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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

CESAR GALINDO, et al.,

Plaintiffs,

v.

OCWEN LOAN SERVICING, LLC,

Defendant.

Case No. 17-CV-00021-LHK 

ORDER GRANTING IN PART AND 

DENYING IN PART MOTION TO 

DISMISS 

Re: Dkt. No. 50

Plaintiffs Cesar Galindo (“Galindo”) and Maria Rivera (“Rivera”) (collectively, 

“Plaintiffs”), bring suit against Defendant Ocwen Loan Servicing, LLC (“Defendant”) for 

negligence and violation of California’s Unfair Competition Law (“UCL”). See ECF No. 31 (First 

Amended Complaint, or “FAC”). Before the Court is Defendant’s motion to dismiss. ECF No. 50 

(“Def. Mot.”). Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for 

decision without oral argument and accordingly VACATES the motion hearing set for October 5, 

2017, at 1:30 p.m. Having considered the submissions of the parties, the relevant law, and the 

record in this case, the Court hereby GRANTS with prejudice in part and DENIES in part

Defendant’s motion to dismiss.

I. BACKGROUND
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A. Factual Background

On September 26, 2006, Galindo borrowed $436,000 from Bank of America, N.A. 

(“BOA”), secured by a deed of trust encumbering property located at 3146 Barletta Lane in San 

Jose, CA (hereinafter, “the Property”). FAC, Ex. 1. (“Deed of Trust”). Rivera, the wife of 

Galindo, is not a borrower on the loan, but “is a joint owner of the Property.” FAC ¶ 15. 

Plaintiffs defaulted on the loan on March 1, 2009. ECF No. 51-1.1 A Notice of Default and 

Election to Sell Under Deed of Trust was recorded on March 2, 2011. Id. 

On September 1, 2012, Defendant acquired from BOA the servicing rights for Plaintiffs’ 

loan. FAC, Ex. 2. Plaintiffs allege that they “began applying for a [Home Affordable 

Modification Program (“HAMP”)] loan modification,” although Plaintiffs do not specify in their 

Complaint a date that Plaintiffs began applying for a loan modification. FAC ¶ 17. In 2015, “after 

years of loan modification application negotiations that resulted in bad faith denials, Plaintiffs

filed an administrative complaint.” FAC ¶ 21. On May 29, 2015, Plaintiffs received a letter from

Defendant in response to Plaintiffs’ administrative complaint. Id. Ex. 2. 

Defendant’s May 29, 2015 letter to Plaintiffs, which Plaintiffs attach to the FAC, informed 

Plaintiffs that “[a] review of [Defendant]’s records indicate[d] [Plaintiffs] were approved [by 

Defendant] for a Trial Period Plan (TPP) Offer,” and that an offer was sent to Plaintiffs’ attention 

on September 14, 2012. Id. “The [September 14, 2012 TPP offer] letter indicated if [Plaintiffs] 

completed the TPP by making all payments as stipulated in the offer,” Plaintiffs would receive a 

loan modification. Id. Under the terms of the TPP offer, Plaintiffs “were required to make three 

(3) TPP payments” in order to “be eligible for the modification.” Id. Defendant’s May 29, 2015 

 

1 Defendant requests judicial notice of the Notice of Default and Election to Sell Under Deed of 

Trust. See ECF No. 50. On a motion to dismiss, the Court is limited to “allegations contained in 

the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice.” 

Akhtar v. Mesa, 698 F.3d 1302, 1212 (9th Cir. 2012). The Court may take judicial notice of facts 

not subject to reasonable dispute that “can be accurately and readily determined from sources 

whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). “[M]atters of public 

record” are the appropriate subjects of judicial notice. Lee v. City of Los Angeles, 250 F.3d 668, 

689 (9th Cir. 2001), overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 

1119, 1125–26 (9th Cir. 2002). Accordingly, the Court GRANTS Defendant’s unopposed request 

for judicial notice of the Notice of Default and Election to Sell Under Deed of Trust because it is a 

“matter of public record” and not subject to reasonable dispute. 
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letter to Plaintiffs informed Plaintiffs that Defendant denied Plaintiffs a loan modification “on 

December 13, 2012” because Plaintiffs “failed to make the TPP” payments. Id. However, 

according to Plaintiffs, “Plaintiffs never received notice” of the offer. FAC ¶ 24.

Defendant’s May 29, 2015 letter to Plaintiffs also informed Plaintiffs that Defendant’s

“[r]ecords indicate[d] that [Plaintiffs’] initial request for a [HAMP loan modification] was 

received on May 26, 2014; however, [Plaintiffs] were denied for the HAMP program and 

[Defendant] was unable to offer [Plaintiffs] a HAMP because the owner of the account does not 

participate in the government’s HAMP program.” Id. Defendant’s May 29, 2015 letter further 

informed Plaintiffs that Defendant had continued to review Plaintiffs’ account for alternatives to 

HAMP, but “additional documents were required” from Plaintiffs, and Plaintiffs never submitted 

the required documents. Id. 

Defendant’s May 29, 2015 letter to Plaintiffs further stated that Defendant approved 

Plaintiffs “for a Proprietary Modification” on December 14, 2014. Id. Defendant sent Plaintiffs 

“[a] Proposed Modification Agreement” on December 15, 2014. Id. The Proposed Modification 

Agreement “indicated that in order to accept the terms [Plaintiffs] were required to make a down 

payment in the amount of $4,245.88 on or before January 1, 2015 and two (2) TPP payments each 

in the amount of $4,245.88 on February 1, 2015 and March 1, 2015.” Id. However, because 

Plaintiffs “failed to make the initial TPP by the required due date[,] the modification was denied 

on February 9, 2015.” Id. Defendant sent a denial letter to Plaintiffs on February 11, 2015. Id. 

Defendant’s May 29, 2015 letter to Plaintiffs also told Plaintiffs that Defendant received 

“[a] second HAMP request” from Plaintiffs on April 8, 2015.” Id. However, Defendant again 

denied Plaintiffs a HAMP modification “because the owner of the account either does not allow 

principal reduction or does not participate in the HAMP” program. Id. 

In or about September 2015, BSI Financial Services, Inc. (“BSI”) acquired from Defendant

the servicing rights to Plaintiffs’ loan. FAC ¶ 26. Thereafter, Plaintiffs sent a loan modification 

request to BSI. Id. ¶ 27. On September 28, 2015, BSI filed a Notice of Trustee’s Sale 

(hereinafter, “Notice of Sale”) with the Santa Clara County Recorder’s Office. FAC ¶ 32 & Ex. 3. 
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Plaintiff alleges that when BSI recorded the Notice of Sale, “[n]o decision had been made on 

Plaintiffs’ loan modification application.” Id. 

B. Procedural History

On January 4, 2017, Plaintiffs filed suit against BSI in this Court. ECF No. 1. Plaintiffs 

alleged four causes of action against BSI: (1) negligence; (2) breach of the implied covenant of 

good faith and fair dealing; (3) violation of California Civil Code Section 2923.6(c); and (4) 

violation of the UCL. 

On January 26, 2017, BSI moved to dismiss all four causes of action. See ECF No. 11. 

On February 2, 2017, Plaintiffs opposed BSI’s motion. ECF No. 14. On February 9, 2017, BSI 

filed a reply. ECF No. 15.

On March 17, 2017, the Court granted BSI’s motion to dismiss. ECF No. 23. As relevant 

here, the Court held that Plaintiffs failed to state a claim for negligence against BSI because 

Plaintiffs based their negligence claim, in part, on conduct that was committed by Defendant, not 

BSI. Id. at 10–11. For similar reasons, the Court held that Plaintiffs could not state a claim for 

violation of the implied covenant of good faith and fair dealing or the UCL against BSI for 

Defendant’s conduct. The Court held that Plaintiffs also failed to state a claim that BSI violated 

California Civil Code § 2923.6(c). The Court granted Plaintiffs leave to amend the complaint 

within thirty days, but stated that Plaintiffs “may not add new causes of action or parties without 

leave of the Court or stipulation of the parties pursuant to Federal Rule of Civil Procedure 15.” Id. 

at 17. 

On April 13, 2017, Plaintiffs filed a motion for leave to file a FAC and requested leave of 

Court to add Defendant as a defendant. ECF No. 26. BSI did not oppose Plaintiffs’ motion. ECF 

No. 28. On May 26, 2017, the Court granted Plaintiffs’ motion for leave to file a FAC. ECF No. 

30.

On May 29, 2017, Plaintiffs filed a FAC, which added Defendant as a defendant and 

alleged that BSI violated California Civil Code § 2923.6(c) and that both Defendant and BSI were 

negligent and violated the UCL. ECF No. 31. 
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On July 5, 2017, Plaintiffs filed a motion for a temporary restraining order (“TRO”), which 

asked the Court to enjoin Defendant and BSI from selling Plaintiffs’ home at a trustee’s sale that 

was scheduled to occur on July 19, 2017. ECF No. 46. That same day, the Court ordered 

Defendant and BSI to file a response to Plaintiffs’ TRO motion on or before July 11, 2017.

On July 10, 2017, Defendant and BSI filed oppositions to Plaintiffs’ motion for a TRO. 

ECF Nos. 52 & 53. That same day, the Court issued an order for Plaintiffs to reply to Defendants’ 

oppositions to Plaintiffs’ motion for TRO. ECF No. 54. On July 11, 2017, Plaintiffs filed a reply. 

ECF No. 55. On July 14, 2017, the Court denied Plaintiffs’ TRO motion. ECF No. 56. The Court 

found that Plaintiffs failed to demonstrate a likelihood of success on the merits of their claim 

because at that point in time, Defendant and BSI were not the servicers of Plaintiffs’ loan. Thus, 

Defendant and BSI “d[id] not have the authority to stop the foreclosure sale scheduled for July 19, 

2017.” Id. at 7. Beyond that, the Court found that Plaintiffs “failed to establish a likelihood of 

success on the merits of their claims against [Defendant] for negligence and violation of the 

UCL,” which were “the only claims that Plaintiffs brief[ed] in their TRO motion and discuss[ed] 

in their declaration in support of their TRO motion.” Id. at 10. 

While Plaintiffs’ TRO motion was pending, both BSI and Defendant moved to dismiss 

Plaintiffs’ FAC on July 10, 2017. ECF No. 48; Def. Mot. On July 24, 2017, ten days after the 

Court denied Plaintiffs’ TRO motion, Plaintiffs voluntarily dismissed BSI without prejudice. ECF 

No. 57. That same day, Plaintiffs opposed Defendant’s motion to dismiss. ECF No. 58 (“Pl. 

Opp.”). On July 31, 2017, Defendant filed a Reply. ECF No. 62 (“Reply”). 

II. LEGAL STANDARD

A. Motion to Dismiss Under Rule 12(b)(6)

Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a 

short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint 

that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 

12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to plead 

“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 
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550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual 

content that allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “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.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 

12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] 

the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & 

Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

The Court, however, need not accept as true allegations contradicted by judicially 

noticeable facts, see Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look 

beyond the plaintiff’s complaint to matters of public record” without converting the Rule 12(b)(6) 

motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 

1995). Nor must the Court “assume the truth of legal conclusions merely because they are cast in 

the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per 

curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and unwarranted 

inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 

(9th Cir. 2004). 

B. Leave to Amend

If the Court determines that a complaint should be dismissed, it must then decide whether 

to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to 

amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose 

of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” 

Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation 

marks omitted). When dismissing a complaint for failure to state a claim, “a district court should 

grant leave to amend even if no request to amend the pleading was made, unless it determines that 

the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal 

quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing 
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amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the 

moving party has acted in bad faith.” Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 

(9th Cir. 2008).

III. DISCUSSION

Plaintiffs bring causes of action against Defendant for (1) negligence; and (2) violation of 

the UCL. The Court addresses each cause of action in turn.

A. Negligence

The elements of negligence in California are: (1) defendant had a legal duty to use due care 

towards the plaintiff; (2) the defendant breached that duty; and (3) the breach was the proximate or 

legal cause of (4) the resulting injury. Ladd v. Cty. of San Mateo, 911 P.2d 496, 498 (Cal. 1996). 

The California Supreme Court has identified six factors, known as the Biakanja factors, to 

determine whether there is a duty of care. The Biakanja factors are: (1) the extent to which the 

transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) 

the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection 

between the defendant’s conduct and the injury suffered, (5) the moral blame attached to the 

defendant’s conduct, and (6) the policy of preventing future harm. See Biakanja v. Irving, 49 Cal. 

2d 657, 650 (1958). 

“As a general rule in California, a ‘financial institution owes no duty of care to a borrower 

when the institution’s involvement in the loan transaction does not exceed the scope of its 

conventional role as a mere lender of money.” Alvarez v. BAC Home Loans Serv., L.P., 228 Cal. 

App. 4th 941, 944 (Cal. Ct. App. 2014) (citing Lueras v. BAC Home Loans Serv., L.P., 221 Cal. 

App. 4th 49, 62 (Cal. Ct. App. 2013)). However, in applying this general rule, California courts 

have differed in their application of the Biakanja factors in the home loan modification context. 

In Lueras, 221 Cal. App. 4th at 67, the California Court of Appeal for the Fourth District

concluded that “a loan modification is the renegotiation of loan terms, which falls squarely within 

the scope of a lending institution’s conventional role as a lender of money.” The Lueras court 

reasoned that the Biankanja factors did not support finding a duty of care because the borrower’s 
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harm—being unable to make payments on their loan—was a result of the borrower’s default on 

their home loan, and was not “closely connected to the lender’s conduct” as long as the lender did 

not place the borrower in a position that created the need for the loan modification in the first 

place. Id. Thus, the Lueras court concluded that the lender had no common law duty under 

California law “to offer or approve a loan modification.” Id. 

However, in Alvarez, the California Court of Appeal for the First District concluded that a 

lender did have a common law duty “to exercise reasonable care in the review of [plaintiffs’] loan 

modification applications once [the lender] had agreed to consider” the plaintiffs’ loan 

modification applications. Alvarez, 228 Cal. App. 4th at 944. The plaintiffs in Alvarez alleged 

that the lender improperly handled their home loan modifications and that the lender’s delay in 

processing the plaintiffs’ loan modification “deprived [Plaintiffs] of the opportunity to seek relief 

elsewhere.” Id. The Alvarez court reasoned that “[t]he transaction was intended to affect the 

plaintiffs and it was entirely foreseeable that failing to timely and carefully process the loan 

modification applications could result in significant harm to” plaintiffs. Id. at 951. The court in 

Alvarez thus held that the Biankanja factors supported finding a duty of care. Id. at 952. 

Defendant urges the Court to follow Lueras and find that Defendant owed no duty of care 

to Plaintiffs. On the other hand, Plaintiffs rely on Alvarez to contend that (1) Defendant owed a 

duty of care to Plaintiffs; and (2) Defendant breached that duty by failing to provide Plaintiffs with 

notice of a loan modification offer in September 2012 and by incorrectly informing the Plaintiffs 

that Plaintiffs’s were not eligible for a HAMP loan modification. FAC ¶¶ 65, 67. 

There has been disagreement amongst federal courts as to whether Lueras or Alvarez is 

more persuasive. Compare Romo v. Wells Fargo Bank, N.A., 2016 WL 324286, at *9 (N.D. Cal. 

Jan. 27, 2016) (stating that “most federal district courts have followed Alvarez”), with Marques v. 

Wells Fargo Bank, N.A., 2016 WL 5942329, at *7 (N.D. Cal. Oct. 13, 2016) (“A growing number 

of courts that have addressed this issue since Lueras and Alvarez have adopted the holding in 

Lueras in finding that a mortgage servicer does not owe borrowers a duty of care in processing a 

residential loan modification”). 
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The Court has not found and the parties do not cite a single Ninth Circuit decision, 

published or unpublished, that adopts the holding in Alvarez. However, at least four Ninth Circuit 

unpublished opinions adopted the holding in Lueras and found that financial institutions owed no

duty of care to borrowers in the loan modification process. See Anderson v. Deutsche Bank Nat’l 

Trust Co. Americas, 649 F. App’x 550, 552 (9th Cir. 2016) (“[W]hen ‘the lender did not place the 

borrower in a position creating a need for a loan modification no moral blame . . . attaches to the 

lender’s conduct.’” (quoting Lueras, 221 Cal. App. 4th at 67)); Badame v. J.P. Morgan Chase 

Bank, N.A., 641 F. App’x 707, 709–10 (9th Cir. 2016) (“Chase did not owe Plaintiffs a duty of 

care when considering their loan modification application because ‘a loan modification is the 

renegotiation of loan terms, which falls squarely within the scope of a lending institution’s 

conventional role as a lender of money.” (quoting Lueras, 221 Cal. App. 4th at 67); Deschaine v. 

IndyMac Morg. Servs., 617 F. App’x 690, 692 (9th Cir. 2015) (citing Lueras for the proposition 

that “IndyMac had no duty to offer Deschaine a loan modification based on an income determined 

by Deschaine or to handle Deschaine’s loan ‘in such a way to prevent foreclosure and forfeiture of 

his property’”); Benson v. Ocwen Loan Servicing, LLC, 562 F. App’x 567, 569–70 (9th Cir. 2014) 

(citing Lueras for the proposition that a loan servicer did not owe a borrower “a common law duty 

of care”); see also Newman v. Bank of N.Y. Mellon, 2017 WL 1831940, at *11 (E.D. Cal. May 8, 

2017) (“[T]he Ninth Circuit has repeatedly relied on Lueras to find there is no duty of care in the

loan modification process.”). 

Because the weight of Ninth Circuit authority, albeit unpublished, follows Lueras, this 

Court does the same. In Lueras, the California Court of Appeal concluded that a lender owes no 

duty of care to a borrower in the loan modification process because “a loan modification is the 

renegotiation of loan terms, which falls squarely within the scope of a lending institution’s 

conventional role as a lender of money.” 221 Cal. App. 4th at 67. Further, Lueras observed that 

the Biakanja factors do not support finding that a lender owed a duty of care to a borrower in the 

loan modification process. Id. Thus, under Lueras, Plaintiffs cannot establish that Defendant 

owed Plaintiffs a duty of care in the loan modification process. Further, as Lueras makes clear,
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affording Plaintiffs leave to amend would be futile. As a result, the Court GRANTS with 

prejudice Defendant’s motion to dismiss Plaintiffs’ negligence claim. See Leadsinger, 512 F.3d at 

532 (stating that leave to amend may be denied if allowing amendment would be futile). 

B. UCL

California’s UCL prohibits business practices that are “unfair, unlawful or fraudulent.” 

Cal. Bus. & Prof. Code § 17200. Plaintiffs bring their UCL claim under the “unlawful” and 

“unfair” prongs of the UCL.

2

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practices”). Specifically, Plaintiffs argue that Defendant acted unlawfully and unfairly by (1) 

“failing to provide Plaintiffs with their approved HAMP loan modification offer in September of 

2012”; (2) incorrectly telling Plaintiffs that Plaintiffs’ 2014 HAMP loan modification application 

was denied because Plaintiffs were no longer HAMP-eligible; and (3) “failing to properly process 

Plaintiffs’ loan modification application.” FAC ¶ 76. 

Defendant moves to dismiss Plaintiffs’ entire UCL claim on the ground that “[t]he viability 

of a UCL claim stands or falls with the antecedent substantive causes of action.” Def. Mot. at 8. 

Thus, according to Defendant, Plaintiffs’ UCL claim fails because Plaintiffs do not sufficiently 

allege any “antecedent substantive causes of action.” Id.

Defendant is half correct. To the extent that Plaintiffs bring their UCL claim under the 

“unlawful” prong, Plaintiffs have failed to sufficiently allege a UCL violation because Plaintiffs 

have not successfully alleged that Defendant violated any other law. “Under the UCL’s 

‘unlawful’ prong, violations of other laws are ‘borrowed’ and made independently actionable 

under the UCL.” Herron v. Best Buy Co., Inc., 924 F. Supp. 2d 1161, 1177 (E.D. Cal. Feb. 14, 

 

2

In their opposition to Defendants’ motion to dismiss, Plaintiffs argue for the first time that 

“Plaintiffs have also sufficiently alleged the fraudulent prong of the UCL.” Pl. Opp. at 12. The 

Court need not address this new UCL theory because Plaintiffs’ FAC does not appear to bring a 

claim under the “fraudulent” prong of the UCL. Specifically, while the FAC identifies particular 

acts as “unlawful” and “unfair,” the FAC mentions the word “fraudulent” only in passing and does 

not identify any specific acts as “fraudulent.” See FAC ¶¶ 70–81. Thus, Plaintiffs’ FAC fails to 

“provide[] fair notice of the nature of” Plaintiffs’ new theory under the “fraudulent” prong of the 

UCL and “the facts which underlie” that theory. Grid Sys. v. Tex. Instruments, Inc., 771 F. Supp. 

1033, 1037 (N.D. Cal. 1991). 
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2013). Other than Plaintiffs’ UCL claim against Defendant, Plaintiffs’ FAC asserts only a 

negligence claim against Defendant. As discussed above, Plaintiffs cannot state a negligence 

claim against Defendant because Defendant owed no duty of care to Plaintiffs in the loan 

modification process. Accordingly, because Plaintiffs’ claim under the “unlawful” prong of the 

UCL necessarily relies on Plaintiffs’ negligence claim, Plaintiffs have failed to state a claim under 

the “unlawful” prong of the UCL. Singh v. Wells Fargo Bank, N.A., 2009 WL 2365881, at *5 

(N.D. Cal. July 30, 2009) (dismissing UCL claim because plaintiff failed to show that the 

defendant committed any underlying violation of law). Further, because the Court grants with 

prejudice Defendant’s motion to dismiss Plaintiffs’ negligence claim, it would be futile to allow 

Plaintiffs to amend their UCL claim under the “unlawful” prong. As a result, the Court GRANTS

with prejudice Defendant’s motion to dismiss Plaintiffs’ UCL claim to the extent the claim relies 

on the “unlawful” prong of the UCL. See Leadsinger, 512 F.3d at 532 (stating that leave to amend 

may be denied if allowing amendment would be futile).

However, to the extent that Plaintiffs bring their UCL claim under the “unfair” prong, 

Defendant’s argument is unavailing. Under California law, it is well established that “a practice 

may be deemed unfair [under the UCL] even if not specifically proscribed by some other law.” 

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

“[w]hile a UCL claim against an ‘unlawful’ practice may require a statutory or regulatory 

violation, an unfair practice does not.” Zuniga v. Bank of America N.A., 2014 WL 7156403, at *7 

(C.D. Cal. 2014); see id. (“[A] plaintiff may state a claim [under the UCL] for an unfair practice 

without relying on that practice being unlawful.”). Thus, the Court DENIES Defendant’s motion 

to dismiss Plaintiffs’ UCL claim to the extent the claim relies on the “unfair” prong of the UCL.

IV. CONCLUSION

For the foregoing reasons, Defendant’s motion to dismiss is GRANTED in part and 

DENIED in part. In particular:

1. The Court GRANTS with prejudice Defendant’s motion to dismiss Plaintiffs’ 

negligence claim.
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United States District Court

Northern District of California

2. The Court GRANTS with prejudice Defendant’s motion to dismiss Plaintiffs’ UCL 

claim to the extent Plaintiffs’ UCL claim relies on the “unlawful” prong of the UCL.

3. The Court DENIES Defendant’s motion to dismiss Plaintiffs’ UCL claim to the extent 

Plaintiffs’ UCL claim relies on the “unfair” prong of the UCL. 

IT IS SO ORDERED.

Dated: September 29, 2017

______________________________________

LUCY H. KOH

United States District Judge