Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_10-cv-00395/USCOURTS-caed-2_10-cv-00395-2/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1692 Fair Debt Collection Act

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 Because oral argument was not determined to be of material 1

assistance, the Court ordered this matter submitted on the

briefing. E.D. Local Rule 230(g).

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

IRENE ANOKHIN, No. 2:10-cv-00395-MCE-EFB

Plaintiff,

v. MEMORANDUM AND ORDER

BAC HOME LOAN SERVICING, LP,

et al.

Defendants.

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This action arises from a mortgage loan transaction in which

Irene Anokhin (“Plaintiff”) purchased a home in 2006. Presently

before the Court is a Motion by BAC Home Loan Servicing, LP and

Mortgage Electronic Registration System, Inc. (“Defendants”) to

Dismiss Plaintiff’s First Amended Complaint (“Complaint”) for

failure to state a claim upon which relief can be granted

pursuant to Federal Rule of Civil Procedure 12(b)(6). 

1

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 The factual assertions in this section are based on the 2

allegations in Plaintiff’s Complaint unless otherwise specified.

2

For the reasons set forth below, Defendants’ Motion to Dismiss is

granted.

BACKGROUND2

Through a mortgage transaction executed on April 10, 2006,

Plaintiff purchased a home in Sacramento, California. After

failing to make several payments pursuant to the terms of the

mortgage, Plaintiff alleges she executed a Deed in Lieu,

“granting, assigning and transferring” all of her rights and

interest in the subject property on October 22, 2007. Not

receiving any further correspondence from the lender, Plaintiff

believed the issue was resolved. 

Plaintiff defaulted on the mortgage in 2007. Defendant, BAC

Home Loan Servicing, LP (“BAC”), the current servicer of

Plaintiff’s mortgage, commenced foreclosure proceedings. A

Notice of Default was filed on November 9, 2007 indicating that

the amount due under the mortgage was $14,329.56. On March 5,

2008, a Notice of Trustee’s Sale was filed. A second Notice of

Default was filed on May 15, 2009 which stated that the amount

due under the mortgage was $64,735.08. 

On July 20, 2009, Plaintiff sent to BAC what she describes

as a “Qualified Written Request” (“QWR”) seeking information

regarding her current ownership and a detailed accounting of the

amounts allegedly due under the loan. BAC has yet to respond to

the QWR, which it received on July 24, 2009.

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3

Plaintiff filed her Complaint on February 16, 2010 alleging

violations of numerous state and federal claims including:

(1) Wrongful Foreclosure; (2) Quiet Title; (3) Real Estate

Settlement Procedures Act, 12 U.S.C. § 2605; (4) California

Business and Processional Code § 17200, et seq.; (5) Intentional

Infliction of Emotional Distress; (6) Void Contract; (7) To Void

and Cancel Deed of Trust; (8) California Civil Code § 2923.5; and

(9) Unfair Debt Collection Practices under the Federal Fair Debt

Collection Practices Act, 15 U.S.C. § 1692, et seq. 

On March 15, 2010, Plaintiff filed a voluntary petition

under Chapter 7 of the federal bankruptcy laws. (Pl.’s Mot. to

Stay 2.) On July 19, 2010, this Court directed the parties to

provide simultaneous briefing on the status of “Plaintiff’s

Chapter 7 Bankruptcy Proceedings, any pending or forthcoming

stays, and how such matters apply in this case.” (ECF No. 16.) 

As indicated in parties’ supplemental briefing, on June 9, 2010,

the trustee in Plaintiff’s bankruptcy action filed a Report of

Abandonment of Real Property, including the subject property in

this civil suit. (Defs.’ Supplemental Br. Exh. 1.) The

Bankruptcy Court subsequently entered an order approving the

report filed by the trustee and terminated the bankruptcy case on

July 6, 2010. 

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4

STANDARD

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

Rule 12(b)(6), all allegations of material fact must be accepted

as true and construed in the light most favorable to the

nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,

337-38 (9th Cir. 1996). Federal Rule of Civil Procedure 8(a)(2)

requires only “a short and plain statement of the claim showing

that the pleader is entitled to relief,” in order to “give the

defendant fair notice of what the...claim is and the grounds upon

which it rests.” Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct.

99, 2 L. Ed. 2d 80 (1957). While a complaint attacked by a

Rule 12(b)(6) motion to dismiss does not need detailed factual

allegations, a plaintiff’s obligation to provide the “grounds” of

his “entitlement to relief” requires more than labels and

conclusions, and a formulaic recitation of the elements of a

cause of action will not do. Bell Atl. Corp. v. Twombly, 2007

U.S. LEXIS 5901, 20-22 (U.S. 2007) (internal citations and

quotations omitted). Factual allegations must be enough to raise

a right to relief above the speculative level. Id. at 21 (citing

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

pp. 235-236 (3d ed. 2004) (“The pleading must contain something

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

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

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5

If the court grants a motion to dismiss a complaint, it must

then decide whether to grant leave to amend. The court should

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

faith[,] dilatory motive on the part of the movant,...undue

prejudice to the opposing party by virtue of...the amendment,

[or] futility of the amendment....” Fed. R. Civ. P. 15(a); Foman

v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is

only denied when it is clear that the deficiencies of the

complaint cannot be cured by amendment. DeSoto v. Yellow Freight

Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

ANALYSIS

A. Standing

The commencement of a bankruptcy case creates an estate

consisting of the debtor’s property, which includes legal causes

of action. Cusano v. Klein, 264 F.3d 936 (9th Cir. 2001); see

also Smith v. Arthur Anderson LLP, 421 F.3d 989 (9th Cir. 2005). 

A trustee administers the estate and is vested with title to “all

of the bankrupt’s property at the time the bankruptcy petition is

filed.” Stein v. United Artists Corp., 691 F.2d 885, 891 (9th

Cir. 1982). In such a capacity, the trustee has the ability to

sue and be sued. 11 U.S.C. § 323. If property is not exempt

from the estate, then it remains with the estate unless the

trustee “abandons” it. 11 U.S.C. § 722. Abandonment requires an

affirmative action or some other evidence of intent by the

trustee. Stein, 691 F.2d at 890. 

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6

The moment Plaintiff declared bankruptcy, her civil suit

against Defendants became the property of the estate. Turner v.

Cook, 362 F.3d 1219, 1225-1226 (9th Cir. 2004). However, on

June 9, 2010, the trustee administering Plaintiff’s estate filed

a Report of Abandonment of Real Property, which included the

subject property in this civil suit. (Defs. Supplemental Br.

Exh. 1.) The Bankruptcy Court entered an Order Approving the

Trustee’s Report of No Distribution and Closing Case, and the

bankruptcy proceeding was terminated on July 6, 2010.

The record clearly establishes that the trustee took an

affirmative action to abandon the estate’s interest in the

property. The bankruptcy proceeding having terminated, Plaintiff

may proceed as the “real party in interest” in the instant civil

litigation. See Catalano v. C.I.R., 279 F.3d 682 (9th Cir.

2002).

B. RESPA Claims

Plaintiff alleges that BAC violated RESPA by failing to

respond to the QWR sent on July 20, 2009. (Complaint ¶ 35.)

Plaintiff asserts that, as a result, she is unable to allege the

“exact nature of the fees that were charged to her account” after

having executed the Deed in Lieu and cannot “confirm the name of

the current beneficiary under her Note.” (Complaint ¶ 36.) 

Defendants’ main contention is that the July 20, 2009

correspondence does not constitute a QWR. (Defs.’ Mot. to

Dismiss 12.) 

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7

A plaintiff alleging violation of RESPA section 2605 must

show: (i) that the servicer failed to adhere to the rules

governing a QWR; and (ii) that the plaintiff incurred “actual

damages” as a consequence of the servicer’s failure. See 12

U.S.C. § 2605. For the purposes of RESPA, a QWR is defined as “a

written correspondence [] that... includes a statement of the

reasons for the belief of the borrower, to the extent applicable,

that the account is in error or provides sufficient detail to the

servicer regarding other information sought by the borrower.” 

12 U.S.C. § 2605(e)(1)(B). A loan servicer has the duty to act

when it receives a QWR “for information relating to the servicing

of the loan.” 12 U.S.C. § 2605(e)(1)(A). 

Based on Plaintiff’s allegations, the letter submitted to

Defendants constitutes a QWR as it requests information regarding

fees charged to her account. See id. However, critical to any

action brought alleging a violation of § 2605 is the ability of

the plaintiff to show damages. 12 U.S.C. § 2605(f)(1)(A). These

damages must flow from the failure of the servicer to provide the

information sought by the plaintiff through the QWR. Id. Section

2605 permits an aggrieved plaintiff to recover two types of

damages: statutory and actual. Here, Plaintiff has shown neither.

Courts may issue statutory damages not to exceed $1,000 in

cases where there is a “pattern or practice of noncompliance”

with § 2605. 12 U.S.C. § 2605(f)(1). Plaintiff has only

provided evidence to show that Defendants failed to respond to a

qualified written response on one occasion. This is not a

sufficient showing to establish statutory damages. E.g, McLean

v. GMAC Mortgage Corp., 595 F. Supp. 2d 1360 (S.D. Fla. 2009). 

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8

As regards to actual damages, Plaintiff makes the statement

that she has suffered damages due to negative reporting to a

credit rating agency. (Complaint ¶ 69.) This also falls short

of the showing requirement. To constitute actual damages, the

negative credit rating must itself cause damage to the plaintiff

as evidenced by, for example, failing to qualify for a home

mortgage. McLean, 595 F. Supp. 2d at 1373. Plaintiff’s

conclusory statement that she suffered negative credit ratings

does not itself establish actual damages. 

Plaintiff’s Complaint fails to allege any damages, pecuniary

or otherwise, that she has suffered due to BAC’s failure to

respond to the QWR within the required time frame. As a

consequence, she has failed to state a claim upon which relief

can be granted.

Plaintiff additionally argues that “[e]ven if no damages are

alleged or warranted, Plaintiff can seek declaratory relief and

request that this Court orders compliance with the RESPA

requirements.” (Pl.’s Opp’n 11:7) However Plaintiff has not

pointed to any authority which might suggest that this Court may

mandate statutory compliance by Defendants. Nothing in the

statute or case law suggests that the Court may provide such a

remedy.

Accordingly, Defendants’ Motion to Dismiss Plaintiff’s RESPA

claim is granted.

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9

C. FDCPA Claims

Plaintiff argues that Defendants violated the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692, et seq., by filing

negative credit reports that damaged her credit history,

continuing to contact her through computerized and other debt

collection calls, and by “falsely stating the amounts of a debt

by including the amounts that are not permitted by law or

contract.” (Complaint ¶¶ 69, 71, 71.) 

The FDCPA regulates only “debt collectors.” 15 U.S.C.

§§ 1692(e)-(f). FDCPA’s definition of “debt collector” excludes

any person who collects debt “to the extent such

activity...(i) concerns a debt which was originated by such

person; or (ii) concerns a debt which was not in default at the

time it was obtained by such person. 15 U.S.C. § 1692(a)(6)(f). 

As a result, the FDCPA does not extend to cover the “consumer’s

creditors, a mortgage servicing company, or any asignee of the

debt, so long as the debt was not in default at the time it was

assigned.” Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047

(E.D.Cal. 2009) (quoting Perry v. Stewart Title Co., 756 F.2d

1197, 1208 (5th Cir. 1985)). 

It is well established in the Eastern District of California

that a mortgage servicer is not considered a “debt collector”

under the FDCPA. See Angulo v. Countrywide Home Loans, Inc.,

2009 WL 3427179 at *5 (E.D.Cal. Oct. 26, 2009). Therefore, as a

loan servicer, BAC cannot be held liable. 

Accordingly, Defendants’ Motion to Dismiss Plaintiff’s FDCPA

claim is granted.

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D. Plaintiff’s Remaining Causes of Action

Having failed to allege a viable federal claim, with only

Plaintiff’s state law claims remaining, this Court ceases to have

subject matter jurisdiction over the suit. The Court declines to

exercise its supplemental jurisdiction over the remaining state

causes of action and they are dismissed without prejudice. The

Court need not address the merits of Defendants’ Motion to

Dismiss with respect to the remaining state law causes of action

as those issues are now moot. 

CONCLUSION

For the reasons set forth above, Defendants’ Motion to

Dismiss Plaintiff’s First Amended Complaint (Docket No. 6) is

GRANTED with leave to amend. 

Plaintiff may file an amended complaint not later than

twenty (20) days after the date this Memorandum and Order is

filed electronically. If no amended complaint is filed within

said twenty (20)-day period, without further notice, Plaintiff’s

claims against Defendants will be dismissed without leave to

amend. 

IT IS SO ORDERED. 

Dated: August 20, 2010

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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