Al Petrovich v. Ocwen Loan Servicing
16-15396
| 9th Cir. | Dec 12, 2017Background
- Petrovich sued Western Progressive (trustee) and Ocwen (servicer) seeking to prevent a nonjudicial foreclosure and alleging wrongful foreclosure, FDCPA, RESPA, slander of title, and UCL violations.
- He contends the deed of trust and note were improperly assigned: originally from lender Sand Canyon to Deutsche Bank, and later to Western Progressive, and that those assignments were void.
- The district court dismissed all claims; Petrovich appealed. The Ninth Circuit reviews de novo and affirms dismissal.
- Central legal threshold: under California law a borrower generally may not bring a preemptive judicial action to stop a nonjudicial foreclosure; and to challenge an assignment on that basis the assignment must be void (not merely voidable).
- Petrovich’s three theories that the assignment to Deutsche Bank was void were rejected as barred by precedent, unsupported by authority, or inadequately pleaded.
- Secondary claims (declaratory relief, FDCPA, RESPA, slander of title, UCL) were dismissed as derivative, precluded by Ninth Circuit precedent, insufficiently pleaded, or legally privileged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a borrower bring a preemptive suit to stop a California nonjudicial foreclosure? | Petrovich seeks to void assignments and stop foreclosure. | Defendants say California law bars preemptive challenges to nonjudicial foreclosure. | Dismissal affirmed; California law generally bars preemptive suits. |
| Was the assignment to Deutsche Bank void (so later transfers were void)? | Assignment void because it occurred after pooling date, omitted intermediaries, or Sand Canyon sold earlier. | Defendants: those defects (if any) make assignments at most voidable; allegations are speculative. | Allegations fail: Turner forecloses the pooling-date theory; other theories lack legal support or specific pleaded facts. |
| FDCPA claim based on nonjudicial foreclosure notices | Foreclosure and notices are attempts to collect debt and violate FDCPA. | Actions to facilitate nonjudicial foreclosure are not ‘‘debt collection’’ under FDCPA; any §1692f(6) claim depends on flawed assignment theory. | Dismissed: Ho forecloses §1692e theory; §1692f(6) not pleaded/derivative and fails on same assignment defects. |
| RESPA claim for failure to respond to qualified written request (QWR) | Ocwen failed to timely provide requested payoff statement and caused damages. | Petrovich did not allege Ocwen’s specific failure nor actual damages or a pattern of noncompliance. | Dismissed: only part of letters qualified as QWR and Petrovich failed to plead required elements and damages. |
| Slander of title based on public foreclosure filings | Public filings falsely disparaged title because assignments were ineffective. | Foreclosure notices and statutory procedures are privileged communications under Cal. Civ. Code §47(c)(1). | Dismissed: communications are privileged; plaintiff’s bare assignment theory insufficient to overcome privilege. |
| UCL claim premised on other causes of action | Appellants assert unfair, unlawful, fraudulent conduct via the same facts. | Defendants: UCL requires an underlying unlawful act; if underlying claims fail, UCL fails. | Dismissed: UCL claim is derivative and fails because underlying claims were dismissed. |
Key Cases Cited
- Knievel v. ESPN, 393 F.3d 1068 (9th Cir. 2005) (standard of review for motion to dismiss)
- Turner v. Wells Fargo Bank N.A., 859 F.3d 1145 (9th Cir. 2017) (assignments after pooling date are voidable, not void)
- Yvanova v. New Century Mortgage Corp., 365 P.3d 845 (Cal. 2016) (assignment must be void, not merely voidable, to defeat nonjudicial foreclosure)
- Ho v. ReconTrust Co., N.A., 858 F.3d 568 (9th Cir. 2016) (sending notices to facilitate nonjudicial foreclosure is not FDCPA debt-collection under §1692e)
- Dowers v. Nationstar Mortgage, LLC, 852 F.3d 964 (9th Cir. 2017) (§1692f(6) regulates certain nonjudicial foreclosure activity)
- Medrano v. Flagstar Bank, FSB, 704 F.3d 661 (9th Cir. 2012) (definition and elements of a RESPA qualified written request)
- Jack Russell Terrier Network of Northern California v. American Kennel Club, Inc., 407 F.3d 1027 (9th Cir. 2005) (court will assume truth of pleaded facts but not unpleaded assumptions)