Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00119/USCOURTS-casd-3_17-cv-00119-0/pdf.json

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

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

BAHRAM MANOUCHEHRI, 

Plaintiff, 

vs. 

HSBC BANK USA, NATIONAL 

ASSOCIATION, AS TRUSTEE FOR THE 

HOLDERS OF THE DEUTSCHE ALT-A 

SECURITIES, INC. MORTGAGE LOAN 

TRUST, MORTGAGE PASS-THROUGH 

CERTIFICATES SERIES 2007-0A4, et al. , 

Defendants. 

CASE NO. 17cv119-LAB (BGS) 

ORDER GRANTING PARTIAL 

JUDGMENT ON THE PLEADINGS 

Ten years ago, Bahram Manouchehri bought a San Diego home. Countrywide loaned 

Manouchehri the money, he defaulted, and eventually his deed of trust was assigned to 

20 defendant HSBC Bank. The Bank substituted the Law Offices of Les Zieve as trustee. After 

21 four years of foreclosure proceedings, the Trustee sold Manouchehri's home to the Bank. 

22 Manouchehri didn't leave, so the Bank filed an unlawful detainer action against him in state 

23 court. He removed that case, and this Court remanded for lack of jurisdiction. At the same 

24 time, Manouchehri filed this action against the Bank and the Trustee. He alleges they 

25 violated two federal laws: the Fair Debt Collection Practices Act and the Truth in Lending 

26 Act. He also alleges six state causes of action. Defendants filed a motion for judgment on 

27 the pleadings.

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1 The Court takes judicial notice of the undisputed public records filed at Dkt. 6 and Dkt.15. 

Fed. R. Evid. 201 ; see In re Jcenhower, 755 F.3d 1130, 1142 (9th Cir. 2014). 

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1 Jurisdiction 

2 This Court has federal question jurisdiction to hear Manouchehri's federal claims. 

3 28 U.S.C. § 1331. But there's no diversity jurisdiction because both Manouchehri and the 

4 Trustee are California citizens; complete diversity, therefore, is lacking. 28 U.S.C. § 1332. 

5 [Dkt. 6 at 2-3.) 

6 Standard 

7 "After the pleadings are closed-but early enough not to delay trial-a party may 

8 move for judgment on the pleadings." Fed. R. Civ. P. 12(c). Motions under Rule 12(c) are 

9 "functionally identical" to Rule 12(b) motions, and the Court must accept Manouchehri's 

10 plausible factual allegations as true. Dworkin v. Hustler Magazine Inc., 867 F .2d 1188, 1192 

11 (9th Cir. 1989). 

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13 A. 

Analysis 

Fair Debt Collection Practices Act 

14 The Fair Debt Collection Practices Act was designed "to eliminate abusive debt 

15 collection practices by debt collectors." 15 U.S.C. § 1692(e). A debt collector is someone 

16 who attempts to collect money a consumer owes to another. Id. § 1692a (5),(6). 

17 Manouchehri concedes that the Bank isn't a debt collector under the Act, but maintains that 

18 the Trustee counts as a debt collector under § 1692f(6) because it's enforcing a security 

19 interest by foreclosing on his home to collect the money he owes the Bank. See Dowers v. 

20 Nationstar Mortg., LLC, 852 F.3d 964, 971 (9th Cir. 2017); Vien-Phuong Thi Ho v. 

21 ReconTrust Co., NA, 858 F.3d 568, 572 (9th Cir. 2016). 

22 Section 1692f(6) prohibits debt collectors from taking "any nonjudicial action to effect 

23 dispossession or disablement of property if' they have "no present right to possession of the 

24 property claimed as collateral through an enforceable security interest." Manouchehri 

25 suspects that when he agreed to the loan ten years ago, Countrywide's money came from 

26 some unknown third party. [Dkt. 6 at 5.) He says that maneuver, known as table-funding, is 

27 illegal in California when used to fund loans for homes. Therefore, the Trustee violated 

28 § 1692f(6) by foreclosing on "an invalid secured claim." [Dkt. 17 at 8.) The Court disagrees. 

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1 Aside from policy arguments, Manouchehri's only support for his theory is a citation 

2 to California Business & Professions Code § 10234(d). He highlights the following portion 

3 of that provision: "A trust deed may be recorded in the name of the real estate broker 

4 negotiating the loan if .... the real property securing the loan as described in the trust deed 

5 is not a dwelling." Manouchehri reads this statute to say it was illegal for Countrywide, the 

6 original lender of his loan, to record its own name on the trust deed because it may have 

7 acted as a broker for some unknown third party who funded his mortgage. In other words, 

8 he reads § 10234( d) to say table-funding residential mortgages is illegal. 

9 The statute doesn't say that. And Manouchehri offers no authority in support of his 

10 interpretation. Instead, two district courts have already rejected Manouchehri's theory, 

11 brought by his same attorney in this case. See Palmerv. MTG Fin., Inc. , 2017 WL 2311680, 

12 at *4, *6 (E.D. Cal. May 26, 2017); Grieves v. MTG Fin. Inc., 2017 WL 3142179, at *12 n.1 

13 (N.D. Cal. July 25, 2017). This Court rejects that theory as well. 2 

14 Even if Manouchehri is right about § 10234(d), he's only offered conclusory 

15 allegations that his original loan was illegally table-funded: "Plaintiff is informed and believes 

16 ... that [Countrywide] was not the actual funding lender ... but instead acted as a 'broker' 

17 to bring in anonymous outside funding from a third party to table-fund the loan proceeds." 

18 [Dkt. 6 at 5.] He speculates that Countrywide may have obtained the money "from a pre19 funded SPE or other source." [Dkt. 6 at 8.] But the Court need not accept those conclusory 

20 and speculative statements as true. See Palmer, 2017 WL 2311680, at *6. And as a practical 

21 matter, it doesn't make any sense to force a trustee attempting to comply with California's 

22 strict foreclosure rules to face federal debt collection litigation because the debtor claims it's 

23 possible his original loan ten years ago came from an unknown source. 

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2 California courts have also found no authority for this theory. See, e.g., Tejeda v. Wells 

Fargo Bank, N.A. , 2017 WL 5899169, at *3-4 (Cal. Ct. App. Nov. 30, 2017) ("Assuming the 

loan here was table funded, we find nothing in California's statutory scheme that authorizes 

a borrower to void a deed of trust based on table funding."); Allen v. Bank of New York 

Mellon, 2016 WL 5239625, at *13 (Cal. Ct. App. Sept. 22, 2016). 

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1 B. Truth in Lending Act 

2 Manouchehri also maintains he has a claim under the Truth in Lending Act because 

3 he didn't receive notice that his Deed of Trust was assigned to the Bank. 15 U.S.C. 

4 § 1641 (g). But Manouchehri had one year to bring this claim when the assignment occurred 

5 in 2013. He filed this complaint in 2016. The statute of limitations bars his claim. Id. at 

6 §1640(e). Cervantes v. Countrywide Home Loans, 656 F.3d 1034, 1045 (9th Cir. 2011).3 

7 Manouchehri argues that the Court should equitably toll the statute of limitations 

8 because it was the Bank's fault he didn't find out about the assignment. But courts only 

9 apply equitable tolling when, "despite all due diligence, the party invoking equitable tolling 

10 is unable to obtain vital information bearing on the existence of the claim." Cervantes, 656 

11 F .3d at 1045. Here, Manouchehri had constructive notice of the assignment because it was 

12 recorded. He can't show he exercised due diligence or that "extraordinary circumstances" 

13 exist that justify equitable tolling. See McQuinn v. Bank of Am., N.A., 656 F. App'x 848, 849 

14 (9th Cir. 2016). 

15 Disposition 

16 The motion for judgment on the pleadings for the federal causes of action is granted. 

17 Manouchehri didn't argue for leave to amend, and there's no reason to offer it: his FDCPA 

18 claim fails as a legal theory and his TILA claim is time-barred . The Court declines to exercise 

19 supplemental jurisdiction over the remaining state law claims and dismisses them without 

20 prejudice. 28 U.S.C. § 1367(c)(3); United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 

21 (1966). The clerk is directed to close the case. 

22 IT IS SO ORDERED. 

23 Dated: J - t\ ..., l eJ 

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HONORABLE LARRY ALAN BURNS 

United States District Judge 

3 Manouchehri alleges the assignment occurred in 2011 , but attaches a notice of assignment 

indicating it occurred in 2013. [Dkt. 6-1 at 1; see also Dkt. 15-2 at 39.) 

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