Court Opinion

ID: 4228028
Source: CourtListenerOpinion
Date Created: 2017-12-12 21:02:56.314554+00
Date Added: 2024-06-11T14:42:56.273650
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                               DEC 12 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                             U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

AL DAVIS PETROVICH,                              No.   16-15396

              Plaintiff-Appellant,               D.C. No. 3:15-cv-00033-EMC

 v.
                                                 MEMORANDUM*
OCWEN LOAN SERVICING, LLC;
WESTERN PROGRESSIVE, LLC,

              Defendants-Appellees.

                    Appeal from the United States District Court
                      for the Northern District of California
                    Edward M. Chen, District Judge, Presiding

                    Argued and Submitted November 15, 2017
                            San Francisco, California

Before: RAWLINSON and BYBEE, Circuit Judges, and SMITH,** Chief District
Judge.

      Al Petrovich appeals the district court’s dismissal of his wrongful-

foreclosure action against Western Progressive, LLC and Ocwen

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
              The Honorable William E. Smith, Chief United States District Judge
for the District of Rhode Island, sitting by designation.
Loan Servicing, LLC, respectively the trustee and servicer for the deed of trust

encumbering Petrovich’s home. We have jurisdiction under 28 U.S.C. § 1291, and

“[w]e review the district court’s grant of a motion to dismiss de novo.” Knievel v.

ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). We affirm.

1.    California law bars Petrovich’s wrongful-foreclosure claim because he filed

suit before appellees’ nonjudicial foreclosure of his home.1 Kan v. Guild Mortg.

Co., 178 Cal. Rptr. 3d 745, 748 (Cal. Ct. App. 2014) (“California courts have

refused to delay the nonjudicial foreclosure process by allowing trustor-debtors to

pursue preemptive judicial actions to challenge the right, power, and authority of a

foreclosing ‘beneficiary’ or beneficiary’s ‘agent’ to initiate and pursue

foreclosure.”). We take no position as to whether California recognizes a carve out

to this bar for complaints that “identif[y] a specific factual basis for alleging that

the foreclosure was not initiated by the correct party.” Gomes v. Countrywide

Home Loans, Inc., 121 Cal. Rptr. 3d 819, 825 (Cal. Ct. App. 2011). Rather, we

      1
         Although the California Supreme Court has yet to address this precise
issue, see, e.g., Yvanova v. New Century Mortg. Corp., 365 P.3d 845, 855 (Cal.
2016), “[w]e should nevertheless follow a published intermediate state court
decision regarding California law unless we are convinced that the California
Supreme Court would reject it,” Muniz v. United Parcel Serv., Inc., 738 F.3d 214,
219 (9th Cir. 2013).
                                            2
find that, even if this carve out exists, Petrovich’s allegations fail as a matter of law

or are inadequately pled.

      In order for a homeowner to challenge a California nonjudicial foreclosure

based on a theory that the deed of trust was ineffectively assigned to the

foreclosing party, the assignment must be void rather than merely voidable.

Yvanova v. New Century Mortg. Corp., 365 P.3d 845, 861 (Cal. 2016). Petrovich

alleges three reasons why the assignment of his deed of trust and the underlying

promissory note from Sand Canyon, the original lender, to Deutsche Bank,

Western Progressive’s predecessor in interest, was void. Each allegation is made

in support of his central contention that the subsequent assignment to Western

Progressive was also void and that Western Progressive and Ocwen therefore lack

authority to foreclose on his home.

      Our recent decision in Turner v. Wells Fargo Bank NA precludes Petrovich’s

first allegation that the assignment of his deed of trust to Deutsche Bank after the

closing date set by the pooling and servicing agreement rendered that assignment

void. 859 F.3d 1145, 1149 (9th Cir. 2017) (holding that such a transfer is “merely

rendered . . . voidable, not void”). As to his second allegation, Petrovich has cited

no authority supporting his contention that the instrument recording the assignment

from Sand Canyon to Deutsche Bank was required to also note any intermediaries

                                            3
in the securitization process. Nor has he argued that this ostensible defect renders

the assignment void.

      Finally, Petrovich has not plausibly alleged that it is “impossible” that

Deutsche Bank ever owned his note and deed of trust because Sand Canyon sold

them to an undetermined entity before 2009. This allegation is premised on his

assumption that the assignment to Deutsche Bank occurred at or near the time it

was recorded in 2011. Petrovich therefore fails to account for the fact that

recording a security interest does not reveal when the underlying debt was

conveyed. See Fontenot v. Wells Fargo Bank, N.A., 129 Cal. Rptr. 3d 467, 480

(Cal. Ct. App. 2011) (rejecting a similar argument and recognizing that

“assignments of debt, as opposed to assignments of the security interest incident to

the debt, are commonly not recorded”), disapproved of on other grounds by

Yvanova, 365 P.3d at 858–59 n.13.

      Because Petrovich does not allege when Sand Canyon conveyed his note to

Deutsche Bank, he implicitly asks this court to assume that the conveyance

occurred at the time of the 2011 recording—or at least after Sand Canyon sold its

residential mortgages—in order to conclude that this assignment was void. Such

an assumption is impermissible in ruling on a motion to dismiss. Jack Russell

Terrier Network of N. Cal. v. Am. Kennel Club, Inc., 407 F.3d 1027, 1035 (9th Cir.

                                          4
2005) (“Although we assume the truth of the facts alleged in the complaint, we

cannot assume any facts necessary to the Appellants’ claim that they have not

alleged.”). It also demonstrates that Petrovich has failed to allege a “specific

factual basis” for why the assignment to Deutsche Bank was void and thus why

Western Progressive and Ocwen lack authority to foreclose on his home. The

district court therefore properly dismissed this claim.2

2.    Petrovich’s request for declaratory relief is derivative of his contention that

Western Progressive and Ocwen lack authority to foreclose on his home and was

therefore also properly dismissed.

3.    Petrovich further claims that Western Progressive and Ocwen violated the

Fair Debt Collection Practices Act (“FDCPA”). Our recent decision in Ho v.

ReconTrust Co., NA forecloses his assertion that appellees violated 15 U.S.C.

§ 1692e by attempting to nonjudicially foreclosure on his home. 858 F.3d 568, 572

(9th Cir. 2016) (“[A]ctions taken to facilitate a non-judicial foreclosure, such as

sending the notice of default and notice of sale, are not attempts to collect ‘debt’ as

that term is defined by the FDCPA.”). While Section 1692f(6) of the FDCPA does

      2
         Petrovich also raises several allegations and arguments not included in his
complaint and not raised before the district court. We decline to address them.
Self Directed Placement Corp. v. Control Data Corp., 908 F.2d 462, 466 (9th Cir.
1990) (“Generally, this Court will not consider arguments that are raised for the
first time on appeal.”).
                                           5
“regulate[] nonjudicial foreclosure activity,” Dowers v. Nationstar Mortg., LLC,

852 F.3d 964, 971 (9th Cir. 2017), Petrovich’s complaint does not allege a

violation of this specific provision. Moreover, Petrovich’s new argument that

appellees have “no present right to possession of” his home, which they “claim[] as

collateral through” his deed of trust, 15 U.S.C. § 1692f(6)(A), is again premised on

his argument that Sand Canyon’s assignment of this security interest and the note

to Deutsche Bank was ineffective. Thus, even if alleged, his Section 1692f

argument similarly fails to state a claim.

4.    Petrovich also brings a slander-of-title claim in regard to the public filings

associated with the foreclosure proceedings. “Slander of title occurs when there is

an unprivileged publication of a false statement which disparages title to property

and causes pecuniary loss.” Stalberg v. W. Title Ins. Co., 32 Cal. Rptr. 2d 750, 752

(Cal. Ct. App. 1994). California “deems the statutorily required mailing,

publication, and delivery of notices in nonjudicial foreclosure, and the performance

of statutory nonjudicial foreclosure procedures, to be privileged communications

under the qualified common-interest privilege of” California Civil Code § 47(c)(1).

Kachlon v. Markowitz, 85 Cal. Rptr. 3d 532, 545 (Cal. Ct. App. 2008). Petrovich’s

threadbare argument that this privilege is inapplicable due to the purportedly

ineffective assignment is without merit.

                                             6
5.    Petrovich also alleges that Ocwen violated the Real Estate Settlement

Procedures Act (“RESPA”), which “requires the servicer of a federally related

mortgage loan to provide a timely written response to inquiries from borrowers

regarding the servicing of their loans.” Medrano v. Flagstar Bank, FSB, 704 F.3d

661, 665 (9th Cir. 2012) (citing 12 U.S.C. § 2605(e)(1)(A), (e)(2)). Of the two

judicially-noticed letters that Petrovich sent to Ocwen, only the portion requesting

“an itemized and verified payoff statement” is a qualified written response

(“QWR”) under RESPA. See id. at 666 (defining the elements of a QWR, which

triggers the servicer’s statutory obligation to respond). However, Petrovich fails to

allege (1) that Ocwen did not provide the specific information requested and (2)

that he suffered any actual damages from a potential non-response. Nor can one

potential instance of non-responsiveness constitute a “pattern or practice of

noncompliance” warranting statutory damages. See 12 U.S.C. § 2605(f). This

claim was therefore properly dismissed.

6.    Finally, Petrovich alleges that appellees “have committed and continue to

commit unlawful, unfair and fraudulent acts in direct violation of” California’s

Unfair Competition Law (“UCL”). “To state a cause of action based on an

unlawful business act or practice under the UCL, a plaintiff must allege facts

sufficient to show a violation of some underlying law.” Prakashpalan v.

                                          7
Engstrom, Lipscomb & Lack, 167 Cal. Rptr. 3d 832, 856 (Cal. Ct. App. 2014).

Petrovich concedes that his UCL claim is derivative of his other claims. Because

all of these claims were properly dismissed, he is unable to establish that appellees

violated any law and is thus unable to allege a UCL violation.

      Accordingly, the district court is AFFIRMED.

                                          8
                                                          FILED
Petrovich v. Ocwen Loan Servicing, Case No. 16-15396
                                                          DEC 12 2017
Rawlinson, Circuit Judge, concurring:
                                                       MOLLY C. DWYER, CLERK
                                                        U.S. COURT OF APPEALS
     I concur in the result.