Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-01488/USCOURTS-caed-2_14-cv-01488-3/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332 Diversity-Petition for Removal

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

PAIMAN RAHBARIAN, an 

individual,

Plaintiff,

v.

JP MORGAN CHASE; and DOES 1 

through 20, inclusive,

Defendants.

No. 2:14-cv-01488-JAM-KJN

ORDER DENYING DEFENDANT’S MOTION 

TO DISMISS

Plaintiff Paiman Rahbarian (“Plaintiff”) alleges that 

Defendant JPMorgan Chase Bank (“Defendant”) improperly serviced

his mortgage and recorded inaccurate notices purporting to 

foreclose on his property. Plaintiff has twice amended his 

allegations and they are now sufficient to survive Defendant’s 

renewed motion to dismiss.1

///

/// 

 

1

This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

scheduled for May 20, 2015.

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 1 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Attar Fakhri, Plaintiff’s mother, took out a mortgage on her 

home in 2007. SAC ¶ 39. The Deed of Trust named California 

Reconveyance (“CRC”) as trustee and Washington Mutual as lender 

and beneficiary. Id. Plaintiff alleges that Washington Mutual 

transferred the mortgage to “WaMu Mortgage Pass-Through 

Certificate Series 2007-OA4.” SAC ¶ 40. This entity then “filed 

a Form 10-K with the SEC and was dissolved.” SAC ¶ 41. 

Dissolution caused “the assets,” including Plaintiff’s mother’s 

mortgage, to be distributed to the certificate holders. Id. 

Washington Mutual then itself dissolved, conveying its assets to 

Defendant. SAC ¶¶ 42-43. Plaintiff alleges that his mother’s 

mortgage was not among these assets now owned by Defendant, 

because it was previously transferred to the certificate holders. 

SAC ¶ 48. 

Following his mother’s death in 2011, Plaintiff took 

possession of the mortgaged home. SAC ¶¶ 44-45. Plaintiff soon 

defaulted on the mortgage, and CRC issued a Notice of Default and 

Election to Sell, dated March 12, 2013. SAC ¶ 50. On that same 

day, CRC recorded a Corporate Assignment of Deed of Trust, signed 

by Colleen Irby as Vice President of JPMorgan Chase. SAC ¶ 46. 

Two weeks later, CRC also recorded a Notice of Trustee Sale. 

SAC ¶ 56. Both the Notice of Default and the Notice of Trustee 

Sale listed Washington Mutual as beneficiary. SAC ¶¶ 50, 56.

The Court previously granted in part and denied in part 

(Docs. ##17, 24) Defendant’s two motions to dismiss. The current 

operative pleading, the second amended complaint (“SAC”), 

contains one cause of action brought under California’s Homeowner 

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 2 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

Bill of Rights (“HBOR”). It alleges that Defendant violated HBOR 

in three ways: by failing to “provide notice to Plaintiff that he 

could request certain information from Defendant,” by having 

Colleen Irby “robo-sign” the Corporate Assignment of Deed of 

Trust without reviewing “competent and reliable evidence to 

substantiate the borrower’s default and the right to foreclose,” 

and by “fail[ing] to engage in the appropriate loss mitigation.” 

SAC ¶¶ 61-63 (citing Cal. Civ. Code §§ 2923.55, 2924.17 & 

2923.55(b)(1)(iii)). Defendant now moves for the third time to 

dismiss the “robo-signing” allegations under California Civil 

Code section 2924.17 (Doc. #26). Plaintiff opposes the motion 

(Doc. #27).

II. OPINION

This Court’s previous orders granted with leave to amend 

Defendant’s motions to dismiss Plaintiff’s section 2924.17 claim. 

The first order held that the allegations of the original 

complaint lacked specificity, see Doc. #17, and the second order 

concluded that the first amended complaint (“FAC”) did not 

demonstrate that any alleged robosigning was a “material”

violation, see Doc. #24. Plaintiff twice amended his allegations 

in accordance with these orders, and the Court now finds them

sufficient to survive a motion to dismiss. 

Defendant argues that the robosigning allegations are still 

“conclusory” and “lack factual support.” Mot. at 5:18-19. 

Defendant notes that some of the allegations remain unchanged in 

the SAC. See Mot. at 4. But Defendant ignores that Plaintiff 

has added several other facts to support his section 2924.17 

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 3 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

theory. Compare Compl. ¶¶ 21, 31, 34, with SAC ¶¶ 47-50, 60-64; 

see Doc. #17 at 15. Defendant also emphasizes that Plaintiff 

raises many of the same arguments about sufficiency of the 

robosigning allegations that he made in opposing the last motion 

to dismiss. See Reply at 1. Defendant’s point is accurate, but 

Plaintiff’s reiteration of these arguments is appropriate because 

the Court did not previously foreclose them. Indeed, the Court 

did not reach these arguments in ruling on the last motion to 

dismiss, because the Court resolved that motion on the issue of 

materiality. See Doc. #24 at 5 (“The Court grants leave to amend 

to allow Plaintiff one more chance to supplement his factual 

allegations in order to establish that the violation was 

material. Resolving the motion on this issue, the Court does not 

reach Defendant’s further arguments that the FAC’s robosigning 

allegations lack specificity.”).2

Section 2924.17 provides that 

a notice of default, notice of sale, assignment of a 

deed of trust, or substitution of trustee recorded by 

or on behalf of a mortgage servicer in connection with 

a foreclosure subject to the requirements of Section 

2924, or a declaration or affidavit filed in any court 

relative to a foreclosure proceeding shall be accurate 

and complete and supported by competent and reliable 

evidence. 

Cal. Civ. Code § 2924.17(a). The section imposes an obligation 

on the mortgage servicer to “ensure that it has reviewed 

 

2

In a similar vein, Defendant complains that Plaintiff has raised 

“arguments [that] are virtually identical to the allegations 

Plaintiff made in his original Complaint in support of his cause 

of action for wrongful foreclosure.” Reply at 3:16-18. But 

Plaintiff has not attempted to reintroduce his wrongful 

foreclosure claim; instead he uses similar factual allegations to 

support his amended robosigning claim. 

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 4 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

competent and reliable evidence to substantiate the borrower's 

default and the right to foreclose, including the borrower's loan 

status and loan information.” Cal. Civ. Code § 2924.17(b). 

Plaintiff alleges here that Defendant violated this section 

by recording a notice of default and notice of trustee sale 

without ensuring their accuracy. See SAC ¶¶ 50, 56, 62. As a 

result, these notices contained false information – namely, that 

Washington Mutual was the beneficiary. See Compl. Exhs. 4-5; SAC 

¶¶ 48, 56, 60, 62. The SAC also explains at length why 

Washington Mutual was not the beneficiary. See SAC ¶¶ 39-49. 

Taking as true these factual allegations, the Court finds that 

Plaintiff has stated a claim under section 2924.17, because 

Defendant recorded notices that were not complete, accurate and 

supported by competent and reliable evidence. See Penermon v. 

Wells Fargo Bank, N.A., 47 F. Supp. 3d 982, 997-98 (N.D. Cal. 

2014) (denying motion to dismiss section 2924.17 claim where 

complaint alleged that notice of default stated incorrect

outstanding loan balance). Resolving that this theory 

sufficiently pleads a section 2924.17 violation, the Court does 

not reach the parties’ other arguments as to alternative ways 

Defendant may have violated this section.

Defendant next argues that Plaintiff has still not 

established that any violation of the section was “material,” as 

required by California Civil Code section 2924.12. Mot. at 6; 

Reply at 2-3. This same issue was raised in the last motion. 

There, the Court ruled in Defendant’s favor, because Plaintiff’s 

only argument at the time was unsupported by facts in the 

complaint, and because Plaintiff did not counter the only case 

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 5 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

cited by either party on the materiality issue, Johnson v. PNC 

Mortg., 2014 WL 6629585 (N.D. Cal. Nov. 21, 2014). See Doc. #24 

at 5.

Plaintiff now raises two further arguments. First, 

Plaintiff argues that Johnson articulates the wrong standard. 

Opp. at 7. Second, he highlights his amended allegation that but 

for Defendant’s conduct, he would have been eligible for “Section 

8.8 of the Making Home Affordable program.” See id.; SAC ¶ 64.

As to Plaintiff’s first argument, the Court notes that there 

is little case law defining the statute’s term “material.” 

Courts that have considered the issue take divergent approaches. 

Some have concluded that materiality is a factual question that 

should not be resolved on a motion to dismiss. See, e.g.,

Hestrin v. Citimortgage, Inc., 2015 U.S. Dist. LEXIS 23547, at *8 

n.4 (C.D. Cal. Feb. 25, 2015); Garcia v. PNC Mortg., 2015 WL 

534395, at *4-*5 (N.D. Cal. Feb. 9, 2015). Others have suggested

that every violation that contravenes the purpose of HBOR is a 

material violation. See, e.g., Green v. Wells Fargo Bank, N.A., 

2015 WL 2159460, at *3 (N.D. Cal. May 7, 2015); Hendricks v. 

Wells Fargo Bank, N.A., 2015 WL 1644028, at *8-*9 (C.D. Cal. Apr. 

14, 2015); Rizk v. Residential Credit Sols., Inc., 2015 WL 

573944, at *12 (C.D. Cal. Feb. 10, 2015). Still others have 

considered whether it is “plausible” that the violation caused 

the plaintiff to suffer damages. See, e.g., Mackensen v. 

Nationstar Mortg. LLC, 2015 WL 1938729, at *7 (N.D. Cal. Apr. 28, 

2015) (stating that but for defendant’s alleged wrongdoing, 

plaintiff “may have been able to keep [his] house”) (citation 

omitted); Salazar v. U.S. Bank Nat’l Ass’n, 2015 WL 1542908, at 

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 6 of 7
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

*7 (C.D. Cal. Apr. 6, 2015) (“[I]t is plausible that [defendant’s 

compliance] would have prevented Plaintiff from suffering the 

loss of her home, ruined credit, emotional distress, and a future 

inability to purchase a home.”). 

The Court declines to choose between these competing 

formulations; Plaintiff’s allegation that he should have been 

eligible for the Making Home Affordable program is sufficient 

under any of them. One purpose of the statute is to “ensure that 

borrowers who may qualify for a foreclosure alternative are 

considered for, and have a meaningful opportunity to obtain, 

available loss mitigation options.” See Cal. SB 900 § 1. And 

taking as true that Plaintiff would be eligible for this loss 

mitigation option, the Court finds it at least plausible that 

Plaintiff could have avoided foreclosure. See Mackensen, 2015 WL 

1938729, at *7. The Court therefore concludes that the SAC 

pleads a viable material violation of section 2924.17.

III. ORDER

For the reasons set forth above, the Court DENIES 

Defendant’s motion to dismiss.

IT IS SO ORDERED.

Dated: May 13, 2015

Case 2:14-cv-01488-JAM-KJN Document 29 Filed 05/14/15 Page 7 of 7