Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_10-cv-00609/USCOURTS-cand-4_10-cv-00609-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1441 Petition for Removal

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CHARLES A. BONNER,

Plaintiff,

 v.

SELECT PORTFOLIO SERVICING, INC., et

al.,

Defendants. /

No. 10-00609 CW

ORDER GRANTING

DEFENDANTS SELECT

PORTFOLIO

SERVICING, INC.;

TIMOTHY J.

O’BRIEN; JASON H.

MILLER; AND

MATTHEW L.

HOLLINGSWORTH’S

MOTION TO DISMISS

AND DENYING AS

MOOT DEFENDANTS

SELECT PORTFOLIO

SERVICING, INC.;

TIMOTHY J.

O’BRIEN; JASON H.

MILLER; AND

MATTHEW L.

HOLLINGSWORTH’S

SECOND MOTION TO

DISMISS (Docket

Nos. 4 and 19)

Plaintiff Charles A. Bonner brings twenty-one claims against

Defendants Select Portfolio Servicing, Inc.; Timothy J. O’Brien,

Bryan M. Marshall; Jason H. Miller; Matthew L. Hollingsworth;

Encore Credit Corp; and Option One Mortgage Corp. for their alleged

conduct related to a loan he obtained. Defendants Select

Portfolio, O’Brien, Miller and Hollingsworth (collectively, Select

Portfolio) move to dismiss Plaintiff’s complaint. Defendants

Marshall, Encore Credit and Option One Mortgage do not appear to

have been served and have not answered Plaintiff’s complaint. 

Plaintiff opposes the motion. The motion was taken under

submission on the papers. On July 21, 2010, Select Portfolio filed

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1 Select Portfolio requests judicial notice of documents filed

in the official records of the County of Marin. Plaintiff does not

oppose the request. Because the documents contain facts “capable

of accurate and ready determination by resort to sources whose

accuracy cannot reasonably be questioned,” the Court grants Select

Portfolio’s request. Fed. R. Evid. 201(b). 

2

a second motion to dismiss Plaintiff’s complaint. Having

considered all the papers submitted by the parties, the Court

GRANTS Select Portfolio’s first motion and dismisses Plaintiff’s

claims against Select Portfolio, O’Brien, Miller and Hollingsworth. 

The Court grants leave to amend. Because the Court grants Select

Portfolio’s first motion to dismiss, their second motion to

dismiss, which is directed at the same complaint, is DENIED as

moot. 

BACKGROUND

On December 5, 2005, Plaintiff obtained a $900,000 loan from

Defendant Encore Credit for property located at 146-148 Buchanan

Court in Sausalito, California. Select Portfolio’s Request for

Judicial Notice (RJN),1

 Ex. A. The deed of trust associated with

this loan, recorded on December 9, 2005, named Fidelity National

Title Insurance Company as trustee and Mortgage Electronic

Registration Systems, Inc. (MERS) as beneficiary. RJN, Ex. A at 2. 

On January 21, 2009, a Notice of Default and Election To Sell

under Deed of Trust was recorded based on the December, 2005 deed. 

The notice indicated that Plaintiff had defaulted on his payment

obligations and warned that his property could be sold three months

after the date of the notice. RJN, Ex. B at 1. At that time,

Plaintiff was past due in the amount of $38,599.07. RJN, Ex. B at

1. 

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2

 In his complaint, Plaintiff alleges that, as officers of

Select Portfolio, Defendants Miller and Hollingsworth “directed,

authorized, and ratified, the illegal conduct of AM CAL . . . .” 

Compl. ¶¶ 7-8. AM CAL is not named as a Defendant and it is not

clear what role it played in Plaintiff’s loan. 

3

On February 24, 2009, Select Portfolio sought the recording of

a notice of “Corporate Assignment of Deed of Trust,” which

indicated that MERS had assigned its beneficial interest in the

deed of trust to U.S. Bank. RJN, Ex. C. A Notice of Trustee’s

Sale was then recorded on April 22, 2009, stating that Plaintiff’s

property would be sold on May 13, 2009. RJN, Ex. D. U.S. Bank

purchased the property and acquired title to it on June 16, 2009. 

RJN, Ex. E. 

Plaintiff’s complaint contains general allegations concerning

the residential mortgage industry and Select Portfolio. He alleges

that he provided “proof of payment on the deed of trust,” but

Select Portfolio nevertheless “refused to reinstate the title” to

his property. Compl. ¶ 22. He also avers that Select Portfolio

foreclosed on his property, even though it lacked “the right to do

so” and knew that he did not have the “knowledge and means to

contest” the foreclosure. Compl. ¶ 26. He pleads that Select

Portfolio was not in possession of his mortgage note at the time of

foreclosure. According to Plaintiff, Defendants O’Brien, Marshall,

Miller and Hollingsworth are officers of Select Portfolio.2

Against all Defendants, Plaintiff brings twenty-one causes of

action: (1) violations of the Home Ownership Equity Protection Act

(HOEPA); (2) violations of the Real Estate Settlement Procedures

Act (RESPA); (3) violations of the Truth-in-Lending Act (TILA);

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(4) violations of the Fair Credit Reporting Act (FCRA);

(5) fraudulent misrepresentation; (6) breach of fiduciary duty;

(7) unjust enrichment; (8) civil conspiracy; (9) civil RICO; (10) a

request to “set aside illegal trustee sales;” (11) quiet title;

(12) violation of California Business and Professions Code § 17200;

(13) wrongful foreclosure; (14) usury; (15) predatory lending;

(16) unfair debt collection practices; (17) slander of title;

(18) invasion of privacy; (19) “intentional infliction of emotion

distress;” (20) trespass; and (21) conversion.

Plaintiff’s complaint appears similar to the one he filed in

Bonner v. Redwood Mortgage Corporation, No. 10-0479 WHA (N.D.

Cal.). In that case, the court dismissed Plaintiff’s sixteen

claims and required him to seek leave to amend his complaint. 

Bonner, 2010 WL 1267069, at *11. Plaintiff did not do so. 

The complaint also bears some resemblance to that filed in

Jacob v. Aurora Loan Services, No. 10-1789 SC (N.D. Cal.), which

was filed on behalf of that plaintiff by Plaintiff’s law firm. 

LEGAL STANDARD

A complaint must contain a “short and plain statement of the

claim showing that the pleader is entitled to relief.” Fed. R.

Civ. P. 8(a). Dismissal under Rule 12(b)(6) for failure to state a

claim is appropriate only when the complaint does not give the

defendant fair notice of a legally cognizable claim and the grounds

on which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). In considering whether the complaint is sufficient to

state a claim, the court will take all material allegations as true

and construe them in the light most favorable to the plaintiff. NL

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Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

However, this principle is inapplicable to legal conclusions;

“threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements,” are not taken as true. 

Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949-50 (2009)

(citing Twombly, 550 U.S. at 555).

When granting a motion to dismiss, the court is generally

required to grant the plaintiff leave to amend, even if no request

to amend the pleading was made, unless amendment would be futile. 

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

F.2d 242, 246-47 (9th Cir. 1990). In determining whether amendment

would be futile, the court examines whether the complaint could be

amended to cure the defect requiring dismissal “without

contradicting any of the allegations of [the] original complaint.” 

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990). 

Leave to amend should be liberally granted, but an amended

complaint cannot allege facts inconsistent with the challenged

pleading. Id. at 296-97.

DISCUSSION

Plaintiff concedes that his complaint is “general in nature,”

but he nevertheless maintains that it satisfies the requirements of

Federal Rule of Civil Procedure 8. Opp’n at 1. He cites Conley v.

Gibson, 355 U.S. 41 (1957), and other cases that predate the

Supreme Court’s recent clarification of the Rule 8 pleading

standard. 

As noted above, conclusory short and plain statements are not

sufficient to support a plaintiff’s claims on a motion to dismiss. 

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Iqbal, 129 S. Ct. at 1949-50. Plaintiff must offer factual

allegations that, if taken as true, demonstrate his entitlement to

relief. Furthermore, in evaluating his claims, the Court considers

the documents proffered by Select Portfolio, which contain

undisputed facts concerning Plaintiff’s loan and the foreclosure of

his property. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89

(9th Cir. 2001). 

Also, Plaintiff has alleged several fraud-based claims. As

discussed in further detail below, these claims trigger the

heightened pleading requirements of Rule 9(b); short and plain

statements do not suffice. 

I. HOEPA and TILA Claims

Plaintiff asserts that Select Portfolio failed to disclose

information concerning his loan as required by HOEPA and TILA. He

seeks rescission of his loan and statutory damages.

HOEPA and TILA are part of the same statutory scheme and share

the same limitations periods. See, e.g., Runaj v. Wells Fargo

Bank, 667 F. Supp. 2d 1199, 1208 (S.D. Cal. 2009); Rendon v.

Countrywide Home Loans, 2009 WL 3126400, *9 (E.D. Cal.) (“HOEPA is

an amendment of TILA, and therefore is governed by the same

remedial scheme and statutes of limitations as TILA.”) (citing

Kemezis v. Matthew, 2008 WL 2468377, *3 (E.D. Pa.)). Claims for

rescission are subject to a three-year statute of limitations, 15

U.S.C. § 1635(f), whereas those for damages must be brought within

one year from the date loan documents are signed, Meyer v.

Ameriquest Mortgage Co., 342 F.3d 899, 902 (9th Cir. 2003) (citing

15 U.S.C. § 1640(a),(e)). Plaintiff executed his loan on December

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3 Plaintiff’s property has already been sold. Thus, even if

he had brought suit within the limitations period, Plaintiff would

not have a right to rescind under HOEPA or TILA. See 15 U.S.C.

§ 1635(f). 

7

5, 2005. Thus, on their face, his claims for rescission and

damages under HOEPA and TILA are untimely. 

Plaintiff asserts that the limitations periods should be

equitably tolled based on his allegations of fraud. Equitable

tolling cannot apply to Plaintiff’s claim for rescission. Section

“1635(f) is a statute of repose, depriving the courts of subject

matter jurisdiction when a § 1635 claim is brought outside the

three-year limitation period.” Miguel v. Country Funding Corp.,

309 F.3d 1161, 1164 (9th Cir. 2002); see also Beach v. Ocwen

Federal Bank, 523 U.S. 410, 417 (1998). There is “no federal right

to rescind, defensively or otherwise, after the 3-year period of

§ 1635(f) has run.” Beach, 523 U.S. at 419. Thus, the Court lacks

subject matter jurisdiction over Plaintiff’s claim for rescission

and cannot equitably toll the limitations period.3

Although his damages claims are susceptible to equitable

tolling, Plaintiff does not plead facts that entitle him to

application of the doctrine. Plaintiff’s general allegations

concerning “DEFENDANTS and LENDERS,” Compl. ¶¶ 40-42, do not

explain how Plaintiff was prevented from discovering, in the

exercise of reasonable diligence, the information necessary to

bring his damages claims within the one-year limitations period. 

See, e.g., Meyer v. Ameriquest Mortgage Co., 342 F.3d 899, 902 (9th

Cir. 2003); Lingad v. Indymac Fed. Bank, 682 F. Supp. 2d 1142, 1147

(E.D. Cal. 2010) (rejecting equitable tolling at pleading stage

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when “plaintiff fails to allege any facts demonstrating that the

TILA violations alleged could not have been discovered by due

diligence”) (citing Meyer). Equitable tolling is not warranted for

Plaintiff’s damages claims. 

Even if the limitations period were tolled, Plaintiff has not

alleged facts indicating that Select Portfolio is a “creditor” that

could be liable for the claims he brings. See 15 U.S.C. §§ 1605

and 1639. For the purposes of HOEPA and TILA, a “creditor” is a

person “who both (1) regularly extends, whether in connection with

loans, sales of property or services, or otherwise, consumer credit

which is payable by agreement in more than four installments or for

which the payment of a finance charge is or may be required, and

(2) is the person to whom the debt arising from the consumer credit

transaction is initially payable on the face of the evidence of

indebtedness . . . .” Id. § 1602(f); see also 12 C.F.R.

§ 226.2(a)(17)(i). Plaintiff’s loan documents name Defendant

Encore Credit as the lender, not Select Portfolio. Although

assignees of an original creditor could be held liable, Plaintiff

has not alleged facts that suggest Select Portfolio is such an

assignee. See 15 U.S.C. § 1641(d)(1). 

Accordingly, Plaintiff’s claims for rescission under HOEPA and

TILA are dismissed with prejudice because they are untimely. 

Plaintiff’s damages claims under HOEPA and TILA are dismissed with

leave to amend to allege facts that support equitable tolling and

to plead facts that show Select Portfolio is a “creditor” or

qualifying assignee under these statutes. 

II. RESPA Claim 

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4 Plaintiff also pleads that “15 U.S.C. Sec. 1681(s)(2)(b)”

affords him a private right of action. This section does not

exist, and the Court cannot determine the statute to which

Plaintiff intends to refer.

9

Plaintiff asserts a claim under 12 U.S.C. § 2607 against

Select Portfolio, alleging that it “accepted charges for the

rendering of real estate services, which were in fact charges for

other than services actually performed.” Compl. ¶ 72. Claims

under RESPA are subject to a one-year statute of limitations. See

12 U.S.C. § 2614. Although Plaintiff claims that he is entitled to

equitable tolling, this argument fails for the same reason stated

above. Further, Plaintiff has not alleged facts to suggest that

Select Portfolio rendered any “settlement service” for which it

could be held liable. See 12 U.S.C. §§ 2602(3) and 2607. 

Accordingly, Plaintiff’s RESPA claim against Select Portfolio

is dismissed with leave to amend to plead facts that support

equitable tolling and that suggest Select Portfolio offered a

“settlement service” as defined by 12 U.S.C. § 2602(3). 

III. FCRA Claim

Plaintiff appears to bring a claim under 15 U.S.C. § 1681o,4

which provides that any “person who is negligent in failing to

comply with any requirement imposed under this subchapter with

respect to any consumer is liable to that consumer . . . .” 

Plaintiff contends that Select Portfolio “wrongfully, improperly,

and illegally reported negative information” about him “to one or

more Credit Reporting Agencies . . . .” Compl. ¶ 79. However, he

has not plead facts explaining the nature of this information, how

it was negative and how it caused him injury. Nor has he made

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factual allegations to show how Select Portfolio negligently failed

to comply with the FCRA. The Court accordingly dismisses this

claim with leave to amend to plead a factual basis. 

IV. Fraudulent Misrepresentation Claim 

Plaintiff pleads that Select Portfolio failed to disclose

information, which constituted fraud under California law. To

state a claim for fraud, a plaintiff must plead

“‘(a) misrepresentation; (b) knowledge of falsity (or

scienter); (c) intent to defraud, i.e., to induce reliance;

(d) justifiable reliance; and (e) resulting damage.’” In re

Napster, Inc. Copyright Litig., 479 F.3d 1078, 1096 (9th Cir. 2007)

(quoting Small v. Fritz Cos., Inc., 30 Cal. 4th 167, 173 (2003));

see generally Cal. Civ. Code §§ 1709-10. Averments concerning

fraud “shall be stated with particularity.” Fed. R. Civ. Proc.

9(b). The allegations must be “specific enough to give defendants

notice of the particular misconduct which is alleged to constitute

the fraud charged so that they can defend against the charge and

not just deny that they have done anything wrong.” Semegen v.

Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Statements of the

time, place and nature of the alleged fraudulent activities are

sufficient, id. at 735, provided the plaintiff sets forth “what is

false or misleading about a statement, and why it is false.” In re

GlenFed, Inc., Secs. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994). 

Scienter may be averred generally, simply by saying that it

existed. Id. at 1547; see Fed. R. Civ. Proc. 9(b) (“Malice,

intent, knowledge, and other condition of mind of a person may be

averred generally.”). Allegations of fraud based on information

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and belief usually do not satisfy the particularity requirements of

Rule 9(b); however, as to matters peculiarly within the opposing

party’s knowledge, allegations based on information and belief may

satisfy Rule 9(b) if they also state the facts upon which the

belief is founded. Wool v. Tandem Computers, Inc., 818 F.2d 1433,

1439 (9th Cir. 1987).

Plaintiff alleges two instances of fraud against Select

Portfolio. First, he avers that Select Portfolio fraudulently

misrepresented that it would restore title in his name after he

provided proof of payment on the deed of trust. However, he has

not alleged facts concerning how this fraud was perpetrated. He

broadly asserts these allegations against “DEFENDANT SELECT

PORTFOLIO SERVICING and LENDERS,” but does not plead which

employees of Select Portfolio actually effectuated the fraud. 

Compl. ¶ 22. Nor does he allege the time and place of this alleged

fraud. Plaintiff’s general allegations do not satisfy the

requirements of Rule 9(b).

Second, Plaintiff alleges that Select Portfolio failed to

advise him of “any material facts affecting the terms and

conditions of the loans and [his] ability to pay the loan in full.” 

Compl. ¶ 38. However, he has not alleged that Select Portfolio was

even involved in the origination of his loan; as noted above,

Defendant Encore Credit was Plaintiff’s lender. Even if Select

Portfolio was somehow involved, Plaintiff does not identify the

time, place and manner of this alleged fraud. Furthermore, the

documents provided by Select Portfolio suggest that Plaintiff

received information concerning the terms of his loan. See

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generally RJN, Ex. A. Plaintiff does not plead how a fraud was

perpetrated, notwithstanding the disclosures contained in these

documents. 

Plaintiff’s fraudulent misrepresentation claim is therefore

dismissed with leave to amend. Plaintiff must allege facts

identifying the time, place and manner of the alleged fraud. 

Furthermore, to the extent Plaintiff rests his fraud claim on

omissions concerning his loan’s terms, he must alleged that Select

Portfolio was involved in the origination of his loan and plead how

the alleged non-disclosures constituted a fraud, notwithstanding

the information contained in his loan documents. 

V. Claim for Breach of Fiduciary Duty

“A debt is not a trust and there is not a fiduciary relation

between debtor and creditor as such. The same principle should

apply with even greater clarity to the relationship between a bank

and its loan customers.” Price v. Wells Fargo Bank, 213 Cal. App.

3d 465, 476 (1989) (internal quotations and citations omitted). 

Generally, a financial institution does not owe a borrower a duty

of care. Nymark v. Heart Fed. Sav. & Loan Ass’n, 213 Cal. App. 3d

1089, 1095-96 (1991).

Plaintiff argues that Select Portfolio was his fiduciary

because it contracted “to provide mortgage loan services and a loan

program” to him. Compl. ¶ 90. This is not sufficient to create a

fiduciary relationship under California law. Accordingly,

Plaintiff’s breach of fiduciary duty claim is dismissed with leave

to amend to plead facts suggesting the existence of a fiduciary

relationship. 

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VI. Unjust Enrichment

California courts appear to be split as to whether there is an

independent cause of action for unjust enrichment. Baggett v.

Hewlett-Packard Co., 582 F. Supp. 2d 1261, 1270-71 (C.D. Cal. 2007)

(applying California law). One view is that unjust enrichment is

not a cause of action, or even a remedy, but rather a general

principle, underlying various legal doctrines and remedies. 

McBride v. Boughton, 123 Cal. App. 4th 379, 387 (2004). In

McBride, the court construed a “purported” unjust enrichment claim

as a cause of action seeking restitution. Id. There are at least

two potential bases for a cause of action seeking restitution:

(1) an alternative to breach of contract damages when the parties

had a contract which was procured by fraud or is unenforceable for

some reason; and (2) where the defendant obtained a benefit from

the plaintiff by fraud, duress, conversion, or similar conduct and

the plaintiff chooses not to sue in tort but to seek restitution on

a quasi-contract theory. Id. at 388. In the latter case, the law

implies a contract, or quasi-contract, without regard to the

parties’ intent, to avoid unjust enrichment. Id.

Another view is that a cause of action for unjust enrichment

exists and its elements are receipt of a benefit and unjust

retention of the benefit at the expense of another. Lectrodryer v.

SeoulBank, 77 Cal. App. 4th 723, 726 (2000); First Nationwide Sav.

v. Perry, 11 Cal. App. 4th 1657, 1662-63 (1992). 

Plaintiff has failed to state a basis for a restitutionary

remedy. He alleges that he had an “implied contract” with Select

Portfolio “to ensure that [he] understood all fees which would be

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paid . . . and to not charge any fees not related to the settlement

of the loans and without full disclosure . . . .” Compl. ¶ 95. 

However, he has not plead facts to show how such an implied

contract arose. And, as with his RESPA claims, Plaintiff has not

alleged facts that tend to show Select Portfolio was involved in

any settlement activities related to his loan or collected any fees

from him. Accordingly, Plaintiff’s unjust enrichment claim is

dismissed with leave to amend to plead facts supporting a claim

upon which a restitutionary remedy could be based. 

VII. Civil Conspiracy

Civil conspiracy “is not a cause of action, but a legal

doctrine that imposes liability on persons who, although not

actually committing a tort themselves, share with the immediate

tortfeasors a common plan or design in its perpetration.” Applied

Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 510

(1994) (citing Wyatt v. Union Mortg. Co., 24 Cal. 3d 773, 784

(1979)). “Standing alone, a conspiracy does no harm and engenders

no tort liability. It must be activated by the commission of an

actual tort.” Applied Equip. Corp., 7 Cal. 4th at 511. “The

elements of an action for civil conspiracy are (1) formation and

operation of the conspiracy and (2) damage resulting to plaintiff

(3) from a wrongful act done in furtherance of the common design.” 

Rusheen v. Cohen, 37 Cal. 4th 1048, 1062 (2006) (citing Doctors’

Co. v. Superior Court, 49 Cal. 3d 39, 44 (1989))

Here, Plaintiff has not stated a cause of action on which

conspiratorial liability could be based. Even if he had, Plaintiff

has not plead facts to show the formation and operation of a

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conspiracy. Id. Plaintiff’s recitation of the elements of civil

conspiracy is not sufficient to sustain this theory of liability. 

Accordingly, Plaintiff’s civil conspiracy claim is dismissed

with leave to amend to state a claim on which conspiratorial

liability could be based and to plead facts showing the formation

and operation of a conspiracy. 

VIII. Civil RICO Claim

To state a claim for relief in a private RICO action,

Plaintiff must allege four essential elements: (1) a pattern of

racketeering activity, (2) the existence of an enterprise engaged

in or affecting interstate or foreign commerce, (3) a nexus between

the pattern of racketeering activity and the enterprise and (4) an

injury to its business or property by reason of the above. Sedima

S.P.R.L. v. Imrex Co., Inc. et al., 473 U.S. 479 (1985). 

The racketeering activities upon which Plaintiff appears to

rely are the federal offenses of mail fraud and wire fraud. “A

wire fraud violation consists of (1) the formation of a scheme or

artifice to defraud; (2) use of the United States wires or causing

a use of the United States wires in furtherance of the scheme; and

(3) specific intent to deceive or defraud.” Odom v. Microsoft

Corp., 486 F.3d 541, 554 (9th Cir. 2008) (internal quotation marks

omitted); 18 U.S.C. § 1343. The elements of mail fraud differ only

in that they involve the use of the United States mails rather than

wires. See 18 U.S.C. § 1341. All such allegations must be plead

with particularity. Moore v. Kayport Package Express, Inc., 885

F.2d 531, 541 (9th Cir. 1989). 

Plaintiff’s RICO claim fails for several reasons. The claim

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5 Inexplicably, Plaintiff pleads that Select Portfolio is a

person “as defined by ORC Sec. 2923.31(G),” Compl. ¶ 105,

apparently referring to Ohio Rev. Code Ann. § 2923.31(G). 

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rests on his allegations of fraud, which as noted above, are not

sufficiently plead. Indeed, Plaintiff does not identify which

deceptive statements were made by mail or by wire. Further, he

fails to allege a pattern of fraudulent activity. A pattern can be

shown through either closed- or open-ended continuity. Turner v.

Cook, 362 F.3d 1219, 1229 (9th Cir. 2004). To allege closed-ended

continuity, a plaintiff must aver a “series of related predicates”

that extends “over a substantial period of time” and threatens

future criminal conduct. Id. (citing Howard v. Am. Online, Inc.,

208 F.3d 741, 750 (9th Cir. 2000)) (editing marks omitted). To

plead open-ended continuity, a plaintiff “must charge a form of

predicate misconduct that ‘by its nature projects into the future

with a threat of repetition.’” Turner, 362 F.3d at 1229 (quoting

Religious Tech. Ctr. v. Wollersheim, 971 F.2d 364, 366 (9th Cir.

1992)). Plaintiff’s allegations do not support either theory of

continuity. 

Plaintiff recites the remaining elements of a RICO claim,

asserting that Select Portfolio is a RICO person5 and part of a

RICO enterprise. However, the mere recitation of these elements,

as noted above, is not sufficient to state a claim.

Accordingly, Plaintiff’s RICO claim is dismissed with leave to

amend. Plaintiff must adequately allege facts that tend to show a

cognizable pattern of racketeering activity, the existence of an

enterprise, a nexus between the racketeering activity and the

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enterprise and injury. As already noted, any averments of fraud

must be made with particularity. 

IX. Request to Set Aside Illegal Trustee Sale and Claim for

Wrongful Foreclosure

A plaintiff seeking to set aside a foreclosure sale must first

allege tender of the amount of the secured indebtedness. Abdallah

v. United Sav. Bank, 43 Cal. App. 4th 1101, 1109 (1996) (citing

FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal. App. 3d 1018,

1021-22 (1989)); Smith v. Wachovia, 2009 WL 1948829, at *3 (N.D.

Cal.). Without pleading tender or the ability to offer tender, a

plaintiff cannot seek to set aside a foreclosure sale. Karlsen v.

Am. Sav. & Loan Ass’n, 15 Cal. App. 3d 112, 117 (citing Copsey v.

Sacramento Bank, 133 Cal. 659, 662 (1901)); Smith, 2009 WL 1948829,

at *3 (citing Karlsen). 

Although he alleges neither tender nor his ability to offer

tender, Plaintiff argues that “equity demands that [he] be afforded

. . . his day in court.” Opp’n at 2. This unsubstantiated

assertion does not support the exercise of the Court’s equitable

power. Accordingly, Plaintiff’s claims to set aside the trustee

sale and for wrongful foreclosure are dismissed with leave to amend

to plead tender or the ability to offer tender.

X. Quiet Title

To state a claim for quiet title, a plaintiff’s complaint must

contain: (1) a description of the property; (2) the title of the

plaintiff and its basis; (3) the adverse claims to that title;

(4) the date as of which the determination is sought; and (5) a

prayer for relief of quiet title. Cal. Civ. Proc. Code § 761.020. 

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Plaintiff’s property has already been sold and he does not

plead tender or the ability to make tender; thus, he does not

appear to have a colorable claim to the property. See, e.g.,

Kelley v. Mortg. Elec. Registration Sys., 642 F. Supp. 2d 1048,

1057 (N.D. Cal. 2009); Agbabiaka v. HSBC Bank USA Nat’l Ass’n, 2010

WL 1609974, at *7 (N.D. Cal.). He also fails to allege facts

suggesting that Select Portfolio has made an adverse claim to the

property, the title to which appears to be held by U.S. Bank. RJN,

Ex. E. Plaintiff does not even plead the date as of which he seeks

a quiet title determination. 

Accordingly, Plaintiff has not stated an action for quiet

title against Select Portfolio. This claim is dismissed with leave

to amend.

XI. Violations of California Business and Professions Code § 17200

California’s Unfair Competition Law (UCL) prohibits any

“unlawful, unfair or fraudulent business act or practice.” Cal.

Bus. & Prof. Code § 17200. The UCL incorporates other laws and

treats violations of those laws as unlawful business practices

independently actionable under state law. Chabner v. United Omaha

Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). Violation of

almost any federal, state or local law may serve as the basis for a

UCL claim. Saunders v. Superior Court, 27 Cal. App. 4th 832, 838-

39 (1994). In addition, a business practice may be “unfair or

fraudulent in violation of the UCL even if the practice does not

violate any law.” Olszewski v. Scripps Health, 30 Cal. 4th 798,

827 (2003). 

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6

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under the fraud prong of the UCL. However, his complaint clearly

states that he pleads the unfair prong. Compl. ¶ 120. Even if he

plead the fraudulent conduct, as noted above, he fails to plead

such fraud with particularity. 

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Plaintiff pleads the unfair prong of the UCL.6 California

courts appear to disagree on the definition of an unfair business

practice in the context of consumer actions. Morgan v. AT&T

Wireless Svcs., Inc., 177 Cal. App. 4th 1235, 1254 (2009). Some

courts apply the definition set forth by the California Supreme

Court in Cel-Tech Communications, Inc. v. Los Angeles Cellular

Telephone Co., which requires “any finding of unfairness to

competitors under section 17200 be tethered to some legislatively

declared policy or proof of some actual or threatened impact on

competition.” 20 Cal. 4th 163, 186-87 (1999). However, the CelTech court explicitly stated that this test is limited to actions

“by a competitor alleging anticompetitive practices.” Id. at 187

n.12. Other courts employ an alternative definition in consumer

actions, providing that “a practice is unfair if (1) the consumer

injury is substantial, (2) the injury is not outweighed by any

countervailing benefits to consumers or competition, and (3) the

injury is one that consumers themselves could not reasonably have

avoided.” Morgan, 177 Cal. App. 4th at 1254-55 (citation omitted).

Under either standard, Plaintiff has failed to allege unfair

business practices. He has not plead facts to show that consumers

or competition were harmed by Select Portfolio’s actions or that

consumers could not have avoided the harm of which he complains. 

Furthermore, he seeks damages for his UCL claim. See Compl. ¶ 120. 

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Damages are not available under the UCL. Korea Supply Co. v.

Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003) (“A UCL action

is equitable in nature; damages cannot be recovered.”).

Plaintiff’s UCL claim is therefore dismissed with prejudice to

the extent that it seeks damages. Insofar as he seeks restitution,

his UCL claim is dismissed with leave to amend to plead facts to

show that Select Portfolio engaged in an unfair business practice. 

XII. Usury

The California Constitution provides, “No person, association,

copartnership or corporation shall by charging any fee, bonus,

commission, discount or other compensation receive from a borrower

more than the interest authorized by this section upon any loan or

forbearance of any money, goods or things in action.” Cal. Const.

art. XV, § 1. “Under current California law, a loan that charges

an interest rate greater than 10 percent per annum is usurious.” 

321 Henderson Receivables Origination LLC v. Sioteco, 173 Cal. App.

4th 1059, 1076 (2009) (citation omitted). 

“The essential elements of usury are: (1) The transaction must

be a loan or forbearance; (2) the interest to be paid must exceed

the statutory maximum; (3) the loan and interest must be absolutely

repayable by the borrower; and (4) the lender must have a willful

intent to enter into a usurious transaction.” Ghirardo v.

Antonioli, 8 Cal. 4th 791, 798 (1994) (citations omitted).

Plaintiff has not plead facts to suggest that Select Portfolio

had any role in the initial lending transaction or, even if it were

a lender, that it received interest in excess of ten percent. Even

if Plaintiff made such allegations, it does not appear that his

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loan falls within the scope of California’s usury laws. The

prohibition on usurious transactions does not apply to loans made

by real estate brokers. Cal. Civ. Code § 1916.1. 

Accordingly, Plaintiff’s claim for usury is dismissed with

leave to amend to allege that Select Portfolio was a lender in an

unlawful transaction that falls within the scope of California’s

usury laws. 

XIII. Predatory Lending

Plaintiff avers that Select Portfolio engaged in predatory

lending in violation of California Financial Code sections 4970-

4979.3. However, Plaintiff has not alleged facts showing that the

loan he obtained falls within the scope of California’s predatory

lending laws. See Cal. Fin. Code § 4970(b), (d). He also fails to

plead how these laws were violated. Nor has he alleged facts to

show that Select Portfolio, which was not his original lender,

could be held liable for predatory lending. See Cal. Fin. Code

§ 4979.8 (prohibiting application of predatory lending laws “on an

assignee that is a holder in due course”). Accordingly,

Plaintiff’s predatory lending claim is dismissed with leave to

amend to allege facts showing the existence of predatory lending

and that Select Portfolio is an entity that could be held liable

under these laws. 

XIV. Claim for Unfair Debt Collection

Plaintiff pleads that Select Portfolio violated the federal

Fair Debt Collections Practice Act (FDCPA), 15 U.S.C. §§ 1692, et

seq.; California’s Rosenthal Fair Debt Collection Practices Act

(RFDCPA); and RESPA. Plaintiff did not respond to Select

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Portfolio’s argument for dismissal of this claim to the extent it

rests on RFDCPA and RESPA. Accordingly, the Court dismisses this

claim with prejudice insofar as it is based on these two statutes. 

Plaintiff has not alleged facts showing that Select Portfolio

is a “debt collector” subject to the FDCPA. See generally 15

U.S.C. § 1692a(6). Further, he has not alleged how Select

Portfolio violated the FDCPA. He contends that Select Portfolio

“made false promises to plaintiff” and failed to communicate with

him in good faith, but he does not make factual allegations in

support of these broad vague claims. Opp’n at 10. 

Accordingly, Plaintiff’s claim for unfair debt collection,

insofar it is based on the FDCPA, is dismissed with leave to amend

to plead facts indicating that Select Portfolio is a “debt

collector” that violated the FDCPA. To the extent that this claim

rests on violations of RFDCPA and RESPA, it is dismissed with

prejudice. 

XV. Claim for Slander of Title

Plaintiff alleges that Select Portfolio made “false and

malicious written and/or spoken public statements disparaging his

title” to the Sausalito property. Compl. ¶ 138. Although not

explicitly stated, the statements of which Plaintiff complains

appear to be the publicly recorded notices concerning the

foreclosure sale.

Slander of title is “a tortious injury to property resulting

from unprivileged, false, malicious publication of disparaging

statements regarding the title to property owned by plaintiff, to

plaintiff's damage.” Southcott v. Pioneer Title Co., 203 Cal. App.

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2d 673, 676 (1962) (citations omitted). 

Plaintiff’s slander of title claim fails because notices filed

pursuant to a non-judicial foreclosure action constitute privileged

communications. Cal. Civ. Code § 2924(d). Plaintiff maintains

that the notices were not privileged if “the foreclosure process

was achieved through fraud or as the result of fraudulent

misrepresentation . . . .” Opp’n at 10. However, as already

noted, Plaintiff has not adequately plead any fraudulent conduct. 

Thus, there is no reason to believe that the foreclosure notices

were not privileged. 

Accordingly, Plaintiff’s slander of title claim is dismissed. 

Plaintiff is granted leave to amend to plead facts showing that

Select Portfolio disseminated unprivileged, false and malicious

communications. 

XVI. Claim for Invasion of Privacy

Plaintiff alleges that Defendants “have engaged in a pattern

and practice of misrepresenting themselves as Plaintiff to First

Party Lien Holders and making payments on said First Party Liens in

Plaintiff’s name, fraudulently representing that they were

Plaintiff.” Compl. ¶ 140. However, in his opposition, Plaintiff

maintains that these facts were alleged in error and that they

“were mistakenly included from a different complaint.” Opp’n at

11. Plaintiff proffered a similar excuse in his opposition to the

defendants’ motion to dismiss in the Redwood Mortgage Corporation

action. Case No. 10-0479 WHA, Docket No. 18 at 9-10.

Because Plaintiff concedes that he has not properly plead his

invasion of privacy claim, the Court dismisses it with leave to

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amend. 

XVII. Claim for Intentional Infliction of Emotional Distress

A claim of intentional infliction of emotional distress

requires a plaintiff to plead: “(1) extreme and outrageous conduct

by the defendant with the intention of causing, or reckless

disregard of the probability of causing, emotional distress;

(2) the plaintiff’s suffering severe or extreme emotional distress;

and (3) actual and proximate causation of the emotional distress by

the defendant's outrageous conduct.” Christensen v. Superior

Court, 54 Cal. 3d 868, 903 (1991). 

Plaintiff pleads that Select Portfolio committed “extreme and

outrageous conduct” by, among other things, violating the laws

discussed above, committing fraud, breaching fiduciary duties and

invading his privacy. However, as already discussed, he has not

plead sufficient facts showing that Select Portfolio committed any

of these acts. Without sufficiently pleading “extreme and

outrageous conduct,” Plaintiff’s claim for intentional infliction

of emotional distress fails. 

Accordingly, Plaintiff’s claim for intentional infliction of

emotional distress is dismissed with leave to amend. 

XVIII. Claims for Trespass and Conversion

“Trespass is an unlawful interference with possession of

property.” Girard v. Ball, 125 Cal. App. 3d 772, 788 (1981). 

Under California law, a claim for conversion requires a plaintiff

to allege (1) “ownership or right to possession of property;” (2) a

defendant’s wrongful act toward the property, causing interference

with the plaintiff’s possession; and (3) damage to the plaintiff. 

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PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil &

Shapiro, LLP, 150 Cal. App. 4th 384, 394 (2007).

Plaintiff’s trespass and conversion claims against Select

Portfolio appear to arise from its participation in the nonjudicial foreclosure process. Opp’n at 12. However, the

foreclosure proceeded pursuant to rights granted under the deed of

trust. See, e.g., RJN, Ex. A § 9. Plaintiff has not plead any

facts to show that this process was unlawful. 

Accordingly, Plaintiff’s claims for trespass and conversion

are dismissed with leave to amend to plead facts showing an

unlawful interference with his property rights. 

CONCLUSION

For the foregoing reasons, Select Portfolio’s Motion to

Dismiss is GRANTED. (Docket No. 4.) Plaintiffs’ claims against

Select Portfolio, O’Brien, Miller and Hollingsworth are dismissed

as follows:

1. Plaintiff’s claims for rescission under HOEPA and TILA

are dismissed for lack of subject matter jurisdiction. 

His claim for damages under these statutes are dismissed

with leave to amend. Plaintiff must allege facts that

support equitable tolling of the one-year statute of

limitations and that show Select Portfolio is a

“creditor” or qualifying assignee that could be held

liable under HOEPA and TILA. 

2. Plaintiff’s RESPA claim is dismissed with leave to amend

to plead facts that support equitable tolling of the oneyear statute of limitations and that show Select

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Portfolio rendered a “settlement service” as defined by

12 U.S.C. § 2602(3).

3. Plaintiff’s FCRA claim is dismissed with leave to amend

because he fails to plead a factual basis. Plaintiff

must allege facts showing how Select Portfolio

negligently violated FCRA.

4. Plaintiff’s fraudulent misrepresentation claim is

dismissed with leave to amend because he fails to satisfy

the heightened pleading requirements of Rule 9(b). 

Plaintiff must plead fraud with sufficient specificity.

5. Plaintiff’s claim for breach of fiduciary duty is

dismissed with leave to amend to plead facts showing the

existence of a fiduciary relationship and a breach

thereof. 

6. Plaintiff’s claim for unjust enrichment is dismissed with

leave to amend to plead facts that would warrant the

award of a restitutionary remedy. 

7. Plaintiff’s civil conspiracy charge is dismissed with

leave to amend to plead a tort on which conspiratorial

liability could be based and to plead facts showing the

formation and operation of a conspiracy. 

8. Plaintiff’s civil RICO claim is dismissed with leave to

amend to plead mail and wire fraud with particularity and

to allege facts showing a pattern of racketeering

activity, the existence of an enterprise, a nexus between

the pattern of racketeering activity and the enterprise

and an injury to Plaintiff arising from the racketeering

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conduct.

9. Plaintiff’s claims to “set aside the illegal trustee

sales” and wrongful foreclosure are dismissed with leave

to amend. Plaintiff must plead tender or his ability to

offer tender. 

10. Plaintiff’s quiet title action is dismissed with leave to

amend to plead a colorable claim to the Sausalito

property, an adverse claim by Select Portfolio and a date

as of which he seeks a quiet title determination.

11. Plaintiff’s UCL claim, to the extent he seeks damages, is

dismissed with prejudice; damages are not available under

the UCL. Insofar as he seeks restitution, Plaintiff’s

UCL claim is dismissed with leave to amend. If he

intends to plead the unfair prong, he must adequately

allege harm to competition or a harm to consumers that

they could not avoid. If he intends to plead under the

fraud prong, he must plead fraudulent conduct with

particularity. 

12. Plaintiff’s “usury” claim is dismissed with leave to

amend. Plaintiff must plead that Select Portfolio was a

lender involved in an unlawful transaction that falls

within the scope California’s usury laws. 

13. Plaintiff’s claim for predatory lending is dismissed with

leave to amend to allege facts indicating that Select

Portfolio is an entity that could be held liable for

predatory lending and that it engaged in such unlawful

practices. 

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14. Plaintiff’s claim for unfair debt collection, to the

extent that it is based on the RFDCPA and RESPA, is

dismissed with prejudice; Plaintiff did not respond to

Select Portfolio’s argument addressing these statutes. 

Insofar as this claim rests on the FDCPA, it is dismissed

with leave to amend. Plaintiff must plead facts that

show Select Portfolio is a “debt collector” that engaged

in conduct that violated the FDCPA. 

15. Plaintiff’s claim for slander of title is dismissed with

leave to amend. Plaintiff must allege unprivileged,

false and malicious communications that caused him

damage. 

16. Plaintiff’s claim for invasion of privacy is dismissed

with leave to amend. 

17. Plaintiff’s claim for intentional infliction of emotional

distress is dismissed with leave to amend to plead facts

that show Select Portfolio engaged in extreme and

outrageous conduct. 

18. Plaintiff’s claims for trespass and conversion are

dismissed with leave to amend. Plaintiff must plead

facts that Select Portfolio unlawfully interfered with

his property. 

Plaintiff is granted leave to amend so long as he can cure the

abovementioned defects by truthfully alleging facts that are not

inconsistent with those contained in his current complaint. If he

can do so, Plaintiff may file an amended complaint within fourteen

days of the date of this Order. In any amended complaint,

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Plaintiff must plead against which Defendants he brings each cause

of action and what each Defendant did to support relief under each

respective cause of action. Defendants may file a motion to

dismiss three weeks thereafter, with Plaintiff’s opposition due two

weeks following and a reply, if any, due one week after that. 

Defendants’ motion will be taken under submission on the papers. 

As noted above, Plaintiff filed a similar pleading in the

Bonner v. Redwood Mortgage Corporation action, which was dismissed

for reasons similar to those addressed by this Court. Thus,

Plaintiff is on ample notice that his pleadings are not sufficient

to state the claims he brings. Plaintiff, who is apparently an

attorney licensed to practice in California, is reminded of his

obligations under Federal Rule of Civil Procedure 11. In

particular, he must abide by the prohibition on filing pleadings

that are “presented for any improper purpose, such as to harass,

cause unnecessary delay, or needlessly increase the cost of

litigation.” Fed. R. Civ. 11(b)(1). If he files an amended

complaint, Plaintiff’s failure to make a good faith effort to

comply with Rule 11 will result in the imposition of sanctions and

a referral to the State Bar of California. 

Within three days of the date of this Order, Plaintiff must

provide proof that he has served Defendants Marshall, Encore Credit

Corp. and Option One Mortgage Corp. If he fails to provide such

proof, Plaintiff’s claims against these Defendants shall be

dismissed without prejudice. If Plaintiff has not served these

Defendants and still wishes to do so, he may, within three days of

the date of this Order, file a motion for an extension of time to

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serve these Defendants. Fed. R. Civ. P. 4(m). Leave will be

granted only if Plaintiff establishes good cause for his failure to

serve. 

Select Portfolio’s second motion to dismiss Plaintiff’s

complaint is DENIED as moot. (Docket No. 19.) The case management

conference scheduled for August 3, 2010 is vacated. Unless this

case has been dismissed, a case management conference will be held

on October 26, 2010 at 2:00 p.m.

IT IS SO ORDERED.

Dated: July 26, 2010 

CLAUDIA WILKEN

United States District Judge

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