N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C U IT
JOANNE ANDER SON, a n individual in he r own c a

pa c ity and a s he i r to the Esta

te of ELLIOT B ERD, now de c e a se d; e t a l., Plaintiffs - Appe lla nts,
v. DEUTSC HE B ANK NATIONAL TR UST C OM PANY AM ER IC AS, De fe nda

nt,
a nd AUR OR A LOAN SER

V IC ES, LLC and NATIONSTAR

M OR TGAGE, LLC , De fe nda

nts - Appe lle e s. No. 14-55822 D.C . No. 8:11-c v-00006-JVS-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 Jam e s V. Se lna , Distric t

Judge , Pre siding Argue d a nd Subm itte d Fe brua

ry 2, 2016 Pa sa de n a , C a l ifornia 

# FIL ED
MAY04 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 9th C ir. R . 36-3.B e fore : D.W . NELSON, C ALLAHAN, a nd N.R
. SM ITH, C irc uit Judge s. Appe lla nts in this puta

t ive c la ss a c tion a

re a group of fina

nc ia lly distre sse d hom e m ortga gors (“ M ortga g ors” ) who a c c use m ortga ge se rvic e rs Aurora Loa n Se rvic e s, LLC (“ Aurora ” ) and Na tionsta r Loa n Se rvic e s , LLC (“Nationsta r” ) of a
range of unla

wful be haviors re late d to offe ring loa n m o dific ations. B e c a

u se the
e xte nsive fa c tua l a

nd proc e dura l history

of this c a se is fa

m ilia r to the pa

rtie s and the c ourt, we re c ount it only a s is ne c e ssa

ry to e xpla in our disposition. M ortga gors a

ppe a l from

the distric t c ourt’ s dism issa l of the ir ne glige n c e ba se d c la im s a ga inst Aurora and the ir c la im that Nationsta r viola te d C a lifornia ’ s R ose ntha l Fa ir De bt C olle c tion Pra c tic e s Ac t (“ R o se ntha l Ac t ” ), C a l. C iv.C ode § 1788.17. “ W e re vie w de novo thedistric t c o urt’ s dism issa l for fa i lure to sta te a
c la im pursua nt to Fe de ra l R

ule of C ivil Proc e dure 12(b)(6),” Lac e y v . Maric opa C ty
. , 693 F.3d 896, 911 (9th C ir. 2012) (e n ba nc ), and we AFFIRM
. 1. M ortga gors c onte nd tha t the distric t c ourt e rre d

by fa iling to find tha

t C a lifornia la w im pose s on a

loa n se rvic e r a

duty of c are to proc e ss prom

ptly a pe nding loa

n-m odific ation a

pplic at ion. M ortga gors m a inta in tha t , ha d the distric t
c ourt a pplie d the fa c tors se t out in Biak anja v . Irv ing , 320 P.2d 16

2(C a l. 1958), it would ha v e be e n oblige d to c onc l ude tha t Aurora owe d M ortga gors
a duty of c are in the proc e ssing of the ir loa n-m odific ation a

pplic ations. W e disa gre e . Unde r C a lifornia

la w, “ a s a ge ne ra l rule , a fina nc ia l institution owe s no duty of c are to a

borrowe r whe n the institution’ s involve m e nt in theloa n tra nsa c tion doe s not e xc e e d the sc ope of its c onve ntiona l role a s a m e re le nde r of m one y .” N y mark v . He art Fe d. Sav

. & Loan Assn. , 283 C a l. R ptr. 53, 56 (C a l. C t. App. 1991). The que s tion of whe the r a le n de r owe s a

duty of c are to a

borrowe r-c lie nt is, howe ve r, subje c t to a

ba la n c ing of the so-c a lle d Biak a nja fa c t ors. Id. at 58. The se fa c tors inc l ude : “ the e xte nt to whic h the tra nsa c t ion wa s inte nde d to a ffe c t the p la intiff, thefore se e a

bility of ha rm to him , the de gre e of c e rta inty tha t the pla i ntiff suffe re d injury , the c lose ne ss of the c onne c tion be twe e n the de fe nda nt’ s
c onduc t a nd the injury

suffe re d, the m ora l bla

m e atta c he d to the de fe nda nt’ s
c onduc t, a

nd the polic y

of pre ve nting futureha

rm .” Biak

anja , 320 P.2d a

t 19. Although the C a l ifornia

Supre m e C o urt ha s not a d dre sse d the que stion of whe the r a loa n se rvic e r owe s a

c om m on la w duty to a pprove a loa n m odific ation

3a

pplic ation within a

pa rtic ula r tim e fra m e , 1 we c onc lude tha t a pplic ation of the Biak anja fa c tors doe s not support im position of such a

duty whe re , a s he re , the borrowe rs’ ne glige nc e c la i m s a re ba se d on a l le gations of de l ay s in the proc e ssing of the ir loa

n m odific ation a

pplic ations. Se e Alv are

z v . BAC HomeLoans Se rv ic ing, L.P. , 176 C a l. R ptr. 3d 304, 308 (C a l. C t. App. 2014); Lue ras v . BAC HomeLoans Se rv ic ing, LP , 163 C a l. R p t r. 3d 804, 820 (C a l . C t. App. 2013). Apply ing the Biak

anja fa c tors to thefa c ts a lle g e d he re , we obse rve tha

t the
re vie w a n d a pprova l of a

loa n m odific ation ha s signific ant im plic ations not just for the b orrowe r, but a l so for the le nde r. Additionally , ha rm to the borrowe r a s a

re sult of an e xte nde d re vie w pe riod, whilefore s e e a ble , is ne ithe r c e rta in nor prim a rily
attributa ble to the le nde r’ s de la

y in the proc e ssing of the a pplic ation. R athe r, whe n, a s he re , “ the m odific ation wa s ne c e ssa ry due to the borrowe r’ s ina b i lity to
re pa y the loa n, the borrowe r’ s ha

rm , suffe re d from

de nia l of a loa

n m odific ation, [is] not . . . c lose ly

c o nne c te d to the le nde r’ s c onduc t.” Lue ras , 221 C a l. R ptr. 4th
at 820. Sim i la

rly , whe n “ the le nde r did not pla c e the borrowe r in a position
c re ating a ne e d for a

loa n m o dific ation, [] no m ora l bla m e . . . a tta c he [s] to the le nde r’ s c onduc t.” Id. As a re sult, thela st of the e num e ra te d Biak anja fa c t ors, the

1 W e de c line to c e rtify

this que stion to the

Supre m e C ourt of C a lifornia , C a l. R . C t. 8.548, a s it se e m s c le a r tha t the C a lifornia

Supre m e C ourt is a

ware of the e m e rge n c e of this issue , but ha s not indic ate d a re a dine ss to a ddre s s it. 4polic y

of pre ve nting futureha

rm , is not im

plic ate d unde r the se c irc um sta

nc e s. Ac c ordingly , the distric t c ourt did not err in dism issing M ortga gors’ ne glige nc e ba se d c la im s for fa ilure to a lle g e fa c t s giving rise to a c om m on la w duty of c are . 2. To the e xte nt tha

t M ortga gors a sse rt a

c h a l le nge to the distric t c ourt’ s de nia l of the i r re que st for le ave to a m e nd to a dd a

ne glige n t m isre p re se ntat ion
c la im , we a ffirm

the distric t c ourt’ s ruling. The distric t c ourt did not a

buse its disc re tion in c onside ring M o rtga gors’ undue de la y in bringing such a

c la i m in this protra c te d litiga

tion. Se e Asc o n Props., Inc . v . Mobil Oil C o. , 866 F.2d 1149, 1160 (9th C ir. 1989) (e xpla ining tha t “ disc re t ion to de ny

le ave to a

m e nd is pa

rtic ula rly broa d whe re pla i ntiff ha s ha d prior opportunitie s to a m e nd” ). 3. B e c a use we a ffirm

the dism issa l of M ortga gors’ ne glige nc e -ba se d c la im s,
we do not re a c h

the issue of whe the r those c la i m s a re pre e m pte d by the Hom e Owne rs’ Loa

n Ac t (“ HOLA” ), 12 U.S.C
. § 1461 e t se q. 4. M ortga gors’ R ose ntha l Ac t c la im c onc e rns a

de bt va lida

tion notic e date d July 15, 2012, whic h Nationsta r se n t M ortga g ors in a pa c ke t c onta ining two othe r doc um e nts. M o rtga gors ha ve not a de quate ly

a lle ge d tha

t se nding the de bt
va lida tion notic e c onstitute d the ty pe of a busive de bt c olle c tion pra c tic e tha t is subje c t to theR ose ntha l Ac t .

5M ortga gors’ argum e nt tha t the de bt va lida

t ion notic e viola

t e s C amac ho v

. Bridge port Fin., Inc
. , 430 F.3d 1078 (9th C ir. 2005), is al so una va iling be c a

use M ortga gors ra ise it for the first tim e on a ppe a l. M o rtga gors ha

ve not ide ntifie d a

ny

“ e x c e ptiona l c irc um sta

nc e s” t hat would wa

rran t a favora ble e xe rc ise of our disc re tion to c onside r it, a nd we de c l ine to do so. Mano–Y &M, Ltd. v . Fie l d ( In
reMortgage

Store , Inc
. ), 773 F.3d 990, 998 (9th C ir. 2014). AFFIRM E D.

6