Coltrin v. James B. Nutter & Company
2:19-cv-00483
| E.D. Cal. | May 21, 2019Background
- In 2008 Coltrin obtained a $456,000 reverse mortgage from James B. Nutter & Company (Nutter) on property in Oroville, CA; payments were not due until 2094 but Coltrin remained obligated to pay taxes and insurance.
- Coltrin failed to maintain hazard insurance and pay property taxes; Quality Loan Service recorded a Notice of Default in March 2018 and a Notice of Trustee’s Sale in November 2018.
- Coltrin sued Nutter asserting six claims: four under California’s Homeowner Bill of Rights (HBOR) (single point of contact, foreclosure alternatives, rescission for pending modification, and dual tracking), plus negligence and a UCL claim; he later voluntarily dismissed the dual-tracking claim.
- Nutter moved to dismiss; it also sought judicial notice of public records (bankruptcy dockets and a California DBO report). Coltrin did not meaningfully oppose several threshold factual points relied on by Nutter.
- The court took judicial notice of the listed public records (but not disputed factual statements in them), dismissed all of Coltrin’s claims with prejudice, and imposed $850 in sanctions on Coltrin’s counsel for procedural violations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cal. Civ. Code § 2923.7 (single point of contact) applies | Coltrin: Nutter failed to assign a single point of contact during foreclosure | Nutter: § 2923.7 does not apply because it is a small servicer (foreclosed on <175 CA homes) | Court: Dismissed with prejudice; § 2923.7 inapplicable to Nutter |
| Whether Cal. Civ. Code § 2924.9 (foreclosure-alternative notice) applies | Coltrin: Nutter failed to provide required foreclosure-alternative communications | Nutter: § 2924.9’s requirements do not apply to entities described in § 2924.18(b) (small servicers) | Court: Dismissed with prejudice; § 2924.9 inapplicable to Nutter |
| Whether servicer must rescind sale under § 2923.6/2924.11 when modification application pending | Coltrin: He filed a loan modification before the sale and servicer failed to rescind | Nutter: §§ 2923.6/2924.11 do not apply to small servicers per § 2924.18(b) | Court: Dismissed with prejudice; statutes inapplicable to Nutter |
| Negligence — duty and causation | Coltrin: Nutter mishandled his loan-modification application causing harm | Nutter: No duty of care owed; harm primarily attributable to Coltrin’s failure to pay taxes/insurance | Court: Dismissed with prejudice; no duty shown and amendment would be futile |
| UCL (Cal. Bus. & Prof. Code § 17200) claim | Coltrin: Nutter engaged in unlawful, unfair, or fraudulent practices in foreclosure/modification handling | Nutter: No underlying unlawful act; conduct not unfair or fraudulent; lack of particularity | Court: Dismissed with prejudice for failure to plead unlawful/unfair/fraudulent conduct with particularity |
| Judicial notice and sanctions | Coltrin: did not contest RJN; filed an overlength opposition and failed to meet-and-confer | Nutter: Requested judicial notice of public records and sought compliance with court rules | Court: Took judicial notice of public records; imposed $350 for excess pages and $500 for failing to meet-and-confer (total $850) |
Key Cases Cited
- United States v. 14.02 Acres of Land, 547 F.3d 943 (9th Cir.) (courts may judicially notice public records in Rule 12 context)
- Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir.) (limitations on taking judicial notice of disputed facts in public records)
- Lueras v. BAC Home Loans Servicing, LP, 221 Cal. App. 4th 49 (Cal. Ct. App.) (elements and limits of negligence claims against mortgage servicers)
- Nymark v. Heart Fed. Sav. & Loan Assn., 231 Cal. App. 3d 1089 (Cal. Ct. App.) (factors for determining duty of care by financial institutions)
- Biakanja v. Irving, 49 Cal.2d 647 (Cal. 1958) (duty analysis factors in California)
- Anderson v. Deutsche Bank Nat. Tr. Co. Americas, [citation="649 F. App'x 550"] (9th Cir.) (persuasive authority limiting servicer duties re: loan-modification processing)
- Saldana v. Wells Fargo Bank, N.A., 367 F. Supp. 3d 1063 (N.D. Cal.) (dismissing negligence claim based on servicer’s alleged inadequate explanations)
- Khan v. CitiMortgage, Inc., 975 F. Supp. 2d 1127 (E.D. Cal.) (UCL claims must be tied to an underlying unlawful act)
- Podolsky v. First Healthcare Corp., 50 Cal. App. 4th 632 (Cal. Ct. App.) (standards for “unfair” under UCL)
- Watson Labs., Inc. v. Rhone-Poulenc Rorer, Inc., 178 F. Supp. 2d 1099 (C.D. Cal.) (requirements for showing public deception under UCL)