Herrejon v. Ocwen Loan Servicing, LLC
980 F. Supp. 2d 1186
E.D. Cal.2013Background
- Pro se plaintiffs Ricardo Herrejon and Rosa Navarro-Herrejon sued Ocwen, OneWest, and MTC to block a nonjudicial foreclosure sale of their Bakersfield residence and alleged unlawful foreclosure, fraud, UCL violations, FDCPA and other claims.
- Plaintiffs filed a verified complaint and emergency papers seeking injunctive relief to stop a November 4, 2013 trustee sale.
- The court reviewed the complaint sua sponte under Fed. R. Civ. P. 12(b)(6) and Rule 8/9(b) pleading standards.
- The court found plaintiffs failed to allege specific wrongful acts by each defendant, failed to plead fraud with particularity, and largely relied on conclusory assertions.
- Court determined plaintiffs did not and could not plausibly allege the ability to tender the full indebtedness, a threshold requirement for many challenges to nonjudicial foreclosure.
- As a result, the court dismissed the action without leave to amend, denied injunctive relief, and entered judgment for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of pleadings (Rule 8) | Complaint gives fair notice of unlawful foreclosure and related causes | Complaint is prolix, conclusory, lumps defendants, fails to identify specific acts | Complaint fails Rule 8; dismissal warranted |
| Fraud and particularity (Rule 9(b)) | Defendants misapplied payments and made misrepresentations | Allegations are vague, do not identify who said what, when, or why false | Fraud claims fail Rule 9(b) for lack of particularity |
| Requirement to tender indebtedness | Tender is unnecessary to challenge sale timing/procedure | Tender of full debt is required to enjoin or set aside nonjudicial sale | Plaintiffs failed to allege valid tender or ability to tender; claims barred |
| Validity of nonjudicial foreclosure / presumption of regularity | Defendants lacked authority; absence of original note invalidates sale | Nonjudicial foreclosure procedures and trustee authority satisfied; possession of original note not required | Foreclosure entitled to presumption of regularity; plaintiffs didn't rebut it |
| FDCPA applicability | Foreclosure-related communications violate FDCPA | Foreclosure is not debt collection under FDCPA; servicer/creditor status excludes liability | FDCPA claim dismissed — foreclosure conduct not covered and defendants not shown to be debt collectors |
| Statutory remedies (Cal. Civ. Code § 2923.5) | Servicer failed to comply with §2923.5 contact/postponement requirements | §2923.5 requires pre-sale contact/postponement and does not provide post-sale relief; plaintiffs didn't plead owner-occupancy | §2923.5 not shown to apply; no remedy if sale already occurred; injunctive relief denied |
| Request for injunctive relief | Immediate TRO/preliminary injunction needed to prevent irreparable loss | Plaintiffs unlikely to succeed on merits; no irreparable harm shown; equities and public interest favor defendants | Injunctive relief denied under Winter factors |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (legal conclusions not entitled to assumed truth; plausibility standard)
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (U.S. 2008) (elements for preliminary injunction)
- Moeller v. Lien, 25 Cal.App.4th 822 (Cal. Ct. App. 1994) (nonjudicial foreclosure statutory framework; presumption of regularity)
- Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575 (Cal. Ct. App. 1984) (tender requirement to attack trustee's sale)
- Abdallah v. United Savings Bank, 43 Cal.App.4th 1101 (Cal. Ct. App. 1996) (tender required to challenge sale procedures)
- Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177 (N.D. Cal. 2009) (production of original note not required for nonjudicial foreclosure)
- McHenry v. Renne, 84 F.3d 1172 (9th Cir. 1996) (Rule 8 requires simplicity, clarity; prolix complaints may be dismissed)