Green v. Central Mortgage Co.
148 F. Supp. 3d 852
N.D. Cal.2015Background
- The Trust (borrower on a 2007 deed of trust) was conveyed to Angelia Green after her parents died; Green became trustee and made some loan payments but the loan later defaulted.
- Green submitted multiple loan-modification applications to servicer Central Mortgage Company (CMC); CMC allegedly both accepted payments and sent conflicting communications about missing documents and denials.
- Notices of Default (Mar 7, 2014) and Trustee’s Sale (Jun 12, 2014) were recorded; a trustee’s sale occurred (Sept 12, 2014) and Deutsche Bank purchased the property.
- Green filed bankruptcy proceedings that were dismissed; Deutsche Bank obtained an unlawful detainer judgment and eviction; Green sued CMC, PLM (non-monetary), and Deutsche Bank alleging HBOR, RESPA, ECOA, fraud, wrongful foreclosure, UCL, cancellation of deed, and declaratory relief.
- The court granted defendants’ motion to dismiss in part: dismissed the Trust and Green in her individual capacity; Green remains as plaintiff only in her capacity as trustee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / real party in interest | Green (individually) lost title and was harmed; trustee may sue in own name | Deed requires written lender-approved assumption; Green never assumed loan in writing, so no individual standing | Green individually and Trust dismissed; Green may proceed only as trustee (real party in interest) |
| Res judicata (prior unlawful detainer) | Prior UD should not bar claims by trustee; many claims concern pre-sale conduct and statutory violations | UD judgment bars re-litigation of foreclosure validity and related claims | Defendants failed to show identity of claims and privity; res judicata not applied on record presented |
| HBOR §2923.55 (30‑day contact requirement) | Servicer failed to contact Green in person/phone 30 days before NOD | Servicer had early communications and modification discussions before NOD | Claim fails: court finds allegations establish communications pre-dating NOD; §2923.55(b)(2) claim dismissed with prejudice |
| HBOR §2923.6 (complete application tolls sale) | Green submitted complete application; sale proceeded while application pending | Green’s own allegations show prior denials and timeline: no complete application pending when NOD/notice of sale/trustee’s sale recorded | Claim fails: §2923.6(c) dismissal with prejudice (timeline dispositive) |
| HBOR §2923.7 (single point of contact) | Servicer never provided an effective SPOC; confusion and contradictory info harmed Green | (Implied) statute triggered only on explicit SPOC request or no harm shown | Claim against servicer (CMC) survives; claim against Deutsche Bank dismissed (statute applies to servicer) |
| HBOR §2924.17 (accuracy of foreclosure declarations) | Declaration in NOD falsely stated servicer could not contact borrower | Deutsche Bank not subject; servicer’s declaration accurate per defendants | Claim against CMC survives (disputed factual accuracy); claim dismissed as to Deutsche Bank |
| RESPA (12 C.F.R. §1024.41(b)(2)(i) & (f)(2)) | Servicer failed timely to acknowledge and properly process a complete loss-mitigation application and filed NOD while application pending | Regulations apply only to servicers (not Deutsche Bank); plaintiff’s acknowledgment allegations are vague | Claim under (f)(2) against CMC survives; claim under (b)(2)(i) dismissed without prejudice as pleaded; all RESPA claims dismissed as to Deutsche Bank |
| ECOA (15 U.S.C. §1691(d)(1)) | Servicer failed to notify applicant of action within 30 days on completed credit (modification) application | ECOA applies to creditors; defaulted borrower exclusion prevents duties | Court rejects narrow reading; ECOA notice claim survives against CMC; dismissed as to Deutsche Bank |
| Fraud / Negligent misrepresentation | CMC misrepresented receipt/status of documents and miscalculated income causing reliance and damages | Claims fail for lack of particularity, duty, reliance; Deutsche Bank not involved | Fraud and negligent misrepresentation survive against CMC (pleaded with sufficient particularity and duty at pleading stage); dismissed as to Deutsche Bank |
| Tender rule (setting aside sale) | Tender not required for statutory (HBOR) and statutory damages claims | Plaintiff failed to tender full indebtedness so equitable claims fail | Court declines to apply tender at pleading stage; equitable claims survive for now |
Key Cases Cited
- Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) (court may judicially notice existence of public records but not disputed facts within them)
- United States v. Corinthian Colleges, 655 F.3d 984 (9th Cir. 2011) (district court generally may not consider materials beyond the pleadings on Rule 12(b)(6) motion)
- Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888 (Cal. 2002) (elements and effect of claim preclusion under California law)
- Boeken v. Philip Morris USA, 48 Cal.4th 788 (Cal. 2010) (distinguishes claim preclusion and issue preclusion terminology in California)
- Lona v. Citibank, N.A., 202 Cal.App.4th 89 (Cal. Ct. App. 2011) (summary of California “tender rule” and its exceptions)
- Nymark v. Heart Fed. Sav. & Loan Ass'n, 231 Cal.App.3d 1089 (Cal. Ct. App. 1991) (factors for whether a financial institution owes a duty of care)
- Estate of Migliaccio v. Midland Nat’l Life Ins. Co., 436 F.Supp.2d 1095 (C.D. Cal. 2006) (trusts/estates lack capacity to sue; representative must be real party in interest)