Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02550/USCOURTS-casd-3_11-cv-02550-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1601 Truth in Lending

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ABBAS R. MOBINE,

Plaintiff,

CASE NO. 11-cv-2550 – IEG (BGS)

ORDER GRANTING MOTION TO

vs. DISMISS, [Doc. No. 3].

ONEWEST BANK, FSB, a California

Banking Association; INDYMAC

MORTGAGE SERVICES, a division of

OneWest Bank, FSB; MORTGAGE

ELECTRONIC REGISTRATION SYSTEM,

INC., a Delaware Corporation; ALL

PERSONS UNKNOWN CLAIMING ANY

LEGAL OR EQUITABLE RIGHT, TITLE,

ESTATE, LIEN, OR INTEREST IN THE

PROPERTY DESCRIBED IN THE

COMPLAINT ADVERSE TO PLAINTIFF’S

TITLE, OR ANY CLOUD ON PLAINTIFF;

and DOES 1 through 100,

Defendants.

Presently before the Court is Defendants OneWest Bank, FSB, IndyMac Mortgage

Services, and Mortgage Electronic Registration System, Inc. (“MERS”)’s motion to dismiss. 

Plaintiff filed an opposition, and Defendants replied. Having considered the parties’ arguments,

and for the reasons set forth below, the Court GRANTS the motion to dismiss.

BACKGROUND

Plaintiff Abbas R. Mobine was the owner of real property located at 5817 Bucknell

Avenue, La Jolla, CA 92037 (“Property”). He alleges that on or around March 2007, he decided

to refinance the Property with Washington Mutual, which promised Plaintiff very favorable terms. 

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However, approximately a week before the loan was to close, Washington Mutual cancelled the

loan due to lending problems it was experiencing. Subsequently, loan officers from Washington

Mutual attempted to find another lender willing to satisfy Plaintiff’s lending needs. They found

Downey Savings but, before the loan could close, Downey similarly cancelled the loan due to

lending problems it was experiencing. Subsequently, a broker from Downey informed Plaintiff

that yet another lending institution was secured to fund Plaintiff’s loan.

At that time, Plaintiff was getting ready to leave for a three-month business trip to Europe. 

He alleges he was informed that the closing of the loan could not wait until he got back. 

Accordingly, on August 15, 2008, while Plaintiff was in Europe, he received the loan documents

from La Jolla Bank for a loan in the amount of $3,250,000.00, signed and notarized them, and

mailed them back to La Jolla Bank. Plaintiff alleges that at the time of execution, he was not

provided with a copy of the loan documents he executed. The escrow closed on August 21, 2008.

Plaintiff alleges that after he returned to the United States and received a copy of the loan

documents, he discovered provisions that had not been part of the original loan agreement as

represented to him. Specifically, Plaintiff alleges that the following provisions stood out: (1) the

interest rate on the loan was higher than was agreed upon during negotiations; (2) the loan was

amortized, instead of being an interest only loan as agreed upon during negotiations; and (3)

Plaintiff was charged $70,000.00 in loan commissions, even though it was agreed that all costs

were to be paid by the lender. (Compl. ¶ 14 [Doc. No. 1].) When Plaintiff confronted La Jolla

Bank about the discrepancies, he was allegedly told that nothing could be done to rectify the

situation. (Id.) Plaintiff did not pursue the problem further at that time. (Id. ¶ 20.)

In December 2009, Plaintiff requested loan modification from La Jolla Bank. He alleges

that representatives from La Jolla Bank’s loan and loss mitigation departments represented to him

that a permanent loan modification was being drawn up for him. (Id. ¶ 21.) On February 24,

2010, Plaintiff received a notice from OneWest, notifying him that La Jolla Bank was closed by

the Office of Thrift Supervision and that the Federal Deposit Insurance Corporation (“FDIC”) was

named Receiver. (Id. ¶ 22.) The letter also alleged that the servicing of Plaintiff’s mortgage loan

was assigned to OneWest. On March 1, 2010, Plaintiff alleges he received a letter from OneWest

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alleging that ownership of his loan was transferred to OneWest. (Id. ¶ 23.) On April 19, 2010,

Plaintiff alleges he was instructed by OneWest’s Loan Modification Department to submit a new

loan modification application. (Id. ¶ 24.) On May 21, 2010, Plaintiff alleges he was contacted by

Mr. Roy Brown with OneWest’s Loan Modification Department indicating that his application for

loan modification was approved. (Id. ¶ 25.) Plaintiff alleges that he subsequently lost contact with

Brown and that only after several weeks was he able to find out that the office Brown worked at

had been “phased out” and that everyone there was fired. (Id. ¶¶ 25, 26.)

On June 2010, Plaintiff alleges he contacted Ms. Brenda Diaz, OneWest’s main Corporate

Customer Experience Representative, and was informed that his loan was now being serviced by

IndyMac. (Id. ¶ 27.) Plaintiff alleges that after speaking with Diaz, he was contacted by Mr. Jim

Nolan and Mr. Dan Grenci, who asked him to resend a current loan modification application. (Id.) 

Subsequently, both Nolan and Grenci allegedly represented to Plaintiff that his application would

be approved. (Id. ¶¶ 28, 29.) However, when he finally received the modification paperwork,

Plaintiff alleges he discovered that the modification was only limited to six months. (Id. ¶ 29.) 

Plaintiff signed and executed the paperwork in September 2010. (Id. ¶ 30.)

On September 9, 2010, after Plaintiff again inquired about a permanent loan modification,

Mr. Mark Mosier asked him to submit a new loan modification application. (Id. ¶ 32.) After

another period of waiting, Plaintiff was finally informed by Mr. Babu Abraham that Plaintiff

would not be receiving a permanent loan modification because his loan exceed $1,000,000.00. 

Some time later, because of the rising monthly payments (amounting to $20,000 by September

2010), Plaintiff alleges that he was forced to sell the Property at a short sale to avoid default.

In support of their motion to dismiss, Defendants submit a number of exhibits they want

the Court to take judicial notice of. Defendants first submit a copy of the promissory note and the

deed of trust in this case. (Def. RJN, Exs. A, B [Doc. No. 3-1].) They also submit a copy of the

Purchase and Assumption Agreement (“P & A Agreement”) between the FDIC, as Receiver for La

Jolla Bank, and OneWest, dated February 19, 2010. (Id., Ex. C.) Next, Defendants submit a

Corporate Assignment of Deed of Trust, showing that on April 17, 2010, the FDIC assigned the

deed of trust to the Property to OneWest. (Id., Ex. D.) This assignment was recorded on April 29,

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2010. (Id.) Finally, Defendants submit a copy of the Forbearance Agreement between Plaintiff

and IndyMac, dated October 18, 2010 and executed on November 24, 2010. (Id., Ex. E.) The

Court can properly take judicial notice of each of these documents. See Fed. R. Evid. 201(b)(2);

see also Intri-Plex Tech., Inc. v. Crest Group, Inc., 499 F.3d 1048, 1052 (9th Cir. 2007) (“‘[A]

court may take judicial notice of “matters of public record” without converting a motion to dismiss

into a motion for summary judgment,’ as long as the facts noticed are not ‘subject to reasonable

dispute.’” (citation omitted)); Lopez v. Wash. Mut. Bank, F.A., No. 1:09-CV-1838 AWI JLT, 2010

WL 1558938, at **3-4 (E.D. Cak. Apr. 19, 2010) (taking judicial notice of several recorded

documents, including a Purchase and Assumption Agreement between the FDIC and JPMorgan).

Plaintiff commenced this suit on August 18, 2011 in the Superior Court for the County of

San Diego. Plaintiff’s complaint alleges five causes of action: (1) fraud; (2) unfair business

practices; (3) violations of the Truth in Lending Act (“TILA”); (4) violations of the Real Estate

Settlement Procedures Act (“RESPA”); and (5) unjust enrichment. On November 2, 2011,

Defendants removed the case to this Court. Defendants filed their motion to dismiss on November

9, 2011. Plaintiff filed an opposition on December 12, 2011, and Defendants replied on December

14, 2011. The Court took this matter under submission pursuant to the Civil Local Rule 7.1(d)(1).

LEGAL STANDARD

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests

the legal sufficiency of the pleadings. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “To

survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to

‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard

is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a

defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with’ a

defendant’s liability, it ‘stops short of the line between possibility and plausibility of “entitlement

to relief.”’” Id. (internal citation omitted). “Dismissal can be based on the lack of a cognizable

legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri

v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).

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In ruling on a motion to dismiss, the court must “accept all factual allegations in the

complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 

Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). The court, however, need not accept “legal

conclusions” as true. Iqbal, 129 S. Ct. at 1949. Thus, “a formulaic recitation of the elements of a

cause of action will not do.” Twombly, 550 U.S. at 555. It is also improper for the court to assume

that plaintiff “can prove facts that it has not alleged.” Associated Gen. Contractors of Cal., Inc. v.

Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). On the other hand, “[w]hen there are

well-pleaded factual allegations, a court should assume their veracity and then determine whether

they plausibly give rise to an entitlement to relief.” Iqbal, 129 S. Ct. at 1950.

DISCUSSION

Defendants premise their motion to dismiss on several grounds. First, they argue that to

the extent Plaintiff’s claims are based on conduct of La Jolla Bank, those claims should be

dismissed because OneWest is not liable for the acts or omissions of La Jolla Bank pursuant to the

P & A Agreement under which OneWest acquired La Jolla Bank assets from the FDIC. Second,

Defendants argue MERS should be dismissed because there are no allegations made against it. 

Third, they argue that any claims for failure to modify Plaintiff’s loan must be dismissed because

there is no right to a loan modification. Fourth, Defendants assert that Plaintiff’s fraud claim fails

because Plaintiff did not allege it with the requisite specificity and because it is barred by the

statute of limitations. Fifth, they assert that Plaintiff’s TILA and RESPA claims fail because they

occurred prior to Defendants acquiring the assets and because they are nonetheless time-barred. 

Sixth, Defendants assert that Plaintiff’s unjust enrichment claim fails because it does not amount

to an independent cause of action in California and because there is nothing unjust in them

retaining Plaintiff’s monthly payments pursuant to the deed of trust. Finally, they assert Plaintiff’s

unfair business practices claim fails due to the failure of all of his predicate claims.

I. Liability for conduct by La Jolla Bank

The Court first addresses Defendants’ argument that Plaintiff cannot maintain any of the

claims against OneWest because OneWest did not assume liability for borrower claims related to

loans or commitments to lend made by La Jolla Bank when it entered into the P and A Agreement

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with the FDIC regarding La Jolla Bank assets.

Under the Federal Deposit Insurance Act, 12 U.S.C. §§ 1811-1832(d), the FDIC may

accept appointment as a receiver for any closed insured depository institution. See 12 U.S.C. §

1821(c). As a receiver, “the FDIC . . . ‘steps into the shoes’ of the failed [financial institution]”

and operates as its successor. O’Melveny & Myers v. F.D.I.C., 512 U.S. 79, 86 (1994) (citation

omitted); see also 12 U.S.C. § 1821(d)(2)(A)(i), (B)(i) (providing that when it becomes a receiver,

the FDIC succeeds to “all rights, titles, powers, and privileges of the insured depository

institution” and may “take over the assets of and operate the insured depository institution”). The

FDIC then has “broad powers to allocate assets and liabilities,” such as through a P & A

Agreement. West Park Assocs. v. Butterfield Sav. & Loan Ass’n, 60 F.3d 1452, 1458-59 (9th Cir.

1995). Absent an express transfer of liability, no liability is transferred from a failed bank to an

assuming bank. See Kennedy v. Mainland Sav. Ass’n, 41 F.3d 986, 990-91 (5th Cir. 1994); Payne

v. Sec. Sav. & Loan Ass’n, F.A., 924 F.2d 109, 111 (7th Cir. 1991); Williams v. F.D.I.C., No. CIV

2:07-2418 WBS GGH, 2009 WL 5199237, at *2 (E.D. Cal. Dec. 23, 2009). As one court noted,

“[t]he reason for this rule is clear—‘an assuming bank would rarely be inclined to enter a P & A

agreement with the FDIC knowing that it could be taking on unidentified liabilities of undefined

dimensions that could arise at some uncertain date in the future.’” Williams, 2009 WL 5199237, at

*5 (citation omitted).

In this case, the Office of Thrift Supervision closed La Jolla Bank on February 19, 2010,

and appointed the FDIC as receiver. OneWest entered into the P & A Agreement with the FDIC

regarding La Jolla Bank on the same day. (See Def. RJN, Ex. C.) Section 2.5(l) of the P & A

Agreement lists liabilities assumed by OneWest, but nowhere mentions that OneWest assumed any

liability to pay monetary relief associated with borrower claims arising out of the loans originated

by La Jolla Bank. Accordingly, because this liability was not expressly assumed by OneWest, it

remained with the FDIC and was not transferred to OneWest. See Kennedy, 41 F.3d at 990-91;

Payne, 924 F.2d at 111; Williams, 2009 WL 5199237, at *2.

Plaintiff’s arguments to the contrary are not persuasive. Plaintiff argues that OneWest did

assume liability for all acts and omissions by La Jolla Bank, and points to the following provision

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in the Corporate Assignment of Deed of Trust for support: “This assignment is made without

recourse, representation or warranty, express or implied, by the FDIC in its corporate capacity or

as Receiver.” (Def. RJN, Ex. D.) Plaintiff, however, confuses the liability of FDIC to OneWest

and the liability of OneWest to borrowers of La Jolla Bank. As Plaintiff correctly points out,

OneWest took the deed of trust from the FDIC with full knowledge that it had no recourse against

FDIC. (See Def. RJN, Ex. D.) Nothing in this assignment of the deed of trust, however, purports

to supplant the earlier P & A Agreement between the FDIC and OneWest governing the liabilities

assumed by OneWest. Courts have uniformly held that absent an express transfer of liability, no

liability is transferred from a failed bank to an assuming bank. See Kennedy, 41 F.3d at 990-91;

Payne, 924 F.2d at 111; Williams, 2009 WL 5199237, at *2. Because Plaintiff fails to point to

anything in the P & A Agreement to defeat the presumption of no liability, the Court GRANTS

Defendants’ motion in this regard and DISMISSES WITH PREJUDICE any claims against

OneWest that are premised on acts or omissions of La Jolla Bank.

II. Claims against MERS

Defendants move to dismiss MERS as a defendant because apart from naming MERS as a

defendant, the complaint fails to allege any wrongdoing by MERS. Plaintiff failed to oppose this

ground for dismissal in his opposition. Moreover, a review of the complaint fails to reveal any

allegations of wrongdoing by MERS. Accordingly, the Court GRANTS the motion to dismiss in

this regard and DISMISSES all of the causes of action against MERS.

III. First cause of action (fraud)

Plaintiff’s first cause of action alleges fraud against all Defendants. According to Plaintiff,

Defendants perpetrated fraud in several different ways: (1) by misrepresenting to Plaintiff that the

loan was a conventional loan, despite the fact that it carried an adjustable rate; (2) by failing to

diligently and in good faith make a determination on Plaintiff’s qualification for prime rate loan

with a fixed interest rate; (3) by fraudulently inducing Plaintiff into entering a loan Defendants

knew Plaintiff was not in a financial position to afford; (4) by misleading Plaintiff and engaging in

material omissions by failing to disclose to Plaintiff the fact that he was being sold an adjustable

rate mortgage product; and (5) by intentionally and knowingly selling a loan to Plaintiff that would

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likely place him in a position of default and foreclosure. (Compl. ¶ 36.) Regardless of the truth of

these allegations, however, it is clear that all of them are directed at the conduct preceding and

accompanying the consummation of the subject loan, which occurred before OneWest acquired

any of the assets of La Jolla Bank pursuant to the P & A Agreement. Accordingly, because

OneWest did not assume any liability for the acts or omissions of La Jolla Bank at the

consummation of the loan, the Court DISMISSES this cause of action WITH PREJUDICE.

IV. Third cause of action (TILA violations)

Plaintiff’s third cause of action alleges that Defendants violated TILA in the following

ways: (1) by failing to include and disclose certain charges in the finance charge shown on the

Truth in Lending statement as required by 15 U.S.C. § 1605 and Regulation Z, 12 C.F.R. §

226.18(d); (2) by disclosing a different charge than what was identified on the promissory note; (3)

by providing a variable rate loan, instead of a fixed rate one; and (4) by calculating the annual

percentage rate based upon improperly calculated and disclosed amounts in violation of TILA and

Regulation Z, 12 C.F.R. §§ 226.18(c), (d), and 226.22. (Compl. ¶ 45, 46.) As a remedy for failure

to provide the required disclosures, Plaintiff seeks rescission of the loan transaction. (Id. ¶ 47.) 

However, just as with the first cause of action, it is clear that all of these allegations cannot be

asserted against OneWest because they relate to conduct at the origination of the loan.

Moreover, it is clear from the face of the complaint that any TILA claim for rescission has

expired. Section 1635 governs the borrower’s right under TILA to rescind a “consumer credit 

transaction . . . in which a security interest . . . is or will be retained or acquired in any property

which is used as the principal dwelling of the person to whom credit is extended.” 15 U.S.C. §

1635(a); see also 12 C.F.R. § 226.15(a). While the borrower’s right of rescission must normally

be exercised within a three-day period, TILA extends that period to three years under certain

circumstances. See 15 U.S.C. § 1635(f); 12 C.F.R. § 226.15(a)(3). Crucially, § 1635(f)

unambiguously states that the borrower’s right of rescission “shall expire three years after the date

of consummation of the transaction or upon the sale of the property, whichever occurs first,

notwithstanding the fact that the information and forms required under this section or any other

disclosures required under this part have not been delivered” to the borrower. In this case,

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Plaintiff consummated the current loan transaction on August 15, 2008. (Def. RJN, Ex. A, B.) As

such, Plaintiff’s right of rescission expired three years after that, on August 15, 2011. See 15

U.S.C. § 1635(f). Plaintiff did not commence this suit until August 18, 2011. [Doc. No. 1.]

The expiration of the right of rescission not only bars Plaintiff’s claim, but also deprives

the Court of subject matter jurisdiction as to this claim. The Supreme Court has held that

“§ 1635(f) completely extinguishes the right of rescission at the end of the 3-year period.” Beach

v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998). The Supreme Court stated:

Section 1635(f) . . . takes us beyond any question whether it limits more than the

time for bringing a suit, by governing the life of the underlying right as well. The

subsection says nothing in terms of bringing an action but instead provides that the

“right of rescission [under the Act] shall expire” at the end of the time period. It

talks not of a suit’s commencement but of a right’s duration, which it addresses in

terms so straightforward as to render any limitation on the time for seeking a

remedy superfluous. There is no reason, then, even to resort to the canons of

construction that we use to resolve doubtful cases, such as the rule that the creation

of a right in the same statute that provides a limitation is some evidence that the

right was meant to be limited, not just the remedy.

Id. at 417 (internal citations omitted). As the Ninth Circuit observed, § 1635(f) acts as a statute of

repose, “depriving the courts of subject matter jurisdiction when a § 1635 claim is brought outside

the three-year limitation period.” Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir.

2002). In the present case, because Plaintiff did not attempt to rescind his transaction within the

three-year limitation period, his right of rescission expired before he commenced this suit, and the

Court lacks subject matter jurisdiction over this claim.1 See id. at 1164-66.

Accordingly, because OneWest did not assume any liability for the acts or omissions of La

Jolla Bank at the consummation of the loan, and because Plaintiff’s TILA claim expired before he

commenced this suit, the Court DISMISSES this cause of action WITH PREJUDICE.

V. Fourth cause of action (RESPA violations)

Plaintiff’s fourth cause of action alleges Defendants violated RESPA, 12 U.S.C. § 2607,

when they “accepted charges for the rendering of real estate services which were in fact charges

for other than services actually performed.” (Compl. ¶ 50.) Because this cause of action does not

1

 To the extent Plaintiff alleges that he is entitled to equitable tolling on his TILA rescission

claim, the Court notes that “[e]quitable tolling does not apply to rescission under . . . TILA.” See

Taylor v. Money Store, 42 Fed. App’x 932, 933 (9th Cir. 2002) (not for publication).

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relate to the origination of the loan, the P & A Agreement is no bar to OneWest’s liability.

Moreover, contrary to Defendants’ arguments, this cause of action is not time barred. 

Section 2614 provides that any action pursuant to § 2607 must be brought within one year “from

the date of the occurrence of the violation.” 12 U.S.C. § 2614. In this case, Plaintiff’s complaint

alleges Defendants’ acceptance of charges as the relevant “violation.” Because this violation was

presumably ongoing until Plaintiff sold the Property, and may still be on going, the Court cannot

say that this cause of action is time barred on the face of the complaint. See Cervantes v.

Countrywide Home Loans, Inc., 656 F.3d 1034, 1045 (9th Cir. 2011) (“A district court may dismiss

a claim ‘[i]f the running of the statute is apparent on the face of the complaint.’ However, a

district court may do so ‘only if the assertions of the complaint, read with the required liberality,

would not permit the plaintiff to prove that the statute was tolled.’” (internal citations omitted)).

Nonetheless, the Court agrees with Defendants that this cause of action must be dismissed. 

Section 2607 prohibits the acceptance of “any portion, split, or percentage of any charge made or

received for the rendering of a real estate settlement service in connection with a transaction

involving a federally related mortgage loan other than for services actually performed.” In this

case, Plaintiff merely states in a conclusory manner that the charges that OneWest accepted were

not for services actually performed, but fails to allege any facts in support.2

 (See Compl. ¶¶ 50,

51.) Accordingly, because Plaintiff failed to make more than conclusory allegations, the Court

GRANTS Defendants’ motion to dismiss in this regard and DISMISSES Plaintiff’s fourth cause

of action for RESPA violations WITH LEAVE TO AMEND. See Iqbal, 129 S. Ct. at 1949 (the

court need not accept “legal conclusions” as true); Twombly, 550 U.S. at 555 (“[A] formulaic

recitation of the elements of a cause of action will not do.”).

VI. Fifth cause of action (unjust enrichment)

Plaintiff’s fifth cause of action alleges unjust enrichment against Defendants. However,

California does not recognize a cause of action for unjust enrichment. See, e.g., Levine v. Blue

2

 Elsewhere in the complaint, and in his opposition to Defendants’ motion, Plaintiff alleges that

OneWest accepted monthly payments without having the right to receive them. (See Compl. ¶ 23;

Pl. Opp., at 9-10 [Doc. No. 4].) However, at least from the face of the complaint and the judicially

noticeable documents, it appears that OneWest could properly accept the monthly payments from

Plaintiff due to the valid assignment of the deed of trust to it by the FDIC. (See Def. RJN, Exs. C, D.)

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Shield of Cal., 189 Cal. App. 4th 1117, 1138 (2010); Durell v. Sharp Healthcare, 183 Cal. App. 4th

1350, 1370 (2010) (“‘[T]here is no cause of action in California for unjust enrichment.’ Unjust

enrichment is synonymous with restitution.” (internal citations omitted)).

Moreover, even when viewed in the form of restitution, “[t]he theory of unjust enrichment

requires one who acquires a benefit which may not justly be retained, to return either the thing or

its equivalent to the aggrieved party so as not to be unjustly enriched.” Otworth v. Southern Pac.

Transp. Co., 166 Cal. App. 3d 452, 460 (1985). Thus, unjust enrichment is inapplicable where the

defendant has merely obtained that to which it was entitled pursuant to a contract between the

parties. See Jones v. Wells Fargo Bank, 112 Cal. App. 4th 1527, 1541 (2003). In this case, there

are no allegations that OneWest received any benefit at Plaintiff’s expense such that it was

unjustly enriched. Rather, in light of the valid assignment of the deed of trust, it appears that

OneWest was entitled to collect Plaintiff’s monthly payments.3

 (See Def. RJN, Exs. C, D.)

Accordingly, the Court GRANTS the motion to dismiss in this regard and DISMISSES

Plaintiff’s unjust enrichment claim WITH LEAVE TO AMEND.

VII. Second cause of action (unfair business practices)

Finally, as a second cause of action, Plaintiff alleges that Defendants’ conduct constitutes

unfair business practices in violation of California Business and Professions Code § 17200.

Section 17200 defines unfair competition as “any unlawful, unfair or fraudulent business

act or practice” and “unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code

§ 17200. Because the statute is written in the disjunctive, it prohibits three separate types of unfair

3

 Plaintiff cites to the California Commercial Code in arguing that Defendant was not a “holder

in due course” of the note and therefore was not legally entitled to receive his monthly payments under

the deed of trust. See Cal. Comm. Code §§ 3301, 3302, 3303. As a number of courts have held,

however, the California Commercial Code does not govern non-judicial foreclosures, which are

governed by the California Civil Code Sections 2924 through 2924i instead. See Castaneda v. Saxon

Mortg. Servs., Inc., 687 F. Supp. 1191, 1201 (E.D. Cal. 2009) (“[S]ection 3301 [of the Commercial

Code] reflects California’s adoption of the Uniform Commercial Code, and does not govern

non-judicial foreclosures, which is governed by California Civil Code section 2924.”); Gardner v. Am.

Home Mortg. Serv., Inc., 691 F. Supp. 2d 1192, 1202 (E.D. Cal. 2010) (“California Civil Code

sections 2924 through 2941 govern non-judicial foreclosures initiated under a deed of trust. 

‘California courts have consistently held that the Civil Code provisions “cover every aspect” of the

foreclosure process and are “intended to be exhaustive.”’ Therefore, ‘Plaintiff's reliance on Cal.

Comm. Code § 3301 is misplaced’ . . . .” (internal citations omitted)); see also I. E. Assocs. v. Safeco

Title Ins. Co., 39 Cal. 3d 281, 285-86 (1985) (“The statutory provisions regulating the nonjudicial

foreclosure of deeds of trust are contained in sections 2924-2924i.”).

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competition: (1) unlawful acts or practices, (2) unfair acts or practices, and (3) fraudulent acts or

practices. Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999).

In this case, it appears Plaintiff alleges a cause of action only under the “unfair” prong of

§ 17200. An “unfair” business practice is one that either “offends an established public policy” or

is “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” See

People v. Casa Blanca Convalescent Homes, Inc., 159 Cal. App. 4th 509, 530 (1984), abrogated

on other grounds in Cel-Tech, 20 Cal. 4th at 186-87 & n.12; accord McDonald v. Coldwell

Banker, 543 F.3d 498, 506 (9th Cir. 2008). In the present case, Plaintiff’s second cause of action

expressly relies on other alleged violations listed in the complaint to state a claim. Because the

Court has already dismissed every other cause of action, the Court similarly DISMISSES the

second cause of action for unfair business practices WITH LEAVE TO AMEND.

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss. First, the

Court dismisses with prejudice all of the causes of action against Defendant MERS because

Plaintiff failed to make any allegations as against that Defendant. Second, the Court dismisses

Plaintiff’s first cause of action for fraud and third cause of action for TILA violations with

prejudice. Finally, the Court dismisses Plaintiff’s fourth cause of action for RESPA violations,

fifth cause of action for unjust enrichment, and second cause of action for unfair business practices

with leave to amend.

If Plaintiff wishes to amend any of the causes of action that the Court dismissed with leave

to amend, he may do so within 21 days of the filing of this Order.

IT IS SO ORDERED.

Date: January 24, 2012 ________________________________

IRMA E. GONZALEZ

United States District Judge

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