Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00821/USCOURTS-casd-3_11-cv-00821-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1444 Petition for Removal- Foreclosure

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

YAO ZHAO,

Plaintiff,

CASE NO. 11cv821-MMA (CAB)

vs. ORDER RE: DEFENDANTS’

MOTION FOR JUDGMENT ON

THE PLEADINGS

[Doc. No. 26]

OCWEN LOAN SERVICING LLC, et al.,

Defendant.

This matter is before the Court on Defendants Ocwen Loan Servicing LLC, et al’s [Doc. No.

26] motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). On

August 19, 2011, the Court issued a [Doc. No. 40] tentative ruling granting in part and denying in

part Defendants’ motion. On August 22, 2011, the Court held a hearing on the motion. 

Having reviewed the submissions of the parties and considered the arguments of counsel, the

Court AFFIRMS its tentative ruling for reasons stated on the record during the hearing, and in

accordance therewith:

1. The Court DENIES Defendants’ motion for judgment on Plaintiff’s fraud claim

against Defendant Ocwen. The Court finds that the claim is not moot, and has been pleaded

sufficiently under Federal Rule of Civil Procedure 9(b). The Court notes with respect to

Defendants’ argument that Plaintiff fails to plead the misrepresentation of a “past or existing” fact,

such allegations are not required in order to state a plausible fraud claim. The elements of fraud are:

(1) the defendant misrepresents material facts; (2) with knowledge of the falsity of the

Case 3:11-cv-00821-MMA-KSC Document 34 Filed 08/24/11 Page 1 of 3
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representations or the duty of disclosure; (3) with intent to defraud or induce reliance; (4) which

induces justifiable reliance by the plaintiff; (5) to his or her detriment. Hahn v. Mirda, 147 Cal. App.

4th, 740, 748 (2007). On the other hand, for negligent misrepresentation, a plaintiff must establish,

inter alia, “misrepresentation of a past or existing material fact, without reasonable ground for

believing it to be true . . .” Hydro-Mill Co., Inc. v. Hayward, Tilton and Rolapp Ins. Associates, Inc.,

115 Cal.App.4th 1145, 1154 (2004) (emphasis added). Negligent misrepresentation is a “separate

and distinct tort.” See Bily v. Arthur Young & Co., 3 Cal.4th 370, 413 (1992). Plaintiff does not

allege a negligent misrepresentation claim, only a fraud claim. See Complaint ¶ 22 (“Defendant

Ocwen, by and through its agents and employees, was aware that the statements made to Plaintiff

Zhao were false . . . Defendant Ocwen knew that it did not intend to follow through on any of the

representations made to Plaintiff. . .”) (emphasis added). 

2. The Court GRANTS Defendants’ motion for judgment on Plaintiff’s wrongful

foreclosure claim against all Defendants. The Court finds that the claim is moot.

3. The Court GRANTS Defendants’ motion for judgment on Plaintiff’s breach of

contract claim against Defendant Ocwen. The Court finds that Plaintiff fails to plead the existence

of an enforceable oral agreement between himself and Ocwen. See Raedeke v. Gibraltar Sat. &

Loan Assn. (1974) 10 Cal.3d 665, 673 (“[i]n the absence of consideration, a gratuitous oral promise

to postpone a sale of property pursuant to the terms of a trust deed ordinarily would be

unenforceable under section 1698”); Grant v. Aerodraulics Co., 91 Cal.App.2d 68, 75 (1949)

(agreeing to pay part of a preexisting debt is generally not valid consideration); Lawther v. Onewest

Bank, 2010 U.S. Dist. LEXIS 131090 (N.D. Cal. Nov. 30, 2010) (plaintiff’s reduced monthly

payments could not constitute consideration, as he was already required to make such payments

under the terms of his original loan agreement).

4. The Court DENIES Defendants’ motion for judgment on Plaintiff’s promissory

estoppel claim against Defendant Ocwen. The Court finds that the claim is not moot, and Plaintiff

alleges sufficient facts to establish the elements of his claim. 

5. The Court DENIES Defendants’ motion for judgment on Plaintiff’s unfair

competition claim against Defendant Ocwen, based on the Court’s finding that Plaintiff has

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sufficiently pleaded his fraud claim.

6. The Court GRANTS Defendants’ motion for judgment on Plaintiff’s quiet title,

rescission, and cancellation of instrument claims against all Defendants. The Court finds that these

claims are moot. Furthermore, the Court finds that the claims fail under the “tender” rule. 

7. Based on the foregoing, the Court DISMISSES Defendants Freddie Mac and CalWestern Reconveyance Corporation from this action. 

IT IS SO ORDERED.

DATED: August 24, 2011

Hon. Michael M. Anello

United States District Judge

Case 3:11-cv-00821-MMA-KSC Document 34 Filed 08/24/11 Page 3 of 3