N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT TOM C ASAULT, on be h a lf of the m s e lve s and a ll othe r sim ila

rly situa te d; e t a l., Pla i ntiffs-Appe lla

nts, v. ONE W EST B A

NK FSB ; e t

a l., De fe nda nts-Appe lle e s. No. 14-55494 D.C . No. 2:11-c v-10520-DOC -R

NB M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia Dav id O. C arte r, Distric t Judge , Pre siding Subm itte d August 1, 2016 ** Pa sa de n a , C a l ifornia B e fore : O’ SC A

NNLAIN, R

AW LINSON, a

nd C A LLAHAN, C irc uit Judge s. Tom C a sa ult a nd othe rs (“ Pla i ntiffs” ) a

ppe a l the distric t

c o urt’ s R ule 12(b)(6) orde rs dism issing the ir se c ond a nd third a m e nde d c om

pla ints in the ir c la ss a c tion a g a inst va

rious ba nking a nd m ortga ge le nding/se rvic ing e ntitie s (the



# FIL ED AUG 04 2016 M OLLY C. DW Y ER, CLERK U . S . CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3. ** The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without oral a

rgum e nt. Se eFe d. R . App. P. 34(a)(2).“ Se rvic e r De fe n da nts” ) and institutiona

l truste e s (the “ Truste e De fe nda nts” ). Spe c ific a lly , the y a

ppe a l the dism issa l of two c a use s of a c tion: fra

u d , a s the te rm is de fine d in C a lifornia

C ivil C ode § 3294, a

nd im prope r fore c losure , arising under C a lifornia C om m e rc i a l C ode § 3602. 1 W e have jurisdic t ion unde r 28 U.S.C . § 1291 a nd re vie w de novo, a c c e pting a ll we ll-ple a de d a lle gations a s true . Lloy d v . C VB Fin. C

orp. , 811 F.3d 1200, 1205 (9th C i r. 2016). W e a ffirm . 1. Pla intiffs fa il to a l le ge a fra ud c la im a ga inst theSe rvic e r De fe nda nts. A pla intiff m

ust suffic i e ntly

ple a d justifia

ble re lia nc e a s pa rt of sta ting a c la im for fraud. C ity Sols., Inc . v . C

le ar C hanne l C o mmc ’ns , 365 F.3d 835, 840 (9th C ir. 2004); Lazar v . Supe rior C o urt , 12 C a l. 4th 631, 638 (1996). He re , Pla i ntiffs c la im that the y de trim e nta lly

re lie d on (1) m isre pre s e ntations c onta ine d in offe rs of loa n m odific ation a ssista

nc e a dve rtise d by

the se de fe nda

nts on the ir we bsite s or c om m unic ate d through the

m a i l, a n d (2) the a c tions of the se de fe nda nts a fte r c om m e n c e m e nt of the loa

n m odific ation proc e ss. W ith re spe c t to theinitia l offe rs, it wa s not re a sona b le for Pla intiffs to re ly on the offe rs be c a

u s e the y c onta ine d no promise or gua rante e of a

loa n m odific ation. W ith re s pe c t to theSe rvic e r De fe nda nts’ c onduc t during the

1 Pla intiffs do not a

ppe a l the distric t c ourt’ s dismi ssa l of the re m a i ning c a use s of a c tion. 2m odific ation proc e ss, Pla intiffs do not provide a singlea lle gation tha

t the fore c losure s the y

suffe re d we re due to justifia ble re lia nc e on a n a c tiona ble m isre pre se ntation or omission a nd not dueto the ir own fa ilure to pa y the ir m ortga ge s. 2. Pla intiffs fa il to a l le ge a c a use of a c tion for im

prope r fore c losure a ga inst theTruste e De fe nda nts. Unde r C a lifornia

la w , “ an instrum e nt is pa id to the e xte nt pa y m e nt is m a de by

or on be ha lf of a pa

rty oblige d to pa

y the instrum e nt.” C a l. C om . C o de § 3602(a )(1). Pla i ntiffs c la im that the Truste e De fe n d ants fore c lose d on the ir prope rtie s in viola tion of this provision be c a use the Se rvic e r De fe nda nts m a de “ a dva

n c e ” pa ym e nts to theTruste e De fe n da nts “ on the ir be ha lf” whe n the y

we re de linque nt on the ir loa n pa ym e nts, thus a

b solving them

of de fa ult. It is c o nte nde d tha

t by m ak ing the se pa

y m e nts, theSe rvic e rs “ took ove r” Pla intiffs’ m ortga ge obliga

tions. Eve n if we a c c e pt a s true tha t the Se rvic e rs m a de a dva nc e s whe n Pla intiffs we re de linque nt on the ir loa n pa ym e nts, thec o n c lusion tha t the s e a dva

nc e s c onstitute d a

“ taking ove r” of the ir loa n obliga tions is not pla

usiblein light of the va rious a gre e m e nts re fe re n c e d in thec om p la ints. Them ortga ge prom i ssory note s de fine “ de fa

ult” a s fa ilure to pa

y the full a m ount of e a c h m o nthly

pa ym e nt on the date it is due , a

nd the trust a gre e m e nts a

nd pooling a

n d se rvic ing a gre e m e nts 3c onte m

p late borrowe r de fa

ult a nd fore c losure . M ore ove r, the pa ym e nts m a de by the Se rvic e rs we re provisional, re im bursa ble a dva n c e s m a de for the be ne fit of c e rtific ate holde rs of a

give n trust, not for the

be ne fit of the borrowe rs. AFFIRM E D .

4