Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_10-cv-02361/USCOURTS-cand-5_10-cv-02361-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-Personal Property

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California 

** E-filed July 14, 2010 ** 

NOT FOR CITATION 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

SCOTT DOMNIE, 

 Plaintiff, 

 v. 

SAXON MORTGAGE; MORTGAGE 

ELECTRONIC REGISTRATION 

SYSTEMS, INC.; and DOES 1-10, inclusive, 

 

 Defendants. 

____________________________________/

No. C10-02361 HRL 

ORDER THAT CASE BE 

REASSIGNED TO A DISTRICT 

COURT JUDGE 

REPORT AND RECOMMENDATION 

[Re: Docket Nos. 6 & 7] 

Plaintiff Scott Domnie (“Domnie”) sought to modify his home mortgage loan with defendant 

Saxon Mortgage Services, Inc. (“Saxon”). When his efforts failed, Domnie sued Saxon and 

Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively, “Defendants”) in state 

court alleging breach of contract, fraud, negligence, intentional tort, “Deceptive Practices 17200,” 

and violations of the California Foreclosure Prevention Act (“CFPA”), and seeking declaratory and 

injunctive relief. (Docket No. 1, Ex. A (“Complaint”).) Defendants timely removed the case to 

federal court and thereafter filed motions to dismiss and to strike portions of Domnie’s complaint. 

(Docket Nos. 1, 6 & 7.) Domnie has not filed an opposition to either motion. Pursuant to Civil 

Local Rule 7-1(b), the Court finds the matter suitable for determination without oral argument, and 

the July 20, 2010 hearing is vacated. 

Case 5:10-cv-02361-JF Document 10 Filed 07/14/10 Page 1 of 5
2 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California 

LEGAL STANDARD 

On motion, a court may dismiss a complaint for failure to state a claim. FED. R. CIV. P. 

12(b)(6). The federal rules require that a complaint include a “short and plain statement” showing 

the plaintiff is entitled to relief. FED. R. CIV. P. 8(a)(2). The statement must “raise a right to relief 

above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55 (2007). Yet only 

plausible claims for relief with survive a motion to dismiss. Ashcroft v. Iqbal, 556 U.S. ___, 129 

S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). A claim is plausible if its factual content “allows the 

court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 

1949. A plaintiff does not have to provide detailed facts, but the pleading must include “more than 

an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 1950. 

In deciding a motion to dismiss, the court is ordinarily limited to the face of the complaint. 

Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). The factual 

allegations pled in the complaint must be taken as true and reasonable inferences draw from them 

must be construed in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 

337-38 (9th Cir. 1996); Mier v. Owens, 57 F.3d 747, 750 (9th Cir. 1995) (citing Usher v. City of Los 

Angeles, 828 F.2d 556, 561 (9th Cir. 1987)). However, the court cannot assume that “the [plaintiff] 

can prove facts which [he or she] has not alleged.” Associated General Contractors of California, 

Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). “Nor is the court required 

to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or 

unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) 

(citing Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994)), amended on other 

grounds by 275 F.3d 1187 (9th Cir. 2001). 

DISCUSSION 

Defendants’ argument in favor of dismissal is that Domnie’s complaint utterly fails to meet 

federal pleading standards, and a review of Domnie’s complaint confirms their contention. For 

example, Domnie’s claim for breach of contract alleges that he and his wife entered into an implied 

agreement with Defendants which required them to make “good faith and reasonable efforts” to 

Case 5:10-cv-02361-JF Document 10 Filed 07/14/10 Page 2 of 5
3 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California 

modify the loan (Complaint at 3), but he fails to allege the conduct that allegedly created such an 

implied agreement. See CAL. CIV. CODE § 1621 (“An implied contract is one, the existence and 

terms of which are manifested by conduct.”). Likewise, his fraud claim alleges that Defendants 

made representations as to their authority to modify the loan and promised that diligent efforts 

would be made to do so (Complaint at 4-5), but he fails to allege what was said, when it was said, or 

how exactly he was misled. See FED. R. CIV. P. 9(b) (requiring fraud to be pled with particularity). 

And his complaint fails to set forth any facts whatsoever supporting his claims for intentional tort or 

“deceptive practices 17200.” 

Domnie’s negligence claim alleges that Defendants had a duty to modify their loan and 

breached that duty when they did not do so. (Complaint at 6.) But lenders and loan servicers 

generally do not owe a legal duty to their borrowers. See Shepherd v. Amer. Home Mortg. Servs., 

Inc., No. Civ. 2:09-1916 WBS GGH, 2009 WL 4505925, at *2 (E.D. Cal. 2009); Nymark v. Heart 

Fed. Sav. & Loan Ass’n., 231 Cal.App.3d 1089, 1096 (1991). And the authority cited by Domnie — 

the CFPA and the Making Home Affordable Program1

 — do not place a duty upon Defendants to 

provide a loan modification. See CAL. CIV. CODE § 2923.52 et seq.; Williams v. Geithner, No. 09-

1959 ADM/JJG, 2009 WL 3757380, at *6 (D.Minn. 2009). 

Domnie’s CFPA claim also fails. He claims that Defendants violated the CFPA because 

they “miscalculated the homeowners[’] income” and “acted maliciously during the foreclosure and 

modification period because it lacks standing to foreclose and authority to modify the loan.” 

(Complaint at 11.) The CFPA, though, modifies the foreclosure process to provide additional time 

for all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria; 

it does not speak to Domnie’s contentions of miscalculation of a homeowner’s income or malicious 

actions during foreclosure or loan modification periods. See CAL. CIV. CODE § 2923.52 et seq. 

 

1

 In October 2008, Congress passed the Emergency Economic Stabilization Act (“EESA”). 12 

U.S.C. § 5201. The EESA allocated money to the U.S. Department of the Treasury (“Treasury”) to 

restore liquidity and stability to the financial system and also established the Troubled Asset Relief 

Program, which was intended to reduce foreclosures. 12 U.S.C. §§ 5211 & 5225. Enabled with this 

authority, Treasury, the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac created the 

Making Home Affordable Program, which consists of two components: (1) the Home Affordable 

Refinance Program, and (2) the Home Affordable Modification Program (the “HAMP”). The 

HAMP is aimed to financially assist homeowners who have defaulted on their mortgages or who are 

in imminent risk of default by reducing monthly payments to sustainable levels. See Williams v. 

Geithner, No. 09-1959 ADM/JJG, 2009 WL 3757380, at *1-2 (D.Minn. 2009). 

Case 5:10-cv-02361-JF Document 10 Filed 07/14/10 Page 3 of 5
4 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California 

Finally, Domnie’s claims for declaratory and injunctive relief fail, too. He claims that a 

“controversy currently exists between the parties” concerning the “validity and enforceability of the 

foreclosure” on Domnie’s property. Domnie contends that “the scheduled trustee’s sale was 

improperly noticed pursuant to California Civil Code [§] 2923.5.” (Complaint at 13.) Nowhere in 

the complaint, though, does Domnie allege any facts about the purported improper notice. For 

example, he does not identify when a notice of default was provided, or when the trustee’s sale was 

noticed and how it was improper. 

For these reasons, Domnie’s complaint fails to state a claim upon which relief can be given 

and thus should be dismissed. FED. R. CIV. P. 12(b)(6). 

CONCLUSION 

Because the parties have yet to consent to the undersigned’s jurisdiction, this Court 

ORDERS the Clerk of the Court to reassign this case to a district court judge. The undersigned 

further RECOMMENDS that the newly-assigned district court judge dismiss this action without 

prejudice, allow Domnie to file a First Amended Complaint within 14 days of the order dismissing 

the action, and deny as moot Defendants’ motion to strike. 

IT IS SO ORDERED. 

Dated: July 14, 2010 

HOWARD R. LLOYD 

UNITED STATES MAGISTRATE JUDGE

Case 5:10-cv-02361-JF Document 10 Filed 07/14/10 Page 4 of 5
5 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California 

C10-02361 HRL Notice will be electronically mailed to: 

Alice Marie Dostalova amdostalova@wolfewyman.com, lcwhite@wolfewyman.com 

Jonathan Fried jon.fried@yahoo.com 

Kimberly Ann Paese kapaese@wolfewyman.com, crgonzales@wolfewyman.com 

Stuart Bruce Wolfe sbwolfe@wolfewyman.com 

Counsel are responsible for distributing copies of this document to co-counsel who have not 

registered for e-filing under the court’s CM/ECF program. 

 

Case 5:10-cv-02361-JF Document 10 Filed 07/14/10 Page 5 of 5