Necer v. PHH Mortgage Corporation
1:21-cv-01730
E.D. Cal.Jun 11, 2024Background
- Amalia Necer obtained title to a residential property in Bakersfield, CA, in 2005, secured by a deed of trust, and later sought a loan modification after defaulting during the COVID-19 pandemic.
- PHH Mortgage Corporation serviced the loan and offered Necer a Trial Period Plan (TPP), requiring completion of payments and submission of acceptance forms.
- Despite Necer’s claims of making the required payments, issues arose regarding whether she completed the acceptance process and whether payments cleared.
- The property was scheduled for foreclosure, sold at a trustee’s sale, but the sale was later rescinded and all parties were restored to their pre-sale positions.
- Necer filed suit alleging wrongful foreclosure, promissory estoppel, breach of contract, fraud, and violation of California’s Unfair Competition Law (UCL), seeking injunctive and declaratory relief.
- The Court considered defendants’ motion to dismiss based on failure to provide contractual notice of grievance and failure to state claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Necessity of notice of grievance (Deed of Trust §15/§20) | Notice provisions didn't apply to PHH as servicer, only lender; not required post-foreclosure | Notice provisions bind plaintiff; PHH as servicer entitled to notice before suit | Notice provision applies; failure to provide notice requires dismissal |
| Wrongful foreclosure (dual tracking, damages) | PHH misrepresented payment status, engaged in dual tracking, caused damages | Claim is moot due to rescinded sale; no procedural violation or prejudice; no required parties omitted | Claim moot after rescission; lacked merits; not all elements pled |
| Promissory estoppel (promise of modification) | PHH promised modification if TPP completed; substantial reliance and detriment | No promise to modify, just to consider; plaintiff failed to complete requirements or submit all docs | No clear, enforceable promise; no reasonable reliance pled |
| Breach of contract (TPP) | Performed all TPP obligations; PHH breached by demanding extra payment and foreclosing | Plaintiff did not submit required acceptance form; did not fulfill TPP conditions | No performance/excuse for nonperformance; no breach claim |
| Fraud | PHH made false statements about payments and sale status | No specific false statements alleged; insufficient Rule 9(b) detail | No facts pled with particularity; claim dismissed |
| Violation of UCL | PHH’s "dual tracking" was unlawful/unfair | No statutory or contractual violation; no underlying claim survives | No predicate violation or facts to support "dual tracking"; claim dismissed |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for Rule 12(b)(6) motions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for surviving motion to dismiss)
- Lona v. Citibank, N.A., 202 Cal. App. 4th 89 (2011) (elements of wrongful foreclosure claim)
- Oasis W. Realty, Inc. v. Goldman, 51 Cal. 4th 811 (2011) (standard for breach of contract claims)
- Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163 (1999) (UCL liability prongs)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (particularity requirement for fraud claims)