Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-01660/USCOURTS-caed-2_09-cv-01660-0/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1601 Truth in Lending

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ERNESTO PATACSIL and No. 2:09-cv-01660-MCE-KJM

MARILYN PATACSIL,

Plaintiffs,

v. MEMORANDUM AND ORDER

WILSHIRE CREDIT CORPORATION;

ARGENT MORTGAGE COMPANY, LLC;

T.D. SERVICE COMPANY; SOUTH

COAST LOANS AND MORTGAGE,

INC.; JOHN BONAGOFSKY, JR.;

JAMES STEVEN LITSIS; DANA K.

SCHAITERER; JOHN SANDERS, 

Defendants.

----oo0oo----

Plaintiffs Ernesto Patacsil and Marilyn Patacsil

(“Plaintiffs”) seek monetary and injunctive relief from

Defendants for claims arising under the federal Truth in Lending

Act (“TILA”), California Rosenthal Fair Debt Collection Practices

Act (“RFDCPA”), the federal Real Estate Settlement Procedures Act

(“RESPA”), California’s Unfair competition Law (“UCL”), and

California’s Foreign Language Contract Act. 

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 The factual assertions in this section are based on the 1

allegations in Plaintiff’s Second Amended Complaint unless

otherwise specified.

2

Plaintiffs also allege state law claims of negligence, breach of

fiduciary duty, fraud, breach of contract, breach of implied

covenant of good faith and fair dealing, and wrongful

foreclosure.

Presently before the Court is a Motion by Defendant Wilshire

Credit Corporation (“Defendant”) to Dismiss the Second, Third,

Fourth, Sixth, Seventh, Tenth, and Eleventh Claims of Plaintiffs’

Second Amended Complaint for failure to state a claim upon which

relief may be granted pursuant to Federal Rule of Civil Procedure

12(b)(6). For the reasons set forth below, Defendant’s Motion to

Dismiss is granted.

BACKGROUND1

This action arises out of activity surrounding a residential

loan transaction for property located at 335 Prado Way, Stockton,

County of San Joaquin, California (“Property”). In January 2005,

Defendant John Sanders approached Plaintiffs representing himself

as a loan officer for Defendant South Coast Loans and Mortgage,

Inc. and solicited Plaintiffs to refinance their residence. 

Sanders told Plaintiffs that he could get them the “best deal”

and the “best interest rates” on the market.

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3

Sanders promised Plaintiffs an affordable loan with a fixed

rate, however he actually sold Plaintiffs an adjustable rate loan

with prepayment penalties. Sanders further promised Plaintiffs

that if the loans ever became unaffordable, he would refinance

them into an affordable loan. 

To qualify for these loans, Sanders overstated Plaintiffs’

income without Plaintiffs’ knowledge or consent. Plaintiffs are

native of the Phillippines and their English skills, both verbal

and written, are limited. Sanders failed to provide a translator

at any stage of the proceeding. Plaintiffs further allege that

Sanders hid facts from Plaintiffs surrounding the transaction

which prevented Plaintiffs from discovering the nature of the

transaction. 

On or about March 30, 2005 Plaintiffs completed the loan on

the Property. The terms of the loan were memorialized in a

Promissory Note, which was secured by a Deed of Trust on the

Property. The Deed of Trust identified Town and Country Title

Services, Inc. as Trustee, and Defendant Argent Mortgage as

Lender. 

Plaintiffs allege that they were not given a copy of the

documents prior to closing and that at the closing, they were

only given a few minutes to sign the documents. Plaintiffs

further allege they were not allowed to review the documents and

were told only to sign and initial the documents and that they

were not provided with the required copies of a proper notice of

cancellation of the transaction.

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4

Plaintiffs allege that Defendant began demanding monthly

payments from the Plaintiffs, but failed to give requisite notice

to the Plaintiffs that it acquired servicing rights. 

On or about June 3, 2009, a Qualified Written Request

(“QWR”) under RESPA was mailed to Defendant identifying

Plaintiffs, their loan, and listing their reasons for their

belief that the account was in error due to fraud, improper

charges, improper increases, and requesting specific information. 

In addition, the QWR included a demand to rescind the loan. 

Plaintiffs state that Defendant never properly responded to the

QWR. 

STANDARD

On a motion to dismiss for failure to state a claim under

Rule 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, 127 S. Ct. 1955, 1964 (2007) (quoting Conley v.

Gibson, 355 U.S. 41, 47 (1957)). 

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5

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. Id. at 1964-65 (internal citations and quotations

omitted). Factual allegations must be enough to raise a right to

relief above the speculative level. Id. at 1965 (citing 5 C.

Wright & A. Miller, Federal Practice and Procedure § 1216, pp.

235-36 (3d ed. 2004) (“The pleading must contain something

more...than...a statement of facts that merely creates a

suspicion [of] a legally cognizable right of action”)). 

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

assertion of entitlement to relief. Without 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.” Twombly, 550 U.S. 556 n.3. 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. 

Nevertheless, “[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.

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6

When a claim for fraud is raised, Federal Rule of Civil

Procedure 9(b) provides that “a party must state with

particularity the circumstances constituting fraud.” “A pleading

is sufficient under Rule 9(b) if it identifies the circumstances

constituting fraud so that the defendant can prepare an adequate

answer from the allegations.” Neubronner v. Milken, 6 F.3d 666,

671-672 (9th Cir. 1993) (internal quotations and citations

omitted). “The complaint must specify such facts as the times,

dates, places, benefits received, and other details of the

alleged fraudulent activity.” Id. at 672.

A court granting a motion to dismiss a complaint must then

decide whether to grant leave to amend. A court should “freely

give” leave to amend when there is no “undue delay, bad faith[,]

dilatory motive on the part of the movant,...undue prejudice to

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

the amendment....” Fed. R. Civ. P. 15(a); Foman v. Davis, 371

U.S. 178, 182 (1962). Generally, leave to amend is denied only

when it is clear the deficiencies of the complaint cannot be

cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957

F.2d 655, 658 (9th Cir. 1992).

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7

ANALYSIS

A. California’s RFDCPA

The California’s Rosenthal Fair Debt Collection Practices

Act (“RFDCPA”) was enacted “to prohibit debt collectors from

engaging in unfair or deceptive acts or practices in the

collection of consumer debts, and to require debtors to act

fairly in entering into and honoring such debts.” Cal. Civ. Code

§ 1788.1. Plaintiffs allege that Defendant violated the RFDCPA

by “using unfair and unconscionable means to collect a debt not

owed to Defendant,...sending deceptive letters and making phone

calls to Plaintiffs demanding payment.” Further, Plaintiffs

allege that Defendant “repeatedly made false reports to credit

reporting agencies about Plaintiffs’ credit standing, falsely

stated the amount of Plaintiffs’ mortgage debt, falsely stated

that a debt was owed, and falsely stated Plaintiffs’ payment

history.” In addition, the Plaintiffs state that Defendant

“increased the amount of Plaintiffs’ mortgage debt by stating

amounts not permitted by law or contract.” 

However, based on the language of the statute, courts have

declined to regard a residential mortgage loan as a ‘debt’ under

the RFDCPA. See Cal. Civ. Code § 1788.2(e)-(f); Castaneda v.

Saxon Mortg. Services, Inc., No. 2:09CV01124, 2009 WL 4640673, at

*3 (E.D. Cal. Dec. 3, 2009) (holding that a foreclosure pursuant

to a deed of trust does not constitute a debt collection under the

RFDCPA); Ines v. Countrywide Home Loans, Inc., No. 08CV1267, 2008

WL 4791863, at *3 (S.D. Cal. 2008) (stating plaintiff’s mortgage

debt claim did not fall within the meaning of the RFDCPA); 

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8

Pittman v. Barclays Capital Real Estate, Inc., No. 09CV0241, 2009

WL 1108889, at *3 (S.D. Cal. April 24, 2009) (dismissing

plaintiff’s mortgage-related RDFCPA claim for failing to “invoke

statutory protections”). 

The behavior Plaintiffs complain of arises out of or exists

in connection to their residential loan mortgage. The alleged

actions by Defendant, including sending letters, making phone

calls and making reports, all stem from the initial residential

loan mortgage. As the courts have repeatedly held, the

collection of this debt does not fall under the purview of the

RFDCPA. 

 Defendant’s Motion to Dismiss Plaintiff’s RFDCPA claim is

granted. 

B. Negligence

Plaintiffs allege that Defendant “owed Plaintiffs a duty of

due care to determine the true identity of the party owning

Plaintiffs’ Mortgage Note and Deed of Trust before demanding

payments from Plaintiffs.” Plaintiffs allege that Defendant

breached that duty when they “took payments to which they were not

entitled, charged fees it was not entitled to charge, and

wrongfully made or otherwise authorized negative reporting of

Plaintiffs’ creditworthiness to various credit bureaus.” Plaintiffs

allege that Defendant further had a duty to “properly respond to

Plaintiffs’ Qualified Written Request pursuant to 12 U.S. C.

§ 2605(e), and to give Plaintiffs notice of the transfer of the

servicing rights to their loan pursuant to 12 U.S.C. § 2605(c).” 

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9

In order to state a cause of action for negligence, a

plaintiff must allege: (1) the defendant has a legal duty to use

due care; (2) the defendant breached such legal duty; (3) the

defendant’s breach was the proximate or legal cause of the

resulting injury; and (4) damage to the plaintiff. Ladd v.

County of San Mateo, 12 Cal. 4th 913, 917 (1996). The existence

of a legal duty on the part of the defendant is a question of law

to be determined by the court. Kentucky Fried Chicken of

California, Inc. v. Superior Court, 14 Cal. 4th 814, 819 (1997);

Isaacs v. Huntington Memorial Hospital, 38 Cal. 3d 112, 124

(1985). When not provided by statute, the existence of such a

duty depends upon the foreseeability of the risk and a weighing

of policy considerations for and against the imposition of

liability. Jacoves v. United Merchandising Corp., 9 Cal. App.

4th 88, 105 (1992).

“[A]s a general rule, a financial institution owes no duty

of care to a borrower when the institution’s involvement in the

loan transaction does not exceed the scope of its conventional

role as a mere lender of money.” Nymark v. Heart Fed. Sav. &

Loan Ass’n, 231 Cal. App. 3d 1089, 1095-96 (1991) (affirming

summary judgment in favor of defendant lending institution

because defendant owed no duty to Plaintiff in conducting its

loan processing procedures); see Wagner v. Benson, 101 Cal. App.

3d 27, 35 (1980) (“Liability to a borrower for negligence arises

only when the lender ‘actively participates’ in the financed

enterprise ‘beyond the domain of the usual money lender.’”). 

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10

However, the analysis does not stop there. Rather, California

courts look to six factors in determining whether a financial

institution owes a duty of care to a borrower-client. These

facts are: “[1] the extent to which the transaction was intended

to affect the plaintiff, [2] the foreseeability of harm to him,

[3] the degree of certainty that the plaintiff suffered injury,

[4] the closeness of the connection between the defendant’s

conduct and the injury suffered, [5] the moral blame attached to

the defendant’s conduct, and [6] the policy of preventing future

harm.” Nymark, 231 Cal. App. 3d at 1098.

Plaintiffs allege that Defendant is a “diversified financial

marketing and/or services corporations engaged primarily in

residential mortgage banking and/or related business.” 

Plaintiffs’ own description indicates that Defendant is a

financial institution. As such, Defendant owed no duty of care. 

Nor have Plaintiffs provided the Court with any statute creating

a duty, or special relationship giving rise to a duty between

Plaintiff and Defendant.

The Defendant’s Motion to Dismiss Plaintiffs’ negligence

claim is granted. 

C. RESPA

Plaintiffs allege that they sent Defendant a QWR that stated

the reasons for the Plaintiffs’ belief that the loan was in error

and a request to rescind the loan. Plaintiffs contend Defendant

violated RESPA, 12 U.S.C. § 2605(e)(2), by failing to properly

respond to Plaintiffs’ QWR. 

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11

RESPA requires mortgage loan servicers who receive a QWR for

information relating to the servicing of their loan to provide a

written response within twenty (20) days acknowledging receipt of

the correspondence. 12 U.S.C. § 2605(e)(1)(A). For the purposes

of the Act, a QWR is defined as “a written correspondence []

that... includes a statement of the reasons for the belief of the

borrower, to the extent applicable, that the account is in error

or provides sufficient detail to the servicer regarding other

information sought by the borrower.” 12 U.S.C. § 2605(e)(1)(B).

A loan servicer has the duty to act when it receives a QWR “for

information relating to the servicing of the loan.” 12 U.S.C.

§ 2605(e)(1)(A). “Servicing means receiving any scheduled

periodic payments from the borrower...and making the payments of

principal and interest and such other payments with respect to

the amounts received from the borrower.” Id. § 2605(i)(3). 

Although Plaintiffs describe their letter as a QWR, they

fail to allege any facts which qualify it as such. Plaintiffs

have not alleged that they were seeking information about

servicing of the loan. Plaintiffs only allege that their QWR

included Plaintiffs’ names, loan number, a statement for reasons

for Plaintiffs’ belief that the loan was in error, and a demand

to rescind the loan. This alleged QWR simply relates to the

origination of the loan, not any servicing errors. See Consumer

Solutions REO, LLC v. Hillery, 2009 WL 2711264 at *9 (N.D. Cal.

Aug. 26 2009) (finding borrower’s letter to mortgage loan

servicer did not qualify as a QWR, where letter simply disputed

loan’s validity, and not its servicing). 

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12

Further, Plaintiffs fail to state when Defendant violated

RESPA and whether the sixty (60)-day period accorded for a timely

response had lapsed. Delino v. Platinum Community Bank, 628 F.

Supp. 2d 1226, 1231-1232 (S.D. Cal. 2009). 

Plaintiffs have therefore failed to state a claim for

violation of RESPA. Defendant’s Motion to Dismiss Plaintiffs’

RESPA claim is granted.

D. Fraud

Plaintiffs’ sixth claim is for fraud. Plaintiffs allege

that Defendant “misrepresented to Plaintiffs that Defendant has

the right to collect monies from Plaintiffs on its behalf or on

behalf of others when Defendant had no legal right to collect.” 

In California the required elements of fraud are

“a) misrepresentation; b) knowledge of falsity; c) intent to

defraud, i.e., to induce reliance; d) justifiable reliance; and

e) resulting damage.” In re Estate of Young, 160 Cal. App. 4th

62, 79 (2008) (citation omitted). A claim for fraud requires a

heightened pleading standard in which the allegations must be

“specific enough to give defendants notice of the particular

misconduct which is alleged to constitute the fraud charged so

that they can defend against the charge and not just deny that

they have done anything wrong.” Semegen v. Weidner, 780 F.2d

727, 731 (9th Cir. 1985). 

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13

Statements of the time, place and nature of the alleged

fraudulent activities are sufficient, id. at 735, provided the

plaintiff sets forth “what is false or misleading about a

statement and why it is false.” In re GlenFed, Inc., Securities

Litigation, 42 F.3d 1541, 1548 (9th Cir. 1994). 

Here, that standard has not been met. Plaintiffs’ complaint

does not specifically allege what was false or misleading about

these statements and why they are false, therefore falling short

of the necessary pleading standard. Simply alleging that

Defendant “misrepresented” facts is insufficient. 

Plaintiffs also allege that Defendant failed to “adequately

supervise, train, and direct its employees” and that Defendant

“implemented policies and procedures which permitted and

encouraged the conduct of its employees and agents in this case.” 

However, the Plaintiffs fail to connect this assertion to their

allegation of fraud. If the claim is based on the presumption

that the “misrepresentation” conducted by Defendant’s employees

would amount to fraud, then it fails. As discussed, supra, the

general “misconduct” described is insufficient for a claim of

fraud. If, instead, the Plaintiffs are alleging that Defendant

engaged in fraud by failing to supervise, train, and direct

employees, then this claim also fails. Plaintiffs’ complaint

does not specifically allege why this conduct by Defendant

amounts to fraud, therefore falling flat of the necessary

pleading standard. 

Defendant’s Motion to Dismiss Plaintiffs’ fraud claim is

granted. 

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14

E. California’s UCL

California’s Business and Professions Code § 17200 et seq.,

more commonly known as California’s Unfair Competition Law

defines unfair competition as “any unlawful, unfair or fraudulent

business act or practice.” “Unlawful” practices are practices

“forbidden by law, be it civil or criminal, federal, state, or

municipal, statutory, regulation, or court-made.” Saunders v.

Superior Court, 27 Cal. App. 4th 832, 838-39 (1994) (citing

People v. McKale, 25 Cal. 3d 626, 632 (1979)). 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. McKale, 25 Cal. 3d at 635. 

A business act or practice is “unfair” when the conduct

“threatens an incipient violation of an antitrust law, or

violates the policy or spirit of one of those laws because its

effects are comparable to a violation of the law, or that

otherwise significantly threatens or harms competition.” 

Cel-Tech Communications, Inc. v. L.A. Cellular Tel. Co., 20 Cal.

4th 163, 187 (1999). To sufficiently plead an action based on an

“unfair” business act or practice, a plaintiff must allege facts

showing the “unfair” nature of the conduct and that the harm

caused by the conduct outweighs any benefits that the conduct may

have. Motors, Inc. v. Times Mirror Co., 102 Cal. App. 3d 735,

740 (1980). 

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15

A “fraudulent” business act or practice is one in which

members of the public are likely to be deceived. Hall v. Time,

Inc., 158 Cal. App. 4th 847, 849 (2008); Olsen, supra, 48 Cal.

App. 4th at 618 (“does not refer to the common law tort of fraud

but only requires a showing [that] members of the public ‘are

likely to be deceived’”). Thus, in order to state a cause of

action based on a “fraudulent” business act or practice, the

plaintiff must allege that consumers are likely to be deceived by

the defendant’s conduct. Committee on Children’s Television,

Inc. v. General Foods Corp., 35 Cal. 3d 197, 212 (1983). 

Furthermore, a plaintiff alleging unfair business practices

under § 17200 “must state with reasonable particularity the facts

supporting the statutory elements of the violation. Khoury v.

Maly’s of California, Inc., 14 Cal. App. 4th 612, 619 (1993).

In alleging violation of the UCL, Plaintiffs incorporate by

reference all prior causes of actions, however, none of those

claims have been sufficiently plead to survive a motion to

dismiss. Plaintiffs therefore lack a predicate “unlawful” action

to underlie their UCL claim. 

Similarly Plaintiffs fail to allege with reasonable

particularity “unfair” or “fraudulent” behavior by Defendant. 

Plaintiffs assert that “unlawful, unfair, and/or fraudulent

business practices” have occurred but they do not identify which

specific behaviors they believe are punishable under the UCL. To

the extent to which they may be referring to all alleged wrongful

conduct listed in the complaint, Plaintiffs still fail to state

why such behavior is “unfair” or “fraudulent” as defined by the

statute.

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Due to Plaintiffs’ failure to sufficiently plead unlawful,

unfair or fraudulent behaviors, Defendant’s Motion to Dismiss

Plaintiffs’ UCL claim is granted.

F. Wrongful Foreclosure

California Civil Code § 2924-2924i govern non-judicial

foreclosures. California courts have consistently held that the

Civil Code provisions “cover every aspect” of the foreclosure

process, I.E. Associates v. Safeco Title Ins. Co., 39 Cal. 3d

281, 285 (1985), and are “intended to be exhaustive,” Moeller v.

Lien, 25 Cal. App. 4th 822, 834 (1994). As such, Plaintiffs’

reliance on Cal. Comm. Code § 3301 is misplaced. Pursuant to

§ 2924(a)(1) of the California Civil Code, a “trustee, mortgagee

or beneficiary or any of their authorized agents” may conduct the

foreclosure process. There is no requirement that the party

initiating non-judicial foreclosure proceedings be in possession

of the original note. See, e.g., Candelo v. NDEX West, LLC,

No. CV F 08-1916 LJO DLB, 2008 WL 5382259, *4 (E.D. Cal. Dec. 23,

2008) (“No requirement exists under statutory framework to

produce the original note to initiate non-judicial

foreclosure.”); Putkkuri v. Recontrust Co., No. 08cv1919 WQH

(AJB), 2009 WL 32567, *2 (S.D. Cal. Jan. 5, 2009) (“Production of

the original note is not required to proceed with a non-judicial

foreclosure.”). Furthermore, a defaulted borrower is “required

to allege tender of the amount of [the lender’s] secured

indebtedness in order to maintain any cause of action for

irregularity in the sale procedure.” 

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Abdallah v. United Savings Bank, 43 Cal. App. 4th 1101, 1109

(1996). Therefore, an action to set aside a foreclosure sale,

unaccompanied by an offer to tender, does not state a cause of

action which a court of equity recognizes. Karlsen v. American

Sav. & Loan Ass’n, 15 Cal. App. 3d 112, 117 (1981). This rule

extends to nonjudicial proceedings. See id.; Dimock v. Emerald

Properties LLC, 81 Cal. App. 4th 868 (2000); Hauger v. Gates, 42

Cal. 2d 752 (1954). Before a Plaintiff may set aside a

nonjudicial foreclosure because of irregularities in the sale,

they must first tender the full amount. See Arnolds Mgmt. Corp.

V. Eischen, 158 Cal. App. 3d 575, 577. The tender rule applies

to “any cause of action for irregularity in the sale procedure.” 

Abdallah v. United Savings Bank, 43 Cal. App. 4th 1101, 1009

(1996). 

Plaintiffs argue that Defendant lacked standing to proceed

with its non-judicial foreclosure because Defendant was not a

“person entitled to enforce the security interest of the

Property”. Plaintiffs allege Defendant was not a beneficiary,

trustee, mortgagee, assignee, or employee of the person or entity

entitled to payment and as a result did not have the right to

commence foreclosure proceedings. This Court finds this argument

irrelevant in light of the fact that the Plaintiffs have failed

to offer the requisite tender. The Plaintiffs have not

accompanied such a claim with an offer of tender and therefore,

they do not state a claim which a court of equity recognizes. 

 Defendant’s Motion to Dismiss Plaintiffs’ wrongful foreclosure

claim is granted.

///

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G. Violation of California’s Foreign Language Contract Act

Plaintiffs’ tenth claim alleges a violation of California’s

Foreign Language Contract Act, Cal. Civ. Code § 1632. Plaintiffs’

assert that they speak primarily Tagalog and have limited

understanding of the English language, and thus were entitled to

translations during negotiations and translations of documents

pursuant to Cal. Civ. Code § 1632. California Civil Code § 1632

provides, in relevant part: 

“Any person engaged in a trade or business who

negotiates primarily in Tagalog...orally or

written..shall deliver to the other party to the

contract or agreement and prior to the execution

thereof, a translation of the contract or agreement in

the language in which the contract or agreement was

negotiated, which includes a translation of every term

and condition of that agreement.” 

Cal. Civ. Code § 1632(b). 

“To take advantage of this exception...Plaintiffs must

allege that Defendant either acted as the real estate broker or

had a principal-agent relationship with the broker who negotiated

the loan.” Ortiz v. Accredited Home Lenders, Inc., 639 F. Supp.

2d 1159, 1166 (S.D. Cal. July 13, 2009) (citing Alvara v. Aurora

Loan Serv., Inc., 2009 WL 1689640, at 3* (N.D. Cal. June 16,

2009)). More clearly, California law requiring translation of a

contract or agreement for a loan or extension of credit for use

primarily for personal, family or household purposes only applies

to real estate brokers, rather than to lenders and subsequent

servicers. See Delino, 628 F. Supp. 2d at 1234. 

///

///

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Plaintiffs assert that Defendant was the loan servicer and

never once mention their participation in the origination of the

loan nor do they assert that a principal-agent relationship

exists. Because Defendant is not alleged to have been involved

in the origination of the loan, they can not be liable for

disclosure violations occurring at the time of the origination. 

 Defendant’s Motion to Dismiss Plaintiffs’ California Civil

Code § 1632 claim is granted.

CONCLUSION

For the reasons set forth above, the motion of Defendant

Wilshire Credit Corporation to Dismiss (Docket No. 34) the claims

alleged against it in Plaintiffs’ Second Amended Complaint

(Docket No. 29) is GRANTED. Leave to amend is denied inasmuch as

this is Plaintiff’s third unsuccessful attempt to allege any

viable claims against Defendant Wilshire Credit Corporation.

IT IS SO ORDERED.

Dated: February 5, 2010

________________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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