Jara v. Aurora Loan Services
2012 WL 1094348
N.D. Cal.2012Background
- Plaintiff Jara purchased property in South San Francisco on January 18, 2006, financing with an $865,000 loan packaged into two notes from Pacific Community Mortgage, Inc.
- Pacific transferred servicing rights on the first note to Aurora, which later became the loan servicer before default occurred in 2008.
- Jara entered into loan modification agreements after hardship under HAMP; Cal Western recorded a default notice and trustee’s sale occurred on August 25, 2010, at which Aurora purchased the property.
- Jara filed suit in state court; case was removed to federal court; after prior amendments, he filed a Fourth Amended Complaint (Fourth AC) naming Aurora and MERS only.
- Defendants moved to dismiss; the court granted the motion to dismiss with prejudice, dismissing all of Jara’s claims under TILA, FDCPA, quiet title, cancellation of instrument, UCL, and declaratory relief.
- The court also denied a motion to strike plaintiff’s opposition as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| TILA disclosure requirement viability | Jara contends Aurora failed to disclose owner identity per § 1641(g). | Aurora was not owner/assignee; § 1641(g) applies only to new owners/assignees after 2009; no notice duty by servicer. | TILA claim dismissed with prejudice; no viable owner-transfer notification by Aurora. |
| FDCPA liability of a mortgage servicer | Aurora engaged in debt collection and violated FDCPA by withholding notices and deceiving debtor. | Aurora was a servicer, not a debt collector; FDCPA does not apply to servicers absent default‑time ownership. | FDCPA claim dismissed with prejudice; Aurora not a debt collector under the FDCPA as pleaded. |
| Quiet title viability | Jara seeks to quiet title against the mortgagee for alleged improper lending/foreclosure structure. | Quiet title requires tender of the debt; Jara failed to allege ability or willingness to tender. | Quiet title claim dismissed with prejudice. |
| Cancellation of instrument | Cancellation of the deed rests on FDCPA and anti-deficiency-law violations. | Underlying FDCPA/claims fail; statute-based grounds insufficient; documents show loan structure not supporting claimed theory. | Cancellation of instrument claim dismissed with prejudice. |
| Unfair Competition Law (UCL) claim | Aurora engaged in unfair/fraudulent practices in handling the loan. | Pleading deficiencies persist; no viable predicate UCL claim and no particularized fraud allegations under Rule 9(b). | UCL claim dismissed with prejudice. |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (facial plausibility required)
- Lopez v. Smith, 203 F.3d 1122 (9th Cir. 2000) (leave to amend when possible defect curable)
- Perry v. Stewart Title Co., 756 F.2d 1197 (5th Cir. 1985) (debt collector not include mortgage servicing company when debt not in default)
- Kelley v. Mortgage Elec. Registration Sys., 642 F.Supp.2d 1048 (N.D. Cal. 2009) (quiet title limitations; tender requirement)
- Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F.Supp.2d 952 (N.D. Cal. 2010) (ownership/tendency of quiet title considerations)
- Arnolds Mgmt Corp. v. Eischen, 158 Cal.App.3d 575 (Cal. Ct. App. 1984) (tender and payment obligations in foreclosure challenges)
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (U.S. 1998) (TILA disclosures standards)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA scope; debt collector definition)
- Pantoja v. Countrywide Home Loans, Inc., 640 F.Supp.2d 1177 (N.D. Cal. 2009) (tender requirements in foreclosure challenges)