Court Opinion

ID: 4269648
Source: CourtListenerOpinion
Date Created: 2018-04-24 20:00:29.53154+00
Date Added: 2024-06-11T14:31:38.640597
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            APR 24 2018
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

WLADIMIR WASJUTIN, an individual;                No.   16-55974
SILVIA WASJUTIN, an individual,
                                                 D.C. No.
              Plaintiffs-Appellants,             2:15-cv-09401-MWF-JC

 v.
                                                 MEMORANDUM*
BANK OF AMERICA, N.A., a
corporation; COUNTRYWIDE BANK,
N.A.; SELECT PORTFOLIO
SERVICING, INC.; DOES, 1 through 10,
inclusive,

              Defendants-Appellees.

                   Appeal from the United States District Court
                       for the Central District of California
                  Michael W. Fitzgerald, District Judge, Presiding

                      Argued and Submitted February 5, 2018
                               Pasadena, California

Before: W. FLETCHER, BERZON, and OWENS, Circuit Judges.

      The Wasjutins appeal from the district court’s order dismissing their claim

against Bank of America, granting judgment on the pleadings to Select Portfolio

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Servicing (“SPS”), and denying leave to amend. We review the district court’s

12(b)(6) and 12(c) rulings de novo. Cervantes v. Countrywide Home Loans, Inc.,

656 F.3d 1034, 1040 (9th Cir. 2011); Fleming v. Pickard, 581 F.3d 922, 925 (9th

Cir. 2009). We review the denial of leave to amend for abuse of discretion.

Cervantes, 656 F.3d at 1041.

      1.     The district court did not err in granting judgment on the pleadings on

the Wasjutins’ claim for dual-tracking under California’s Homeowner Bill of

Rights (“HBOR”).

      At the time SPS sent the Wasjutins a trial loan modification, HBOR’s

prohibition on dual-tracking provided, in relevant part:

             If a borrower submits a complete application for a first lien
             loan modification offered by, or through, the borrower’s
             mortgage servicer, [the] mortgage servicer . . . shall not
             record a notice of default or notice of sale . . . while the
             complete first lien loan modification application is pending.
             A mortgage servicer . . . shall not record a notice of default
             or notice of sale . . . until . . . [t]he borrower does not accept
             an offered first lien loan modification within 14 days of the
             offer.

Cal. Civ. Code § 2923.6(c) (2013) (emphasis added). The effect of this language is

clear: HBOR does not prohibit every overture to foreclosure while a loan

modification is pending; it prohibits, as here relevant, the recordation of a default

notice, Monterossa v. Superior Court, 237 Cal. App. 4th 747, 752 (2015), which

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marks the formal beginning of the nonjudicial foreclosure process. See Cal. Civ.

Code § 2924(a)(1); Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919, 927

(2016). The Wasjutins have not alleged recordation, and have therefore not alleged

the elements of a dual-tracking claim.1

      2.     The district court did not err with respect to the claims brought under

California Civil Code § 2924(a)(6).

      There is no private right of action under section 2924(a)(6). Lucioni v. Bank

of Am., N.A., 3 Cal. App. 5th 150, 158-59 (2016), review denied (Nov. 30, 2016);

see also Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 995 (9th Cir. 2007). And

at least as to Bank of America, even if a private action were available under section

2924(a)(6), the claim would still be unsupported by the facts alleged in the

operative complaint. There is no allegation connecting Bank of America to the

      1
         On January 1, 2018, section 2923.6(c) sunset, and a related provision, Cal.
Civ. Code § 2924.11(c), took effect. We need not determine whether the former
provision remains in effect for purposes of this appeal, whether the new provision
applies, or whether neither is now applicable. The Wasjutins’ claim fails
regardless, as recordation of the default notice is an element of both versions of the
statute and was not alleged.
                                           3
Wasjutins’ promissory note or deed of trust at the time SPS mailed the unrecorded

notice of default naming Wells Fargo as the Wasjutins’ noteholder.2

      3.     The district court did not err in granting judgment on the pleadings on

the Wasjutins’ wrongful foreclosure claim.

      As a general rule, California does not allow preemptive challenges to the

authority to foreclose, “because [such challenges] would result in the

impermissible interjection of the courts” into California’s nonjudicial foreclosure

regime. Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808, 814

(2016), review denied, (July 13, 2016); Jenkins v. JPMorgan Chase Bank, N.A.,

216 Cal. App. 4th 497, 513, as modified (June 12, 2013); see also Gomes v.

Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1155 (2011).3 Limited,

statutorily defined exceptions exist. See Cal. Civ. Code § 2924.12(a)(1); Lucioni, 3
Cal. App. 5th at 159-60. But the common-law cause of action for wrongful

foreclosure is not among these exceptions. See, e.g., Daniels v. Select Portfolio

      2
        The district court did err in effectively taking judicial notice of Wells
Fargo’s status as noteholder. See Fed. R. Evid. 201(b)(2). Even if the default
notice had been recorded, the district court could only have taken judicial notice of
the existence and authenticity of the recorded document — not the truth of its
contents. See Lee v. City of Los Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001).
However, this error is immaterial to our affirmance.
      3
      Jenkins was disapproved in part in Yvanova, on other grounds. See
Yvanova, 62 Cal. 4th at 933-36.
                                          4
Servicing, Inc., 246 Cal. App. 4th 1150, 1184-85 (2016) (identifying, as the first

element of wrongful foreclosure, that “the trustee . . . caused an illegal, fraudulent,

or willfully oppressive sale of real property”).

      The California Supreme Court has held that homeowners have standing to

challenge void (but not voidable) transfers of the authority to foreclose on their

property. Yvanova, 62 Cal. 4th at 923-24, 938. But the existence of standing to

bring such a challenge and the proper cause of action for doing so are separate

questions. Nothing about Yvanova suggests that, contrary to longstanding

precedent on this point, California now allows an action for wrongful foreclosure

before a foreclosure takes place.4 Id. at 924 (“We do not hold or suggest that a

borrower may attempt to preempt a threatened nonjudicial foreclosure by a suit

questioning the foreclosing party’s right to proceed.”); id. at 933-34.

      4.     The district court did not err in granting judgment on the pleadings on

the claim for violation of the implied covenant of good faith and fair dealing.

      To the limited extent the Wasjutins’ complaint addresses the covenant of

good faith and fair dealing, it is vague, conclusory, and difficult to connect to the

      4
        We note that preforeclosure actions predicated in part on a lack of authority
to foreclose are still possible by other means. For example, plausible allegations of
a void transfer might support a claim under Civil Code section 2924.17, for which
the California legislature has expressly authorized preforeclosure injunctive relief.
See Cal. Civ. Code § 2924.12(a)(1).
                                           5
terms of any contract, including the deed of trust. The Wasjutins allege that “SPS

failed [to] present and give notice of a reasonable loan modification.” But the

Wasjutins did receive a trial loan modification; based on the facts as pled, they

failed to pursue it or to seek an alternative modification.

      The Wasjutins alternatively frame their claim as rooted in SPS’s failure to

identify their true “creditor” — apparently a reference to the investors in Wells

Fargo’s securitization trust, which was beneficiary under the deed of trust.

According to the Wasjutins, lacking knowledge of their true creditor, they were

unable to negotiate a loan modification with the parties holding an interest in their

debt. But again, the Wasjutins did negotiate a loan modification. Nor is there any

reason to believe, based on the facts as pled, that a further modification would have

been denied, had it been sought.

      5.     The district court did not err in granting judgment on the pleadings on

the claim brought under California’s Unfair Competition Law (“UCL”), Cal. Bus.

& Prof. Code § 17200. Absent any predicate violation of statute or common law,

there is no basis for invoking the UCL’s “unlawful” prong. See Rose v. Bank of

Am., N.A., 57 Cal. 4th 390, 396 (2013). And for the same reasons the Wasjutins’

good-faith-and-fair-dealing claim fails, there is no basis for invoking the UCL’s

“unfair” prong.

                                           6
      6.     The denial of leave to amend was not an abuse of discretion. See

Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir.

2011); Allen v. City of Beverly Hills, 911 F.2d 367, 374 (9th Cir. 1990).

      AFFIRMED.

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