Casault v. Federal National Mortgage Ass'n, 2012 U.S. Dist. LEXIS 184368

Plaintiffs filed a Second Amended Complaint against Servicer Defendants and Trustee Defendants alleging harm from loan modification and foreclosure processes.
SAC groups claims into three categories: against Loan Originator Defendants (dismissed earlier), Servicer Defendants, and Trustee Defendants.
SAC asserts that HAMP-related offers and servicing practices were fraudulent and violated state law, Rosenthal Act, UCL, and negligence; some claims pertain to foreclosures when loans were allegedly not in default.
Motions to dismiss were brought under Rule 12(b)(6) by Servicer Defendants and Trustee Defendants; the court addressing both orders.
Court analyzed pleading sufficiency, reliance, and the relationship between trust PSAs, advances, and alleged “taking over” of loan obligations.
Court granted the Servicer Defendants’ motion in part (without prejudice on some fraud/UCL/FDCPA-related claims; with prejudice on negligence) and granted the Trustee Defendants’ motion to dismiss with prejudice; amended complaint deadline set.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Fraud pleadings sufficiency	Alleges misrepresentations in loan modification offers and post-offer conduct.	Lacks specificity; fails Rule 9(b) pleading with who/what/when/where/how.	Fraud claims DISMISSED; leave to amend denied for initial fraud but allowed without prejudice for amended specificity.
Rosenthal Act viability	Servicers acted as debt collectors in collecting debt and deceived borrowers.	Servicers are not debt collectors; claims not properly pled under FDCPA/Rosenthal Act.	Rosenthal Act claims DISMISSED WITH LEAVE TO AMEND (not precluded entirely).
UCL unlawful and unfair/fraudulent practices	SAC states unlawful/unfair/fraudulent business practices by Servicers.	Pleading deficient; fraud-based prongs require specificity and non-fraud elements inadequate.	Unlawful prong DISMISSED WITH LEAVE TO AMEND; unfair/fraudulent prongs DISMISSED WITH LEAVE TO AMEND.
Negligence against Servicers	Servicers owed duty of care during modification/foreclosure processes.	Loan modification activity is traditional lending; no duty beyond typical lender duties; penalties not viable.	Negligence DISMISSED WITH PREJUDICE.
HOLA preemption and Foreclosure theory against Trustee Defendants	Advance payments and trust agreements negate default and foreclosures were improper.	Trusts/PSAs do not show taking over obligations; foreclosures proper on default.	Claims not preempted; Trustee claims DISMISSED WITH PREJUDICE; no viable state-law ground remains.

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plaintiff must plead plausible claims, not mere conclusions)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (facial plausibility required; legal conclusions not enough)
Papasan v. Allain, 478 U.S. 265 (U.S. 1986) (pleading standard requires more than mere allegations)
Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (requirements of Rule 9(b): times, places, persons, and details)
Nymark v. Heart Fed. Sav. & Loan Assn., 231 Cal.App.3d 1089 (Cal. Ct. App. 1991) (six-factor test for duty in financial lending context)
Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001 (9th Cir. 2008) (preemption field and scope of HOLA in banking)
Taguinod v. World Savings Bank, FSB, 755 F. Supp. 2d 1064 (C.D. Cal. 2010) (fraud preemption and treatment under HOLA context)
McKell v. Washington Mut., Inc., 142 Cal.App.4th 1457 (Cal. Ct. App. 2006) (UCL elements and pleading standards in California)
Khoury v. Maly’s of California, Inc., 14 Cal.App.4th 612 (Cal. Ct. App. 1993) (elements and pleading standards for UCL claims)
Saunders v. Superior Court, 27 Cal.App.4th 832 (Cal. Ct. App. 1994) (unlawful practices as baseline for 17200 claims)
Bartold v. Glendale Federal Bank, 81 Cal.App.4th 816 (Cal. Ct. App. 2000) (deed of trust and nonjudicial foreclosure framework)