Dominguez v. Selene Finance, LP, 3:23-cv-06225

Background

In 2004 Dominguez executed a note and Deed of Trust naming Gateway Bank as Lender; the Deed of Trust contains a notice-and-cure provision that requires notifying the Lender (or its assigns) before commencing judicial action.
The Deed of Trust was reassigned over time and, by relevant time, the loan was owned by RCF 2 with U.S. Bank as owner trustee.
Selene entered a Base Servicing Agreement (2020) with RCF 2 (and a Manager) to service loans and received a Limited Power of Attorney from U.S. Bank limited to enumerated tasks.
In Aug–Sept 2022 Plaintiff received notices that servicing was transferred to Selene; letters stated servicing transfer would not change mortgage terms.
Plaintiff sued Selene alleging FDCPA and Rosenthal Act claims based on form collection letters; Selene asserted the Deed of Trust’s notice-and-cure provision barred suit unless Plaintiff first notified Selene as an "assign."
Court permitted discovery on whether Selene is an “assign” under Section 13 and the parties cross-moved for partial summary judgment; court found as a matter of law Selene is not an assign and denied Selene’s motion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether "assign" means an entity that receives ownership/title (assignment of rights)	"Assign" means transfer of title/ownership; Selene is not an assign because no document manifests present transfer of rights to Selene	"Assign" can include any transferee of powers (including servicers exercising rights under documents like POA or servicing agreements)	Court: "Assign" under California law means transfer of title/ownership; Selene did not show a present transfer, so not an assign
Whether the Base Servicing Agreement / Limited POA effected an assignment of servicing rights	These documents show no assignment; Base Servicing Agreement explicitly preserves Owner as sole owner of assets and servicing rights	Selene: the Agreement and POA conferred numerous powers and thus effected an assignment	Court: Agreement and POA expressly preserve Owner's ownership and label Selene an independent contractor; they evidence delegation, not assignment
Whether Selene's conduct and notices are consistent with assigning rights	Plaintiff: Selene’s communications treated the transfer as a servicing change that did not alter loan terms, showing Selene did not consider itself an assignee	Selene: prior practice/cases show servicers can be assignees; its conduct of servicing supports assign status	Court: Selene's own notices and conduct are inconsistent with claiming assign status and support conclusion of delegation, not assignment
Whether portions of the Base Servicing Agreement should be sealed	Plaintiff sought public access to key provisions (termination, intent) relied on in the ruling	Selene sought to seal most of the Agreement claiming competitive harm and trade secrets	Court: denied sealing of sections 8.01, 8.02, and 9.10 (intention, termination) but granted sealing of other portions where compelling reasons existed

Key Cases Cited

Com. Disc. Co. v. Cowen, 18 Cal.2d 610 (Cal. 1941) ("assign" ordinarily means transfer of title/ownership)
Fink v. Shemtov, 210 Cal. App. 4th 599 (Cal. Ct. App. 2012) (assignment requires manifestation of present intent to transfer rights)
Heritage Pac. Fin., LLC v. Monroy, 215 Cal. App. 4th 972 (Cal. Ct. App. 2013) (party asserting assignment bears the burden of proof)
California Ins. Guarantee Assn. v. Workers’ Comp. Appeals Bd., 203 Cal. App. 4th 1328 (Cal. Ct. App. 2012) (service/collection agreements can be delegations rather than assignments when owner retains title and control)
Amalgamated Transit Union, Loc. 1756, AFL-CIO v. Superior Court, 46 Cal.4th 993 (Cal. 2009) (assignments are essentially free of formalities but require present transfer intent)
Giotta v. Ocwen Loan Servicing, LLC, [citation="706 F. App'x 421"] (9th Cir. 2017) (distinguished: involved an explicit document assigning servicing rights)