Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00033/USCOURTS-cand-3_15-cv-00033-4/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332 Diversity-Account Receivable

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

AL DAVIS PETROVICH,

Plaintiff,

v.

OCWEN LOAN SERVICING, LLC, et al.,

Defendants.

Case No. 15-cv-00033-EMC 

ORDER GRANTING DEFENDANTS’

MOTION TO DISMISS FIRST 

AMENDED COMPLAINT

Docket No. 45

Plaintiff Al Davis Petrovich, a pro se litigant, has filed suit against Ocwen Loan Servicing 

and Western Progressive (collectively “Defendants”). Docket No. 44, First Amended Complaint 

(“FAC”). Mr. Petrovich has asserted claims for, inter alia, wrongful foreclosure, slander of title, 

and violation of California Business & Professions Code § 17200. Currently pending before the 

Court is Defendants‟ motion to dismiss. For the reasons stated below, the Court GRANTS

Defendants‟ motion to dismiss. The dismissal is with prejudice. 

I. FACTUAL & PROCEDURAL BACKGROUND

In his first amended complaint, Mr. Petrovich alleges as follows. 

Mr. Petrovich owns certain real property located in Rio Dell, California. FAC ¶ 5. On 

November 14, 2004, Mr. Petrovich obtained a $180,000 mortgage loan from Option One 

Mortgage Corporation. Docket No. 46-1, Defendants‟ Request for Judicial Notice (“D‟s RJN”), 

Ex. 1. 

The loan was secured with real property, as reflected in the deed of trust.1 See id. at 1. 

 

1

The financing or refinancing of real property in California is generally accomplished by the use 

of a deed of trust. Calvo v. HSBC Bank USA, N.A., 199 Cal. App. 4th 118, 125 (2011). A deed of 

trust surpassed the common-law mortgage as the “generally accepted and preferred security device 

in California” during the 19th and early 20th centuries, before the California Legislature 

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(deed of trust). The deed of trust reflects on its face that Mr. Petrovich is the borrower and Option 

One Corporation is the lender. Id. The deed of trust also provides that the trustee for the deed of 

trust is Premier Trust Deed Services. Id. The closing date of the trust agreement is May 12, 2006. 

FAC ¶ 21. 

On November 7, 2011, Sand Canyon Corporation (formerly known as Option One 

Mortgage Corporation), assigned the deed of trust to Deutsche Bank National Trust Company as 

trustee for Soundview Home Loan Trust. D‟s RJN, Ex. 2. 

On June 2, 2014, Leticia N. Arlas, the Assistant Secretary of Sand Canyon Corporation, 

recorded a “Corrective Assignment of Deed of Trust” to correct “the instrument no. on the 

assignment recorded on November 07, 2011 as instrument number 2011-22980-1” because the 

original assignment did not contain the recorded instrument number. D‟s RJN, Ex. 3. Ocwen 

Loan Servicing, servicing agent for Deutsche Bank National Trust Company requested the 

recording. Id.; FAC ¶ 24. 

On June 7, 2014, Western Progressive was substituted as a trustee under a deed of trust. 

D‟s RJN, Ex. 4. After Mr. Petrovich defaulted on his loan, notice of default was recorded on June 

24, 2014, followed by a notice of trustee‟s sale on December 5, 2014. D‟s RJN, Ex. 5, Ex. 6. 

There was no foreclosure sale. 

Plaintiff alleges that his promissory note and deed of trust “were not properly assigned to 

the Trust on or before the “Closing Date” of May 12, 2006” in violation of the Pooling and 

Service Agreement and New York Trust Law. FAC ¶¶ 20-21. Thus, due to the improper 

securitization2of the note and the deed of trust on Mr. Petrovich‟s property, “Defendants are 

 

eliminated most of the legal and economic distinctions between a mortgage that contains a power 

of sale and a deed of trust. 4 Miller & Starr, Cal. Real Estate § 10:1 p. 13 (3d ed. 2011). “[I]n 

California there is little practical difference between mortgages and deeds of trust; they perform 

the same basic function, and . . . a deed of trust is „practically and substantially only a mortgage 

with power of sale.‟ . . . [A]lthough „there are no statutory provisions dictating the form or stating 

the effect of deeds of trust‟, deeds of trust are analogized to mortgages[,] and the same rules are 

generally applied to deeds of trust that are applied to mortgages.” Domarad v. Fisher & Burke, 

Inc., 270 Cal. App. 2d 543, 553 (1969). 

2

In simplified terms, “securitization” is the process where (1) many loans are bundled together 

and transferred to a passive entity, such as a trust, and (2) the trust holds the loans and issues 

investment securities that are repaid from the mortgage payments made on the loans. (Oppenheim 

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without any right to demand payment, declare default, negotiate or foreclose on Plaintiff‟s home.” 

FAC ¶ 17. Plaintiff also alleges that Defendants “execut[ed] and fil[ed] a fabricated corrective 

assignment of deed of trust” to “facilitate a non-judicial foreclosure.” FAC ¶ 22. Based on 

foregoing, Plaintiff asserts the following causes of action: (1) declaratory relief; (2) violation of 15 

U.S.C. § 1692; (3) slander of title; (4) wrongful foreclosure; (5) violation of 12 U.S.C. § 2605; and 

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

Pending before the Court is Defendants‟ motion to dismiss Mr. Petrovich‟s complaint on 

the ground that Mr. Petrovich is not a party to the trust, thus he cannot state a claim based on a 

supposedly defective transfer of his loan to a closed investment trust. Docket No. 53 at 4 

(“Reply”). 

II. REQUESTS FOR JUDICIAL NOTICE

A. Legal Standard

On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), evidence beyond 

the pleading should not be considered unless: (1) the document is attached to or incorporated by 

reference into the complaint; or (2) the fact is subject to judicial notice pursuant to Federal Rule of 

Evidence 201. United States v. Corinthian Colleges, 655 F.3d 984, 999 (9th Cir. 2011). 

Under Federal Rule of Evidence 201, “[a] judicially noticed fact must be one not subject to 

reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the 

trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy 

cannot reasonably be questioned.” Fed. R. Evid. 201. Courts may take judicial notice of 

“undisputed matters of public record,” but generally may not take judicial notice of “disputed facts 

stated in public records.” Lee v. City of Los Angeles, 250 F.3d 668, 690 (9th Cir. 2001) (emphasis 

in original). Facts subject to judicial notice may be considered on a motion to dismiss. Mullis v. 

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

The doctrine of incorporation by reference is distinct from judicial notice. The doctrine 

 

& Trask-Rahn, Deconstructing the Black Magic of Securitized Trusts: How the Mortgage-Backed 

Securitization Process is Hurting the Banking Industry’s Ability to Foreclose and Proving the Best 

Offense for a Foreclosure Defense, 41 Stetson L. Rev. 745, 753-54 (2012). 

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“permits a district court to consider documents „whose contents are alleged in a complaint and 

whose authenticity no party questions, but which are not physically attached to the . . . 

pleadings.‟” In re Silicon Graphics Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999) (quoting Branch 

v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)).

A court “may consider evidence on which the complaint „necessarily relies‟ if: (1) the 

complaint refers to the document; (2) the document is central to the plaintiff‟s claim; and (3) no 

party questions the authenticity of the copy attached to the 12(b)(6) motion. The court may treat 

such a document as „part of the complaint, and thus may assume that its contents are true for 

purposes of a motion to dismiss under Rule 12(b)(6).‟” Marder v. Lopez, 450 F.3d 445, 448 (9th 

Cir. 2006) (internal citations omitted). Such documents do not convert the motion to dismiss into 

a motion for summary judgment. Id. The Ninth Circuit states that “judicial notice is inappropriate 

where the facts to be noticed are irrelevant.” Meador v. Pleasant Valley State Prison, 312 F. 

App‟x 954, 956 (9th Cir. 2009). 

B. Defendants‟ Request

Defendants request judicial notice over six exhibits: (1) A deed of trust recorded on 

December 16, 2005, in the official records of the Humboldt County Recorder‟s Office as 

Document Number 2005-43149-12; (2) Assignment recorded on November 7, 2011, in the official 

records of the Humboldt County Recorder‟s Office as Document Number 2011-22980-1; (3)

Corrective Assignment recorded on June 2, 2014, in the official records of the Humboldt County 

Recorder‟s Office as Document Number 2014-009566-2; (4) a Substitution of Trustee recorded on 

June 17, 2004, in the official records of the Humboldt County Recorder‟s Office as Document 

Number 2014-011191-4; (5) a Notice of Default recorded on June 26, 2014, in the official records 

of the Humboldt County Recorder‟s Office as Document Number 2014-011191-4; (6) a Notice of 

Trustee‟s sale recorded on December 15, 2014, in the Official Records of the Humboldt County 

Recorder‟s Office as Document Number 2014-021257-2. Defendants‟ Request For Judicial 

Notice (“D‟s RJN”), Docket No. 46. The Court GRANTS Defendants‟ request for judicial notice 

of the Exhibits 1-6. In this case, Exhibits 1-6 are judicially noticeable because these documents 

are matters of public record. See Valasquez v. Mortgage Elec. Registration Sys., Inc., No. C 08-

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3818 PJH, 2008 WL 4938162, at *2 (N.D. Cal. Nov. 17, 2008) (taking judicial notice of a deed of 

trust, assignment of deed of trust, notice of default, substitution of trustee, rescission of notice of 

default and election to sell under deed of trust); Grant v. Aurora Loan Services, Inc., 736 

F.Supp.2d 1257, 1264 (C.D. Cal. 2010) (noting that a “[party] provided a reference number for the 

document, showing that it was in fact recorded; this demonstrates that it is a public record”); 

Fimbres v. Chapel Mortgage Corp., No. 09-CV-0886-IEG, 2009 WL 4163332, *3 (S.D. Cal. Nov.

20, 2009) (taking judicial notice of a deed of trust, notice of default, notice of trustee‟s sale, 

assignment of deed of trust, and substitution of trustee as each was a public record); Angulo v. 

Countrywide Home Loans, Inc., No. 1:09-CV-877-AWI-SMS, 2009 WL 3427179, *3 n. 3 (E.D.

Cal. Oct.26, 2009) (“The Deed of Trust and Notice of Default are matters of public record. As 

such, this court may consider these foreclosure documents”); Distor v. U.S. Bank NA, No. C 09-

02086 SI, 2009 WL 3429700, *2 (N.D. Cal. Oct. 22, 2009) (finding that a deed of trust, notice of 

default and election to sell under deed of trust, and notice of trustee‟s sale were matters of public 

record and thus proper subjects of judicial notice). I recommend that the Court take judicial notice 

of the existence of the assignment of deed of trust, but not the veracity of the facts recited therein. 

See Lee, 250 F.3d at 690 (judicial notice of public records is limited to the existence of the 

documents, not the truth of the matters stated in them). Mr. Petrovich objected to Defendants‟ 

Request for Judicial Notice on numerous grounds that don‟t have any legal support. Docket No. 

52, Plaintiff‟s Opposition to Defendants‟ Request for Judicial Notice. For the reasons stated 

above, Plaintiff‟s objections are denied. 

C. Plaintiff‟s Request

Without opposition from Defendants, Plaintiff filed with the Court three exhibits 

referenced in the FAC: (1) Exhibit C: Declaration of Dale M. Sugimoto, filed in In re Wilson, 413 

B.R. 330, 331-32 (Bankr. E.D. La. 2009); (2) Exhibit D: Plaintiff‟s July 17, 2014, letter to OcwenRonald M. Faris, President and CEO; (3) Exhibit E: Plaintiff‟s December 12, 2014 letter to Ocwen 

Loan Servicing, LLC. Docket No. 44. The Court GRANTS Plaintiffs‟ request for judicial notice 

of the Exhibits C-E. In this case, Exhibit C is judicially noticeable because a court may take 

judicial notice of court records in another case. See e.g., United States v. Wilson, 631 F.2d 118 

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(9th Cir. 1980) (stating that a court may take judicial notice of court records in another case). 

Notice can be taken, however, not for the truth of the matters asserted in the litigation, but rather 

to establish the fact of such litigation and related filings. San Luis v. Badgley, 136 F.Supp.2d 

1136, 1146 (E.D. Cal. 2000). As for exhibits D and E, Mr. Petrovich makes reference to these 

letters in Paragraph 26 of the FAC. “A district court may consider material that is „properly 

submitted as part of the complaint‟; or, if the documents are not physically attached to the 

complaint, they may be considered if the documents‟ „authenticity is not contested and the 

plaintiff‟s complaint necessarily relies on them.‟” Helm v. Alderwoods Group, Inc., 696 

F.Supp.2d 1057, 1072 (N.D. Cal. 2009) (quoting Lee, 250 F.3d at 688 (9th Cir. 2001)). Thus, it is 

appropriate to take judicial notice of Plaintiff‟s July 17 and December 12, 2014 letters. Foster 

Poultry Farms v. Alkar-Rapidpak-MP Equip., Inc., 868 F. Supp. 2d 983, 990 (E.D. Cal. 2012).

III. DISCUSSION

A. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss for 

failure to state a claim for relief.

“To survive a motion to dismiss, a complaint must contain sufficient 

factual matter, accepted as true, to „state a claim to relief that is 

plausible on its face.‟” A claim is facially plausible “when the 

plaintiff pleads factual content that allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct 

alleged.” The plausibility standard requires more than the sheer 

possibility or conceivability that a defendant has acted unlawfully. 

“Where a complaint pleads facts that are merely consistent with a 

defendant‟s liability, it stops short of the line between possibility 

and plausibility of entitlement to relief.” Dismissal under Rule 

12(b)(6) is proper only when the complaint either (1) lacks a 

cognizable legal theory or (2) fails to allege sufficient facts to 

support a cognizable legal theory.

Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678-79 

(2009)); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).

B. Wrongful Foreclosure

Mr. Petrovich contends that because the corrective assignment of deed of trust was 

recorded in 2014 after the closing date of May 12, 2006, Defendants are in violation of the pooling 

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and servicing agreement (“PSA”) applicable to the trust. FAC ¶ 65. When a borrower asserts an 

assignment was ineffective, a question often arises about the borrower‟s standing to challenge the 

assignment of the loan (note and the deed of trust) – an assignment to which the borrower is not a 

party. Glaski v. Bank of America, Nat’l Ass’n, 218 Cal. App. 4th 1079 (2013). Defendants 

challenge Mr. Petrovich‟s argument on the ground that Mr. Petrovich has no standing to challenge 

any noncompliance with the PSA. See Docket No. 45 at 3-7 (“MTD”). 

There is a split of authority on the issue as to whether a borrower may challenge the 

securitized trust‟s chain of ownership by alleging that attempts to transfer the deed of trust to the 

securitized trust occurred after the trust‟s closing date. Compare Glaski, 218 Cal. App. 4th at 

1097-98 (finding that plaintiff had sufficiently stated a claim for wrongful foreclosure by alleging 

that the deed of trust was transferred to a securitized trust after the pool‟s closing date) with 

Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal. App. 4th 497, 515 (2013) (finding that the 

plaintiff lacked standing to enforce the investment trust‟s pooling and servicing agreement because 

she was an unrelated third party to the alleged securitization whose obligations under the 

promissory note remained unchanged). 

Mr. Petrovich points out that the California Supreme Court granted review on the issue of 

whether, in a wrongful foreclosure case, a borrower has standing to challenge a defective 

assignment of a note and deed of trust that allegedly rendered the assignment void. Docket No. 51 

at 4-5 (“Opp‟n”); Yvanova v. New Century Mortg.Corp., 331 P.3d 1275 (Cal. 2014). This Court 

need not resolve the issue of standing because Yvanova is a post-foreclosure case. By contrast, 

this case is a pre-foreclosure case. 

In Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149 (2011), the California 

Court of Appeal held that because of the expeditious nature of California‟s non-judicial 

foreclosure process, there is generally no preemptive right of action to determine standing to 

foreclose, or claim for damages for wrongful initiation of foreclosure proceedings absent a 

completed sale. Id. at 1154. See Gieseke v. Bank of Am., N.A., No. 13-CV-04772-JST, 2014 WL 

718463, at *3 (N.D. Cal. Feb. 23, 2014); Tamburri v. Suntrust Mortgage, Inc., No. 11-CV-02899-

JST, 2013 WL 4528447, at *5 (N.D. Cal. Aug. 26, 2013) aff'd sub nom. Tamburri v. SunTrust 

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Mortgage, Inc., 623 F. App‟x 878 (9th Cir. 2015). As this Court recently held in Hills v. 

Mortgage Electronic Registration System, Inc. et al., No 15-cv-05108-EMC:

Here, regardless of the debtor‟s standing to challenge an assignment, 

courts are generally not authorized to intervene in the nonjudicial 

foreclosure process established by California law. As explained in 

Gomes, “the policy behind nonjudicial foreclosure [is] providing a 

quick, inexpensive and efficient remedy.” Id. If the Court were to 

allow [the borrower] to proceed with her PSA challenge, it would 

likely get embroiled in complex trust issues (in deciding the validity 

of the assignment which was made after the PSA closing date, a 

matter which may turn on, e.g., an interpretation of another state‟s 

law on trusts (see, e.g., Glaski, 218 Cal. App. 4th at 1096-97)

(interpreting New York law in finding that transfer to the trust postclosing date was void); this would go against the speedy resolution 

intended by the nonjudicial foreclosure process. 

Second, although Gomes carved out an exception and indicated that 

a plaintiff could bring a preemptive wrongful foreclosure action in 

court (i.e., go outside of the nonjudicial foreclosure process) so long 

as he or she had a “specific factual basis for alleging that the 

foreclosure was not initiated by the correct party,” id. at 1156 

(emphasis in original), [the borrower] has not pled sufficient factual 

allegations to place his case within that exception.

Hills v. Mortgage Electronic Registration System, Inc. et al., No 15-cv-05108-EMC, at * 10 (N.D. 

Cal. Feb. 5, 2016). 

As in Hills, Mr. Petrovich “simply pled a „technicality‟ which [he] contends nullifies the 

intended assignment – i.e., that the transfer of the note and/or deed of trust was not timely made. 

The contention stands in contrast to situations in which the exception to the Gomes bar could 

apply – situations where there were specific facts indicating that the foreclosing party was not the 

real owner of the note.” Id. Compare Frazier, 2011 WL 6303391, at *5 (“Even if Plaintiffs were 

right that their loan was not timely transferred to the trust, that does not mean that the owner of the 

note and deed of trust could not therefore foreclose. That would simply mean that the loan was 

not put into the trust (i.e., the investment vehicle).”) with Tamburri, 2011 WL 6294472, at *10

(stating that Gomes is inapposite because the plaintiff‟s complaint identified a specific factual 

basis that the foreclosing parties had no actual authority to foreclose); Gates v. LLP Mortg., Inc., 

No. CV 13-8737 DSF (PLAx), 2013 U.S. Dist. LEXIS 183638, at *6 (C.D. Cal. Dec. 30, 2013) 

(recognizing the exception in Gomes and indicating that a forged assignment could potentially 

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meet that exception but plaintiff‟s “bald assertion that the assignment was forged, absent other

supporting allegations, is not a specific factual basis”); Bergman v. Bank of Am., N.A., No. C-13-

00741 JCS, 2013 U.S. Dist. LEXIS 153173, at *15, 76 (N.D. Cal. Oct. 23, 2013) (concluding that 

plaintiffs met the Gomes exception because they alleged that the bank had sold the deed of trust 

and therefore a substitution of trustee executed by the bank thereafter was void); Barrionuevo v. 

Chase Bank, N.A., 885 F. Supp. 2d 964, 966-67, 974 (N.D. Cal. 2012) (holding that a claim for 

wrongful foreclosure was adequately pled where the allegation was that Chase could not have 

obtained the deed of trust through a WaMu asset sale because the deed of trust had previously 

been sold by WaMu through a securitization). The kind of technicality alleged here is not

sufficient to justify an exemption from the otherwise applicable bar on judicial intervention into 

the nonjudicial foreclosure process. 

Petrovich also asserts as another basis for his claim that “defendants rely on falsified 

documents” to foreclose and he wants to find “who the true and current creditor/holder in due 

course is of his „Note‟ and „Deed of Trust‟ and what rights, if any, the Defendants have regarding 

Plaintiff‟s „Note‟ and „Deed of Trust.‟” FAC ¶ 52. To support his fraud theory, Mr. Petrovich 

asserts that “Defendants attempted to cover up the lack of proper assignment, transfer, or grant of 

Plaintiff‟s „Deed of Trust‟ by executing and filing a fabricated Corrective Assignment of Deed of 

Trust.” FAC ¶ 22. As explained above, Ocwen requested the recording of the corrective 

assignment because the original assignment did not contain the recorded instrument number.3 D‟s 

RJN, Ex. 3; FAC ¶ 24. Again, Mr. Petrovich alleges a mere technicality; he does not allege a 

fraudulent scheme to foreclose by a party with no financial right or interest. This is insufficient 

“specific factual basis” to warrant an exception to Gomes.

Accordingly, the Court concludes that Mr. Petrovich has failed to allege any cognizable 

claim based on the chain of title. His complaint, therefore, must be dismissed with prejudice. 

 

3

“The purpose of this corrective assignment is to correct the instrument no. on the assignment 

recorded on November 07, 2011 as instrument number 2011-22980-1.” Corrective Assignment of 

Deed of Trust, D‟s RJN, Ex. 3. 

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C. Declaratory Relief

Based on the above allegations, Mr. Petrovich requests a court order “stating that none of 

the Defendants have any right or interest in Plaintiff‟s “Note,” “Deed of Trust” or Property which 

authorizes them to collect Plaintiff‟s payments or enforce the “Note” or “Deed of Trust.” FAC ¶ 

33. Mr. Petrovich acknowledges in both his FAC and opposition to Defendants‟ motion to dismiss 

that he executed both a promissory note in the amount of $180,000, and a deed of trust securing 

his debt on November 14, 2005. D‟s RJN, Ex. 1. Consequently, there is no dispute between the 

parties as to the existence of the secured home loan debt. There is also no dispute that the deed of 

trust contains: (1) an explicit power of sale clause in favor of the beneficiary-creditor; (2) 

provisions setting forth Mr. Petrovich‟s obligations with regard to repaying the loan and 

maintaining the property; and (3) provisions stating the beneficiary-creditor may transfer the 

promissory note at any time without providing notice of the transfer to Mr. Petrovich. D‟s RJN, 

Ex. 1 ¶¶6, 19. 

Mr. Petrovich‟s default on the secured debt triggered the beneficiary-creditor‟s option 

under the deed of trust‟s power of sale clause, and section 2924 of the California Civil Code 

allows the “trustee, mortgagee, or beneficiary, or any of their authorized agents” to record a notice 

of default and election to sell the real property security, thus initiating the nonjudicial foreclosure 

process. Cal. Civ. Code § 2924 (a)(1). Because of the reasons stated above, Mr. Petrovich cannot 

challenge Defendants‟ authority to initiate nonjudicial foreclosure, the Court DISMISSES

Plaintiff‟s cause of action for declaratory relief without leave to amend. 

D. Violation of 15 U.S.C. § 1692

Plaintiff alleges that Defendants violated 15 U.S.C. §1692a(6) by “attempting to collect on 

Plaintiff‟s purported obligation” and thus are debt collectors within the meaning of the Fair Debt 

Collection Practices Act. (“FDCPA”). FAC ¶ 39. 

Title 15, United States Code, §1692a(6) in pertinent part provides: 

The term “debt collector” means any person who uses any 

instrumentality of interstate commerce or the mails in any business 

the principal purpose of which is the collection of any debts, or who 

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regularly collects or attempts to collect, directly or indirectly, debts 

owed or due or asserted to be owed or due another.

15 U.S.C.A. § 1692a(6). 

Mr. Petrovich failed to state a FDCPA claim because he cannot sufficiently allege that 

Ocwen Loan Servicing and Western Progressive are “debt collectors.” To be held liable for 

violation of the FDCPA, a defendant must fall within the FDCPA‟s definition of “debt collector.” 

See Heintz v. Jenkins, 514 U.S. 291, 294 (1995). The term does not include, however, any person 

collecting or attempting to collect any debt owed or due or asserted to be owed or due another to 

the extent such activity . . . concerns a debt which was originated by such person [or] . . . concerns 

a debt which was not in default at the time it was obtained by such person.” 15 U.S.C. § 

1692a(6)(F)(iii) & (iii). Indeed, “[t]he legislative history of section 1692a(6) indicates 

conclusively that a debt collector does not include the consumer‟s creditors, a mortgage servicing 

company, or an assignee of a debt, as long as the debt was not in default at the time it was 

assigned.” Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (citing S.Rep. No. 95-

382, 95th Cong., 1st Sess. 3, reprinted in 1977 U.S. Code Cong. & Ad. News 1695, 1698). Here, 

Defendant Ocwen Loan Servicing was the loan servicer before the mortgage went into default, and 

the FDCPA excludes persons attempting to collect a debt that was not in default at the time it was 

obtained. Id. 

Moreover, “the law is clear that foreclosing on a property pursuant to a deed of trust is not 

a debt collection within the meaning of . . . the FDCA. Gamboa v. Tr. Corps, No. 09-0007 SC, 

2009 WL 656285, at *4 (N.D. Cal. Mar. 12, 2009). Therefore, as the trustee under the deed of 

trust with the power to sell the foreclosed property, Western Progressive cannot have violated the 

FDCA. D‟s RJN, Ex. 4. Accordingly, the Court DISMISSES Mr. Petrovich‟s FDCPA claim with 

prejudice. 

E. Slander of Title

A claim for slander of title arises when a false statement – “which disparages title to 

property and causes pecuniary loss” – is published in an unprivileged publication. Stalberg v. W. 

Title Ins. Co., 27 Cal.App. 4th 925, 929 (1994). Section 47(c)(1) provides a privilege for 

publications that serve as communications between interested parties. Kachlon v. Markowitz, 168 

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Cal.App. 4th 316, 336 (2008). That privilege is qualified by the requirement that the 

communications are not malicious – i.e. neither “motivated by hatred or ill will” nor without 

reasonable basis in fact. Id. (citations omitted). The Section 47(c)(1) privilege applies to 

nonjudicial foreclosure notices. Id. at 339. Mr. Petrovich alleges slander of title based on the 

publication of a notice of default and a notice of sale, both of which are nonjudicial foreclosure 

notices under Section 2924. See Cal. Civ. Code § 2924(a)(1); 2924(a)(4). Such publications are 

privileged absent a showing of malice. Kachlon, 168 Cal. App. 4th at 339. For this purpose, 

malice is defined as actual malice, meaning “„that the publication was motivated by hatred or ill 

will towards the plaintiff or by a showing that the defendant lacked reasonable grounds for belief 

in the truth of the publication and therefore acted in reckless disregard of the plaintiff‟s rights.‟” 

Id. at 336. Here, Plaintiff alleges that Defendants fabricated the mortgage documents and 

recorded the “Notice of Trustee‟s Sale” knowing that they “were not acting on behalf of the 

current and true beneficiary.” FAC ¶¶ 56, 58. For the reasons stated above, Mr. Petrovich‟s 

current pleading fails to allege specific facts establishing a plausible claim of malice, and therefore 

fails to establish that the publications were not privileged; rather, his claims are based on 

technicalities the legal effect of which is in dispute. Furthermore, Mr. Petrovich has not alleged 

sufficient and plausible facts indicating falsity, disparagement of title, or pecuniary loss. Thus, the 

Court DISMISSES this cause of action without leave to amend. 

F. Violation of 12 U.S.C. § 2605

“RESPA [as 12 U.S.C. § 2605 is referred to] requires the servicer of a federally related

mortgage loan to provide a timely written response to inquiries from borrowers regarding the 

servicing of their loans.” Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 665 (9th Cir. 2012) 

(citing 12 U.S.C. § 2605(e)(1)(A), (e)(2)). “If the servicer fails to respond properly to such a 

request, the statute entitles the borrower to recover actual damages and, if there is a „pattern or 

practice of noncompliance,‟ statutory damages of up to $1,000.” Id. (citing 12 U.S.C. § 2605(f)). 

To state a claim under RESPA, a plaintiff must allege that (1) a defendant violated RESPA; and 

(2) that defendant‟s violation caused the plaintiff monetary damages. Hutchinson v. Del. Sav. 

Bank FSB, 410 F. Supp. 2d 374, 383 (D.N.J. 2006) (“alleging a breach of RESPA duties alone 

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does not state a claim under RESPA. Plaintiff must, at a minimum, also allege that the breach 

resulted in actual damages”).

Mr. Petrovich sent two letters to Defendants asking for loan origination documents and 

inquiring about the ownership of the loan. Exs. D, E. Defendants argue that Plaintiff‟s claim fails 

because Mr. Petrovich‟s letters do not qualify as Qualified Written Requests (QWS) under 

RESPA. Reply at 17. Defendants are correct. In his letters, Mr. Petrovich was not asking for 

information relating to the servicing of his loan.4 A QWR must seek information relating to the 

servicing of the loan; a request for loan origination documents is not a QWR. Patacsil v. Wilshire 

Credit Corp., No. 2:09-cv-01660-MCE-KJM, 2010 WL 500466 at *5 (E.D. Cal. Feb.8, 2010) 

(finding that request for information “simply relat[ing] to the origination of the loan, not any 

servicing errors” was not a QWR); Lima v. Am. Home Mortg. Servicing, No. C 09-3561 CW, 2010 

WL 144810 at *3 (N.D. Cal. Jan.11, 2010) (holding that a request for “documents associated with 

the loan‟s origination” is not a QWR under RESPA). Because a request for loan origination 

documents does not, as a matter of law, constitute a QWR, Plaintiff has failed to state a claim for a 

RESPA violation. Therefore, the Court DISMISSES this cause of action without leave to amend. 

G. Violation of the UCL

In his sixth cause of action, Mr. Petrovich alleges that “Defendants have committed and 

continue to commit unlawful, unfair and fraudulent acts in direct violation of Cal. Bus. And Prof. 

Code section 17200, et seq.” FAC ¶ 83. 

California‟s Unfair Competition Law prohibits any “unlawful, unfair or fraudulent 

business act or practice.” Cal. Bus. & Prof. Code § 17200. “Each of these three adjectives 

[unlawful, unfair or fraudulent] captures a separate and distinct theory of liability.” Rubio v. 

Capital One Bank, 613 F.3d 1195, 1203 (9th Cir.2010) (quotation marks omitted). 

Here, Mr. Petrovich did not allege an “unfair” claim. Mr. Petrovich stated in his FAC that 

“described unlawful and fraudulent acts and practices gave Defendants an unfair advantage over 

 

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a viewing of the original Trust Deed and Promissory Note.”; Ex. E: “Please provide the belowrequested information and any additional information or documents you think establishes your 

right to make the demands or to carry out the threats of the Notice.”

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their competitors. Defendants‟ well coordinated scheme of deception has unjustly enriched them 

at the expense of unknowing Californians.” FAC ¶ 89. His fraud claim is based on “recordation 

of false documents;” it fails because there is nothing fraudulent in the “Corrective Assignment of 

Deed of Trust.” FAC ¶ 86.

Under the “unlawful” prong, 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) (citing Cel-Tech Comms., Inc. v. Los 

Angeles Cellular Co., 20 Cal.4th 163, 180 (1999)). “To state a cause of action based on an 

unlawful business act or practice under the UCL, a plaintiff must allege facts sufficient to show a 

violation of some underlying law.” Prakashpalan v. Engstrom, Lipscomb and Lack, 223 

Cal.App.4th 1105, 1133 (Cal. Ct. App. 2014) (“unlawful practices are practices „forbidden by law, 

be it civil or criminal, federal, state, or municipal, statutory, regulatory or court-made.‟”).

Here, Plaintiff alleges that “Defendants‟ Ocwen and Western unlawful conduct violated 15 

U.S.C. § 1692, 12 U.S.C. § 2605 and several other California and federal laws.” FAC ¶ 85. 

Because the Court dismissed all Mr. Petrovich‟s legal claims, Mr. Petrovich cannot state a claim 

for unlawful conduct under the UCL. Thus, the Court DISMISSES this cause of action without 

leave to amend.]

IV. CONCLUSION

For the foregoing reasons, the motion to dismiss is GRANTED with prejudice. 

This order disposes of Docket No. 45. The Clerk shall enter judgment and close the file in 

this case.

IT IS SO ORDERED.

Dated: February 12, 2016

______________________________________

EDWARD M. CHEN

United States District Judge

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