Court Opinion

ID: 3203459
Source: CourtListenerOpinion
Date Created: 2016-05-13 20:01:16.533254+00
Date Added: 2024-06-11T12:05:38.223312
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           MAY 13 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

DAVID LEROY NEWMAN,                              No. 13-17297

              Plaintiff - Appellant,             D.C. No. 1:12-cv-01629-AWI-
                                                 GSA
 v.
                                                 ORDER and
BANK OF NEW YORK MELLON                          MEMORANDUM*
CORP., as Trustee for the Certificate
Holders of CWMBS, Inc., CHL Mortgage
Pass-Through Trust 2007-HY7, Mortgage
Pass Through Certificates 2007-HY7
(“BONY”), FKA The Bank of New York;
et al.,

              Defendants - Appellees.

                   Appeal from the United States District Court
                       for the Eastern District of California
                 Anthony W. Ishii, Senior District Judge, Presiding

                          Submitted December 13, 2015**
                             San Francisco, California

Before: KOZINSKI, BYBEE, and CHRISTEN, Circuit Judges.

        *
             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).
This case is submitted as of the date of this order.

      Plaintiff David Newman defaulted on his home mortgage and was told his

home was going to be foreclosed on. He filed this action seeking a declaration that

defendants do not have the right to foreclose and raising various related causes of

action. The district court dismissed Newman’s complaint with prejudice. We

reverse and remand with respect to most of Newman’s claims, but we affirm the

district court’s dismissal of Newman’s claims under California Civil Code section

2923.5.

1.    The district court dismissed Newman’s claims for declaratory relief, quasi

contract, violations of the Fair Debt Collection Practices Act, violations of

California Business & Professions Code section 17200, and accounting because the

court determined that a borrower like Newman has no standing to challenge a

foreclosing entity’s legal authority to foreclose. But while this appeal was

pending, the California Supreme Court decided Yvanova v. New Century Mortgage

Corp., 365 P.3d 845 (Cal. 2016), which clarified that borrowers do have standing

to challenge a foreclosing entity’s authority to foreclose once the foreclosure has

occurred. Id. at 860–61. And it appears that Newman’s home was recently

foreclosed on, bringing him within the class of people who have standing to bring

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these kind of claims. We therefore reverse the district court’s dismissal of these

claims for the district court to apply intervening California case law in the first

instance.

2.    As to Newman’s negligence claim, the district court correctly held that a

lender generally owes no duty to consider a loan modification. But while this

appeal was pending, the California Court of Appeal decided another case, Alvarez

v. BAC Home Loans Servicing, L.P., 176 Cal. Rptr. 3d 304 (Cal. Ct. App. 2014),

which clarified that a lender may have a duty to act reasonably once it

affirmatively agrees to consider a loan modification application. Id. at 310.

Because Newman alleges that defendants agreed to consider his loan modification

request, we also remand this claim to the district court for consideration of

intervening California case law in the first instance.

3.    We affirm the district court’s dismissal of Newman’s claim for violations of

California Civil Code section 2923.5. Now that Newman’s home has been

foreclosed on, there is no remedy for a violation of this statute. Stebley v. Litton

Loan Servicing, LLP, 134 Cal. Rptr. 3d 604, 607 (Cal. Ct. App. 2011) (“After the

sale, [section 2923.5] provides no relief.”).

       The parties will bear their own costs.

AFFIRMED in PART, REVERSED in PART and REMANDED.

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