Court Opinion

ID: 2809423
Source: CourtListenerOpinion
Date Created: 2015-06-17 20:01:23.245354+00
Date Added: 2024-06-11T12:26:11.831496
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                            FOR THE NINTH CIRCUIT                              JUN 17 2015

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

JASON DESCHAINE,                                 No. 14-15345

              Plaintiff - Appellant,             D.C. No. 2:13-cv-01991-WBS-
                                                 KJN
  v.

INDYMAC MORTGAGE SERVICES, a                     MEMORANDUM*
division of One West Bank, FSB; et al.,

              Defendants - Appellees.

                  Appeal from the United States District Court
                       for the Eastern District of California
                William B. Shubb, Senior District Judge, Presiding

                             Submitted June 2, 2015**
                               Pasadena, California

Before: M. SMITH and N.R. SMITH, Circuit Judges and LAMBERTH,*** Senior
District Judge.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Royce C. Lamberth, Senior District Judge for the U.S.
District Court for the District of Columbia, sitting by designation.
      We have jurisdiction of this case under 28 U.S.C. § 1291, and we affirm the

district court’s dismissal as follows:1

1.    The district court did not err in dismissing Deschaine’s negligent and

intentional misrepresentation claims. Deschaine failed to allege with sufficient

particularity the “who, what, when, where, and how” of the alleged statements

made by IndyMac representatives as required by the heightened pleading

standards. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.

2003). Deschaine also failed to plead facts demonstrating reliance. See Cadlo v.

Owens-Illinois, Inc., 23 Cal. Rptr. 3d 1, 5-6 (Ct. App. 2004). The alleged

misrepresentations were made after Deschaine defaulted, received a loan

modification, defaulted again, declared bankruptcy, and sought yet another loan

modification. Thus, Deschaine failed to demonstrate that he continued seeking a

loan modification because of the alleged misrepresentations. Additionally,

Deschaine failed to plead with any particularity the viability of the “other options”

he allegedly could have (but did not) pursue (because of his reliance on the alleged

misrepresentations). Therefore, Deschaine cannot demonstrate that he refrained

from pursuing other options due to his reliance on the alleged misrepresentations.

      1
           Deschaine filed the underlying action against Defendants IndyMac
Mortgage Services, a division of OneWest Bank, FSB (“IndyMac”) and the
Federal Home Loan Mortgage Corporation (“Freddie Mac”).
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2.    The district court did not err in dismissing Deschaine’s breach of contract

claim. Deschaine failed to plead facts demonstrating that IndyMac failed to

perform under either (1) its express obligations under the Workout Agreement, or

(2) its implied obligations under the United States Treasury directives. Deschaine

argues that IndyMac used the wrong income when it determined he did not qualify

for a permanent Home Affordable Modification Program (“HAMP”) loan

modification. However, Deschaine does not allege that he identified or possessed

financial documents that would demonstrate that IndyMac’s income calculations

were incorrect, negligent, or varied from the formula outlined in the Treasury

directives. Contrary to Deschaine’s allegations, 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.” Lueras v. BAC Home Loans Servicing, LP, 163 Cal. Rptr. 3d 804, 820

(Ct. App. 2013) (internal quotation marks omitted). Additionally, IndyMac

performed under the implied duties imputed to lenders by the HAMP Treasury

directives. Id. at 825-28. After determining Deschaine did not qualify for a

permanent HAMP loan modification, IndyMac notified Deschaine of its

determination and offered him the Modification Agreement, a good-faith

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permanent modification consistent with HAMP guidelines. See West v. JPMorgan

Chase Bank, N.A., 154 Cal. Rptr. 3d 285, 299 (Ct. App. 2013).

3.    The district court did not err in dismissing Deschaine’s promissory estoppel

claim. According to Deschaine, IndyMac promised to grant him a permanent

HAMP loan modification, and promised not to sell his home while he was in the

modification process. Under California law, to bring an action for promissory

estoppel, a plaintiff must demonstrate: “(1) a promise clear and unambiguous in its

terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance

must be both reasonable and foreseeable; and (4) the party asserting the estoppel

must be injured by his reliance.” US Ecology, Inc. v. State, 28 Cal. Rptr. 3d 894,

905 (Ct. App. 2005) (alteration in original) (citing Laks v. Coast Fed. Sav. & Loan

Ass’n., 131 Cal. Rptr. 836, 839 (Ct. App. 1976)).

      Deschaine’s promissory estoppel claim fails, because IndyMac did not make

a clear and unambiguous promise to offer Deschaine a permanent HAMP loan

modification. As to the alleged promise that there was no foreclosure sale date,

Deschaine failed to allege the reasonableness of his reliance on this one oral

statement. Deschaine’s default “triggered the lawful enforcement of the power of

sale clause in the deed of trust, and it was the triggering of the power of sale clause

that subjected [Deschaine’s] home to nonjudicial foreclosure.” Jenkins v. JP

                                           4
Morgan Chase Bank, N.A., 156 Cal. Rptr. 3d 912, 933 (Ct. App. 2013). Deschaine

failed to demonstrate why it was reasonable for him to conclude that IndyMac

would gratuitously waive its legally enforceable right to pursue default remedies

provided for in the loan agreement, including acceleration and foreclosure.

Deschaine also failed to allege facts showing it was reasonable for him to rely on

one oral statement that clearly conflicted with the various written notices of default

and trustee’s sale he had received.

4.    The district court did not err in dismissing Deschaine’s negligence claim,

because IndyMac did not have “a common law duty of care to offer, consider, or

approve a loan modification, or to explore and to offer [Deschaine] foreclosure

alternatives.” See Lueras, 163 Cal. Rptr. 3d at 820. In California, as a “general

rule, 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.” Id. at 816 (internal quotation marks

omitted). Therefore, IndyMac owed no duty of care to Deschaine when

considering his request for a loan modification, 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.” Id. at 820. Deschaine failed

to demonstrate that an exception to this rule applied by alleging facts indicating

                                          5
that IndyMac was acting outside the scope of its conventional role as a lender of

money, trustee, or nominee or that IndyMac did something to induce him not to

make his monthly loan payments or that caused or exacerbated his default by

negligently servicing the loan. See id. at 820-21.

5.    The district court did not err in dismissing Deschaine’s California Civil

Code section 2923.6 violation claim. Deschaine argued that he “did not receive a

denial letter and was not given a chance to appeal” the denial of his loan

modification in violation of California Civil Code section 2923.6(c) and (d).

However, section 2923.6(c)(3) specifically authorizes a lender to pursue

foreclosure against a defaulted borrower if “[t]he borrower accepts a written first

lien loan modification, but defaults on, or otherwise breaches the borrower’s

obligations under, the first lien loan modification.” Id. (Emphasis added).

Deschaine does not dispute that he defaulted under the original loan agreement and

defaulted again under the Modification Agreement (a “first lien loan

modification”). Thus, because of Deschaine’s multiple defaults, Deschaine did not

have a statutory right to appeal subsequent loan modification application denials.

6.    The district court did not err in dismissing Deschaine’s California Civil

Code section 2923.7 violation claim. Because of Deschaine’s previous defaults,

Deschaine did not have a statutory right to a single point of contact as required by

                                          6
California Civil Code § 2923.7. California Civil Code § 2923.6(g) states that “[i]n

order to minimize the risk of borrowers submitting multiple applications . . . the

mortgage servicer shall not be obligated to evaluate applications from borrowers

who have already been evaluated or afforded a fair opportunity to be evaluated for

a first lien loan modification prior to January 1, 2013.” Deschaine defaulted under

the original loan agreement and defaulted again under the loan Modification

Agreement (a “first lien loan modification”). Thus, Deschaine was not entitled to

this statutory protection.

7.    The district court did not err in dismissing Deschaine’s California Civil

Code section 2924 violation claim, because Deschaine did not have standing to

contest the alleged fraudulent transfer of his deed of trust. See Fontenot v. Wells

Fargo Bank, N.A., 129 Cal. Rptr. 3d 467, 481 (Ct. App. 2011) (explaining that

even if a deed of trust was fraudulently transferred, “it [was] difficult to conceive

how plaintiff was prejudiced by [the alleged defective assignment] . . . [b]ecause a

promissory note is a negotiable instrument [and] a borrower must anticipate it can

and might be transferred to another creditor . . . without changing [plaintiff’s]

obligations under the note”); Herrera v. Fed. Nat. Mortg. Ass’n, 141 Cal. Rptr. 3d

326, 333 (Ct. App. 2012) (reiterating that California’s foreclosure statutes

authorizing a “trustee, mortgagee, or beneficiary, or an agent of any of them [to]

                                           7
initiate foreclosure, [do] not include a requirement that an agent demonstrate

authorization by its principal”).

8.    The district court did not err in dismissing Deschaine’s California Business

and Professions Code § 17200 (“UCL”) violation claims. The UCL prohibits any

“unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code

§ 17200. Because Deschaine failed to plead a plausible cause of action for each of

the claims that he incorporated and relied upon as a basis for this cause of action,

Deschaine’s UCL claims also fail.

9.    The district court did not err in dismissing Deschaine’s claim of wrongful

foreclosure, because Deschaine failed to allege facts demonstrating that he made an

unambiguous tender of the entire amount of IndyMac’s secured debt. Therefore,

under the tender rule, Deschaine cannot challenge the foreclosure. See Arnolds

Mgmt. Corp. v. Eischen, 205 Cal. Rptr. 15, 17-18 (Ct. App. 1984) (finding under

California law, the tender rule requires that as a precondition to challenging a

foreclosure sale, or any cause of action implicitly integrated to the sale, the

borrower must make a valid and viable tender of payment of the secured debt).

10.   The district court properly declined to grant Deschaine’s request to amend

his complaint for a third time. Deschaine did not demonstrate how he would cure

                                           8
the defects if leave were granted. See Lipton v. Pathogenesis Corp., 284 F.3d

1027, 1039 (9th Cir. 2002).2

      AFFIRMED.

      2
             IndyMac requests that we take judicial notice of two documents. We
may take judicial notice of matters of public record in addition to documents
referenced in the complaint, documents upon which the claim necessarily relies,
and documents whose authenticity is not questioned. See Lee v. City of L.A., 250
F.3d 668, 688-89 (9th Cir. 2001). We decline to take judicial notice of the
requested documents, because they are not necessary to the determination of this
case
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