Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_14-cv-01709/USCOURTS-casd-3_14-cv-01709-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332 Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

LUIS CORDERO, 

 Plaintiff,

 vs. 

U.S. BANK, N.A., et al., 

 Defendants.

Case No. 14CV1709-MMA (BLM)

ORDER GRANTING DEFENDANTS’ 

MOTION TO DISMISS 

[Doc. No. 4] 

Plaintiff Luis Cordero has filed a civil complaint alleging various violations of the 

California Homeowner Bill of Rights. Defendants U.S. Bank, N.A. (“U.S. Bank”) and 

Residential Credit Solutions, Inc. (“RCS”) move to dismiss Plaintiff’s complaint in its 

entirety.1

 [Doc. No. 4.] Plaintiff did not file a response in opposition, and Defendants 

filed a Notice of Plaintiff’s Non-Opposition to the motion to dismiss. [Doc. No. 10.] The 

Court determined the matter suitable for decision on the papers and without oral 

argument pursuant to Civil Local Rule 7.1(d)(1). For the reasons set forth below, the 

Court GRANTS Defendants’ motion to dismiss. 

// 

 

1

 As noted in Defendants’ motion, Defendant Sage Point Lender Services, LLC (“Sage”) filed a Declaration of NonMonetary Status prior to the removal of this action to federal court. Plaintiff did not object, therefore, Defendant Sage is not 

required to participate further in the proceeding, but is bound by any court order regarding the deed of trust that is the subject 

of the action. Cal. Civ. Code § 2924l(d) (West). 

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BACKGROUND

 On September 8, 2005, Plaintiff executed a deed of trust against his residence at 

974 Loma View, Chula Vista, CA 91910 as security for a loan of $430,400 from 

Mortageit, Inc. [Cmpl. ¶ ¶ 1, 12.] On February 23, 2009, Plaintiff went into default, a 

Substitution of Trustee was recorded, and a Notice of Default was recorded. [Doc. No. 

4.] A Notice of Trustee’s Sale was recorded on May 27, 2009. [Id.] On October 15, 

2012, an Assignment of Deed of Trust was recorded wherein all beneficial interest in the 

deed of trust was assigned to Defendant U.S. Bank [Cmpl. ¶ 13], and on March 8, 2013 a 

Substitution of Trustee was recorded substituting Defendant Sage, as trustee under the 

deed of trust. [Doc. No. 4.] A Notice of Default and Election to Sell Under Deed of 

Trust was recorded on January 16, 2014, and a Notice of Trustee’s Sale was recorded on 

April 23, 2014. [Id.] 

 Plaintiff filed this action in the Superior Court of California, County of San Diego 

on January 20, 2014 alleging claims for violations of the California Homeowner Bill of 

Rights, codified as California Civil Code Sections 2923.5, 2924.17, 2924.19, 2924(a)(5), 

2923.7, and 2923.6. Defendants removed the case to federal court on July 21, 2014, and 

now move to dismiss Plaintiff’s claims under Federal Rule of Civil Procedure Rule 

12(b)(6). 

LEGAL STANDARD

A. Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6)

 A Rule 12(b)(6) motion to dismiss challenges the legal sufficiency of the 

complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “While a complaint 

attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, 

a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more 

than labels and conclusions, and a formulaic recitation of the elements of a cause of 

action will not do. 

// 

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Factual allegations must be enough to raise a right to relief above the speculative level.” 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations, brackets, and 

citations omitted). 

 In reviewing the motion to dismiss under Rule 12(b)(6), the court must assume the 

truth of all factual allegations, and construe them in the light most favorable to the 

nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). 

However, “conclusory allegations of law and unwarranted inferences are not sufficient to 

defeat a motion to dismiss,” Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th 

Cir. 1998), and a court generally may not look beyond the complaint for additional facts, 

United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Parrino v. FHP, Inc., 146 

F.3d 699, 705–06 (9th Cir. 1998). 

 Where a motion to dismiss is granted, “leave to amend should be granted ‘unless 

the court determines that the allegation of other facts consistent with the challenged 

pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 

957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. ServWell Furniture 

Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). Therefore, where leave to amend would be 

futile, the court may dismiss the claims without leave to amend. See id.

B. Unopposed Motions to Dismiss

 A district court may properly grant an unopposed motion to dismiss pursuant to a 

local rule where the local rule permits, but does not require, the granting of a motion for 

failure to respond. See Ghazali v. Moran, 46 F.3d 52, 53-54 (9th Cir. 1995). Southern 

District of California Civil Local Rule 7.1 provides: “If an opposing party fails to file the 

papers in the manner required by Civil Local Rule 7.1(e)(2), that failure may constitute a 

consent to the granting of a motion or other request for ruling by the court.” S.D. Cal 

Civ. L. R. 7.1(f)(3)(c). “Although there is...a [public] policy favoring disposition on the 

merits, it is the responsibility of the moving party to move towards that disposition at a 

// 

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reasonable pace, and to refrain from dilatory and evasive tactics.” In re Eisen, 31 F.3d 

1447, 1454 (9th Cir. 1994) (affirming grant of motion to dismiss for failure to prosecute); 

see also Ruiz v. Bank of America, N.A., 10-CV-500-MMA(BLM), 2010 WL 8510152 

(S.D. Cal. Sept 30, 2010) (Anello J.) (dismissing action pursuant to local Rule 7.1 for 

plaintiff’s failure to respond to a motion to dismiss); Yueh Chen v. PMC Bancorp, No. 

09-CV-2704-WQH(BLM), 2010 WL 2943506 (S.D. Cal. July 23, 2010) (Hayes, J.) 

(same). 

C. Requests for Judicial Notice 

 Generally, a district court’s review on a 12(b)(6) motion to dismiss is limited to the 

complaint. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). However, “a 

court may take judicial notice of matters of public record,” id. at 689 (internal quotations 

and citations omitted), and 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. 1994), overruled on other 

grounds by Gailbraith v. Cnty. Of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). Judicially 

noticed facts “may be considered on a motion to dismiss.” Mullis v. United States Bankr. 

Ct., 828 F.2d 1385, 1388 (9th Cir. 1987). 

DISCUSSION

I. Unopposed Motion to Dismiss 

Although the motion to dismiss in this case may be granted as unopposed pursuant 

to Civil Local Rule 7.1, the Court finds it appropriate to consider the motion to dismiss 

on the merits. 

II. Requests for Judicial Notice 

Defendants filed a Request for Judicial Notice concurrently with the motion to 

dismiss, requesting the Court take judicial notice of certain public records relating to 

Plaintiff’s complaint. [Doc. No. 5.] The public records include a Deed of Trust [Exh. 1], 

// 

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a Substitution of Trustee [Exh. 2], a Notice of Default and Election to Sell under Deed of 

Trust [Exh. 3], a Notice of Trustee’s Sale [Exh. 4], an Assignment of Deed of Trust [Exh. 

5], a Substitution of Trustee [Exh. 6], a Notice of Default and Election to Sell under Deed 

of Trust [Exh. 7], and a Notice of Trustee’s Sale [Exh. 8].

Neither party questions the authenticity of these public records, therefore to the 

extent that the Court references such documents herein, Defendant’s Request for Judicial 

Notice is GRANTED. 

III. Motion to Dismiss 

 A. First Cause of Action: Violation of Cal. Civ. Code Section 2923.5 

 Defendants move to dismiss Plaintiff’s Section 2923.5 claim. California Civil 

Code Section 2923.5 prohibits a “mortgage servicer, mortgage trustee, beneficiary, or 

authorized agent” from recording a notice of default until the mortgage servicer has 

satisfied certain statutory outreach requirements. 

 Plaintiff alleges Defendants “did not contact [Plaintiff] with any foreclosure 

alternatives and proceeded with filing a Notice of Default...Further, [Defendant Sage] 

made no attempt to contact Plaintiff by phone as required by law.” [Cmpl. ¶ 17.] 

Plaintiff also alleges that “the only telephonic communication [Plaintiff] was able to 

maintain was with Defendant RESIDENTIAL CREDIT SOLUTIONS” and that those 

communications were “both minimal and unhelpful; ultimately providing [Plaintiff] with 

inadequate foreclosure prevention assistance.” [Id.] Plaintiff later contends Defendant 

RCS “could not provide specifics regarding [Plaintiff’s] home loan or foreclosure 

prevention alternatives,” but, “acted with bare minimum standards,” and “did send 

Plaintiff written correspondence.” [Cmpl. ¶ 26.] 

 As a preliminary matter, Section 2923.5 requires a mortgage servicer to “contact 

the borrower in person or by telephone in order to assess the borrower’s financial 

situation and explore options for the borrower to avoid foreclosure.” Cal Civ. Code § 

2923.5(a)(2). Although Defendant RCS is a mortgage servicer [Cmpl. ¶ ¶ 2], Defendant 

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U.S. Bank is not [Cmpl. ¶ ¶ 3], so there is no cause of action against it under this 

Section.2

 

 Furthermore, Plaintiff acknowledges in his complaint Defendant RCS contacted 

Plaintiff by phone and in writing, and that Defendant RCS acted with minimum standards 

in providing Plaintiff with information regarding foreclosure alternatives. Indeed, as 

Defendants note in the motion to dismiss, Plaintiff acknowledges he was permitted to 

submit a loan modification package after the notice of default was recorded, even though 

the application was denied. [Cmpl. ¶ ¶ 15, 19.] There is no requirement Plaintiff be 

satisfied with the results of the mortgage servicer’s contact, as Section 2923.5 merely 

“contemplates contact and some analysis of the borrower’s financial situation.” See 

Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 877 (N.D. Cal. 2010). 

 Plaintiff fails to state a plausible claim against Defendants under Section 2923.5. 

Accordingly, this cause of action is DISMISSED. 

B. Second Cause of Action: Violation of Cal. Civ. Code Section 2924.17 

Plaintiff’s second claim arises under California Civil Code Section 2924.17, which 

requires a mortgage servicer to review “competent and reliable evidence to substantiate 

the borrower’s default and the right to foreclose” before recording a notice of default or 

notice of sale in connection with a foreclosure. Section 2924.17(c) provides an additional 

civil penalty for “multiple and repeated uncorrected” violations of the review 

requirement, but only if the action is brought by a government entity. Defendants move 

to dismiss Plaintiff’s second cause of action on grounds the claim “is not brought by a 

government entity or an administrative proceeding [sic],” and “no sale has occurred to 

date so the claim is not even ripe for economic damages.” [Doc. No. 4.] 

 

2

 Plaintiff’s complaint also fails to include allegations regarding whether Defendants are the types of entities described in 

California Civil Code Section 2924.18(b), as required in Section 2923.5(g). If Defendants are not accurately described under 

Section 2924.18(b), it is likely that Defendants’ conduct would instead be governed under Section 2923.55, which contains 

provisions largely similar to those in Section 2923.5. However, the Court’s analysis would apply with equal force to an 

identical claim brought by Plaintiff under Section 2923.5. 

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Defendants’ argument misses the mark. Although this provision provides an 

additional avenue of relief to specified government entities, it is not a prerequisite to a 

claim under this Section. See Cal. Civ. Code § 2924.12(a)(1) (West) (“If a trustee’s deed 

upon sale has not been recorded, a borrower may bring an action for injunctive relief to 

enjoin a material violation of Section...2924.17”); Major v. Wells Fargo Bank, N.A., 14-

CV-998-LAB-RBB, 2014 WL 4103936 (S.D. Cal. Aug. 18, 2014) (“[Plaintiffs’] claim 

that Wells Fargo did not ensure that they had reviewed all the information required under 

Section 2924.17 is an intelligible allegation, but as Wells Fargo argues it lacks 

materiality. The purpose of the statute is to make sure that lenders determine that they 

have a right to foreclose before initiating foreclosure proceedings.”). 

Nonetheless, Plaintiff’s claim is subject to dismissal. Section 2924.17(b) requires 

a mortgage servicer “ensure that it has reviewed competent and reliable evidence to 

substantiate the borrower’s default and the right to foreclose, including the borrower’s 

loan status and loan information” before filing a notice of default or notice of sale. While 

Plaintiff alleges he was refused a request to reapply for a second loan modification after 

receiving a substantial increase in income [Cmpl. ¶ 19], there is no further allegation the 

notices were inaccurate or incomplete, or that the mortgage servicer failed to review 

“competent and reliable evidence” regarding Plaintiff’s default or the right of Defendants 

to foreclose. These allegations are insufficient to bring an action under Section 2924.17, 

therefore the second cause of action is DISMISSED. 

 C. Third Cause of Action: Violation of Cal. Civ. Code Section 2924.19 

 Pursuant to Section 2924.19(a)(1), “[i]f a trustee’s deed upon sale has not been 

recorded, a borrower may bring an action for injunctive relief to enjoin a material 

violation of Section 2923.5, 2924.17, or 2924.18.” Plaintiff makes no allegations for this 

cause of action, but instead “request[s] damages due to lack of mortgage assistance and 

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pursuit of foreclosure.”3 [Cmpl. ¶ 22.] Defendants move to dismiss on grounds that 

Section 2924.19 only authorizes injunctive relief or monetary damages resulting from 

material violations of Section 2923.5, 2924.17, or 2924.18, and cannot be pled as an 

independent claim. 

 As discussed above, Plaintiff fails to state a plausible claim under Section 2923.5 

or Section 2924.17. Plaintiff also fails to allege a violation of Section 2924.18, which 

prohibits recording a notice of default or notice of sale while a borrower’s first lien loan 

modification application is pending (commonly referred to as “dual tracking”). As such, 

Plaintiff’s derivative third cause of action fails and is DISMISSED. 

D. Fourth Cause of Action: Violation of Cal. Civ. Code Section 2924(a)(5) 

Plaintiff’s fourth claim arises under Section 2924(a)(5), which requires written 

notice be provided to a borrower “whenever a sale is postponed for a period of at least 10 

business days.” Although Plaintiff alleges “no contact was made to confirm the 

postponement of the Trustee sale date” [Cmpl. ¶ 24.], Plaintiff does not allege the sale 

was postponed for at least 10 business days, or prejudice from the lack of formal notice.4

 

Therefore, the fourth cause of action is DISMISSED. 

E. Fifth Cause of Action: Violation of Cal. Civ. Code Section 2923.7 

Plaintiff’s fifth claim is brought pursuant to Section 2923.7, which sets forth: 

“Upon request from a borrower who requests a foreclosure prevention alternative, the 

mortgage servicer shall promptly establish a single point of contact and provide...direct 

means of communication with the single point of contact.” Defendants move to dismiss 

 

3

 Plaintiff’s complaint does not contain a specific request for injunctive relief. The Court notes that within three days of 

filing his complaint in state court, Plaintiff filed an ex parte application requesting a temporary restraining order prohibiting 

Defendants from proceeding with a trustee’s sale or otherwise disposing of Plaintiff’s property. [See Doc. No. 1, Notice of 

Removal, Exh. 4.] The record reflects that the ex parte hearing on Plaintiff’s application for a TRO was vacated by the state 

court judge and not rescheduled prior to the action’s removal by Defendants one month later. Plaintiff did not renew his 

request for injunctive relief in this Court subsequent to removal. 

4 See Pantoja v. Countrywide Home Loans Inc., 640 F. Supp. 2d 1177, 1186 (N.D. Cal. 2009) (notice of default not deficient 

where notice misidentified beneficiary under California Civil Code Section 2924c(b)(1) because plaintiff did not allege 

prejudice); c.f. Lehner v. United States, 685 F.2d 1187, 1190-91 (9th Cir. 1982) (rejecting claim foreclosure was invalid 

because notice of sale was sent to incorrect address). 

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the fifth cause of action because Plaintiff acknowledges he was in contact with the 

mortgage servicer, Defendant RCS, and because other allegations in the complaint appear 

to indicate there was a “single point of contact” as defined in Section 2923.7. Defendants 

also argue Plaintiff has failed to allege prejudice resulting from the purported failure to 

create a single point of contact. 

Plaintiff claims Defendants “did not provide a single point of contact 

knowledgeable of both possible foreclosure prevention alternatives and the specifics of 

Plaintiff’s home loan,” and “Plaintiff was never given the opportunity to contact 

Defendants US. [sic] BANK or SAGE POINT.” [Cmpl. ¶ 26.] Plaintiff also alleges 

Defendant RCS “could not provide specifics regarding his home loan or foreclosure 

prevention alternatives.” [Id.] Section 2923.7 only requires the single point of contact be 

knowledgeable of possible foreclosure prevention alternatives to ensure “the borrower is 

considered for all foreclosure prevention alternatives offered by, or through, the mortgage 

servicer.” Cal. Civ. Code § 2923.7(b) (West). Section 2923.7 does not impose a duty on 

the single point of contact to “describe the foreclosure process, answer questions in a 

timely and effective manner, and [provide] updates on the status of [a borrower’s] home.” 

[Cmpl. ¶ 26]. Plaintiff acknowledges he was in contact with Defendant RCS, and that he 

was able to submit an application for loan modification. [Cmpl. ¶ 26, 28.] Plaintiff’s 

additional allegations are irrelevant, therefore, the fifth cause of action is DISMISSED. 

 F. Sixth Cause of Action: Violation of Cal. Civ. Code Section 2923.6

 Finally, Plaintiff alleges Defendants violated Section 2923.6, which prohibits 

recording a notice of default or notice of sale while a first lien loan modification 

application is pending, and sets forth guidelines regarding denied and subsequent 

applications. 

 Plaintiff alleges he “was not formally declined for loan modification” and 

Defendant RCS “did not provide any means of appeal or other foreclosure prevention 

alternatives with the denial of Plaintiff’s loan modification application.” [Cmpl. ¶ 28.] 

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Defendants argue Plaintiff fails to allege Section 2923.6 applies to Defendants, Plaintiff 

is not entitled protection under the statute, and that Plaintiff failed to allege prejudice 

resulting from the procedural irregularity. 

 Section 2923.6 only applies “to mortgages or deeds of trust described in Section 

2924.15.” Section 2924.15 states Section 2923.6 “shall apply only to first lien mortgages 

or deeds of trust that are secured by owner-occupied residential real property containing 

no more than four dwelling units.” Assuming the property at issue contains no more than 

four dwelling units, Section 2923.6(i) further provides subdivisions (c)-(h) “shall not 

apply to entities described in subdivision (b) of Section 2924.18,” which include entities 

that foreclosed on 175 or fewer residential real properties with four or fewer dwelling 

units in California during the preceding annual reporting period. Plaintiff fails to address 

these requirements in the complaint, therefore there are insufficient allegations to 

establish Section 2923.6 applies. 

 Assuming Section 2923.6 does apply, it does not require Plaintiff be provided 

“means of appeal or other foreclosure prevention alternatives,” but rather it prohibits 

recording “a notice of default or notice of sale...while the complete first lien loan 

modification application is pending,” until “[t]he mortgage servicer makes a written 

determination that the borrower is not eligible for a first lien loan modification, and any 

appeal period...has expired.” Cal. Civ. Code § 2923.6(c) (West). Additionally, although 

Plaintiff alleges he “was not given ample opportunity to reapply once a substantial 

material change in his income occurred,” [Cmpl. ¶ 28], he fails to indicate whether his 

change in income was documented and submitted to the mortgage servicer as required for 

borrowers denied a first lien loan modification. Cal. Civ. Code § 2923.6(g) (West). 

 In sum, Plaintiff’s sixth cause of action lacks sufficient allegations to establish 

grounds to his entitlement of relief. Therefore, it is DISMISSED. 

// 

// 

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CONCLUSION

For the reasons set forth above, the Court DISMISSES Plaintiff’s complaint in its 

entirety without prejudice. The Clerk of Court is instructed to close the case. 

IT IS SO ORDERED.

Dated: September 17, 2014 

 

Hon. Michael M. Anello 

United States District Judge 

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