Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-02632/USCOURTS-caed-2_13-cv-02632-3/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332 Diversity-Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JAMES KOURETAS,

Plaintiff,

v.

NATIONSTAR MORTGAGE 

HOLDINGS, INC., et al.,

Defendants.

No. 2:13-cv-02632-MCE-KJN

MEMORANDUM AND ORDER

On December 20, 2013, Plaintiff James Kouretas (“Plaintiff”) filed the operative 

Complaint against Defendants Nationstar Mortgage Holdings, Inc. (“Nationstar”) and 

Bank of America, N.A. (“BofA”) (collectively “Defendants”). Compl., ECF No. 1. Plaintiff 

asserts causes of action for violations of the Homeowner Bill of Rights, Cal. Civ. Code 

§ 2923.6(b), and Elder Abuse, Cal. Welf. & Inst. Code §§ 15600-15675, as well as civil 

Racketeering Influenced and Corrupt Organizations Act (“RICO”) violations, 18 U.S.C.

§§ 1961-1968. BofA filed a Motion to Dismiss for failure to state a claim pursuant to 

Federal Rule of Civil Procedure 12(b)(6).

1

 BofA Mot., Jan. 13, 2014, ECF No. 13. 

Nationstar filed a Motion to Dismiss the following day. Nationstar Mot., Jan. 14, 2014, 

ECF No. 16. 

 1 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless 

otherwise noted.

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Plaintiff filed a timely opposition to these motions. Opp’n, Feb. 19, 2014, ECF No. 22.

For the reasons set forth below, Defendants’ Motions to Dismiss are GRANTED.2

BACKGROUND3

Plaintiff holds title to the property known as 3324 S Street, Sacramento, 

California, 95816. The property was secured by a first deed of trust in favor of Bank of 

America. In November 2013, Nationstar Mortgage Holdings became the loan servicer.

In May 2013, Plaintiff wrote to Bank of America to request a loan modification. A 

Bank of America representative responded, stating that the bank had received his 

request and was transferring the request to a specialist. Plaintiff was told the bank 

would contact Plaintiff within fifteen days. Then, on May 28, 2013, Bank of America 

recorded and served Plaintiff with a notice of trustee’s sale. However, in June 2013, 

Bank of America wrote to Plaintiff, stating that his loan modification request had been 

forwarded to a specialist. Then, a week later, Bank of America sent Plaintiff a Notice of 

Intent to Accelerate, threatening to accelerate repayment of the full amount of the note 

despite the fact that Plaintiff’s loan was being evaluated for a loan modification.

In July 2013, Plaintiff completed and again submitted loan modification papers to 

Bank of America. Bank of America sent a letter stating that Plaintiff was being 

considered for a short sale. Thereafter, Bank of America sent another letter to Plaintiff, 

acknowledging receipt of Plaintiff’s request for a loan modification and stating that the 

request was forwarded to a specialist in the appropriate department. However, on 

August 1, 2013, Bank of America recorded a notice of default. Then, on September 3, 

2013, Bank of America recorded a second notice of default. 

///

 2 Because oral argument would not be of material assistance, the Court ordered these matters 

submitted on the briefs pursuant to E.D. Cal. Local Rule 230(g).

3 The following recitation of facts is taken, at times verbatim, from Plaintiff’s Complaint. ECF 

No. 1.

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Later in September, multiple Bank of America representatives wrote to Plaintiff, stating 

that they would “continue the work [Plaintiff] started” with Plaintiff’s previous points of 

contact at the bank.

Finally, in October 2013, Bank of America informed Plaintiff that they would not 

modify Plaintiff’s loan. Thereafter, Plaintiff’s loan servicing was transferred to Nationstar. 

Nationstar wrote to Plaintiff in November 2013, informing Plaintiff that Nationstar wanted 

to help Plaintiff stay in his home. Nonetheless, in December 2013, Plaintiff received a 

notice of trustee sale, which is scheduled to take place on Monday, December 30, 2013.

STANDARD

On a motion to dismiss for failure to state a claim under Federal Rule of Civil 

Procedure 12(b)(6), all allegations of material fact must be accepted as true and 

construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. 

Co., 80 F.3d 336,337-38 (9th Cir. 1996). Rule 8(a)(2) requires only “a short and plain 

statement of the claim showing that the pleader is entitled to relief” in order to “give the 

defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 

47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require 

detailed factual allegations. However, “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.” Id. (internal citations and 

quotations omitted). A court is not required to accept as true a “legal conclusion 

couched as a factual allegation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) 

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

///

///

///

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

Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. Miller, Federal 

Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must contain 

something more than “a statement of facts that merely creates a suspicion [of] a legally 

cognizable right of action.”)). 

Furthermore, “Rule 8(a)(2) . . . requires a showing, rather than a blanket 

assertion, of entitlement to relief.” Twombly, 550 U.S. at 556 n.3 (internal citations and 

quotations omitted). Thus, “[w]ithout some factual allegation in the complaint, it is hard 

to see how a claimant could satisfy the requirements of providing not only ‘fair notice’ of 

the nature of the claim, but also ‘grounds’ on which the claim rests.” Id. (citing 5 Charles 

Alan Wright & Arthur R. Miller, supra, at § 1202). A pleading must contain “only enough 

facts to state a claim to relief that is plausible on its face.” Id. at 570. If the “plaintiffs . . . 

have not nudged their claims across the line from conceivable to plausible, their 

complaint must be dismissed.” Id. However, “[a] well-pleaded complaint may proceed 

even if it strikes a savvy judge that actual proof of those facts is improbable, and ‘that a 

recovery is very remote and unlikely.’” Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 

232, 236 (1974)).

A court granting a motion to dismiss a complaint must then decide whether to 

grant leave to amend. Leave to amend should be “freely given” where there is no 

“undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 

to the opposing party by virtue of allowance of the amendment, [or] futility of the 

amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 

Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 

be considered when deciding whether to grant leave to amend). Not all of these factors 

merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 

carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 

185 (9th Cir. 1987)). 

///

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Dismissal without leave to amend is proper only if it is clear that “the complaint could not 

be saved by any amendment.” Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d 1048, 

1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1013 (9th Cir. 2005); 

Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) (“Leave need 

not be granted where the amendment of the complaint . . . constitutes an exercise in 

futility . . . .”)).

ANALYSIS

As stated above, Plaintiff brings claims for violations of the Homeowner Bill of 

Rights, California’s Elder Abuse law, and the civil RICO statutes. Each claim is 

addressed in turn, below.4

A. Homeowner Bill of Rights

Plaintiff asserts that he is entitled to relief under the California Homeowner Bill of 

Rights, Cal. Civ. Code § 2923.6(b), because Defendants engaged in “dual tracking” in 

violation of California Civil Code § 2923.6(c). Compl. at 5. Plaintiff also states a cause 

of action against BofA for providing Plaintiff with “no fewer than three points of contact 

while . . . taking affirmative steps to foreclose on [Plaintiff’s] home,” Compl. at 6, in 

violation of California Civil Code § 2923.6(a). 

The California Homeowner Bill of Rights went into effect on January 1, 2013, and 

it offers homeowners greater protection during the foreclosure process. Id. Section 

2923.6(b) states “it is the intent of the legislature that the mortgage servicer offer the 

borrower a loan modification or work out a plan if such a modification or plan is 

consistent with its contractual or other authority.” 

///

///

 4 While Defendants each submitted a Request for Judicial Notice in support of their respective 

motions, ECF Nos. 14, 17, because the Court did not consider the documents contained therein, those 

Requests are DENIED AS MOOT.

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The statute further provides that “if a borrower submits a complete application for 

a first lien loan modification . . . the mortgage servicer . . . shall not record a notice of 

default or notice of sale, or conduct a trustee's sale, while the complete first lien loan 

modification application is pending.” Id. § 2923.6(c). Plaintiff alleges that Defendants 

violated the California Homeowner Bill of Rights by engaging in “dual tracking,” or 

negotiating with Plaintiff for a loan modification while simultaneously advancing the 

foreclose process. 

Importantly, however, the California Homeowner Bill of Rights applies 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. For these purposes, ‘owner 

occupied’ means that the property is the principal residence of the borrower . . . .” Cal. 

Civ. Code. § 2924.15(a). Plaintiff’s Complaint makes no allegations, nor provides any 

evidence, that the property at issue is his principal residence. Rather, Plaintiff states that 

he “holds title to the property.” Compl. at 3. Moreover, Plaintiff does not contend in his 

Opposition that he has sufficiently alleged these two causes of action.

Because Plaintiff has failed to allege that the property at issue is his principal 

residence, Defendants’ motions to dismiss Plaintiff’s first two causes of action are hereby 

GRANTED.

B. Civil RICO Violations

“Under 18 U.S.C. § 1962(c), it is unlawful ‘for any person employed by or 

associated with any enterprise . . . to conduct or participate, directly or indirectly, in the 

conduct of such enterprise's affairs through a pattern of racketeering activity or collection 

of unlawful debt.’ ‘Racketeering activity’ is defined as a number of ‘generically specified 

criminal acts as well as the commission of one of a number of listed predicate offenses.’” 

Dotson v. Metrociti Mortg., CIV. S-10-3484 KJM, 2011 WL 3875997 (E.D. Cal. Aug. 31, 

2011) (quoting Sosa v. DirectTV, Inc., 437 F.3d 923, 939 (9th Cir. 2006)). 

///

///

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Although § 1962 defines a crime, a plaintiff may seek civil remedies for RICO violations if 

he has been “injured in his business or property by reason of a violation of [§] 1962 . . . .” 

18 U.S.C. § 1964(c). 

To state a RICO claim, a plaintiff must allege: (1) conduct; (2) of an enterprise; 

(3) through a pattern; (4) of racketeering activity, establishing that (5) the defendant 

caused injury the plaintiff’s business or property. Sedima, S.P.R.L. v. Imrex Co., 

473 U.S. 479, 496 (1985); Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir.2007) 

(internal quotations omitted). “Enterprise” is defined as “any individual, partnership, 

corporation, association, or other legal entity, and any union or group of individuals 

associated in fact although not a legal entity.” 18 U.S.C. § 1961. Racketeering activity 

includes any act which is indictable under certain provisions of Title 18 of the United 

States Code. See 18 U.S.C. § 1961(1)(b); McAnelly v. PNC Mortg., 2:10-CV-02754-

MCE, 2011 WL 6260537 (E.D. Cal. Dec. 15, 2011). To properly plead a RICO violation 

for civil damages, a plaintiff must therefore show that the defendants, through two or 

more acts constituting a pattern, participated in an activity affecting interstate commerce. 

Sanford v. MemberWorks, Inc., 625 F.3d 550, 557 (9th Cir. 2010).

Here, Plaintiff alleges that “Defendants . . . conspired amongst one another to 

create an enterprise whereby they would utilize their positions of power to ‘service 

transfer’ the loan in order to ‘cleanse’ the violations of the California Homeowner Bill of 

Rights. Specifically, by transferring the note to Nationstar for foreclosure, [BofA] could 

not be held liable for actually foreclosing on the property after engaging in violations of 

the law. For its part, Nationstar could be free to foreclose without being held liable for 

dual-tracking because it ostensibly never engaged in any substantive negotiations with 

Mr. Kouretas.” Compl. at 6-7. Thus, according to Plaintiff, Defendants engaged in a 

pattern of activity which allowed them to “separately and together violate California law 

for the purposes of enriching a third party.” Compl. at 7.

///

///

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There are several problems with this claim. First, as stated above, “[t]he term 

‘racketeering activity’ includes ‘any act indictable under several provisions of Title 18 of 

the United States Code, and includes the predicate acts of mail fraud, wire fraud and 

obstruction of justice.’” Sanford, 625 F.3d at 557. Plaintiff does not allege that 

Defendants engaged in any of the acts that constitute racketeering activity. Violations of 

the Homeowner Bill of Rights are not predicate offenses under RICO. See 18 U.S.C.

§ 1961. 

Moreover, to the extent that Plaintiff attempts to allege that Defendants engaged 

in fraudulent actions, these facts must be pled with the particularity required by Rule 

9(b). Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065-66 (9th Cir. 2004) (citing Alan 

Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1989)) (heightened 

pleading standards of Rule 9(b) apply when RICO predicate acts are acts of fraud). 

Under Rule 9(b)'s requirement, a plaintiff must plead with particularity the time, place, 

and manner of each act of fraud, as well as the role of each defendant in each scheme. 

See Fed. R. Civ. P. 9(b); Sun Savings & Loan Ass'n v. Dierdorff, 825 F.2d 187, 196 (9th 

Cir. 1987).

Even if Plaintiff had sufficiently alleged a RICO violation, she has failed to allege a 

“concrete financial loss” to her business or property. See Oscar v. Univ. Students Coop. 

Ass'n, 965 F.2d 783, 785 (9th Cir.1992) (en banc). “The fifth element has two subparts: 

the plaintiff must show that the injury was proximately caused by the conduct and that he 

has suffered a concrete financial loss.” Myers v. Encore Credit, CIV S-11-1714 KJM, 

2012 WL 4511033 (E.D. Cal. Sept. 30, 2012) (citing Chaset v. Fleer/Skybox Intern., LP, 

300 F.3d 1083, 1086 (9th Cir. 2002). “Congress enacted RICO ‘to combat organized 

crime, not to provide a federal cause of action and treble damages' for personal injuries.” 

Id. (quoting Oscar, 965 F.2d at 785). Here, Plaintiff does not allege any concrete 

financial loss—he does not allege that he has had to pay late fees, fines, or that he has 

actually lost his home. 

///

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His Complaint states only that “as a proximate result of this pattern of racketeering 

activity, all defendants have damaged Mr. Kouretas and his family in an amount 

provable at trial.” Compl. at 7. Thus, Plaintiff fails to show that his property or person 

has been injured. 

As such, Defendants’ Motion to Dismiss Plaintiff’s third cause of action is 

GRANTED.

C. Elder Abuse

Plaintiff alleges only that “Mr. Kouretas is an elderly individual” and 

“Defendants . . . by their actions alleged herein, did wantonly violate California law 

against the physical, emotional, and financial abuse of elders.” Compl. at 7. Nationstar

contends that elder abuse is not a cause of action, and cites to ARA Living CentersPacific, Inc. v. Superior Court, 18 Cal. App. 4th 1556 (1993), Delaney v. Baker, 

20 Cal.4th 23 (1999) and Berkeley v. Dowds, 152 Cal. App. 4th 518 (2007), for this 

proposition. However, Perlin v. Fountain View Management, Inc., 163 Cal. App. 4th 657, 

665-66 (2008) examined ARA Living Berkeley, and Delaney, and rejected those holdings 

as “inconsistent with the California Supreme Court’s dicta” in Covenant Care, Inc. v. 

Superior Court, 32 Cal. 4th 771 (2004), which referred to “Elder Abuse Act causes of 

action,” “an Elder Abuse Act cause of action,” to “Elder Abuse Act claims,” and to “an 

action under the Elder Abuse Act.” Perlin, 163 Cal. App. 4th at 667-66. “Additionally, 

such claims have been recognized by other California appellate courts and numerous 

federal courts.” Rand v. Am. Nat. Ins. Co., C 09-0639 SI, 2009 WL 2252115 (N.D. Cal. 

July 28, 2009) (citing Intrieri v. Superior Court, 117 Cal. App. 4th 72, 82 (2004); Benun v. 

Superior Court, 123 Cal. App. 4th 113, 119 (2004); Wolk v. Green, 516 F. Supp. 2d 

1121, 1133 (N.D. Cal. 2007), Negrete v. Fid. & Guar. Life Ins. Co., 444 F. Supp. 2d 998, 

1002 (C.D. Cal. 2006)); see also Zimmer v. Nawabi, 566 F. Supp. 2d 1025, 1033-34 

(addressing merits of “Financial Elder Abuse Claim”). “Indeed, California Welfare and 

Institutions Code section 15657 itself is entitled, ‘Civil Actions for Abuse of Elderly or 

Dependent Adults.’” Id. at 666. 

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Accordingly, this Court finds that Plaintiff may bring a cause of action for Elder Abuse.

The California Legislature enacted the Elder Abuse Act, Cal. Welf. & Inst. Code 

§§ 15600-15675, “to protect elders by providing enhanced remedies which encourage 

private, civil enforcement of laws against elder abuse and neglect.” Negrete,

444 F. Supp. 2d at 1001. A person is considered an “elder” under the Act if the person 

is sixty-five years of age or older. Cal. Welf. & Inst. Code § 15610.27. Financial elder 

abuse is defined in subsection 15610.30(a), which provides:

“Financial abuse” of an elder or dependent adult occurs when 

a person or entity does any of the following: (1) Takes, 

secretes, appropriates, or retains real or personal property of 

an elder or dependent adult to a wrongful use or with intent to 

defraud, or both. (2) Assists in taking, secreting, 

appropriating, or retaining real or personal property of an 

elder or dependent adult to a wrongful use or with intent to 

defraud, or both. 

Cal. Welf. & Inst. Code § 15610.30(a)(1)-(2). To utilize the Elder Abuse Act's enhanced 

remedies, a plaintiff must prove “by clear and convincing evidence that the defendant 

has been guilty of recklessness, oppression, fraud, or malice in the commission of the 

abuse.” Id. § 15657.5(b).

Here, Plaintiff fails to allege that any person or entity has “take[n], secrete[d], 

appropriate[d], or retaine[d]” his real or personal property. Plaintiff’s bare-bones 

allegation that Defendants “wantonly violate[d] California law against the physical, 

emotional, and financial abuse of elders,” along with the remaining allegations in 

Plaintiff’s complaint, is not sufficient to state a claim upon which relief can be granted 

under the Elder Abuse Act, as there is simply no allegation that Plaintiff has been 

deprived of any real or personal property at all.

Accordingly, Defendants’ Motion to Dismiss Plaintiff’s fourth cause of action is 

hereby GRANTED

///

///

///

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CONCLUSION

For the reasons set forth above, Defendant Nationstar’s Motion to Dismiss, ECF 

No. 16, is GRANTED with leave to amend. Defendant BofA’s Motion to Dismiss, ECF 

No. 13, is likewise GRANTED with leave to amend. 

Plaintiff has twenty (20) days from the date of this Memorandum and Order to file 

an amended complaint. If no amended complaint is filed, all causes of action dismissed 

by this Memorandum and Order will be dismissed with prejudice without further notice to 

the parties.

IT IS SO ORDERED.

Dated: March 12, 2014

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