Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-02253/USCOURTS-cand-5_15-cv-02253-4/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1345 Foreclosure

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

KIMBERLY COX,

Plaintiff,

v.

OLD REPUBLIC NATIONAL TITLE 

INSURANCE COMPANY, et al.,

Defendants.

Case No. 15-cv-02253-BLF 

ORDER GRANTING MOTIONS TO 

DISMISS

[Re: ECF 45, 51, 53]

Before the Court are three Motions to Dismiss by Defendants Mortgage Electronic 

Registration Systems, Inc. (“MERS”), ECF 45 (“MERS Mot.”), Old Republic Default 

Management Services, a Division of Old Republic National Title Company (“Old Republic”), 

ECF 51 (“Old Republic Mot.”), and New Penn Financial, LLC, d/b/a Shellpoint Mortgage 

Servicing (“Shellpoint”) and The Bank of New York Mellon fka The Bank of New York as 

Trustee for The Certificateholders of CWMBS, Inc., CHL Mortgage Pass-Through Trust 2005-02 

Mortgage Pass-Through Certificates, Series 2005-02 (“BONY”) (collectively, “Defendants”), ECF 

53 (“Shellpoint Mot.”).

1

Defendants raise numerous grounds for dismissal in their three motions to dismiss, 

including that Plaintiff lacks standing to bring this action in its entirety, that many of the counts 

 

1

Plaintiff alleges in her First Amended Complaint (“FAC”) that Old Republic is a “fictitious 

business, non-existent entity and a sham.” FAC ¶ 8. She makes the same allegation with respect to 

BONY and further “contends that . . . the entity sued by Plaintiff may not in fact be represented by 

its purported counsel nor made an appearance in this action.” FAC ¶ 10. In their moving papers, 

Old Republic and BONY state that they were erroneously sued as “Old Republic National Title 

Insurance Company” (“ORNTIC”) and “The Bank of New York Mellon Corporation as Trustee 

for the Certificateholders of CWMBS, Inc. – CHL Mortgage Pass-Through Trust 2005-02,” 

(“BONYMC”) respectively. Old Republic Mot. at 12, Shellpoint Mot. at n.2. This issue is not 

properly before the Court on these motions to dismiss. However, the Court notes that the Clerk 

declined to enter default as to ORNTIC and BONYMC on September 1, 2015. ECF 62-64.

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are time-barred, and that certain counts do not apply to certain Defendants because of the 

Defendants’ alleged role in the loan process. For the reasons stated below, the Court GRANTS 

Defendants’ Motions to Dismiss each of the claims with leave to amend, as requested by Plaintiff 

at the hearing.

I. BACKGROUND

This action constitutes Plaintiff Kimberly Cox’s (“Plaintiff”) fourth attempt to rid herself 

of a purported loan secured by the residential real property commonly known as 131 Sutphen 

Street in Santa Cruz, CA (“Property”). First Amended Compl. (“FAC”), ECF 40 ¶¶ 7, 13. Plaintiff 

alleges that she acquired the Property in fee simple and recorded the deed on September 1, 1998. 

Id. ¶ 14. Plaintiff alleges that the Property was, at all relevant times, her principal dwelling and 

remains her “primary property,” though she is now a citizen of Nevada. Id. ¶¶ 7, 13.

Plaintiff alleges that, on December 21, 2004, a copy of a Deed of Trust (“DOT”), dated 

December 10, 2004, was recorded. Id. ¶ 15. The DOT purported to secure a $544,000 loan to 

Plaintiff with the Property. Id. Exh. 10. The Deed named Plaintiff as the Borrower, America’s 

Wholesale Lender (“AWL”), described as “a corporation organized and existing under the laws of 

New York,” as the Lender, CTC Real Estate as the Trustee, and MERS as the Beneficiary. Id. ¶¶ 

1, 15; Exh. 10, ECF 40-3 at 3-4. Plaintiff alleges that the Deed was and is invalid and counterfeit 

because AWL did not exist as named (i.e., as a New York corporation) and because her initials 

and signatures throughout the DOT were forged. Id. ¶ 15. She does not, however, allege that she 

never received the $544,000.

Plaintiff additionally alleges that, notwithstanding the loan’s invalidity, she rescinded the 

loan on July 13, 2007 by “serving the rescission on the Lender designated in the DOT.” Id. ¶¶ 16, 

32. Plaintiff attaches a copy of the alleged letter as Exhibit 13 to the FAC. In the letter, addressed

to AWL, Plaintiff writes that, pursuant to TILA, she “hereby rescind[s] the above-referenced loan 

due to violations of TILA which includes, but is not limited to the unlawful failure to give me 

timely, accurate and proper material disclosures and notices under TILA.” Id. Exh. 13 at 1. 

Plaintiff explains that she is “ready, willing and able to tender the property or the reduced payoff 

amount” once certain conditions are met. Id. at 2. She gives AWL “twenty (20) days . . . to accept 

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[her] offer of tender . . . or [sic] return all [her] payments not accounted for [and] terminate the 

deed of trust;” otherwise, she states, “rescission will automatically terminate [the DOT] and 

ownership of [the Property] will vest in [Plaintiff] without any obligation to pay any more for it.” 

Id. at 2. Plaintiff alleges that Defendants had until August 5, 2007 to return her payments and 

terminate the security interest but that none did so. FAC ¶ 32. As a result, Plaintiff alleges, the 

subject Note and DOT were not only invalid and void, but also extinguished by law in 2007. Id. 

On November 13, 2009, MERS assigned the allegedly invalid DOT to The Bank of New 

York Mellon fka The Bank of New York as Trustee for the Benefit of the Certificateholders 

CWMBS, Inc. CHL Mortgage Pass-Through Trust 2005-02 Mortgage Pass-Through Certificates, 

Series 2005-2 (“BONYM”) and substituted Reconstruct Company, N.A. (“Reconstruct”) as the 

new trustee. Id. ¶ 18, Exh. 7. Plaintiff alleges this Substitution and Assignment was recorded on 

December 7, 2009. FAC ¶ 18. 

Plaintiff alleges that, on July 2, 2010, she recorded a notice denying the authenticity of her 

signatures on the DOT. Id. ¶ 19; FAC, Exh. 14 at 2. 

On November 12, 2010, Plaintiff filed for Chapter 7 bankruptcy in the United States 

Bankruptcy Court for the Northern District of California before Judge Novack. See Case No. 5:10-

bk-61716. Plaintiff listed the Property as real property owned in "Fee Simple" on her Schedule A. 

MERS RJN Exh. A, ECF 46-1 at 2.2Plaintiff listed debt related to her Property in Schedule F, 

which pertains to unsecured nonpriority claims, as purportedly owed to three different creditors: 

AWL, with Countrywide Home Loans, The Bank of New York, and The Bank Of New York 

Mellon As Trustee C/O BAC Home Loans Servicing as assignees or other notification for AWL; 

BAC Home Loans Servicing, LP; and Reconstruct. Id. at 9, 10, 12; see also FAC ¶ 32. Plaintiff 

described each debt as contingent, unliquidated, and disputed, “contend[ing] that if this debt is 

proven to exist at all, it is unsecured and subject to discharge. Subject to Setoff [sic].” MERS RJN 

Exh. A at 9, 10, 12.

On April 12, 2011, Plaintiff initiated an associated adversary proceeding in the Bankruptcy 

 

2 As discussed in Section III.A of this Order, the Court GRANTS MERS’ Request for Judicial 

Notice.

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Court against numerous defendants, including some of the Defendants in this case, seeking 

declaratory relief regarding the lien on the Property, to cancel the security instrument, and to quiet 

title. See Case No. 5:11-ap-05106. On June 17, 2011, Judge Novack granted a motion to dismiss 

the adversary proceeding, finding that because the claims arose before the filing of the bankruptcy, 

they either belonged to the estate if they had not been abandoned and therefore only the Chapter 7 

trustee had standing to bring them or, if they had been abandoned, the bankruptcy court did not 

have jurisdiction over the claims. MERS RJN Exh. E, ECF 46-5 at 7; Id. Exh. D, ECF 46-4 at 2.

On January 27, 2012, the bankruptcy court granted Plaintiff a discharge under 11 U.S.C. § 

727 and closed Plaintiff’s Chapter 7 case. MERS RJN Exh. B, ECF 46-2 at 2. Plaintiff alleges that 

this discharge included any purported debt to Defendants. FAC ¶ 32.

On May 24, 2012, Plaintiff filed an action in the Santa Cruz Superior Court relating to this 

loan, again against numerous defendants, including some of the Defendants in this case, seeking 

declaratory relief and to quiet title and asserting Unfair Practices Act (“UPA”) violations, slander 

of title, and quasi-contract claims. See Santa Cruz Cnty. Super. Ct. Case No. CV174201.3

Plaintiff alleges that, on October 28, 2014, a Substitution of Trustee (“SOT 2”), dated 

October 7, 2014, was recorded. FAC ¶ 21. Through SOT 2,4Shellpoint substituted in Old 

Republic Default Management Services, a Division of Old Republic National Title Insurance 

Company (“Old Republic”) as trustee for the allegedly invalid DOT. Id. Exh. 18. Plaintiff alleges 

that, on that same day, a Notice of Default and Election to Sell Under Deed of Trust (“NOD 1”), 

dated October 21, 2014, was recorded. FAC ¶ 20 and Exh. 15. NOD 1 lists Old Republic as the 

trustee but is signed by ORNTIC. Id. at 2. NOD 1 additionally identifies MERS as nominee for 

AWL as beneficiary and Shellpoint as servicer for BONY as the beneficiary or its agent. Id. at 2. 

Plaintiff alleges that this Notice of Default was recorded prematurely because Shellpoint did not 

execute the California Authorization to Proceed until December 10, 2014. Id. ¶ 20 and Exh. 16. In 

 

3

Shellpoint and BONY argue that Plaintiff voluntarily dismissed the state court action. Shellpoint 

Mot. at 4. Shellpoint and BONY do not cite to anything to support this contention, and it is not 

alleged in the FAC.

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Plaintiff refers to the two Substitutions of Trustee as “SOT 2” and “SOT 3.” The Court follows 

Plaintiff’s naming convention.

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addition, Plaintiff alleges that, contrary to Shellpoint’s representation in the Authorization to 

Proceed, it never offered Plaintiff a loan modification or workout plan to avoid foreclosure. Id. ¶ 

20 and Exhs. 16, 17 at 7. Plaintiff alleges that ORNTIC, Shellpoint, and BONY themselves or 

vicariously through each other recorded or caused the recording of NOD 1 and SOT 2. Id. ¶¶ 63, 

69. 

Plaintiff alleges that, on December 17, 2014, she notified each Defendant and their counsel 

in writing that the DOT was counterfeit. Id. ¶ 15.A, n. 20. The recipients listed on the letter are 

Shellpoint, ORNTIC, Old Republic, and Old Republic Diversified Services, Inc. Id. Exh. 17. 

Plaintiff alleges that, on December 19, 2014, another substitution of trustee (“SOT 3”) was 

recorded, id. ¶ 23, through which Shellpoint substituted in ORNTIC as trustee, id. Exh. 20.

Plaintiff alleges that, on the same day, a second Notice of Default and Election to Sell Under Deed 

of Trust (“NOD 2”), dated December 18, 2014, was recorded. Id. ¶ 22 and Exh. 19. Plaintiff 

alleges that, on April 30, 2015, a Notice of Trustee’s Sale (“NOTS”) was recorded. Id. ¶ 24, Exh. 

21. Plaintiff alleges that ORNTIC, Shellpoint, and BONY recorded or caused the recording of 

SOT 3, NOD 2, and NOTS. Id. ¶¶ 38, 69.

Plaintiff alleges that each substitution and the notice of sale, while “appearing valid on its 

face” was in fact invalid and void because the underlying DOT was void. Id. ¶¶ 1, 18, 21, 23-24, 

27-31.

Based on the above allegations, Plaintiff asserts that all Defendants violated 15 U.S.C. §§ 

1635 (count 1) and 1641 (count 4), sections of the Truth in Lending Act (“TILA”). Plaintiff also 

alleges that all Defendants violated California’s Unfair Practices Act (“UPA”), Cal. Bus. and Prof. 

Code § 17000 et seq. (count 5) and slandered her title (count 6), which she seeks to quiet (count 

9). Plaintiff additionally asserts fraud (count 2), “quasi-contract/unjust enrichment/restitution”

(count 7) and violations of the Rosenthal Debt Collection Practices Act (“RFDCPA” or 

“Rosenthal Act”), Cal. Civil Code § 1788 et seq., and the Federal Fair Debt Collection Practices 

Act (“FDCPA”), 15 U.S.C. § 1692 et seq.(count 3) against Old Republic and Shellpoint. Finally, 

Plaintiff asks the Court to cancel the instruments of Old Republic, MERS, and Shellpoint under 

Cal. Civil Code § 3412 (count 8).

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Defendants filed three motions to dismiss: MERS and Old Republic filed separate motions

on August 14, 2015 and August 20, 2015, respectively, while Shellpoint and BONY filed a 

combined motion on August 20, 2015. Plaintiff opposed MERS’ Motion to Dismiss on August 28, 

2015, ECF 61, and the other Defendants’ Motions to Dismiss on September 3, 2015, ECF 65 

(“Shellpoint Opp.”), ECF 66 (“Old Republic Opp.”). The Court heard argument on these motions 

on October 21, 2015. 

II. LEGAL STANDARD

A. Rule 12(b)(6)

“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 

claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 

Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 

729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as 

true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. 

Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court 

need not accept as true “allegations that are merely conclusory, unwarranted deductions of fact, or 

unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) 

(internal quotation marks and citations omitted). Nor does must the Court “accept as true 

allegations that contradict matters properly subject to judicial notice or by exhibit.” Sprewell v. 

Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). While a complaint need not contain 

detailed factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a 

claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it 

“allows the court to draw the reasonable inference that the defendant is liable for the misconduct 

alleged.” Id.

B. Rule 9(b)

When a party pleads a cause of action for fraud or mistake, as here, it is subject to the 

heightened pleading requirements of Rule 9(b). “In alleging fraud or mistake, a party must state 

with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Rule 9(b) 

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demands that the circumstances constituting any alleged fraud be plead “specific[ally] enough to 

give defendants notice of the particular misconduct . . . so that they can defend against the charge 

and not just deny that they have done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d 1120 

(9th Cir. 2009) (citing Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)). Claims of 

fraud must be “accompanied by the who, what, when, where, and how of the misconduct alleged.” 

Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). “Rule 9(b) does not allow a complaint to 

merely lump multiple defendants together but ‘require[s] plaintiffs to differentiate their allegations 

when suing more than one defendant ... and inform each defendant separately of the allegations 

surrounding his alleged participation in the fraud.’ ” Swartz v. KPMG LLP, 476 F.3d 756, 764-765 

(9th Cir. 2007). “[W]hen asserting a fraud claim against a corporation, the plaintiff ‘must allege 

the names of the persons who made the allegedly fraudulent representations, [and] their authority 

to speak.’” Digby Adler Grp., LLC v. Mercedes-Benz U.S.A., LLC, No. 14-CV-02349-TEH, 2015 

WL 1548872, at *3 (N.D. Cal. Apr. 7, 2015).

III. REQUESTS FOR JUDICIAL NOTICE

Before addressing the substantive arguments before it, the Court considers the parties’ 

requests for judicial notice (“RJN”). Under Federal Rule of Evidence 201, facts appropriate for 

judicial notice are those “not subject to reasonable dispute in that [they are] either (1) generally 

known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready 

determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. 

Evid. 201(b). This includes court records. Bovarie v. Giurbino, 421 F. Supp. 2d 1309, 1313 (S.D. 

Cal. 2006) (citing U.S v. Author Svcs., 22 Inc., 804 F.2d 1520, 1522 (9th Cir. 1986)).

A. Defendants’ Requests for Judicial Notice

MERS asks the Court to take judicial notice of thirteen exhibits: 1) Bankruptcy Schedules 

filed in the bankruptcy of Kimberly Cox in the Northern District of California as Case No. 5:10-

bk-61716 (Exh. A); 2) Bankruptcy Discharge and Trustee's Notice of No Assets filed in the 

bankruptcy of Kimberly Cox on January 27, 2012 (Exh. B); 3) Bankruptcy Adversary Complaint 

filed by Kimberly Cox in the bankruptcy case, No. 5:10-bk-61716, as Adversary No. 11-5106 

styled as Kimberly Cox vs. Recontrust Company, N.A. et al., (Exh. C); 4) Bankruptcy Order 

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Dismissing Adversary Action of Kimberly Cox (Exh. D); 5) Transcript of hearing on Motion to 

Dismiss as heard in Adversary Action of Kimberly Cox (Exh. E); 6) Fictitious Business Name 

Statement of Countrywide Home Loans, Inc. as America's Wholesale Lender as filed with the 

Clerk of Santa Cruz County (Exh. F); 7) Verified Second Amended Complaint filed in the 

Superior Court of Santa Cruz County, styled as Kimberly Cox vs. Reconstruct Company, N.A.; 

Mortgage Electronic Registration Systems, Inc.; Bank of New York Mellon fka The Bank ofNew 

York as Trustee for the Benefit of the Certificateholders CWMBS, Inc. CHL Mortgage Passthrough Certificates, Series 2005-2; Countrywide Home Loans, Inc.,; Bank of America 

Corporation, Case No. CV174201, (Exh. G); 8) Deed of Trust recorded in the Official Records of 

Santa Cruz County on December 21, 2004, as Document No. 2004-0089505 (Exh. H); 9) 

Substitution of Trustee and Assignment of Deed of Trust recorded in the Official Records of Santa 

Cruz County on December 7, 2009, as Document No. 2009-0056700 (Exh. I); 10) Substitution of 

Trustee recorded in the Official Records of Santa Cruz County on December 7, 2009, as 

Document No. 2009-0056700 (Exh. J); 11) Notice of Default recorded in the Official Records of 

Santa Cruz County on December 19, 2014, as Document No. 2014-0043352 (Exh. K); and 12) 

Notice of Trustee's Sale recorded in the Official Records of Santa Cruz County on April 30, 2015, 

as Document No. 20154-0016503 (Exh. L). ECF 56. 

Old Republic requests judicial notice of five exhibits: 1) Deed of Trust recorded December 

21, 2004, in the Official Records of the Santa Cruz County Recorder’s Office as Document No. 

2001-0089505 (Exh. A) (same as MERS’ Exh. H); 2) Substitution of Trustee and Assignment of 

Deed of Trust recorded December 7, 2009, in the Official Records of the Santa Cruz County 

Recorder’s Office as Document No. 2009-0056700 (“Exh B”); 3) Substitution of Trustee recorded 

December 19, 2014, in the Official Records of the Santa Cruz County Recorder’s Office as 

Document No. 2014-0043351 (“Exh. C”); 4) Notice of Default and Election to Sell Under Deed of 

Trust recorded December 19, 2014, in the Official Records of the Santa Cruz County Recorder’s 

Office as Document No. 2014-0043352 (“Exh. D”); 5) Notice of Trustee’s Sale recorded April 30, 

2015, in the Official Records of the Santa Cruz County Recorder’s Office as Document No. 2015-

0016503 (Exh. E). ECF 52. 

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Plaintiff objects to both RJNs, arguing that noticing the exhibits would convert MERS’ and 

Old Republic’s Motions to Dismiss into Motions for Summary Judgment. However, a court may 

consider documents on a motion to dismiss without converting it into a motion for summary 

judgment if the documents are judicially noticeable. See United States v. Ritchie, 342 F.3d 903, 

907 (9th Cir.2003). Specifically, on a motion to dismiss, a federal court may take judicial notice of 

“documents whose contents are alleged in a complaint and whose authenticity no party questions, 

but which are not physically attached to the pleading.” Branch v.Tunnell, 14 F.3d 449, 454 (9th 

Cir. 2002), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119, 

1124 (9th Cir. 2002). This rule serves to “prevent plaintiffs from surviving a Rule 12(b)(6) motion 

by deliberately omitting documents upon which their claims are based.” Swartz v. KMPG LLC, 

476 F.3d 756, 763 (9th Cir. 2007). 

Each of Defendants’ proposed exhibits is a record either of a court or the Santa Cruz 

County Recorder’s Office and Plaintiff does not dispute their validity. In fact, a number of MERS’ 

and each of Old Republic’s proposed exhibits is identical to exhibits attached to the FAC. MERS’ 

Exhibits A-L and Old Republic’s Exhibits 1-5 are therefore judicially noticeable as documents 

“capable of accurate and ready determination by resort to sources whose accuracy cannot 

reasonably be questioned,” see Fed. R. Evid. 201(b), and judicially noticing these exhibits does 

not convert Defendants’ motions into motions for summary judgment. Accordingly, the Court 

GRANTS MERS’ and Old Republic’s RJN for Exhibits A-L and 1-5, respectively.

B. Plaintiff’s Requests for Judicial Notice

In support of her objection to MERS’ RJN, Plaintiff requests judicial notice of four 

exhibits: 1) Reconstruct Company, N.A.; Mortgage Electronic Registration Systems, Inc.; Bank of 

New York Mellon fka The Bank of New York as Trustee for the Benefit of the Certificateholders 

CWMBS, Inc. CHL Mortgage Pass-through Certificates, Series 2005-2; Countrywide Home 

Loans, Inc.,; Bank of America Corporation’s Memorandum of Points and Authorities in Support 

of Demurrer to Second Amended Complaint of Cox, 2) Order Denying Defendants’ Demurrer to 

Plaintiff’s Second Amended Complaint, 3) Order Granting Defendants’ Motion to Dismiss 

Adversary Proceedings, and 4) Bank of America, N.A. v. Linda A. Nash (2015) Case No. 59-

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2011-CA-004389, a judgment from Florida’s Circuit Court of the Eighteenth Judicial Circuit. ECF 

61-2 at 4. 

Plaintiff also requests judicial notice of one exhibit in support of her objection to Old 

Republic’s RJN: Brief of Amicus Curiae Consumer Financial Protection Bureau in Support of 

Appellant and Reversal, Case No. 10-56884 in the United States Court of Appeals for the Ninth 

Circuit, Vien Phuong Thi Ho, Plaintiff-Appellant, v Reconstruct Company, N.A. et al., 

Defendants-Appellees, on appeal from the United States District Court for the Central District of 

California. ECF 66-3.

Defendants do not object to Plaintiff’s RJNs and the Court finds that, as court documents, 

all of Plaintiff’s requested exhibits are documents “capable of accurate and ready determination by 

resort to sources whose accuracy cannot reasonably be questioned.” See Fed. R. Evid. 201(b).

Accordingly, the Court GRANTS Plaintiff’s requests to judicially notice Exhibits 1-4 in response 

to MERS and Exhibit 1 in response to Old Republic.

The Court’s grant of judicial notice extends to notice of the claims and disclosures made in 

these documents, but not to the underlying facts.

IV. DISCUSSION

Having addressed the RJNs, the Court now turns to the substance of the Motions to 

Dismiss. Defendants raise numerous grounds for dismissal. The Court first considers MERS’ 

argument that Plaintiff lacks standing to bring the FAC in its entirety. See MERS Mot. at 5-8. The 

Court then considers arguments against individual claims.

A. Standing

MERS contends that Plaintiff lacks standing to bring this action because if any viable 

claims exist they belong to the Chapter 7 estate and the Chapter 7 trustee is therefore the only one 

with standing to bring them. MERS Mot. at 6. MERS argues that the claims belong to the estate

because they arose from pre-petition loans and events—specifically, Plaintiff’s allegations that the 

DOT was counterfeit and invalid when recorded in 2004 and that Plaintiff rescinded the loan in 

2007. Id. at 6. In considering this argument, the Court considers the timing, but not the merits, of 

the underlying counts.

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“When [an individual] declare[s] bankruptcy, all the ‘legal or equitable interests,’ he had in 

his property became the property of the bankruptcy estate and are represented by the bankruptcy 

trustee.” Turner v. Cook, 362 F.3d 1219, 1225-26 (9th Cir. 2004) (quoting 11 U.S.C. § 541(a)(1)). 

“Causes of action are among such legal or equitable interests.” Id. at 1226 (citing Sierra 

Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 707 (9th Cir.1986)). See also In re 

Polis, 217 F.3d 899, 901 (7th Cir. 2000) (finding that estate property includes TILA claim). Thus, 

MERS is correct that any pre-petition claim that Plaintiff had regarding the Property would have 

been property of the estate.

Unless the bankruptcy court orders otherwise, property of the estate that is not abandoned 

or administered remains property of the estate. 11 U.S.C. § 554(d). To be either abandoned or 

administered, property must be properly scheduled. Id. §§ 554(c), 521(1); see also Vreugdenhill, 

950 F.2d 524, 526 (8th Cir. 1991) (unless formally scheduled, property is not abandoned at the 

close of the estate, even if the trustee knew of the existence of the property when the case closed). 

MERS argues that Plaintiff failed to properly schedule these claims as assets in her 

Bankruptcy Schedules although they existed at the time of filing and that, therefore, they could not 

have been administered or abandoned. MERS Mot. at 6. Plaintiff responds that she properly 

scheduled the purported debt as unsecured and that it was, thereafter, judicially discharged and 

abandoned back to Plaintiff. Opp. to MERS Mot. at 11, ¶ 27. However, “[c]auses of action are 

separate assets which must be formally listed.” Cusano v. Klein, 264 F.3d 936, 947 (9th Cir. 2001) 

(citing Vreugdenhill, 950 F.2d at 526). “Simply listing the underlying asset [or liability] out of 

which the cause of action arises is not sufficient.” Id. Thus, regardless of whether or not Plaintiff 

scheduled her debt properly, she failed to schedule any related claims as assets. 

As a result, the Court agrees with MERS that any claim now before the Court that accrued 

pre-petition remains property of the estate and that the Chapter 7 trustee, rather than Plaintiff, has 

standing to bring those claims. See In re Lopez, 283 B.R. 22, 28 (9th Cir. BAP 2002). “The same 

result follows” for all claims “related to” Plaintiff’s allegations that the DOT was void when 

recorded in 2004 and that her actions in 2007 rescinded her loan. Cusano v. Klein, 264 F.3d 936, 

948-49 (9th Cir. 2001). This includes any claim that may exist against MERS, whose last alleged 

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act—recording the Substitution and Assignment—occurred on December 7, 2009. Accordingly, 

the Court GRANTS MERS’ Motion to Dismiss,5 with leave to amend only to the extent that 

Plaintiff can plead around this standing barrier.

However, the Court does not agree with MERS that Plaintiff lacks standing to bring the 

FAC in its entirety because Plaintiff challenges the remaining Defendants’ actions not only on the 

basis of the invalidity of the 2004 DOT and the alleged 2007 rescission, but also on the basis that 

her debt was discharged in 2010 and that Shellpoint, BONY, and Old Republic continued to 

violate the law by attempting to collect on the debt. See, e.g., FAC ¶¶ 32, 38, 45, 50, 86, 91. The 

Court finds that Plaintiff retains standing for any claims that accrued post-petition. See Cusano 

264 F.3d at 947-48 (9th Cir. 2001) (finding that the plaintiff could not sue on claims that accrued 

pre-petition and were subject to scheduling but retained standing for post-petition claims).6

Applying this set of findings to the nine counts before it, the Court concludes that, to the 

extent that they exist, Plaintiff’s first, third, and fourth counts belong to the estate because each 

accrued before November 2010. Plaintiff’s first count accrued on August 6, 2007, one day after 

the date by which Plaintiff alleges Defendants should have returned any payments paid by 

Plaintiff following her alleged rescission of the DOT to be in compliance with TILA. Id. ¶ 35. 

 

5 MERS, Shellpoint, and BONY also argue that Plaintiff is estopped from bringing any prepetition claims because she failed to list them as assets in her bankruptcy schedules. MERS Mot. 

at 7-8; Shellpoint Mot. at 18-19. Defendants rely heavily on Hamilton v. State Farm Fire & Cas. 

Co., (2001) 270 F.3d 778 (9th Cir. 2001) to make this argument. Hamilton held that “a party is 

judicially estopped from asserting causes of action not . . . mentioned in the debtor’s schedules or 

disclosure schedules” because, in doing so, a plaintiff necessarily asserts contradictory positions 

and obtains all of the benefits of bankruptcy without having to comply with his affirmative duty to 

disclose all assets. Id. at 784-85. Defendants argue that if Plaintiff is not estopped she will receive 

“the very type of impermissible windfall that Hamilton prevents.” Shellpoint Mot. at 19. Because 

the Court finds that Plaintiff lacks standing to bring the pre-petition claims, the Court need not 

determine whether she is additionally estopped from bringing the same claims. 

6

Though not relevant to Plaintiff’s standing, the Court notes that, in light of Defendants’ 

contention that Plaintiff improperly scheduled her debt during her bankruptcy, it is unclear at this 

juncture whether the purported debt at issue was in fact discharged. In addition, the Court notes 

that the Explanation of Bankruptcy Discharge in a Chapter 7 Case provides that “a creditor may 

have the right to enforce a valid lien, such as a mortgage . . ., against the discharged [] debtor’s 

property after the bankruptcy, if that lien was not avoided or eliminated in bankruptcy case.” 

Defendants have not briefed either of these potential grounds for dismissing the remaining counts 

and so the Court does not reach them on these motions.

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Plaintiff’s third count alleges that Old Republic and Shellpoint have violated the Rosenthal Act

and FDCPA by “telling Plaintiff she owes a debt she does not” and that the statutory exemptions 

for trustees and servicers do not apply to them “because the purported DOT was void pursuant to 

the Rescission.” Id. ¶ 46; see also id. ¶ 41. This argument for their liability accrued pre-petition 

and therefore belongs to the estate. Plaintiff’s fourth count challenges Defendants’ failure to notify 

her of specific information, pursuant to § 1641, within 30 days of any assignment of her purported 

loan, which allegedly occurred only once, in November 2009. FAC ¶¶ 55, 56. Accordingly, the

Court GRANTS the Motions to Dismiss counts one, three, and four with leave to amend.

Plaintiff’s sixth count of slander of title against Old Republic and her seventh, eighth, and 

ninth counts also belong to the estate because Plaintiff’s attempts to plead around Defendant’s 

correct arguments for dismissal all rely on the 2007 rescission, as discussed in further detail 

below. For example, Plaintiff concedes that trustees are exempt from such claims, but alleges that 

Old Republic does not qualify because “in this case, the DOT [is] void pursuant to the Rescission” 

in 2007. Id. ¶ 74. Because Plaintiff could have equally pled around this exemption—and those for 

counts seven through nine, detailed below—before November 2010, these claims belong to the 

estate. The Court GRANTS the Motions to Dismiss count six against Old Republic and counts 

seven through nine with leave to amend.

In addition, the vast majority of Plaintiff’s seventh count of quasi-contract/unjust 

enrichment/restitution against Old Republic and Shellpoint also belongs to the estate because of 

the alleged timing of her payments. Plaintiff alleges that she paid $106,862.44 in payments that 

were not due. FAC ¶ 80. Of this total amount, only $39 was paid after November 2010. See id. 

Exh. 25 (showing a $30 payment on February 26, 2014 and three $3 payments on March 6, 2014). 

Thus, all but $39 of this count, if it survives at all, belongs to the estate.

Portions of Plaintiff’s remaining—second, fifth, and sixth—counts similarly belong to the 

estate, but Plaintiff retains standing to bring any claims based on Defendants’ alleged activity 

following the discharge of her debt in the bankruptcy case. Specifically, Plaintiff retains standing 

to bring the portions of her second count—fraud against Old Republic and Shellpoint—that 

alleges that they are misrepresenting themselves as the substituted trustee and servicer, 

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respectively, of Plaintiff’s purported debt because “any related ‘debt’ [was] discharged in 

Plaintiff’s Ch. 7 Bankruptcy.” Id. ¶ 38. And she also has standing to bring her sixth count against

Shellpoint and BONY for slandering her title by recording NODs, SOTs, and a NOTS that 

contained false statements regarding the discharge of her debt.

Finally, Plaintiff’s fifth count alleges that each of the Defendants has violated the UPA by 

committing a variety of underlying crimes or civil violations. The following claims existed prepetition and belong to the estate, and the Court therefore GRANTS the Motions to Dismiss these 

claims with leave to amend: that the Defendants committed mortgage fraud in violation of 

California Penal Code § 532(f)(a)(4) and recording fraud in violation of California Penal Code § 

115(a) by recording or causing the recording of the Substitution of Assignment in November 

2009; that each Defendant failed to disclose the identity of the real lender, allegedly in violation of 

California Financial Code § 50505 et seq.; that each Defendant violated California Business and 

Professions Code § 17500 by attempting to dispose of the Property in civil conspiracy with the 

other Defendants by inducing the public to purchase the Property when no lien existed on the 

Property pursuant to the rescission. On the other hand, the following claims arose post-petition 

and so Plaintiff retains the ability to bring them: violations of California Penal Code §§ 

532(f)(a)(4) and 115(a) through the 2014 recordings of Notices of Default and Substitutions of 

Trustee and the 2015 Notice of Trustee’s Sale; Shellpoint and Old Republic’s violations of

California Civil Code § 2924.17(a) and (b) by continuing to record such documents after receiving 

notice from plaintiff of the inaccuracies in the documents; and violations of California Penal Code 

§ 182 et seq. through an attempt to sell property that could not reasonably be sold in its present 

condition because it is encumbered.

The Court next considers Defendants’ arguments regarding dismissal of the individual 

claims. While the Court need not reach the arguments regarding the claims dismissed for lack of 

standing, the Court briefly discusses them in order to offer Plaintiff some guidance should Plaintiff

plead around her lack of standing.

B. First Count: TILA, 15 U.S.C. § 1635, Against All Defendants

Plaintiff alleges that she rescinded her loan in 2007 and that Defendants then failed to 

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return her payments and terminate the security interest in violation of § 1635. As noted above, if 

this count exists, it belongs to the estate. However, Defendants argue that the count does not exist 

at all because it is time-barred.

MERS correctly notes that TILA provides for two different timelines depending on 

whether or not a creditor provided the statutorily required material disclosures, defined as “the 

required disclosures of the annual percentage rate, the finance charge, the amount financed, the 

total amount of payments, the payment schedule, and the disclosures and limitations referred to 

in” related regulations. 12 C.F.R. § 226.23 n. 48. If the creditor did provide them, a borrower has 

three days to rescind; if the creditor failed to, the right of rescission lasts three years. 12 C.F.R. § 

226.23(a)(3). 

Plaintiff alleges that she had three years to rescind and that her rescission timely occurred 

on July 13, 2007, when she sent a letter to AWL. FAC ¶¶ 15, 16. Shellpoint and BONY argue that 

Plaintiff must file suit, and not simply send a letter, within three years in order to fall within the 

statute of repose. Shellpoint Mot. at 9-10. While this reading is in line with prior decisions by this 

district and the Ninth Circuit, it ignores the Supreme Court’s recent holding that, under TILA, “so 

long as the borrower notifies within three years after the transaction is consummated, his 

rescission is timely. The statute does not also require him to sue within three years.” Jesinoski v. 

Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015). Thus, if Plaintiff qualifies for the 

three year statute of repose, her rescission is not time-barred.7

However, MERS argues that Plaintiff has failed to allege that she falls within the threeyear statute of repose. MERS Mot. at 9-10. MERS contends that Plaintiff had only three days to 

rescind because the letter asserts only that the DOT failed to accurately identify the lender and 

neither the letter nor the FAC identifies any material nondisclosure. Id. Plaintiff responds that her 

 

7

Shellpoint and BONY additionally argue that, even if Plaintiff’s TILA rescission was timely, it 

would still fail because she has offered no evidence that she has tendered, or can tender, the 

borrowed funds back to the lender. Shellpoint Mot. at 14. This argument, too, ignores controlling 

precedent that has distinguished the cases on which Shellpoint and BONY rely. See Merritt v. 

Countrywide Fin. Corp., 759 F.3d 1023, 1033 (9th Cir. 2014) (holding that “plaintiffs can state a 

claim for rescission under TILA without pleading that they have tendered, or that they have the 

ability to tender, the value of their loan.”). 

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notice of rescission gives her three years because it referenced “the unlawful failure to give [her] 

timely, accurate and proper material disclosures and notices under TILA.” MERS Opp. at 13; see 

also Compl. Exh. 13.

The Court agrees with MERS. “A pleading that offers ‘labels and conclusions’ or ‘a 

formulaic recitation of the elements of a cause of action will not do.’” Iqbal, 556 U.S. at 678

(quoting Twombly, 550 U.S. at 555). The FAC fails to allege facts identifying the purported 

deficiencies that support Plaintiff’s contention that MERS failed to make material disclosures thus 

opening the way to the three years limitations period in which to rescind and her count is therefore 

time-barred.8 Accordingly, the Court GRANTS the Motions to Dismiss Plaintiff’s first count with 

leave to amend.9

C. Second Count: Fraud Against Old Republic and Shellpoint

Plaintiff alleges that Old Republic and Shellpoint are engaging in fraud by calling 

themselves the trustee and servicer, respectively, of Plaintiff’s loan in NOD 2, SOT 3, and NOTS 

because neither is authorized as such pursuant to the 2007 rescission and 2012 discharge. FAC ¶ 

38. As noted above, Plaintiff retains standing to bring the portions of this count that allege that Old 

Republic and Shellpoint are misrepresenting themselves as the substituted trustee and servicer, 

respectively, of Plaintiff’s purported debt because “any related ‘debt’ [was] discharged in 

Plaintiff’s Ch. 7 Bankruptcy.” FAC ¶ 38. However, Old Republic and Shellpoint argue that the 

count is not sufficiently pled under Rule 9(b). Old Republic Mot. at 4-6, Shellpoint Mot. at 10-11.

The elements of fraud are “(a) misrepresentation (false representation, concealment, or 

nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce 

 

8

The parties did not brief nor does the Court decide whether the letter of rescission itself must 

identify the material nondisclosures.

9

Though the Court dismisses this count in its entirety, the Court additionally addresses Old 

Republic’s argument that the count, even if not time-barred, cannot apply to Old Republic, as a 

trustee, in order to provide Plaintiff with maximal guidance should she choose to amend. Old 

Republic argues that TILA applies only to creditors, as defined in 12 C.F.R. § 226.2(a)(17), and 

that Old Republic, the alleged trustee, does not fit this definition. Old Republic Mot. at 3. Plaintiff 

does not disagree with Old Republic’s reading of the statute, but instead argues that Old Republic 

is not the properly substituted trustee. Old Republic Opp. at 6. As discussed at length above, 

Plaintiff lacks standing to make such a claim. Accordingly, the Court finds that Plaintiff’s first 

count, in addition to being time-barred, has failed to state a claim against Old Republic. 

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reliance; (d) justifiable reliance; and (e) resulting damage.” Lazar v. Superior Court, 12 Cal. 4th 

631, 638 (1996). Shellpoint argues that Plaintiff fails to allege any facts showing any of these 

elements. Shellpoint Mot. at 10-11. Similarly, Old Republic argues that the FAC “fails to offer any 

specific facts that any authorized representative for Old Republic made any fraudulent statements” 

and is “completely devoid of what was said, by whom, when it was said and how it was 

communicated.” Old Republic Mot. at 6. Plaintiff responds that she not only provided details of 

the fraud in ¶¶ 38 and 39 of the FAC, but also included the allegedly fraudulent statements as 

exhibits to her complaint. See, e.g., Shellpoint Opp. at 17.

The Court agrees with Defendants that Plaintiff has failed to plead this count with 

sufficient particularity. Plaintiff fails to identify the “names of the persons who made the allegedly 

fraudulent representations, [and] their authority to speak.’” Digby, 2015 WL 1548872, at *3. In 

addition, Plaintiff does not even allege which entity recorded the challenged instruments, much 

less when and how. Instead, Plaintiff alleges that each challenged instrument “was recorded,” see 

FAC ¶¶ 22-24, and later broadly asserts that Shellpoint and Old Republic “record[ed] or caus[ed]

them] to be recorded,” id. ¶ 38. Accordingly, the Court GRANTS the Motions to Dismiss

Plaintiff’s second count with leave to amend.

D. Third Count: FDCPA and Rosenthal Act Against Old Republic and Shellpoint 

Plaintiff alleges that Old Republic and Shellpoint violated the FDCPA and the Rosenthal 

Act, which were enacted to prohibit debt collectors from engaging in abusive and unfair or

deceptive practices in the collection of consumer debts, see 15 U.S.C. § 1692; Cal. Civ. Code § 

1788.1(c), by falsely telling her she owes a debt that she does not due to the rescission and the 

discharge, id. ¶ 49, 51 (alleging violations of Cal. Civ. Code § 1788.17 and 15 U.S.C. §§ 

1692e(2)(A) and 1692e(10)). Plaintiff also alleges that Old Republic and Shellpoint violated 15 

U.S.C. § 1692f(6)(A) by unconscionably attempting to collect the purported debt by dispossessing 

Plaintiff of the Property without lawful authority, id. ¶ 52. Both Shellpoint and Old Republic argue 

that they do not qualify as “debt collectors” under these statutes—Shellpoint because of the 

activity in which it allegedly took part and Old Republic because of its role as trustee.

The Rosenthal Act defines “debt collector” as “any person who, in the ordinary course of 

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business, regularly, on behalf of himself or herself or others, engages in debt collection.” Cal. Civ. 

Code § 1788.2(c). The Rosenthal Act specifically exempts trustees from liability. “California Civil 

Code § 2924(b) provides a statutory exemption from the Rosenthal Act for a trustee under a deed 

of trust” acting in good faith. In re Landry, 493 B.R. 541, 554 (Bankr. E.D. Cal. 2013). The 

FDCPA defines “debt collector” as any person who uses interstate commerce “in any business the 

principal purpose of which is the collection of any debts, or who regularly collects . . . debts owed 

. . . another.” 15 U.S.C. § 1692a. The FDCPA exempts activity that “is incidental to a bona fide 

fiduciary obligation” or “concerns a debt which was not in default at the time it was obtained by 

such person.” Id. Old Republic and Shellpoint argue they fall within the exceptions and Shellpoint

additionally argues that foreclosure activity does not qualify as “debt collection.”

“[T]he law is clear that foreclosing on a property pursuant to a deed of trust is not a debt 

collection within the meaning of the RFDCPA or the FDCPA.” Gamboa v. Tr. Corps, 2009 WL 

656285, at *4 (N.D. Cal. 2009). Thus, Shellpoint argues, to the extent that Plaintiff’s claim is 

predicated on foreclosure-related activity—“which is the only possible reading of the 

allegations”—the claim fails as a matter of law. Shellpoint Mot. at 13. However, Plaintiff responds 

that Shellpoint and Old Republic are not exempt from these statutes because the DOT is “void 

pursuant to the Rescission” and, therefore, they are not the duly-substituted servicer and trustee, 

respectively. FAC ¶¶ 41, 46. As noted above, any such attempt to plead around the statutory 

exemptions on the basis of the 2007 rescission belongs to the estate. If Plaintiff could allege that 

these Defendants are violating the Rosenthal Act and/or the FDCPA by continuing to attempt to 

foreclose on the Property after it was properly discharged in the 2012 bankruptcy, however, such a 

claim would not belong to the estate.10

Shellpoint additionally argues that this count fails to state a claim because the allegations 

“simply parrot[] the language of the statutes” and fail to provide sufficient factual detail as to the 

 

10 Paragraph 45 of the Complaint, which states that “any debt remaining [was] discharged in 

Plaintiff’s Ch[apter] 7 Bankruptcy and neither [Defendant was] acting therefore in the authorized 

capacity each claims” comes close such an allegation. In further paragraphs, however, Plaintiff 

alleges that the Defendants’ foreclosure activity was unlawful only “because the purported DOT 

was void pursuant to the Rescission.” FAC ¶¶ 41, 46.

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alleged debt collection activity. Shellpoint Mot. at 11. As above, the Court agrees with Shellpoint 

because Plaintiff fails to even identify which Defendant “falsely t[old] Plaintiff she owes a debt 

she does not.” As for the unconscionability allegation, Plaintiff does not identify the “nonjudicial 

action” Old Republic and Shellpoint took “to effect dispossessing Plaintiff of her property,” FAC 

¶ 52, nor does she allege that the Property was sold. See Shellpoint Mot. at 19. Accordingly, the 

Court GRANTS the Motions to Dismiss Plaintiff’s fourth count with leave to amend.

E. Fourth Count: TILA, 15 U.S.C. § 1641 Against All Defendants

Upon the sale, transfer, or assignment of a mortgage loan, 15 U.S.C. § 1641(g)(1) requires 

“the new owner or assignee of the debt [to] notify the borrower in writing of such transfer.” Such 

notification must be made “not later than 30 days after the date on which a mortgage loan is . . . 

assigned.” Id. Plaintiff alleges that MERS assigned the DOT to BONY on November 13, 2009, 

FAC ¶¶ 18, 57, but claims that she never received such notification, id. ¶ 56. As noted above, if 

this count exists, it belongs to the estate. However, MERS, Shellpoint, and Old Republic argue 

that the count does not exist at all with respect to them because the statute does not govern their 

alleges roles with respect to Plaintiff’s purported debt. 

Though alleged against all Defendants, this count can only possibly exist against BONY 

because the statute governs only “the new owner or assignee of the debt.” See MERS Mot. at 12, 

Old Republic Mot. at 7, Shellpoint Mot. at 13-14. Accordingly, the Court GRANTS the Motions 

to Dismiss Plaintiff’s fifth count against MERS, Shellpoint, and Old Republic with leave to 

amend.

BONY argues that Plaintiff’s claim fails against it as well because it does not plead 

detrimental reliance on any allegedly inadequate disclosure—also a necessary element of any 

claim for actual damages based upon an alleged TILA violation. See Gold Country Lenders v.

Smith, 289 F.3d 1155, 1157 (9th Cir. 2002) (“We join with other circuits and hold that in order to 

receive actual damages for a TILA violation, . . . a borrower must establish detrimental 

reliance.”). Plaintiff responds that her allegations that she continued to make payments following 

the rescission shows detrimental reliance. Shellpoint Opp. at 15. However, Plaintiff does not 

allude to these payments in her § 1641 claim, instead alleging economic damages from diminished 

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property value and unmarketable title. FAC ¶ 58. More importantly, Plaintiff does not allege that 

these damages resulted from detrimental reliance on the alleged lack of § 1641(g) disclosures, nor 

is it clear to the Court how they could have. Therefore, the Court agrees with BONY that Plaintiff 

has failed to allege detrimental reliance on this allegedly inadequate disclosure. Accordingly, the 

Court GRANTS BONY’s Motion to Dismiss Plaintiff’s fifth count with leave to amend.

F. Fifth Count: UPA Against All Defendants

As discussed above, Plaintiff alleges that each Defendant violated California’s Unfair 

Practices Act, which prohibits any unfair, unlawful, or deceptive acts, by violating various 

California laws, specified above, through recording the Substitution and Assignment, SOTs, 

NODs, and NOTS, failing to disclose the identity of the real lender, and conspiring to induce the 

public to purchase the Property. 

Defendants argue that, even if Plaintiff has standing to bring this count, it cannot survive 

because she has failed to allege any lost money or property as required by California Business & 

Professions Code § 17204. See MERS Mot. at 14, Shellpoint Mot. at 14-15. Under § 17204, added 

to restrict the flood of private causes of action under § 17200, a plaintiff must make a two-fold 

showing to establish standing: that she suffered a direct injury and lost money or property as a 

result of the alleged unfair competition. See Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 325 

(2011). Shellpoint argues that Plaintiff has failed to make this showing because loan payments and 

related charges or fees cannot suffice as economic injury they constitute the performance of preexisting contractual obligations. See Auerbach v. Great W. Bank, 74 Cal. App. 4th 1172, 1185 

(1999). Plaintiff responds that she additionally alleged diminution in the value of the Property, 

which does suffice under Kwikset.

Having considered the California Supreme Court’s decision in Kwikset, the Court agrees 

with Plaintiff. Kwikset states

There are innumerable ways in which economic injury from unfair competition 

may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a 

transaction less, than he or she otherwise would have; (2) have a present or future 

property interest diminished; (3) be deprived of money or property to which he or 

she has a cognizable claim; or (4) be required to enter into a transaction, costing 

money or property, that would otherwise have been unnecessary.

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Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 323 (2011). The Court finds that Plaintiff need 

not assert loss of her Property under this standard; rather, as she argues, an allegation of 

diminution in its value should suffice to survive a motion to dismiss.

Old Republic additionally argues that this count fails because UPA applies only to business 

“practices,” which the California Supreme Court has held “requires, at a minimum, ongoing 

conduct.” Mangini v. Aerojet-Gen.Corp., 230 Cal. App. 3d 1125, 1156 (1991) (citing State of 

California ex rel. Van de Kamp v. Texaco, Inc., 46 Cal. 3d 1147, 1169-1170 (1988)). “Relief 

under section 17200 is unavailable to remedy past misconduct.” Id. While Plaintiff fails to address 

this argument in her opposition, the Court finds that Plaintiff has alleged that Defendants 

misconduct is ongoing because the allegedly improper instruments remain recorded.

More convincingly, Defendants argue that Plaintiff cannot simply lump all Defendants 

together without identifying which is responsible for her alleged injuries. Old Republic Mot. at 8-

9, Shellpoint Mot. at 14-15. Old Republic argues that, as a matter of law, it cannot be liable for the 

alleged conduct of the other defendants, nor can its liability under the UPA be predicated on 

vicarious liability. Shellpoint argues that Plaintiff must allege which Defendant is responsible for 

which portion of her damages.

Old Republic directs the Court to Emery v. Visa Internat. Serv. Ass'n, 95 Cal. App. 4th 

952, 960 (2002), which explained that “[t]he concept of vicarious liability has no application to 

actions brought under the unfair business practices act.” Emery v. Visa Internat. Serv. Ass'n, 95 

Cal. App. 4th 952, 960 (2002) (quoting People v. Toomey, 157 Cal.App.3d 1, 14 (1984)). Instead, 

“[a] defendant's liability must be based on his personal ‘participation in the unlawful practices’ 

and ‘unbridled control’ over the practices that are found to violate section 17200 or 17500.” Id. 

(quoting Toomey, 157 Cal. App. 3d at 15). Federal pleading standards similarly require a plaintiff 

to allege which defendant is responsible for her injuries. See Fortaleza v. PNC Fin. Services 

Group, Inc., 642 F. Supp. 2d 1012, 1019-20 (N.D. Cal. 2009).

Furthermore, Plaintiff’s UPA claims sound in fraud and therefore the heightened pleading 

standards of Rule 9(b) apply. See Vess v. Ciba–Geigy Corp., 317 F.3d 1097, 1106–08, 1110 (9th 

Cir. 2003); see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1122 (9th Cir. 2009).

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Plaintiff responds that she has specifically identified the conduct of each defendant in ¶ 63 

of the FAC. However, as discussed above, Plaintiff fails to identify which Defendants recorded or 

caused the recording of the documents—the alleged misconduct upon which nearly every claim is 

based. Instead, Plaintiff alleges that Old Republic “itself, and vicariously through or at the 

direction of” Shellpoint and BONY, that Shellpoint “itself or by directing” Old Republic, and that 

BONY “vicariously through” Shellpoint or Old Republic “record[ed] or caus[ed] to be recorded” 

the documents. Similarly, Plaintiff alleges that MERS “record[ed] or caus[ed] to be recorded” the 

Substitution and Assignment. Similarly, with regard to their failure to disclose the identity of the 

lender, Plaintiff alleges only that Old Republic “itself, and vicariously through or at the direction 

of” Shellpoint and BONY “is responsible” for this violation. Plaintiff also alleges that the

Defendants were “in civil conspiracy with” one another to improperly dispose of the Property. In 

light of the vagueness of these allegations, the Court agrees with Defendants that Plaintiff has 

failed to sufficiently identify which Defendant is responsible for which violation and/or injury and 

how. Accordingly, the Court GRANTS the Motions to Dismiss the fifth count with leave to 

amend.

G. Sixth Count: Slander of Title Against All Defendants

“To plead a claim for slander of title, a plaintiff must allege: (1) a publication, (2) which is 

without privilege or justification and thus with malice, express or implied, (3) is false, either 

knowingly so or made without regard to its truthfulness, and (4) causes direct and immediate 

pecuniary loss.” Howard v. Schaniel, 113 Cal. App. 3d 256, 263-64 (1980). Here, Plaintiff alleges 

slander of title based on the recording of the Substitution and Assignment, NODs, SOTs, and 

NOTS and their continued maintenance on the record. FAC ¶¶ 69, 71. Defendants argue that the

recording of such notices is privileged and cannot be the basis of a tort claim unless malice is 

alleged. See Shellpoint Mot. at 16, Old Republic Mot. at 9-10, MERS Mot. at 15-16. 

Under California Civil Code § 2924(d), recording notices of default and trustee sale are 

privileged acts. See Civ. Code §§ 2924(a) and (d). Such acts cannot form the basis of a tort claim, 

including slander of title unless malice is alleged. See Kachlon v. Markowitz, 168 Cal. App. 4th 

316, 333-34 (2008). 

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Plaintiff responds that the slander count rests not on her allegation that the notices were 

recorded, but that they remain recorded. However, “failing to rescind [the notices] is no less 

privileged, flowing as it does from the statutorily protected act of the recording.” Id. at 343. This is 

so even where the defendant has been shown that the debt has been satisfied. Id. (finding failure to 

rescind privileged even after defendant had been shown that the promissory note had been 

satisfied). Accordingly, the Court GRANTS the Motions to Dismiss the sixth count with leave to 

amend.

H. Seventh Count: Quasi-contract/Unjust Enrichment/Restitution Against Old 

Republic and Shellpoint

Plaintiff alleges a claim of “quasi contract/unjust enrichment/restitution” against Old 

Republic and Shellpoint for the $106,862.44 of loan payments she made that she now alleges were 

never due pursuant to the 2007 rescission. FAC ¶ 80. As discussed above, this claim, to the extent 

that it exists, belongs to the estate. However, Old Republic and Shellpoint argue that it does not 

exist at all. Old Republic contends that unjust enrichment is not a separate cause of action. Old 

Republic Mot. at 10-11. Both defendants argue that unjust enrichment is inapplicable here because 

defendants have merely obtained that to which a contract between the parties entitled them. Id; 

Shellpoint Mot. at 16-17.

Old Republic’s first argument that California does not provide a quasi-contract claim for 

relief ignores the split among California courts regarding this question. See Cheung v. Wells Fargo 

Bank, N.A., 987 F. Supp. 2d 972, 979 (N.D. Cal. 2013) (citing Davenport v. Litton Loan 

Servicing, LP, 725 F.Supp.2d 862, 885 (N.D.Cal.2010) (quasi contract can be its own basis for 

relief) and Bernardi v. JPMorgan Chase Bank, N.A., 2012 WL 2343679 (N.D. Cal. June 20, 2012) 

(holding unjust enrichment is not an independent claim for relief)). 

Defendants’ second argument that a quasi-contract claim cannot exist where the parties are 

acting pursuant to a valid express contract is more persuasive. Id. at 979-980; Jones v. Wells 

Fargo Bank, 112 Cal. App. 4th 1527, 1541 (2003) (holding that, where plaintiff alleged no facts to 

show unjust enrichment except for a note and forbearance agreement between the parties, 

defendants would not be unjustly enriched “by receiving contingent interest to which they are 

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legally entitled.”). Plaintiff responds that the contract is not valid pursuant to the rescission. 

Shellpoint Opp. at 18. As discussed above, Plaintiff lacks standing to make this argument and the 

Court therefore does not consider its merits. Accordingly, the Court GRANTS the Motions to 

Dismiss the seventh count with leave to amend. To the extent that Plaintiff wishes to claim the $39 

she made in payments after initiating her bankruptcy action, she may do so upon alleging that the 

payments were not due pursuant to the discharge, rather than the rescission. 

I. Eighth and Ninth Counts: Cancellation of Instruments Against Old Republic, 

Shellpoint, and MERS and Quiet Title Against All Defendants

Plaintiff’s eighth count aims to cancel each of the notes allegedly recorded regarding 

Plaintiff’s purported debt. To state a cancellation claim, a plaintiff must allege that: (1) there is a 

reasonable apprehension that the instrument left standing might cause serious injury; (2) the 

instrument is invalid on its face; (3) the instrument is void or voidable; (4) the instrument was in 

existence or under the defendant’s possession and control when the action was filed; and (5) if the 

interest is voidable rather than void, that plaintiff acted promptly to rescind. Civ. Code §§ 3412, 

3413; Hironymous v. Hiatt, 52 Cal. App. 727, 731 (1921). Plaintiff’s final count seeks to quiet title 

to the Property.

Defendants argue that Plaintiff has failed to state either claim because she has not alleged 

that she has tendered the full amount owed. MERS Mot. at 16-17, Old Republic Mot. at 11. “In 

obtaining rescission or cancellation, the rule is that the complainant is required to do equity, as a 

condition to his obtaining relief, by restoring to the defendant everything of value which the 

plaintiff has received in the transaction.” Fleming v. Kagan, 189 Cal. App. 2d 791, 796 (1961); see 

also Karlsen v. Am. Sav. & Loan Ass’n, 15 Cal. App. 3d 112, 117 (1971). Similarly, “a mortgagor 

of real property cannot, without paying his debt, quiet his title against the mortgagee.” Miller v. 

Provost, 26 Cal. App. 4th 1703, 1707 (1994); see also Kelley v. Mortg. Elec. Registration Sys., 

Inc., 642 F. Supp. 2d 1048, 1057 (N.D. Cal. 2009) While, as discussed above, TILA has extended

the timing of this common law practice for TILA rescission claims, it continues to govern 

common law claims. 

Plaintiff responds that the tender requirement for both claims does not apply here because 

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the purported loan is already void pursuant to the rescission. While Plaintiff is correct that 

California courts have held that the tender rule does not apply when the plaintiff alleges the title 

documents are void, see Cheung, 987 F. Supp. 2d at 980 (citing Fleming v. Kagan, 189 Cal. App.

2d 791 (1961)), this argument belongs to the estate. Accordingly, the Court GRANTS the Motions 

to Dismiss Plaintiff’s eighth and ninth counts with leave to amend.11

IV. ORDER

For the foregoing reasons, IT IS HEREBY ORDERED that Defendants’ Motions to 

Dismiss the FAC are GRANTED, with leave to amend. Any amended complaint shall be filed on 

or before March 7, 2016.

Dated: January 25, 2016

 ______________________________________

BETH LABSON FREEMAN

United States District Judge

 

11 Old Republic makes several additional arguments premised on the contention that Plaintiff can 

only demand quiet title if she alleges that the initial loan was fraudulent. This is a misreading of 

the law, which requires only that the instrument is void or voidable and invalid on its face. 

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