Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-03317/USCOURTS-caed-2_09-cv-03317-3/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 18:1961 Racketeering (RICO) Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

DEANNA WALTERS,

Civ. No. S-09-3317 FCD/KJM

Plaintiff,

v. MEMORANDUM AND ORDER

FIDELITY MORTGAGE OF

CALIFORNIA, INC.; CAL-WESTERN

RECONVEYANCE CORP; JAMES YORK;

OCWEN LOAN SERVICING, LLC;

HSBC BANK U.S.A., N.A.; AND

DOES 1 THROUGH 50, INCLUSIVE,

Defendants.

____________________________/

----oo0oo----

This matter is before the court on motions by defendants

Ocwen Loan Servicing, LLC (“Ocwen”) and HSBC Bank U.S.A., N.A.

(“HSBC”) (collectively, “defendants”), pursuant to Federal Rules

of Civil Procedure 12(b)(6) and 12(f), to dismiss and to strike

certain claims alleged in plaintiff Deanna Walters’ (“plaintiff”)

second amended complaint (“SAC”). In conjunction with their

motion to dismiss, defendants request that the court take

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1 Because oral argument will not be of material

assistance, the court orders these matters submitted on the

briefs. E.D. Cal. L.R. 230(g).

2 The facts herein are drawn from the allegations in the

SAC and are deemed to be true for the purposes of this motion. 

2

judicial notice of eight exhibits. Plaintiff opposes defendants’

motions. For the reasons set forth below,1 defendants’ motion to

dismiss is GRANTED in part and DENIED in part, and their motion

to strike is DENIED.

BACKGROUND

Plaintiff’s claims arise out of conduct related to a

residential mortgage loan transaction. (SAC, filed May 6, 2010,

¶ 10.)2 On or around October 22, 2004, plaintiff obtained a loan

in the amount of $159,000 from Fidelity Mortgage of California,

Inc. (“Fidelity”) on property located at 3602 Portage Circle

South, Stockton, California (the “Property”). (Id. ¶¶ 10-12.) 

The loan was evidenced by a written promissory note and secured

by a deed of trust, which named Cal-Western ReConveyance Corp.

(“Cal-Western”) as trustee and Mortgage Electronic Registration

Systems, Inc. (“MERS”) as nominee for Fidelity and beneficiary. 

(Id. ¶ 11-12.) 

After the closing of the loan transaction, the servicing

rights to plaintiff’s loan were transferred to Ocwen. (Id.

¶ 14.) Plaintiff alleges that Ocwen acted as an agent of

Fidelity, or alternatively, that Ocwen directly assumed by

assignment or transfer all of Fidelity’s rights and obligations

under the promissory note and deed of trust. (Id. ¶ 15.) From

December 2004 through January 2009, plaintiff dealt only with

Ocwen in connection with the promissory note and deed of trust. 

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(Id. ¶ 17.) Plaintiff asserts that Ocwen acted “on its own

behalf, without advising her or suggesting in any way that it was

acting as an agent for any other party or entity.” (Id.) 

Plaintiff alleges that after Ocwen acquired rights in or

began servicing the loan, it began to engage in a pattern of

unlawful and fraudulent conduct. (Id. ¶ 21.) Plaintiff claims,

inter alia, that Ocwen (1) failed to credit and misapplied timely

payments; (2) failed to provide timely or clear payment

information; (3) prematurely referred plaintiff’s loan to

collections; (4) increased monthly payment amounts and added

costs, fees, and interest charges in violation of the terms of

the original mortgage note; (5) charged plaintiff’s account for

hazard insurance for the Property when it was already insured;

and (6) inaccurately claimed plaintiff was in default and

threatened foreclosure when plaintiff was not in default. (Id.) 

Plaintiff alleges that from January 2005 through January

2009, Ocwen mailed her “monthly statements, reminder notices,

past due notices, notices of default and other written

communications, as well as communications via the internet and

through electronic mail and by telephone that were materially

false and misleading and known by Ocwen to be false.” (Id.

¶ 22.) 

On December 28, 2004, plaintiff paid a monthly installment

on her loan that was due on January 1, 2005, but Ocwen failed to

apply the payment correctly and instead applied it to a payment

due December 1, 2004 that plaintiff had already paid. (Id.

¶ 26.) On or about January 21, 2005, Ocwen sent plaintiff a

notice stating that her current payment had not been received and

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was past due. (Id. ¶ 28.) Ocwen listed late charges of $77.72

in monthly statements mailed to plaintiff for the months of

January, February, and March 2005, when it knew or should have

known that plaintiff’s payments had not been late. (Id.) 

Plaintiff states that in “virtually every written monthly account

statement” that Ocwen sent her between 2005 and 2007, Ocwen

falsely claimed that plaintiff owed additional late fees, even

though her payments were not late. (Id. ¶ 38.) 

On or around January 1, 2005, Ocwen falsely claimed in a

written notice mailed to plaintiff that it had not received proof

of hazard insurance on the Property, despite the fact that Ocwen

was or should have been aware that the premium for the insurance

had been paid in October 2004. (Id. ¶ 30.) In a written notice

mailed to plaintiff, dated February 6, 2005, Ocwen stated that it

had procured hazard insurance because, it asserted, plaintiff had

failed to do so. (Id.) On or around April 18, 2005, Ocwen

charged plaintiff $1,068.00 for the insurance. (Id.) Ocwen then

reversed the charge on May 5, 2005. (Id.)

In April 2005, Ocwen sent plaintiff a written notice of

default even though all the amounts allegedly outstanding were

the result of charges improperly posted to plaintiff’s account. 

(Id. ¶ 29.) Ocwen reflected additional late charges to

plaintiff’s account in monthly statements dated June 17, 2005,

July 5, 2005, and August 3, 2005, although plaintiff had not been

late in making her payments. (Id. ¶ 31.) On August 1, 2005,

plaintiff telephoned Ocwen and spoke to an employee named Mary,

who told plaintiff that the late charges were the result of

errors by the “old” Ocwen and that these errors would be

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corrected. (Id. ¶ 32.) Despite these assurances, and subsequent

telephone requests by plaintiff in September and October 2005,

the account was not corrected. (Id. ¶ 33.)

In October 2005, an unidentified Ocwen employee told

plaintiff by telephone that Ocwen would not accept plaintiff’s

payments because she was in default. (Id. ¶ 34.) On or around

November 29, 2005, plaintiff spoke by telephone to an Ocwen

employee who identified herself as “J. Roberson” and who allowed

plaintiff to make three payments that Ocwen had previously

refused to accept. (Id.) Plaintiff made a payment on November

29, 2005. (Id.) J. Roberson told plaintiff that the payment

would bring her loan current, including all disputed late

charges. (Id.) 

In January 2006, plaintiff learned that the payment she made

on November 29, 2005 had not been credited, and Ocwen returned

the check for plaintiff’s January 2006 payment, falsely claiming

that the check was insufficient. (Id. ¶ 35.) 

On or around February 10, 2006, Ocwen caused Cal-Western to

issue a notice of default and election to sell. (Id. ¶ 36.) 

Plaintiff spoke to an Ocwen representative who told plaintiff

that she needed to pay $7,772.00 to bring her loan current

through March 2006. (Id. ¶ 37.) Although plaintiff paid this

amount by wire transfer on February 22, 2006, she received a

reinstatement quote dated February 28, 2006, falsely stating that

she owed additional money. (Id.) 

In June 2006, plaintiff was falsely informed that she owed a

monthly payment of $1,660.29, when the actual amount owed was

$1,295.00. (Id. ¶ 39.) Plaintiff paid $1,660.29 in the

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expectation that she would receive a credit toward the following

month’s payment. (Id.) In or around June 2006, plaintiff’s online account statement reflected that her next payment due would

be in the amount of $807.50, but a written account statement

mailed to plaintiff, dated June 26, 2006, falsely stated that she

owed more than $6,000, including late charges and fees that

plaintiff did not owe and that Ocwen had repeatedly refused to

correct. (Id. ¶ 40.) 

In October 2006, Ocwen issued another notice of default in

which it falsely claimed that no payments had been made, when in

fact Ocwen was holding plaintiff’s payments in a suspense account

or escrow account. (Id. ¶ 41.) Ocwen also falsely claimed that

plaintiff had not maintained insurance on the Property. (Id.) 

Throughout 2006, plaintiff repeatedly telephoned Ocwen and

was told by Ocwen representatives that Ocwen’s errors would be

corrected, but despite these assurances, Ocwen failed to correct

its errors. (Id. ¶ 42.) Plaintiff alleges that Ocwen never

intended to correct its errors, but “sought deliberately to cause

[plaintiff] to appear to be in default so that it could continue

to charge improper and inflated fees.” (Id. ¶ 43.) Plaintiff

further alleges that Ocwen falsely informed credit reporting

agencies that plaintiff “was in default on her loan when Ocwen

knew and should have known that any defaults were the result of

Ocwen’s inaccurate and fraudulent accounting.” (Id. ¶ 44.) 

In December 2006, Ocwen and/or HSBC caused Cal-Western to

issue a “Notice of Default and Election to Sell.” (Id. ¶ 46.) 

Ocwen returned plaintiff’s payment checks for December 2006 and

January 2007, claiming falsely that the payments were not

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sufficient when it knew or should have known that the payments

were sufficient. (Id. ¶ 45.) 

In or around March 2007, Ocwen informed plaintiff both

orally and in writing that the only way for her to prevent the

foreclosure of her home was to sign a “forbearance agreement”

that required plaintiff to acknowledge owing additional fees and

charges, to make an immediate “down payment” of $1,661.00, and to

accept an increase in monthly payments from $1,295.00 to

$1,700.00 per month. (Id. ¶ 47.) Faced with Ocwen’s false

claims of default and believing she had no choice, plaintiff

signed the agreement and made payments of $1,700.00 per month

according to its terms until approximately October 2008. (Id.) 

In February 2008, Ocwen sent plaintiff a letter offering her

a “loan modification” that would increase plaintiff’s balance to

more than $166,000.00, even though according to a February 18,

2008 monthly statement, plaintiff’s outstanding balance was about

$155,000.00 and the disputed additional fees and charges totaled

only $4,755.00. (Id. ¶ 51.) In or around October 2008, Ocwen

refused to accept additional payments under the forbearance

agreement and informed plaintiff that the only way to avoid

foreclosure was to sign the loan modification agreement. (Id.

¶ 53.) Plaintiff furnished information that Ocwen requested to

process the modification. (Id. ¶¶ 52-53.) In or around November

2008, an Ocwen representative told plaintiff by telephone that

Ocwen could not accept additional payments until the loan

modification had been approved and that the process would take

thirty days. (Id. ¶ 54.) 

///

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In a written communication dated December 12, 2008, Ocwen

falsely claimed that the Property was unoccupied – even though

Ocwen knew or should have known that plaintiff and her family had

continuously occupied the Property – and charged plaintiff for

the inspection and maintenance of her Property. (Id. ¶ 55.) 

Plaintiff repeatedly called Ocwen to try to determine the

status of her loan modification and to process her December 2008

payment, but Ocwen refused to process any payments or to provide

plaintiff with any information. (Id. ¶ 58.) In late December

2008 or early January 2009, plaintiff again contacted Ocwen to

obtain a payoff amount in order to cure Ocwen’s claim that

plaintiff had defaulted on her loan. (Id. ¶ 59.) Plaintiff

spoke to an Ocwen representative who agreed to process a request

for a “reinstatement quote” in the amount of $8,258.60. (Id.)

When plaintiff contacted Ocwen to obtain the status of her

modification agreement on January 6, 2009, Ocwen told plaintiff

that her Property was scheduled to be sold at foreclosure on

January 15, 2009. (Id. ¶ 60.) Between January 6 and January 14,

2009, plaintiff contacted Ocwen several times to make a payment, 

but Ocwen declined her attempts “pending completion of the loan

modification.” (Id. ¶ 62.) On January 14, 2009, plaintiff spoke

with an Ocwen representative named Evelyn, who informed plaintiff

that her loan would be cured and the foreclosure sale would not

proceed if plaintiff agreed to transmit the amount on the

“reinstatement quote” to Ocwen. (Id. ¶ 63.) Plaintiff

immediately ordered the wire transfer of $8,258.60 to J.P.

Morgan, as provided for by written agreement, and confirmed

placement of the wire transfer with Ocwen by fax on the same day. 

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3 Plaintiff’s SAC alleges that she received the notice to

quit from Coral Park Mortgage, Inc. which plaintiff describes as

a “shell corporation” used by York “to avoid tax withholding

obligations in real estate transactions.” (SAC ¶ 69.)

4 York subsequently filed an unlawful detainer complaint

against plaintiff on February 9, 2009, claiming title and the

right to possession under the trustee’s deed. (Id. ¶ 73.)

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(Id. ¶ 64.)

On January 16, 2009, Ocwen sent plaintiff a loan payoff

quote that included a breakdown of the payoff funds with an

expiration date of January 26, 2009. (Id. ¶ 65.) Plaintiff

understood this payoff quote to be confirmation that a

foreclosure sale did not take place. (Id.) However, Cal-Western

had conducted a trustee’s sale on January 15, and title to the

Property was transferred to defendant James York (“York”) by a

deed executed on January 17, 2009. (Id. ¶ 66.)

Around January 30, 2009, plaintiff received a three day

notice to quit from York.3 (Id. ¶ 69.) Thereafter, around

January 31, Evelyn informed plaintiff that Ocwen had received

plaintiff’s wire transfer but that the house was sold in

foreclosure because the money had not been received “in time.” 

(Id. ¶ 70.) Evelyn told plaintiff that she (Evelyn) had

contacted York and advised him that the sale was a mistake, but

that York had refused Ocwen’s request to rescind the sale. (Id.) 

When plaintiff contacted York directly and asked him to rescind

the sale, York claimed he told Ocwen that he would agree to

rescind upon receipt of proof from Ocwen that plaintiff made the

January 14 wire payment. (Id. ¶ 71.) York claimed, however,

that Ocwen never sent him proof.4 (Id.) 

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Plaintiff alleges that between 2005 and 2009, Ocwen provided

services to plaintiff in addition to billing and collecting

payments. (Id. ¶¶ 48-57.) Plaintiff alleges that Ocwen

“repeatedly offered (or pretended) to counsel and advise

[plaintiff] on the best way to avoid foreclosure and to keep her

home.” (Id. ¶ 48.) In a purported effort to guide and assist

plaintiff, Ocwen requested detailed financial information from

plaintiff which it directed her to return to her “Loan Resolution

Consultant.” (Id. ¶ 50.) Plaintiff asserts that “Ocwen’s

conduct was designed to and did create a relationship different

from the usual borrower/lender relationship,” arguing that this

unusual relationship gave rise to a fiduciary duty and a duty of

care on the part of Ocwen. (Id. ¶ 57.)

On May 29, 2009, plaintiff filed this action against

defendants Ocwen, Fidelity, Cal-Western, and York, as well as

MERS, in the California Superior Court, San Joaquin County. 

(Docket No. 1.) On October 28, 2009, plaintiff filed her first

amended complaint (“FAC”), adding defendants J.P. Morgan Chase &

Co. (“J.P. Morgan”) and J.P. Morgan Chase Bank, N.A. (“Chase

Bank”). (Id.) Ocwen and MERS removed the FAC to this court on

November 27, 2009, on the basis of federal question jurisdiction,

28 U.S.C. § 1331. On December 10, 2009, Ocwen and MERS filed a

motion to dismiss the FAC pursuant to Rule 12(b)(6). The court

on April 14, 2010 issued a Memorandum and Order (“the Order”)

granting in part and denying in part the motion. Plaintiff filed

her SAC on May 6, 2010. Plaintiff voluntarily dismissed her

claims against J.P. Morgan and Chase Bank and added HSBC as a

defendant. In her SAC, plaintiff pleads fourteen claims for

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relief: (1) cancellation of trustee’s deed; (2) quiet title; 

(3) injunctive relief; (4) breach of contract; (5) breach of

third party beneficiary obligations; (6) fraud and deception; 

(7) fraudulent business practices in violation of California’s

Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200,

et seq.; (8) violation of California’s Rosenthal Fair Debt

Collection Practices Act (“RFDCPA”), Cal. Civ. Code §§ 1788 et

seq.; (9) unjust enrichment; (10) breach of fiduciary duty; 

(11) negligence; (12) violation of the federal Racketeer

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

§§ 1962(c),(d); (13) intentional interference with contractual

relations; and (14) negligent interference with contractual

relations.

STANDARDS

I. Rule 12(b)(6)

Under Federal Rule of Civil Procedure 8(a), a pleading must

contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” See Ashcroft v. Iqbal, 129

S. Ct. 1937, 1949 (2009). Under notice pleading in federal

court, the complaint must “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) (internal quotations

omitted). “This simplified notice pleading standard relies on

liberal discovery rules and summary judgment motions to define

disputed facts and issues and to dispose of unmeritorious

claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the

complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319,

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322 (1972). The court is bound to give plaintiff the benefit of

every reasonable inference to be drawn from the “well-pleaded”

allegations of the complaint. Retail Clerks Int’l Ass’n v.

Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not

allege “‘specific facts’ beyond those necessary to state his

claim and the grounds showing entitlement to relief.” Twombly,

550 U.S. at 570. “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Iqbal, 129 S. Ct. at 1949. 

Nevertheless, the court “need not assume the truth of legal

conclusions cast in the form of factual allegations.” United

States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th

Cir. 1986). While Rule 8(a) does not require detailed factual

allegations, “it demands more than an unadorned, the

defendant-unlawfully-harmed-me accusation.” Iqbal, 129 S. Ct. at

1949. A pleading is insufficient if it offers mere “labels and

conclusions” or “a formulaic recitation of the elements of a

cause of action.” Id. at 1950 (“Threadbare recitals of the

elements of a cause of action, supported by mere conclusory

statements, do not suffice.”); Twombly, 550 U.S. at 555. 

Moreover, it is inappropriate to assume that the plaintiff “can

prove facts which it has not alleged or that the defendants have

violated the . . . laws in ways that have not been alleged.” 

Associated Gen. Contractors of Cal., Inc. v. Cal. State Council

of Carpenters, 459 U.S. 519, 526 (1983). 

Ultimately, the court may not dismiss a complaint in which

the plaintiff has alleged “enough facts to state a claim to

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relief that is plausible on its face.” Iqbal, 129 S. Ct. at 1949

(citing Twombly, 550 U.S. at 570). Only where plaintiffs have

failed to “nudge[] their claims across the line from conceivable

to plausible” is the complaint properly dismissed. Twombly, 550

U.S. at 570. While the plausibility requirement is not akin to a

probability requirement, it demands more than “a sheer

possibility that a defendant has acted unlawfully.” Iqbal, 129

S. Ct. at 1949. This plausibility inquiry is “a context-specific

task that requires the reviewing court to draw on its judicial

experience and common sense.” Id. at 1950.

II. Rule 12(f)

Federal Rule of Civil Procedure 12(f) enables the court on a

motion by a party or by its own initiative to “order stricken

from any pleading . . . any redundant, immaterial, impertinent,

or scandalous matter.” The function of a Rule 12(f) motion is to

avoid the time and expense of litigating spurious issues. 

Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993),

rev’d on other grounds, 510 U.S. 517 (1994); see also 5A Charles

A. Wright & Arthur R. Miller, Federal Practice and Procedure §

1380 (2d ed. 1990). 

Rule 12(f) motions are generally viewed with disfavor and

not ordinarily granted because they are often used to delay and

because of the limited importance of the pleadings in federal

practice. Bureerong v. Uvawas, 922 F. Supp. 1450, 1478 (C.D.

Cal. 1996). A motion to strike should not be granted unless it

is absolutely clear that the matter to be stricken could have no

possible bearing on the litigation. Lilley v. Charren, 936 

F. Supp. 708, 713 (N.D. Cal. 1996).

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ANALYSIS

I. Motion to Dismiss

Defendants move to dismiss plaintiff’s claims for quiet

title, breach of contract, breach of third-party beneficiary

obligations, fraud, fraudulent business practices, violation of

the RFDCPA, unjust enrichment, breach of fiduciary duty,

negligence, violation of RICO, intentional interference with

contractual relations, and negligent interference with

contractual relations. (Defs.’ Mot. to Dismiss SAC (“Defs.’

Mot.”) at 2.) In connection with their motion, defendants ask

the court to take judicial notice of eight exhibits, including,

among other documents, a Deed of Trust and Rider To Security

Instrument executed by plaintiff on October 22, 2004, in favor of

Fidelity, (Request Judicial Notice Supp. Defs.’ Mot. to Dismiss

Pls.’ SAC (“RFJN”), Ex. 1); an Assignment of Deed of Trust

executed by MERS on November 27, 2006, (RFJN, Ex. 5); and a

Trustee’s Deed Upon Sale, dated January 17, 2009, conveying the

Property to defendant York, (RFJN, Ex. 8). Plaintiff objects to

defendants’ request. (Docket No. 35.)

A. Defendants’ Exhibits

In ruling upon a motion to dismiss, the court may consider

matters which may be judicially noticed pursuant to Federal Rule

of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d

646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of

U.S., Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998). Rule 201

permits a court to take judicial notice of an adjudicative fact

“not subject to reasonable dispute” because the fact is either

“(1) generally known within the territorial jurisdiction of the

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trial court or (2) capable of accurate and ready determination by

resort to sources whose accuracy cannot reasonably be

questioned.” Fed. R. Evid. 201(b). The court can take judicial

notice of matters of public record, such as pleadings in another

action and records and reports of administrative bodies. See

Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988).

“Even if a document is not attached to a complaint, it may

be incorporated by reference into a complaint if the plaintiff

refers extensively to the document or the document forms the

basis of the plaintiff’s claim.” United States v. Ritchie, 342

F.3d 903, 908 (9th Cir. 2003). “The defendant may offer such a

document, and the district 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).” 

Id. The policy concern underlying the rule is to prevent

plaintiffs “from surviving a Rule 12(b)(6) motion by deliberately

omitting references to documents upon which their claims are

based.” Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998),

superceded by statute on other grounds as recognized in Abrego

Abrego v. The Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006).

Here, several of plaintiff’s claims for relief are dependent

upon, and plaintiff’s complaint repeatedly refers to, information

contained in the deed of trust (RFJN, Ex. 1), the assignment of

the deed of trust (RFJN, Ex. 5), and the trustee’s deed upon sale

(RFJN, Ex. 8). (See SAC ¶¶ 11-15, 17-20, 66-68.) Because they

form the basis of several of plaintiff’s claims for relief, the

court takes judicial notice of these documents. Accordingly, the

court will treat exhibits 1, 5, and 8 as part of the complaint

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5 Plaintiff also objects to the other exhibits to the

RFJN. Because the court addresses plaintiff’s SAC without resort

to these documents, plaintiff’s remaining objections are

overruled as moot.

16

and will assume that their contents are true for purposes of the

motion to dismiss. See Ritchie, 342 F.3d at 908.5

B. Quiet Title

In her second claim for relief, plaintiff seeks to quiet

title to the Property against the claims of Fidelity, HSBC, and

York, pursuant to California Civil Procedure Code 

§§ 760.010-764.080. (SAC ¶¶ 85-90.) Plaintiff asserts she is

the rightful owner in fee simple and that the trustee’s deed “is

void and subject to cancellation and rescission.” (Id. ¶¶ 86-

87.) 

The purpose of a quiet title action is to determine “‘all

conflicting claims to the property in controversy, and to decree

to each such interest or estate therein as he may be entitled

to.’” Newman v. Cornelius, 3 Cal. App. 3d 279, 284 (1970)

(quoting Peterson v. Gibbs, 147 Cal. 1, 5 (1905)); see also

Garcia v. Wachovia Mortgage Corp., 676 F. Supp. 2d 895, 913 (C.D.

Cal. 2009). A plaintiff may bring a quiet title claim “to

establish title against adverse claims to real or personal

property or any interest therein.” Cal. Civ. Proc. Code 

§ 760.020. 

In order to state a claim for quiet title, the complaint

must be verified and include (1) a legal description of the

property and its street address or common designation; 

(2) the title of the plaintiff and the basis of the title; 

(3) the adverse claims to the title of the plaintiff; (4) the

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date as of which the determination is sought; and (5) a prayer

for the determination of the title of the plaintiff against the

adverse claims. Id. § 761.020. Further, a plaintiff “shall name

as defendants in the action the persons having adverse claims to

the title of the plaintiff against which a determination is

sought.” Id. § 762.010. “If the claim or the share or quantity

of the claim of a person required to be named as a defendant is

unknown, uncertain, or contingent, the plaintiff shall so state

in the complaint.” Id. § 762.020(b). 

California courts have generally held that “the owner of an

equitable interest cannot maintain an action to quiet title

against the owner of the legal title.” Stafford v. Ballinger,

199 Cal. App. 2d 289, 294-95 (1962); see also De Leonis v.

Hammel, 1 Cal. App. 390, 394 (1905). The rationale underlying

this rule is that “‘if the owner of equities could sue to quiet

title he might obtain a judgment based upon his adversary’s fraud

without setting up, in his pleadings[,] the facts constituting

such fraud. This would be manifestly unfair.’” Kennedy v.

Scally, 62 Cal. App. 367, 371 (1923) (quoting Aalyn’s Law Inst.

v. Martin, 173 Cal. 21, 26 (1916)). Consequently, where the

pleadings in an action “set up the facts” upon which a claim of

title is based, plaintiffs may be “entitled to a decree

determining their interest in the land.” Kennedy, 62 Cal. App.

at 371; see also Leeper v. Beltrami, 53 Cal. 2d 195, 214 (1959)

(noting that “where the legal title is in the defendant, and the

plaintiff seeks to quiet title on the ground defendant’s title

was secured from plaintiff by fraud, the plaintiff must plead and

prove facts constituting the fraud.”). Indeed, when the legal

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title to property has been acquired by fraud, the available

remedies include “quieting title in the defrauded equitable title

holder’s name and making the legal title holder the constructive

trustee of the property for the benefit of the defrauded

equitable titleholder.” Warren v. Merrill, 143 Cal. App. 4th 96,

114 (2006); see also De Leonis, 1 Cal. App. at 394 (explaining

that where “the facts upon which plaintiff’s claim is based, are

alleged, there is authority to grant any proper relief” permitted

under the California Code of Civil Procedure).

Here, defendants argue that (1) plaintiff fails to state a

claim because “California does not recognize a challenge to the

title by an owner of a merely equitable interest in the

property”; (2) plaintiff fails to allege a valid offer of tender

of the amount of indebtedness to defendants; and (3) HSBC is not

a proper defendant because HSBC has no adverse claim to

plaintiff’s title. (Defs.’ Mem. P. & A. Supp. Mot. Dismiss SAC

(“Defs.’ Mem.”) at 2-3.) 

1. Quiet Title Claim Against Legal Title Holder

Defendants assert that plaintiff fails to state a claim to

quiet title because the legal title to the Property is held by

defendant York. (Defs.’ Mem. at 3.) However, plaintiff alleges

that any defaults on her loan leading to the foreclosure sale of

the Property were “the result of Ocwen’s inaccurate and

fraudulent accounting” (SAC ¶ 44), and thus, that the trustee’s

deed to York should be set aside as unauthorized and void. (Id.

¶ 87.) Plaintiff alleges a pattern of fraudulent conduct

culminating in the foreclosure sale. (Id. ¶ 21.) Because

plaintiff asserts that the legal title to the Property was

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acquired through fraud and alleges a factual basis for her

assertion, the rule precluding a holder of equitable title from

bringing a quiet title claim against the legal title holder is

inapplicable here. See, e.g., De Leonis, 1 Cal. App. at 394. 

2. Tender of the Amount of Indebtedness

Defendants’ assertion that plaintiff failed to tender the

amount of indebtedness to defendants is likewise without merit. 

As the court held in its prior Order, plaintiff sufficiently

alleges that she entered a reinstatement quote agreement with

Ocwen to cure her alleged default and that she timely wired

$8,258.60 in accordance with Ocwen’s instructions. (SAC ¶¶ 63-

64.) Construing these allegations in the light most favorable to

the plaintiff, it is plausible to infer that she fulfilled her

obligations under the agreement, and thus, that Ocwen had no

contractual basis to exercise the power of sale. 

3. Proper Defendant

Finally, defendants argue that HSBC is not a proper

defendant to plaintiff’s quiet title claim because HSBC has no

claim to the title. (Defs.’ Mem. at 3.) Plaintiff counters that

HSBC may have a claim to the Property if plaintiff succeeds in

obtaining a decree setting aside the trustee’s deed transferring

the Property to defendant York. (Pl.’s Opp. Mot. to Dismiss SAC

(“Pls.’ Opp.”) at 5-6.) Plaintiff thus appears to allege a claim

by HSBC that is uncertain or contingent, as contemplated under

California Civil Procedure Code § 762.020(b). 

According to the assignment of the deed of trust, MERS as

nominee for Fidelity assigned all rights, title, and interest in

the Property to HSBC, the assignee beneficiary, on November 27,

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2006. (RFJN Ex. 5.) Plaintiff states: “It is unclear what

rights, if any, defendant HSBC Bank could have acquired by reason

of this Assignment, since MERS was solely the nominee of Fidelity

under the Deed of Trust and does not appear to have had any

rights under the Promissory Note.” (SAC ¶ 18.) Construing the

SAC in the light most favorable to plaintiff, the court finds

that plaintiff alleges alternate theories, including the theory

that HSBC as beneficiary of the deed of trust held an interest in

the Property prior to the foreclosure sale. 

The beneficiary of a deed of trust containing a power of

sale may proceed with a nonjudicial foreclosure sale upon default

by the trustor. See Moeller v. Lien, 25 Cal. App. 4th 822, 830

(1994). “This interest, the benefici[ary]’s power to cause a

sale of the property, is effectively a lien on the property.” 

Yulaeva v. Greenpoint Mortgage Funding, Inc., No. S-09-1504, 2009

WL 2880393, at *9 (E.D. Cal. 2009); see also Monterey S.P.

Partnership v. W.L. Bangham, 49 Cal. 3d 454, 460 (1989). The

beneficiary’s security interest in the property may be the

subject of a quiet title action. See Cal. Civ. Pro. Code §

760.010(a); Yulaeva, 2009 WL 2880393, at *9. 

Here, if plaintiff prevails in her attempt to obtain a

decree setting aside the trustee’s deed and the parties are

restored to the positions they held prior to the sale, HSBC would

potentially be the holder of a security interest in the Property

and may thus be an adverse claimant for the purposes of

plaintiff’s quiet title claim. 

Accordingly, defendants’ motion to dismiss plaintiff’s

second claim for relief as to defendant HSBC is DENIED.

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C. Breach of Contract

In her fourth claim for relief, plaintiff alleges that

Fidelity, HSBC, and Ocwen are liable to her for breach of

contract. (SAC ¶¶ 94-104.) Plaintiff also appears here to

proceed under alternate theories according to which Ocwen is

either an agent of an undisclosed principal or is itself the

principal liable to plaintiff. (See SAC ¶ 100.) Plaintiff

alleges that Fidelity assigned to Ocwen the loan servicing rights

and obligations pertaining to the promissory note and deed of

trust and that Ocwen breached obligations it assumed. (Id.

¶¶ 94-104.) Further, plaintiff alleges that Ocwen on its own

behalf entered into a “Forbearance Agreement” and a “Loan

Reinstatement Agreement” with plaintiff. (Id. ¶¶ 98-101.) 

Plaintiff asserts that she performed all her obligations

under the agreements and that “Fidelity, HSBC Bank and Ocwen

breached the terms of the Promissory Note, the Forbearance

Agreement and the Loan Reinstatement Agreement” by, inter alia,

failing to credit timely payments, misapplying payments received,

prematurely referring plaintiff’s loan to collections, charging

improper fees, and proceeding with the foreclosure sale despite

plaintiff’s compliance with terms for reinstatement of the loan. 

(Id. ¶ 103.)

A claim for breach of contract must include facts

demonstrating (1) that a contract exists between the parties; 

(2) that the plaintiff performed his contractual duties or was

excused from nonperformance; (3) that the defendant breached

those contractual duties; and (4) that plaintiff’s damages were a

result of the breach. Reichert v. Gen. Ins. Co. of America, 68

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Cal. 2d 822, 830 (1968); First Commercial Mortgage Co. v. Reece,

89 Cal. App. 4th 731, 745 (2001). “A written contract may be

pleaded either by its terms–set out verbatim in the complaint or

a copy of the contract attached to the complaint and incorporated

therein by reference–or by its legal effect.” McKell v.

Washington Mut., Inc., 142 Cal. App. 4th 1457, 1489 (2006). 

Pleading a contract by its legal effect requires the plaintiff to

“‘allege the substance of its relevant terms,’” which is “‘more

difficult’” because the plaintiff must engage in “‘careful

analysis of the instrument, comprehensiveness in statement, and

avoidance of legal conclusions.’” Id. (quoting 4 Witkin, Cal.

Procedure (4th ed. 1997) Pleading § 480, p. 573). 

Defendants argue that plaintiff fails to state a breach of

contract claim against Ocwen because Ocwen was not a party to the

promissory note and merely functioned as the servicer of the loan

in making a forbearance agreement and loan modification agreement

with plaintiff. (Defs.’ Mem. at 4.) Defendants further argue

that plaintiff fails to state a breach of contract claim against

Ocwen because plaintiff does not state whether the alleged

contracts were oral or written, does not attach the agreements to

the SAC, and does not set forth the terms of the contracts. (Id.

at 5.) Finally, defendants argue that plaintiff fails to state a

breach of contract claim against HSBC because plaintiff fails to

allege the existence of any contract between plaintiff and HSBC

or to allege facts that would give rise to a plausible claim for

breach of contract by HSBC. (Id. at 5-6.) 

Contrary to defendants’ assertions, plaintiff alleges a

theory of liability under which Ocwen assumed contractual

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obligations to plaintiff arising out of the promissory note and

deed of trust and independently entered two additional contracts

with plaintiff: a forbearance agreement and a loan modification

agreement. (SAC ¶¶ 97-101.) Thus, plaintiff sufficiently

alleges the existence of contracts between plaintiff and Ocwen. 

Likewise, although plaintiff’s allegations regarding the role of

HSBC are less than fully clear, a liberal construction of the SAC

permits the court to infer an alternative theory of liability

according to which HSBC assumed contractual obligations to

plaintiff when MERS assigned the deed of trust to HSBC. (See SAC

¶ 18) (alleging that MERS assigned its interest in the mortgage

to HSBC).

With respect to the forbearance agreement and the loan

reinstatement agreement, plaintiff has neither attached these

documents to her complaint nor stated their terms verbatim, and

her allegations are too vague to plead the legal effect of either

document. However, the court has taken judicial notice of the

deed of trust, and plaintiff alleges sufficient facts to state a

plausible claim for breach of various obligations arising under

the deed of trust against both Ocwen and HSBC. 

Accordingly, defendants’ motion to dismiss plaintiff’s claim

for breach of contract is DENIED as to the allegations concerning

the deed of trust and GRANTED with leave to amend concerning all

other alleged contracts.

D. Breach of Third Party Beneficiary Obligations

In her fifth claim for relief, plaintiff alleges that Ocwen

entered into an agreement or agreements with Fidelity and/or with

HSBC and that the agreement(s) were intended to benefit

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plaintiff. (SAC ¶¶ 105-07.) Plaintiff alleges that Ocwen

breached the agreement(s) by, inter alia, failing to credit

timely payments, misapplying payments received, prematurely

referring plaintiff’s loan to collections, charging improper

fees, and proceeding with the foreclosure sale despite

plaintiff’s compliance with terms for reinstatement of the loan. 

(Id. at ¶ 108.)

“A contract, made expressly for the benefit of a third

person, may be enforced by him at any time before the parties

thereto rescind it.” Cal. Civ. Code § 1559. The contract “does

not need to specifically name the party as the beneficiary; the

only requirement is that ‘the party is more than incidentally

benefitted by the contract.’” Cartwright v. Viking Indus., Inc.,

No. 2:07-CV-02159, 2009 WL 2982887, *9 (E.D. Cal. Sept. 14, 2009)

(quoting Shell v. Schmidt, 126 Cal. App. 2d 279, 290 (1954)). 

“The test for determining whether a contract was made for the

benefit of a third person is whether an intent to benefit a third

person appears from the terms of the contract.” Johnson v.

Holmes Tuttle Lincoln-Mercury, Inc., 160 Cal. App. 2d 290, 297

(1958). “If the terms of the contract necessarily require the

promisor to confer a benefit on a third person, then the

contract, and hence the parties thereto, contemplate a benefit to

the third person.” Id. 

Here, defendants argue that plaintiff has not alleged any

facts to demonstrate that Ocwen and HSBC intended plaintiff to be

the beneficiary of the servicing agreement, and that plaintiff

has not sufficiently alleged facts to establish a breach of the

servicing agreement. (Defs.’ Mem. at 7-8.) However, plaintiff

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alleges that Ocwen and Fidelity and/or HSBC entered one or more

agreements requiring Ocwen to provide various services to

plaintiff, including billing plaintiff, providing her with

information regarding her account, and consulting with plaintiff

regarding loan modification and forbearance. (See SAC ¶¶ 48-57.) 

Thus, plaintiff sufficiently alleges that she is the third party

beneficiary of one or more contracts between Ocwen and Fidelity

and/or HSBC. Further, plaintiff’s allegations are sufficient to

put defendants on notice of the basis of her claims. 

Accordingly, defendants’ motion to dismiss plaintiff’s fifth

claim for relief is DENIED.

E. Fraud

Plaintiff in her sixth claim for relief alleges that Ocwen

engaged in fraud by making false and misleading statements to

plaintiff regarding the status of her loan. (SAC ¶¶ 110-116.) 

Under Federal Rule of Civil Procedure 9(b)’s heightened

pleading requirements, to allege a claim for fraud, a plaintiff

“must state with particularity the circumstances constituting

fraud.” Fed. R. Civ. P. 9(b). In other words, the plaintiff

must include “the who, what, when, where, and how” of the fraud. 

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)

(citations omitted). Further, “[w]hen a fraudulent statement is

alleged, the plaintiff must set forth what is false or misleading

about the statement, and why it is false.” Marksman Partners,

L.P. v. Chantal Pharm. Corp., 927 F. Supp. 1297, 1308 (C.D. Cal.

1996) (internal quotations and citation omitted). The purpose of 

Rule 9(b) is to ensure that defendants accused of the conduct

specified have adequate notice of what they are alleged to have

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done, so that they may defend against the accusations. Concha v.

London, 62 F.3d 1493, 1502 (9th Cir. 1995).

Furthermore, when asserting a fraud claim against a

corporation, a “plaintiff’s burden . . . is even greater . . . .

The plaintiff must ‘allege the names of the persons who made the

allegedly fraudulent representations, their authority to speak,

to whom they spoke, what they said or wrote, and when it was said

or written.’” Lazar v. Superior Court, 12 Cal. 4th 631, 645

(1996) (quoting Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal.

App. 4th 153, 157 (1991)); see also Akhavein v. Argent Mortgage

Co., No. 5:09-cv-00634, 2009 U.S. Dist. LEXIS 61796, at *10 (N.D.

Cal. July 17, 2009); Edejer v. DHI Mortgage Co., No. C 09-1302,

2009 U.S. Dist. LEXIS 52900, at *36 (N.D. Cal. June 12, 2009)

(dismissing fraud claim where plaintiff did not allege any

misrepresentation or false statements made by defendants and

failed to allege names of individuals who made fraudulent

representations).

Defendants contend that plaintiff fails to state a claim for

fraud because plaintiff “does not contend and her allegations do

not support an inference” that Ocwen committed any acts with a

specific intent to defraud her. (Defs.’ Mem. at 8.) However,

under Rule 9(b), “[m]alice, intent, knowledge and other

conditions of a person’s mind may be alleged generally.” Here,

plaintiff alleges that “Ocwen engaged in a pattern and scheme to

disseminate false and misleading information in order to confuse

and trick [plaintiff] into making payments of amounts that were

not due and into believing that [her loan] was in default when in

fact the loan was not in default.” (Id. ¶ 111.) These

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allegations sufficiently allege intent to engage in fraud, and

thus, plaintiff satisfies her pleading burden under Rule 9(b).

Accordingly, defendants’ motion to dismiss plaintiff’s fraud

claim is DENIED.

F. California Business & Professions Code § 17200

In her seventh claim for relief, plaintiff alleges that

defendants Ocwen, York, Fidelity, and HSBC violated § 17200 of

the California Business and Professions Code by engaging in

fraudulent business practices. (SAC ¶¶ 117-20.) 

The Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code

§§ 17200 et seq., forbids acts of unfair competition, which

includes “any unlawful, unfair or fraudulent business act or

practice.” Id. § 17200. The UCL “incorporates other laws and

treats violations of those laws as unlawful business practices

independently actionable under state law.” Plascencia v. Lending

1st Mortgage, 583 F. Supp. 2d 1090, 1098 (9th Cir. 2008); see

also Farmers Ins. Exch. v. Superior Court, 2 Cal. 4th 377, 383

(1992). “California’s UCL has a broad scope that allows for

‘violations of other laws to be treated as unfair competition

that is independently actionable’ while also ‘sweep[ing] within

its scope acts and practices not specifically proscribed by any

other law.’” Hauk v. JP Morgan Chase Bank U.S., 552 F.3d 1114

(9th Cir. 2009) (internal citations omitted)). “Violation of

almost any federal, state, or local law may serve as the basis

for a UCL claim.” Plascencia, 583 F. Supp. at 1098 (citing

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

Defendants argue that plaintiff fails to allege her claim

with sufficient particularity, and that plaintiff’s claim against

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HSBC fails because plaintiff does not allege a claim for fraud

against HSBC. (Defs.’ Mem. at 9.) 

Plaintiff’s UCL claim is founded upon the same allegations

as her fraud claim, and as set forth supra, plaintiff’s

allegations are sufficient to state a claim for fraud against

Ocwen. However, plaintiff does not plead any facts to establish

fraudulent conduct by HSBC. “Rule 9(b) does not allow a

complaint to merely lump multiple defendants together but

require[s] plaintiffs to differentiate their allegations when

suing more than one defendant...and inform each defendant

separately of the allegations surrounding his alleged

participation in the fraud.” Swartz v. KPMG LLP, 476 F.3d 756,

765-766 (9th Cir. 2007) (internal quotation and citation

omitted). Because plaintiff fails to state any allegations of

fraud against HSBC, let alone allegations sufficient to satisfy

the heightened pleading standards of Rule 9(b), plaintiff’s UCL

allegations against HSBC fail to state a claim. 

Accordingly, defendants’ motion to dismiss plaintiff’s claim

for violations of California Business & Professions Code § 17200

is DENIED with respect to Ocwen and GRANTED with leave to amend

with respect to HSBC.

G. California’s Rosenthal Act

Plaintiff in her eighth claim for relief alleges that Ocwen

violated California’s Rosenthal Fair Debt Collection Practices

Act (“RFDCPA”), Cal. Civ. Code §§ 1788 et seq., by falsely

representing plaintiff’s debt, by adding unwarranted debt, by

falsely informing credit reporting agencies that plaintiff had

defaulted on her loan when it knew that these statements would

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defame plaintiff, and by placing telephone calls seeking

financial information about plaintiff without disclosing the

identity of the caller. (SAC ¶ 122.) 

The purpose of the RFDCPA is “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(b). The RFDCPA defines a “debt collector” as “any

person who, in the ordinary course of business, regularly, on

behalf of himself or herself of others, engages in debt

collection.” § 1788.2(c). A debt collector violates the act,

e.g., when it engages in threats, use of profane language, or

harassment; when it places telephone calls without disclosing the

caller’s identity; when it communicates to a third party that a

debtor has engaged in conduct, other than failure to pay a

consumer debt, that the debt collector knows or has reason to

believe will defame the debtor; and when it makes a false

representation that a consumer debt may be increased by the

addition of fees or other charges if such fees or charges may not

be lawfully added to the existing debt. Id. §§ 1788.10;

1788.11(a),(b),(e); 1788.13(e). 

Ocwen argues that plaintiff fails to state a claim under the

RFDCPA (1) because Ocwen is not a “debt collector” within the

meaning of the act and (2) because plaintiff fails to allege any

facts demonstrating a violation of RFDCPA. (Defs.’ Mem. at 10-

11.) The RFDCPA’s definition of “debt collector” broadly

encompasses “any person” who regularly engages in debt

collection. Cal. Civ. Code § 1788.2(c). Here, plaintiff alleges

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that Ocwen regularly billed her and collected payments on her

mortgage loan debt from 2004 through 2009. (See SAC ¶ 17.) 

Thus, plaintiff pleads sufficient facts to show that Ocwen is a

“debt collector” under the RFDCPA.

As defendants point out, some federal district courts have

broadly held that the RFDCPA does not apply to mortgage

foreclosures. See, e.g., Rosal v. First Fed. Bank of Cal., 671

F. Supp. 2d 1111, 1135 (N.D. Cal. 2009). Here, however, the

gravamen of plaintiff’s claim is that Ocwen engaged in a pattern

of improper conduct in the course of servicing her loan,

ultimately causing the wrongful foreclosure of the home. Hence,

plaintiff’s claim arises out of debt collection activities beyond

the scope of the ordinary foreclosure process, and consequently,

a remedy may be available under the RFDCPA. See Wilson v. JP

Morgan Chase Bank, NA, No. CIV 2:09-8630, 2010 WL 2574032, at *10

(E.D. Cal. June 25, 2010) (dismissing an RFDCPA claim where the

plaintiff did not identify “any debt collection actions of

defendants that fall outside the normal foreclosure process”). 

Turning to the substance of her claim, plaintiff asserts

that Ocwen violated RFDCPA by making defamatory statements about

her to credit reporting agencies and by placing anonymous calls

seeking financial information about her. (SAC ¶ 122.) But

plaintiff fails to plead any details regarding the alleged

statements and calls. These bare allegations thus fail to put

Ocwen on notice of the basis for the alleged RFDCPA violations. 

See Twombly, 550 U.S. at 555. However, plaintiff does

sufficiently allege facts to support her claim that Ocwen

represented to plaintiff that she would be charged unlawful fees.

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(See, e.g., SAC ¶¶ 31, 38.) 

Accordingly, defendants’ motion to dismiss plaintiff’s claim

for violations of the RFDCPA is DENIED as to the allegations that

Ocwen represented that plaintiff would be charged unlawful fees,

and GRANTED with leave to amend as to all other allegations. 

H. Unjust Enrichment/Restitution

In her ninth claim for relief, plaintiff alleges that Ocwen,

York, Fidelity, and HSBC “unjustly benefitted from the acts

described” in the SAC and unjustly retained benefits at her

expense. (SAC ¶ 124-26.) 

In order to establish a claim for unjust enrichment, a

plaintiff must plead “receipt of a benefit and unjust retention

of the benefit at the expense of another.” Lectrodryer v.

SeoulBank, 77 Cal. App. 4th 723, 726 (2000). Furthermore, the

plaintiff must demonstrate that the defendant received the

benefit through mistake, fraud, coercion or request. Nibbi

Bros., Inc. v. Home Fed. Sav. & Loan Ass’n, 205 Cal. App. 3d

1415, 1422 (1988).

HSBC argues that plaintiff fails to allege any facts

demonstrating that HSBC unjustly received and retained a benefit,

and that plaintiff thus fails to state a claim for unjust

enrichment against HSBC. (Defs.’ Mem. at 11-12.) In its prior

Order, the court held that plaintiff had sufficiently alleged

that by proceeding with the trustee’s sale despite plaintiff’s

compliance with the reinstatement quote, Ocwen unjustly received

a benefit. (Order at 26.) Liberally construing the allegations

in the SAC, plaintiff may be understood to allege an alternative

theory of liability under which HSBC by assignment became the

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beneficiary of the deed of trust and Ocwen’s principal, that HSBC

instigated the trustee’s sale, and that HSBC thus unjustly

received the proceeds of an improper foreclosure sale. (See SAC

¶ 18-19.) Consequently, plaintiff alleges sufficient facts to

state a claim for unjust enrichment against HSBC.

Accordingly, defendants’ motion to dismiss plaintiff’s claim

for unjust enrichment is DENIED.

I. Breach of Fiduciary Duty

Plaintiff in her tenth claim for relief alleges breach of

fiduciary duty by defendants Ocwen, Fidelity, and HSBC. (SAC ¶¶

127-30.) Plaintiff bases her claim on Ocwen’s conduct in

servicing her loan, pointing, inter alia, to Ocwen’s alleged

failure to timely credit payments, failure to provide plaintiff

with timely information regarding her loan, and imposition of

improper fees. (Id. ¶ 128.) 

“To state a claim for breach of a fiduciary duty, ‘a

plaintiff must demonstrate the existence of a fiduciary

relationship, breach of that duty and damages.’” Serrano v. Sec.

Nat’l Mortgage Co., No. 09-CV-1416, 2009 U.S. Dist. LEXIS 71725,

at *12-13 (S.D. Cal. Aug. 14, 2009) (quoting Shopoff & Cavallo

LLP v. Hyon, 167 Cal. App. 4th 1489, 1509 (2008). “Absent

‘special circumstances’ a loan transaction ‘is at arms-length and

there is no fiduciary relationship between the borrower and

lender.’” Rangel v. DHI Mortgage Co., Ltd., No. CV F 09-1035,

2009 U.S. Dist. LEXIS 65674, at *8 (E.D. Cal. July 21, 2009)

(quoting Oaks Mgmt. Corp. v. Superior Court, 145 Cal. App. 4th

453, 466 (2006)); see also Nymark v. Heart Fed. Savings & Loan

Ass’n, 231 Cal. App. 3d 1089, 1096 (stating that “As a general

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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.”).

Ocwen and HSBC argue that plaintiff fails to state a claim

because plaintiff fails to establish a fiduciary duty on the part

of either Ocwen or HSBC. (Defs.’ Mem. at 12-13.) Curiously, or

perhaps tellingly, the only precedent plaintiff cites in support

of her claim is a case in which the Ninth Circuit refused to hold

as a matter of law that the relationship between an investment

banker and a client could not be a fiduciary relationship. In re

Daisy Systems Corp., 97 F.3d 1171, 1178 (9th Cir. 1996). Rather,

the Ninth Circuit stated, “the existence of a fiduciary relation

is a question of fact which properly should be resolved by

looking to the particular facts and circumstances of the

relationship at issue.” Id. 

Turning to the particular facts and circumstances alleged

here, plaintiff fails to plead any allegations to plausibly

suggest that her relationship with Ocwen was anything other than

an ordinary, arms-length relationship. Under California law, a

borrower-lender relationship does not create a fiduciary duty. 

See, e.g., Rangel, 2009 U.S. Dist. LEXIS 65674, at *8. Plaintiff

points to the financial “counseling” Ocwen provided her as

evidence of the assumption of a fiduciary duty. (See SAC ¶¶ 48-

57.) However, the facts plaintiff alleges do not demonstrate

more than an attempt to collect an outstanding debt. Because

plaintiff does not plead facts sufficient to show how Ocwen’s

role in servicing her loan exceeded the conventional role of “a

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mere lender of money,” Nymark, 231 Cal. App. 3d at 1096,

plaintiff fails to establish that Ocwen owed her a fiduciary

duty. Nor does plaintiff allege facts sufficient to establish

that she had any relationship whatsoever with HSBC. 

While under Federal Rule of Civil Procedure 15(a)(2), leave

to amend should be freely given, the court is not required to

allow futile amendments. Klamath-Lake Pharm. Ass’n v. Klamath

Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983). Here,

amendment of plaintiff’s breach of fiduciary duty claim would be

futile under the governing law described above, and plaintiff

does not allege any other facts that could plausibly give rise to

such a claim against defendants. See Iqbal, 129 S. Ct. at 1949.

Accordingly, defendants’ motion to dismiss plaintiff’s

breach of fiduciary duty claim is GRANTED without leave to amend. 

I. Negligence

In her eleventh claim for relief, plaintiff alleges that

defendants Ocwen, Fidelity, and HSBC are liable for negligence.

(SAC ¶ 131-35.) Plaintiff argues that defendants owed her a duty

of care, “the least of which was the accurate and timely

accounting and reporting of her debt payments, and the accurate

and timely communication to [plaintiff] and various credit

reporting agencies of the nature and amount of her debt.” (Id. ¶

132.) Plaintiff alleges that defendants breached this duty, thus

causing her damages in the form of financial harm, damage to her

reputation, emotional distress, and the foreclosure of her home. 

(Id. ¶ 134.)

Under California law, the elements of a claim for negligence

are “(a) a legal duty to use due care; (b) a breach of such legal

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duty; and (c) the breach as the proximate or legal cause of the

resulting injury.” Ladd v. County of San Mateo, 12 Cal. 4th 913,

917 (1996) (emphasis in original) (internal quotations and

citation omitted); see Cal. Civ. Code § 1714(a). A financial

institution generally has no duty of care to a borrower unless

the institution exceeds the scope of the traditional role of a

lender of money. Nymark, 231 Cal. App. 3d at 1095.

Defendants argue that plaintiff’s negligence claim fails as

a matter of law because defendants do not owe plaintiff a tort

duty of care. (Defs.’ Mem. at 12-13.) As with plaintiff’s

breach of fiduciary duty claim, plaintiff does not allege facts

that would suggest Ocwen’s actions exceeded “the domain of the

usual money lender.” Nymark, 231 Cal. App. 3d at 1096 (internal

quotations and citation omitted). Because plaintiff does not

plead sufficient allegations to show a relationship with Ocwen or

HSBC outside the scope of a traditional lender-borrower

relationship, she fails to establish that either Ocwen or HSBC

owed her a tort duty of care. Plaintiff’s reliance on Shafer v.

Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone, 107 Cal.

App. 4th 54, 70 (2003), is inapposite. (See Pls.’ Opp. at 16.). 

The court in Shafer recognized a duty to refrain from engaging in

intentionally tortious conduct; this duty is not applicable to

plaintiff’s claim for negligence. 

As with her breach of fiduciary duty claim, amendment of

plaintiff’s negligence claim would be futile under the governing

law, and plaintiff fails to allege any other facts that could

plausibly give rise to a duty on the part of defendants. See

Iqbal, 129 S. Ct. at 1949. 

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6 The court construes the SAC to refer to 18 U.S.C. §

1962, and not to 18 U.S.C. § 1852, which deals with the removal

or transportation of timber.

7 Violations of 15 U.S.C. § 1692 are not predicate RICO

violations. See 18 U.S.C. § 1961(1). The court deems this

language to be superfluous, and does not understand plaintiff to

state a separate claim for relief under the Fair Debt Collection

Practices Act.

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Accordingly, defendants’ motion to dismiss plaintiff's

negligence claim is GRANTED without leave to amend.

J. RICO

In her twelfth claim for relief, plaintiff alleges that

Ocwen violated the federal Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. § 1962(c) and § 1962(d), by

engaging in a pattern of racketeering activity consisting of mail

and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343. In

addition, plaintiff alleges that Ocwen violated RICO through “the

use of the mail and interstate commerce . . . in violation of 18

U.S.C. § 1852;6 and repeated violations of the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692 et seq.”7 (SAC ¶

141.)

Title 18 U.S.C. § 1962(c) makes it “unlawful for any person

employed by or associated with any enterprise” engaged in or

affecting interstate commerce “to conduct or participate,

directly or indirectly, in the conduct of such enterprise’s

affairs through a pattern of racketeering activity.” Section

1962(d) makes it unlawful for any person to conspire to commit a

violation of § 1962(c). The “racketeering activity” prohibited

under § 1962(c) includes a variety of acts indictable under Title

18 of the United States Code, including “any act which is

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indictable under . . . section 1341 (relating to mail fraud)

[and] section 1343 (relating to wire fraud.” 18 U.S.C. §

1961(1)(B). RICO permits “[a]ny person injured in his business

or property by reason of a violation of section 1962” to recover

treble damages. 18 U.S.C. § 1964(c).

Ocwen argues that plaintiff lacks standing to assert a RICO

claim, and that plaintiff fails to allege the elements of a RICO

claim against Ocwen. (Defs.’ Mem. at 13-16.)

1. Standing

A plaintiff has standing to bring a RICO claim and can

recover only to the extent that “he has been injured in his

business or property by the conduct constituting the violation.” 

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985); See 18

U.S.C. § 1964. Furthermore, a RICO plaintiff “‘must show proof

of concrete financial loss’ and must demonstrate that the

racketeering activity proximately caused the loss.” Guerrero v.

Gates, 442 F.3d 697, 707 (9th Cir. 2006)(citing Chaset v.

Fleer/Skybox Int’l, 300 F.3d 1083, 1087 (9th Cir. 2002)). 

Ocwen advances two arguments in support of its contention

that plaintiff lacks standing to bring her RICO claim. First,

Ocwen asserts that plaintiff’s claim is not within the scope of

litigation contemplated under RICO because RICO was “‘intended to

combat organized crime, not to provide a federal cause of action

and treble damages to every tort plaintiff.’” (Defs.’ Mem. at 14

(quoting Dumas v. Major League Baseball Props., Inc., 104 F.

Supp. 2d 1220, 1221 (S.D. Cal. 2000)).) Second, Ocwen maintains

that plaintiff seeks to recover for injuries not compensable

under RICO, citing Berg v. First State Ins. Co., 915 F.2d 460,

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(9th Cir. 1990), and Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d

1193, 1204 (S.D. Cal. 2008) (Defs.’ Reply Opp. Mot. to Dismiss

Pls.’ SAC (“Defs.’ Reply”) at 7-8.)

Regarding Ocwen’s first argument, the Supreme Court has

expressly declined to limit the pattern of racketeering

encompassed by RICO to organized crime activity. See H.J. Inc.

v. Northwestern Bell Tel. Co., 492 U.S. 229, 248 (1989)

(explaining that “Congress for cogent reasons chose to enact a

more general statute, one which, although it had organized crime

as its focus, was not limited in application to organized

crime”); see also Sedima, 473 U.S. at 497 (stating that “RICO is

to be read broadly.”). Here, plaintiff bases her RICO claim on

allegations of mail and wire fraud allegedly committed “on a

nearly monthly basis over a period of more than four years.” 

(Pls. Opp. at 16). Because the “racketeering activity”

encompassed by RICO is defined to include mail and wire fraud, 18

U.S.C. §§ 1341, 1343, plaintiff alleges injury within the scope

of RICO. 

Notwithstanding Ocwen’s assertions to the contrary,

plaintiff also alleges losses that are compensable under RICO.

Plaintiff asserts that defendants’ acts of mail and wire fraud

caused her financial losses in the form of excessive fees and

costs, as well as the loss of her home as a result of the

foreclosure sale. (Pl.’s Opp. at 18.) These alleged injuries

constitute a “concrete financial loss” of plaintiff’s “property,”

and thus satisfy the injury requirement of RICO standing. See

Guerrero, 442 F.3d at 707.

///

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Ocwen’s reliance on Berg and Izenberg is misplaced. In

Berg, the plaintiffs suffered no financial loss but sought RICO

recovery for emotional distress. 915 F.2d at 464. The court

held that emotional distress was not a compensable injury to

“business or property” within the meaning of §1964(c). Id.

Here, by contrast, plaintiff alleges financial injury in the form

of excess fees and costs, as well as the loss of her house. (SAC

¶¶ 21, 60-70.) Thus, Berg is distinguishable. Similarly, in

Izenberg, the court found that the plaintiffs failed to state a

RICO claim where the only financial injury pled consisted of

legal fees and the alleged possibility of future losses in the

form of foreclosure on the plaintiffs’ property and excess

mortgage fees. 589 F. Supp. 2d at 1204-05. Here, however,

plaintiff alleges actual financial losses, and Izenberg is

therefore inapplicable. Consequently, Ocwen fails to demonstrate

that plaintiff lacks standing to bring a RICO claim.

2. Elements of a RICO Claim

In order to state a claim for a violation of § 1962(c), a

plaintiff must plead “(1) conduct (2) of an enterprise (3)

through a pattern (4) of racketeering activity.” Sedima,

S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985). 

“To allege a violation of the mail fraud statute, it is

necessary to show (1) the defendants formed a scheme or artifice

to defraud; (2) the defendants used the United States mails or

caused a use of the United States mails in furtherance of the

scheme; and (3) the defendants did so with the specific intent to

deceive or defraud.” Schreiber Distrib. Co. v. Serv-Well

Furniture Co., Inc., 806 F.2d 1393, 1399-1400 (9th Cir. 1986). 

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The elements of wire fraud are identical but require use of the

United States wires rather than the mails. Id. at 1400. 

The Ninth Circuit has held that the particularity

requirements of Rule 9(b) apply to RICO claims. Moore v. Kayport

Package Exp., Inc., 885 F.2d 531, 541 (9th Cir. 1989). Thus,

“[a]llegations of fraud under section 1962(c) must identify the

time, place, and manner of each fraud plus the role of each

defendant in each scheme.” Schreiber, 806 F.2d at 1401 (internal

quotations and citation omitted). 

Ocwen argues that plaintiff fails to allege facts

establishing a pattern of racketeering activity by Ocwen and

fails to allege the existence of an enterprise within the meaning

of 1962(c). (Defs.’ Mem. at 15-16.) 

a. Pattern of Racketeering Activity

To establish a “pattern of racketeering activity” under

RICO, a plaintiff must show at least two “predicate acts” of

racketeering within ten years. See 18 U.S.C. § 1961(5); Turner

v. Cook, 362 F.3d 1219, 1229 (9th Cir. 2004). “A ‘pattern’ of

racketeering activity also requires proof that the racketeering

predicates are related and ‘that they amount to or pose a threat

of continued criminal activity.’” Turner, 362 F.3d at 1229

(quoting H.J. Inc., 492 U.S. at 239). The Supreme Court has

identified two types of continuity: closed-ended continuity,

consisting of “a closed period of repeated conduct,” and openended continuity, consisting of “past conduct that by its nature

projects into the future with a threat of repetition.” H.J.,

Inc., 492 U.S. at 241. The Court has emphasized that continuity

is “centrally a temporal concept.” Id. at 242. Thus,

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8 In its motion to dismiss, Ocwen does not address, and

thus the court does not reach, the issue of whether plaintiff

adequately alleges all the elements of wire and mail fraud with

the particularity required by Rule 9(b). Here, the court assumes

without deciding that plaintiff sufficiently alleges the elements

of these RICO predicate offenses.

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“[p]redicate acts extending over a few weeks or months and

threatening no future criminal conduct do not satisfy this

requirement” because “Congress was concerned in RICO with longterm criminal conduct.” Id. 

Here, Ocwen asserts that plaintiff fails to allege (1) any

conduct affecting interstate commerce and (2) “a causal

connection between Ocwen’s alleged wrongdoing and the purported

pattern.” (Defs.’ Mem. at 15, 15 n.3.) 

While an “effect on commerce is an essential element of a

RICO violation,” the “required nexus need not be great”; indeed,

even a “minimal effect on interstate commerce satisfies this

jurisdictional element.” United States v. Bagnariol, 665 F.2d

877, 892 (9th Cir. 1981). Here, plaintiff alleges that Ocwen

made use of the mails and wires to conduct fraudulent activities. 

These allegations suffice to meet the requirement of a “minimal

effect on interstate commerce.” 

Furthermore, despite Ocwen’s argument that plaintiff fails

to allege a “causal connection” between Ocwen’s actions and a

pattern of racketeering activity, plaintiff in fact alleges

several specific instances of fraudulent activity between January

2005 and January 2009 involving the use of the wires and mails.8

(See SAC ¶¶ 21-22, 28-29, 31, 38, 43, 55.) Plaintiff thus

adduces more than two predicate acts of alleged racketeering

activity and alleges a pattern of criminal activity extending

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beyond “a few weeks or months.” H.J., Inc., 492 U.S. at 242. 

Hence, plaintiff sufficiently alleges long-term criminal activity

to satisfy the Supreme Court’s test for a closed-ended pattern of

continuity. (See, e.g., SAC ¶¶ 21-22.)

b. Enterprise

Title 18 U.S.C. § 1962(c) provides: “It shall be unlawful

for any person employed by or associated with any enterprise” to

conduct or participate in the conduct of the enterprise’s affairs

through a pattern of racketeering activity. RICO broadly defines

“enterprise” to include “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(4). The Supreme Court has explained

that “Section 1961(4) describes two categories of associations

that come within the purview of the ‘enterprise’ definition. The

first encompasses organizations such as corporations and

partnerships, and other ‘legal entities.’ The second covers ‘any

union or group of individuals associated in fact although not a

legal entity.’” United States v. Turkette, 452 U.S. 576, 581-82

(1981). 

The Ninth Circuit interprets § 1962(c) to require a

distinction between the “person” named as the defendant and the

“enterprise” with which the “person” is employed or associated.

See Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1533 (9th Cir.

1992). Thus, “for the purposes of a single action, a corporate

defendant cannot be both the RICO person and the RICO enterprise

under section 1962(c).” Id. at 1534. 

///

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However, a plaintiff may be able to state a claim for a

violation of § 1962(c) against corporate employees where the

corporation is named as the “enterprise.” See Cedric Kushner

Promotions, Ltd., v. King, 533 U.S. 158, 163 (2001) (holding that

the president and sole employee of a closely held corporation was

a “person” distinct from the “enterprise” of the corporation

itself); see also Miranda v. Ponce Fed. Bank, 948 F.2d 41, 45

(1st Cir. 1991) (explaining that “Officers of a corporate

enterprise may be personally liable for civil RICO violations if

they conducted their employer’s affairs through a proscribed

pattern of racketeering activity.”). Consequently, “the

inability of a corporation to operate except through its officers

is not an impediment to section 1962(c) suits,” and poses a

problem “only when the corporation is the named defendant–when it

is both the ‘person’ and the ‘enterprise.’” Sever, 978 F.2d at

1534 (emphasis in original).

In addition, “a group or union consisting solely of

corporations or other legal entities can constitute an

‘associated in fact’ enterprise.” United States v. Blinder, 10

F.3d 1468, 1473 (9th Cir. 1993) (emphasis in original). 

Significantly, an “enterprise” may consist entirely of

corporations that are also named as defendants. See River City

Mkts., Inc. v. Fleming Foods West, Inc., 960 F.2d 1458, 1461-62

(9th Cir. 1992) (explaining that while “a single individual or

entity cannot be both the RICO enterprise and an individual RICO

defendant” because “an individual cannot associate or conspire

with himself,” “[a]ll the circuits that have considered the

question have concluded that a plaintiff is free to name all

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members of an association-in-fact enterprise as individual

defendants.”)

In the instant case, plaintiff identifies Ocwen as “an

‘enterprise’ within the meaning of 18 U.S.C. § 1961(4).” (SAC ¶

138.) However, plaintiff fails to plead sufficient facts to

identify an enterprise distinct from Ocwen in its role as

defendant. Plaintiff asserts that “Ocwen has conducted a

mortgage foreclosure enterprise in which the other defendants

cooperate and assist in Ocwen’s plan to generate unlawful fees

and charges and to foreclose on properties where the owners have

substantial equity, through fraudulent billings and charges and

other fraudulent conduct.” (Pls.’ Opp. at 18.) While this

theory, if supported by factual allegations, might be sufficient

to plausibly allege the existence of a RICO enterprise, plaintiff

fails to plead any allegations of mail fraud or wire fraud, with

the particularity required under Rule 9(b), against any defendant

other than Ocwen. Hence, despite her conclusory assertion that

the “enterprise thus consists of an association between Ocwen,

MERS, HSBC, Cal-Western Reconveyance, the trustee and York, at

the very least,” (Id.), plaintiff does not support her theory

with factual allegations sufficient to state a claim for which

relief can be granted. See Sever, 978 F.2d at 1534. 

Accordingly, defendants’ motion to dismiss plaintiffs’

twelfth claim for relief is GRANTED with leave to amend. 

K. Intentional Inference with Contractual Relations

In her thirteenth claim, plaintiff alleges that Ocwen

intentionally interfered with plaintiff’s contractual relations

with Fidelity and/or HSBC. (SAC ¶ 147-52.) 

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California courts have long held “that a stranger to a

contract may be liable in tort for intentionally interfering with

the performance of a contract.” Pac. Gas & Elec. Co. v. Bear

Stearns & Co., 50 Cal. 3d 1118, 1126 (1990). “The elements which

a plaintiff must plead to state the cause of action for

intentional interference with contractual relations are (1) a

valid contract between plaintiff and a third party; 

(2) defendant’s knowledge of this contract; (3) defendant’s

intentional acts designed to induce a breach or disruption of the

contractual relationship; (4) actual breach or disruption of the

contractual relationship; and (5) resulting damage.” Id. 

Although interference with contractual relations is an

intentional tort, “it does not require that the defendant act

with specific intent to interfere.” Davis v. Nadrich, 174 Cal.

App. 4th 1, 10 (2009). Thus, a plaintiff may bring a claim where

the defendant “does not act for the purpose of interfering with

the contract or desire it but knows that the interference is

certain or substantially certain to occur as a result of his

action.” Quelimane Co. v. Stewart Title Guar. Co., 19 Cal. 4th

26, 56 (1998) (quoting Rest. 2d Torts § 766, com. j, p.12).

Here, defendants argue that plaintiff fails to allege that

Ocwen had any intent to induce a breach of contract or that HSBC

and/or Fidelity breached any contract. (Defs.’ Mem. at 16-17.) 

Defendants argue that plaintiff must allege facts demonstrating

that Ocwen “acted with the purpose or design to cause the breach”

in order to meet the intentional act requirement. (Id. at 17.) 

However, contrary to defendants’ assertions, plaintiff may

sufficiently state a claim if she alleges that contractual

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interference was “incidental” to an “independent purpose” of

Ocwen but known to Ocwen “to be a necessary consequence” of its

actions. Quelimane, 19 Cal. 4th at 56 (quoting Rest. 2d Torts §

766, com. j, p.12). Under the liberal notice pleading standards

of Rule 8(a), plaintiff satisfies this burden. Plaintiff alleges

that if she breached the terms of her agreements with Fidelity

and/or HSBC, Ocwen induced the breach by, inter alia, failing to

credit payments as contractually required, charging fees that

exceeded contractually specified amounts, and by instructing

plaintiff to make payments on terms that failed to prevent the

foreclosure sale of her home. (SAC ¶ 150.) Thus, plaintiff

sufficiently states a claim for interference with contractual

relations. 

Accordingly, defendants’ motion to dismiss plaintiff’s

thirteenth claim for relief is DENIED. 

L. Negligent Interference with Contractual Relations

In her fourteenth claim for relief, plaintiff asserts a

claim for “negligent interference with contractual relations.” 

(SAC ¶¶ 153-55.) However, California law does not recognize a

cause of action for negligent interference with contractual

relations, Davis, 174 Cal. App. 4th at 9, as plaintiff herself

acknowledges in her opposition to defendants’ motion to dismiss. 

(Pls.’ Opp. at 19).

Accordingly, defendants’ motion to dismiss plaintiff’s

fourteenth claim for relief is GRANTED without leave to amend.

II. Motion to Strike

Defendants also move pursuant to Federal Rule of Civil

Procedure 12(f) to strike plaintiff’s claims for quiet title,

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breach of third party beneficiary obligations, intentional

interference with contractual relations, and negligent

interference with contractual relations. (Mot. to Strike, filed

June 4, 2010, at 2.) In addition, defendants move to strike

plaintiff’s prayer for punitive damages in connection with her

fraud claim. (Id.) 

A. Claims

Defendants argue that plaintiff failed to comply with the

requirements of Rule 15(a)(2) by not securing leave from the

court before amending her quiet title claim to add HSBC as a

defendant and adding her claims for breach of third party

beneficiary obligations and intentional and negligent

interference with contractual relations. (Id.) 

While as a technical matter defendants are correct that

plaintiff’s amendments were not contemplated within the leave to

amend granted by the court’s prior Order, a “court should freely

give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). 

Consequently, the court construes plaintiff’s opposition to

defendants’ motion to strike as a motion for leave to amend and

grants the motion.

B. Punitive Damages

Finally, defendants assert that the SAC fails to plead

sufficient facts to warrant the award of punitive damages. (Mot.

to Strike at 2.) Under California Civil Code § 3294, punitive

damages are available where a plaintiff proves that a defendant

is guilty of fraud. See, e.g., Scott v. Phoenix Schools, Inc.,

175 Cal. App. 4th 702, 715-16 (2009) (explaining that “Punitive

damages are appropriate if the defendant’s acts are

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reprehensible, fraudulent or in blatant violation of law or

policy.”) (quotation and citation omitted). 

Here, as set forth supra, plaintiff sufficiently alleges a

claim for fraud. Furthermore, plaintiff argues that defendants’

conduct constituted “an unlawful, deceptive, systematic and

continuous scheme and pattern of fraud, wrongful conduct and

abuse.” (SAC ¶ 21.) Thus, plaintiff alleges acts by defendants

that are reprehensible, fraudulent, and in violation of law. 

Hence, defendants’ argument that plaintiff fails to plead

sufficient allegations to support punitive damages is without

merit. 

Accordingly, defendants’ motion to strike is DENIED.

CONCLUSION

For the foregoing reasons, defendants’ motion to dismiss is

GRANTED in part and DENIED in part as follows: 

(1) Defendants’ motion to dismiss plaintiffs’ second claim

for relief for quiet title is DENIED.

(2) Defendants’ motion to dismiss plaintiffs’ fourth claim

for relief for breach of contract is DENIED as to the

allegations concerning the deed of trust and GRANTED

with leave to amend as to all other alleged breaches of

contract.

(3) Defendants’ motion to dismiss plaintiffs’ fifth claim

for relief for breach of third party beneficiary

obligations is DENIED.

(4) Defendants’ motion to dismiss plaintiffs’ sixth claim

for relief for fraud is DENIED.

///

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(5) Defendants’ motion to dismiss plaintiffs’ seventh claim

for relief for violations of California’s Unfair

Competition Law is DENIED as to defendant Ocwen and

GRANTED with leave to amend as to defendant HSBC.

(6) Defendants’ motion to dismiss plaintiffs’ eighth claim

for relief for violations of California’s RFDCPA is

DENIED as to the allegations that Ocwen represented

that plaintiff would be charged unlawful fees, and

GRANTED with leave to amend as to all other

allegations.

(7) Defendants’ motion to dismiss plaintiffs’ ninth claim

for relief for unjust enrichment is DENIED.

(8) Defendants’ motion to dismiss plaintiffs’ tenth claim

for relief for breach of fiduciary duty is GRANTED

without leave to amend.

(9) Defendants’ motion to dismiss plaintiffs’ eleventh

claim for relief for negligence is GRANTED without

leave to amend.

(10) Defendants’ motion to dismiss plaintiffs’ twelfth claim

for relief for violation of RICO is GRANTED with leave

to amend.

(11) Defendants’ motion to dismiss plaintiffs’ thirteenth

claim for relief for intentional interference with

contractual relations is DENIED.

(12) Defendants’ motion to dismiss plaintiffs’ fourteenth

claim for relief for negligent interference with

contractual relations is GRANTED without leave to

amend.

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Defendants’ motion to strike is DENIED.

Plaintiff is granted fifteen (15) days from the date of this

order to file a third amended complaint in accordance with this

order. Defendants are granted thirty (30) days from the date of

service of plaintiff’s third amended complaint to file a response

thereto.

IT IS SO ORDERED. 

DATED: August 4, 2010

 

FRANK C. DAMRELL, JR.

UNITED STATES DISTRICT JUDGE

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