assignment of Deed of Trust, which states

that MERS assigned and transferred to U.S. Bank as trustee for the WAMU Trust under the

DOT. (RJN Ex. B.) Colleen Irby executed the Assignment as Officer for MERS. (Id.) On the

same day, Defendants also recorded a Substitution of Trustee, which states that the U.S. Bank as

trustee, by JP Morgan, as attorney-in-fact substituted its rights under the DOT to the California

Reconveyance Company (CRC). (RJN Ex. C.) Colleen Irby also executed the Substitution as

Officer of U.S. Bank, National Association as trustee for the WAMU Trust. (Id.) And again,

on the same day, CRC, as trustee, recorded a Notice of Default and Election to Sell. (RJN Ex.

D.)

A Notice of Trustees sale was recorded, stating that the estimated unpaid balance on the

note was $989,468.00 on July 1, 2011. (RJN Ex. E.)

On August 8, 2011, Plaintiff sent JPMorgan a Qualified Written Request (QWR) letter

in an effort to verify and validate her debt. (FAC 35 & Ex. C.) In the letter, she requested that

JPMorgan provide, among other things, a true and correct copy of the original note and a

complete life of the loan transactional history. (Id.) Although JPMorgan acknowledged the

QWR within five days of receipt, Plaintiff alleges that it failed to provide a substantive

response. (Id. 35.) Specifically, even though the QWR contained the borrows name, loan

number, and property address, Plaintiff alleges that JPMorgans substantive response concerned

the same borrower, but instead supplied information regarding an entirely different loan and

property. (Id.)

On September 26, 2011, Plaintiff commenced this action. Thereafter, Plaintiff filed her

FAC asserting nine claims: (1) declaratory relief; (2) negligence; (3) quasi contract; (4) violation

of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692; (5) violation of the

Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605; (6) violation of California

Business and Professions Code 17200; (7) accounting; (8) breach of contract; and (9) breach of

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implied covenant of good faith and fair dealing. Defendants now moves to dismiss the FAC in

its entirety with prejudice. Plaintiff opposes. (Doc. 14.)

II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which relief can

be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal

sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court

must accept all allegations of material fact as true and construe them in light most favorable to

the nonmoving party. Cedars-Sanai Med. Ctr. v. Natl League of Postmasters of U.S., 497 F.3d

972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not necessarily

assume the truth of legal conclusions merely because they are cast in the form of factual

allegations. Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003)

(internal quotation marks omitted). In fact, the court does not need to accept any legal

conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, , 129 S. Ct. 1937, 1949 (2009)

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed

factual allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief

requires more than labels and conclusions, and a formulaic recitation of the elements of a cause

of action will not do. Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the

allegations in the complaint must be enough to raise a right to relief above the speculative

level. Id. Thus, [t]o survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to state a claim to relief that is plausible on its face. Iqbal, 129 S. Ct.

at 1949 (citing Twombly, 550 U.S. at 570). A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged. Id. The plausibility standard is not akin to a probability

requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.

Id. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory

or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749

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F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling on a

motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19

(9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity

is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1

(9th Cir. 1995) (superceded by statutes on other grounds). Moreover, the court may consider the

full text of those documents, even when the complaint quotes only selected portions. Id. It may

also consider material properly subject to judicial notice without converting the motion into one

for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

III. DISCUSSION

Plaintiffs primary contention here is that Defendants are not her true creditors and as

such have no legal, equitable, or pecuniary right in this debt obligation in the loan. (Pl.s Oppn

1:511.) She contends that her promissory note and DOT were never properly assigned to the

WAMU Trust because the entities involved in the attempted transfer failed to adhere to the

requirements set forth in the Trust Agreement and thus the note and DOT are not a part of the

trust res. (FAC 17, 20.) Defendants moves to dismiss the FAC in its entirety with prejudice.

A. Applicability of Gomes

Plaintiff alleges that the May 2010 assignments are improper for two primary reasons: (1)

the assignment of her loan into the WAMU Trust is improper because it was not assigned before

the end of May 2006 as required by the Trust Agreement, and (2) the May 2010 assignments are

improper because Collen Irby lacked the authority to execute the assignments. Defendants argue

that like the borrower in Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149

(2011), Plaintiff seeks to test whether the person initiating the foreclosure has the authority to

do so without presenting any competent, particularized factual allegations or evidence

Defendants lack[] authority to proceed with the foreclosure. (Defs. Mot. 4:1318.) They go

on to explain that the assignments and notice of default and election to sell executed in May

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2010 are proper. (Defs. Reply 3:264:4.) However, Defendants put the cart before the horse.

The vital allegation in this case is the assignment of the loan into the WAMU Trust was

not completed by May 30, 2006 as required by the Trust Agreement. This allegation gives rise

to a plausible inference that the subsequent assignment, substitution, and notice of default and

election to sell may also be improper. Defendants wholly fail to address that issue. (See Defs.

Mot. 3:166:2; Defs. Reply 2:134:4.) This reason alone is sufficient to deny Defendants

motion with respect to this issue.

Moving on, Defendants reliance on Gomes is misguided. In Gomes, the California Court

of Appeal held that a plaintiff does not have a right to bring an action to determine a nominees

authorization to proceed with a nonjudicial foreclosure on behalf of a noteholder. 192 Cal. App.

4th at 1155. The nominee in Gomes was MERS. Id. at 1151. Here, Plaintiff is not seeking such

a determination. The role of the nominee is not central to this action as it was in Gomes. Rather,

Plaintiff alleges that the transfer of rights to the WAMU Trust is improper, thus Defendants

consequently lack the legal right to either collect on the debt or enforce the underlying security

interest.

B. Declaratory Relief

Declaratory relief is not an independent cause of action or theory of recovery, only a

remedy. 28 U.S.C. 2201, 2202. Where a substantive cause of action already exists in the

complaint, a plaintiff cannot assert a declaratory-relief claim as a superfluous second cause of

action for the determination of identical issues. Jensen v. Quality Loan Serv. Corp., 702 F.

Supp. 2d 1183, 1189 (E.D. Cal. 2010) (internal quotation marks omitted). To grant declaratory

relief, a district court must find an actual controversy, which is definite and concrete . . .

[and] real and substantial. Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227,

240-41 (1937).

Plaintiff requests that the Court make a finding and issue appropriate orders stating that

none of the named Defendants . . . have any right or interest in Plaintiffs Note, Deed of Trust, or

the Property which authorizes them . . . to collect Plaintiffs mortgage payments or enforce the

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terms of the Note or Deed of Trust in any manner whatsoever. (FAC 50.) Defendant

simplifies this as a request for a determination of the ownership of [the] Note and Deed of

Trust, which they argue is addressed in her other causes of action. (Defs. Mot. 6:1620.)

The Court disagrees with Defendants. As discussed above and below, there is an actual

controversy that is not superfluous. Therefore, the Court DENIES Defendants motion as to

Plaintiffs claim for declaratory relief.

C. Negligence

[T]o recover on a theory of negligence, [p]laintiffs must prove duty, breach, causation,

and damages. Truong v. Nguyen, 156 Cal. App. 4th 865, 875 (2007). The existence of a duty

of care owed by defendant to a plaintiff is a prerequisite to establishing a claim for negligence.

Nymark v. Heart Fed. Sav. & Loan Assn, 231 Cal. App. 3d 1089, 1095 (1991). [A]s a general

rule, a financial institution owes no duty of care to a borrower when the institutions

involvement in the loan transaction does not exceed the scope of its conventional role as a mere

lender of money. Id. at 1096. Liability to a borrower for negligence arises only when the

lender actively participates in the financed enterprise beyond the domain of the usual money

lender. Wagner v. Benson, 101 Cal. App. 3d 27, 35 (1980) (quoting Connor v. Great W. Sav. &

Loan Assn, 69 Cal. 2d 850, 864 (1968)).

Plaintiff alleges that Defendants have a duty to exercise reasonable care and skill to

follow California law with regard to enforcement of monetary obligations, and to refrain from

taking or failing to take any action against Plaintiff that they did not have legal authority to do.

(FAC 56.) Defendants argue that they are the mortgage servicer and that Plaintiff fails to

plead facts supporting a finding that Defendants conduct exceeded the scope of a conventional

mortgage servicer. (Defs. Mot. 7:57.) Plaintiff responds that JPMorgans mishandling of the

loan-modification applications and failure to afford a loan modification is beyond the domain

of a usual money lender. (Pl.s Oppn 17:2418:19.) However, there is no common-law duty

to modify a contract. Vella v. Hudgins, 151 Cal. App. 3d 515, 519 (1984). Thus, Plaintiff fails

to allege facts as to the loan-modification process that maintain her claim for negligence.

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Defendants also argue that they have clearly established they had such authority to

collect payments. (Defs. Reply 5:286:5.) However, as discussed above, they have not.

Accordingly, the Court GRANTS IN PART and DENIES IN PART Defendants

motion as to Plaintiffs negligence claim. Given that the legal authority of Defendants that

derive from the allegedly improper assignment of rights to the WAMU Trust is central to this

action, Plaintiff may pursue her claim on that ground. However, that said, the Court

DISMISSES WITHOUT PREJUDICE Plaintiffs negligence claim insofar as it relies on facts

alleged regarding the loan-modification process, which are insufficient to maintain her

negligence claim.

D. Quasi-Contract

A claim for quasi-contract is synonymous with one for unjust enrichment. FDIC v.

Dintino, 167 Cal. App. 4th 333, 346 (2008). Unjust enrichment requires the receipt of a benefit

and the unjust retention of that benefit at the expense of another. Peterson v. Cellco Pship, 164

Cal. App. 4th 1583, 1593 (2008). However, California courts appear to be split on whether

unjust enrichment can be an independent claim or merely an equitable remedy. Falk v. Gen.

Motors Corp., 496 F. Supp. 2d 1088, 1099 (N.D. Cal. 2007); see Bernardi v. JPMorgan Chase

Bank, N.A., No. 11-cv-4212, 2012 WL 2343679, at *3 (N.D. Cal. June 20, 2012) (noting that

quasi-contract is not an independent cause of action under California law, and thus the claim is

subject to dismissal for that reason alone).

Defendants argue that Plaintiffs quasi-contract claim fails because [t]he Deed of Trust

is an express binding agreement that defines the parties rights. (Defs. Mot. 7:816.) Plaintiff

responds that she was not paying her true creditor because there was no valid assignment that

allowed [Defendants] to collect on her debt obligation. (Pl.s Oppn 19:313.) As discussed

above, Plaintiff sufficiently alleges facts that put Defendants legal rights that derive from the

Trust Agreement in question. Consequently, Plaintiff adequately alleges facts that show

Defendants were unjustly enriched in collecting payments based on those presumed rights.

Therefore, the Court DENIES Defendants motion as to Plaintiffs quasi-contract claim.

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E. FDCPA

The [FDCPA] prohibits debt collector[s] from making false or misleading

representations and from engaging in various abusive and unfair practices. Heintz v. Jenkins,

514 U.S. 291, 292 (1995). To be liable for an FDCPA violation, a defendant must, as a

threshold matter, be a debt collector within the meaning of those acts. Id. at 294.

Under the FDCPA, a debt collector is any person who uses any instrumentality of

interstate commerce or the mails in any business the principal purpose of which is the collection

of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or

due or asserted to be owed or due another. 15 U.S.C. 1692a(6). This definition includes any

creditor who, in the process of collecting his own debts, uses any name other than his own which

would indicate that a third person is collecting or attempting to collect such debts. Id.

1692a(6). The FDCPA does not, however, cover the consumers creditors, a mortgage

servicing company, or any assignee of the debt, so long as the debt was not in default at the time

it was assigned. Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009)

(quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)); see also 15 U.S.C.

1692a(4) (defining creditor). Consequently, a loan servicer is not a debt collector if it

acquired the loan before the borrower was in default. See Schlegel v. Wells Fargo Bank, N.A.,

799 F. Supp. 2d 1100, 1103-04 (N.D. Cal. 2011).

Defendants argue that they are not debt collectors within the meaning of the FDCPA.

(Defs. Mot. 9:1315.) That argument is predicated on the presumption that all of the legal

rights attached to the loan were properly assigned. Plaintiff responds that Defendants are debt

collectors because U.S. Banks principal purpose is to collect debt and it also attempted to

collect payments. (Pl.s Oppn 19:2327.) She explicitly alleges in the FAC that U.S. Bank has

attempted to collect her debt obligation and that U.S. Bank is a debt collector. Consequently,

Plaintiff sufficiently alleges a claim under the FDCPA.

Defendants also argue that the FDCPA claim is time barred. (Defs. Mot. 7:1827.) A

FDCPA claim must be brought within one year from the date on which the violation occurs.

15 U.S.C. 1692k(d). Defendants contend that the violation occurred when the allegedly false

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assignment occurred on May 26, 2010. (Defs. Mot. 7:2227.) However, Plaintiff alleges that

U.S. Bank violated the FDCPA when it attempted to enforce Plaintiffs debt obligation and

collect mortgage payments when it allegedly had no legal authority to do so. (FAC 72.)

Defendants wholly overlook those allegations in the FAC. Thus, Defendants fail to show that

Plaintiffs FDCPA claim is time barred.

Accordingly, the Court DENIES Defendants motion as to Plaintiffs FDCPA claim.

F. RESPA

RESPA imposes certain disclosure obligations on loan servicers who transfer or assume

the servicing of a federally related mortgage loan. Morris v. Bank of America, No. C 09-02849,

2011 WL 250325, at *4 (N.D. Cal. Jan. 26, 2011) (citing 12 U.S.C. 2605(b)). Under RESPA,

a Qualified Written Response (QWR) is written request from the borrower (or an agent of the

borrower) for information relating to the servicing of such loan. 12 U.S.C. 2605(e)(1)(A).

The term servicing means receiving any scheduled periodic payments from a borrower

pursuant to the terms of any loan . . . and making the payments of principal and interest and such

other payments with respect to the amounts received from the borrower as may be required

pursuant to the terms of the loan. 12 U.S.C. 2603(i)(3). Among other things, a QWR must

include a statement of the reasons for the belief of the borrower, to the extent applicable, that

the account is in error or provide[] sufficient detail to the servicer regarding other information

sought by the borrower. Id. 2605(e)(1)(B). It must also include the name and account of the

borrower. Id.

Defendants argue that Plaintiffs letter does not constitute a QWR because it requests a

list of unsupported demands rather than specific particular errors or omissions in the account

along with an explanation from the borrower why she believes an error exists. (Defs. Mot.

10:413.) However, the letter explains that it concerns sales and transfers of mortgage

servicing rights; deceptive and fraudulent servicing practices to enhance balance sheets;

deceptive, abusive, and fraudulent accounting tricks and practices that may have also negatively

affected any credit rating, mortgage account and/or the debt or payments that [Plaintiff] may be

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obligated to. (FAC Ex. C.) The letter goes on to put JPMorgan on notice of

potential abuses of J.P. Morgan Chase or previous servicing companiesor previous servicing companies [that] could have deceptively,wrongfully, unlawfully, and/or illegally: Increased the amounts ofmonthly payments; Increased the principal balance Ms. Naranjo owes;Increased the escrow payments; Increased the amounts applied andattributed toward interest on this account; Decreased the properamounts applied and attributed toward the principal on this account;and/or[] Assessed, charged and/or collected fees, expenses andmiscellaneous charges Ms. Naranjo is not legally obligated to pay underthis mortgage, note and/or deed of trust.

(Id.) Based on the substance of letter, the Court cannot find as a matter of law that the letter is

not a QWR.

Defendants also argue that the RESPA claim fails because Plaintiff fails to plead actual

damages arising from JPMorgans alleged failure to respond. (Defs. Mot. 10:1419.) To state

a claim for relief under RESPA, a plaintiff must allege either a purported pattern or practice of

violating the statute or actual damages caused by the asserted violation. 12 U.S.C. 2605(f);

Fonua v. First Allied Funding, No. C 09-497, 2009 WL 816291, at *3 (N.D. Cal. Mar. 27,

2009). Here, Plaintiff alleges actual pecuniary damages that include costs related to damage to

her credit. (FAC 91.) That is a sufficient allegation of actual damages. See Wise v. Wells

Fargo Bank, N.A., F. Supp. 2d , 2012 WL 105887, at *6 (C.D. Cal. 2012).

Accordingly, the Court DENIES Defendants motion as to Plaintiffs RESPA claim.

G. California Business and Professions Code 17200 (Unfair Competition Law)

Californias Unfair Competition Law (UCL) prohibits any unlawful, unfair or

fraudulent business act or practice . . . . Cal. Bus. & Prof. Code 17200. This cause of action

is generally derivative of some other illegal conduct or fraud committed by a defendant. Khoury

v. Malys of Cal., Inc., 14 Cal. App. 4th 612, 619 (1993). Plaintiff alleges that Defendants

violated the UCL by collecting payments that they lacked the right to collect, and engaging in

unlawful business practices by violating the FDCPA and RESPA.

//

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1. Standing

Standing to bring a UCL claim requires a person who has suffered injury in fact and has

lost money or property as a result of the unfair competition. Cal. Bus. & Prof. Code 17204.

To have standing under the UCL, a plaintiff must sufficiently allege that (1) she has lost money

or property sufficient to constitute an injury in fact under Article III of the Constitution, and

(2) there is a causal connection between the defendants alleged UCL violation and the

plaintiffs injury in fact. Rubio v. Capital One Bank, 613 F.3d 1195, 1203-04 (9th Cir. 2010)

(citing Birdsong v. Apple, Inc., 590 F.3d 959-60 (9th Cir. 2009); Hall v. Time Inc., 158 Cal. App.

4th 847, 855-56 (2008)).

Defendants argue that Plaintiffs allegation regarding a cloud on her title does not

constitute an allegation of loss of money or property, and even if Plaintiff were to lose her

property, she cannot show it was a result of Defendants actions. (Defs. Mot. 12:2213:4.) The

Court disagrees. As discussed above, Plaintiff alleges damages resulting from Defendants

collection of payments that they purportedly did not have the legal right to collect. These

injuries are monetary, but also may result in the loss of Plaintiffs property. Furthermore, these

injuries are causally connected to Defendants conduct. Thus, Plaintiff has standing to pursue a

UCL claim against Defendants.

2. Unlawful, Unfair or Fraudulent Conduct

Under the UCL, there are three varieties of unfair competitionbusiness acts or practices

that are unlawful, unfair, or fraudulent. Cal. Bus. & Prof. Code 17200. Each prong of the

UCL is a separate and distinct theory of liability, each offering an independent basis for

relief. Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). Furthermore, a claim

under 17200 is derivative of some other illegal conduct or fraud committed by a defendant,

and [a] plaintiff must state with reasonable particularity the facts supporting the statutory

elements of the violation. Benham v. Aurora Loan Servs., No. C-09-2059, 2009 WL 2880232,

at *4 (N.D. Cal. Sept. 1, 2009) (quoting Khoury, 14 Cal. App. 4th at 619).

//

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Defendants argue that Plaintiff fails to plead an unlawful, fraudulent, and unfair act.

(Defs. Mot. 13:515:3.) Specifically, with respect to pleading a fraudulent act, Defendants

contend that Plaintiff fails to meet the heightened pleading standard required to allege fraud

against a corporation. (Id. at 14:420.) Plaintiff responds that she satisfies the unlawful prong

through her allegations that Defendants business practices violated the FDCPA and RESPA,

and the fraudulent prong because Defendants business pattern, collecting debt they have no

right to, is extremely likely to deceive both Plaintiff[] and the public. (Pl.s Oppn 22:518.)

As discussed above, Plaintiff alleges cognizable theories of liability, including, among

others, violations of the FDCPA and RESPA. Thus, Plaintiff may proceed with her UCL claim

under the unlawful prong.

The fraudulent prong requires a plaintiff to have actually relied on the alleged

misrepresentation to her detriment. In re Tobacco II Cases, 46 Cal. 4th 326, 330 (2009).

Moreover, under Federal Rule of Civil Procedure 9(b), the circumstances constituting fraud or

any other claim that sounds in fraud must be stated with particularity. Fed. R. Civ. P. 9(b);

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir. 2003). This standard requires,

at a minimum, that a plaintiff plead evidentiary facts, such as time, place, persons, statements,

and explanations of why the statements are misleading. See In re GlenFed, Inc. Sec. Litig., 42

F.3d 1541, 1547-48 (9th Cir. 1994) (en banc). Plaintiff fails allege facts that satisfy these

heightened requirements. (See FAC 95123.)

Finally, Plaintiff fails to respond to Defendants argument that she fails to allege facts to

satisfy the unfairness prong. (See Pl.s Oppn 22:518.) The only mention of the unfairness

prong in Plaintiffs opposition is a conclusory assertion that Defendants engaged in unfair

practices. (Id. at 22:56.) Thus, it appears that Plaintiff has abandoned this ground of her UCL

claim.

In sum, Plaintiff has standing to pursue her UCL claim. Furthermore, the Court

GRANTS IN PART and DENIES IN PART Defendants motion as to the UCL claim.

Plaintiff may pursue her UCL claim under the unlawful prong, but the Court DISMISSES

WITHOUT PREJUDICE the UCL claim under the fraudulent and unfairness prongs.

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H. Accounting

Accounting is not an independent cause of action but merely a type of remedy and an

equitable remedy at that. Batt v. City & Cnty. of San Francisco, 155 Cal. App. 4th 65, 82

(2007). An accounting may be brought to compel a defendant to account to a plaintiff for money

where (1) a fiduciary duty exists, or (2) where no fiduciary duty exists, the accounts are so

complicated that an ordinary legal action demanding a fixed sum is impracticable. Civic W.

Corp. v. Zila Indus., Inc., 66 Cal. App. 3d 1, 14 (1977).

Plaintiff alleges that Defendants owe a fiduciary duty in their capa

case file california fdcpa respa ucl quasi contract decl relief m-t-d denied naranjo v....

Documents

thatthe plaintiff

loan transaction

ca trial court

origination documents

theuse of documents

sbmc mortgage

securitization scheme

alleged wamu securitization