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Matched Legal Cases: ['§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 1461', '§ 2923', '§ 2924', '§ 2923', '§ 2923', '§ 3', '§ 56', '§ 56', '§ 2923', '§ 2923', '§ 2923', '§ 1461', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 1461', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2923', '§ 2924', '§ 2924']

Javaheri _ Chase Motion for Partial Summary Judgment 21june2012 | Foreclosure | Washington Mutual
Javaheri _ Chase Motion for Partial Summary Judgment 21june2012Uploaded by Brenda ReedRelated InterestsForeclosureWashington MutualSummary JudgmentFederal Rules Of Civil ProcedureBankingRating and Stats5.0 (1)Document ActionsDownloadShare or Embed DocumentEmbedDescription: Javaheri v. JPMorgan Chase Bank NA, California Reconveyance Company. Motion filed by Chase on June 21, 2012 for Partial Summary Judgment.View MoreJavaheri v. JPMorgan Chase Bank NA, California Reconveyance Company. Motion filed by Chase on June 21, 2012 for Partial Summary Judgment.Copyright: Attribution Non-Commercial (BY-NC)Download as PDF, TXT or read online from ScribdFlag for inappropriate contentCase 2:10-cv-08185-ODW-FFM Document 58Filed 06/21/12 Page 1 of 30 Page ID #:1030
THEODORE E. BACON (CA Bar No. 115395) tbacon@AlvaradoSmith.com DAVID J. MASUTANI (CA Bar No. 172305) dmasutani@alvaradosmith.com MICHAEL B. TANNATT (CA Bar No. 117133) mtannatt@alvaradosmith.com ALVARADOSMITH A Professional Corporation 633 W. Fifth Street, Suite 1100 Los Angeles, CA 90071 Tel: (213) 229-2400 Fax: (213) 229-2499 Attorneys for Defendants JPMORGAN CHASE BANK, N. A. and CALIFORNIA RECONVEYANCE COMPANY UNITED STATES DISTRICT COURT
A LVARADO S MITH A P ROFES SIONAL C ORPORATI ON L OS A NGE LES
CENTRAL DISTRICT OF CALIFORNIA DARYOUSH JAVAHERI, Case No.: CV-10 8185 ODW (FFMx) The Hon. Otis D. Wright II. NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF DATE: TIME: CRTRM: Action Filed: Trial Date: July 30, 2012 1:30 p.m. 11 October 29, 2010 September 18, 2012
JPMORGAN CHASE BANK, N.A., CALIFORNIA RECONVEYANCE COMPANY and DOES 1-150, inclusive, Defendants.
NOTICE OF MOTION AND MOTION FOR PARTIAL SUMMARY JUDGMENT
Case No. CV-10 8185 ODW (FFMx)
Case 2:10-cv-08185-ODW-FFM Document 58
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TO THE HONORABLE OTIS D. WRIGHT II, UNITED STATES DISTRICT COURT JUDGE, ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on July 30, 2012, at 1:30 p.m., or as soon thereafter as this matter may be heard in Courtroom “11” of the above entitled Court, located at 312 N. Spring Street, Los California 90012, the Honorable Otis D. Wright II, United States District Court Judge presiding, defendant JPMorgan Chase Bank, N.A., (“JPMorgan”) and California Reconveyance Company ("CRC") (collectively referenced hereinafter as "Defendants") will move the Court for an Order for Partial Summary Judgment in favor of JPMorgan and CRC against the five remaining claims raised in plaintiff Daryoush Javaheri's (“Plaintiff”) Second Amended Complaint ("SAC") filed in Case No. CV-10 81851, which is now consolidated with Plaintiff's Complaint filed in Case No. CV 11-10072. This Motion is brought pursuant to Federal Rule of Civil Procedure 56, and United States Court for the Eastern District of California Local Rule 260: 1. For an order adjudicating that there is no merit to the first claim for
“Violation of California Civil Code § 2923.5” in the SAC and that the final judgment in this action shall, in addition to any matters determined at trial, award judgment as established by such adjudication. 2. For an order adjudicating that there is no merit to the second claim for
“Wrongful Foreclosure” in the SAC and that the final judgment in this action shall, in addition to any matters determined at trial, award judgment as established by such adjudication. 3. For an order adjudicating that there is no merit to the third claim for
“Quasi Contract” in the SAC and that the final judgment in this action shall, in
This motion does not address those claims raised in Plaintiff's Complaint filed in Case No. CV 11-10072 prior to its consolidation into Case No. CV-10 8185.
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addition to any matters determined at trial, award judgment as established by such adjudication. 4. For an order adjudicating that there is no merit to the fifth claim for
“Quiet Title” in the SAC and that the final judgment in this action shall, in addition to any matters determined at trial, award judgment as established by such adjudication. 5. For an order adjudicating that there is no merit to the sixth claim for
“Declaratory and Injunctive Relief” in the SAC and that the final judgment in this action shall, in addition to any matters determined at trial, award judgment as established by such adjudication. This Motion is based on this Notice, the accompanying Memorandum of Points and Authorities, the pleadings and papers on file in this action, and such further oral and documentary evidence as may be presented at the hearing on this Motion. This motion is made following the conference of counsel pursuant to L. R. 7-3, which took place on May 29, 2012. DATED: June 21, 2012 Respectfully submitted, ALVARADOSMITH A Professional Corporation By: /s/ Michael B. Tannatt_______________ THEODORE E. BACON DAVID J. MASUTANI MICHAEL B. TANNATT Attorneys for Defendants JPMorgan Chase Bank, N. A. and California Reconveyance Company
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TABLE OF CONTENTS Page I. II. III. IV. SUMMARY OF ARGUMENT .....................................................................1 STATEMENT OF FACTS ...........................................................................1 STANDARDS FOR SUMMARY JUDGMENT...........................................3 SUMMARY JUDGMENT SHOULD BE GRANTED AS TO ALL FIVE OF THE CLAIMS SET FORTH IN THE COMPLAINT .............................4 A. No First Claim for Violation of Civil Code § 2923.5 Has Been Stated..................................................................................................4 1. 2. Claims Brought Under Civil Code § 2923.5 Are Preempted By the Home Owner's Loan Act ...............................................4 Civil Code § 2923.5 Does Not Apply To This Case Because The Property Was Not Owner Occupied Between January 1, 2003 To December 31, 2007.....................................................5 No Violation of Civil Code § 2923.5 Has Been Stated Because Sufficient Contacts Were Made Both Prior To And After the Recording of the NOD ...............................................6 a. b. B. Workout Contacts With Plaintiff Prior To The Recording of the NOD ....................................................8 Workout Contacts With Plaintiff After The Recording of the NOD .....................................................................8
No Second Claim for Wrongful Foreclosure Has Been Stated ............9 1. 2. 3. 4. The Evidence Establishes That JPMorgan is Both The Servicer And Beneficial Note Holder Of The Subject Loan ......9 No Recording of Transfer of Beneficial Interest Is Required Under California Law .............................................................13 No Action Can Be Brought To Determine Whether The Foreclosing Party Has The Authority to Foreclose ..................14 California Cases Have Uniformly Held That Possession of the Note Is Not A Requirement To Conducting A NonJudicial Foreclosure ................................................................16 The Signature on the Substitution of Trustee Is That of Deborah Brignac.....................................................................17
No Third Claim for Quasi-Contract Can Been Stated........................17
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No Fifth Claim for Quiet Title Can Been Stated ...............................19 No Sixth Claim for Declaratory and Injunctive Relief Can Been Stated................................................................................................21
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TABLE OF AUTHORITIES Page(s) Cases Anderson v. Liberty Lobby, 477 U.S. 242, 106 S. Ct. 2205, 91 L. Ed. 2nd 202 (1986).......................................................................................... 4 Coyotzi v. Countrywide Fin. Corp., 2009 U.S. Dist. LEXIS 91084, *54 (E.D. Cal. Sept. 15, 2009).............................. 20 Debrunner v. Deutsche Bank National Trust Company, 204 Cal. App. 4th 433 138 Cal.Rptr.3d 830 (2012)..............................................................................16, 17 Edejer v. DHI Mortgage Co., No. C. 09–1302 PJH, 2009 WL 1684714, at *10 (N.D.Cal. June 12, 2009)........... 22 Ernesto and Araceli Ortiz v. Accredited Home Lenders, Inc., et. al., 639 F.Supp.2d 1159 (Cal. 2009)............................................................................ 19 Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 129 Cal.Rptr.3d 467 (2011)................................................................................... 13 Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 121 Cal. Rptr. 3d 819 (2011)................................................................................. 14 Guerra v. Sutton, 783 F.2d 1371 (9th Cir. 1986) ............................................................................... 21 Hedging Concepts, Inc. v. First Alliance Mortgage Co., 41 Cal.App.4th 1410, 49 Cal.Rptr.2d 191 (1996)..................................................................................... 17 Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183 (E.D. Cal. 2010).................................................................. 22 Keenan v. Allan, 91 F.3d 1275 (9th Cir.1996) .................................................................................... 4 Lance Camper Manufacturing Corp. v. Republic Indemnity Co. of America, 44 Cal.App.4th 194, 51 Cal.Rptr.2d 622 (1996)..................................................................................... 17 Lupertino v. Carbahal, 35 Cal.App.3d 742, 111 Cal. Rptr. 112 (1973)...................................................................................... 19 Mabry v. SuperiorthCourt, 185 Cal. App. 4 208, 110 Cal. Rptr. 3d 101 (2010)................................................................................4, 7
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Mangindin v. Washington Mutual Bank, 2009 U.S. Dist. LEXIS 51231, *13-*14 (N.D. Cal. June 18 2009) ........................ 21 Matsushita Electric Industrial Co. v. Zenith Radio, 475 U.S. 574, 106 S. Ct. 1348, 89 L.Ed.2d 538 (1986) .......................................................................................3, 11 Mbaba v. Indymac Federal Bank F.S.B., No. 1:09–CV–01452–0WW–GSA, 2010 WL 424363, at *4 (E.D.Cal. Jan. 27, 2010) .............................................................................................................................. 22 Miller v. Provost, 26 Cal. App. 4th 1703, 33 Cal.Rptr.2d 288 (1994)..................................................................................... 20 Mohammed Adhavein v. Argent Mortgage Co., 2009 U.S. Dist. LEXIS 61796, *14 (N.D. Cal. July 17, 2009)............................... 21 Nool v. Homeq Servicing, 2009 U.S. Dist. LEXIS 80640, *20 (E.D. Cal. Sept. 3, 2009)................................ 20 Pagtalunan v. Reunion Mortg., Inc., 2009 U.S. Dist. LEXIS 34811, *14 (N.D. Cal. April 8, 2009) ..........................20, 22 Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291 (S.D. Cal. 2011).................................................................... 5 Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952 (N.D. Cal. 2010) .................................................... 9, 15, 16, 20 Salvador Herrera v. Federal Nation Mortgages Association, 2012 WL 1726950 (May 17, 2012) ....................................................................... 13 Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064 (C.D. Cal. 2010) ................................................................4, 5 Statutes 12 U.S.C. § 1461......................................................................................................... 4 Civil Code § 2923.5 ................................................................................. 1, 4, 5, 6, 7, 8
Civil Code § 2924 -2924k....................................................................................15, 22
Rules Fed. R. Civ. Proc. 56(c) .........................................................................................3, 11 Fed. R. Civ. Proc. 56(e) .............................................................................................. 4
iv TABLE OF AUTHORITIES
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MEMORANDUM OF POINTS AND AUTHORITIES Defendant JPMorgan Chase Bank, N. A. ("JPMorgan") and California Reconveyance Company ("CRC") (collectively hereinafter referenced as "Defendants") submit the following Memorandum of Points and Authorities in support of their Motion for Partial Summary Judgment ("MSJ") to the Second Amended Complaint ("SAC") of plaintiff Daryoush Javaheri ("Plaintiff"). I. SUMMARY OF ARGUMENT Plaintiff entered into a Residential Construction Loan Agreement with Washington Mutual Bank ("WaMu") in the amount of $2,660,000.00 in November, 2007 ("Subject Loan"), secured by real property located at 10809 Wellworth Avenue, California 90024 ("Subject Property"). Plaintiff defaulted on the Subject Loan, and on May 14, 2010, a Notice of Default and Election To Sell ("NOD") was recorded, and on August 16, 2010, a Notice of Trustee's Sale ("NOTS") was recorded. Plaintiff's remaining five causes of action are for violation of Civil Code § 2923.5, wrongful foreclosure, quiet title, quasi-contract, and declaratory and injunctive relief. None of these claims have merit. No cause of action for violation of Civil Code § 2923.5 has been stated because it is preempted by the Home Owner's Loan Act and because the Subject Loan is a construction loan. The other claims are based on the erroneous allegation that the Note for the Subject Loan was sold to a securitized trust. However, this claim is a fabrication. The Note was never sold to a securitized trust. JPMorgan is the beneficiary. Plaintiff has no evidence to the contrary. Consequently, JPMorgan and CRC request that judgment be entered in their favor on all of the remaining claims in the SAC. II. STATEMENT OF FACTS Plaintiff obtained the Subject Loan from Washington Mutual Bank ("WaMu") on or about November, 2007. The Subject Loan was for approximately $2,660,000.00 and it was secured by the Subject Property. Statement of Uncontroverted Facts ("SUF"), Nos. 1 - 8. The Subject Loan was a construction loan subject to a
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Residential Construction Loan Agreement, which represented Plaintiff's obligation to repay the Subject Loan pursuant to its terms (the "Agreement"). SUF, No. 1. In addition, in November, 2007, the Plaintiff signed a Fixed/Adjustable Rate Note, along with a Construction Loan Addendum to Note (hereinafter collectively referenced as the "Note") for the Subject Loan. SUF, No. 2. On September 25, 2008, the Office of Thrift Supervision ("OTS") directed the Federal Deposit Insurance Corporation ("FDIC") to be the receiver of WaMu ("OTS Order"). See SUF, No. 9. On September 25, 2008, JPMorgan executed a Purchase and Assumption Agreement (“P & A Agreement”) with the FDIC acting as receiver of WaMu. The P & A Agreement transferred to JPMorgan “all right, title, and interest of the Receiver in and to all of the assets” of WaMu and its subsidiaries, and provided that JPMorgan “specifically purchases all mortgage servicing rights and obligations of [WaMu]” pursuant to. § 3.1 of the P & A Agreement. SUF, No 10 - 15. The transfer of assets included the Subject Loan, which had never been sold to a securitized trust. SUF, No. 16. On October 16, 2010, a Notice of Completion of the completed residential structure on the Subject Property was recorded. SUF, No. 17. Beginning in 2009, Plaintiff fell behind on his payments on the Subject Loan. SUF, No. 18. On May 3, 2010, a Substitution of Trustee ("Substitution"), substituting CRC as the trustee, was recorded. SUF, No. 19. Deborah Brignac signed the Substitution. SUF, No. 20. On May 3, 2010, a NOD was recorded in the official records of the Los Angeles County Recorder's Office as Document No. 20100596313. SUF, No. 21. On May 14, 2010, a Notice of Rescission ("Rescission Notice") was recorded in the official records of the Los Angeles County Recorder's Office as Document No. 201000661623. SUF, No. 22.
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On May 14, 2010, a 2nd NOD was recorded in the official records of the Los Angeles County Recorder's Office as Document No. 20100661624. SUF, No. 23. The 2nd NOD was also served on Plaintiff. SUF, No. 24. On August 16, 2010, a Notice of Trustee's Sale ("NOTS) was recorded in the official records of the Los Angeles County Recorder's Office as Document No. 20101136133. SUF, No. 25. The NOTS was also served on Plaintiff. SUF, No. 26. The NOTS was also published in the local newspaper. SUF, No. 27 It was also posted on the Subject Property. SUF, No. 28: To date, Plaintiffs have not tendered or offered to tender the entire amount of indebtedness owing under the DOT. See SUF, No. 64. At present, the Subject Loan is still due for the November 1, 2009 payment as well all subsequent payments thereafter. SUF, No. 63. To date, no trustee's sale has occurred. See SUF, No. 65. III. STANDARDS FOR SUMMARY JUDGMENT A motion for summary judgment is a procedure which terminates, without a trial, actions in which “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Federal Rule of Civil Procedure, Rule 56(c). A summary judgment motion may be made in reliance on the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any.” Id. Upon showing that this is no genuine issue of material fact as to particular claims, the court may grant summary judgment in the party's favor "upon all or any part thereof." Federal Rules of Civil Procedure, § 56(a), (b); See Wang Laboratories, Inc. v. Mitsubishi Electronics America, Inc., 860 F.Supp. 1448, 1450 (CD CA 1993). In order to preclude a grant of summary judgment, the non-moving party must do more than show that there is some “metaphysical doubt” as to the material facts. Matsushita Electric Industrial Co. v. Zenith Radio, 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L.Ed.2d 538 (1986) ("Matsushita"). Rather, the non-moving party must set
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forth “‘specific facts showing that there is a genuine issue for trial.’ ” Id. at 587 (quoting Federal Rules of Civil Procedure, § 56(e)). The substantive law defines which facts are material. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S. Ct. 2205, 91 L. Ed. 2nd 202 (1986). Under Rule 56(e), the adverse party must allege specific facts supported by affidavit that raise triable issues. Id. Affidavits that do not affirmatively demonstrate personal knowledge are insufficient. Keenan v. Allan, 91 F.3d 1275, 1278 (9th Cir.1996). IV. SUMMARY JUDGMENT SHOULD BE GRANTED AS TO ALL FIVE OF THE CLAIMS SET FORTH IN THE COMPLAINT A. No First Claim for Violation of Civil Code § 2923.5 Has Been Stated 1. Claims Brought Under Civil Code § 2923.5 Are Preempted By the Home Owner's Loan Act In ruling on a Motion To Dismiss, the Federal District Court of Appeal has held that, notwithstanding the holdings in Mabry v. Superior Court, 185 Cal. App. 4th 208, 110 Cal. Rptr. 3d 101 (2010) ("Mabry"), no cause of action may be stated under Civil Code § 2923.5 because it is pre-empted by the Home Owner's Loan Act ("HOLA"), 12 U. S. C. §§ 1461, et. seq. See Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064, 1073-74 (C.D. Cal. 2010), which holds in pertinent part: Only one California state court has determined that § 2923.5 was not preempted by HOLA. See Mabry v. Superior Court, 185 Cal. App. 4th 208, 231, 110 Cal.Rptr.3d 201, 218 (2010). The court limited its preemption determination by finding that relief under § 2923.5 is limited to a postponement of foreclosure, as opposed to damages. Id. A number of federal courts, on the other hand, have held that § 2923.5 is preempted by HOLA because it “falls squarely within the scope of HOLA's Section 560.2(b)(10), which deals with the ‘[p]rocessing, origination, servicing, sale or purchase of, or investment or participation in, mortgages.’ ” Ngoc Nguyen v. Wells Fargo Bank, N.A., 749 F.Supp.2d 1022, 1033, No. 10–4081, 2010 WL 4348127, at *10 (N. D. Cal. Oct. 27, 2010) (internal quotations and citations omitted); see also Pinales v. Quality Loan Serv. Corp., No. 09–1884, 2010 WL 3749427, at *3 (S. D. Cal. Sep. 22, 2010); Gonzalez v. Alliance Bancorp, No. 10–00805, 2010 WL 1575963, at *5–6, 2010 U.S. Dist. LEXIS 47943, at *15–16 (N.D.Cal. Apr. 19, 2010); Parcray v. Shea Mortgage, Inc., No. 09–1942, 2010 WL 1659369, at *9
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(E.D.Cal. Apr. 23, 2010); Murillo v. Aurora Loan Servs., LLC, No. 09–00503, 2009 WL 2160579, at *4 (N. D. Cal. July 17, 2009). This is not a question of interpreting state law, but rather a question of federal preemption. Thus, the Court is not bound by the decision in Mabry. Moreover, it is evident that the overwhelming weight of authority has held that a claim under § 2923.5 is preempted by HOLA. Defendant's Motion is therefore GRANTED as to this claim. Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064, 1073-74 (C. D. Cal. 2010). More recently, in a case brought against JPMorgan, the Federal District Court held that HOLA preempted the claim for a violation of Civil Code § 2923.5 because, as is the case here, WaMu was a federally chartered bank when the subject loan was originated: Plaintiff's section 2923.5 claim fails because the asserted portions of section 2923.5 have been preempted by the Home Owners' Loan Act (“HOLA”) of 1933, 12 U.S.C. § 1461 et seq. since the loan provider, Washington Mutual Bank, FA, was a federally chartered savings bank at1the time the loan was originated. (Doc. No. 7–1, RJN Ex. 2.) See Quintero Family Trust v. OneWest Bank, F.S.B., 2010 WL 2618729, *4–7, 2010 U.S. Dist. LEXIS 63659, at *13–19 (S.D.Cal.2010); see also Odinma v. Aurora Loan Servs., 2010 WL 1199886, at *6–8, 2010 U.S. Dist. LEXIS 28347, at *19–24 (N.D.Cal.2010); Taguinod v. World Sav. Bank, FSB, 755 F.Supp.2d 1064, 1073–74 (C.D.Cal.2010). Accordingly, the Court GRANTS Defendants' motions to dismiss this claim. Rodriguez v. JP Morgan Chase & Co., 809 F. Supp. 2d 1291, 1295 (S.D. Cal. 2011) ("Rodriquez"). Consequently, for the reasons set forth in Taguinod and in Rodriguez, as a matter of law, summary judgment should be entered in favor of defendants. 2. Civil Code § 2923.5 Does Not Apply To This Case Because The Property Was Not Owner Occupied Between January 1, 2003 To December 31, 2007 In addition to being pre-empted by HOLA, California Civil Code § 2923.5 does not apply to the Subject Loan because the Subject Property was not owner occupied between January 1, 2003 to December 1, 2007 as required by Civil Code § 2923.5,
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subdivision (i), which specifically provides as follows: This section shall apply only to mortgages or deeds of trust recorded from January 1, 2003, to December 31, 2007, inclusive, that are secured by owner-occupied residential real property containing no more than four dwelling units. For purposes of this subdivision, “owner-occupied” means that the residence is the principal residence of the borrower as indicated to the lender in loan documents. Civil Code § 2923.5, subdivision (i). The Subject Loan was entered into in November 7, 2007. SUF, No. 1 . However, when the DOT for the Subject Loan was recorded, no residence existed; rather, the Note provided that its proceeds were to be used for the construction of the residence. SUF, No. 5 and 17. The Notice of Completion was recorded on October 16, 2009. SUF, No. 17. Consequently, during the applicable period of time (from January 1, 2003, to December 31, 2007), no "owner-occupied" residence existed. Consequently, in addition to being pre-empted by HOLA, the facts in this case establish that Civil Code § 2923.5 did not apply to the Subject Loan. For this additional reason, Defendants' MSJ to this first cause action should be granted. 3. No Violation of Civil Code § 2923.5 Has Been Stated Because Sufficient Contacts Were Made Both Prior To And After the Recording of the NOD Contrary to Plaintiff's allegations in the SAC, ¶ 26, Defendants did comply with the provisions of Civil Code § 2923.5 before having the NOD issued in May, 2010. See SAC, ¶ 26. Civil Code § 2923.5 subdivision (a) provides that prior to instituting the foreclosure proceedings, the borrower shall be contacted to explore workout options. Subdivision (a) provides in pertinent part: A mortgagee, beneficiary or authorized agent shall contact the borrower in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure.
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Civil Code § 2923.5, subdivision (a) (2)2 Under the case of Mabry, supra, 185 Cal. App. 4th 208, the Court of Appeal has instructed that the provisions of § 2923.5 "must be narrowly construed" in order to avoid crossing the line from state foreclosure law into federally preempted loan servicing provisions under HOLA. Hence any "assessment" must necessarily be simple-something on the order of, "why can't you make your payments?" First, to the degree that the words “assess” and “explore” can be narrowly or expansively construed, they must be narrowly construed in order to avoid crossing the line from state foreclosure law into federally preempted loan servicing. Hence, any “assessment” must necessarily be simple-something on the order of, “why can't you make your payments?” The statute cannot require the lender to consider a whole new loan application or take detailed loan application information over the phone. (Or, as is unlikely, in person.) Second, the same goes for any “exploration” of options to avoid foreclosure. Exploration must necessarily be limited to merely telling the borrower the traditional ways that foreclosure can be avoided (e.g., deeds “in lieu,” workouts, or short sales), as distinct from requiring the lender to engage in a process that would be functionally indistinguishable from taking a loan application in the first place. In this regard, we note that section 2923.5 directs lenders to refer the borrower to “the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency.” The obvious implication of the statute's referral clause is that the lender itself does not have any duty to become a loan counselor itself. Mabry, supra, 185 Cal.App.4th 208, 232, 110 Cal.Rptr.3d 201, 218. Because of the narrow construction of § 2923.5 that must be made in order to avoid preemption by federal banking law, the Court in Mabry emphasizes that "there is no right, for example, under the statute, to a loan modification." Mabry, 185 Cal App. at 231 (emphasis added by the Court of Appeal). Furthermore, "[g]iven such a narrow construction, section 2923.5 does not, as the law in Blaisdell did not, alter the 'integrity of the basic debt.'" Mabry,185 Cal. App. at 233. In this case, Eric Waller ("Waller"), a Home Loans Litigation Analyst, has reviewed the Consolidated Notes Log ("Consolidated Notes Log") and the Loss
The Court should note that subsection (g) of Civil Code § 2923.5 is an alternative provision to subsection (a), and that the provisions of subsection (g) only apply if the borrower has not been contacted as required by subsection (a) (2).
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Mitigation Notes ("Loss Mitigation Notes"). Both of these documents are computerized business records showing the contacts and other actions taken on the Subject Loan. Waller has reviewed these documents and summarized the following in his declaration filed concurrently herewith ("Waller Decl."). The Consolidated Notes Log is attached as Exhibit "8" to the Waller Decl. and the Loss Mitigation Notes are attached as Exhibit "9" thereto. SUF, Nos. 43 – 44. The entries for these documents are to be reviewed in reverse chronological order. a. Workout Contacts With Plaintiff Prior To The Recording of the NOD As set forth in the Waller Decl., on February 19, 2010, a loan servicer spoke with the Plaintiff and advised him of the workout options available to the Plaintiff. In this same conversation, the Plaintiff advised the loan servicer of his financial situation. The Plaintiff informed the loan servicer that he had hired an attorney to work on this case and that he would be submitting documents in approximately two weeks. At the end of the telephone call, the loan servicer provided Plaintiff with his contact information. SUF, No. 46. In addition, on March 16, 2010, when Plaintiff called to check the status of the Subject Loan, the loan servicer again attempted to explore with Plaintiff whether an early resolution workout solution would be feasible. However, the Plaintiff declined to discuss the options. Thereafter, the loan servicer attempted to discuss with the Plaintiff the reasons for default and his current financial circumstances. However, the Plaintiff was not prepared to discuss his financial circumstances. SUF, NO. 49. b. Workout Contacts With Plaintiff After The Recording of the NOD Even after the NOD was recorded on May 3, 2010, the loan servicing unit continued to work with the Plaintiff to obtain a loan work solution. See SUF, Nos. 53 – 61. In sum, although Civil Code § 2923.5 is pre-empted by HOLA and the Civil
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Code's terms are not even applicable to the Subject Loan, JPMorgan's loan servicing department and its loss mitigation department did contact Plaintiff in order to determine whether a workout solution was feasible in this case. For these reasons, Defendants' MSJ should be granted as to this first cause of action. B. No Second Claim for Wrongful Foreclosure Has Been Stated
In addition to the points and authorities set forth below, Plaintiff's claim for wrongful foreclosure should be dismissed because no trustee's sale has occurred and thus this claim is premature. SUF, No. 65. See Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 961 (N.D. Cal. 2010), which holds: In their motion to dismiss, Defendants argue that Plaintiff's wrongful foreclosure claim fails for one basic reason—there was no foreclosure sale of the Subject Property. (Defs.' Mot. 4:14–15; Dkt. # 10.) A lender or foreclosure trustee may only be liable to the mortgagor or trustor for wrongful foreclosure if the property was fraudulently or illegally sold under a power of sale contained in a mortgage or deed of trust. Munger v. Moore, 11 Cal.App.3d 1, 7, 89 Cal.Rptr. 323, 326 (1970). Here, there is no dispute that a foreclosure sale did not take place. See RJN, Exhibits 1–4. Accordingly, the Court finds that this cause of action is premature. For this reason, in addition to what is set forth below, this claim should be dismissed. 1. The Evidence Establishes That JPMorgan is Both The Servicer And Beneficial Note Holder Of The Subject Loan In the SAC, Plaintiff has erroneously alleged that "WaMu remained the lender for no more than a few days until it sold the loan." See SAC, ¶ 34. Based on these erroneous allegations, the Court denied Defendants' Motion To Dismiss as to the second and fourth causes of action. In this regard, the Court ruled: Plaintiff, however, has cured this deficiency by alleging facts in his SAC to support these claims. Specifically, Plaintiff alleges that "between November 15 and November 30, 2007, WaMu transferred Plaintiffs Note to Washington Mutual Mortgage Securities Corporation." (SAC ¶ 14.) Plaintiff claims that the Note was then "sold to an investment trust and became part of, or was subject to, a Loan Pool, a Pooling and Servicing Agreement, a Collateralized Debt Obligation, a Mortgage-Backed Security, a Mortgage Pass-Through Certificate, a Credit
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Default Swap, an Investment Trust, and/or a Special Purpose Vehicle." (SAC ¶ 14.) Plaintiff identifies the security as Standard & Poor CUSIP # 31379XQC2, Pool Number 432551. (SAC ¶ 14.) The Court must accept these facts as true when deciding a motion to dismiss. Iqbal, 129 S. Ct. at 1949. Coupled with Plaintiffs allegation that JPMorgan never properly recorded its claim of ownership in the Subject Property, (SAC ¶ 16), the above-mentioned facts regarding the transfer of Plaintiff s Note prior to JPMorgan's acquisition of WaMu's assets raise Plaintiffs right to relief above a speculative level. Furthermore, in the face of these specific factual allegations, JPMorgan' s assertion that the P&A Agreement suffices to establish their ownership of the Note is no longer viable. Indeed, the P&A Agreement does not specifically identify Plaintiffs Note. (See Dkt. No. 10, Exh. 2.) Court's Civil Minute Order dated June 2, 2011. Contrary to Plaintiff's allegations in the SAC, the beneficial interest in the Subject Loan has never been transferred to Standard & Poor CUSIP #31379XQCZ, Pool Number 432551 or any other securitized trust. SUF, Nos. 14 – 16. To the contrary, WaMu retained the beneficial interest in the Subject Loan, which under, paragraph 3.1 of the P & A Agreement, JPMorgan acquired from the FDIC, acting as WaMu's receiver. SUF, Nos. 14 -16. Nor does Plaintiff provide any credible evidence to the contrary. On or about December 16, 2011, JPMorgan propounded upon Plaintiff a First Set of Special Interrogatories (SUF, No. 32 - 37), to which Plaintiff responded on February 15, 2012 (SUF, No. 32-37 ). Interrogatory No. 5 specifically asked Plaintiff to state all facts upon which Plaintiff based his contention in the SAC, ¶ 14 that "between November 15 and 30, 2007, WaMu transferred Plaintiff's Note to Washington Mutual Mortgage Securities Corporation." SUF, No. 33. In response to Interrogatory, No. 5, Plaintiff provided two purported theories by which he attempted to justify his claim that WaMu had transferred the Note to Washington Mutual Securities Corporation. In pertinent part, the Plaintiff responded as follows: The number 432551 was written on the fact of Plaintiff's recorded Deed of Trust. This number corresponded to
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Standard & Poor # 31379XQC2. Wamu also securitized the condominium note, as described in Plaintiff's Complaint in Javeheri v. JPMorgan Chase, Case No. CV-11-10072-ODW. SUF, No. 34. Contrary to Plaintiff's whimsical contentions as to the meaning of number "432551",3 the most self-evident explanation is that, rather than corresponding to the "Standard & Poor Number 31379XQC2", the number "4325-5-14" that appears on Page 2 of the recorded DOT refers to the Assessor's Parcel Number for the Subject Property, which is "4325-005-014". See SUF, Nos. 29 – 30. It is simply that the number on the DOT omits the zeroes contained in the Assessor's Parcel Number. SUF, No. 31. Plaintiff's other theory regarding the "condominium note" is also equally spurious. Simply because the "condominium note", which pertains to a different loan and to a different property, and which is the subject of Case No. CV-11-10072-ODW, was purportedly sold to a securitized trust, does not in and of itself provide any basis whatsoever that the Note for the Subject Loan "was then sold to an investment trust and became part of, or was subject to, a Loan Pool, a Pooling and Servicing Agreement, a Collateralized Debt Obligation, a Mortgage-Backed Security, a Mortgage Pass-Through Certificate, a Credit Default Swap, an Investment Trust, and/or a Special Purpose Vehicle," as alleged in the SAC ¶ 14. As set forth in Matsushita, supra, 475 US 574, 586-587, “When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts ... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.''' Here, the Plaintiff has attempted to construct his case only
The Court is asked to note that Plaintiff did not even state the correct number on the face page of the DOT. Rather than "432551", the number appearing on the face page of the DOT is "4325-514".
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on nonsensical conjectures. For these reasons, Defendants' MSJ should be granted as to the second cause of action. The only other basis that Plaintiff provides in his responses to JPMorgan's First Set of Interrogatories is that the Note was sold is based on his claim that Plaintiff purportedly filled out only one loan application for the Subject Loan and the loan that Plaintiff obtained from WaMu which was secured by the Wilshire Boulevard condominium located at 10660 Wilshire Blvd., #1401, Los Angeles, CA 90024, which is the subject of the related USDC Case No. CV-11-10072-ODW (FFMx) ("Condominium Loan"). See SUF, Nos. 36 – 39. However, the Uniform Residential Loan Application ("Loan Application"), which is attached as Exhibit "2" to the SAC, does not even reference the Subject Loan. At page 1, the Loan Application references only the Condominium Loan. Furthermore, the Subject Loan was an entirely different loan than the Condominium Loan. The Subject Loan is based on a Residential Construction Loan Agreement. SUF, Nos. 1 – 2 and 16. According to the Plaintiff's allegations, the Condominium Loan was a simple loan secured by a residential structure that had already been constructed. SUF, Nos 42. Furthermore, the Uniform Residential Application that was submitted on behalf of the Condominium Loan is different than the Loan Application used for the Subject Loan. SUF, No. 41. Consequently, there is no evidentiary basis upon which to draw any inference that because the Condominium Loan's note was purportedly sold to a securitized trust pursuant to a Pooling and Service Agreement, that the Subject Loan's Note was also sold. In fact, according to JPMorgan's records, the Note was not sold. SUF, Nos. 15 and 16. For these reasons, JPMorgan's MSJ should be granted as to the second cause of action.
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No Recording of Transfer of Beneficial Interest Is Required Under California Law
Under California law, no recording of the note is required to evidence the transfer of a note. See Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 271-72, 129 Cal.Rptr.3d 467, 480-481 (2011) ("Fontenot"), which holds in pertinent part: There is a further, overriding basis for rejecting a claim based solely on the alleged invalidity of the MERS assignment. Plaintiff's cause of action ultimately seeks to demonstrate that the nonjudicial foreclosure sale was invalid because HSBC lacked authority to foreclose, never having received a proper assignment of the debt. In order to allege such a claim, it was not enough for plaintiff to allege that MERS's purported assignment of the note in the assignment of deed of trust was ineffective. Instead, plaintiff was required to allege that HSBC did not receive a valid assignment of the debt in any manner. Plaintiff rests her argument on the documents in the public record, but assignments of debt, as opposed to assignments of the security interest incident to the debt, are commonly not recorded. The lender could readily have assigned the promissory note to HSBC in an unrecorded document that was not disclosed to plaintiff.11 To state a claim, plaintiff was required to allege not only that the purported MERS assignment was invalid, but also that HSBC did not receive an assignment of the debt in any other manner. There is no such allegation Emphasis added. See also Salvador Herrera v. Federal Nation Mortgages Association, 2012 WL 1726950 (May 17, 2012). Plaintiff alleges in the SAC, ¶ 28 that "neither WaMu, Chicago Title, CRC nor Chase has recorded a transfer of the beneficial interest in the Note to Chase." However, as set forth in Fontenot, supra, transfers or assignments of the note are commonly not recorded. Consequently, the mere allegation that no "transfer of the beneficial interest has been recorded" fails to support that such an interest was not transferred to JPMorgan. For this reason, the MSJ should be granted.
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No Action Can Be Brought To Determine Whether The Foreclosing Party Has The Authority to Foreclose
California law does not provide for a judicial action to determine whether the person initiating the foreclosure has the authority to do so. Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1155, 121 Cal. Rptr. 3d 819, 824 (2011), review denied (May 18, 2011), cert. denied, 132 S. Ct. 419, 181 L. Ed. 2d 287 (U.S. 2011), which holds in pertinent part: In his declaratory relief cause of action, Gomes sets forth the purported legal authority for his first cause of action, alleging that Civil Code section 2924, subdivision (a), by “necessary implication,” allows for an action to test whether the person initiating the foreclosure has the authority to do so. We reject this argument. Section 2924, subdivision (a)(1) states that a “trustee, mortgagee, or beneficiary, or any of their authorized agents” may initiate the foreclosure process. However, nowhere does the statute provide for a judicial action to determine whether the person initiating the foreclosure process is indeed authorized, and we see no ground for implying such an action. (See Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592, 596, 113 Cal.Rptr.3d 498, 501, 236 P.3d 346 [legislative intent, if any, to create a private cause of action is revealed through the language of the statute and its legislative history].) Significantly, “ [n]onjudicial foreclosure is less expensive and more quickly concluded than judicial foreclosure, since there is no oversight by a court, ‘[n]either appraisal nor judicial determination of fair value is required,’ and the debtor has no postsale right of redemption.” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1236, 44 Cal.Rptr.2d 352, 358, 900 P.2d 601.) The recognition of the right to bring a lawsuit to determine a nominee's authorization to proceed with foreclosure on behalf of the noteholder would fundamentally undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely for the purpose of delaying valid foreclosures. Emphasis added. Consequently, Plaintiff is wrong under California law when he alleges that "[i]f Chase can prove that it is a servicer, Chase cannot foreclose on Plaintiff's property without authorization from the Lender under the terms of the Deed of Trust." See SAC, ¶ 30. In this case, the facts establish that CRC and JPMorgan have complied with
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Civil Code § 2924 -2924k. See SUF, Nos. 18 – 27. Furthermore, it is clear that JPMorgan, pursuant to ¶ 3.1 of the P & A Agreement acquired "all right, title and interest of the Receiver in and to all of the assets of Washington Mutual Bank". SUF, No. 11 – 14. At ¶ 3.1, the P & A Agreement further provides that JPMorgan purchases "all mortgage servicing rights and obligations of Washington Mutual Bank." (Emphasis added.) SUF, No. 14. Consequently, there is no basis to dispute JPMorgan's acquisition of WaMu's servicing rights in the Subject Loan, in addition the Note. Furthermore, the evidence establishes that CRC as the trustee is entitled under the DOT to institute and conduct the foreclosure procedures as to the Subject Loan. See SUF, Nos. 18 - 19. See Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 963 (N.D. Cal. 2010), which holds in pertinent part: Where a deed of trust contains a power-of-sale clause, the beneficiary may pursue non-judicial foreclosure, commonly referred to as a trustee's sale, under section 2924. Ung v. Koehler, 135 Cal.App.4th 186, 192, 37 Cal.Rptr.3d 311, 314 (2005). Here, the power-of-sale clause is included on page three of the first DOT, which provides that “Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the [P]roperty ....” (RJN, Ex. 1, Dkt. # 11.) Further, the NOD complies with section 2924; it identifies CRC as Trustee, provides the instrument number under which the first DOT was recorded, informs Plaintiff of the amount for which he is in arrears, and further notifies him of the election to sell under the first DOT. (RJN Ex. 4, Dkt. # 11.) Thus, the Court finds that CRC complied with section 2924. Further, the Court finds no merit to Plaintiff's argument that there were improprieties in the assignment of the power-ofsale clause in the first DOT. In support of his claim, Plaintiff argues that there is no record of an assignment of the beneficial interest from WaMu/Chase. (Pl.'s Opp'n 6:13–15, Dkt. # 13.) However, the first DOT identifies WaMu as lender and beneficiary, and CRC as the Trustee under the instrument. (RJN, Ex. 1, Dkt. # 11.) Under the Agreement, Chase acquired certain assets and liabilities of WaMu from the FDIC, which was acting as receiver for WaMu. (RJN, Ex. 5, Dkt. # 11.) BofA was assigned beneficial interest in the first DOT by Chase as evidenced by the Assignment of DOT. (RJN, Ex. 3, Dkt. # 11.) Thus, CRC, the Trustee under the first DOT, acted as the authorized agent of BofA when it recorded the NOD, in compliance with section 2924(a)(1).
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Rosenfeld v. JPMorgan Chase Bank, N. A., 732 F. Supp. 2d 952, 963 (N.D. Cal. 2010) ("Rosenfield") (Emphasis added.) In this case, pursuant to ¶ 24 of the DOT, the lender at its option had the right to appoint a successor trustee. SUF, No. 6. The Substitution of the Trustee, substituting CRC as trustee, was recorded on May 3, 2010. SUF, No. 19. Consequently, as the District Court in Rosenfeld holds, CRC was and is entitled to administer the foreclosure proceedings in this case. For this reason, there is no basis upon which to call the foreclosure wrongful and thus the MSJ should be granted as to this cause of action. 4. California Cases Have Uniformly Held That Possession of the Note Is Not A Requirement To Conducting A Non-Judicial Foreclosure Under California law, as well as under many federal cases, there is no requirement that the foreclosing parties possess the original note. See the recent case of Debrunner v. Deutsche Bank National Trust Company, 204 Cal. App. 4th 433, 440 138 Cal.Rptr.3d 830, 835 (2012), which holds in pertinent part: Plaintiff raises several issues related to the validity of the transfer of the deed of trust, but his position on most of them is predicated on a single contention, that no foreclosure of a deed of trust is valid unless the beneficiary is in possession of the underlying promissory note. . . As the parties recognize, many federal courts have rejected this position, applying California law. All have noted that the procedures to be followed in a nonjudicial foreclosure are governed by sections 2924 through 2924k, which do not require that the note be in the possession of the party initiating the foreclosure. (See, e.g., Geren v. Deutsche Bank National (E.D.Cal.2011) 2011 WL 3568913; Kolbe v. JP Morgan Chase Bank, N.A. (N.D.Cal.2011) 2011 WL 4965065; Hague v. Wells Fargo Bank, N.A. (N.D.Cal.2011) 2011 WL 3360026, 3; Impink v. Bank of America (S.D.Cal.2011) 2011 WL 3903197.) We likewise see nothing in the applicable statutes that precludes foreclosure when the foreclosing party does not possess the original promissory note..
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Debrunner v. Deutsche Bank Nat. Trust Co., 204 Cal. App. 4th 433, 440 (2012) (emphasis added). Consequently, in order to conduct the foreclosure proceedings, Defendants are not required, as erroneously alleged at ¶ 31 of the SAC, to produce the original promissory note, a copy of which is attached as Exhibit "3" to the Waller Decl. Consequently, Defendants' MSJ should be granted. 5. The Signature on the Substitution of Trustee Is That of Deborah Brignac The signature that appears on the Substitution of Trustee is that of Deborah Brignac ("Brignac"), who was entitled to sign the document on behalf of JPMorgan, the present beneficiary on the Subject Loan. See SUF, No. 20. Consequently, Plaintiff's allegations at ¶¶ 36 - 39 that Brignac did not sign the NOTS are without merit. For these reasons, the MSJ should be granted. C. No Third Claim for Quasi-Contract Can Been Stated
Plaintiff’s rights and obligations vis-a-vis JPMorgan are controlled by the Note and DOT, which are attached as Exhibits "4" and "6" to the Waller Decl. SUF, Nos. 2 – 8. These two agreements, as between Plaintiff, JPMorgan and CRC, constitute the controlling documents as to their obligations and duties under the Subject Loan and as to the security interests in the Subject Property and the statute of frauds directs all parties to look to these documents to establish their respective rights and obligations. The attempt to plead some quasi-contract in substitution of these two documents must fail. See Hedging Concepts, Inc. v. First Alliance Mortgage Co., 41 Cal.App.4th 1410, 1420, 49 Cal.Rptr.2d 191, 197-198 (1996) and Lance Camper Manufacturing Corp. v. Republic Indemnity Co. of America, 44 Cal.App.4th 194, 203, 51 Cal.Rptr.2d 622, 628 (1996), which states in pertinent part: Finally, as to the Insured's claim of unjust enrichment resulting in an implied-in-fact contract, it is well settled that an action based on an implied-in-fact or quasi-contract cannot lie where there exists between the parties a valid express contract covering the same subject matter. (WalNoon Corp. v. Hill (1975) 45 Cal.App.3d 605, 613 [119
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Cal.Rptr. 646, 650-651]; Tollefson v. Roman Catholic Bishop (1990) 219 Cal.App.3d 843, 855 [268 Cal.Rptr. 550, 557].) Here, the Insured has alleged the existence and validity of an enforceable written contract between the parties in its first two causes of action. The Insured then realleges the existence of the written contract in its claim of a quasi-contract. This is internally inconsistent. The Insured must allege that the express contract is void or was rescinded in order to proceed with its quasi-contract claim. (Lloyd v. Williams (1964) 227 Cal.App.2d 646, 649 [38 Cal.Rptr. 849, 851].) It seems unlikely that the Insured would want to avoid the contract or claim a rescission, inasmuch as this would require the Insured to return the benefits it received under the contract. (Ibid.). In the Court's Minute Order, the Court denied the Motion To Dismiss for the following reasons: Plaintiff seeks restitution by alleging that JPMorgan was unjustly enriched by "any payments he made to [JPMorgan] that were not paid to the lender or beneficiary, if any." (SAC ¶ 44.) The Court previously dismissed Plaintiffs claim for restitution because Plaintiffs "argument [was] based on his assertion that JPMorgan is not the owner, a holder, or a beneficiary under the note." (See Dkt. No. 28 at 5.) As the Court noted above, however, Plaintiff has cured any deficiencies with respect to this assertion. While JPMorgan correctly contends that unjust enrichment, restitution, or quasi contract are not independent causes of action, (Mot. at 7), as previously discussed, Plaintiffs allegations that JPMorgan did not own his Note have/been sufficiently alleged. Consequently, if indeed JPMorgan did not own the Note yet received payments therefrom, those payments may have been received unjustly. Accordingly, Defendant's Motion is DENIED as to Plaintiff's third claim for quasi contract. As shown above, JPMorgan does own the Note. However, under the terms of the DOT, JPMorgan would still be entitled to administer the Subject Loan, if as erroneously alleged in the SAC, JPMorgan had acquired only the servicing rights from the FDIC acting as receiver when JPMorgan entered into the P & A Agreement to purchase WaMu's assets. Under the terms of ¶ 20 of the DOT, Plaintiff agreed to the following terms: The Note or a partial interest in the Note (together with the Security Instrument) can be sold one or more times without prior notice to the borrower. SUF, No. 7.
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Furthermore, the DOT states that in the event that the Note or interest in the Note were to be transferred, the loan servicing duties will remain with the successor Loan Servicer: If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrowers will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser under otherwise provided by the Note purchaser. SUF, No. 8. Consequently, even if as erroneously alleged at ¶ 34 in the SAC, the Note had been sold to a securitized trust, which it was not, JPMorgan, which under the P & A Agreement acquired all of WaMu's servicing rights, still would have been authorized and entitled to collect the monthly payments on behalf of any entity to whom the Note had been sold. SUF, No. 13. As the owner of the Note and the Loan Servicer, JPMorgan was entitled to collect monthly payments from Plaintiff. For these reasons, the MSJ should be granted as to the third claim because there is no legal basis for the Plaintiff to have the Note and DOT declared void. For these reasons, Defendants' MSJ should be granted. D. No Fifth Claim for Quiet Title Can Been Stated
The Court is asked to take note that a quiet title claim does not apply in this case because a security interest does not constitute an adverse claim in real property. See Lupertino v. Carbahal, 35 Cal.App.3d 742, 748, 111 Cal. Rptr. 112 (1973) A deed of trust "carries none of the incidents of ownership of the property, other than the right to convey upon default on the part of the debtor in payment of his debt.") Furthermore, whether a notice of default or a notice of trustee sale has been recorded on the subject property does not affect Plaintiff's ownership right in the subject property. See Ernesto and Araceli Ortiz v. Accredited Home Lenders, Inc., et. al. 639 F.Supp.2d 1159 (Cal. 2009) ("Plaintiffs are still the owners of the Property. The
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recorded foreclosure Notices do not affect Plaintiffs' title, ownership, or possession in the Property.") Furthermore, Plaintiff fails to state a claim for Quiet Title because he has not paid the $2,660,000.00 plus interest that is owing under the Subject Loan. SUF, No. 64. Unless such a showing is made, no quiet title claim has been stated. See Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 975 (N.D. Cal. 2010), which holds in pertinent part: Here, Plaintiff cannot establish that he is entitled to quiet title. A basic requirement of an action to quiet title is an allegation that plaintiffs “are the rightful owners of the property, i.e., that they have satisfied their obligations under the deed of trust.” Kelley v. Mortgage Elec. Registration Sys., 642 F.Supp.2d 1048, 1057 (N.D.Cal.2009). Thus, it is dispositive as to this claim that, under California law, a borrower may not assert “quiet title” against a mortgagee without first paying the outstanding debt on the property. Miller v. Provost, 26 Cal.App.4th 1703, 1707, 33 Cal.Rptr.2d 288, 290 (1994) (“a mortgagor of real property cannot, without paying his debt, quiet his title against the mortgagee”) (citation omitted); Rivera v. BAC Home Loans Servicing, L.P., 2010 WL 2757041, at *8 (N. D. Cal. July 9, 2010). As Plaintiff concedes that he has not paid the debt secured by the mortgage, he cannot sustain a quiet title action against Defendants. Accordingly, Plaintiff's eleventh cause of action for quiet title is DISMISSED WITHOUT LEAVE TO AMEND Emphasis added. See also (Nool v. Homeq Servicing, 2009 U.S. Dist. LEXIS
80640, *20 (E.D. Cal. Sept. 3, 2009) (a “mortgagor of real property cannot, without
paying his debt, quiet his title against the mortgagee.”); Miller v. Provost, 26 Cal.
App. 4th 1703, 1707, 33 Cal.Rptr.2d 288, 290 (1994) (“a trustor/borrower is unable to
quiet title without discharging his debt. The cloud upon his title persists until the debt
is paid.”) Coyotzi v. Countrywide Fin. Corp., 2009 U.S. Dist. LEXIS 91084, *54 (E.D. Cal. Sept. 15, 2009); Pagtalunan v. Reunion Mortg., Inc., 2009 U.S. Dist. LEXIS 34811, *14 (N.D. Cal. April 8, 2009). For this reason alone, Plaintiff's fifth claim should be dismissed. In the SAC, ¶ 63, Plaintiff erroneously alleges that his "obligations under the
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DOT were fulfilled and the loan was fully paid when WaMu received funds in excess of the balance on the Note as proceeds of sale through securitization(s) of the loan and insurance proceeds from Credit Default Swaps.” As shown above in section "A", no sale of the Note has occurred. However, even assuming Plaintiff's erroneously alleged facts that the Note was sold to a securitized trust, this alleged fact would still not entitle Plaintiff to quiet title. See Matraecia v. JPMorgan Chase Bank, NA, 2011 WL 3319721, * (E. D. 2011) ("There is no legal authority that the sale or pooling investment interests in an underlying note can relieve borrowers of their mortgage obligations or extinguish a secured party's right to foreclose on secured property.") In other words, even under Plaintiff's erroneous claim that the Note was sold to a securitized trust, no quiet title claim can be stated because Plaintiff has not satisfied his obligations under the DOT. Thus, Defendants' MSJ should be granted as to this fifth claim for this additional reason. E. No Sixth Claim for Declaratory and Injunctive Relief Can Been Stated Under Federal law, "[d]eclaratory relief is appropriate when (1) the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and (2) when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding. Guerra v. Sutton, 783 F.2d 1371, 1376 (9th Cir. 1986). A Federal Court may decline to address a claim for declaratory relief where "the relief [a] plaintiff seeks is entirely commensurate with the relief sought through [his] other causes of action. . .[the] declaratory relief claim is duplicative and unnecessary." Mohammed Adhavein v. Argent Mortgage Co., 2009 U.S. Dist. LEXIS 61796, *14 (N.D. Cal. July 17, 2009) ("Mohammed"); Mangindin v. Washington Mutual Bank, 2009 U.S. Dist. LEXIS 51231, *13-*14 (N.D. Cal. June 18 2009). Here, Plaintiff seeks to have the Court adjudicate claims that are redundant of his other alleged causes of action and are therefore unnecessary. In the SAC, ¶ 67, Plaintiff merely repeats his claims that JPMorgan or CRC cannot foreclose because
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JPMorgan is not present holder or beneficiary of the Note and that Brignac's signature is forged on the Substitution of Trustee. These claims have been already alleged at SAC, ¶¶ 28 – 39. However, as shown above, Civil Code § 2924 -2924k do not require possession of the original note in order to foreclose. Nor was Brignac's signature on the Substitution forged. See SUF, Nos. 19 - 20. Consequently, Plaintiff's declaratory relief claims also similarly fail along with their corresponding or encompassed causes of action. See Pagtalunan, 2009 U.S. Dist. LEXIS 34811 at *6-*7. As a result, the SAC fails to allege any basis for contending that declaratory relief would be necessary or useful. Nor is Plaintiff entitled to injunctive relief. A request for injunctive relief by itself does not state a cause of action ....” Mbaba v. Indymac Federal Bank F.S.B., No. 1:09–CV–01452–0WW–GSA, 2010 WL 424363, at *4 (E.D.Cal. Jan. 27, 2010); see also Edejer v. DHI Mortgage Co., No. C. 09–1302 PJH, 2009 WL 1684714, at *10 (N.D.Cal. June 12, 2009). "An injunction is a remedy, not a separate claim or cause of action. A pleading can . . . request injunctive relief in connection with a substantive claim, but a separately pled claim or cause of action for injunctive relief is inappropriate." Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1201 (E.D. Cal. 2010). As set forth in the MSJ, Plaintiff has not stated any basis entitling him to relief under any of the claims in his SAC, injunctive or otherwise. Thus, Defendants' MSJ should be granted as to this claim for relief.
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CONCLUSION Based on the foregoing, JPMorgan and CRC are entitled to partial summary
judgment as to one or more of the five remaining claims set forth in the SAC. DATED: June 21, 2012 Respectfully submitted, ALVARADOSMITH A Professional Corporation
By: /s/ Michael B. Tannatt_______________ THEODORE E. BACON DAVID J. MASUTANI MICHAEL B. TANNATT Attorneys for Defendants JPMORGAN CHASE BANK, N. A. and CALIFORNIA RECONVEYANCE COMPANY
23 NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT
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