Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_12-cv-03766/USCOURTS-cand-5_12-cv-03766-6/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

LEONARD TYSON and MARY ANN 

TYSON,

Plaintiffs,

v.

TD SERVICES COMPANY; US BANK 

N.A., INDIVIDUALLY AND AS 

TRUSTEE FOR CHEVY CHASE 

FUNDING LLC MORTGAGE BACKED 

CERTIFICATES SERIES 2005 C TRUST, 

AND AS TRUSTEE FOR CCB LIBOR 

SERIES 2005 C TRUST,

Defendants.

Case No. 5:12-cv-03766-HRL 

ORDER GRANTING T.D. SERVICES 

MOTION TO DISMISS

Re: Dkt. No. 52

Plaintiffs Leonard and Mary Ann Tyson sue for alleged violations of state and federal law 

in connection with the non-judicial foreclosure of certain real property located in Santa Cruz 

County, California. They invoke the court’s federal question jurisdiction, 28 U.S.C. § 1331.

The court previously granted defendant T.D. Services Company’s motion to dismiss the 

First Amended Complaint (FAC). Specifically, the court concluded that the FAC failed to state a 

claim under the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, because 

there were no allegations that T.D. Services engaged in any activities beyond that which is 

statutorily required for non-judicial foreclosure. The court gave plaintiffs leave to amend and 

declined to exercise jurisdiction over plaintiffs’ state law claims unless and until they alleged a 

Case 5:12-cv-03766-HRL Document 64 Filed 09/30/15 Page 1 of 7
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viable federal claim for relief as to T.D. Services.

Pursuant to Fed. R. Civ. P. 12(b)(6), T.D. Services moves to dismiss the claims asserted 

against it in the Second Amended Complaint (SAC), arguing that plaintiffs still fail to state a claim 

for relief. Plaintiffs oppose the motion. The matter was deemed submitted on the papers without 

oral argument. Civ. L.R. 7-1(b). All parties have expressly consented that all proceedings in this 

matter may be heard and finally adjudicated by the undersigned. 28 U.S.C. § 636(c); Fed. R. Civ. 

P. 73. Upon consideration of the moving and responding papers, the court grants the motion to 

dismiss without leave to amend as to plaintiff’s FDCPA claim. This court declines to exercise 

jurisdiction over plaintiffs’ state law claims against T.D. Services, and those claims are dismissed 

without prejudice.

BACKGROUND

The following background facts are drawn from the allegations of the SAC:

The Tysons purchased a residence at 1500 Wharf Road #10 and #20 in Capitola, 

California. They acquired the property at a tax sale and used it primarily as a vacation home. Due 

to domestic difficulties, the property has been Leonard Tyson’s primary residence for the past 

several years.

After acquiring the property at the tax sale, plaintiffs obtained a $1,495,000 loan from 

Chevy Chase Bank FSB. The loan was secured by a first deed of trust on the property. The deed 

of trust was recorded in July 2005 at the Santa Cruz County Recorder’s Office. Plaintiffs say that 

they never received any notice that the loan was assigned to anyone else.

Plaintiffs subsequently defaulted on the loan. They claim that in 2010, T.D. Services, as 

trustee, recorded two Notices of Default (NODs) with the Santa Cruz County recorder and 

provided copies of the notices to plaintiffs. According to the complaint, the NODs stated that the 

loan was in default as to U.S. Bank as Trustee for Chevy Chase Funding LLC Mortgage Backed 

Certificates Series 2005 C Trust and also as Trustee for CCB Libor Series 2005 C Trust. Plaintiffs 

say that in May 2010, T.D. Services proceeded with two non-judicial foreclosure sales as to the 

subject property and then recorded deeds conveying the property to Chevy Chase Funding LLC 

Mortgage Backed Certificates Series 2005 C Trust and CCB Libor Series 2005 C Trust.

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On or about May 17, 2012, T.D. Services issued a Notice of Rescission as to the trustee’s 

deeds upon sale with respect to the property in question. According to that notice, T.D. Services 

was informed “that through inadvertence and oversight, the conducting of the trustee’s sale was 

done, however the chain of beneficial interest was not perfected.”1

Plaintiffs filed the instant lawsuit against both T.D. Services and U.S. Bank, N.A. In 

addition to a claim for declaratory relief (Claim 1), plaintiffs assert three claims against T.D. 

Services for violation of the FDCPA, 15 U.S.C. § 1692 (Claim 2); wrongful foreclosure (Claim 4); 

and violation of California Business and Professions Code § 17200 (Claim 7).

LEGAL STANDARD

A motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) tests 

the legal sufficiency of the claims in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 

2001). Dismissal is appropriate where there is no cognizable legal theory or an absence of 

sufficient facts alleged to support a cognizable legal theory. Id. (citing Balistreri v. Pacifica Police 

Dep’t, 901 F.2d 696, 699 (9th Cir. 1990)). In such a motion, all material allegations in the 

complaint must be taken as true and construed in the light most favorable to the claimant. Id. 

However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements, do not suffice.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Moreover, “the court 

is not required to accept legal conclusions cast in the form of factual allegations if those 

conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness 

Network, 18 F.3d 752, 754-55 (9th Cir. 1994).

Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the 

claim showing that the pleader is entitled to relief.” This means that the “[f]actual allegations 

must be enough to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. 

Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations omitted) 

However, only plausible claims for relief will survive a motion to dismiss. Iqbal, 129 S.Ct. at 

1950. A claim is plausible if its factual content permits the court to draw a reasonable inference 

 

1

Plaintiffs apparently intended to (but did not) append a copy of this document to the SAC. 

Nevertheless, they did append the notice as an exhibit to their FAC. (See Dkt. 6, Ex. B).

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that the defendant is liable for the alleged misconduct. Id. A plaintiff does not have to provide 

detailed facts, but the pleading must include “more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Id. at 1949.

Documents appended to the complaint or which properly are the subject of judicial notice 

may be considered along with the complaint when deciding a Fed. R. Civ. P. 12(b)(6) motion. See

Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990); 

MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).

While leave to amend generally is granted liberally, the court has discretion to dismiss a 

claim without leave to amend if amendment would be futile. Rivera v. BAC Home Loans 

Servicing, L.P., 756 F. Supp.2d 1193, 1997 (N.D. Cal. 2010) (citing Dumas v. Kipp, 90 F.3d 386, 

393 (9th Cir. 1996)).

DISCUSSION

This court previously dismissed plaintiff’s FDCPA claim against T.D. Services because 

plaintiffs’ allegations were insufficient to show that T.D. Services “engaged in any action beyond 

statutorily mandated actions for nonjudicial foreclosure,” which is required to properly plead an 

FDCPA claim in the foreclosure context. See Natividad v. Wells Fargo Bank, N.A., No. 3:12-cv03646 JSC, 2013 WL 2299601 at *9 (N.D. Cal., May 24, 2013).

In their opposition papers, plaintiffs essentially ask this court to reconsider its earlier ruling 

in view of two subsequent developments that plaintiffs claim constitute “[s]ignificant changes in 

the law.” (Opp. at 2). To the extent they seek reconsideration of this court’s decision, plaintiffs 

should have moved for leave to file a motion for reconsideration under Civil Local Rule 7-9, 

rather than arguing the matter in their opposition papers. Nevertheless, for the reasons discussed 

below, this court finds plaintiff’s arguments unpersuasive in any event.

First, plaintiffs argue that the Ninth Circuit’s decision in Corvello v. Wells Fargo Bank, 

N.A. provides “new guidance” on the question whether T.D. Services engaged in debt collection 

under the FDCPA in connection with non-judicial foreclosure activities. 728 F.3d 878 (9th Cir. 

2013). Corvello is inapposite. That case has nothing to do with the FDCPA or non-judicial 

foreclosure. Rather, the issue in Corvello was whether Wells Fargo Bank was contractually 

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required to offer the plaintiffs a permanent loan modification after they complied with the bank’s 

trial period plan. Plaintiff points out that the Corvello court found that Wells Fargo engaged in 

debt collection within the meaning of the Rosenthal Act, which is California’s debt collection 

statute. But, Wells Fargo played a completely different role (loan servicer) than T.D. Services did 

here; and, Wells Fargo did not dispute that it was a debt collector within the meaning of the 

Rosenthal Act. Id. at 885. For purposes of resolving the instant motion, this court finds no 

particular significance in Corvello’s comment, made in passing, that the Rosenthal Act is the state 

version of the FDCPA.

Next plaintiffs ask the court to consider Bulletin 07 issued by the Consumer Financial 

Protection Bureau (CFPB). The bulletin outlines what debt collection conduct violates the DoddFrank Act and says that the obligations discussed in the bulletin are in addition to those imposed 

under the FDCPA. This court, however, finds nothing in the bulletin stating that statutorily 

mandated actions for non-judicial foreclosure constitute debt collection within the meaning of the 

FDCPA.

Moreover, plaintiffs’ SAC still fails to allege that T.D. Services engaged in any action 

beyond that which is statutorily required for non-judicial foreclosure. Nor is there any basis in 

the SAC for plaintiff’s highly conclusory assertions (made only in their opposition papers) that 

T.D. Services unlawfully permitted multiple bidders to engage in “bid chilling.” Plaintiffs have 

already been given an opportunity to amend this claim, and it is not apparent that the identified 

deficiencies can be corrected through a further amendment. Accordingly, T.D. Services’ motion 

to dismiss the FDCPA claim is granted and that claim is dismissed without leave to amend.

Plaintiffs’ sole federal claim against T.D. Services having been dismissed, the court 

declines to exercise supplemental jurisdiction over their state law claims.2 28 U.S.C. § 1367(c). 

 

2 While the SAC continues to assert federal jurisdiction under the Declaratory Judgment Act, 28 

U.S.C. § 2201, as noted in this court’s order on defendant’s prior motion to dismiss, the 

Declaratory Judgment Act does not by itself confer federal subject matter jurisdiction. Nationwide 

Mut. Ins. Co. v. Liberatore, 408 F.3d 1158, 1161 (9th Cir. 2005). See also Vaden v. Discover 

Bank, 559 U.S. 49, 129 S. Ct. 1262, 1278 n.19 2009 (“[T]he Declaratory Judgment Act does not 

enlarge the jurisdiction of the federal courts; it is ‘procedural only.’”).

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The state law claims are dismissed without prejudice.

SO ORDERED.

Dated: September 30, 2015

________________________

HOWARD R. LLOYD

United States Magistrate Judge

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United States District Court

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5:12-cv-03766-HRL Notice has been electronically mailed to:

Alisa Alexandra Givental aag@severson.com, jc@severson.com, tmp@severson.com

Andrew Weiss Noble awn@severson.com, jc@severson.com, lkh@severson.com

Ann Murphy m-m@pacbell.net

Bruce William Dannemeyer bruce@dreyfusslaw.com, roma@dreyfusslaw.com

Gary Weston Sullivan gwsullivanlaw@gmail.com

Glenn Lee Moss m-m@pacbell.net

Joseph W. Guzzetta jwg@severson.com, ipk@severson.com, jc@severson.com

Case 5:12-cv-03766-HRL Document 64 Filed 09/30/15 Page 7 of 7