Case File California FDCPA RESPA UCL QUASI CONTRACT Decl Relief M-T-D DENIED Naranjo v. SBMC Mortgage

Edward J. Schwartz U.S.
Courthouse
U.S. District Court
Southern District of California
940 Front Street
San Diego, CA 92101-8900
_______________________________________________________________
CARMEN R. NARANJO,
Plaintiff,
v.
SBMC MORTGAGE, et al.,
Defendants.
---------------------------
All
Opposing Motions
and
ORDER
July 24, 2012
CA Trial Court Upholds Claims for Improper Assignment, Accounting, Unfair Practices
Posted on August 2, 2012 by Neil Garfield
Editors Note: In an extremely well-written and well reasoned decision Federal District Court Judge M. James
Lorenz denied the Motion to dismiss of US Bank on an alleged WAMU securitization that for the first time
recognizes that the securitization scheme could be a sham, with no basis in fact.
Although the Plaintiff chose not to make allegations regarding false origination of loan documents, which I
think is important, the rest of the decision breaks the illusion created by the banks and servicers through the
use of documents that look good but do not meet the standards of proof required in a foreclosure.
1. I would suggest that lawyers look at the claim and allegations that the origination documents were false and
were procured by fraud.
2. Since no such allegation was made, the court naturally assumed the loan was validly portrayed in the loan
documents and that the note was evidence of the loan transaction, presuming that SBMC actually loaned the
money to the Plaintiff, which does not appear to be the case.
3. This Judge actually read everything and obvious questions in his mind led him to conclude that there were
irregularities in the assignment process that could lead to a verdict in favor of the Plaintiff for quiet title,
accounting, unfair practices and other claims.
4. The court recites the fact that the loan was sold to currently unknown entity or entities. This implicitly
raises the question of whether the loan was in fact actually sold more than once, and if so, to whom, for how
much, and raises the issues of whom Plaintiff was to direct her payments and whether the actual creditor
was receiving the money that Plaintiff paid. a point hammered on, among others, at the Garfield Seminars
coming up in Emeryville (San Francisco), 8/25 and Anaheim, 8/29-30. If you really want to understand what
went on in the mortgage meltdown and the tactics and strategies that are getting traction in the courts, you
are invited to attend. Anaheim has a 1/2 day seminar for homeowners. Call customer service 520-405-1688 to
attend.
5. For the first time, this Court uses the words (attempt to securitize a loan as opposed to assuming it was
done just based upon the paperwork and the presence of the the parties claiming rights through the
assignments and securitization.
6. AFTER the Notice of Sale was recorded, the Plaintiff sent a RESPA 6 Qualified Written request. The
defendants used the time-honored defense that this was not a real QWR, but eh court disagreed, stating that
the Plaintiff not only requested information but gave her reasons in some details for thinking that something
might be wrong.
7. Plaintiff did not specifically mention that the information requested should come from BOTH the subservicer
claiming rights to service the loan and the Master Servicer claiming rights to administer the payments from
all parties and the disbursements to those investor lenders that had contributed the money that was used to
fund the loan. I would suggest that attorneys be aware of this distinction inasmuch as the subservicer only
has a small snapshot of transactions solely between the borrower and the subservicer whereas the the
information from the Master Servicer would require a complete set of records on all financial transactions and
all documents relating to their claims regarding the loan.
8. The court carefully applied the law on Motions to Dismiss instead of inserting the opinion of the Judge as to
whether the Plaintiff would win stating that material allegations, even if doubtful in fact, are assumed to be
true, which is another point we have been pounding on since 2007. The court went on to say that it was
obligated to accept any claim that was plausible on its face.
9. The primary claim of Plaintiffs was that the Defendants were not her true creditors and as such have no
legal, equitable, or pecuniary right in this debt obligation in the loan, which we presume to mean that the
court was recognizing the distinction, for the first time, between the legal obligation to pay and the loan
documents.
10. Plaintiff contended that there was not a proper assignment to anyone because the assignment took place
after the cutoff date in 2006 (assignment in 2010) and that the person executing the documents, was not a
duly constituted authorized signor. The Judges decision weighed more heavily that allegation that the
assignment was not properly made according to the trust Document, thus taking Defendants word for it that
a trust was created and existing at the time of the assignment, but also saying in effect that they cant pick
up one end of the stick without picking up the other. The assignment, after the Notice of Default, violated the
terms of the trust document thus removing the authority of the trustee or the trust to accept it, which as any
reasonable person would know, they wouldnt want to accept having been sold on the idea that they were
buying performing loans. More on this can be read in whose Lien Is It Anyway?, which I just published and is
available on www.livinglies-store.com
11. The Court states without any caveats that the failure to assign the loan in the manner and timing set forth in
the trust document (presumably the Pooling and Servicing Agreement) that the note and Deed of trust are
not part of the trust and that therefore the trustee had no basis for asserting ownership, much less the right
to enforce.
12. THEN this Judge uses simple logic and applies existing law: if the assignment was void, then the notices of
default, sale, substitution of trustee and any foreclosure would have been totally void.
13. I would add that lawyers should consider the allegation that none of the transfers were supported by any
financial transaction or other consideration because consideration passed at origination from the investors
directly tot he borrower, due to the defendants ignoring the provisions of the prospectus and PSA shown to
the investor-lender. In discovery what you want is the identity of each entity that ever showed this loan is a
loan receivable on any regular business or record or set of accounting forms. It might surprise you that
NOBODY has the loan posted as loan receivable and as such, the argument can be made that NOBODY can
submit a CREDIT BID at auction even if the auction was otherwise a valid auction.

FW: Naranjo v. SBMC Mtg: So Dist Cally - aom to WAMU trust not PSA timely; borrower challenge to f/c OK on
this basis
Posted By admin On 30. July 2012 @ 17:30 In Unlawful Beneficiary, assignment, California, case law, wrongful
foreclosure, Bank fraud | No Comments
Posted by April Charney:
lots of helpful statements in this decision, including:
The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30,
2006 as required by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent
assignment, substitution, and notice of default and election to sell may also be improper. Defendants wholly fail to
address that issue. ( See Defs. Mot. 3:166:2; Defs. Reply 2:134:4.) This reason alone is sufficient to deny
Defendants motion with respect to this issue.
Naranjo v. SBMC Mortg., 2012 WL 3030370 (S.D. Cal. July 24, 2012).
re: Naranjo v. SBMC MORTGAGE, Dist. Court, SD California 2012
<excerpts>
III. DISCUSSION
Plaintiff's primary contention here is that Defendants "are not her true creditors and as such have no legal, equitable, or pecuniary right in this debt
obligation" in the loan. (Pl.'s Opp'n 1:5-11.) She contends that her promissory note and DOT were never properly assigned to the WAMU Trust because
the entities involved in the attempted transfer failed to adhere to the requirements set forth in the Trust Agreement and thus the note and DOT are not a
part of the trust res. (FAC 17, 20.) Defendants moves to dismiss the FAC in its entirety with prejudice
. . .
Shortly thereafter, SBMC sold her loan to a currently unknown entity or entities. (FAC 15.) Plaintiff alleges that these unknown entities and Defendants
were involved in an attempt to securitize the loan into the WAMU Mortgage Pass-through Certificates WMALT Series 2006-AR4 Trust ("WAMU Trust").
(Id. 17.) However, these entities involved in the attempted securitization of the loan "failed to adhere to the requirements of the Trust Agreement
necessary to properly assign the mortgage loan into the Trust."
[4]
(Id. ) Specifically, Plaintiff alleges that her loan "was not properly
assigned to the WAMU Trust on or before May 30, 2006, the `Closing Date' as set forth in the Trust Agreement." (Id. 17, 21.)
"The Closing Date is the date by which all of the notes and mortgages had to be transferred into the WAMU Trust in order for the mortgage loan to be a
part of the trust res." (Id. 21.)
. . .
Therefore, the Court DENIES Defendants' motion as to Plaintiff's claim for declaratory relief.
. . .
Therefore, the Court DENIES Defendants' motion as to Plaintiff's quasi -contract claim.
. . .
Accordingly, the Court DENIES Defendants' motion as to Plaintiff's FDCPA claim.
. . .
Accordingly, the Court DENIES Defendants' motion as to Plaintiff's RESPA claim.
. . .
Plaintiff alleges that Defendants violated the UCL by collecting payments that they lacked the right to collect , and engaging in
unlawful business practices by violating the FDCPA and RESPA. As discussed above, Plaintiff alleges cognizable theories of liability, including, among
others, violations of the FDCPA and RESPA. Thus, Plaintiff may proceed with her UCL claim under the unlawful prong.
. . .
Therefore, the Court DENIES Defendants' motion as to Plaintiff's accounting claim.
______________________________________________________________
Naranjo v. SBMC MORTGAGE, Dist. Court, SD California 2012
CARMEN R. NARANJO, Plaintiff,
v.
SBMC MORTGAGE, et al., Defendants.
No. 11-cv-2229-L(WVG).
United States District Court, S.D. California.
July 24, 2012.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS'
MOTION TO DISMISS [DOC. 12]
M. JAMES LORENZ, District Judge.
On September 29, 2011, Plaintiff Carmen R. Naranjo commenced this action against Defendants SBMC Mortgage
("SBMC"),
[1]
JPMorgan Chase ("JPMorgan"), and U.S. Bank N.A. After defaulting on her home loan, Plaintiff now sues Defendants
in an attempt to prevent foreclosure of the property securing the loan. Defendants now moves to dismiss the First Amended
Complaint ("FAC"). Plaintiff opposes.
The Court found this motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1).
(Doc. 15.) For the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss.
I. BACKGROUND
[2]
On or about February 21, 2006, Plaintiff executed a promissory note in favor of SBMC Mortgage ("SBMC") in the amount of
$825,000.00, secured by a deed of trust ("DOT"), to finance real property located in La Jolla, California. (FAC 1, 15 [Doc. 10].
[3]
)
The DOT, attached as Exhibit E to the FAC, identified Plaintiff as Borrower, SBMC Mortgage as Lender, T.D. Service Co. as
Trustee, and Mortgage Electronic Registration Systems, Inc. ("MERS") as both nominee and beneficiary under the security
instrument. (DOT 1.)
Shortly thereafter, SBMC sold her loan to a currently unknown entity or entities. (FAC 15.) Plaintiff alleges that these unknown
entities and Defendants were involved in an attempt to securitize the loan into the WAMU Mortgage Pass-through Certificates
WMALT Series 2006-AR4 Trust ("WAMU Trust"). (Id. 17.) However, these entities involved in the attempted securitization of the
loan "failed to adhere to the requirements of the Trust Agreement necessary to properly assign the mortgage loan into the
Trust."
[4]
(Id.) Specifically, Plaintiff alleges that her loan "was not properly assigned to the WAMU Trust on or before May 30, 2006,
the `Closing Date' as set forth in the Trust Agreement." (Id. 17, 21.) "The Closing Date is the date by which all of the notes and
mortgages had to be transferred into the WAMU Trust in order for the mortgage loan to be a part of the trust res." (Id. 21.)
In May 2009, Plaintiff sought to modify her loan with JPMorgan Chase Bank, N.A. ("JPMorgan") under the belief that it had the
authority to negotiate her loan. (FAC 22-24.) However, she made little progress. (Id.) She continued to follow-up and submit
loan-modification applications for over 19 months. (Id. 27.)
In August 2009, Plaintiff was hospitalized, resulting in unforeseen financial hardship. (FAC 25.) As a result, she defaulted on her
loan. (See id. 26.)
On May 26, 2010, Defendants recorded an Assignment of Deed of Trust, which states that MERS assigned and transferred to U.S.
Bank as trustee for the WAMU Trust under the DOT. (RJN Ex. B.) Colleen Irby executed the Assignment as Officer for MERS. (Id.)
On the same day, Defendants also recorded a Substitution of Trustee, which states that the U.S. Bank as trustee, by JP Morgan,
as attorney-in-fact substituted its rights under the DOT to the California Reconveyance Company ("CRC"). (RJN Ex. C.) Colleen
Irby also executed the Substitution as Officer of "U.S. Bank, National Association as trustee for the WAMU Trust." (Id.) And again,
on the same day, CRC, as trustee, recorded a Notice of Default and Election to Sell. (RJN Ex. D.)
A Notice of Trustee's sale was recorded, stating that the estimated unpaid balance on the note was $989,468.00 on July 1, 2011.
(RJN Ex. E.)
On August 8, 2011, Plaintiff sent JPMorgan a Qualified Written Request ("QWR") letter in an effort to verify and validate her debt.
(FAC 35 & Ex. C.) In the letter, she requested that JPMorgan provide, among other things, a true and correct copy of the original
note and a complete life of the loan transactional history. (Id.) Although JPMorgan acknowledged the QWR within five days of
receipt, Plaintiff alleges that it "failed to provide a substantive response." (Id. 35.) Specifically, even though the QWR contained
the borrow's name, loan number, and property address, Plaintiff alleges that "JPMorgan's substantive response concerned the
same borrower, but instead supplied information regarding an entirely different loan and property." (Id.)
On September 26, 2011, Plaintiff commenced this action. Thereafter, Plaintiff filed her FAC asserting nine claims: (1) declaratory
relief; (2) negligence; (3) quasi contract; (4) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. 1692; (5)
violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. 2605; (6) violation of California Business and
Professions Code 17200; (7) accounting; (8) breach of contract; and (9) breach of implied covenant of good faith and fair dealing.
Defendants now moves to dismiss the FAC in its entirety with prejudice. Plaintiff opposes. (Doc. 14.)
II. LEGAL STANDARD
The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A
motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.
2001). The court must accept all allegations of material fact as true and construe them in light most favorable to the nonmoving
party. Cedars-Sanai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). Material allegations, even
if doubtful in fact, are assumed to be true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not
"necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. Fox
Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003)(internal quotation marks omitted). In fact, the court does not need to
accept any legal conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, ___, 129 S. Ct. 1937, 1949 (2009)
"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation
to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the allegations in the
complaint "must be enough to raise a right to relief above the speculative level." Id. Thus, "[t]o survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Iqbal, 129
S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "The plausibility standard is
not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. A
complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a
cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).
Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v.
Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the complaint whose
authenticity is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir.
1995) (superceded by statutes on other grounds). Moreover, the court may consider the full text of those documents, even when
the complaint quotes only selected portions. Id. It may also consider material properly subject to judicial notice without converting
the motion into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).
III. DISCUSSION
Plaintiff's primary contention here is that Defendants "are not her true creditors and as such have no legal, equitable, or pecuniary
right in this debt obligation" in the loan. (Pl.'s Opp'n 1:5-11.) She contends that her promissory note and DOT were never properly
assigned to the WAMU Trust because the entities involved in the attempted transfer failed to adhere to the requirements set forth
in the Trust Agreement and thus the note and DOT are not a part of the trust res. (FAC 17, 20.) Defendants moves to dismiss
the FAC in its entirety with prejudice.
A. Applicability of Gomes
Plaintiff alleges that the May 2010 assignments are improper for two primary reasons: (1) the assignment of her loan into the
WAMU Trust is improper because it was not assigned before the end of May 2006 as required by the Trust Agreement, and (2) the
May 2010 assignments are improper because Collen Irby lacked the authority to execute the assignments. Defendants argue that
like the borrower in Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149 (2011), Plaintiff seeks to "`test whether the
person initiating the foreclosure has the authority to do so' without presenting any competent, particularized factual allegations or
evidence Defendants `lack[] authority to proceed with the foreclosure.'" (Defs.' Mot. 4:13-18.) They go on to explain that the
assignments and notice of default and election to sell executed in May 2010 are proper. (Defs.' Reply 3:26-4:4.) However,
Defendants put the cart before the horse.
The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30, 2006 as
required by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent assignment, substitution,
and notice of default and election to sell may also be improper. Defendants wholly fail to address that issue. (See Defs.' Mot. 3:16-
6:2; Defs.' Reply 2:13-4:4.) This reason alone is sufficient to deny Defendants' motion with respect to this issue.
Moving on, Defendants' reliance on Gomes is misguided. In Gomes, the California Court of Appeal held that a plaintiff does not
have a right to bring an action to determine a nominee's authorization to proceed with a nonjudicial foreclosure on behalf of a
noteholder. 192 Cal. App. 4th at 1155. The nominee in Gomes was MERS. Id. at 1151. Here, Plaintiff is not seeking such a
determination. The role of the nominee is not central to this action as it was in Gomes.Rather, Plaintiff alleges that the transfer of
rights to the WAMU Trust is improper, thus Defendants consequently lack the legal right to either collect on the debt or enforce the
underlying security interest.
B. Declaratory Relief
Declaratory relief is not an independent cause of action or theory of recovery, only a remedy. 28 U.S.C. 2201, 2202. Where a
substantive cause of action already exists in the complaint, a plaintiff cannot assert a declaratory-relief claim as a "superfluous
second cause of action for the determination of identical issues." Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1189
(E.D. Cal. 2010) (internal quotation marks omitted). To grant declaratory relief, a district court must find an "actual controversy,"
which is "definite and concrete . . . [and] real and substantial." Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227,
240-41 (1937).
Plaintiff requests that the Court "make a finding and issue appropriate orders stating that none of the named Defendants . . . have
any right or interest in Plaintiff's Note, Deed of Trust, or the Property which authorizes them . . . to collect Plaintiff's mortgage
payments or enforce the terms of the Note or Deed of Trust in any manner whatsoever." (FAC 50.) Defendant simplifies this as a
request for "a determination of the ownership of [the] Note and Deed of Trust," which they argue is "addressed in her other causes
of action." (Defs.' Mot. 6:16-20.) The Court disagrees with Defendants. As discussed above and below, there is an actual
controversy that is not superfluous. Therefore, the Court DENIES Defendants' motion as to Plaintiff's claim for declaratory relief.
C. Negligence
"[T]o recover on a theory of negligence, [p]laintiffs must prove duty, breach, causation, and damages." Truong v. Nguyen, 156 Cal.
App. 4th 865, 875 (2007). "The existence of a duty of care owed by defendant to a plaintiff is a prerequisite to establishing a claim
for negligence."Nymark v. Heart Fed. Sav. & Loan Ass'n, 231 Cal. App. 3d 1089, 1095 (1991). "[A]s 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 1096. "Liability to a borrower for negligence arises only when the lender
`actively participates' in the financed enterprise `beyond the domain of the usual money lender.'" Wagner v. Benson, 101 Cal. App.
3d 27, 35 (1980) (quoting Connor v. Great W. Sav. & Loan Ass'n, 69 Cal. 2d 850, 864 (1968)).
Plaintiff alleges that Defendants "have a duty to exercise reasonable care and skill to follow California law with regard to
enforcement of monetary obligations, and to refrain from taking or failing to take any action against Plaintiff that they did not have
legal authority to do." (FAC 56.) Defendants argue that they are the mortgage servicer and that Plaintiff fails to "plead facts
supporting a finding that Defendants' conduct exceeded the scope of a conventional mortgage servicer." (Defs.' Mot. 7:5-7.) Plaintiff
responds that JPMorgan's mishandling of the loan-modification applications and failure to afford a loan modification is "beyond the
domain of a usual money lender." (Pl.'s Opp'n 17:24-18:19.) However, there is no common-law duty to modify a contract. Vella v.
Hudgins, 151 Cal. App. 3d 515, 519 (1984). Thus, Plaintiff fails to allege facts as to the loan-modification process that maintain her
claim for negligence.
Defendants also argue that they have "clearly established they had such authority" to collect payments. (Defs.' Reply 5:28-6:5.)
However, as discussed above, they have not.
Accordingly, the Court GRANTS IN PART and DENIES IN PART Defendants' motion as to Plaintiff's negligence claim. Given that
the legal authority of Defendants that derive from the allegedly improper assignment of rights to the WAMU Trust is central to this
action, Plaintiff may pursue her claim on that ground. However, that said, the Court DISMISSES WITHOUT PREJUDICE Plaintiff's
negligence claim insofar as it relies on facts alleged regarding the loan-modification process, which are insufficient to maintain her
negligence claim.
D. Quasi-Contract
A claim for quasi -contract is synonymous with one for unjust enrichment. FDIC v. Dintino, 167 Cal. App. 4th 333, 346 (2008).
Unjust enrichment requires the receipt of a benefit and the unjust retention of that benefit at the expense of another. Peterson v.
Cellco P'ship, 164 Cal. App. 4th 1583, 1593 (2008). However, "California courts appear to be split on whether unjust enrichment
can be an independent claim or merely an equitable remedy." Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088, 1099 (N.D. Cal.
2007); see Bernardi v. JPMorgan Chase Bank, N.A., No. 11-cv-4212, 2012 WL 2343679, at *3 (N.D. Cal. June 20, 2012) (noting
that quasi -contract is not an independent cause of action under California law, and thus the claim is subject to dismissal for that
reason alone).
Defendants argue that Plaintiff's quasi -contract claim fails because "[t]he Deed of Trust is an express binding agreement that
defines the parties' rights." (Defs.' Mot. 7:8-16.) Plaintiff responds that she "was not paying her true creditor because there was no
valid assignment that allowed [Defendants] to collect on her debt obligation." (Pl.'s Opp'n 19:3-13.) As discussed above,
Plaintiff sufficiently alleges facts that put Defendants' legal rights that derive from the Trust Agreement in
question. Consequently, Plaintiff adequately alleges facts that show Defendants were unjustly enriched in collecting
payments based on those presumed rights. Therefore, the Court DENIES Defendants' motion as to Plaintiff's quasi -contract claim.
E. FDCPA
"The [FDCPA] prohibits debt collector[s] from making false or misleading representations and from engaging in various abusive and
unfair practices." Heintz v. Jenkins, 514 U.S. 291, 292 (1995). To be liable for an FDCPA violation, a defendant must, as a
threshold matter, be a "debt collector" within the meaning of those acts. Id. at 294.
Under the FDCPA, a debt collector is "any person who uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. 1692a(6). This definition includes "any creditor
who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is
collecting or attempting to collect such debts." Id. 1692a(6). The FDCPA does not, however, cover "the consumer's creditors, a
mortgage servicing company, or any assignee of the debt, so long as the debt was not in default at the time it was assigned." Nool
v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009)(quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th
Cir. 1985)); see also 15 U.S.C. 1692a(4) (defining "creditor"). Consequently, a loan servicer is not a debt collector if it acquired
the loan before the borrower was in default. See Schlegel v. Wells Fargo Bank, N.A., 799 F. Supp. 2d 1100, 1103-04 (N.D. Cal.
2011).
Defendants argue that they are not "debt collectors" within the meaning of the FDCPA. (Defs.' Mot. 9:13-15.) That argument is
predicated on the presumption that all of the legal rights attached to the loan were properly assigned. Plaintiff responds that
Defendants are debt collectors because U.S. Bank's principal purpose is to collect debt and it also attempted to collect payments.
(Pl.'s Opp'n 19:23-27.) She explicitly alleges in the FAC that U.S. Bank has attempted to collect her debt obligation and that U.S.
Bank is a debt collector. Consequently, Plaintiff sufficiently alleges a claim under the FDCPA.
Defendants also argue that the FDCPA claim is time barred. (Defs.' Mot. 7:18-27.) A FDCPA claim must be brought "within one
year from the date on which the violation occurs." 15 U.S.C. 1692k(d). Defendants contend that the violation occurred when the
allegedly false assignment occurred on May 26, 2010. (Defs.' Mot. 7:22-27.) However, Plaintiff alleges that U.S. Bank violated the
FDCPA when it attempted to enforce Plaintiff's debt obligation and collect mortgage payments when it allegedly had no legal
authority to do so. (FAC 72.) Defendants wholly overlook those allegations in the FAC. Thus, Defendants fail to show that
Plaintiff's FDCPA claim is time barred.
Accordingly, the Court DENIES Defendants' motion as to Plaintiff's FDCPA claim.
F. RESPA
"RESPA imposes certain disclosure obligations on loan servicers who transfer or assume the servicing of a federally related
mortgage loan." Morris v. Bank of America, No. C 09-02849, 2011 WL 250325, at *4 (N.D. Cal. Jan. 26, 2011) (citing 12 U.S.C.
2605(b)). Under RESPA, a Qualified Written Response ("QWR") is "written request from the borrower (or an agent of the borrower)
for information relating to the servicing of such loan." 12 U.S.C. 2605(e)(1)(A). "The term `servicing' means receiving any
scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making the payments of principal and
interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the
terms of the loan." 12 U.S.C. 2603(i)(3). Among other things, a QWR must include a "statement of the reasons for the belief of
the borrower, to the extent applicable, that the account is in error or provide[] sufficient detail to the servicer regarding other
information sought by the borrower." Id. 2605(e)(1)(B). It must also include the name and account of the borrower. Id.
Defendants argue that Plaintiff's letter does not constitute a QWR because it requests a list of unsupported demands rather than
specific particular errors or omissions in the account along with an explanation from the borrower why she believes an error exists.
(Defs.' Mot. 10:4-13.) However, the letter explains that it "concerns sales and transfers of mortgage servicing rights; deceptive and
fraudulent servicing practices to enhance balance sheets; deceptive, abusive, and fraudulent accounting tricks and practices that
may have also negatively affected any credit rating, mortgage account and/or the debt or payments that [Plaintiff] may be obligated
to." (FAC Ex. C.) The letter goes on to put JPMorgan on notice of
potential abuses of J.P. Morgan Chase or previous servicing companies or previous servicing companies [that] could
have deceptively, wrongfully, unlawfully, and/or illegally: Increased the amounts of monthly payments; Increased the
principal balance Ms. Naranjo owes; Increased the escrow payments; Increased the amounts applied and attributed
toward interest on this account; Decreased the proper amounts applied and attributed toward the principal on this
account; and/or[] Assessed, charged and/or collected fees, expenses and miscellaneous charges Ms. Naranjo is not
legally obligated to pay under this mortgage, note and/or deed of trust.
(Id.) Based on the substance of letter, the Court cannot find as a matter of law that the letter is not a QWR.
Defendants also argue that the RESPA claim fails because Plaintiff fails to plead actual damages arising from JPMorgan's alleged
failure to respond. (Defs.' Mot. 10:14-19.) To state a claim for relief under RESPA, a plaintiff must allege either a purported pattern
or practice of violating the statute or actual damages caused by the asserted violation. 12 U.S.C. 2605(f);Fonua v. First Allied
Funding, No. C 09-497, 2009 WL 816291, at *3 (N.D. Cal. Mar. 27, 2009). Here, Plaintiff alleges "actual pecuniary damages" that
include costs related to damage to her credit. (FAC 91.) That is a sufficient allegation of actual damages. See Wise v. Wells
Fargo Bank, N.A., ___ F. Supp. 2d ___, 2012 WL 105887, at *6 (C.D. Cal. 2012).
Accordingly, the Court DENIES Defendants' motion as to Plaintiff's RESPA claim.
G. California Business and Professions Code 17200 (Unfair
Competition Law)
California's Unfair Competition Law ("UCL") prohibits "any unlawful, unfair or fraudulent business act or practice. . . ." Cal. Bus. &
Prof. Code 17200. This cause of action is generally derivative of some other illegal conduct or fraud committed by a
defendant. Khoury v. Maly's of Cal., Inc., 14 Cal. App. 4th 612, 619 (1993). Plaintiff alleges that Defendants violated the UCL by
collecting payments that they lacked the right to collect, and engaging in unlawful business practices by violating the FDCPA and
RESPA.
1. Standing
Standing to bring a UCL claim requires "a person who has suffered injury in fact and has lost money or property as a result of the
unfair competition." Cal. Bus. & Prof. Code 17204. To have standing under the UCL, a plaintiff must sufficiently allege that (1)
she has lost "money or property" sufficient to constitute an "injury in fact" under Article III of the Constitution, and (2) there is a
"causal connection" between the defendant's alleged UCL violation and the plaintiff's injury in fact. Rubio v. Capital One Bank, 613
F.3d 1195, 1203-04 (9th Cir. 2010) (citingBirdsong v. Apple, Inc., 590 F.3d 959-60 (9th Cir. 2009); Hall v. Time Inc., 158 Cal. App.
4th 847, 855-56 (2008)).
Defendants argue that Plaintiff's allegation regarding a cloud on her title does not constitute an allegation of loss of money or
property, and even if Plaintiff were to lose her property, she cannot show it was a result of Defendants' actions. (Defs.' Mot. 12:22-
13:4.) The Court disagrees. As discussed above, Plaintiff alleges damages resulting from Defendants' collection of payments
that they purportedly did not have the legal right to collect. These injuries are monetary, but also may result in the loss of Plaintiff's
property. Furthermore, these injuries are causally connected to Defendants' conduct. Thus, Plaintiff has standing to pursue a UCL
claim against Defendants.
2. Unlawful, Unfair or Fraudulent Conduct
Under the UCL, there are three varieties of unfair competitionbusiness acts or practices that are unlawful, unfair, or fraudulent.
Cal. Bus. & Prof. Code 17200. "Each prong of the UCL is a separate and distinct theory of liability," each offering "an
independent basis for relief." Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). Furthermore, a claim under 17200
is "derivative of some other illegal conduct or fraud committed by a defendant, and `[a] plaintiff must state with reasonable
particularity the facts supporting the statutory elements of the violation.'" Benham v. Aurora Loan Servs., No. C-09-2059, 2009 WL
2880232, at *4 (N.D. Cal. Sept. 1, 2009) (quoting Khoury, 14 Cal. App. 4th at 619).
Defendants argue that Plaintiff fails to plead an unlawful, fraudulent, and unfair act. (Defs.' Mot. 13:5-15:3.) Specifically, with
respect to pleading a fraudulent act, Defendants contend that Plaintiff fails to meet the heightened pleading standard required to
allege fraud against a corporation. (Id. at 14:4-20.) Plaintiff responds that she satisfies the unlawful prong through her allegations
that Defendants' business practices violated the FDCPA and RESPA, and the fraudulent prong because "Defendants' business
pattern, collecting debt they have no right to, is extremely likely to deceive both Plaintiff[] and the public." (Pl.'s Opp'n 22:5-18.)
As discussed above, Plaintiff alleges cognizable theories of liability, including, among others, violations of the FDCPA and RESPA.
Thus, Plaintiff may proceed with her UCL claim under the unlawful prong.
The fraudulent prong requires a plaintiff to have "actually relied" on the alleged misrepresentation to her detriment . In re Tobacco II
Cases, 46 Cal. 4th 326, 330 (2009). Moreover, under Federal Rule of Civil Procedure 9(b), the "circumstances constituting fraud" or
any other claim that "sounds in fraud" must be stated "with particularity." Fed. R. Civ. P. 9(b);Vess v. Ciba-Geigy Corp. USA, 317
F.3d 1097, 1103-04 (9th Cir. 2003). This standard requires, at a minimum, that a plaintiff plead evidentiary facts, such as time,
place, persons, statements, and explanations of why the statements are misleading. See In re GlenFed, Inc. Sec. Litig., 42 F.3d
1541, 1547-48 (9th Cir. 1994) (en banc). Plaintiff fails allege facts that satisfy these heightened requirements. (See FAC 95-
123.)
Finally, Plaintiff fails to respond to Defendants' argument that she fails to allege facts to satisfy the unfairness prong. (See Pl.'s
Opp'n 22:5-18.) The only mention of the unfairness prong in Plaintiff's opposition is a conclusory assertion that Defendants
engaged in unfair practices. (Id.at 22:5-6.) Thus, it appears that Plaintiff has abandoned this ground of her UCL claim.
In sum, Plaintiff has standing to pursue her UCL claim. Furthermore, the Court GRANTS IN PART and DENIES IN PART
Defendants' motion as to the UCL claim. Plaintiff may pursue her UCL claim under the unlawful prong, but the Court DISMISSES
WITHOUT PREJUDICE the UCL claim under the fraudulent and unfairness prongs.
H. Accounting
Accounting "is not an independent cause of action but merely a type of remedy and an equitable remedy at that." Batt v. City &
Cnty. of San Francisco, 155 Cal. App. 4th 65, 82 (2007). An accounting may be brought to compel a defendant to account to a
plaintiff for money where (1) a fiduciary duty exists, or (2) where no fiduciary duty exists, "the accounts are so complicated that an
ordinary legal action demanding a fixed sum is impracticable." Civic W. Corp. v. Zila Indus., Inc., 66 Cal. App. 3d 1, 14 (1977).
Plaintiff alleges that Defendants owe a fiduciary duty in their capacities as creditor and mortgage servicer. (FAC 125.) She
pursues this claim on the grounds that Defendants collected payments from her that they had no right to do. Defendants argue that
various documents recorded in the Official Records of San Diego County from May 2010 show that Plaintiff fails to allege facts
sufficient to state a claim for accounting. (Defs.' Mot. 16:1-3.) Defendants are mistaken. As discussed above, a fundamental
issue in this action is whether Defendants' rights were properly assigned in accordance with the Trust Agreement in 2006. Plaintiff
alleges facts that allows the Court to draw a reasonable inference that Defendants may be liable for various misconduct
alleged. See Iqbal, 129 S. Ct. at 1949.
Therefore, the Court DENIES Defendants' motion as to Plaintiff's accounting claim.
I. Breach of Contract, and Breach of the Implied Covenant of Good
Faith and Fair Dealing
[5]
A claim for breach of contract requires that a plaintiff plead: (1) the existence of a contract, (2) a breach of the contract by
defendant, (3) performance or excuse of non-performance on behalf of the plaintiff, and (4) damages suffered by the plaintiff as a
result of the defendant's breach.McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100, 104 (1989). Every contract also
contains an implied covenant of good faith and fair dealing that "neither party will do anything which will injure the right of the other
to receive the benefits of the agreement."Kransco v. Am. Empire Surplus Lines Ins. Co., 23 Cal. 4th 390, 400 (2000) (internal
quotation marks omitted). Thus, "the implied covenant of good faith and fair dealing protects only the parties' right to receive the
benefit of their agreement." Foley v. Interactive Data Corp., 47 Cal. 3d 654, 698 n.39 (1988). "[T]he implied covenant will only be
recognized to further the contract's purpose; it will not be read into a contract to prohibit a party from doing that which is expressly
permitted by the agreement itself." Wolf v. Walt Disney Pictures & Television, 162 Cal. App. 4th 1107, 1120 (2008).
Defendants argue that Plaintiff fails to allege facts that constitute a breach of contract or a breach of the implied covenant of good
faith and fair dealing. (Defs.' Reply 8:21-27.) The Court agrees. Plaintiff alleges that Defendants breached the contract by failing to
follow Section 2 of the DOT, which in turn "resulted in improper fees and taxes being added to the balance of the Loan," but fails
to allege detailed facts demonstrating that Defendants indeed failed to comply with the DOT. (See FAC 133-36.) For example,
she does not identify which payments were misapplied, when they were misapplied, and for how much.
Therefore, the Court GRANTS Defendants' motion as to Plaintiff's claim for breach of contract and breach of the implied covenant
of good faith and fair dealing.
[6]
Accordingly, the Court DISMISSES WITHOUT PREJUDICE both of these claims.
IV. CONCLUSION & ORDER
In light of the foregoing, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss. The Court also
DENIES Defendants' motion to strike Plaintiff's request for attorneys' fees on the grounds that they fail to make the request under
the appropriate Federal Rule of Civil Procedure. If Plaintiff decides to file a Second Amended Complaint, she must do so by August
7, 2012.
IT IS SO ORDERED.
[1] Plaintiff has since voluntarily dismissed SBMC Mortgage from this action. (Doc. 8.)
[2] Defendants also request judicial notice for five documents, all of which are documents recorded in the Official Records of San Diego County. (Request for
Judicial Notice ("RJN") 1:1-2:1 [Doc. 12-2].) These documents are central to Plaintiff's claims, and there is no question concerning the authenticity of these
documents. Moreover, Plaintiff has not opposed the request. Accordingly, the Court GRANTS the request. See Branch v. Tunnell, 14 F.3d 449, 453-54 (9th
Cir. 1994).
[3] Paragraph 1 in the FAC states that Plaintiff executed the note with Countrywide. After reviewing the moving papers, this appears to be a misidentification
that will be treated as such.
[4] Plaintiff's references to the Trust Agreement and Pooling Services Agreement ("PSA") appear to be interchangeable. (See Compl. 20.)
[5] Plaintiff pleads her claims for breach of contract and breach of the implied covenant of good faith and fair dealing "[i]n the alternative, if the Court finds
that U.S. Bank is a successor in interest to the Deed of Trust." (FAC 129, 140.) Though the Court has not found that U.S. Bank is the successor in
interest, the Court will address the sufficiency of these claims for the sake of completion.
[6] In the absence of a breach-of-contract claim, the Court also dismisses Plaintiff's claim for breach of the implied covenant of good faith and fair dealing.
U.S. District Court
Southern District of California (San Diego)
CIVIL DOCKET FOR CASE #: 3:11-cv-02229-L-WVG
Naranjo v. SBMC Mortgage et al
Assigned to: Judge M. James Lorenz
Referred to: Magistrate Judge William V. Gallo
Demand: $5,000,000
Cause: 28:2201 Injunction
Date Filed: 09/26/2011
Jury Demand: Plaintiff
Nature of Suit: 480 Consumer Credit
Jurisdiction: Federal Question
Plaintiff
Carmen R. Naranjo represented by Deborah P. Gutierrez
Bergman & Gutierrez LLP
6100 Center Drive
Suite 1050
Los Angeles, CA 90045
(310) 893-6200
Fax: (310) 988-2930
Email: deborah@b-g-law.com
TERMINATED: 07/12/2012
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Penelope P Bergman
Bergman & Gutierrez LLP
6100 Center Drive
Suite 1050
310-893-6213
Fax: 310-988-2930
Email: penelope@b-g-law.com
V.
Defendant
SBMC Mortgage
TERMINATED: 11/04/2011
Defendant
JPMorgan Chase represented by Alexia Marie Norge
Bryan Cave LLP
3161 Michelson Drive
Suite 1500
Irvine, CA 92612
(949) 223-7000
Fax: (949) 223-7100
Email: norgea@bryancave.com
LEAD ATTORNEY
Defendant
U.S. Bank N.A.
as Trustee for WAMU Mortgage Pass-
Through Certificates WMALT Series
2006-AR4 Trust
represented by Alexia Marie Norge
(See above for address)
LEAD ATTORNEY
Defendant
DOES 1-10
inclusive
Date Filed # Docket Text
09/26/2011 1 COMPLAINT with Jury Demand against All Defendants ( Filing fee $ 350
receipt number 0974-4001573.), filed by Carmen R. Naranjo. (Attachments:
# 1 Info Sheet, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D)
The new case number is 3:11-cv-2229-L-WVG. Judge M. James Lorenz and
Magistrate Judge William V. Gallo are assigned to the case. (Deborah P.
Gutierrez)(pvm) (cap). (Entered: 09/26/2011)
09/26/2011 2 Summons Issued.
Counsel receiving this notice electronically should print this summons and
serve it in accordance with Rule 4, Fed.R.Civ.P and LR 4.1. (pvm) (cap).
(Entered: 09/26/2011)
10/24/2011 3 SUMMONS RETURNED EXECUTED by Carmen R. Naranjo, JP Morgan
Chase served on 10/5/2011, Answer due 10/26/2011 (Gutierrez, Deborah)
Modified docket text on 10/25/2011 (mtb). (Entered: 10/24/2011)
10/26/2011 4 MOTION to Dismiss Plaintiff's Verified Complaint by JPMorgan Chase.
(Attachments: # 1 Request for Judicial Notice)(Norge, Alexia) Contacted
attorney re separate Memo of Points and Authorities on 10/27/2011 (knb).
(Entered: 10/26/2011)
10/31/2011 5 Amended MOTION to Dismiss Plaintiff's Verified Complaint by JPMorgan
Chase, U.S. Bank N.A.. (Attachments: # 1 Memo of Points and Authorities,
# 2 Request for Judicial Notice)(Norge, Alexia) (mtb). (Entered: 10/31/2011)
11/01/2011 6 Notice of Document Discrepancies and Order Thereon by Judge M. James
Lorenz Accepting Document: 4 Motion to Dismiss from Defendants JPMorgan
Chase, U.S. Bank N.A. Non-compliance with local rule(s), ECF 2(f): Lacking
proper signature, Civ. L. Rule 7.1 or 47.1: Lacking memorandum of points and
authorities in support as a separate document. IT IS HEREBY ORDERED: The
document is accepted despite the discrepancy noted above. Any further non-
compliant documents may be stricken from the record. Signed by Judge M.
James Lorenz on 11/1/2011.(mtb)(jrd) (Entered: 11/01/2011)
Lorenz Accepting Document: 5 Amended Motion to Dismiss from Defendants
JPMorgan Chase, U.S. Bank N.A. Non-compliance with local rule(s), ECF
2(f): Lacking proper signature. IT IS HEREBY ORDERED: The document is
accepted despite the discrepancy noted above. Any further non-compliant
documents may be stricken from the record. Signed by Judge M. James Lorenz
on 11/1/2011.(mtb)(jrd) (Entered: 11/01/2011)
11/04/2011 8 NOTICE of Voluntary Dismissal by Carmen R. Naranjo of Defendant SBMC
Mortgage Without Prejudice (Attachments: # 1 Order)(Gutierrez, Deborah)
(mtb). (Entered: 11/04/2011)
Lorenz Accepting Document: 8 Request for dismissal from Plaintiff Carmen R.
Naranjo. Non-compliance with local rule(s), ECF 2(h): Includes a proposed
order or requires judges signature, ECF 2(f): Lacking proper signature. IT IS
HEREBY ORDERED: The document is accepted despite the discrepancy
noted above. Any further non-compliant documents may be stricken from the
record. Signed by Judge M. James Lorenz on 11/7/2011.(mtb)(jrd) (Entered:
11/10/2011)
11/16/2011 10 AMENDED COMPLAINT with Jury Demand against JPMorgan Chase,
SBMC Mortgage, U.S. Bank N.A., filed by Carmen R. Naranjo. (Attachments:
# 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E)
(Gutierrez, Deborah) (mtb). (Entered: 11/16/2011)
11/17/2011 11 ORDER Terminating 5 Defendants' Motion to Dismiss As Moot. Signed by
Judge M. James Lorenz on 11/17/2011. (mtb)(jrd) (Entered: 11/17/2011)
12/05/2011 12 MOTION to Dismiss Plaintiff's First Amended Complaint by JPMorgan Chase,
U.S. Bank N.A.. (Attachments: # 1 Memo of Points and Authorities,
# 2 Request for Judicial Notice)(Norge, Alexia) (mtb). (Entered: 12/05/2011)
Lorenz Accepting Document: 12 Motion to dismiss from Defendants
JPMorgan Chase, SBMC Mortgage, U.S. Bank N.A. Non-compliance with
local rule(s), Civ. L. Rule 5.1: Wrong time and date on motion and/or
supporting documentation. The parties shall note that the hearing date for this
motion is on April 2, 2012 at 10:30 a.m. in Courtroom 14. IT IS HEREBY
ORDERED: The document is accepted despite the discrepancy noted above.
Any further non-compliant documents may be stricken from the record. Signed
by Judge M. James Lorenz on 12/6/2011.(mtb)(jrd) (Entered: 12/08/2011)
03/12/2012 14 RESPONSE in Opposition re 12 MOTION to Dismiss Plaintiff's First
Amended Complaint filed by Carmen R. Naranjo. (Attachments: #1 Exhibit A)
(Gutierrez, Deborah) (mtb). (Entered: 03/12/2012)
03/20/2012 15 ORDER Re: Oral Argument. The Court finds the 12 MOTION to
Dismiss Plaintiff's First Amended Complaint suitable for determination on the
papers and without oral argument. Accordingly, no appearances are required on
April 2, 2012, and the motion will be deemed submitted as of that date. Signed
by Judge M. James Lorenz on 3/19/2012.(mtb)(jrd) (Entered: 03/20/2012)
03/26/2012 16 REPLY - Other re 14 Response in Opposition to Motion to Dismiss Plaintiff's
First Amended Complaint filed by JPMorgan Chase. (Marutzky, Amanda)
(mtb). (Entered: 03/26/2012)
07/11/2012 17 MOTION to Substitute Attorney /Request for Substitution of Bergman &
Gutierrez LLP in place of Prosper Law Group, LLP by Carmen R. Naranjo.
(Bergman, Penelope) (mtb). (Entered: 07/11/2012)
Lorenz: Accepting Document, from Plaintiff Carmen R. Naranjo,
re 17 MOTION to Substitute Attorney /Request for Substitution of Bergman &
Gutierrez LLP in place of Prosper Law Group, LLP. Non-compliance with
local rule(s), ECF 2(f): Lacking proper signature. IT IS HEREBY ORDERED:
The document is accepted despite the discrepancy noted above. Any further
non-compliant documents may be stricken from the record. Signed by Judge
M. James Lorenz on 7/12/2012.(mtb)(jrd) (Entered: 07/12/2012)
07/12/2012 19 ORDER granting 17 Motion to Substitute Attorney. Attorney Penelope P.
Bergman is substituted in place of Deborah P. Gutierrez. Signed by Judge M.
James Lorenz on 7/11/2012. (mtb) (Entered: 07/12/2012)
07/24/2012 20 ORDER granting in part and denying in part 12 Motion to Dismiss. The Court
also DENIES Defendants motion to strike Plaintiffs request for attorneys fees
on the grounds that they fail to make the request under the appropriate Federal
Rule of Civil Procedure. If Plaintiff decides to file a Second Amended
Complaint, she must do so by August 7, 2012. Signed by Judge M. James
Lorenz on 7/24/2012. (mtb) Modified to change to an opinion on 7/25/2012
(mtb). (Entered: 07/24/2012)
PACER Service Center
Transaction Receipt
08/01/2012 08:42:00
PACER Login: cc8982 Client Code:
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
CARMEN R. NARANJO,
Plaintiff,
v.
SBMC MORTGAGE, et al.,
Defendants.
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Case No. 11-cv-2229-L(WVG)
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS
MOTION TO DISMISS [DOC. 12]
On September 29, 2011, Plaintiff Carmen R. Naranjo commenced this action against
Defendants SBMC Mortgage (SBMC), JPMorgan Chase (JPMorgan), and U.S. Bank N.A.
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After defaulting on her home loan, Plaintiff now sues Defendants in an attempt to prevent
foreclosure of the property securing the loan. Defendants now moves to dismiss the First
Amended Complaint (FAC). Plaintiff opposes.
The Court found this motion suitable for determination on the papers submitted and
without oral argument. See Civ. L.R. 7.1(d.1). (Doc. 15.) For the following reasons, the Court
GRANTS IN PART and DENIES IN PART Defendants motion to dismiss.
Plaintiff has since voluntarily dismissed SBMC Mortgage from this action. (Doc. 8.)
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I. BACKGROUND
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On or about February 21, 2006, Plaintiff executed a promissory note in favor of SBMC
Mortgage (SBMC) in the amount of $825,000.00, secured by a deed of trust (DOT), to
finance real property located in La Jolla, California. (FAC 1, 15 [Doc. 10]. ) The DOT,
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attached as Exhibit E to the FAC, identified Plaintiff as Borrower, SBMC Mortgage as Lender,
T.D. Service Co. as Trustee, and Mortgage Electronic Registration Systems, Inc. (MERS) as
both nominee and beneficiary under the security instrument. (DOT 1.)
Shortly thereafter, SBMC sold her loan to a currently unknown entity or entities. (FAC
15.) Plaintiff alleges that these unknown entities and Defendants were involved in an attempt to
securitize the loan into the WAMU Mortgage Pass-through Certificates WMALT Series 2006-
AR4 Trust (WAMU Trust). (Id. 17.) However, these entities involved in the attempted
securitization of the loan failed to adhere to the requirements of the Trust Agreement necessary
to properly assign the mortgage loan into the Trust. (Id.) Specifically, Plaintiff alleges that her
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loan was not properly assigned to the WAMU Trust on or before May 30, 2006, the Closing
Date as set forth in the Trust Agreement. (Id. 17, 21.) The Closing Date is the date by
which all of the notes and mortgages had to be transferred into the WAMU Trust in order for the
mortgage loan to be a part of the trust res. (Id. 21.)
In May 2009, Plaintiff sought to modify her loan with JPMorgan Chase Bank, N.A.
(JPMorgan) under the belief that it had the authority to negotiate her loan. (FAC 2224.)
However, she made little progress. (Id.) She continued to follow-up and submit loan-
Defendants also request judicial notice for five documents, all of which are documents
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recorded in the Official Records of San Diego County. (Request for Judicial Notice (RJN)
1:12:1 [Doc. 12-2].) These documents are central to Plaintiffs claims, and there is no question
concerning the authenticity of these documents. Moreover, Plaintiff has not opposed the request.
Accordingly, the Court GRANTS the request. See Branch v. Tunnell, 14 F.3d 449, 453-54 (9th
Cir. 1994).
Paragraph 1 in the FAC states that Plaintiff executed the note with Countrywide. After
3
reviewing the moving papers, this appears to be a misidentification that will be treated as such.
Plaintiffs references to the Trust Agreement and Pooling Services Agreement (PSA)
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appear to be interchangeable. (See Compl. 20.)
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modification applications for over 19 months. (Id. 27.)
In August 2009, Plaintiff was hospitalized, resulting in unforeseen financial hardship.
(FAC 25.) As a result, she defaulted on her loan. (See id. 26.)
On May 26, 2010, Defendants recorded an Assignment of Deed of Trust, which states
that MERS assigned and transferred to U.S. Bank as trustee for the WAMU Trust under the
DOT. (RJN Ex. B.) Colleen Irby executed the Assignment as Officer for MERS. (Id.) On the
same day, Defendants also recorded a Substitution of Trustee, which states that the U.S. Bank as
trustee, by JP Morgan, as attorney-in-fact substituted its rights under the DOT to the California
Reconveyance Company (CRC). (RJN Ex. C.) Colleen Irby also executed the Substitution as
Officer of U.S. Bank, National Association as trustee for the WAMU Trust. (Id.) And again,
on the same day, CRC, as trustee, recorded a Notice of Default and Election to Sell. (RJN Ex.
D.)
A Notice of Trustees sale was recorded, stating that the estimated unpaid balance on the
note was $989,468.00 on July 1, 2011. (RJN Ex. E.)
On August 8, 2011, Plaintiff sent JPMorgan a Qualified Written Request (QWR) letter
in an effort to verify and validate her debt. (FAC 35 & Ex. C.) In the letter, she requested that
JPMorgan provide, among other things, a true and correct copy of the original note and a
complete life of the loan transactional history. (Id.) Although JPMorgan acknowledged the
QWR within five days of receipt, Plaintiff alleges that it failed to provide a substantive
response. (Id. 35.) Specifically, even though the QWR contained the borrows name, loan
number, and property address, Plaintiff alleges that JPMorgans substantive response concerned
the same borrower, but instead supplied information regarding an entirely different loan and
property. (Id.)
On September 26, 2011, Plaintiff commenced this action. Thereafter, Plaintiff filed her
FAC asserting nine claims: (1) declaratory relief; (2) negligence; (3) quasi contract; (4) violation
of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692; (5) violation of the
Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605; (6) violation of California
Business and Professions Code 17200; (7) accounting; (8) breach of contract; and (9) breach of
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implied covenant of good faith and fair dealing. Defendants now moves to dismiss the FAC in
its entirety with prejudice. Plaintiff opposes. (Doc. 14.)
II. LEGAL STANDARD
The court must dismiss a cause of action for failure to state a claim upon which relief can
be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal
sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court
must accept all allegations of material fact as true and construe them in light most favorable to
the nonmoving party. Cedars-Sanai Med. Ctr. v. Natl League of Postmasters of U.S., 497 F.3d
972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not necessarily
assume the truth of legal conclusions merely because they are cast in the form of factual
allegations. Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003)
(internal quotation marks omitted). In fact, the court does not need to accept any legal
conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, , 129 S. Ct. 1937, 1949 (2009)
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief
requires more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do. Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the
allegations in the complaint must be enough to raise a right to relief above the speculative
level. Id. Thus, [t]o survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face. Iqbal, 129 S. Ct.
at 1949 (citing Twombly, 550 U.S. at 570). A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Id. The plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.
Id. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory
or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749
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F.2d 530, 534 (9th Cir. 1984).
Generally, courts may not consider material outside the complaint when ruling on a
motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19
(9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity
is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1
(9th Cir. 1995) (superceded by statutes on other grounds). Moreover, the court may consider the
full text of those documents, even when the complaint quotes only selected portions. Id. It may
also consider material properly subject to judicial notice without converting the motion into one
for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).
III. DISCUSSION
Plaintiffs primary contention here is that Defendants are not her true creditors and as
such have no legal, equitable, or pecuniary right in this debt obligation in the loan. (Pl.s Oppn
1:511.) She contends that her promissory note and DOT were never properly assigned to the
WAMU Trust because the entities involved in the attempted transfer failed to adhere to the
requirements set forth in the Trust Agreement and thus the note and DOT are not a part of the
trust res. (FAC 17, 20.) Defendants moves to dismiss the FAC in its entirety with prejudice.
A. Applicability of Gomes
Plaintiff alleges that the May 2010 assignments are improper for two primary reasons: (1)
the assignment of her loan into the WAMU Trust is improper because it was not assigned before
the end of May 2006 as required by the Trust Agreement, and (2) the May 2010 assignments are
improper because Collen Irby lacked the authority to execute the assignments. Defendants argue
that like the borrower in Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149
(2011), Plaintiff seeks to test whether the person initiating the foreclosure has the authority to
do so without presenting any competent, particularized factual allegations or evidence
Defendants lack[] authority to proceed with the foreclosure. (Defs. Mot. 4:1318.) They go
on to explain that the assignments and notice of default and election to sell executed in May
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2010 are proper. (Defs. Reply 3:264:4.) However, Defendants put the cart before the horse.
The vital allegation in this case is the assignment of the loan into the WAMU Trust was
not completed by May 30, 2006 as required by the Trust Agreement. This allegation gives rise
to a plausible inference that the subsequent assignment, substitution, and notice of default and
election to sell may also be improper. Defendants wholly fail to address that issue. (See Defs.
Mot. 3:166:2; Defs. Reply 2:134:4.) This reason alone is sufficient to deny Defendants
motion with respect to this issue.
Moving on, Defendants reliance on Gomes is misguided. In Gomes, the California Court
of Appeal held that a plaintiff does not have a right to bring an action to determine a nominees
authorization to proceed with a nonjudicial foreclosure on behalf of a noteholder. 192 Cal. App.
4th at 1155. The nominee in Gomes was MERS. Id. at 1151. Here, Plaintiff is not seeking such
a determination. The role of the nominee is not central to this action as it was in Gomes. Rather,
Plaintiff alleges that the transfer of rights to the WAMU Trust is improper, thus Defendants
consequently lack the legal right to either collect on the debt or enforce the underlying security
interest.
B. Declaratory Relief
Declaratory relief is not an independent cause of action or theory of recovery, only a
remedy. 28 U.S.C. 2201, 2202. Where a substantive cause of action already exists in the
complaint, a plaintiff cannot assert a declaratory-relief claim as a superfluous second cause of
action for the determination of identical issues. Jensen v. Quality Loan Serv. Corp., 702 F.
Supp. 2d 1183, 1189 (E.D. Cal. 2010) (internal quotation marks omitted). To grant declaratory
relief, a district court must find an actual controversy, which is definite and concrete . . .
[and] real and substantial. Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227,
240-41 (1937).
Plaintiff requests that the Court make a finding and issue appropriate orders stating that
none of the named Defendants . . . have any right or interest in Plaintiffs Note, Deed of Trust, or
the Property which authorizes them . . . to collect Plaintiffs mortgage payments or enforce the
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terms of the Note or Deed of Trust in any manner whatsoever. (FAC 50.) Defendant
simplifies this as a request for a determination of the ownership of [the] Note and Deed of
Trust, which they argue is addressed in her other causes of action. (Defs. Mot. 6:1620.)
The Court disagrees with Defendants. As discussed above and below, there is an actual
controversy that is not superfluous. Therefore, the Court DENIES Defendants motion as to
Plaintiffs claim for declaratory relief.
C. Negligence
[T]o recover on a theory of negligence, [p]laintiffs must prove duty, breach, causation,
and damages. Truong v. Nguyen, 156 Cal. App. 4th 865, 875 (2007). The existence of a duty
of care owed by defendant to a plaintiff is a prerequisite to establishing a claim for negligence.
Nymark v. Heart Fed. Sav. & Loan Assn, 231 Cal. App. 3d 1089, 1095 (1991). [A]s a general
rule, a financial institution owes no duty of care to a borrower when the institutions
involvement in the loan transaction does not exceed the scope of its conventional role as a mere
lender of money. Id. at 1096. Liability to a borrower for negligence arises only when the
lender actively participates in the financed enterprise beyond the domain of the usual money
lender. Wagner v. Benson, 101 Cal. App. 3d 27, 35 (1980) (quoting Connor v. Great W. Sav. &
Loan Assn, 69 Cal. 2d 850, 864 (1968)).
Plaintiff alleges that Defendants have a duty to exercise reasonable care and skill to
follow California law with regard to enforcement of monetary obligations, and to refrain from
taking or failing to take any action against Plaintiff that they did not have legal authority to do.
(FAC 56.) Defendants argue that they are the mortgage servicer and that Plaintiff fails to
plead facts supporting a finding that Defendants conduct exceeded the scope of a conventional
mortgage servicer. (Defs. Mot. 7:57.) Plaintiff responds that JPMorgans mishandling of the
loan-modification applications and failure to afford a loan modification is beyond the domain
of a usual money lender. (Pl.s Oppn 17:2418:19.) However, there is no common-law duty
to modify a contract. Vella v. Hudgins, 151 Cal. App. 3d 515, 519 (1984). Thus, Plaintiff fails
to allege facts as to the loan-modification process that maintain her claim for negligence.
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Defendants also argue that they have clearly established they had such authority to
collect payments. (Defs. Reply 5:286:5.) However, as discussed above, they have not.
Accordingly, the Court GRANTS IN PART and DENIES IN PART Defendants
motion as to Plaintiffs negligence claim. Given that the legal authority of Defendants that
derive from the allegedly improper assignment of rights to the WAMU Trust is central to this
action, Plaintiff may pursue her claim on that ground. However, that said, the Court
DISMISSES WITHOUT PREJUDICE Plaintiffs negligence claim insofar as it relies on facts
alleged regarding the loan-modification process, which are insufficient to maintain her
negligence claim.
D. Quasi-Contract
A claim for quasi-contract is synonymous with one for unjust enrichment. FDIC v.
Dintino, 167 Cal. App. 4th 333, 346 (2008). Unjust enrichment requires the receipt of a benefit
and the unjust retention of that benefit at the expense of another. Peterson v. Cellco Pship, 164
Cal. App. 4th 1583, 1593 (2008). However, California courts appear to be split on whether
unjust enrichment can be an independent claim or merely an equitable remedy. Falk v. Gen.
Motors Corp., 496 F. Supp. 2d 1088, 1099 (N.D. Cal. 2007); see Bernardi v. JPMorgan Chase
Bank, N.A., No. 11-cv-4212, 2012 WL 2343679, at *3 (N.D. Cal. June 20, 2012) (noting that
quasi-contract is not an independent cause of action under California law, and thus the claim is
subject to dismissal for that reason alone).
Defendants argue that Plaintiffs quasi-contract claim fails because [t]he Deed of Trust
is an express binding agreement that defines the parties rights. (Defs. Mot. 7:816.) Plaintiff
responds that she was not paying her true creditor because there was no valid assignment that
allowed [Defendants] to collect on her debt obligation. (Pl.s Oppn 19:313.) As discussed
above, Plaintiff sufficiently alleges facts that put Defendants legal rights that derive from the
Trust Agreement in question. Consequently, Plaintiff adequately alleges facts that show
Defendants were unjustly enriched in collecting payments based on those presumed rights.
Therefore, the Court DENIES Defendants motion as to Plaintiffs quasi-contract claim.
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E. FDCPA
The [FDCPA] prohibits debt collector[s] from making false or misleading
representations and from engaging in various abusive and unfair practices. Heintz v. Jenkins,
514 U.S. 291, 292 (1995). To be liable for an FDCPA violation, a defendant must, as a
threshold matter, be a debt collector within the meaning of those acts. Id. at 294.
Under the FDCPA, a debt collector is any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which is the collection
of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another. 15 U.S.C. 1692a(6). This definition includes any
creditor who, in the process of collecting his own debts, uses any name other than his own which
would indicate that a third person is collecting or attempting to collect such debts. Id.
1692a(6). The FDCPA does not, however, cover the consumers creditors, a mortgage
servicing company, or any assignee of the debt, so long as the debt was not in default at the time
it was assigned. Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009)
(quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)); see also 15 U.S.C.
1692a(4) (defining creditor). Consequently, a loan servicer is not a debt collector if it
acquired the loan before the borrower was in default. See Schlegel v. Wells Fargo Bank, N.A.,
799 F. Supp. 2d 1100, 1103-04 (N.D. Cal. 2011).
Defendants argue that they are not debt collectors within the meaning of the FDCPA.
(Defs. Mot. 9:1315.) That argument is predicated on the presumption that all of the legal
rights attached to the loan were properly assigned. Plaintiff responds that Defendants are debt
collectors because U.S. Banks principal purpose is to collect debt and it also attempted to
collect payments. (Pl.s Oppn 19:2327.) She explicitly alleges in the FAC that U.S. Bank has
attempted to collect her debt obligation and that U.S. Bank is a debt collector. Consequently,
Plaintiff sufficiently alleges a claim under the FDCPA.
Defendants also argue that the FDCPA claim is time barred. (Defs. Mot. 7:1827.) A
FDCPA claim must be brought within one year from the date on which the violation occurs.
15 U.S.C. 1692k(d). Defendants contend that the violation occurred when the allegedly false
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assignment occurred on May 26, 2010. (Defs. Mot. 7:2227.) However, Plaintiff alleges that
U.S. Bank violated the FDCPA when it attempted to enforce Plaintiffs debt obligation and
collect mortgage payments when it allegedly had no legal authority to do so. (FAC 72.)
Defendants wholly overlook those allegations in the FAC. Thus, Defendants fail to show that
Plaintiffs FDCPA claim is time barred.
Accordingly, the Court DENIES Defendants motion as to Plaintiffs FDCPA claim.
F. RESPA
RESPA imposes certain disclosure obligations on loan servicers who transfer or assume
the servicing of a federally related mortgage loan. Morris v. Bank of America, No. C 09-02849,
2011 WL 250325, at *4 (N.D. Cal. Jan. 26, 2011) (citing 12 U.S.C. 2605(b)). Under RESPA,
a Qualified Written Response (QWR) is written request from the borrower (or an agent of the
borrower) for information relating to the servicing of such loan. 12 U.S.C. 2605(e)(1)(A).
The term servicing means receiving any scheduled periodic payments from a borrower
pursuant to the terms of any loan . . . and making the payments of principal and interest and such
other payments with respect to the amounts received from the borrower as may be required
pursuant to the terms of the loan. 12 U.S.C. 2603(i)(3). Among other things, a QWR must
include a statement of the reasons for the belief of the borrower, to the extent applicable, that
the account is in error or provide[] sufficient detail to the servicer regarding other information
sought by the borrower. Id. 2605(e)(1)(B). It must also include the name and account of the
borrower. Id.
Defendants argue that Plaintiffs letter does not constitute a QWR because it requests a
list of unsupported demands rather than specific particular errors or omissions in the account
along with an explanation from the borrower why she believes an error exists. (Defs. Mot.
10:413.) However, the letter explains that it concerns sales and transfers of mortgage
servicing rights; deceptive and fraudulent servicing practices to enhance balance sheets;
deceptive, abusive, and fraudulent accounting tricks and practices that may have also negatively
affected any credit rating, mortgage account and/or the debt or payments that [Plaintiff] may be
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obligated to. (FAC Ex. C.) The letter goes on to put JPMorgan on notice of
potential abuses of J.P. Morgan Chase or previous servicing companies
or previous servicing companies [that] could have deceptively,
wrongfully, unlawfully, and/or illegally: Increased the amounts of
monthly payments; Increased the principal balance Ms. Naranjo owes;
Increased the escrow payments; Increased the amounts applied and
attributed toward interest on this account; Decreased the proper
amounts applied and attributed toward the principal on this account;
and/or[] Assessed, charged and/or collected fees, expenses and
miscellaneous charges Ms. Naranjo is not legally obligated to pay under
this mortgage, note and/or deed of trust.
(Id.) Based on the substance of letter, the Court cannot find as a matter of law that the letter is
not a QWR.
Defendants also argue that the RESPA claim fails because Plaintiff fails to plead actual
damages arising from JPMorgans alleged failure to respond. (Defs. Mot. 10:1419.) To state
a claim for relief under RESPA, a plaintiff must allege either a purported pattern or practice of
violating the statute or actual damages caused by the asserted violation. 12 U.S.C. 2605(f);
Fonua v. First Allied Funding, No. C 09-497, 2009 WL 816291, at *3 (N.D. Cal. Mar. 27,
2009). Here, Plaintiff alleges actual pecuniary damages that include costs related to damage to
her credit. (FAC 91.) That is a sufficient allegation of actual damages. See Wise v. Wells
Fargo Bank, N.A., F. Supp. 2d , 2012 WL 105887, at *6 (C.D. Cal. 2012).
Accordingly, the Court DENIES Defendants motion as to Plaintiffs RESPA claim.
G. California Business and Professions Code 17200 (Unfair Competition Law)
Californias Unfair Competition Law (UCL) prohibits any unlawful, unfair or
fraudulent business act or practice . . . . Cal. Bus. & Prof. Code 17200. This cause of action
is generally derivative of some other illegal conduct or fraud committed by a defendant. Khoury
v. Malys of Cal., Inc., 14 Cal. App. 4th 612, 619 (1993). Plaintiff alleges that Defendants
violated the UCL by collecting payments that they lacked the right to collect, and engaging in
unlawful business practices by violating the FDCPA and RESPA.
//
//
//
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1. Standing
Standing to bring a UCL claim requires a person who has suffered injury in fact and has
lost money or property as a result of the unfair competition. Cal. Bus. & Prof. Code 17204.
To have standing under the UCL, a plaintiff must sufficiently allege that (1) she has lost money
or property sufficient to constitute an injury in fact under Article III of the Constitution, and
(2) there is a causal connection between the defendants alleged UCL violation and the
plaintiffs injury in fact. Rubio v. Capital One Bank, 613 F.3d 1195, 1203-04 (9th Cir. 2010)
(citing Birdsong v. Apple, Inc., 590 F.3d 959-60 (9th Cir. 2009); Hall v. Time Inc., 158 Cal. App.
4th 847, 855-56 (2008)).
Defendants argue that Plaintiffs allegation regarding a cloud on her title does not
constitute an allegation of loss of money or property, and even if Plaintiff were to lose her
property, she cannot show it was a result of Defendants actions. (Defs. Mot. 12:2213:4.) The
Court disagrees. As discussed above, Plaintiff alleges damages resulting from Defendants
collection of payments that they purportedly did not have the legal right to collect. These
injuries are monetary, but also may result in the loss of Plaintiffs property. Furthermore, these
injuries are causally connected to Defendants conduct. Thus, Plaintiff has standing to pursue a
UCL claim against Defendants.
2. Unlawful, Unfair or Fraudulent Conduct
Under the UCL, there are three varieties of unfair competitionbusiness acts or practices
that are unlawful, unfair, or fraudulent. Cal. Bus. & Prof. Code 17200. Each prong of the
UCL is a separate and distinct theory of liability, each offering an independent basis for
relief. Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). Furthermore, a claim
under 17200 is derivative of some other illegal conduct or fraud committed by a defendant,
and [a] plaintiff must state with reasonable particularity the facts supporting the statutory
elements of the violation. Benham v. Aurora Loan Servs., No. C-09-2059, 2009 WL 2880232,
at *4 (N.D. Cal. Sept. 1, 2009) (quoting Khoury, 14 Cal. App. 4th at 619).
//
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Defendants argue that Plaintiff fails to plead an unlawful, fraudulent, and unfair act.
(Defs. Mot. 13:515:3.) Specifically, with respect to pleading a fraudulent act, Defendants
contend that Plaintiff fails to meet the heightened pleading standard required to allege fraud
against a corporation. (Id. at 14:420.) Plaintiff responds that she satisfies the unlawful prong
through her allegations that Defendants business practices violated the FDCPA and RESPA,
and the fraudulent prong because Defendants business pattern, collecting debt they have no
right to, is extremely likely to deceive both Plaintiff[] and the public. (Pl.s Oppn 22:518.)
As discussed above, Plaintiff alleges cognizable theories of liability, including, among
others, violations of the FDCPA and RESPA. Thus, Plaintiff may proceed with her UCL claim
under the unlawful prong.
The fraudulent prong requires a plaintiff to have actually relied on the alleged
misrepresentation to her detriment. In re Tobacco II Cases, 46 Cal. 4th 326, 330 (2009).
Moreover, under Federal Rule of Civil Procedure 9(b), the circumstances constituting fraud or
any other claim that sounds in fraud must be stated with particularity. Fed. R. Civ. P. 9(b);
Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir. 2003). This standard requires,
at a minimum, that a plaintiff plead evidentiary facts, such as time, place, persons, statements,
and explanations of why the statements are misleading. See In re GlenFed, Inc. Sec. Litig., 42
F.3d 1541, 1547-48 (9th Cir. 1994) (en banc). Plaintiff fails allege facts that satisfy these
heightened requirements. (See FAC 95123.)
Finally, Plaintiff fails to respond to Defendants argument that she fails to allege facts to
satisfy the unfairness prong. (See Pl.s Oppn 22:518.) The only mention of the unfairness
prong in Plaintiffs opposition is a conclusory assertion that Defendants engaged in unfair
practices. (Id. at 22:56.) Thus, it appears that Plaintiff has abandoned this ground of her UCL
claim.
In sum, Plaintiff has standing to pursue her UCL claim. Furthermore, the Court
GRANTS IN PART and DENIES IN PART Defendants motion as to the UCL claim.
Plaintiff may pursue her UCL claim under the unlawful prong, but the Court DISMISSES
WITHOUT PREJUDICE the UCL claim under the fraudulent and unfairness prongs.
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H. Accounting
Accounting is not an independent cause of action but merely a type of remedy and an
equitable remedy at that. Batt v. City & Cnty. of San Francisco, 155 Cal. App. 4th 65, 82
(2007). An accounting may be brought to compel a defendant to account to a plaintiff for money
where (1) a fiduciary duty exists, or (2) where no fiduciary duty exists, the accounts are so
complicated that an ordinary legal action demanding a fixed sum is impracticable. Civic W.
Corp. v. Zila Indus., Inc., 66 Cal. App. 3d 1, 14 (1977).
Plaintiff alleges that Defendants owe a fiduciary duty in their capacities as creditor and
mortgage servicer. (FAC 125.) She pursues this claim on the grounds that Defendants
collected payments from her that they had no right to do. Defendants argue that various
documents recorded in the Official Records of San Diego County from May 2010 show that
Plaintiff fails to allege facts sufficient to state a claim for accounting. (Defs. Mot. 16:13.)
Defendants are mistaken. As discussed above, a fundamental issue in this action is whether
Defendants rights were properly assigned in accordance with the Trust Agreement in 2006.
Plaintiff alleges facts that allows the Court to draw a reasonable inference that Defendants may
be liable for various misconduct alleged. See Iqbal, 129 S. Ct. at 1949.
Therefore, the Court DENIES Defendants motion as to Plaintiffs accounting claim.
I. Breach of Contract, and Breach of the Implied Covenant of Good Faith and
Fair Dealing
5
A claim for breach of contract requires that a plaintiff plead: (1) the existence of a
contract, (2) a breach of the contract by defendant, (3) performance or excuse of non-
performance on behalf of the plaintiff, and (4) damages suffered by the plaintiff as a result of the
defendants breach. McDonald v. John P. Scripps Newspaper, 210 Cal. App. 3d 100, 104
Plaintiff pleads her claims for breach of contract and breach of the implied covenant of
5
good faith and fair dealing [i]n the alternative, if the Court finds that U.S. Bank is a successor
in interest to the Deed of Trust. (FAC 129, 140.) Though the Court has not found that U.S.
Bank is the successor in interest, the Court will address the sufficiency of these claims for the
sake of completion.
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(1989). Every contract also contains an implied covenant of good faith and fair dealing that
neither party will do anything which will injure the right of the other to receive the benefits of
the agreement. Kransco v. Am. Empire Surplus Lines Ins. Co., 23 Cal. 4th 390, 400 (2000)
(internal quotation marks omitted). Thus, the implied covenant of good faith and fair dealing
protects only the parties right to receive the benefit of their agreement. Foley v. Interactive
Data Corp., 47 Cal. 3d 654, 698 n.39 (1988). [T]he implied covenant will only be recognized
to further the contracts purpose; it will not be read into a contract to prohibit a party from doing
that which is expressly permitted by the agreement itself. Wolf v. Walt Disney Pictures &
Television, 162 Cal. App. 4th 1107, 1120 (2008).
Defendants argue that Plaintiff fails to allege facts that constitute a breach of contract or a
breach of the implied covenant of good faith and fair dealing. (Defs. Reply 8:2127.) The
Court agrees. Plaintiff alleges that Defendants breached the contract by failing to follow Section
2 of the DOT, which in turn resulted in improper fees and taxes being added to the balance of
the Loan, but fails to allege detailed facts demonstrating that Defendants indeed failed to
comply with the DOT. (See FAC 13336.) For example, she does not identify which
payments were misapplied, when they were misapplied, and for how much.
Therefore, the Court GRANTS Defendants motion as to Plaintiffs claim for breach of
contract and breach of the implied covenant of good faith and fair dealing. Accordingly, the
6
Court DISMISSES WITHOUT PREJUDICE both of these claims.
IV. CONCLUSION & ORDER
In light of the foregoing, the Court GRANTS IN PART and DENIES IN PART
Defendants motion to dismiss. The Court also DENIES Defendants motion to strike
Plaintiffs request for attorneys fees on the grounds that they fail to make the request under the
appropriate Federal Rule of Civil Procedure. If Plaintiff decides to file a Second Amended
In the absence of a breach-of-contract claim, the Court also dismisses Plaintiffs claim
6
for breach of the implied covenant of good faith and fair dealing.
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Complaint, she must do so by August 7, 2012.
IT IS SO ORDERED.
DATED: July 24, 2012
M. James Lorenz
United States District Court Judge
COPY TO:
HON. WILLIAM V. GALLO
UNITED STATES MAGISTRATE JUDGE
ALL PARTIES/COUNSEL
11cv2229
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1 Stuart W. Price, California Bar No. 125918
swprice@bryancave.com
2 Sean D. Muntz, California Bar No. 223549
3 sean.muntz@bryancave.com
Amanda L. Marutzky, California Bar No. 274376
4 marutzkya@bryancave.com
BRYAN CAVE LLP
5 3161 Michelson Drive, Suite 1500
6 Irvine, California 92612-4414
Telephone: (949) 223-7000
7 Facsimile: (949) 223-7100
8 Attorneys for Defendants
9 Defendants JPMORGAN CHASE BANK, N.A., erroneously
sued as JPMorgan Chase, and U.S. BANK, N.A. as Trustee
10 for WaMu Mortgage Pass-Through Certificates WMAL T
Series 2006-AR4 Trust
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15 CARMEN R. NARANJO, an individual,
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Plaintiff,
vs.
18 SBMC MORTGAGE; JPMORGAN
CHASE; U.S. BANK, NA AS TRUSTEE
19 FOR WAMUMORTGAGEPASS-
THROUGH CERTIFICATES WMALT
20 SERIES 2006-AR4 TRUST and Does 1 - 10,
inclusive,
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IRO IDOCS\53 8756.1
Defendant( s).
Case No. 11 CV2229L WVG
REPLY IN SUPPORT OF
MOTION OF DEFENDANTS
TO DISMISS PLAINTIFF'S
FIRST AMENDED
COMPLAINT
Hon. M. James Lorenz
Date: April 2, 2012
Time: 10:30 a.m.
Courtroom: 14
Complaint Filed: 9/26/11
REPLY IN SUPPORT OF MOTION TO DISMISS
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1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Plaintiff Carmen R. Naranjo opposes the Motion to Dismiss by Defendant
4 JPMorgan Chase Bank, N.A. and U.S. Bank N.A. as Trustee for WaMu Mortgage
5 Pass-Through Certificates WMAL T Series 2006-AR4 Trust. The underlying theme
6 of the opposition is that Defendants are not entitled to foreclose due to an allegedly
7 invalid assignment and substitution. Plaintiff essentially claims Defendants must
8 prove ownership of Plaintiff s promissory note in order to foreclose. Not so.
9 Because that theory is central to all of Plaintiff s claims, she fails to state a viable
10 cause of action and fails to show that amendment would cure the deficiencies in the
11 pleading. Defendant respectfully requests the Court dismiss Plaintiffs First
12 Amended Complaint without leave to amend .
13 II. PLAINTIFF'S OPPOSITION FAILS TO CURE THE DEFICIENCIES
14 OF HER SECOND AMENDED COMPLAINT
15 A. Plaintiff Cannot Credibly Argue Against the Validity of the
16 Recorded Documents.
17 Plaintiff does not, and cannot, dispute the plain language of Evidence Code
18 452 which clearly allows this court to take judicial notice of the documents attached
19 to Defendants' Request for Judicial Notice. Plaintiff also does not dispute that the
20 court may take judicial notice of Exhibits A-D because they are the subject of the
21 present action, are mentioned throughout the First Amended Complaint and are not
22 reasonably subject to dispute. See, e.g., McElroy v. Chase Manhattan Mortg. Corp.,
23 134 Cal. App. 4th 388,394 (2005) (taking judicial notice of notice of default and
24 notice of trustee's sale recorded in county official records).
25 Instead, Plaintiff attempts to argue against the truthfulness of the contents of
26 the recorded documents. (Opp. 5:24-7:12.) However, "a court may take judicial
27 notice of the fact of a document's recordation, the date the document was recorded
28 and executed, the parties to the transaction reflected in a recorded document, and the
IRO 1 DOCS\538756.1 1
1 document's legally operative language, assuming there is no genuine dispute
2 regarding the document's authenticity. From this, the court may deduce and rely
3 upon the legal effect of the recorded document, when that effect is clear from its
4 face." Fontenot v. Wells Fargo Bank, N.A., 2011 Cal. App. LEXIS 1059 at * 13-14
5 (Cal. App. 1st Dist., Aug. 11,2011) (Court of Appeal considered recorded
6 documents related to real estate transaction).
7 Furthermore, California courts have also found these documents judicially
8 noticeable as they are not reasonably subject to dispute under 452(h). See
9 Satchmed Plaza Owners Ass 'n v. UWMC Hospital Corp., 167 Cal. App. 4th 1034,
10 1040-41 (2008) (granting request for judicial notice of recorded deeds).
11 For these reasons, the Court may properly take judicial notice of Exhibits A-
12 D, and rely upon the legal effect of the recorded documents.
13 B. Plaintiff Cannot Argue Around the Applicability of Gomes.
14 Plaintiff s opposition attempts to distinguish her case from Gomes v.
15 Countrywide Home Loans, 192 Cal. App. 4th 1149 (2011) in order to avoid the legal
16 precedent which bars her claims.
17 In vain, Plaintiff argues her case is not an "original note" or "show me the
18 note" case, (Opp. 7:20-21), and yet, only a few pages earlier she states: "Plaintiffs
19 overarching question is simple: Who is the true owner of her Note and Deed of
20 Trust?" (Opp. 5:1-2.) Just like the borrower in Gomes, here Plaintiff is complaining
21 that she does "not know the identity of the Note's beneficial owner" and that "the
22 person or entity who directed the initiation of the foreclosure process ... [is] neither
23 the Note's rightful owner nor acting with the rightful owner's authority." 192 Cal.
24 App. 4th at 1152. As such, Plaintiff cannot credibly argue the inapplicability of
25 Gomes.
26 Plaintiff further claims the F AC "identified a specific factual basis for
27 alleging that the foreclosure was not initiated by the correct party." (Opp.8:11-12,
28 citing Gomes, 192 Cal. App. 4th at 1156). Plaintiff has not credibly alleged any
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such facts. The recorded loan documents confirm that California Reconveyance
Company, the "correct" party, initiated the foreclosure process. (RJN, Ex.s A-D.)
Plaintiff instead relies on Weingartner v. Chase Home Finance, LLC, et al.,
2010 WL 1006708 (D. Nev. March 15,2010). There, the mortgagors sued various
entities including MERS that were involved in foreclosure proceedings, as generally
supporting their allegation that MERS has no standing to foreclose. First, MERS is
not foreclosing on Plaintiff in this case. Second, the district court in Weingartner
held that MERS, even as a nominee, has the right to substitute a new trustee on the
deed of trust and to administer the deed on behalf of the Lender. Weingartner, 2010
WL 1006708 at *2. In sum, nothing in the case prohibits the factual scenario at bar
- MERS substituting a new trustee on the deed of trust.
Equally, Plaintiffs reliance on Ohlendorfv. Am. Home Mortgage Servicing,
(E.D. Ca1.2010, Marc. 31, 2010, No. CIV.S-09-2081 LKKlEFB) 3010 U.S. Dist.
Lexis 31098) is misplaced. In fact, Plaintiff misleads this Court by failing to tell
this Court that the District Court in Ohlendorf dismissed the borrower's cause of
action for wrongful foreclosure insofar as it was premised on the theory that the note
must be possessed or produced to foreclose, precisely the same theory raised by this
18 Plaintiff in the instant case.
19 The Ohlendorf court does go on to find that the borrower might be able to
20 challenge who was the proper party to assert standing to exercise the right to give a
21 Notice of Default, and that such a challenge may survive a Rule 12 motion.
22 However, the facts in Ohlendorf are vastly different. In Ohlendorf, the borrower
23 made the allegation that the notice of default listed Deutsche Bank National Trust
24 Company as the beneficiary a full month prior to when the assignment to Deutsche
25 was recorded. Those are not the facts of Plaintiff s case.
26 Here, on May 26, 2010, MERS assigned its rights under the Deed of Trust to
27 Defendant U.S. Bank National Association, and Defendant U.S. Bank National
28 Association assigned its rights under the Deed of Trust to California Reconveyance
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1 Company. (RJN, Ex.s B, C.) Also on May 26, 2010, California Reconveyance
2 Company, as Trustee, signed a Notice of Default and Election to Sell. (RJN, Ex. D.)
3 In the instant case, the Notice of Default was given by the properly assigned
4 party. Ohlendorfis factually distinguishable. It should be disregarded.
5 C. Plaintifrs Arguments Against the Validity of the Assignment and
6 Substitution Lack Merit.
7 Plaintiff illogically concludes that CRC was never substituted as trustee under
8 the Deed of Trust because "the Assignment to U.S. Bank was invalid", and even if it
9 was not invalid, "the Substitution [itself] was invalid." (Opp. 10:24-11: 1.)
10 First, Plaintiff s argument that the "assignment is invalid" relies upon the
11 theory that MERS did not have an assignable interest in the deed of trust. (See Opp.
12 11:17-14:9.) Plaintiff is wrong .
13 Since MERS is the beneficiary identified in the Deed of Trust, the Deed of
14 Trust expressly granted MERS the power of sale. Gomes, 192 Cal. App. 4th at
15 1157-57 (holding that the borrower agreed in the Deed of Trust that MERS is
16 authorized to initiate a foreclosure proceeding); Hollins v. ReconTrust, N.A., Case
17 No. CV 11-945 PSG (PLAx), 2011 WL 1743291, at *3 (C.D. Cal. May 6, 2011)
18 (citing Gomes and holding that "federal and state courts in California have
19 repeatedly rejected similar challenges to MERS in cases where the plaintiff
20 expressly authorized MERS to act as a beneficiary.").
21 Not only does the Deed of Trust authorize MERS to serve as the nominee for
22 the lender, including its successors and assigns, the power of sale which is granted
23 to MERS "is not disrupted by securitization of the note." Bezverkhov v. Cal-
24 Western Reconveyance Corp., Case No. 2:09-cv-01880-MCE-KJM, 2009 WL
25 4895581, at *5 (E.D. Cal. Dec. 11,2009).
26 Plaintiff cannot file suit to stop the foreclosure proceedings initiated after she
27 went into default to simply determine "Who is the true owner of [the] Note and
28 Deed of Trust?" (Opp. 5:1-2.) California law is clear that such a fishing expedition
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1 is not permitted and MERS as nominee and beneficiary under the Deed of Trust had
2 authority to assign the beneficial interest of the Deed of Trust to U.S. Bank and as a
3 result, Defendants had authority to initiate foreclosure proceedings.
4 Second, Plaintiffbaselessly alleges Colleen Irby, had no corporate authority
5 to assign Plaintiffs Note. (FAC, ~ 34.) Unfortunately for Plaintiff, a search on
6 'Linkedln' cannot rebut the validity of the recorded documents. (See generally,
7 Opp.) Plaintiffs unsupported assumption regarding Ms. Irby relate to her signing of
8 a substitution. Her personal knowledge is irrelevant. The recorded documents
9 speak for themselves. Defendants clearly own an interest in the note and the
10 substitution to California Reconveyance Company as foreclosing trustee was proper.
11 (See RJN, Ex.s A-D.) Thus, despite Plaintiffs claims, Defendants did in fact have
12 "authority to collect her payments, let alone foreclose ... " (Opp. 10:3-4.)
13 III. PLAINTIFF'S CAUSES OF ACTION INDIVIDUALLY FAIL
14 A. Plaintiff's First Claim For Declaratory Relief Fails to State A
15 Claim Upon Which Relief Can Be Granted.
16 As explained in Defendants' Motion, Plaintiff s declaratory relief cause of
17 action is duplicative of her other claims for relief, and as a result should be
18 dismissed. Plaintiff argues that the sole purpose of her declaratory judgment action
19 is to "determine the rights and obligations of the parties relative to the Property."
20 (Opp. 16:10-11.) As this is the same information sought by Plaintiffs claims for
21 quasi contract (F AC, ~ ~ 61-66), and breach of the implied covenant of good faith
22 and fair dealing (FAC, ~ 137-146), Plaintiffs declaratory judgment cause of action
23 "is not necessary or proper under the circumstances" and should be dismissed. Cal.
24 Civ. Code 1061; Cal. Ins. Guar. Ass 'n v. Super. Ct., 231 Cal.App.3d 1617,1623
25 (1991) ("Generally, an action in declaratory relief will not lie to determine an issue
26 which can be determined in the underlying tort action.").
27 B. Plaintiff's Second Claim for Negligence Fails.
28 Plaintiff s opposition argues that a claim of negligence has been "sufficiently
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plead" since Defendants accepted "payments that they had no authority to collect".
(Opp. 17:11-18:19, 19:3-4.) Defendants have clearly established they had such
authority. (See, supra, Section II. C.) Plaintiff cannot claim unjust enrichment for
tendering payments pursuant to a loan agreement for which she was already
obligated.
In addition, to the extent Plaintiffs claim relies on "numerous loan
modification applications", there is no common law duty to modify a contract.
Vella v. Hudgins, 151 Cal. App. 3d 515, 519 (1984) (parties to contract "may"
modify contract if they desire). Absent specific terms in the contract requiring
modification there is no duty to modify. See Busch v. Globe Indus., 200 Cal. App.
2d 315,320 (1962) (holding that a written contract may expressly provide for
modification).
Plaintiff fails to plead sufficient facts to support a negligence claim.
C. Plaintiff's Third Claim For Quasi Contract Fails.
Plaintiff argues, "Defendants were unjustly enriched at Plaintiff s expense by
accepting payments that they had no authority to collect." (Opp. 19:3-4.) Plaintiffs
statement is premised on her belief that there was no valid assignment that allowed
Defendants to collect on her debt obligation. (Opp. 19: 7-9; FAC ~ ~ 60-64.) For the
identical reasons stated in Section II. C., her logic fails.
D. Plaintiff's Fourth Claim for Violation of 15 U.S.C. 1692, et Seq.
Fails.
Plaintiff s Opposition fails to demonstrate how her claim for Violation of 15
U.S.C. 1692 is not barred by the statute of limitations. Plaintiff tries to avoid this
bar by claiming she "is not advancing a highly technical argument about the timing
or nature of the debt collection activities ... " (Opp. 19:27-28.) Regardless of
Plaintiff s approach in bringing this claim, it is still barred.
The allegedly false assignment was recorded on May 26, 2010. (RJN, Ex. B.)
The initial Complaint was filed on September 26, 2011, which is more than one year
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1 past the acts that allegedly violated the statute. Plaintiffs claim for Violation of 15
2 U.S.C. 1692 fails.
3 E. Plaintiffs Fifth Claim for Violation of 12 U.S.C. 2605 (RESPA)
4 Fails.
5 Plaintiff s opposition fails to demonstrate how the F AC satisfies the strict
6 requirements of 12 U.S.C. 2605. First, Plaintiff merely recites the contents of the
7 August 8, 2011 letter to JPMorgan. (FAC, Ex. C.; Opp. 20:8-12.) As evidenced by
8 it's content, Plaintiff did not send the QWR as an attempt to notify Defendants of
9 some sort of account discrepancy. (See Jd.) Plaintiff fails to rectify the deficiency
10 of her pleading and again fails to show that the letter sent to Defendants constitutes
11 a QWR. Second, Plaintiff fails to state facts sufficient to demonstrate any actual
12 harm. Plaintiffwas already obligated to make her loan payments, and any incurred
13 "attorney's fees and costs" have been by her own choice to litigate.
14 Plaintiffs claim for Violation of 12 U.S.C. 2605 should be dismissed
15 without leave to amend.
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F. Plaintiffs Sixth Claim For Violation of Bus. And Prof. Code
17200, et Seq. Fails to State A Claim Against Defendants.
18 Plaintiffs opposition confirms the claim for violation of Business and
19 Professions Code section 17200 ("VCL") is grounded on her belief that Defendants
20 violated various statutes that form the basis of her other causes of action. (See,
21 Opp. 21:15-22:18.) Because Plaintiff fails to properly allege a violation of the
22 various statutes, her VCL claim likewise fails.
23 Also, only a plaintiff who has suffered actual damage may pursue a private
24 UCL action. Peterson v. Cellco Partnership, 164 Cal. App. 4th 1583, 1590 (Cal.
25 App. 2008). Here, Plaintiff signed a promissory note, promising to repay a loan.
26 She does not allege her payments were for anything other than the repayment of the
27 loan. Plaintiff also fails to show a causal connection between the harm she suffered,
28 and the unlawful business activity alleged. The foreclosure was a result of
IRO lDOCS\538756.1 7
1 Plaintiff s failure to repay the loan she received.
2 The DCL cause of action should be dismissed.
3 G. Plaintiff's Seventh Claim For Accounting Fails to State A Claim
4 Against Defendants.
5 The right to an accounting is not a cause of action, but a remedy. Plaintiff
6 argues she is entitled to the remedy of accounting. (Opp. at p. 19:3-11.) The
7 remedy, however, requires the existence of a fiduciary relationship. 5 Witkin, Cal.
8 Procedure, Pleading, 775 at p. 233 (4th ed. 1997). Plaintiff fails to show the
9 existence of a fiduciary relationship with Defendants. See Perlas v. GMAC Mortg.,
10 LLC, 187 Cal. App. 4th 429,436 (Cal. App. 2010). She is not entitled to an
11 accounting.
12 Thus, Plaintiff s claim should be dismissed with prejudice because she cannot
13 cure the defect in this claim.
14 H. Plaintiff's Eighth and Ninth Causes of Action for Breach of
15
16
Contract and the Implied Covenant of Good Faith and Fair
Dealing Fail to State A Claim.
17 A defendant's conduct in collecting payments and foreclosing upon default is
18 permitted under the note and deed of trust, and cannot serve as the factual predicate
19 for a claim under the implied covenant. See Carma Developers, Inc. v. Marathon
20 Dev. Co., Inc., 2 Cal. 4th 342, 374 (1992).
21 Plaintiff s opposition argues that Defendants are liable for breach of the
22 implied covenant of good faith and fair dealing by not properly applying payments.
23 However, Plaintiff still has not identified any monthly payment that was not
24 properly applied. (See FAC, ~ ~ 135, 145-146.)
25 Since Plaintiff has failed to sufficiently plead facts which constitute a breach of
26 contract or breach of the implied covenant of good faith and fair dealing, her claims
27 should be dismissed without leave to amend.
28
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1 IV. PLAINTIFF HAS FAILED TO DEMONSTRATE THAT SHE IS
2 ENTITLED TO ATTORNEY'S FEES
3 Plaintiffs opposition claims that she is entitled to attorney's fees pursuant to
4 an alleged violation of 12 U.S.C. 2605 ("RESPA"). (Opp.25:22-26:6.) Plaintiff
5 clearly cannot recover under that claim. She has failed to allege any alternative
6 contractual or statutory basis for such an award. This court should strike Plaintiff s
7 claim for attorneys' fees.
8 V. CONCLUSION
9 Plaintiffs First Amended Complaint should be dismissed with prejudice.
10 Plaintiff s allegations do not state facts necessary to maintain any of the stated
11 claims. For these reasons, Defendants' Motion to Dismiss should be granted.
12 Amendment cannot cure these defects or create a claim where none exists. Leave to
13 amend should not be granted.
14
15 Dated: March 26, 2012
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IRO I DOCS\538756. I
Stuart W. Price
Sean D. Muntz
Amanda L. Marutzky
BRYAN CA VE LLP
By: lSI Amanda L. Marutzky
Amanda L. Marutzky
Attorneys for Defendants
JPMORGAN CHASE BANK, N.A.,
erroneously sued as JPMorgan Chase, and
U.S. BANK, N.A. as Trustee for WaMu
Mortgage Pass-Through Certificates
WMALT Series 2006-AR4 Trust
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PROOF OF SERVICE
CCP 1013a(3) Revised 5/1/88
STATE OF CALIFORNIA, COUNTY OF ORANGE
I am employed in the Counh' of Orange, State of California. I am over the
age of 18 and not a party to the within action. My business address is: 3161
Michelson Drive, Suite 1500, Irvine, CA 92612-4414. My email address is:
crosbyk@bryancave.com.
On March 26,2012, I served the foregoing document described as: REPLY
IN SUPPORT OF DEFENDANTS TO DISMISS PLAINTIFF'S FIRST
AMENDED COMPLAINT on all interested parties in this action by placing rX] a
true copy [ ] the original thereof enclosed in sealed envelopes addressed as follows:
Deborah P. Gutierrez
Prosper Law Group, LLP
6100 Center Dr
Ste 1050
Attorneysfor PlaFntiffCarmen R Nararljo
Telephone: (310) 893-6200
Facsimile: (310) 988-2930
Email: deborah@prosperlaw.com
BY CMlECF NOTICE OF ELECTRONIC FILING: I caused said
document(s) to be served by means of this Court's electronic transmission of the
Notice of Electronic filing through the Court's transmission facilities, to the parties
andlor counsel who are registered CMlECF Users set forth in the service list
obtained from this Court.
[ ] BY MAIL - As follows: I am "readily familiar" with the firm's practice of
collection -and processing correspondence for mailing. Under that practice it would
be deposited with U.S. Postal Service on that same day with postage thereon fully
prepaid at Irvine, California in the ordinary course of business. I am aware that on
motion of the party served, service is presumed invalid if postal cancellation date or
postage meter date is more than one day after date of deposit for mailing in affidavit.
[X] (FEDERAL) I declare that I am employed in the office of a member of
the bar of this Court at whose direction the service was made.
Executed on March 26, 2012, at Irvine, California.
IS/ Kellt;
KELLY ROS Y
515822.1
PROOF OF SERVICE
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PROSPER LAW GROUP, LLP
Gordon F. Dickson, Esq., SBN 136857
Deborah P. Gutierrez, Esq., SBN 240383
6100 Center Drive, Suite 1050
Los Angeles, California 90045
Telephone: (310) 893-6200
Facsimile: (310) 988-2930
Attorneys for Plaintiff,
Carmen R. Naranjo
CARMEN R. NARANJO, an individual,
Plaintiff,
vs.
JPMORGAN CHASE BANK, N.A.;
U.S. BANK, N.A. AS TRUSTEE FOR
WAMUMORTGAGEPASS-
SERIES 2006-AR4 TRUST; and Does 1
- 10, inclusive,
Defendants.
Case No. llCV2229 L (WVGx)
OPPOSITION TO DEFENDANTS'
JPMORGAN CHASE BANK'S
AND U.S. BANK, N.A.S MOTION
TO DISMISS PLAINTIFF'S FIRST
AMENDED COMPLAINT
Date: April 2, 2012
Time: 10:30 AM
Courtroom: 14
Judge: Hon. M. James Lorenz
OPPOSITION TO DEFENDANTS' JPMORGAN CHASE BANK'S AND U.S. BANK, N.A.S MOTION TO DISMISS
PLAINTIFF'S FIRST AMENDED COMPLAINT -1-
TABLE OF CONTENTS
INTRODUCTION .......................................................................................... 1
STATEMENT OF FACTS ............................................................................. 1
STANDARD FOR DISMISSAL UNDER FEDERAL RULE OF CIVIL
PROCEDURE 12(b)( 6) .................................................................................. 5
mDICIAL NOTICE IS PROCEDURALLY CORRECT AS TO THE
EXISTENCE OF DOCUMENTS, BUT NOT AS TO THEIR CONTENTS 5
LEGAL ARGUMENTS .................................................................................. 7
A. PlaintiffIs Not Pleading an "Owner of the Note" or "Original Note"
Theory and Gomes is Inapplicable ....................................................... 7
B. California Reconveyance Company is not the Trustee Under
Plaintiffs Deed of Trust ..................................................................... 10
1. The Assignment is Invalid ....................................................... 11
2. Substitution is Invalid ............................................................... 14
C. Plaintiff has Sufficiently Alleged an Actual Controversy Among the
Parties Sufficient to Maintain a Claim for Declaratory RelieL ......... 16
D. Plaintiff has Sufficiently Plead a Negligence Claim Because
Defendants' Loan Modification Activities Exceeded Those of a
Conventional Lender .......................................................................... 17
E. Plaintiff has Sufficiently Pled a Quasi Contract Claim ...................... 18
F. Plaintiff has Sufficiently Pled a Claim for Violation of 15 U.S.C.
1692e ("FDCPA") .............................................................................. 19
G. Plaintiff has Sufficiently Pled a Claim for Violation of 12 U.S.C.
2605 (RESPA) .................................................................................... 20
-i-
I ABLE OF CON lEN IS
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VI.
VII.
H. Plaintiff has Sufficiently Pled a Claim for Violation ofEus. and Prof.
Code Section 17200, et seq. ("UCL") ................................................ 21
I. Plaintiff is Owed an Accounting ........................................................ 22
J. Plaintiff has Sufficiently Alleged Claims for Both Breach of Contract
and Breach of the Implied Covenant of Good Faith and Fair Dealing23
OPPOSITION TO MOTION TO STRlKE ATTORNEY FEES ................. 25
CONCLUSION ............................................................................................. 26
-11-
IABLEOF CONIENIS
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TABLE OF AUTHORITIES
Cases
Ansanelli v. JP Morgan Chase Bank, NA.
2011 WL 1134451 (N.D. CaL) .............................................................................. 17, 18
Archdale v. American Internat. Specialty Lines Ins. Co.,
154 Cal.AppAth 449 th. 19 (2007) .............................................................................. 25
Bank of the West v. Sup. Ct.
2 Cal.4th 1254 (1992) .................................................................................................. 22
Bell Atlantic Corp. v. Twombly,
55 US 544 (2007) ........................................................................................................... 5
Berryman v. Merit Property Management, Inc.,
152 Cal.App. 4th 1544 (2007) ..................................................................................... 22
Born v. Koop (1962)
200 Cal.App.2d 519 ..................................................................................................... 14
Bureerong v. Uvawas,
922 F.Supp.1450 (C.D. Call996) ............................................................................... 25
Castro v. Executive Trustee Services, LLC
(D.Ariz.2009, Feb. 23, 2009, No. CV-08-2156-PHX-LOA) 2009 WL 438683, 2009
Lexis 14134 .................................................................................................................... 8
Cervantes v. City of San Diego,
5 F.3d 1273 (9th Cir. 1993) ............................................................................................ 5
Chasnik v. BAC Home Loans Servicing LP, et al.
No. CV 11-01324 DMG/JCGx (C.D. Cal., October 26, 2011 ) ................................... 23
Chern v. Bank of America,
15 Ca1.3d 866 (1976) ................................................................................................... 22
Cisco v. Van Lew (1943)
60 Cal.App.2d 575 ....................................................................................................... 14
Comunale v. Traders & General Ins. Co.,
50 Cal. 2d 654 (1958) .................................................................................................. 24
-iii-
IABLEOF CONIENIS
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IS
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Conley v. Gibson,
355 U.S. 41 (1957) ........................................................................................................ 5
First Nationwide Savings v. Perry
11 Cal.AppAth 1657 (1992) ........................................................................................ 19
Fisher v. Salmon,
I Cal. 413 (1851) ..................................................................................................... 2, II
Fontenot v. Wells Fargo Bank, NA.,
198 Cal. App. 4th 256 (2011) ............................................................................ 9, 13, 14
Gilligan v. Jamco Dev. Corp.,
108 F.3d 246 (9th Cir. 1997) ......................................................................................... 5
Gomes v. Countrywide Home Loans,
192 Cal.AppAth 1149 (2011) .......................................................................... 7,8,9,10
Hartford Fire Ins. Co. v. California,
509 U.S. 764 (1993) ...................................................................................................... 5
In re Foreclosure Cases,
521 F. Supp. 2d 650 (S.D. Oh. 2007) .......................................................................... 11
In re Vargas,
17
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27
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396 B.R. 511 (Bankr. C.D. Cal. 2008) ........................................................................ II
In Re: Walker,
No. 10-21656-E-11, 2010 Bankr. LEXIS 3781 (E.D. Cal. May 20, 2010) .......... 11, 12
Joslin v. HA.S. Ins. Brokerage,
184 Cal. App. 3d 369 (1986) ......................................................................................... 6
Landmark Nat'l Bank v. Kesler,
289 Kan. 528, 216 P.3d 158 (Kan. 2009) .................................................................... 12
LaSalle Bank v. Lamy,
12 Misc. 3d 1191A, 824 NY.S.2d 769 (N.Y. Sup. Ct. 2006)) .................................... 12
Lectrodryer v. SeoulBank,
77 Cal. App. 4th 723 (2000) ........................................................................................ 19
IABLEOFCONIENIS
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Louiseau v. VISA USA Inc.,
WL 4542896 (S.D. Cal. 2010) .................................................................................... 18
Love v. Fire Ins. Exchange,
221 Cal.App.3d 1136 (1990) ....................................................................................... 24
Love v. Wolf,
226 Cal. App. 2d 378 (1964) ......................................................................................... 6
Mangini v. R. J Reynolds Tobacco Co.,
7 Cal. 4th 1057 (1994) .................................................................................................... 6
Maryland Cas. Co. v. Pacific Coal & Oil Co.,
312 U.S. 270 (1941) .................................................................................................... 16
McBride v. Boughton,
123 Cal. App. 4th 379 ................................................................................................... 19
McKell v. Washington Mut., Inc.,
142 Cal. App. 4th 1457 (2006) .................................................................................... 18
MERS v. Nebraska,
270 Neb. 529 (2005) .................................................................................................... 12
Munson v. Del Taco, Inc.
46 Cal. App. 4th 661 (2009) ........................................................................................ 22
Nymark v. Heart Fed. Savings & Loan Assn.,
231 Cal.App.3d 1089 (1991) ........................................................................................ 17
Ohlendorf v. Am. Home Mortgage Servicing,
t;3s .. ... 8, 9
Osei v. Countrywide Home Loans,
692 F.Supp.2d 1240 (2010) ......................................................................................... 17
Peterson v. Cellco Partnership,
164 Cal. App. 4th 1583 ................................................................................................. 19
Poseidon Development, Inc. v. Woodland Lane Estates, LLC,
152 Cal. App. 4th 1106 (2007) .................................................................................. 6, 7
-v-
I ABLE OF CON lEN I S
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Progressive West Ins. Co. v. Yolo County Superior Court
125 Cal. App. 4th 263(2005) ........................................................................................ 22
RDF Media Ltd. v. Fox Broadcasting Co.,
372 F.Supp.2d 556 (C.D. Cal 2005) ............................................................................ 25
Rutman Wine Co. v. E. & J. Gallo Winery,
829 F.2d 729 (9th Cir. 1987) ......................................................................................... 5
Sacchi v. Mortgage Electronic Registration Systems, Inc.,
No. CV 11-1658 AHM, 2011 WL 2533029 at *13-14 (C.D. CalJune 24, 2011) ....... 9
Scheuer v. Rhodes,
416 U.S. 232 (1974) .................................................................................................. 1, 5
Seattle Audubon Soc y v. Moseley,
80F.3d 1401 (9thCir. 1996) ....................................................................................... 17
StorMedia, Inc. v. Superior Court,
20 Cal.4th 449 (1999) ..................................................................................................... 6
Tamburri v. Suntrust Mortgage, Inc., et al.,
2011 WL 6294472 (N.D.Cal. Dec. 5, 2011) ............................................................. 8, 9
Teselle v. McLoughlin,
173 Cal. App. 4th 156,(2009) ....................................................................................... 22
Vogan v. Wells Fargo et ai.,
No. ll-cv-2098-JAM-KJN,2011 WL 5826016 (N.D. Cal. Nov. 11,2011) ............... 11
Waller v. Truck Ins. Exchange, Inc.,
11 Cal.4th 1,36,44 Cal.Rptr.2d 370 P.2d 619 (1995) ................................................ 24
Weingartner v. Chase Home Finance, LLC
(D.Nev.2010) 702 F.Supp.2d 1276 ................................................................................ 8
Statutes
12 U.S.C. 1692e(2)(A)(5) ............................................................................................. 19
12 U.S.C. 2605(e)(I)(A) ............................................................................................... 20
12 U.S.C. 2605(e)(I)(B)(ii) ........................................................................................... 20
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12 U.S.C. 2605(f)(I)(A) ................................................................................................ 21
15 U.S.c. 1692(a)(6) ..................................................................................................... 19
15 U.S.C. 1692e ...................................................................................................... 19,20
28 U.S.C. Section 2201(a) ................................................................................................ 16
Other Authorities
Bus. and Prof. Code Section 17200 ........................................................................... 21, 22
California Civil Code 2924(a)(I) .................................................................................... 7
Rules
Federal Rule of Civil Procedure, Rule 12(b)(6) ................................................................. 5
Federal Rule of Civil Procedure Rule 12(f) ..................................................................... 25
Federal Rule of Civil Procedure Rule 8(a)(2) .................................................................. 23
-vii-
I ABLE OF CON lEN IS
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1.
MEMORANDUM OF POINTS AND AUTHORITIES
INTRODUCTION
Defendants' Motion to Dismiss (hereinafter "Motion") PlaintiffCannen
Naranjo's (hereinafter "Ms. Naranjo" or "Plaintiff') First Amended Complaint ("FAC")
ignores the well-pled specific factual allegations supporting Ms. Naranjo's claims and
attempts to misstate her allegations in an effort to dismiss her claims. Through the
instant lawsuit, Ms. Naranjo will establish that Defendants JPMorgan Chase Bank, N.A.
(hereinafter "JPMorgan") and US. Bank, N.A. as Trustee for the W AMU Pass-
Through Certificates WMALT Series 2006-AR4 Trust ("U.S. Bank") (collectively
hereinafter the "Defendants"), are not her true creditors and as such have no legal,
equitable, or pecuniary right in this debt obligation secured by the real property located
at 5331 Calumet Avenue, La Jolla, California 92037 (hereinafter "Property").
Defendants' Motion fails, not only because the First Amended Complaint sets
forth sufficient allegations, both legal and factual, to establish a statement of the
claims for which relief can be granted. Plaintiff has sufficiently pleaded both plausible
factual allegations, as well as legal claims, to enable their First Amended Complaint to
move forward. This is not the phase in litigation to resolve the contest between the facts
or on the merits of the case. In reviewing the sufficiency of the claims asserted, the
issue is not whether Plaintiff will ultimately prevail, but whether the Plaintiff is entitled
to offer evidence to support the claims asserted. See Scheuer v. Rhodes, 416 US. 232,
236 (1974).
II. STATEMENT OF FACTS
To begin, on January 24, 2006, Plaintiff executed a promissory note ("Note") in
favor of SBMC Mortgage ("SBMC"), secured by a deed oftrust ("Deed of Trust")
(Note and Deed of Trust collectively "Loan") for the finance of the Property. The Deed
of Trust identified T.D. Service Co. as Trustee and Mortgage Electronic Registration
Systems, Inc. ("MERS") as both nominee and beneficiary under the security instrument.
Plaintiff alleges that shortly after origination SBMC sold her Loan to an entity or entities
that is not US. Bank.
On or around May 26, 2010, Defendants or their agents caused an Assignment of
Deed of Trust ("Assignment") to be recorded in the San Diego County Recorder's
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OPPOS! I ION !O DEFENDAN I S' JPMORcIAN CRASE BANK'S AND ().s. BANK. N.A.S MO I [ON 10 DISMISS
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Office which was purportedly executed May 25, 2010 by "Colleen Irby" as purported
"Officer" of MOltgage Electronic Registration Systems Inc. ("MERS"). The
Assignment recites that "for value received" MERS transfen'ed to U.S. Bank, National
Association as trustee for W AMU Mortgage Pass Through Certificate for WMAL T
2006-AR4 Trust all beneficial interest in Plaintiffs Deed of Trust together with
Plaintiffs Note. See Defendants' RJN Exhibit "B." Plaintiff alleges no such transfer
ever occurred based on the following:
1.
2.
While MERS purports to act as nominee and beneficiary, it is clear that
MERS has no ownership interest in the Note or Deed of Trust and cannot
assign an interest in property. Moreover, long-standing law in the state of
California automatically renders null and void, any assignment involving
an interest in real property by an agent that fails to disclose its principal.
Fisher v. Salmon, 1 Cal. 413 (1851)1 Here, the Assignment signature
block merely indicates "Colleen Irby" is signing the instrument as
"Officer" ofMERS without indicating on whose behalfMERS is
purporting to transfer its interest. The Assignment is void.
"Colleen Irby" lacked personal knowledge and corporate authority to sign
the Assignment on behalf ofMERS since "Colleen Irby" is not an
employee of MERS, but rather a "LS Section Manager" at California
Reconveyance Company. See Exhibit" A," attached hereto is a true and
correct copy of "Colleen Irby's" LinkedIn profile. LinkedIn is a social
networking website geared towards companies and industry professionals
looking to make new business contacts or keep in touch with previous co-
workers, affiliates, and clients. Within LinkedIn, members can create
customizable profiles that detail employment history, business
accomplishments, and other professional accolades
2
"Colleen Irby's"
LinkedIn profile reveals that she has worked as an "LS Section Manager"
for California Reconveyance Company since March, 1984, over 27 years.
I See Cal. Civ. Code section 1095
2 http://www.hudsonhorizons.comlOur-Company/lntemet-Glossary/LinkedIn.htm
2
) IN)] F N .j P (, : R K'S SR N S ( IllNllllllSMISS
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Also, her profile indicates she currently holds the "LS Section Manager"
position with California Reconveyance Company. Finally, MERS is based
out of Virginia, yet "Colleen Irby" as its purported "Officer" signed the
Assignment in Los Angeles County, California. Notably, however,
California Reconveyance Company is based out of Chatsworth, California.
These facts lend further support to Plaintiff's position that "Colleen Irby" is
not an employee ofMERS, but an Employee of California Reconveyance
Company.
On or around May 26, 2010 Defendants or their agents recorded a Substitution of
Trustee ("Substitution") in the San Diego County Recorder's Office, which was
purportedly executed May 25, 2010. Interestingly, the Assignment and Substitution of
Trustee-were recorded the exact same day at the exact same time. Astonishingly, the
Substitution was also signed by "Colleen Irby" but this time as "Officer" of U.S. Bank,
National Association as trustee for W AMU MOltgage Pass through Certificate for
WMALT 2006-AR4 Trust by JPMorgan Chase Bank, National Association, as attorney-
in-fact. Assuming the contents of the Assignment and Substitution are true (which
Plaintiff disputes) on May 25, 2010 "Colleen Irby" was "Officer" of MERS and "Officer
of Defendant "JPMorgan Chase Bank, National Association." The Substitution
purports that U.S. Bank substitutes T.D. Service Co. for California Reconveyance
Company. See Defendants' RJN Exhibit "c." Although Ms. Irby works for California
Reconveyance, she purports to also work for two other companies in an executive role.
Ms. Irby does not hold these titles and has signed these documents without any personal
knowledge of the facts therein or the actual corporate authority required to sign the
same_ Like the Assignment, Plaintiff alleges that no such Substitution ever occurred
based on the following:
1. U.S. Bank, National Association as trustee for W AMU Mortgage Pass
through Certificate for WMAL T 2006-AR4 Trust is purporting to substitute
the Trustee under Plaintiffs Deed of Trust, yet U.S. Bank had not yet
acquired its purported interest in Plaintiffs Note and Deed of Trust as the
Assignment supra was executed and recorded the same day as, but not prior
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OPPOsI I [ON 10 [)EFENDAN [s' JPMOR(TAN CHASE HANK'S ANI) (lX RANK. N.A.S Ml) 111)N I () IllSMlsS
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2.
to, the Substitution. Thus, U.S. Bank did not yet have the ability or
authority under the Deed of Trust to substitute the Trustee.
Even assuming U.S. Bank had been effectively assigned the interest in
Plaintiffs Deed of Trust before the Substitution (which it did not) clearly
"Colleen Irby" is not an employee of JPMorgan and therefore lacks the
personal knowledge and corporate authority as U.S. Bank's attorney-in-fact
to execute and effectuate the Substitution. In this case alone, on the same
day, "Colleen Irby" has executed title documents in two different capacities
for two different companies. Plaintiff alleges "Colleen Irby" is not an
employee of either MERS or JPMorgan, but rather a "LS Section Manager"
at California Reconveyance Company. See Exhibit "A."
The foregoing gives rise to the plausibility that U.S. Bank was never assigned the
beneficial interest in Plaintiff's Note and Deed of Trust and the plausibility that the T.D.
Service Co. was never substituted as Trustee under the Deed ofTmst. Plaintiff alleges
Defendants recorded the foregoing invalid documents in the San Diego County
Recorder's office to give the imminent foreclosure the appearance of propriety.
Notably, it was ultimately California Reconveyance Company who proceeded to initiate
the foreclosure process on the Property. More than coincidentally, "Colleen Irby" who
signed both the Assignment and the Substitution, in two different capacities and for two
different companies is actually an employee of California Reconveyance Company. See
Exhibit "A." This fact lends significant support to Plaintiff's position and gives rise to
the plausibility that the recorded documents are invalid and nothing more than attempt
to carry out the foreclosure of Plaintiff's Property under the guise of legality.
Further corroborating Plaintiff's claim that the Assignment was void, Plaintiff's
forensic loan audit has determined that her Loan is being tracked as a receivable of the
W AMU Mortgage Pass through Certificate for WMAL T 2006-AR4 Trust ("W AMU
Tmst"). According to the audit, the Tmst Agreement governing the creation and
administration of the W AMU Tmst -- the Pooling and Servicing Agreement ("PSA") --
her Loan was not, and is not, part of the W AMU Tmst res as a matter of law because
there was a failure to comply with numerous requirements of the PSA, in violation of
governing New York Trust Law. ( F A C ~ ~ 1,17-21.)
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(IPP/ISIII/IN III I 1I"<I'f<NI IAN 1<:0 IPM/IRnANI'HAsI"<KANK",ANillis RANK NA<::MilllllNllIIIlsMlss
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In light of the foregoing, Plaintiffs overarching question is simple: Who is the
true owner of her Note and Deed of Trust?
III. STANDARD FOR DISMISSAL UNDER FEDERAL RULE OF CIVIL
PROCEDURE 12(b)(6)
Motions to dismiss for failure to state a claim under Federal Rules of Civil
Procedure, Rule 12(b)(6) are viewed with disfavor, and, accordingly, dismissals for
failure to state a claim are "rarely granted." Gilligan v. Jamco Dev. Corp., 108 F.3d 246,
249 (9th Cir. 1997) (citation omitted). The standard for dismissal under Rule 12(b )(6) is
a stringent one. "[A] First Amended Complaint should not be dismissed for failure to
state a claim unless it appears beyond doubt that the Plaintiff can prove no set of facts in
support of his claim which would entitle him to relief." See Hartford Fire Ins. Co. v.
California, 509 U.S. 764, 811 (1993) (quoting Conley v. Gibson, 355 U.S. 41, 45-46
(1957); Cervantes v. City of San Diego,S F.3d 1273, 1274 (9th Cir. 1993) (emphasis
added). The purpose of a motion under Federal Rule 12(b)( 6) is to test the formal
sufficiency of the statement of the claim for relief in the First Amended Complaint. See
Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987). The First
Amended Complaint must be construed in the light most favorable to the nonmoving
party and its allegations taken as true. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).
It is not a procedure for resolving a contest about the facts or the merits of the case. In
reviewing the sufficiency of the First Amended Complaint, the issue is not whether the
Plaintiff will ultimately prevail, but whether the Plaintiff is entitled to offer evidence to
support the claims asserted. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683,
40 L.Ed.2d 90 (1974). Furthermore, more recently, the U.S. Supreme Court has held
that to survive a motion to dismiss, a First Amended Complaint must contain sufficient
factual matter, accepted as true, would "state a claim to relief that is plausible on its
face." See Bell Atlantic Corp. v. Twombly, 55 US 544 (2007).
IV. JUDICIAL NOTICE IS PROCEDURALLY CORRECT AS TO THE
EXISTENCE OF DOCUMENTS, BUT NOT AS TO THEIR CONTENTS
Plaintiff specifically disputes the contents of the documents contained in
Defendants' Request for Judicial Notice. Even though the Court may "take judicial
notice of matters of public record outside the pleadings and consider them for purposes
of the motion to dismiss," the Court may only take judicial notice of their existence, not
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OPPOSitiON f () IlEb hNDAN I s' JPMOR{lAN cRAsE HANK's AND (Jx RANK. NAS MO liON 10 DisMISS
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as to their contents. "Taking judicial notice of a document is not the same as accepting
the truth of its contents or accepting a particular interpretation of its meaning." Joslin v.
HA.S. Ins. Brokerage, 184 Cal. App. 3d 369, 374 (1986). While it is true that the acts of
the county recorder may be subject to judicial notice, Defendants' compilation of such
acts and the deductions that they proffer in that regard are not appropriate subjects for
judicial notice. Without any sort of foundation as to the personal knowledge of the
person making the statements contained in the documents, these are just records of acts
from which nothing may be properly deduced.
"[T]he taking of judicial notice of the official acts of a
governmental entIty does not in and of itself reguire
acceptance of the truth of factual matters which might be
deduced there from, since in many instances what is being
noticed, and thereby established, is no more than the existence
of such acts and not, without supporting evidence, what might
factually be associated with or !low there from." (citations
omitted).
Mangini v. R. J Reynolds Tobacco Co., 7 Cal. 4th 1057, 1062 (1994) (emphasis added).
While courts can take judicial notice of public records, they do not take notice of the
truth of matters stated therein. Love v. Wolf, 226 Cal. App. 2d 378, 403 (1964). In
addition, "when judicial notice is taken of a document ... the truthfulness and proper
16 interpretation of the document are disputable." StorMedia, Inc. v. Superior Court, 20
17 CalA
th
449, 457, fh. 9 (1999).
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Further, in Poseidon Development, Inc. v. Woodland Lane Estates, LLC, 152 Cal.
App. 4th 1106 (2007), the court considered the scope of judicial review of a recorded
document:
"[T]he fact [that] a court may take judicial notice of a recorded deed
or similar document, does not mean it may take judicial notice of
factual matters stated therein. For example, the First Substitution
recites that Shanley 'is the present holder of beneficiary interest under
said Deed ofTrusl.' By taking judicial notice of the First Substitution,
the court does not take judicial notice of this fact because it is hearsay
and it carmot be considered not reasonably subject to dispute."
Id. at 1117 (citations omitted). Therefore, the truthfulness of the contents of the
recorded documents still remains subject to dispute. See StorMedia, supra 20 Cal.4
th
at
457, fn. 9.
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()PIJ{)sIIIlIN II) Ilf"'.I"FNIMNls' lPM()Rl.AN (.HAsE RANK'S ANII!1 s RANK N A S Melli/iN III IlIsMlss
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In the instant case, Defendants rely on several exhibits attached to their Request
for Judicial Notice ("RJN"), filed concurrently with their Motion to Dismiss, to support
. factual contentions which they seek to inject into the pleadings. For instance,
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Defendants rely on Exhibit "B" to support their position that Defendant U.S. Bank was
actually assigned Plaintiff's Note and Deed of Trust. (Motion, p. 1 :26-28.) However,
Plaintiff specifically disputes the validity and veracity of this document. Plaintiff not
only specifically disputes this proposition and the validity of this document, but also this
is the precise type of hearsay that cannot be considered in the context of Defendants'
Motion. Poseidon Development, 152 Cal. App. 4th, at 1117. Pursuant to Rule 12, the
Court is required to convelt Defendants' 12(b)(6) Motion into one for Summary
Judgment, which requires providing Plaintiff the opportunity to conduct discovery and
present material evidence.
v. LEGAL ARGUMENTS
A. Plaintiff Is Not Pleading an "Owner of the Note" or "Original Note"
Theory and Gomes is Inapplicable
Like so many other lenders, Defendants in this case have seized on the recent
ruling in Gomes v. Countrywide Home Loans, 192 Cal.AppAth 1149 (2011) by
improperly expanding its application to mean that no homeowner can challenge a
foreclosure or his purported creditor's right to enforce the Deed of Trust and downplay
the allegations in Plaintiff's FAC in attempt to morph it into a "show me the note" or
"original note" case. This is not what Gomes holds and this is not what Plaintiff pleads.
Gomes held that Califomia Civil Code 2924(a)(1)' does not provide for a judicial
action to determine whether the person initiating the foreclosure process is indeed
authorized. Id. at 1155. But the issue in Gomes was not whether the wrong entity had
initiated foreclosure; rather, the issue was whether the company selling the property in
the nonjudicial foreclosure sale (MERS) was authorized to do so by the owner of the
3 Cal. Civ. Code 2924(a)(1) allows a "trustee, mortgagee, or beneficiary, or any oftheir
authorized agents" to initiate the foreclosure process.
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promissory note (emp. added). Id. at 1155 (rejecting the argument that a plaintiff may
test whether the person initiating the foreclosure as the authority to do so; "[t]he
recognition of the right to bring a lawsuit to detennine 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 oflawsuits filed sole
for the purpose of delaying valid foreclosures"). Notably, the Gomes court explicitly
distinguished Weingartner', Castro
5
, and Ohlendorf all cases where, "the plaintiff
alleged wrongful foreclosure on the ground that assignments of the deed oftmst had
been improperly backdated, and thus the wrong party had initiated the foreclosure
process. No such infirmity is alleged here." Id. Thus, Gomes explicitly avoided the
scenario pled here, in which the "plaintiff's complaint identified a specific factual basis
for alleging that the foreclosure was not initiated by the correct party (emp. in original)."
Id. at 1156. Gomes is therefore inapposite. See Tamburri v. Suntrust Mortgage, Inc., et
al., 2011 WL 6294472 (N.D.Cal. Dec. 5, 2011).
In Weingartner v. Chase Home Finance, LLC, 702 F.Supp.2d 1276, (D.Nev.20lO)
the court "allowed a plaintiff's claim for injunctive relief to proceed when he produced
evidence that the tmstee that initiated the foreclosure was not in fact the trustee at the
time and thus could not proceed under Nevada law." Id. at 1155. Citing to Weingartner,
Castro, and Ohlendorf, the Gomes court made clear that its ruling did not speak to
whether one could bring a suit to detelmine whether the specific party who initiated the
foreclosure process was the proper party or not. Similarly, in distinguishing the facts
before the court to those involved in Ohlendorfv. Am. Home Mortgage Servicing, the
Gomes court noted that its decision did not involve facts concerning whether an
"assignment[ ... ] of the deed of trust had been improperly backdated, and thus the wrong
4 Weingartner v. Chase Home Finance, LIC (D.Nev.2010) 702 F.Supp.2d 1276.
5 Castro v. Executive Trustee Services. LLC (D.Ariz.2009, Feb. 23, 2009, No. CV-08-2IS6-
PBX-LOA) 2009 WL 438683, 2009 Lexis 14134.
6 Ohlendorfv. Am. Home Mortgage Servicing. (E.D. CaL2010, Marc. 31, 2010, No. CIV.S-09-
2081 LKKlEFB) 3010 U.S. Dist. Lexis 31098.
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party had initiated the foreclosure process." Id. at 1155. Importantly, unlike this case,
the Gomes Court held that "no such infirmity [was 1 alleged" by the plaintiff.
As in Ohlendorf, Ms. Naranjo alleges that the "Substitution of Trustee and
Assignment of Deed of Trust," (Defendants' RJN Exhibits "B" and "C") the document
purpOlting to grant U.S. Bank, as Trustee, the beneficial interest in Plaintiffs Note and
Deed of Trust purporting to substitute T.D. Service Co. for California Reconveyance
Company are invalid and have no force or effect. See Section II supra. Plaintiff alleges
that "Colleen Irby" executed these documents the same day in two different capacities
for two different entities with no personal knowledge or corporate authority to do so.
Further, unlike Gomes, Plaintiff alleges that the interest in her Mortgage was never
assigned to U.S. Bank, and that U.S. Bank has no pecuniary or beneficial interest in her
Note and Deed of Trust.
In fact, other courts have acknowledged this important distinction noting Gomes,
"concluded the 'comprehensive' statutory framework regulating nonjudicial foreclosure,
Civil Code sections 2924 through 2924k, did not require the agent of a beneficial owner,
such as MERS, to demonstrate that it was authorized by the owner before proceeding
with foreclosure, at least in the absence of a factual allegation suggesting the agent
lacked authority." Fontenot v. Banko/New York Bank, NA., 2011 WL 3506177 (Cal.
App. I Dist.), (citing Gomes v. GreenPoint Home Loans, Inc., 192 Cal. App. 4th 1149,
1155-1156 (2011); see also Tamburri v. Suntrust Mortgage, Inc. et al. No. C-11-2899
EMC (N.D. Cal. Dec. IS, 20 II) ("Gomes explicitly avoided the scenario pled here, in
which the plaintiffs complaint identified a specific factual basis for alleging that the
foreclosure was not initiated by the correct party."); Sacchi v. Mortgage Electronic
Registration Systems, Inc., No. CV 11-1658 ARM, 2011 WL 2533029 at *13-14 (C.D.
Cal June 24, 20 II) ("Not only is Gomes distinguishable on its facts, the Gomes court
actually suggested that a cause of action for wrongful foreclosure might service if the
"plaintiffs complaint identified a specific factual basis for alleging that the foreclosure
was not initiated by the correct party.")
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Contrary to Defendants' argument, Plaintiff is not alleging that Defendants must
prove their right to foreclose in a court of law. Rather, Plaintiff alleges that U.S. Bank
and JPMorgan, as its purpOlted agent, lacked authority to collect her payments, let alone
foreclose because they do not own an interest in her Note and Deed of Trust and failed
to properly substitute California Reconveyance Company as foreclosing Trustee under
the Deed of Trust. Unlike Gomes, Plaintiff alleged that Defendants do not have any
legal right to either collect on the debt or enforce the underlying security interest. She
has clearly made factual allegations in her F AC that are both plausible and sufficient to
support U.S. Bank lacks authority to enforce a security interest when she challenges
U.S. Bank's ability to enforce that interest throughout the FAC. Thus, Defendants'
Motion to Dismiss on this ground should be denied.
B. California Reconveyance Company is not the Trustee Under Plaintiff's
Deed of Trust
Defendants further argue the foreclosure process in this case is proper because
U.S Bank is the beneficiary in Plaintiff's Deed of Trust and, as such, properly
substituted California Reconveyance Company as Trustee under the Deed of Trust. As a
result, Defendants contend, California Reconveyance Company has the authority to
utilize the California non-judicial foreclosure framework to notice a default and
foreclosure sale. Again, Defendants seek to fall back on the recorded documents
contained in their RJN to support the contention California Reconveyance Company
was properly substituted as Trustee under the Deed of Trust and the underlying
Assignment to U.S. Bank is valid.
Defendants' argument ignores the very lifeblood of Plaintiff's case. The very
specific factual allegations demonstrate California Reconveyance Company was never
substituted as trustee under the Deed of Trust because: I) the Assignment to U.S. Bank
was invalid and as such U.S. Bank did not have the authority to substitute CaJifornia
Reconveyance Company as Trustee under the Deed of Trust and 2) alternatively, even if
the Assigmnent was valid, California Reconveyance Company was never substituted as
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Trustee under Plaintiffs Deed of Trust because the Substitution was invalid.
1. The Assignment is Invalid
The Assignment was executed and notarized after the Closing Date of the W AMU
Trust. (FAC 'il2l, Exhibit "B.") The Assignment's failure to comply with the PSA is a
sufficient basis for pleading its invalidity. See Vogan v. Wells Fargo et al., No. ll-cv-
2098-JAM-KJN, 2011 WL 5826016, at *7 (N.D. Cal. Nov. 11,2011) ("Plaintiffs
alleged that the recorded assignment was executed well after the closing date of the
[trust] to which it was allegedly sold, giving rise to a plausible inference that at least
some part of the recorded assignment was fabricated.").
Wbat is more, as set forth in Section II supra, on or around May 26, 2010,
Defendants or their agents caused the Assignment to be recorded in the San Diego
County Recorder's Office which was purportedly executed May 25, 2010 by "Colleen
Irby" as purported "Officer" of Mortgage Electronic Registration Systems Inc.
("MERS"). The Assignment recites that "for value received" MERS transferred to U.S.
Bank, National Association as trustee for W AMU Mortgage Pass Through Certificate
for WMAL T 2006-AR4 Trust all beneficial interest in Plaintiffs Deed of Trust together
with Plaintiffs Note. See Defendants' RJN Exhibit "B." Plaintiff alleges no such
transfer ever occun'ed based on the following:
a. MERS did not have an Assignable Interest in the Deed of Trust
18 Longstanding law in the state of California automatically renders null and void,
19 any assignment involving an interest in real property by an agent that fails to disclose its
20 principal. Fisher v. Salmon, 1 Cal. 413 (1851). In the matter ofIn Re: Walker, the court
21 held that MERS, acting "only as a nominee" for the loan originator, under the deed of
22 trust, had no interest in a note to assign when there was no evidence that the promissory
23 note had been transferred to MERS. In Re: Walker, No. 10-2l656-E-11, 2010 Bankr.
24 LEXIS 3781 (E.D. Cal. May 20, 2010). The court stated ",[S]everal courts have
25 acknowledged that MERS is not the owner of the underlying note and therefore could
26 not transfer the note, the beneficial interest in the deed of trust, or foreclose upon the
27 property secured by the deed." Id. (citing In re Foreclosure Cases, 521 F. Supp. 2d 650,
28 653 (S.D. Oh. 2007); In re Vargas, 396 B.R. 511, 520 (Bankr. C.D. Cal. 2008);
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Landmark Nat'l Bankv. Kesler, 289 Kan. 528, 216 P.3d 158 (Kan. 2009); LaSalle Bank
v. Lamy, 12 Misc. 3d 1191A, 824 NY.S.2d 769 (N.Y. Sup. Ct. 2006)). The court in In
re Walker held, "Since no evidence ofMERS' ownership of the underlying note has
been offered, and other courts have concluded that MERS does not own the underlying
notes, this court is convinced that JVfERS had no interest it could transfer to Citibank."
Id. Thus, the court ruled that without any evidence ofMERS' ownership of the
underlying note, MERS' attempt to transfer the beneficial interest of a trust deed without
ownership of the underlying note is void under California law.
MERS' lack of ownership interest in a promissory note is a matter of decided case
law based on a record stipulation ofMERS' own lawyers. Specifically, in MERS v.
Nebraska, 270 Neb. 529 (2005), MERS filed a petition requesting a declaratory order
that MERS is not a "mortgage banker" under the Nebraska Mortgage Bankers and
Licensing Act, and therefore not subject to the license and registration requirements of
the Act. In describing MERS' function in the mortgage industry, MERS' counsel
expressly stated:
Mortgage lenders hire MERS to act as their nominee for mortgages, which
allows the lenders to trade the mortgage note and servicing rights on the
market without recording subsequent trades with the various register of
deeds throughout Nebraska.
To execute a MERS Mortgage, the borrower conveys the mortgage to
MERS, who is acting as a contractual nominee. MERS becomes the
recorded grantee, however, the lender retains the note and servicing right.
The lender can then sell that note and servicing rights on the market and
MERS records each transaction electronically on its files. When the
mortgage loan is repaid, MERS, as agent grantor, conveys the property to
the borrower. MERS represents that this system saves the lender and the
consumer the transaction costs that would be associated with manually
recording every transaction.
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Jd. at 534. "Subsequently, counsel for MERS explained that MERS does not take
applications, underwrite loans, make decisions on whether to extend credit, collect
mortgage payments, hold escrows for taxes and insurance, or provide any loan servicing
functions whatsoever. MERS merely tracks the ownership of the lien and is paid for its
services through membership fees charged to its members." !d.
Additionally, MERS, by its own admission, in the elements of its own contract
between MERS and its members entitled "Terms and Conditions," (which Plaintiffs can
amend to include if deemed necessary) expressly affirms "MERS shall have no rights
whatsoever to any payments made on account of such mortgage loans, to any servicing
rights related to such mortgage loans, or to any mortgaged properties securing such
mortgage loans." The "Terms and Conditions" further state that:
MERS and the Member agree that: (i) the MERS system is not a vehicle for
creating or transferring beneficial interests in mOltgage loan, (ii) transfers
of servicing interests reflected on the MERS System are subject to the
consent of the beneficial owner of the mortgage loans, and (iii) membership
in MERS or use of the MERS system shall not modify or supersede any
agreement between or among the members having interests in mortgage
loans registered on the MERS System.
In addition, MERS covenants that "MERS shall at all times comply with the instructions
of the holder of mortgage loan promissory notes. In the absence of contrary instructions
from the note holder, MERS shall comply with instructions from the Servicer shown on
the MERS System in accordance with the Rules and Procedures ofMERS."
The Court in Fontenot v. Wells Fargo Bank likewise recognized that MERS
cannot transfer an interest in property:
While it is true MERS had no power in its own right to assign the
note, since it had no interest in the note to assign, MERS did not
purport to act for its own interests in assigning the note. Rather, the
assigmnent of deed of trust states that MERS was acting as nominee for
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the lender, which did possess an assignable interest. A "nominee" is a
person or entity designated to act for another in a limited role-in
effect, an agent. (Born v. Koop (1962) 200 Cal.App.2d 519, 528 [19
Cal.Rptr. 379]; Cisco v. Van Lew (1943) 60 Cal.App.2d 575, 583-584
[141 P.2d 433].)
Fontenot v. Wells Fargo Bank, NA., 198 Cal. App. 4th 256,270 (2011) (emphasis
added). Here, MERS purports to assign the Note to U.S. Bank. (F AC ~ 34.) MERS
does not identify its principal. As it cannot act on its own, the Assignment is therefore
invalid.
b. "Colleen Irby" Lacked the Requisite Personal Knowledge and
Corporate and Legal Authority to Execute the Assignment
"Colleen Irby" is not an employee of MERS, but rather a "LS Section Manager"
at California Reconveyance Company. See Exhibit" A," attached hereto is a true and
correct copy of "Colleen Irby's" LinkedIn profile. LinkedIn is a social networking
website geared towards companies and industry professionals looking to make new
business contacts or keep in touch with previous co-workers, affiliates, and clients.
Within LinkedIn, members can create customizable profiles that detail employment
history, business accomplishments, and other professional accolades? "Colleen Irby's"
LinkedIn profile reveals that she has worked as an "LS Section Manager" for California
Reconveyance Company since March, 1984, over 27 years. Also, her profile indicates
she currently holds the "LS Section Manager" position with California Reconveyance
Company. Because "Colleen Irby" lacked the personal knowledge and corporate
authority to execute it, the Assigrunent is also factually impossible.
2. Substitution is Invalid
Also, around May 26, 2010 Defendants or their agents recorded a Substitution of
Trustee ("Substitution") in the San Diego County Recorder's Office, which was
purportedly executed May 25, 2010. Interestingly, the Assignment and were recorded
7 http://www.hudsonhorizons.comlOur-Company/lntemet-Glossary/Linkedln.htm
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the exact same day at the exact same time. Astonishingly, the Substitution was also
signed by "Colleen Irby" but this time as "Officer" of U.S. Bank, National Association
as trustee for W AMU Mortgage Pass through Certificate for WMAL T 2006-AR4 Trust
by JPMorgan Chase Bank, National Association, as attorney-in-fact. Assuming the
contents of the Assigmnent and Substitution are true (which Plaintiff disputes) on May
25,2010 "Colleen Irby" was "Officer" ofMERS and "Officer of Defendant "JPMorgan
Chase Bank, National Association." The Substitution purports that U.S. Bank
substitutes T.D. Service Co. for California Reconveyance Company. See Defendants'
RJN Exhibit "C." Plaintiff alleges that no such Substitution ever occurred based on the
following:
1. U.S. Bank, National Association as trustee for W AMU Mortgage Pass
through Certificate for WMAL T 2006-AR4 Trust is purporting to substitute
the Trustee under Plaintiffs Deed of Trust, yet U.S. Bank had not yet
acquired its purported interest in Plaintiffs Note and Deed of Trust as the
Assignment supra was executed and recorded the same day as, but not prior
to, the Substitution. Thus, U.S. Bank did not yet have the ability or
authority under the Deed of Trust to substitute the Trustee.
2. Even assuming U.S. Bank had been effectively assigned the interest in
Plaintiffs Deed of Trust before the Substitution (which it did not) clearly
"Colleen Irby" is not an employee of JPMorgan and therefore lacks the
personal knowledge and corporate authority as U.S. Bank's attorney-in-fact
to execute and effectuate the Substitution. In this case alone, on the same
day, "Colleen Irby" has executed title documents in two different capacities
for two different companies. Plaintiff alleges "Colleen Irby" is not an
employee of either MERS or JPMorgan, but rather a "LS Section Manager"
at California Reconveyance Company. See Exhibit "A."
The foregoing gives rise to the plausibility that U.S. Bank was never assigned the
beneficial interest in Plaintiffs Note and Deed of Trust and the plausibility that the T.D.
Service Co. was never substituted as Trustee under the Deed of Trust. Plaintiff alleges
Defendants recorded the foregoing invalid documents in the San Diego County
Recorder's office to give the imminent foreclosure the appearance of propriety.
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Notably, it was ultimately California Reconveyance Company who proceeded to initiate
the foreclosure process on the Property. More than coincidentally, "Colleen Irby" who
signed both the Assignment and the Substitution, in two different capacities and for two
different entities is actually an employee of California Reconveyance Company. See
Exhibit "A." This fact lends significant support to Plaintiffs position and gives rise to
the plausibility that the recorded documents are invalid and nothing more than attempt
to carry out the foreclosure of Plaintiffs Properry under the guise oflegality.
c. Plaintiff has Sufficiently Alleged an Actual Controversy Among the
Parties Sufficient to Maintain a Claim for Declaratory Relief
The foundation of Plaintiffs FAC is a request that the Court determine the rights
and obligations of the parties relative to the Property. Section 2201(a) of Title 28 of the
United States Code expressly permits a party to bring a cause of action for Declaratory
Relief: "In a case of actual controversy within its jurisdiction, ... any court of the
United States, upon the filing of an appropriate pleading, may declare the rights and
other legal relations of any interested party seeking such declaration, whether or not
further relief is or could be sought."
As to a controversy to invoke declaratory relief, the question is whether there is a
"substantial controversy, between parties having adverse legal rights, of sufficient
immediacy and reality to warrant the issuance of a declaratory judgment." Maryland
Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270 (1941). The United States Supreme
Court further explained:
A justiciable controversy is thus distinguished from a difference or dispute
of a hypothetical or abstract character; from one that is academic or
moot. .. The controversy must be definite and concrete, touching the legal
relations of parties having adverse legal interests .. .It must be a real and
substantial controversy admitting of specific relief through a decree of a
conclusive character, as distinguished from an opinion advising what the law
would be upon a hypothetical state of facts.
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Aetna Life Ins. Co. a/Hartford, Conn. v. Haworth, 300 U.S. 227, 240-241, 57
S.Ct. 461, 464 (1937) (citations omitted). Here, Plaintiff has alleged an actual case and
controversy in connection with Defendants' actions that are present, ongoing and
undoubtedly will continue in the immediate future. See Seattle Audubon Soc yv.
Moseley, 80 F3d 1401, 1405 (9th Cir. 1996) ("A declaratory judgment offers a means
by which rights and obligations may be adjudicated in cases brought by any interested
party involving an actual controversy that has not reached a stage at which either party
may seek a coercive remedy and in cases where a party who could sue for coercive relief
has not yet done so.") Therefore, Plaintiff has pled a "real and substantial" controversy
between the parties warranting declaratory relief.
D. Plaintiff has Sufficiently Plead a Negligence Claim Because
Defendants' Loan Modification Activities Exceeded Those of a
Conventional Lender
Defendants correctly contend that under California law, it is a general rule that "a
financial institution owes no duty of care to a borrower .... " Nymark v. Heart Fed.
Savings & Loan Assn., 231CaI.App.3d 1089, 1096 (1991). However, Nymark is limited
in its application. "A lender may owe a duty of care sounding in negligence to a
borrower when the lender's activities exceed those of a conventional lender . ... " Osei v.
Countrywide Home Loans, 692 F.Supp.2d 1240, 1249 (2010). One such instance is
when the lender goes, " ... beyond its role as a silent lender and loan servicer to offer an
opportunity to plaintiffs for loan modification and to engage with them concerning [a 1
trial period plan." Ansanelli v. JP Morgan Chase Bank, N.A., 2011 WL 1134451 at *7
(N.D. Cal.).
Here, Plaintiffs F AC contains factual allegations demonstrating the efforts
Defendants undertook to assist and process numerous loan modification applications
from Plaintiff. Specifically, on or around May, 2009, Ms. Naranjo went to JPMorgan's
corporate office in downtown San Diego to see about modifYing her Loan. (FAC ~ 23.)
There Ms. Naranjo met with a representative named "Eric" who supplied her with
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paperwork for a loan modification application and instructed her complete the
2 ' application and return it to JPMorgan, Id, Ms, Naranjo did as she was instructed, but
3 when she followed up with the status ofthe application JPMorgan informed her it had
4 been lost and that she would need to resubmit. (F AC ~ 23,) What she thought would be
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a short modification review process dragged on for 19 months as Ms, Naranjo
desperately tried to get a loan modification so that she may keep her home by submitting
and resubmitting applications countless times, (FAC ~ ~ 26-28,) Nearly, a yeaT later,
JPMorgan caused an appraiser to visit Ms, Naranjo's home to assess its value, (FAC ~
28,) Yet, Ms, Naranjo was never afforded a modification,
As a result of JPMorgan's negligent handling of her loan modification
applications Ms, Naranjo was never offered a loan modification for which she qualified,
Ultimately, she was forced to file bankruptcy to save her home from foreclosure, By
way of the foregoing, Plaintiff has alleged that Defendants went beyond their role as a
conventional, silent lender and loan servicer to offer an opportunity to Plaintiff for loan
modification, "This is precisely beyond the domain of a usual money lender:' See
Anaselli at *7 (internal quotations omitted), As a result, Plaintiffs factual allegations
demonstrate sufficient active participation to create a duty of care to Plaintiffs to support
a claim for negligence, Id, Thus, Defendants' Motion to Dismiss this claim should be
denied,
E. Plaintiff has Sufficiently Pled a Quasi Contract Claim
California courts agree that if Plaintiff has alleged that Defendants were unjustly
emiched to their detriment they are allowed to seek restitution under a Quasi Contract
claim, "[I]t is clear that California courts consistently permit a party to seek restitution
under a variety of theories, including quasi-contract and constructive trust." See McKell
v, Washington Mut" Inc" 142 Cal, App, 4th 1457, 1490 (2006), Louiseau v, VISA USA
Inc" WL 4542896 (S,D, Cal, 2010), "Under the law of restitution, "[a]n individual is
required to make restitution ifhe or she is unjustly emiched at the expense of another.
[Citations,] A person is emiched if the person receives a benefit at another's expense,
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[Citation.]" McBride v. Boughton, 123 Cal. App. 4th 379, 389 (citing First Nationwide
Savings v. Perry (1992) 11 Cal.AppAth 1657, 1662).
Defendants were unjustly emiched at Plaintiff's expense by accepting payments
that they had no authority to collect. The elements of an unjust emichment claim are the
"receipt ofa benefit and [the] unjust retention of the benefit at the expense of another."
Peterson v. Cellco Partnership, 164 Cal. App. 4th 1583, 1592 (citing Lectrodryer v.
SeoulBank, 77 Cal. App. 4th 723, 726 (2000)). Plaintiff alleges that she was not paying
her true creditor because there was no valid assignment that allowed the Defendant US.
Bank, or Defendant JPMorgan on its behalf, to collect on her debt obligation. (FAC 1111
60-64.) As such, the Defendants collected mortgage payments that they were not
entitled to at the expense of Plaintiff. Therefore, under the unjust enrichment theory,
Plaintiff has pled sufficient facts that Defendants are required to make restitution as a
result of collecting their mortgage payments when they had no autbority to do so.
F. Plaintiff has Sufficiently Pled a Claim for Violation of 15 U.S.c.
1692e ("FDCPA")
Despite the roundabout argument, Defendants essentially contend Plaintiff's
FDCPA claim fails because they are not "debt collectors." Importantly, Plaintiff is not
arguing that foreclosure is "debt collection" under the FDCP A. Quite simply, US.
Bank Trustee has violated the FDCPA in attempting to collect Plaintiff's debt. The term
'debt collector' means any person who uses any instrumentality of interstate commerce
or the mails in any business the principal purpose of which is the collection of debts, or
who regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another." 15 US.C. I 692(a)(6). Here, US. Bank as
Trustee, is in the business where its principal purpose is to collect Plaintiff's debt for the
benefit of the investors ofthe WAMU Trust. Further, Plaintiff alleges that US. Bank
Trustee attempted to collect payments. (FAC 11111, 68-69.) These collection activities
fall squarely within the FDCPA. 12 U.S.C. 1692e(2)(A)(5). Plaintiff is not advancing
a highly technical argument about the timing or nature of the debt collection activities;
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rather, Plaintiffs claims are based on the most based requirement under the FDCPA:
that a creditor collecting payment must be a true creditor entitled to collect payment.
Here, Plaintiff has alleged that US. Bank Trustee is not her true creditor and thus has no
legal authority to demand payment or take any other action. As a result, Defendants'
Motion to Dismiss this claim should be denied.
G. Plaintiff has Sufficiently Pled a Claim for Violation of 12 U.S.c. 2605
(RESPA)
Defendants first argue Plaintiff failed to send a Qualified Written Request
("QWR") as defined by 12 US.C. 2605. This argument ignores Plaintiffs QWR
(FAC Exhibit "C.") A QWR is a "written request fi'om the borrower (or agent of the
borrower) for information relating to the servicing of such loan." 12 U.S.C.
2605(e)(I)(A). A QWR must include a "statement of the reasons for the belief of the
borrower, to the extent applicable, that the account is in error or provides sufficient
detail to the servicer regarding other information sought by the borrower." 12 US.C.
2605(e)(I)(B)(ii). Here, on August, 8,2011, Plaintiff sent her QWR to JPMorgan via
US. Post Certified Mail. (FAC 'j[84.) Plaintiffs QWR explicitly stated information
allowing JPMorgan to identifY the name and account of the borrower including the loan
number, client name, and property address. (FAC 'j[85.) Plaintiff indicated she believed
her account was in error because of JPMorgan's deceptive servicing practices. !d.
Plaintiff specifically requested: I) a complete life of loan transactional history; 2) the
transaction codes for the software platfonn of the servicer; 3) the code definitions; 4) the
Key Loan Transaction history; 5) contact information for the holder in due course; 5)
copies of all collection notes; 6) itemized statement of the amount needed to fully
reinstate his Loan; 7) non-privileged communication regarding Plaintiffs account; and
8) P-309 screen shots of the system accounts. Id. Because this was a request from
Plaintiff borrower indicating her belief that her account was in error providing detailed
statements of the information sought, it is a QWR under 12 US.C. 2605.
In conformity with Dodd-Frank JPMorgan acknowledged receipt of the QWR
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within five days, but failed to provide a meaningful, substantive response within 30
days. (FAC ~ ~ 86, 87.) Thus, Defendant JPMorgan is in violation ofRESPA.
Defendants next argue Plaintiffs RESPA claim fails because she fails to plead
actual damages as a result of JPMorgan's RESPA violation. In direct contradiction,
Plaintiff has pled that as a direct and proximate result of Defendants' violation of 12
U.S.C. 2605, Plaintiff has suffered pecuniary damages, including over calculation and
overpayment of interest on her Loan, the costs associated with removing the cloud on
her property title, and attorneys' fees and costs. (FAC ~ ~ 90-93.) Moreover, 12 U.S.c.
2605(f)(1)(A) states: "Whoever fails to comply with any provision of this section shall
be liable to the borrower for each such failure in the following amounts ... an amount
equal to the sum of- any actual damages to the borrower as a result of the failure."
Thus, Plaintiff has sufficiently alleged damages.
H. Plaintiff has Sufficiently Pled a Claim for Violation of Bus. and Prof.
Code Section 17200, et seq. ("VCL")
First, Plaintiff has sufficiently alleged injury in order to have standing to bring her
UCL claim. Specifically, Plaintiff alleges she has suffered tangible injuries: her credit
has been damaged because of Defendants' failure to properly maintain Plaintiffs
mortgage accounts; Plaintiff is unable to refinance or sell her home; and the title to her
Property has been rendered unmarketable. (FAC ~ 123.) Moreover, Plaintiffs
allegations call into question whether U.S. Bank Trustee has any right or authority to
collect Plaintiffs mortgage payments. These injuries have caused Plaintiff monetary
damages and will result in the imminent loss of her Property. Had Plaintiff been able to
identifY her true creditor, the payments she made would have been properly credited to
her account, and she could have negotiated with her creditor instead of wasting time
negotiating with a party that does not hold any interest in his Note and Deed ofTrus!.
Plaintiff has suffered monetary and property loss as a result of Defendants' violations
under the Business and Professions Code and is therefore entitled to the remedies
sought. The Unfair Competition Law (UCL) is codified in California Business and
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Professions Code section 17200. The UCL prohibits any unlawfu1,
8
unfair, or
fraudulent' business practice. The UCL is written in the disjunctive, which means a
business act or practice can be alleged to be all or any of the three prongs. Berryman v.
Merit Property Management, Inc., 152 Cal.App. 4th 1544, 1554 (2007).
Here, Plaintiff alleges Defendants have engaged in practices that are: (1) unfair,
(2) likely to deceive, and (3) unlawful. (FAC 1]1]98-112.) Defendants conduct is
ongoing. (FAC 1]113.) Defendants have collected Plaintiffs' payments with no right to
do so. Furthermore, Plaintiffs have sufficiently stated facts constituting unlawful
business practices. Plaintiffs allege that Defendants engaged in an unlawful business
practices by violating FDCPA and RESPA. Defendants' aforementioned conduct is
unlawful and thus satisfies the "unlawful" prong of Cal. Bus. and Prof. Code section
17200.
Defendants also engaged in "fraudulent" business practices. To state a claim for a
fraudulent business practice under section 17200, Plaintiffs need only demonstrate that
"members of the public are likely to be deceived." Bank of the West v. Sup. Ct., 2
Cal.4th 1254, 1267 (1992) citing to Chern v. Bank of America, 15 Ca1.3d 866, 876
(1976). Defendants' business pattern, collecting on a debt they have no right to, is
extremely likely to deceive both Plaintiffs and the public.
I. Plaintiff is Owed an Accounting
"A cause of action for an accounting requires a showing that a relationship exists
between the plaintiff and defendant that requires an accounting, and that some balance is
due the plaintiff that can only be ascertained by an accounting." Teselle v. McLoughlin,
173 Cal. App. 4th 156, 179 (2009).
8 The violation of any federal, state or local law can serve as the predicate for violation of the
unlawful prong of the UCL. Munson v. Del Taco, Inc. 46 Cal. App. 4th 661, 676 (2009).
9 The fraudulent prong of the VeL is premised on whether the public is likely to be deceived.
Progressive West Ins. Co. v. Yolo County Superior Court 125 Cal. App. 4th 263, 284 (2005). It is
unlike common law fraud or deception. Id. The veL's focus is on the defendant's conduct, rather
than Plaintiff's damages, in service of the statute's larger purpose of protecting the general public
against unscrupulous business practices. In re Tobacco}!, 46 Ca1.4th 298, 311 (2009).
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Defendants in this case have held themselves out to be Plaintiffs true creditor(s)
and mortgage servicer. As a result of this purported relationship with Plaintiff,
Defendant has a fiduciary duty to Plaintiff to properly account for the payments made by
Plaintiff.
IO
Because of Defendants' aforementioned fraudulent conduct, Plaintiff has
paid Defendants her mortgage payments even though Defendants have no legal,
equitable, or pecuniary right to an interest in the Property. For that reason, these monies
are due to be returned to Plaintiff in full.
The amount of the money due from Defendants to Plaintiff is unknown to
Plaintiff and carmot be ascertained without an accounting of the receipts and
disbursements of the aforementioned transactions. The amount due to Plaintiff is to be
determined through discovery and proven at trial. Due to Defendants' fraudulent
behavior and misrepresentations, Plaintiff paid money to Defendants that was not owed
to them. Plaintiff stands to lose all of the money. Thus, at this preliminary stage of the
proceedings, Plaintiff has sufficiently alleged a cause of action for accounting. As such,
Defendants Motion to Dismiss this claim should be denied.
J. Plaintiff has Sufficiently Alleged Claims for Both Breach of Contract
and Breach of the Implied Covenant of Good Faith and Fair Dealing
With regard to the Breach of Contract claim, Defendants argue that because
Plaintiff has not set out in detail which payments were incorrectly applied or why, she
cannot maintain her breach of contract claim. Yet, Plaintiff has set forth "a short and
plain statement of the claim" under Fed. R. Civ. P. 8(a)(2), by alleging, in the
alternative, should the Court find that Defendants have a beneficial interest in Plaintiffs
Note and Deed of Trust, that Defendants breached the Deed of Trust by failing to credit
payments made by Plaintiff in the order of priority set forth in section 2 of the Deed of
Trust and attach the Deed of Trust as an Exhibit. (FAC 1]133; FAC Exhibit "E.")
!O Chasnik v. BAC Home Loans Servicing LF, et 01. No. CV 11-01324 DMG/JCGx (C.D. Cal.,
October 26, 2011) (denying motion to dismiss claim for Accounting and finding that "plaintiff alleges
that Defendants have a relationship with her because they 'held themselves out to be plaintiff's true
creditor and mortgage servicer' and accepted her loan payments for approximately 36 months when
they were not entitled to such payments. These allegations, accepted as true, establish a relationship
that would support an accounting. Plaintiff further alleges that she carmot ascertain the amount of
money that Defendants owe her without an accounting, thus satisfying the second prong."
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IlPP/)sllloN Ic) t)F" I' hNDAN Is' IPM()RCyANC RAsF<RANK'SANlltls RANK NAsMClllllN 1(\IIISMi<::"!
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Nothing more is required. Defendants argument that Plaintiff needs to include facts of
precisely which payment and when was not properly apportioned is unavailing;
especially in light of the fact Plaintiff has yet had the opportunity to engage in discovery
to reveal such factual matters.
Thus, under the applicable legal standard, Plaintiff has alleged a short plain
statement of the claim. These factual allegations will be further developed through the
discovery process. At this point, the Court should accept Plaintiffs existing factual
allegations as true and allow this claim to proceed.
Finally, there is an implied covenant of good faith and fair dealing in every
contract that neither party will do anything which will injure the right of the other to
receive the benefits of the agreement." Comunale v. Traders & GeneralIns. Co., 50
Cal. 2d 654, 658 (1958) (internal citation omitted). However, the implied covenant of
good faith and fair dealing supplements "the express contractual covenants, to prevent a
contracting party from engaging in conduct that frustrates the other party's rights to the
benefits of the agreement." Waller v. Truck Ins. Exchange, Inc., 11 Cal. 4th 1, 36, 44
Cal.Rptr.2d 370, 900 P.2d 619 (1995). The covenant thus prevents a contracting party
from taking an action which, although technically not a breach, frustrates the other
party's right to the benefit of the contract. Love v. Fire Ins. Exchange, 221 Cal.App.3d
1136, 1153,271 Cal.Rptr. 246 (1990)."
Plaintiff alleges that there exists the covenant of good faith and fair dealing
implied in every contract. To the extent that Plaintiff establishes that Defendants
breached the Deed of Trust by misapplying their payments, Plaintiff intends to establish
that such misapplication was done with the intent to frustrate the purpose of the contract.
Namely, one of the benefits of the contract was Plaintiffs right to gain equity in the
Property through mortgage payments that were to be applied according to section 2 of
the Deed of Trust. Instead, Defendants practice of applying improper fees and taxes to
Plaintiffs Loan caused their principle balance to grow and to over-accrue interest.
(FAC ~ ~ 144-145.) To the extent Plaintiff is able to prove that Defendants acted in "bad
faith," they may be entitled to punitive damages, emotional distress and attorneys' fees.
Archdale v. American Internat. Specialty Lines Ins. Co., 154 Cal.App.4th 449, 467, fn.
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19 (2007). Here, Plaintiffs detailed First Amended Complaint contains fact-specific
allegations showing in painstaking detail that Defendants' wrongfully sought to
foreclose on her home without having an enforceable security interest and when
challenged, have resorted to relying on an invalid Assignment of Deeds of Trust and
Substitution of Trustee. Further, Plaintiff has alleged that Defendants applied her
payments in violation of Section 2 of the Deed of Trust, falsely causing their principle
and interest to over-accrue. Plaintiff has therefore alleged sufficient facts to support a
claim for Breach of the Implied Covenant of Good Faith and Fair Dealing.
VI. OPPOSITION TO MOTION TO STRIKE ATTORNEY FEES
Under Federal Rule of Civil Procedure Rule 12(f), "[t]he court may strike from a
pleading an insufficient defense or any redundant, immaterial, impertinent, or
scandalous matter." Motions to strike are regarded with disfavor because of the policy
favoring resolution on the merits. See e.g. RDF Media Ltd. v. Fox Broadcasting Co.,
372 F.Supp.2d 556, 566 (C.D. Cal 2005); see also Bureerong v. Uvawas, 922
F.Supp.1450, 1478 (C.D. Cal 1996).
Here, Defendants move to strike Plaintiffs request for attorneys' fees because
"Plaintiff requests an award of attorney's fees without alleging an contractual or
statutory basis for such an award." (Motion, p. 18:2-3.)
Given that Motions to Strike under Fed. R. Civ. P. 12(f) are to be utilized to strike
from the pleadings "an insufficient defense or any redundant, immaterial, impertinent or
scandalous matter" Defendants have failed to establish their Motion to Strike on any of
the statutorily enumerated grounds. Also, Plaintiffs First Amended Complaint contains
fact specific allegations showing that Defendants violated 12 U.S.C. 2605 ("RESPA").
(FAC ~ ~ 81-93.) 12 U.S.C. 2605(f) plainly provides:
"Whoever fails to comply with any provision of this section
shall be liable to the borrower for each such failure in the
following amounts:
(3) Costs
In addition to the amounts under paragraph (1) or (2), in the
case of any successful action under this section, the costs of the
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action, together with any attorneys fees incurred in connection
with such action as the court may determine to be reasonable
under the circumstances (emphasis added)."
Therefore, contrary to Defendants' argument, it is clear that the factual allegations
contained in Plaintiffs First Amended Complaint provide a statutory basis for attorneys'
fees. As such, Defendant Motion to Strike Plaintiffs claim for attorneys' fees should be
denied.
VII. CONCLUSION
Plaintiffs First Amended Complaint is well-plead and allows the Court to infer
more than the mere possibility of misconduct; in fact, when the COUl1 accepts the factual
allegations as true the Court can make a "reasonable inference" that Defendants are
liable for the misconduct. Although Defendants do allege "factual" disputes in their
Motion, this is not sufficient to support this motion to dismiss. Therefore, Plaintiff
respectfully requests that the Court DENY Defendant's Motion in its entirety. To the
extent the Court dismisses any claim or allegation, Plaintiff requests the opportunity to
amend the First Amended Complaint to cure any deficiency, add additional causes of
action or rename any causes of action.
19 Dated: March 12, 2012
Respectfully Submitted,
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By: lsi Deborah P. Gutierrez
Gordon F. Dickson
Carmen Naranjo
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flPPI lsi I j( IN II \ 11,"",,"",I"'NI1AN I S' IPM/ IRhAN ('RASf< RANK'S ANI) I i <:: RANK N A s: MI \ III IN II \ IllsMI<::<::
1 PROOF OF SERVICE
2 Carmen Naranjo v. SBMC Mortgage, et al.
United States District Court- Southern District of California case no. llCV2229 L t'MVGx)
3
I am a resident of the State of California, over the age of eighteen years, and not a party
4 to the within action. My business address is Prosper Law Group, LLP, 6100 Center Drive, Suite
1050, Los Angeles, CA 90045. On March 12, 2012, I served the following document(s) by the
5 method indicated below:
6 OPPOSITION TO DEFENDANTS' JPMORGN CHASE BANK'S AND U.S. BANK, N.A.S
MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT
7
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[ 1
by transmitting via facsimile on this date the documents listed above to the facsimile
munbers set forth below. The transmission was completed before the close of business
and was rep0l1ed complete and without error.
[ ] by placing the document(s) listed above in a sealed envelope via U.S. mail with postage
10 thereon fully prepaid, in the United States Office at Los Angeles, California addressed as
set forth below. I am ~ e a d i l y familiar with the firm's practice of collection and
11 processing of correspondence for mailing. I am aware that on motion of the party served,
service is presumed invalid if the postal cancellation date on postage meter date is more
12 than one day after the date of deposit in this Declaration.
13 [Xl BY CMlECF ELECTRONIC DELIVERY: In accordance with the registered case
participants and in accordance with the procedures set forth at the United States District
14 Court, Central District of California website https:llecf.cacd.uscourts.gov.
15 I] by placing the document(s) listed above in a sealed envelope(s) and consigning it to an
express mail service for guaranteed delivery on the next business day following the date
16 of consignment to the address( es) set forth below. A copy of the consignment slip is
attached to this proof of service.
17
18
(See attached service list)
I declare under penalty of perjury under the laws of the United States that the above is
19 true and correct.
20 Executed on March 12, 2012, Los Angeles, California.
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PROOF OF SERVICE
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Service List
Carmen Naranjo v. SBMC Mortgage, et al.
United States District Court- Southern District of California case no. CVll-2229 L
(MyGx)
Attornev for Defendant JPMorgan Chase and U.S. Bank N.A. As Trustee for WAMU Mortgage
Pass-Through Certificates WMALT Series 2006-AR4 Trust
BRYAN CAVE LLP
3161 Michelson Drive, Suite 1500
Irvine, CA 92612
2
PROOF OF SERVICE
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IR01DOCS\520641.3
NOTICE OF MOTION TO DISMISS (11CV2229)
Stuart W. Price, California Bar No. 125918
Sean D. Muntz, California Bar No. 223549
sean.muntz@bryancave.com
Alexia M. Norge, California Bar No. 267101
norgea@bryancave.com
BRYAN CAVE LLP
Irvine, California 92612-4414
Telephone: (949) 223-7000
Facsimile: (949) 223-7100

JPMORGAN CHASE BANK, N.A., erroneously sued as
JPMorgan Chase; and U.S. BANK, N.A. as Trustee for
WaMu Mortgage Pass-Through Certificates WMALT Series
2006-AR4 Trust



Plaintiff,

vs.

SBMC MORTGAGE; JPMORGAN
FOR WAMU MORTGAGE PASS-
SERIES 2006-AR4 TRUST and Does 1 10,
inclusive,

Defendant(s).

Case No. 11CV2229L WVG

NOTICE OF MOTION AND
MOTION TO DISMISS
PLAINTIFFS FIRST
AMENDED COMPLAINT BY
DEFENDANTS

[Filed concurrently with
Memorandum of Points and
Authorities; Request for Judicial
Notice; and [Proposed] Order]


Date: April 1, 2012
Time: 10:30 a.m.
Courtroom: 14


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IR01DOCS\520641.3 2
NOTICE OF MOTION AND MOTION TO DISMISS (11CV2229)
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on, April 1, 2012 at 10:30 a.m., or as soon
thereafter as this matter may be heard, in Courtroom 14 of the above-entitled Court,
located at 940 Front Street, San Diego, California 92101-8900, Defendants
JPMORGAN CHASE BANK, N.A., erroneously sued as JPMorgan Chase, and U.S.
BANK, N.A. as Trustee for WaMu Mortgage Pass-Through Certificates WMALT
Series 2006-AR4 Trust (Defendants) will, and hereby do, move the Court for an
order dismissing the Complaint filed by Plaintiff Carmen R. Naranjo (Plaintiff),
pursuant to Federal Rule of Civil Procedure 12(b)(6). This Motion is made on the
following grounds:
1. Plaintiffs First Claim for Declaratory Relief against Defendants fails
because declaratory relief is not a claim, but a remedy. Plaintiff also fails to state
facts sufficient to establish the need for a declaration of the Court.
2. Plaintiffs Second Claim for Negligence against Defendants fails
because Plaintiff does not allege facts to establish Defendants have a duty beyond
the scope of a conventional role as a mortgage servicer.
3. Plaintiffs Third Claim for Quasi Contract against Defendants fails
because Plaintiff fails to state facts sufficient to constitute a claim.
4. Plaintiffs Fourth Claim for Violation of Fair Debt Collection Practices
against Defendants fails because efforts by a lender or servicer to collect on a loan
secured by a residence are not subject to the federal Fair Debt Collection Practices
Act (FDCPA). Plaintiff does not plead facts alleging Defendants attempted to
collect a debt, other than a debt secured by a deed of trust.
5. Plaintiffs Fifth Claim for Violation of 12 U.S.C. 2605 against
Defendants fails because Plaintiff fails to state facts sufficient to constitute a claim.
6. Plaintiffs Sixth Claim for Violation of the California Business &
Professions Code Section 17200 (UCL) against Defendants fails because Plaintiff
lacks standing to assert a UCL claim and Plaintiff does not allege specific facts to
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IR01DOCS\520641.3 2
NOTICE OF MOTION AND MOTION TO DISMISS (11CV2229)
constitute a claim.
7. Plaintiffs Seventh Claim for Accounting against Defendants fails
because the right to an accounting is not a cause of action, but a remedy. Plaintiff
also fails to state facts sufficient to establish the need for an accounting.
8. Plaintiffs Eighth Claim for Breach of Contract against Defendants fails
because Plaintiff fails to state a contract and facts sufficient to constitute a claim.
5. Plaintiffs Ninth Claim for Breach of Implied Covenant of Good Faith
and Fair Dealing against Defendants fails because Plaintiff fails to state a contract
and facts sufficient to constitute a claim.
This Motion is based on this Notice of Motion, the accompanying
Memorandum of Points and Authorities, the Request for Judicial Notice filed
concurrently herewith, all pleadings and records on file in this action, and all briefs,
papers, and arguments that the Court may consider.

Dated: December 5, 2011 Stuart W. Price
Sean D. Muntz
Alexia M. Norge
BRYAN CAVE LLP

By:
/s/Alexia M. Norge

Alexia M. Norge



515822.1

PROOF OF SERVICE

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PROOF OF SERVICE
I am employed in the County of Orange, State of California. I am over the
burta@bryancave.com.
On December 5, 2011, I served the foregoing document described as:
NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS FIRST
AMENDED COMPLAINT BY DEFENDANTS on all interested parties in this
action by placing [X] a true copy [ ] the original thereof enclosed in sealed
envelopes addressed as follows:
6100 Center Dr
Ste 1050
Attorney for Plaintiff
Telephone: (310) 893-6200
Facsimile: (310) 988-2930
[ ] BY CM/ECF NOTICE OF ELECTRONIC FILING: I caused said
document(s) to be served by means of this Courts electronic transmission of the
Notice of Electronic filing through the Courts transmission facilities, to the parties
and/or counsel who are registered CM/ECF Users set forth in the service list
[X] BY MAIL - As follows: I am readily familiar with the firms practice
of collection and processing correspondence for mailing. Under that practice it
would be deposited with U.S. Postal Service on that same day with postage thereon
fully prepaid at Irvine, California in the ordinary course of business. I am aware
that on motion of the party served, service is presumed invalid if postal cancellation
date or postage meter date is more than one day after date of deposit for mailing in
affidavit.
Executed on December 5, 2011, at Irvine, California.

/s/Ashley J. Burt
Ashley J. Burt

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IR01DOCS\521957.1
MEMORANDUM OF POINTS AND AUTHORITIES (11CV2229)
BRYAN CAVE LLP
Telephone: (949) 223-7000
Facsimile: (949) 223-7100

JPMORGAN CHASE BANK, N.A., erroneously sued as
JPMorgan Chase; and U.S. BANK, N.A. as Trustee for
WaMu Mortgage Pass-Through Certificates WMALT Series
2006-AR4 Trust



Plaintiff,

vs.

SERIES 2006-AR4 TRUST and Does 1 10,
inclusive,

Defendant(s).

Case No. 11CV2229L WVG

MEMORANDUM OF POINTS
AND AUTHORITIES IN
SUPPORT OF MOTION TO
DISMISS PLAINTIFFS FIRST
DEFENDANTS

[Filed concurrently with Notice of
Motion and Motion to Dismiss;
Request for Judicial Notice; and
[Proposed] Order]


Date: April 1, 2012
Time: 10:30 a.m.
Courtroom: 14


Case 3:11-cv-02229-L-WVG Document 12-1 Filed 12/05/11 Page 1 of 26
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IR01DOCS\521957.1 i
TABLE OF CONTENTS
Page
I. INTRODUCTION............................................................................................. 3
II. ALLEGATIONS FROM THE COMPLAINT AND JUDICIALLY
NOTICEABLE FACTS .................................................................................... 3
III. LEGAL STANDARDS FOR A MOTION TO DISMISS................................ 3
IV. ARGUMENT .................................................................................................... 3
A. Defendants And CRC May Foreclose On The Property. ....................... 3
1. The Foreclosing Party Need Not Own the Note........................... 3
2. CRC is the Substituted Trustee Under Plaintiffs Deed of
Trust. ............................................................................................. 3
B. Plaintiffs First Claim For Declaratory Relief Fails To State A
Claim Against Defendants. ..................................................................... 3
C. Plaintiffs Second Claim For Negligence Fails To State A Claim
Against Defendants. ................................................................................ 3
D. Plaintiffs Third Claim For Quasi Contract Fails To State A
Claim Against Defendants. ..................................................................... 3
E. Plaintiffs Fourth Claim for Violation of 15 U.S.C. 1692, Et
Seq. Is Barred By the Statute of Limitations. ......................................... 3
F. Additionally, Plaintiffs Fourth Claim For Violation of 15 U.S.C.
1692, Et Seq. Fails To State A Claim Against Defendants. ................ 3
G. Plaintiffs Fifth Claim For Violation of Bus. And Prof. Code
17200, Et Seq. Fails to State A Claim Against Defendants................. 3
1. Plaintiff Lacks Standing to Bring a UCL Claim.......................... 3
2. Plaintiffs Underlying UCL Claims Fail ...................................... 3
H. Plaintiffs Sixth Claim For Accounting Fails to State A Claim
Against Defendants. ................................................................................ 3
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IR01DOCS\521957.1 ii
V. PLAINTIFFS REQUEST FOR FEES SHOULD BE STRICKEN................. 3
VI. CONCLUSION................................................................................................. 3

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IR01DOCS\521957.1 iii
TABLE OF AUTHORITIES
Page
Cases
Alameda County Land Use Assn. v. City of Hayward,
38 Cal. App. 4th 1716 (1995) .................................................................................. 6
Animal Legal Defense Fund v. Mendes,
160 Cal. App. 4th 136 (2008) .......................................................................... 10, 11
Ashcroft v. Iqbal,
129 S. Ct. 1937 (2009)............................................................................................. 2
Batt v. City and County of San Francisco,
155 Cal. App. 4th 65 (2007) .................................................................................. 13
Bechtel v. Liberty Nat'l Bank,
534 F. 2d 1335, 1341, fn. 8 (9th Cir. 1976)............................................................. 3
Bell Atl. Corp. v. Twombly,
127 S. Ct. 1955 (2007)............................................................................................. 2
Berryman v. Merit Prop. Mgmt., Inc.,
152 Cal. App. 4th 1544 (2007) .............................................................................. 11
Branch v. Tunnell,
14 F.3d 449 (9th Cir. 1994) ..................................................................................... 3
Buckland v. Threshold Enterprises, Ltd.,
155 Cal. App. 4th 798 (2007) ................................................................................ 10
C.J.L. Constr., Inc. v. Universal Plumbing,
18 Cal. App. 4th 376 (1993) .................................................................................... 6
Cal. Med. Assn, Inc. v. Aetna U.S. Healthcare of Cal.,
94 Cal.App. 4th 151 (2001) ..................................................................................... 7
Cel-Tech Comms. v. L.A. Cellular Tel. Co,,
20 Cal. 4th 163 (1999) ........................................................................................... 12
Dimock v. Emerald Props. LLC,
81 Cal. App. 4th 868 (Cal. App. 2000).................................................................... 5
Distor v. U.S. Bank NA,
No. C 09-02086, 2009 WL 3429700 (N.D. Cal. Oct. 22, 2009) ............................. 8
Duggall v. G.E. Capital Comm. Servs., Inc.,
81 Cal. App. 4th 81 (2000) .................................................................................... 13
Durning v. First Boston Corp.,
815 F.2d 1265 (9th Cir. 1987) ................................................................................. 2
Galbraith v. County of Santa Clara,
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IR01DOCS\521957.1 iv
307 F.3d 1199 (9th Cir. 2002) ................................................................................. 3
Geist v. OneWest Bank,
No. C 10-1879, 2010 WL 4117504 (N.D. Cal. Oct. 19, 2010) ............................... 8
Gutierrez v. Wells Fargo Bank,
No. C 08-5586, 2009 WL 322915 (N.D. Cal. Feb. 9, 2009)................................... 8
Homestead Sav. v. Darmiento,
230 Cal. App. 3d 424 (Cal. App. 1991)................................................................... 5
I. E. Assoc. v. Safeco Title Ins. Co.,
39 Cal. 3d 281 (Cal. App. 1985).............................................................................. 5
In re Tobacco II Cases
207 P.3d 20 (2009) ................................................................................................ 11
Janis v. Cal. State Lottery Com.,
68 Cal. App. 4th 824 (1998) .................................................................................. 13
Jensen v. Quality Loan Serv. Corp,
702 F. Supp. 2d 1183 (E.D. Cal. 2010) ................................................................. 10
Johnson v. Riverside Healthcare Sys., LP,
534 F.3d 1116 (9th Cir. 2008) ................................................................................. 2
Kachlon v. Markowitz,
168 Cal. App. 4th 316 (Cal. App. 2008) ................................................................. 5
Khoury v. Malys of California, Inc.,
14 Cal. App. 4th 612 (1993) .................................................................................. 11
Lai v. Quality Loan Serv. Corp.,
No. CV 10-2308, 2010 WL 3419179 (C.D. Cal. Aug. 26, 2010) ........................... 9
Lal v. Am. Home Servicing, Inc.,
680 F. Supp. 2d 1218 (E.D. Cal. 2010) ................................................................... 9
Moeller v. Lien,
25 Cal. App. 4th 822 (Cal. App. 1994).................................................................... 5
Navarro v. Block,
250 F.3d 729 (9th Cir. 2001) ................................................................................... 2
Nool v. HomeQ Servicing,
653 F. Supp. 2d 1047 (E.D. Cal. 2009) ................................................................... 9
Nwoke v. Countrywide Home Loans, Inc.,
251 Fed. Appx. 363 (7th Cir. 2007) ........................................................................ 9
Nymark v. Heart Fed. Sav. & Loan Assn,
231 Cal. App. 3d 1089 (1991) ................................................................................. 7
People v. McKale,
25 Cal. 3d 626 (1979) ............................................................................................ 11
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IR01DOCS\521957.1 v
Perry v. Stewart Title Co.,
756 F.2d 1197 (5th Cir. 1985) ................................................................................. 9
Scripps Clinic v. Superior Court,
108 Cal. App. 4th 917 (2003) ................................................................................ 12
St. James Church of Christ Holiness v. Super. Ct.,
135 Cal. App. 2d 352 (1955) ................................................................................. 13
Stansfield v. Starkey,
220 Cal. App. 3d 59 (1990) ................................................................................... 12
Tarmann v. State Farm Mut. Auto. Ins. Co.,
2 Cal. App. 4th 153 (1991) .................................................................................... 12
Teselle v. McLoughlin,
173 Cal. App. 4th 156 (2009) ................................................................................ 13
Truong v. Nguyen,
156 Cal. App. 4th 865 (2007) .................................................................................. 7
Vasquez v. L.A. Cnty.,
487 F.3d 1246 (9th Cir. 2007) ................................................................................. 3
Verdier v. Super. Ct.,
88 Cal. App. 2d 527 (1948) ................................................................................... 13
Wilson v. Transit Authority,
199 Cal. App. 2d 716 (1962) ................................................................................... 6
Statutes
15 U.S.C. 1641(g)..................................................................................................... 1
15 U.S.C. 1692........................................................................................................ 11
15 U.S.C. 1692a(3) ................................................................................................... 8
15 U.S.C. 1692a(6) ................................................................................................... 8
15 U.S.C. 1692a(6)(F) .............................................................................................. 9
15 U.S.C. 1692c(d) ................................................................................................... 8
15 U.S.C. 1692k(d)................................................................................................... 8
15 U.S.C. 1692a-1692o .......................................................................................... 8
Bus. & Prof. Code 17200................................................................................ 1, 9, 11
Bus. & Prof. Code 17204........................................................................................ 10
Cal. Civ. Code 2924(a)(1) ........................................................................................ 5
Cal. Civ. Code 2924(a)(3) ........................................................................................ 5
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IR01DOCS\521957.1 vi
Cal. Civ. Code 2934.................................................................................................. 5
Cal. Civ. Code 2934a(b) ....................................................................................... 5, 6
Cal. Civ. Code 2934a(d) ........................................................................................... 5
Cal. Civ. Proc. Code 1021 ...................................................................................... 14

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IR01DOCS\521957.1 1
I. INTRODUCTION
Plaintiff Carmen R. Naranjo defaulted on an $825,000 home loan. She now
sues her mortgage servicer in an attempt to prevent foreclosure of the property
securing the loan.
Plaintiff asserts nine causes of action against JP Morgan Chase Bank, N.A.
(erroneously sued as JPMorgan Chase Bank) and U.S. Bank, N.A. as Trustee for
WaMu Mortgage Pass-Through Certificates WMALT Series 2006-AR4 Trust
(collectively Defendants).
Plaintiff does not plead viable claims.
Plaintiffs claims for negligence, quasi contract, breach of contract, breach of
implied covenant of good faith and fair dealing, violation of 15 U.S.C. 1692(e), et
seq., violation of 12 U.S.C. 2605, and violation of Bus. & Prof. Code 17200 are
not supported by allegations of fact sufficient to constitute a cause of action.
Plaintiffs claims for declaratory relief and accounting are remedies not
causes of action.
This Court should dismiss the First Amended Complaint in its entirety.
II. ALLEGATIONS FROM THE COMPLAINT AND JUDICIALLY
NOTICEABLE FACTS
On February 28, 2006, Plaintiff received an $825,000.00 loan. The loan is
secured by a Deed of Trust encumbering real property in La Jolla, California.
(Defendants Request for Judicial Notice (RJN), Exhibit A.) The Deed of Trust
lists SBMC Mortgage as the lender. (Id.) T.D. Service Co is listed as the Trustee,
and MERS is the nominee for the lender and its successors and assigns and the
beneficiary. (Id.)
On May 26, 2010, MERS assigned its rights under the Deed of Trust to
Defendant U.S. Bank National Association, as Trustee for WaMu Mortgage Pass-
Through Certificates WMALT 2006-AR4. (RJN, Exhibit B.)
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IR01DOCS\521957.1 2
On May 26, 2010, Defendant U.S. Bank National Association, as Trustee for
WaMu Mortgage Pass-Through Certificates WMALT 2006-AR4, by Defendant
JPMorgan Chase Bank, N.A., as attorney-in-fact substituted its rights under the
Deed of Trust to California Reconveyance Company (CRC). (RJN, Exhibit C.)
On May 26, 2010, CRC, as Trustee, signed a Notice of Default and Election
to Sell, noting that Plaintiff was $41,221.77 in arrears. (RJN, Exhibit D.)
On July 1, 2011, a Notice of Trustees sale was recorded, stating that the
estimated unpaid balance of the note was $989,468.00. (RJN, Exhibit E.)
III. PROCEDURAL HISTORY
Defendants filed a Motion to Dismiss Plaintiffs original Complaint, and it
was set for hearing in February 2012. Plaintiff did not oppose, but instead filed a
First Amended Complaint. Defendants Motion to Dismiss Plaintiffs original
Complaint is mooted by her First Amended Complaint (FAC), and the Court took
the February hearing date off calendar.
IV. LEGAL STANDARDS FOR A MOTION TO DISMISS
Motions to dismiss pursuant to Rule 12(b)(6) test the legal sufficiency of the
complaint. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 129
S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974
(2007)); see also Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121-22
(9th Cir. 2008) (A Rule 12(b)(6) dismissal may be based on either a lack of a
cognizable legal theory or the absence of sufficient facts alleged under a
cognizable legal theory.). Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice. Iqbal, 129 S. Ct.
at 1949; see also Twombly, 127 S. Ct. at 1959 (Mere labels and conclusions
and/or formulaic recitation[s] of the elements of a cause of action will not suffice
to overcome a motion to dismiss. (Citations omitted)). Rather, the [f]actual
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IR01DOCS\521957.1 3
allegations must be enough to raise a right to relief above the speculative level . . . .
Twombly, 127 S. Ct. at 1959.
On a motion to dismiss, the Court should disregard allegations that are
contradicted by exhibits to the complaint, or by documents referred to in the
complaint and considered pursuant to judicial notice. Durning v. First Boston
Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The Court may take judicial notice of
Plaintiffs loan documents and their contents, because they are referenced, and thus
deemed incorporated, in the FAC. See Branch v. Tunnell, 14 F.3d 449, 453-54 (9th
Cir. 1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307
F.3d 1199 (9th Cir. 2002).
A court may dismiss claims without granting leave to amend if amending the
complaint would be futile. See Vasquez v. L.A. Cnty., 487 F.3d 1246, 1258 (9th Cir.
2007) (Granting Vasquez leave to amend would have been futile, and we hold that
the district court did not err in preventing such futility.)
V. ARGUMENT
A. Defendants And CRC May Foreclose On The Property.
The crux of Plaintiffs FAC is that Defendants have no authority to go
forward with the foreclosure or collect payments because they have no interest in
the note. (FAC, 19, 20, 32, 36.)
1. The Foreclosing Party Need Not Own the Note.
The Gomes court rejected Plaintiffs claim. In Gomes, the borrower
complained that he [did] not know the identity of the Notes beneficial owner and
alleged that the person or entity who directed the initiation of the foreclosure
process . . . was neither the Notes rightful owner nor acting with the rightful
owners authority. 192 Cal. App. 4th at 1152. The borrower brought a court
action to determine whether the owner of the Note . . . authorized its nominee to
initiate the foreclosure process. Id. at 1154.
The Court of Appeal rejected the borrowers attempt to interject the courts
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IR01DOCS\521957.1 4
into Californias comprehensive non-judicial foreclosure statutes, which are
designed to provide the creditor/beneficiary with a quick, inexpensive and efficient
remedy against a defaulting debtor/trustor. Id.
The Gomes court explained: nowhere does the statute provide for a judicial
action to determine whether the person initiating the foreclosure process is indeed
authorized and held that there was no ground for implying such an action. Id. at
1155. The court observed that permitting such judicial intervention would
fundamentally undermine the non-judicial nature of the process and introduce the
possibility of lawsuits filed solely for the purpose of delaying valid foreclosures.
Id. The Court of Appeal rejected the use of the courts to challenge a foreclosing
partys authority to foreclose except possibly in limited circumstances in which
there is a specific factual basis. Id. at 1156 (emphasis in original).
Plaintiff claims her Property is unmarketable because the title has been
slandered and clouded. (FAC, 41.) Like the borrower in Gomes, Plaintiff here
seek to test whether the person initiating the foreclosure has the authority to do so
without presenting any competent, particularized factual allegations or evidence
Defendants lack[ ] authority to proceed with the foreclosure. Gomes, supra, 195
Cal. App. 4th at 1155-56. Plaintiffs claim should similarly be rejected.
2. CRC is the Substituted Trustee Under Plaintiffs Deed of
Trust.
Sections 2924-2924l of the California Civil Code set forth requirements for
conducting nonjudicial foreclosures. This statutory framework is intended to be
exhaustive and includes a multitude of rules relating to standing, notice, and right to
cure. Homestead Sav. v. Darmiento, 230 Cal. App. 3d 424, 432-33 (1991). The
comprehensive and exhaustive statutory scheme regulating trustee sales is
inconsistent with the judicial incorporation of other, unrelated provisions into the
proceedings. See Moeller v. Lien, 25 Cal. App. 4th 822, 834 (1994); see also I. E.
Assoc. v. Safeco Title Ins. Co., 39 Cal. 3d 281, 288 (1985) (holding the nonjudicial
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IR01DOCS\521957.1 5
foreclosure statute supplants common law as to the rights and duties of the parties to
a deed of trust).
The trustee named in the deed of trust has authority to initiate nonjudicial
foreclosure on the property upon the trustors default, resulting in a sale of the
property. Kachlon v. Markowitz, 168 Cal. App. 4th 316, 334 (2008). The trustee
under the deed of trust has authority to notice a default and foreclosure sale. See
Cal Civ. Code 2924(a)(1) & 2924(a)(3). In addition, the trustee also has the
authority to conduct the sale (hence the label, trustees sale). See Cal Civ. Code
2924(a)(3).
The beneficiary in the deed of trust may make a substitution of trustee . . . to
conduct the foreclosure and sale. Kachlon v. Markowitz, 168 Cal. App. 4th 316,
334 (2008); see also Cal. Civ. Code 2934; Dimock v. Emerald Props. LLC, 81 Cal.
App. 4th 868, 871 (2000). A substituted trustee is permitted to execute and record
the notice of default before the recording of the substitution of the trustee, provided
the substitution is executed before or concurrently with the notice of default. See
Cal Civ. Code 2934a(b). A recorded substitution of trustee is conclusive
evidence that the substituted trustee is authorized to act as the trustee under the
mortgage or deed of trust for all purposes from the date the substitution is executed
by the mortgagee, beneficiaries, or by their authorized agents. Cal. Civ. Code
2934a(d).
Here, on May 26, 2010, the beneficiary of the Deed of Trust on Plaintiffs
property, MERS, assigned its rights to Defendant US Bank, and on the same date,
US Bank, by Defendant JPMorgan Chase, as attorney-in-fact substituted CRC as the
trustee. (RJN, Exhibits B, C.) Thereafter, CRC caused a Notice of Default to be
recorded on the Property. (RJN, Exhibit D.) Accordingly, CRC is within its rights
to conduct the nonjudicial foreclosure. Cal Civ. Code 2934a(b).
Plaintiff also baselessly alleges Colleen Irby, had no corporate authority to
assign Plaintiffs Note. (FAC, 34.) Plaintiffs unsupported assumption regarding
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IR01DOCS\521957.1 6
Ms. Irby relate to her signing of a substitution. Her personal knowledge is
irrelevant.
B. Plaintiffs First Claim For Declaratory Relief Fails To State A
Claim Against Defendants.
A party seeking declaratory relief must plead facts, not conclusions of law,
and must show a controversy of concrete actuality as opposed to one which is
merely academic or hypothetical. See Wilson v. Transit Authority 199 Cal. App. 2d
716, 722-24 (1962). A real and substantial controversy must exist to plead
declaratory relief. Alameda County Land Use Assn. v. City of Hayward, 38 Cal.
App. 4th 1716, 1722 (1995).
Where issues raised in a claim for declaratory relief will be resolved by other
claims for relief, the claim for declaratory relief is unnecessary and serves no useful
purpose. C.J.L. Constr., Inc. v. Universal Plumbing, 18 Cal. App. 4th 376, 290
(1993) (finding that the availability of another form of adequate relief justifies
denial of declaratory relief).
Plaintiff alleges a controversy exists as to the respective rights of the parties
to this matter, including ownership of the Property. (Complaint, 49.) Plaintiff
seeks a determination of ownership of their Note and Deed of Trust, which is
addressed in her other causes of action. Accordingly, she does not plead a real and
substantial controversy. The claim should be dismissed.
C. Plaintiffs Second Claim For Negligence Fails To State A Claim
Against Defendants.
[T]o recover on a theory of negligence, Plaintiffs must prove duty, breach,
causation, and damages. Truong v. Nguyen, 156 Cal. App. 4th 865, 875 (2007).
The existence of a duty of care owed by a defendant to a plaintiff is a prerequisite
to establishing a claim for negligence. Nymark v. Heart Fed. Sav. & Loan Assn,
231 Cal. App. 3d 1089, 1095 (1991). [A]s a general rule, a financial institution
owes no duty of care to a borrower when the institutions involvement in the loan
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IR01DOCS\521957.1 7
transaction does not exceed the scope of its conventional role as a mere lender of
money. Id. at 1093 n.1, 1096 (A commercial lender is entitled to pursue its own
economic interests in a loan transaction [a] right [that] is inconsistent with the
obligations of a fiduciary which might otherwise imply a duty of care.).
Defendants are the mortgage servicer. Plaintiff does not plead facts
supporting a finding that Defendants conduct exceeded the scope of a conventional
role as a mortgage servicer. Thus, Plaintiffs claim fails.
D. Plaintiffs Third Claim For Quasi Contract Fails To State A Claim
Against Defendants.
[A]s a matter of law, a quasi-contract action for unjust enrichment does not
lie where [. . .] express binding agreements exist and define the parties rights. Cal.
Med. Assn, Inc. v. Aetna U.S. Healthcare of Cal., 94 Cal.App. 4th 151, 172 (2001).
The Deed of Trust is an express binding agreement that defines the parties
rights. In addition, the Assignment, Substitution, and Notice of Default all show
that Plaintiff cannot allege facts sufficient to state a claim for quasi contract or
unjust enrichment. (RJN, Exhibits A-E.) Plaintiff fails to state a claim.
E. Plaintiffs Fourth Claim for Violation of 15 U.S.C. 1692 Fails.
1. The claim is time barred.
A claim under the federal Fair Debt Collection Practices Act (FDCPA),
must be brought within one year from the date on which the violation occurs. 15
U.S.C. 1692k(d) (1977).
Plaintiff claims Defendants violated the FDCPA by attempting to collect on
the promissory note under false pretenses; namely that US Bank was assigned
Plaintiffs debt, when in fact they were not. (Complaint, 107.) The allegedly
false assignment was recorded on May 26, 2010. (RJN, Exhibit B.) The Complaint
was filed on September 26, 2011, which is more than one year past the acts that
allegedly violated the statute. Thus the Statute of Limitations bars Plaintiffs claim.

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IR01DOCS\521957.1 8
2. The claim is not properly pleaded.
To state a claim under the federal Fair Debt Collections Practices Act
(FDCPA), a plaintiff must specifically allege [the FDCPAs] elements[:]
(1) that [plaintiff] is a consumer within the meaning of 15 U.S.C. 1692a(3)
and 1692c(d); (2) that the debt arises out of a transaction entered into for personal
purposes; (3) that the defendant is a debt collector within the meaning of 15 U.S.C.
1692a(6); and (4) that the defendant violated one of the provisions of the FDCPA,
15 U.S.C. 1692a-1692o.
Gutierrez v. Wells Fargo Bank, No. C 08-5586, 2009 WL 322915, at *2 (N.D.
Cal. Feb. 9, 2009); see also Geist v. OneWest Bank, No. C 10-1879, 2010 WL
4117504, at *2 (N.D. Cal. Oct. 19, 2010); Distor v. U.S. Bank NA, No. C 09-02086,
2009 WL 3429700, at *5 (N.D. Cal. Oct. 22, 2009).
The plaintiff must allege specific facts demonstrating that defendants
violated the FDCPA[.] Gutierrez, 2009 WL 322915, at *2 (Plaintiff failed to state
an FDCPA claim with allegations that defendants `did unlawfully violate the Fair
Debt Collections Practices Act when plaintiff demanded they cease and desist all
collections until they provide[] plaintiff a bona fide validation of the debt[,]
because [p]laintiff fail[ed] to specifically allege any of the[] elements,.... fail[ed] to
state with specificity which defendants violated the FDCPA, whether they complied
with his request to cease collection efforts, and which specific provisions of the
FDCPA they violated.).
Efforts by a lender or servicer to collect on a loan secured by a residence are
not subject to the federal Fair Debt Collection Practices Act (FDCPA). Congress
enacted the FDCPA to protect[] debtors from improper practices of `debt
collectors; third parties who attempt to recoup debts owed to creditors. Nwoke v.
Countrywide Home Loans, Inc., 251 Fed. Appx. 363, 364-65 (7th Cir. 2007). The
FDCPAs regulation of third party debt collectors does not apply to lenders
attempting to collect on residential loans which w[ere] originated by such
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IR01DOCS\521957.1 9
[lender], or reach a lenders servicing company where the debt [] was not in
default at the time it was obtained by such [servicing company.] See 15 U.S.C.
1692a(6)(F) (1986); Lal v. Am. Home Servicing, Inc., 680 F. Supp. 2d 1218, 1224
(E.D. Cal. 2010).
Thus, [t]he law is well settled that FDCPAs definition of debt collector
does not include the consumers creditors, a mortgage servicing company, or any
assignee of the debt. Lal, 680 F. Supp. 2d at 1224, quoting Perry v. Stewart Title
Co., 756 F.2d 1197, 1208 (5th Cir. 1985); see also, e.g., Nool v. HomeQ Servicing,
653 F. Supp. 2d 1047, 1052-53 (E.D. Cal. 2009); Lai v. Quality Loan Serv. Corp.,
No. CV 10-2308, 2010 WL 3419179, at *2 (C.D. Cal. Aug. 26, 2010) (As a matter
of law, Plaintiffs claim must fail because none of the Defendant[] [lenders,
assignees, or servicers] are `debt collectors within the meaning of the act.).
Here, Defendants are not debt collectors within the meaning of the act. Id.
Plaintiffs claim must fail and should be dismissed, without leave to amend because
she cannot cure this defect.
F. Plaintiffs Fifth Claim for Violation of 12 U.S.C. 2605 (RESPA)
Fails to State a Claim Against Defendants.
Plaintiffs claim for violations of RESPAs provisions relating to QWRs fails
for multiple reasons.
1. Plaintiffs Correspondence With Defendants Did Not
Constitute A QWR.
RESPA has a specific definition of qualified written request. The statute
defines a qualified written request as a written correspondence, other than notice on
a payment coupon or other payment medium supplied by the servicer, that
includes, or otherwise enables the servicer to identify, the name and account of the
borrower . . . and . . . includes a statement of the reasons for the belief of the
borrower, to the extent applicable, that the account is in error or provides sufficient
detail to the servicer regarding other information sought by the borrower. 12
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IR01DOCS\521957.1 10
U.S.C. 2605(e)(1)(B). This provision of RESPA is intended to allow borrowers to
obtain information relating to the servicing" of their loans, and to correct any errors
that may have been made in conjunction with the servicing of the loans. Id.
A request must specify the particular errors or omissions in the account, along
with an explanation from the borrower of why he believes an error exists, in order to
qualify as a QWR. A list of unsupported demands for information is not sufficient.
A qualified written request must . . . include a statement of the reasons for the
belief of the borrower that the account is in error. Walker v. Equity 1 Lenders
Group, 2009 WL 1364430 *4-5 (S.D.Cal. 2009); Morilus v. Countrywide Home
Loans, Inc., 2007 WL 1810676 at *3 (E.D.Pa. June 20, 2007); Harris v. Am. Gen.
Fin., Inc., 2007 WL 4393818 *1 (10th Cir.2007). Plaintiff did not send the QWR as
an attempt to notify Defendants of some sort of account discrepancy. Plaintiff fails
to show the letter sent to Defendants constitutes a QWR. The Claim fails.
2. Plaintiff Fails To Adequately Plead Actual Damages Arising From
Defendants Alleged Failure To Respond.
Even if the correspondence Plaintiff claims was in fact a QWR (which
Defendants deny), Plaintiffs sole claim for relief under RESPA fails for the
separate reason that she has failed to adequately plead she has sustained any actual
damages.
To allege a claim under RESPA, Plaintiff was required to allege that
Defendants purported failure to adequately respond to his QWR resulted in actual
damages. 12 U.S.C. 2605(f)(1). Several courts have interpreted the actual
damages standard to require a showing of pecuniary damages. See, e.g., Copeland
v. Lehman Bros. Bank, FSB, 2010 U.S. Dist. LEXIS 73032, *3 (S.D. Cal., July 15,
2010); Molina v. Washington Mut. Bank, 2010 U.S. Dist. LEXIS 8056, *7 (S.D.
Cal., Jan. 29, 2010). This pleading requirement has the effect of limiting the cause
of action to circumstances in which plaintiff can show that a failure to respond or
give notice has caused them actual harm. Copeland, 2010 U.S. Dist. LEXIS
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IR01DOCS\521957.1 11
73032, at *3 (quoting Shepherd v. Am. Home Mort. Servs., Inc., 2009 U.S. Dist.
LEXIS 108523, *3 (E.D. Cal., Nov. 20, 2009)).
Conclusory allegations of damages are insufficient to meet the above
standards. See, e.g., Durland v. Fieldstone Mortgage Co., 2010 U.S. Dist. LEXIS
92087, **8-10 (S.D. Cal., Sep. 3, 2010) (Plaintiffs allegations consist only of
conclusory allegations; Plaintiff fails to allege specific facts sufficient to support
how [defendants] alleged failure to respond to Plaintiffs QWRs resulted in
pecuniary damages. As such, the Court finds that Plaintiffs claim for actual
damages pursuant to RESPA is not sufficiently pled.); Fullmer v. JPMorgan Chase
Bank, N.A., 2010 U.S. Dist. LEXIS 3551, *6 (E.D. Cal., Jan. 6, 2010) (A claim of a
RESPA violation cannot survive a motion to dismiss when the plaintiff does not
plead facts showing how the plaintiff suffered actual harm due to Defendants
failure to respond to a [QWR].); Saugstad v. Am. Home Mortgage Servicing, Inc.,
2010 U.S. Dist. LEXIS 76628, *8 (E.D. Cal., July 29, 2010) (Plaintiffs vague
claim that as a result of Defendants negligence, Plaintiff suffered and continues to
suffer harm . . . is insufficient to support a negligence claim based on violation of
RESPA.); Ash v. Onewest Bank, FSB, 2010 U.S. Dist. LEXIS 5768, *6 (E.D. Cal.,
Jan. 26, 2010); Rogers v. Cal. State Mortg. Co., Inc., 2010 U.S. Dist. LEXIS 6556,
*11 (E.D. Cal., Jan. 11, 2010).
Plaintiff does not allege she incurred actual damages as a result of
Defendants alleged failure to respond to her purported QWR.
3. Plaintiff Fails To Plead A Pattern Or Practice For Statutory
Damages.
Plaintiff is entitled to statutory damages only if she establishes some pattern
or practice of non-compliance with RESPA. Lal v. American Home Servicing,
Inc., 2010 WL 225524, at *4 (E.D. Cal. Jan. 19, 2010) (rejecting claim of pattern
of noncompliance in the absence of facts and granting motion to dismiss); see also
12 U.S.C. 2605(f)(1)(B).
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IR01DOCS\521957.1 12
Plaintiff fails to state facts to constitute a pattern and practice.
The claim should be dismissed.
G. Plaintiffs Sixth Claim For Violation of Bus. And Prof. Code
17200, Et Seq. Fails to State A Claim Against Defendants.
Plaintiff also sues for alleged violation of Bus. & Prof. Code 17200 (also
known as the Unfair Competition Law or UCL). Plaintiff lacks standing to
bring a UCL claim because she have not suffered injury in fact. Each underlying
UCL claim also fails.
1. Plaintiff Lacks Standing to Bring a UCL Claim
A private plaintiff must have suffered injury in fact and lost money or
property as a result of the defendants conduct in order to have standing to bring a
UCL claim. Bus. & Prof. Code 17204. Because remedies for individuals under
the UCL are restricted to injunctive relief and restitution, the import of the
requirement is to limit standing to individuals who suffer losses of money or
property that are eligible for restitution. Buckland v. Threshold Enterprises, Ltd.,
155 Cal. App. 4th 798, 817 (2007). A plaintiff must show a distinct and palpable
injury, one that is concrete and particularized and not conjectural or
hypothetical. Buckland, 155 Cal. App. 4th at 814. [I]njury must be economic, at
least in part, for a plaintiff to have standing under Business and Professions Code
section 17204. Animal Legal Defense Fund v. Mendes, 160 Cal. App. 4th 136, 147
(2008).
Here, Plaintiff alleges she was injured in that a cloud has been placed upon
title to Plaintiffs property. (FAC, 123.) Where property has not been foreclosed
on, the plaintiff has not lost money or property and therefore does not have
standing to bring a UCL claim. Jensen v. Quality Loan Serv. Corp, 702 F. Supp. 2d
1183, 1199 (E.D. Cal. 2010) (holding that plaintiff lacks UCL standing where he
has not alleged that he has lost any property, only that he will lose his personal
residence if a non-judicial foreclosure occurs). Plaintiffs allegation regarding a
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IR01DOCS\521957.1 13
cloud on her title thus does not constitute an allegation of loss of money or property.
Furthermore, even if Plaintiff were to lose her property, she cannot show it
was as a result of Defendants actions. Plaintiffs failure to repay her loan led to the
foreclosure proceedings. Plaintiff lacks standing to bring a UCL claim.
2. Plaintiffs Underlying UCL Claims Fail
A claim for violation of Bus. & Prof. Code 17200 can be based on unfair,
unlawful, or fraudulent business practices. Bus. & Prof. Code 17200. A plaintiff
must plead a 17200 claim with particularity. See Khoury v. Malys of California,
Inc., 14 Cal. App. 4th 612, 619 (1993); People v. McKale, 25 Cal. 3d 626, 635
(1979) (holding purely conclusionary allegations of 17200 violations are
insufficient to withstand demurrer).
a. Plaintiff Does Not Plead an Unlawful Act
Plaintiff bases her UCL claims on unlawful violations of 15 U.S.C. 1692,
et seq. and of 12 U.S.C. 2605. (FAC, 98-99). A violation of another law is a
predicate for stating a cause of action under the UCLs unlawful prong. Berryman
v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1554 (2007). However,
Plaintiff must plead facts to support the underlying statutory violation. Id. She does
not, and as discussed above, her claims for violation 15 U.S.C. 1692 et seq. 12
U.S.C. 2605 fail. Plaintiff alleges Defendants violated several other laws, but does
not plead facts to support those assertions.
b. Plaintiff Does Not Plead a Fraudulent Act
Plaintiff alleges Defendants committed fraudulent acts with respect to
mortgage servicing and related matters. Plaintiff makes conclusory statements, but
alleges no facts to support her claim. (FAC, 100-110.) The California Supreme
Courts decision in In re Tobacco II Cases confirms that the UCL imposes an
actual reliance requirement under the fraudulent prong. 207 P.3d 20, 39 (2009).
To satisfy the actual reliance requirement, private plaintiffs must allege that the
defendants actions were an immediate cause of the injury producing conduct. Id.
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IR01DOCS\521957.1 14
When the pleaded facts do not naturally give rise to an inference of causation the
plaintiff must plead specific facts affording an inference the one caused the other[].
Animal Legal Defense Fund, 160 Cal. App. 4th at 146.
A plaintiff must plead fraud with particularity, pleading facts which show
how, when, where, to whom, and by what means the [alleged misrepresentations]
were tendered. Stansfield v. Starkey, 220 Cal. App. 3d 59, 73 (1990). When a
party pleads fraud against a corporation, as the plaintiff in this case, the already
heightened pleading standard is further heightened. Plaintiff must allege the names
of the persons who made the allegedly fraudulent representations, their authority to
speak, to whom they spoke, what they said or wrote, and when it was said or
written. Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal. App. 4th 153, 157
(1991).
Plaintiff does not plead the elements of fraud with particularity for any of the
alleged conduct of Defendants, including failing to name any individual who made
representations. (See generally, FAC). Furthermore, Plaintiffs theories regarding
Defendants lack of ability to foreclosure and executing documents without legal
authority fail for lack of particularity.
Finally, Plaintiff has not pled reliance. She cannot, because if she acted in
reliance upon the recorded foreclosure notices, she would have cured her default.
Plaintiff cannot show she was injured by Defendants conduct.
c. Plaintiff Does Not Plead An Unfair Act
Unfair conduct under the UCL has been commonly defined as conduct that
offends an established public policy or. . . is immoral, unethical, oppressive,
unscrupulous or substantially injurious to consumers. Scripps Clinic v. Superior
Court, 108 Cal. App. 4th 917, 939 (2003). When determining whether the
challenged conduct is unfair within the meaning of the unfair competition law. . .,
courts may not apply purely subjective notions of fairness. Id. at 941; see also Cel-
Tech Comms. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 187 (1999).
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IR01DOCS\521957.1 15
Plaintiff has not alleged a factual basis for a claim that Defendants committed
unfair business practices. Her conclusory allegations are insufficient to support
the claim. Plaintiffs claims for violations of the UCL fail.
H. Plaintiffs Seventh Claim For Accounting Fails to State A Claim
Against Defendants.
An action for an accounting . . . is a proceeding in equity for the purpose of
obtaining a judicial settlement of the accounts of the parties in which proceeding the
court will adjudicate the amount due, administer full relief and render complete
justice. Verdier v. Super. Ct., 88 Cal. App. 2d 527, 530 (1948) (internal citations
omitted).
The right to an accounting is not a cause of action, but a remedy. See Batt v.
City and County of San Francisco, 155 Cal. App. 4th 65, 82 (2007) ([an accounting
is] not an independent cause of action but merely a type of remedy) (internal
quotations omitted); Duggall v. G.E. Capital Comm. Servs., Inc., 81 Cal. App. 4th
81, 95 (2000) (The right to an accounting is derivative and depends on the validity
of a plaintiffs underlying claims.). Thus, [a] right to an accounting is derivative;
it must be based on other claims. Janis v. Cal. State Lottery Com., 68 Cal. App.
4th 824, 833-834 (1998); see also St. James Church of Christ Holiness v. Super. Ct.,
135 Cal. App. 2d 352, 359 (1955) (An accounting will not be accorded with respect
to a sum that a plaintiff seeks to recover and alleges in his complaint to be a sum
certain.). A suit for an accounting will not lie where it appears from the complaint
that none is necessary or that there is an adequate remedy at law. Id.
A cause of action for an accounting requires a showing that a relationship
exists between the plaintiff and defendant that requires an accounting and that some
balance is due the plainti ff that can only be ascertained by an accounting. Teselle
v. McLoughlin, 173 Cal. App. 4th 156, 179 (2009) (emphasis added).
Though Plaintiff alleges Defendants owe her money, her basis is that
Defendants owe her a credit for her mortgage payments for the past five years
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because Defendants had no right to collect it. (Complaint, 119.) The Deed of
Trust, Assignment, Substitution, and Notice of Default all show that Plaintiff cannot
allege facts sufficient to state a claim for accounting. (RJN, Exhibits A-E.) Thus,
Plaintiffs claim should be dismissed with prejudice because she cannot cure the
defect in this claim.
I. Plaintiffs Eighth and Ninth Claims For Breach of Contract and
Breach of Covenant of Good Faith and Fair Dealing Fail to State A
Claim Against Defendants.
Plaintiffs FAC has new claims for breach of contract and breach of covenant
of good faith and fair dealing. Plaintiff vaguely alleges that Defendants breached
the loan agreement, but do not allege any facts to support this claim.
The standard elements of a claim for breach of contract are: (1) the contract,
(2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach,
and (4) damage to plaintiff therefrom. Wall St. Network, Ltd. v. New York Times
Co., 164 Cal. App. 4th 1171, 1178 (2008) (internal quotes omitted). If the claim is
based on a written contract, the terms must be set out verbatim in the body of the
complaint or a copy of the written instrument must be attached and incorporated by
reference. Otworth v. S. Pac. Transp. Co., 166 Cal. App. 3d 452, 459 (1985)
(upholding dismissal of breach of contract claim because complaint made no
mention of whether the contract was written or oral, and did not set forth the alleged
contracts terms); see also Nichols v. Greenpoint Mortg. Funding, Inc., 2008 U.S.
Dist. LEXIS 87644, *10 (C.D. Cal. 2008) (dismissing breach of contract claim
where Plaintiff fails to set forth any provisions of the Notes that were breached).
Every contract contains an implied covenant of good faith and fair dealing
that neither party will do anything which will injure the right of the other to receive
the benefits of the agreement. Kransco v. Am. Empire Surplus Lines Ins. Co., 23
Cal. 4th 390, 400 (2000) (quotations omitted). Thus, [t]he implied covenant of
good faith and fair dealing protects only the parties right to receive the benefit of
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their agreement. Foley v. Interactive Data Corporation, 47 Cal. 3d 654, 698, fn. 39
(1988) (emphasis added).
The Court may not find a breach of the implied covenant based upon
conduct permitted by the parties express agreement. A defendants conduct in
collecting payments and foreclosing upon default is permitted under the note and
deed of trust, and cannot serve as the factual predicate for a claim under the implied
covenant. See Carma Developers, Inc. v. Marathon Dev. Co., Inc., 2 Cal. 4th 342,
374 (1992). [T]he implied covenant will only be recognized to further the
contracts purpose; it will not be read into a contract to prohibit a party from doing
that which is expressly permitted by the agreement itself. Wolf v. Walt Disney
Pictures and Television, 162 Cal. App. 4th 1107, 1120 (2008); see also Third Story
Music v. Waits, 41 Cal. App. 4th 798 (1996) (Courts are not at liberty to imply a
covenant directly at odds with a contracts express grant of discretionary power
except in those relatively rare instances when reading the provision literally would,
contrary to the parties clear intention, result in an unenforceable, illusory
agreement.).
Here, Plaintiff does not identify any specific provisions in the Note or Deed
of Trust that any of Defendants purportedly breached, which is an essential element
of a breach of contract claim. Plaintiff identifies Section 2 of the Deed of Trust, but
states no facts constituting a breach. Plaintiffs allegations are vague and
conclusory.
Plaintiff alleges that Defendants breached the agreement and the implied
covenant of good faith and fair dealing by failing to apply Plaintiffs payments, but
alleges no factual allegation to support the claim. Plaintiff has not identified any
monthly payment that was not properly applied. (See FAC, 135, 145-146.)
Plaintiffs claims fail.
VI. PLAINTIFFS REQUEST FOR FEES SHOULD BE STRICKEN
A party cannot recover attorneys fees unless specifically provided by a
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statute or an agreement between the parties. Cal. Civ. Proc. Code 1021. Here,
Plaintiff requests an award of attorneys fees without alleging any contractual or
statutory basis for such an award. Her unsupported request for attorneys fees
should be stricken. See Tapley v. Lockwood Green Engineers, Inc., 502 F.2d 559,
560 (8th Cir. 1974); Whittlestone, Inc., No. 09-16353, 2010 WL 3222417.
VII. CONCLUSION
Plaintiffs First Amended Complaint should be dismissed with prejudice.
Plaintiffs allegations do not state facts necessary to maintain any of the stated
claims. For these reasons, Defendants Motion to Dismiss should be granted.
Amendment cannot cure these defects or create a claim where none exists. Leave to
amend should not be granted.

Dated: December 5, 2011 Stuart W. Price
Sean D. Muntz
Alexia M. Norge
BRYAN CAVE LLP

By:
/s/Alexia M. Norge

Alexia M. Norge

erroneously sued as JPMORGAN CHASE
and U.S. Bank, N.A. as Trustee for WaMu


515822.1

PROOF OF SERVICE

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PROOF OF SERVICE
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT BY
DEFENDANTS on all interested parties in this action by placing [X] a true copy [ ]
the original thereof enclosed in sealed envelopes addressed as follows:
6100 Center Dr
Ste 1050
Telephone: (310) 893-6200
Facsimile: (310) 988-2930
affidavit.

/s/Ashley J. Burt
Ashley J. Burt


IR01DOCS521965.1

REQUEST FOR JUDICIAL NOTICE (11CV2229)

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Plaintiff,

vs.

SERIES 2006-AR4 TRUST and Does 1
10, inclusive,

Defendants.

Case No. 11CV2229 L WVG

REQUEST FOR JUDICIAL NOTICE
IN SUPPORT OF MOTION BY
DEFENDANTS TO DISMISS FIRST
PLAINTIFF

[Filed concurrently with Notice of
Motion and Motion to Dismiss;
Memorandum of Points and Authorities;
and [proposed] Order]


Date: April 1, 2012
Time: 10:30 a.m.
Courtroom: 14

BRYAN CAVE LLP
Telephone: (949) 223-7000
Facsimile: (949) 223-7100

Defendants JPMORGAN CHASE BANK, N.A., erroneously sued as JPMorgan
Chase, and U.S. BANK, N.A. as Trustee for WaMu Mortgage Pass-Through
Certificates WMALT Series 2006-AR4 Trust

IR01DOCS521965.1
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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on April 1, 2012, at 10:30 a.m., or as soon
thereafter as this matter may be heard, in Courtroom 14 of the above-entitled Court,
located at 940 Front Street, San Diego, California 92101-8900, Defendants
JPMORGAN CHASE BANK, N.A., erroneously sued as JPMorgan Chase, and U.S.
BANK, N.A. as Trustee for WaMu Mortgage Pass-Through Certificates WMALT
Series 2006-AR4 Trust (collectively Defendants) will, and do, respectfully request
that the Court take judicial notice, pursuant to Federal Rule of Evidence 201 and
Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), of the documents attached to
this Request for Judicial Notice as Exhibits A through E.
Exhibit A: Deed of Trust recorded in the Official Records of San Diego
County on February 28, 2006, as document No. 2006-0137353, encumbering the
real property located at 5331 Calumet Avenue, La Jolla, California 92037 (the
Property).
Exhibit B: Assignment of Deed of Trust recorded in the Official Records of
San Diego County on May 26, 2010, as document No. 2010-0262853, regarding the
Property.
Exhibit C: Substitution of Trustee recorded in the Official Records of San
Diego County on May 26, 2010, as document No. 2010-0262854, regarding the
Property.
Exhibit D: Notice of Default and Election to Sell under Deed of Trust
recorded in the Official Records of San Diego County on May 26, 2010, as
document No. 2010-0262855, regarding the Property.
Exhibit E: Notice of Trustees Sale recorded in the Official Records of San
Diego County on July 1, 2011, as document No. 2011-0334304, regarding the
Property.
Defendants make this request in support of Defendants Motion to Dismiss
the First Amended Complaint of Plaintiff Carmen R. Naranjo. This request is based

IR01DOCS521965.1

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on the attached Amended Memorandum of Points and Authorities, all pleadings and
records on file in this action, and such briefing, papers and argument as may be
permitted in this matter.

Dated: December 5, 2011
Stuart W. Price
Sean D. Muntz
Alexia M. Norge
BRYAN CAVE LLP

By: /s/Alexia M. Norge
Alexia M. Norge


IR01DOCS521965.1
1

MEMORANDUM OF POINTS AND
AUTHORITIES (11CV2229)

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Documents not physically attached to the complaint may be considered by the
Court on a Rule 12(b)(6) motion if the complaint refers to such document, the
document is central to plaintiffs claims, and there is no question concerning the
authenticity of the document. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994);
Chambers v. Time Warner, Inc., 282 F.3d 147, 153 n.3 (2d Cir. 2002).
Pursuant to Federal Rule of Evidence 201, Defendants JPMORGAN CHASE
BANK, N.A., erroneously sued as JPMorgan Chase, and U.S. BANK, N.A. as
Trustee for WaMu Mortgage Pass-Through Certificates WMALT Series 2006-AR4
Trust (collectively Defendants), therefore requests that the Court take judicial
notice of the following documents in consideration of Defendants concurrently-
filed Motion to Dismiss First Amended Complaint under Rule 12(b)(6) of the
Federal Rules of Civil Procedure:
Exhibit A: Deed of Trust recorded in the Official Records of San Diego
County on February 28, 2006, as document No. 2006-0137353, encumbering the
real property located at 5331 Calumet Avenue, La Jolla, California 92037 (the
Property).
Exhibit B: Assignment of Deed of Trust recorded in the Official Records of
San Diego County on May 26, 2010, as document No. 2010-0262853, regarding the
Property.
Exhibit C: Substitution of Trustee recorded in the Official Records of San
Diego County on May 26, 2010, as document No. 2010-0262854, regarding the
Property.
Exhibit D: Notice of Default and Election to Sell under Deed of Trust
recorded in the Official Records of San Diego County on May 26, 2010, as
document No. 2010-0262855, regarding the Property.
Exhibit E: Notice of Trustees Sale recorded in the Official Records of San
Diego County on July 1, 2011, as document No. 2011-0334304, regarding the

IR01DOCS521965.1

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Property.
Under Federal Rule of Evidence 201, a fact is judicially noticeable when it is
capable of accurate and ready determination by resort to sources whose accuracy
cannot reasonably be questioned. Documents not physically attached to the
complaint may be considered by the Court on a Rule 12(b)(6) motion if the
complaint refers to such document, the document is central to the plaintiffs claims,
and there is no question concerning the authenticity of the document. Branch v.
Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith
v. County of Santa Clara, 307 F.3d 1119, 1121 (9th Cir. 2002). The Court may
consider writings not attached to a complaint even if a plaintiff omits reference to
such writings when the plaintiffs claims are predicated on such documents.
Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998), superseded by statute
on other grounds.
The Courts consideration of the attached documents does not convert
Defendants Rule 12(b)(6) motion into a motion for summary judgment. Branch v.
Tunnell, supra, 14 F.3d 449 at 454; Schwarzer, Tashima & Wagstaffe, Federal Civil
Procedure Before Trial (2005), 9:212.1b.
The conditions for considering the attached documents are met here. The
loan documents of Plaintiff Carmen R. Naranjo (Plaintiff) are referenced
throughout the Complaint, they are central to Plaintiffs claims against Defendants,
and there are no questions concerning their authenticity. Exhibits A through E were
recorded in the Official Records of San Diego County. The Court may take judicial
notice of the documents as official records not subject to reasonable dispute and
capable of accurate and ready determination.
Further, it would be exceedingly difficult, if not impossible, for the Court to
assess the validity of Plaintiffs claims without considering Exhibits A through E, as
they establish each parties rights and obligations under Plaintiffs loan documents
and Plaintiffs standing to bring this action.

IR01DOCS521965.1

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Accordingly, Defendants respectfully requests that the Court take judicial
notice of the attached Exhibits A through E, in considering Defendants Motion to
Dismiss the First Amended Complaint.

Dated: December 5, 2011
Stuart W. Price
Sean D. Muntz
Alexia M. Norge
BRYAN CAVE LLP

By: /s/Alexia M. Norge
Alexia M. Norge


515822.1

PROOF OF SERVICE

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PROOF OF SERVICE
REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION BY
DEFENDANTS TO DISMISS FIRST AMENDED COMPLAINT BY
PLAINTIFF on all interested parties in this action by placing [X] a true copy [ ]
the original thereof enclosed in sealed envelopes addressed as follows:
6100 Center Dr
Ste 1050
Telephone: (310) 893-6200
Facsimile: (310) 988-2930
affidavit.

/s/Ashley J. Burt
Ashley J. Burt

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Gordon F. Dickson, Esq., SBN 136857
Deborah P. Gutierrez, Esq., SBN 240383
6100 Center Drive, Suite 1050
Los Angeles, California 90045
Telephone: (310) 893-6200
Facsimile: (310) 988-2930
Carmen R. Naranjo
Plaintiff,
vs.
JPMORGAN CHASE BANK, N.A.;
U.S. BANK, N.A. AS TRUSTEE FOR
W AMU MORTGAGE PASS-
SERIES 2006-AR4 TRUST; and Does 1
- 10, inclusive,
Defendants.
FIRST AMENDED COMPLAINT
Case No. l1CV2229 L (WVGx)
FOR:
1. DECLARATORY RELIEF
[28 U.S.C. 2201,2202]
2. NEGLIGENCE
3. QUASI CONTRACT
4. VIOLATION OF 15 U.S.C.
1692, ET SEQ.
5. VIOLATION OF 12 U.S.C.
2605
6. VIOLATION OF
CALIFORNIA BUSINESS
AND PROFESSIONS CODE
SECTION 17200, ET SEQ.
7. ACCOUNTING
8. BREACH OF CONTRACT
9. BREACH OF THE IMPLIED
COVENANT OF GOOD
FAITH AND FAIR DEALING
DEMAND FOR JURY TRIAL
-1-
1 TABLE OF CONTENTS
2 I. STATEMENT OF THE CASE ......................................................................................... 3
3 II. JURISDICTION, VENUE, AND P ARTIES ........................................................................ 4
4 III. FACTUAl, ALLEGATIONS ........................................................................................... 6
5 IV. FIRST CAUSE OF ACTION -DECLARATORY RELIEF: To DETERMINE STATUS OF
6 DEFENDANTS' CLAIMS [28 U.S.C. 2201, 2202] ................................................. 12
7 V. SECOND CAUSE OF ACTION - NEGLIGENCE ............................................................. 14
8 VI. THIRD CAUSE OF ACTION - QUASI CONTRACT ........................................................ 15
9 VII. FOURTH CAUSE OF ACTION - VIOLATION OF 15 U.S.C. 1692, ET sEQ ................ 17
10 I VIII. FIFTH CAUSE OF ACTION- VIOLATION OF 12 U.S.C. 2605 ............................. 19
I
11 IX. SIXTH CAUSE OF ACTION - Bus. AND PROF. CODE SECTION 17200, ET sEQ ........... 21
12 X. SEVENTH CAUSE OF ACTION - ACCOUNTING .......................................................... 25
13 XI. EIGHTH CAUSE OF ACTION - BREACH OF CONTRACT ............................................. 26
14 XII. NINTH CAUSE OF ACTION - BREACH OF THE IMPLIED COVENANT OF GOOD FAITH
15 AND FAIR DEAl,ING ................................................................................................. 27
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FIRST AMENDED COMPLAINT -2-
1 COMPLAINT
2 COMES NOW Plaintiff Carmen R. Naranjo ("Plaintiff' or "Ms. Naranjo"), by
3 and through her counsel, for her Complaint against Defendants JPMorgan Chase Bank,
4 N.A. (in its capacity as purported mortgage servicer) (hereinafter "JPMorgan") and
5 U.S. Bank, N.A. as Trustee for the W AMU Pass-Through Certificates WMAL T Series
6 2006-AR4 Trust (in its capacity as purported beneficiary and assignee of Plaintiffs
7 Deed of Trust (hereinafter "U.S. Bank"), (collectively "Defendants"), pleads as follows:
8 I.
9
STATEMENT OF THE CASE
1. On February 21, 2006, Plaintiff executed a promissory note ("Note") in
10 favor of Countrywide, in the amount of$825,000.00 secured by a deed of trust ("Deed
11 of Trust" or "Mortgage") for the finance of real property located at 5331 Calumet
12 Avenue, La Jolla, California 92037. Subsequently, Defendants attempted but failed to
13 assign or transfer Plaintiffs Note to U.S. Bank. As such, Defendants have no authority
14 to collect on the Note and enforce the Deed of Trust. Despite Defendants' failure to
15 perfect a security interest, U.S. Bank and its agents have attempted to collect on this
16 Note and enforce the Deed of Trust with the knowledge that they have no legal right to
17 do so. In addition to violating the Fair Debt Collection Practices Act and the Real Estate
18 Settlement Procedures Act, Defendants knowingly concealed their lack of an
19 enforceable security interest by fabricating and recording false documents in the San
20 Diego County Recorder's Office. Defendants' conduct is not only unfair and fraudulent,
21 but also constitutes a violation of California Penal Code section 532(f)( a)( 4).1 Through
22 this action, Plaintiff seeks damages resulting from Defendants' unlawful conduct and a
23 declaratory judgment establishing that Defendants have failed to substantiate a perfected
24 security interest in the Note and Deed of Trust (collectively referred to as "Loan").
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1 Defendants' recording ofthe Assignment of Deed of Trust violates Cal. Penal Code section
532(f)(a)(4), which prohibits any person from filing a document related to a mortgage loan transaction
with the county recorder's office which that person knows to contain a deliberate misstatement,
misrepresentation, or omission.
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Simply put, Defendants have no legal, equitable, or pecuniary interest in the Note and
Deed of Trust.
2. In the alternative, if the Court finds that any of the Defendants have an
enforceable security interest in either the Note or Deed of Trust, Plaintiff maintains that
Defendants have breached Section 2 of the Deed of Trust and the Implied Covenant of
Good Faith and Fair Dealing, by charging improper fees and miscalculating and
misapplying payments to offset both principal and interest, in addition to the statutory
provisions listed above.
II. JURISDICTION, VENUE, AND PARTIES
3. This Court has original jurisdiction over the claims in this action based on
28 U.S.C. 1331,1343,2201,2202,15 U.S.C. 1692, 12 U.S.C. 2605, and 42
U.S.C. 1983 which confer original jurisdiction on federal district courts in suits to
address the deprivation of rights secured by federal law.
4. This Court also has supplemental jurisdiction over the pendant state law
claims because they form a part of the same case or controversy under Article III of the
United States Constitution, pursuant to 28 U.S.C. 1367.
5. This Court has original jurisdiction over the claims in this action based on
28 U.S.C. 1332 which confers original jurisdiction on federal district courts in suits
between diverse citizens that involve an amount in controversy in excess of$75,000.00.
6. The unlawful conduct, illegal practices, and acts complained of and alleged
in this Complaint were all committed in the Southern District of California and involved
real property that is located in the Southern District of California. Therefore, venue
properly lies in this District, pursuant to 28 U.S.C. 1391(b).
7. Plaintiff is now, and at all times mentioned herein, an individual residing in
the County of San Diego, in the State of California. At all times relevant to this action,
Plaintiff has owned real property commonly known as 5331 Calumet Avenue, La Jolla,
California 92037 (the "Property"), further described as Assessor's Parcel Number 415-
032-01, with the following description:
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4 8.
LOT 42 OF SAN GOLD POINT IN THE CITY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
THEREOF NO 3216, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, APRIL
14, 1955.
At all relevant times, JPMorgan Chase Bank, N.A. is a National
5 Association organized under the laws of the United States with its main office in
6 Columbus, Ohio.
7 9. At all relevant times, U.S. Bank, National Association, as Trustee for the
8 WAMU Mortgage Pass-through Certificates WMALT Series 2006-AR4 Trust, is a
9 national banking association with its main office in Minnesota.
10 10. Plaintiff is ignorant of the true identity and capacity of Defendants
11 designated as Does 1 - 10, but will amend the Complaint when their identities have been
12 ascertained according to proof within the time permitted. However, Plaintiff alleges on
13 information and belief, that each and every Doe Defendant is in some manner
14 responsible for the acts and conduct of the other Defendants, and were, and are,
15 responsible for the injuries, damages, and harm incurred by Plaintiff. Plaintiff further
16 alleges on information and belief that each such designated Defendant acted, and acts, as
17 the authorized agent, representative, and associate of the other Defendants in doing the
18 things alleged herein.
19 11. Whenever reference is made in this Complaint to any act of any
20 Defendant(s), that allegation shall mean that each Defendant acted individually and
21 jointly with the other Defendants.
22 12. Any allegation about acts of any corporate or other business Defendant(s)
23 means that the corporation or other business did the acts alleged through its officers,
24 directors, employees, agents, and/or representatives while they were acting within the
25 actual or ostensible scope of their authority.
26 13. At all relevant times, each Defendant committed the acts, caused or
27 directed others to commit the acts, or permitted others to commit the acts alleged in this
28 Complaint. Additionally, some or all of the Defendants acted as the agent of the other
1 Defendants, and all of the Defendants acted within the scope of their agency if acting as
2 an agent of the other.
3 14. At all relevant times, each Defendant knew or realized that the other
4 Defendants were engaging in or planned to engage in the violations of law alleged in
5 this Complaint. Knowing or realizing that the other Defendants were engaging in or
6 planning to engage in unlawful conduct, each Defendant nevertheless facilitated the
7 commission of those unlawful acts. Each Defendant intended to and did encourage,
8 facilitate, or assist in the commission of the unlawful acts, and thereby aided and abetted I
9 the other Defendants in the unlawful conduct.
10 III. FACTUAL ALLEGATIONS
11 15. On or about February 21, 2006, Carmen R. Naranjo executed a Note and
12 Deed of Trust (hereinafter "Mortgage" or "Deed of Trust") in favor of 5MBC Mortgage
13 secured by the subject property.
14 16. On information and belief, Plaintiff alleges that shortly after the origination
15 of her Loan, 5MBC Mortgage sold her Loan to another entity or entities. Those entities
16 are currently unknown but will be identified through discovery.
1 7 17. Plaintiff alleges that these unknown entities and Defendants were involved
18 in an attempt to securitize his Mortgage into the W AMU Mortgage Pass-through
19 Certificates WMAL T Series 2006-AR4 Trust ("WAMU Trust"). See Exhibit "A," a
20 securitization flow chart depicting the securitization process. In order for Plaintiffs
21 Mortgage to be a part of the W AMU Trust, the entities involved were required to follow
22 various agreements and established laws, including the Trust Agreement that governed
23 the creation of the Trust. Plaintiff alleges the entities involved in the attempted
24 securitization of Plaintiff s Loan failed to adhere to the requirements of the Trust
25 Agreement necessary to properly assign the mortgage loan into the Trust. As a result,
26 Plaintiffs Loan was not assigned to the W AMU Trust and therefore is not part of the
27 Trust res. This fatal defect renders Defendants third-party strangers to the underlying
28 debt obligation without the power or right to demand payment, declare default, negotiate
1 her Loan, and foreclose on her Property. Although Defendants are aware of this fact,
2 they have and continue to act as if they have authority to demand payment, declare
3 default, negotiate his Loan, and foreclose on her Property. Plaintiff specifically disputes
4 this fact.
5 18. Plaintiff s information and belief is based on (1) a title report and analysis
6 of the Property's county records; (2) direct written and oral communication with
7 Defendants; (3) her counsel's research, experience, and extensive review of depositions,
8 case law, amicus briefs, correspondence, news articles, reports, complaints by Attorneys
9 General from various states, and publicly available securitization documents and
10 practices; (4) a review of the purported "Assignment of Deed of Trust" signed by
11 "Colleen Irby"; and (5) an audit of U.S. Bank's filings with the Securities and Exchange
12 Commission ("SEC"), including U.S. Bank's 424B5 Prospectus and Pooling and
13 Servicing Agreement ("PSA").
14 19. Plaintiff s information and belief is further based on a Securitization Audit
15 of her Note and Mortgage that Ms. Naranjo commissioned in order to help her
16 determine (1) the owner of her Loan, and (2) the secured or unsecured status of her Note
17 and Mortgage.
18 20. Based on the findings of the Audit, Plaintiff believes and thereon alleges
19 her Note was supposed to be properly securitized as a mortgage-backed security that is
20 "pooled" together into a trust pool. The trust is regulated by New York and Delaware
21 Trust Laws. Plaintiff alleges her Note was not securitized and that the W AMU Trust
22 has no legal, equitable, or monetary interest in her Promissory Note such that it can
23 demand payment from her. Further, after conducting the Securitization Audit of Ms.
24 Naranjo's chain of title and U.S. Bank's PSA, it was determined that Ms. Naranjo's
25 . Note and Mortgage were not properly conveyed into the WAMU Trust (ifit was ever
26 properly formed) because (1) the beneficial interest in Plaintiffs Note and Mortgage
27 were not effectively assigned, granted, or transferred to the Sponsor or Depositor (who
28 were supposed to convey Plaintiffs Note and Mortgage into the Trust) prior to the
1 Closing Date of the Trust and, (2) U.S. Bank failed to perfect the title to Ms. Naranjo's
2 Note and Mortgage by not strictly following the requirements of the PSA and other law,
3 regulations, and agreements that govern the W AMU Trust. As purported Trustee of the
4 W AMU Trust, U.S. Bank cannot take action which is not authorized by the agreements
5 that created and govern the Trust. U.S. Bank's attempt to acquire an interest in
6 Plaintiffs Loan after the Closing Date indicated in the PSA, is an ultra vires act that is
7 in violation of the Trust Agreement (i.e., the PSA).
8 21. Plaintiff alleges her Loan was not properly assigned to the W AMU Trust
9 on or before May 30, 2006, the "Closing Date" as set forth in the Trust Agreement. The
10 Closing Date is the date by which all of the notes and mortgages had to be transferred
11 into the W AMU Trust in order for the mortgage loan to be a part of the trust res. See
12 Exhibit "B", attached hereto is a true and correct copy of sections 2.04 and 2.05 of the
13 Trust Agreement containing this and other important requirements.
14 22. Conscious they lacked any beneficial interest in Plaintiff sLoan,
15 Defendants deceptive acts began on or around May 2009 when Plaintiff sought to
16 modify her loan to make the monthly payment more affordable.
17 23. On or around May 2009, Ms. Naranjo, under the belief JPMorgan had the
18 authority to negotiate her loan, personally went to JPMorgan's downtown San Diego
19 corporate office in an effort to negotiate a loan modification. At the corporate office
20 Ms. Naranjo was met by "Eric" who supplied her with a request for loan modification
21 packet. Within a day, Ms. Naranjo filled out the packet in its entirety and submitted all
22 of the necessary financial information referenced in the packet.
23 24. About a month later, on or around June 2009, Ms. Naranjo followed up
24 with JPMorgan to ascertain the status of her loan modification application. JPMorgan's
25 representative informed her that her loan modification application paperwork had been
26 lost and required her to complete and return the entire application again. Stunned, Ms.
27 Naranjo did as she was instructed and completed another loan modification application
28 and again submitted her financial information.
1 25. On or around August 2009, Plaintiff suffered unforeseen financial hardship
2 when she was suddenly hospitalized giving birth to her three-month premature child.
3 Simultaneously, due to her absence, her labor-intensive business collapsed. Shortly
4 thereafter, the interest rate of her adjustable rate mortgage increased thereby causing her
5 monthly mortgage payment to surge. Between her piling medical expenses, lost income
6 from her failed business, and her increased monthly mortgage payment Ms. Naranjo
7 knew that if she was not able to obtain a loan modification soon she would not be able to
8 keep her home.
9 26. Shortly thereafter, on or around September 2009, Plaintiff could no longer
10 afford her monthly mortgage obligation on the Property.
11 27. Desperate to keep her property Plaintiff continually tried to follow-up with
12 JPMorgan regarding a loan modification to no avail. For over 19 months Ms. Naranjo
13 submitted countless loan modification applications to JPMorgan franticly trying to work
14 an affordable loan modification.
15 28. Finally, almost a year and a halflater, on or around January 11,2011,
16 JPMorgan sent an appraiser to Ms. Naranjo's property to assess its value. About a
17 month later, on or around February 2,2011, JPMorgan sent a second appraiser to Ms.
18 Naranjo's property.
19 29. Ms. Naranjo became excited thinking that the presence of an appraiser must
20 mean that JPMorgan was ready to propose a long-awaited loan modification. For the
21 next month Ms. Naranjo followed up with JPMorgan regarding a loan modification, but
22 no determination was made.
23 30. On or around March 3,2011, feeling she had no options left, Ms. Naranjo
24 filed Chapter 7 Bankruptcy, affirming her home and car, but discharging all of her other
25 unsecured debts. On or about June 3, 2011 she received a complete discharge.
26 31. Almost immediately thereafter, on or about June 30, 2011, Ms. Naranjo
27 received a Notice of Trustee's Sale informing her that the Property would be sold on
28 July 29,2011.
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1 32. During the entire loan modification process, Plaintiff relied on the
2 representations made by Defendants that JPMorgan had the power to collect payments
3 and modify her Loan. Since then, Plaintiff has learned that none of the Defendants had
4 or have any legal or corporate authority to collect on her Loan, service the Loan, or
5 make derogatory credit reports against her credit.
33. Defendants attempted to cover-up their failure to properly assign, transfer,
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8 Assignment of Deed of Trust.
9 34. On or around May 25,2010, Colleen Irby, a purported "Officer" for
10 MERS, executed the purported AssignJnent of Deed of Trust (hereinafter
11 "Assignment"). The Assignment alleges that for "value received" Mortgage Electronic
12 Registration Systems, Inc. ("MERS") granted, assigned, and transferred to U.S. Bank,
13 National Association as trustee for W AMU Mortgage Pass Through Certificate for
14 WMALT 2006-AR4 Trust all beneficial interest in the Deed of Trust, together with "the
15 money due and to become due thereon with the interest, and all rights accrued or to
16 accrue under said Deed of TrustlMortgage." Plaintiff alleges that no such transfer ever
17 occurred and that Colleen Irby had no corporate authority to assign Plaintiffs Note and
18 Mortgage to U.S. Bank and was not an employee ofMERS.
19 35. On August 8, 2011, in an effort to verify and validate her debt, Ms. Naranjo
20 sent JPMorgan a Qualified Written Request ("QWR") letter pursuant to Real Estate
21 Settlement Procedures Act, 12 U.S.C. 2605(e), in which she requested that the
22 purported servicer (JPMorgan) provide, among other things, a true and correct copy of
23 the original Note and a complete life of the loan transactional history. See Exhibit "C",
24 attached hereto is a true and correct copy of Plaintiffs Qualified Written Request. The
25 Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act,,)2
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2 The Dodd-Frank Act was signed into law on July 21, 2010. The Act amended several statutes
including 12 U.S.C. 2605. The Act amended 12 U.S.C. 2605 by shortening the deadline to
acknowledge a QWR from fifteen days to only five days and shortening the substantive response
deadline from sixty days to thirty days. There is a fifteen day extension allowed if the borrower is
notified of the extension and the reasons for the delay. In addition, the Dodd-Frank Act requires a
1 requires that the servicer provide an acknowledgement of receipt of the QWR within
2 five days of receipt and to substantively respond within thirty business days of receipt.
3 Although JPMorgan properly acknowledged the QWR within five days of receipt, in
4 violation of the Dodd-Frank Act JPMorgan failed to provide a substantive response
5 within 30 days. Specifically, even though the QWR contained the borrower's name,
6 loan number, and property address, JPMorgan's substantive response concerned the
7 same borrower, but instead supplied information regarding an entirely different loan and
8 property.
9 36. Defendants' failure to provide any information regarding Plaintiffs Note at
10 issue in this case supports Plaintiffs allegations that her Note was not properly
11 transferred to U.S. Bank such that Defendants can enforce Plaintiffs obligation and/or
12 collect Plaintiff s mortgage payments.
13 37. Plaintiff does not dispute that she owes money on her mortgage obligation.
14 Rather, Plaintiff disputes the amount owed and seeks the Court's assistance in
15 determining who the true creditor is of his Note and Deed of Trust.
16 38. Ms. Naranjo made payments based on the allegedly improper, inaccurate,
17 and fraudulent representations of Plaintiff s account.
18 39. Plaintiffs information and belief is based on (1) a title report and analysis
19 of the Property's county records; (2) direct written and oral communication with
20 Defendants; (3) her counsel's research, experience, and extensive review of depositions,
21 case law, amicus briefs, correspondence, news articles, reports, complaints by Attorneys
22 General from various states, and publicly available securitization documents and
23 practices; (4) a review of the purported "Assignment of Deed of Trust" signed by
24 "Colleen Irby"; and (5) an audit of U.S. Bank's filings with the Securities and Exchange
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servicer of a federally related mortgage to "respond to a QWR within 10 business days to a request
from a borrower to provide the identity, address, and other relevant contact information about the
owner or assignee of the loan." H.R. 4173 section 1463(a). The Dodd-Frank Act provides available
damages to an individual for failing to respond to a QWR request. Available damages were increased
from actual damages plus $1,000.00 to actual damages plus $2000.00. The Dodd-Frank Act also
prohibits various servicing practices and made a few changes to TILA.
1 Commission ("SEC"), including U.S. Bank's 424B5 Prospectus and Pooling and
2 Servicing Agreement ("PSA").
3 40. Plaintiffs credit and credit score were severely damaged.
4 41. The title to Ms. Naranjo's home has been slandered, clouded, and its
5 salability has been rendered unmarketable.
6 42. Plaintiff does not know who the current beneficiary of her Note and
7 Mortgage actually is, such that she is now subject to double financial jeopardy.
8 43. Plaintiff has offered to and is ready, willing, and able to unconditionally
9 tender her obligation.
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10 FIRST CAUSE OF ACTION - DECLARATORY RELIEF: TO DETERMINE
11 STATUS OF DEFENDANTS' CLAIMS [28 U.S.C. 2201,2202]
12 [Against All Defendants and Doe Defendants]
13 44. Plaintiff hereby incorporates by reference each and every one of the
14 preceding paragraphs as if the same were fully set forth herein.
15 45. Section 2201(a) of Title 28 of the United States Code states:
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In a case of actual controversy within its jurisdiction, except
with respect to Federal taxes other than actions brought under
section 7428 of the Internal Revenue Code of 1986, a
proceeding under section 505 or 1146 of title 11, or in any civil
action involving an antidumping or countervailing duty
proceeding regarding a class or kind of merchandise of a free
3 Case law makes clear that Plaintiff is only required to allege a credible offer of tender, not
actually tender. Alicia v. GE Money Bank, No C 09-00091 SBA, 2009 WL 2136969 at *3 (N.D. Cal.
July 16,2009) (" ... debtor must allege a credible tender of the amount of the secured debt ... ").
Moreover, tender is not required when the owner's action attacks the validity of the underlying debt
because the tender would constitute an affirmation of the debt. Sacchi v. Mortgage Electronic
Registration Systems, Inc., No. CV 11-1658 AHM, 2011 WL 2533029 at *16 (C.D.Cal June 24, 2011)
(emphasis added) citing Onofrio v. Rice, 55 Cal. App. 4th 413,424 (1997); Stockton v. Newman, 148
Cal. App. 2d 558, 564 (1957). See also Foulkrod v. Wells Fargo Financial California Inc., No. CV 11-
732-GHK (AJWx) (C.D. Cal. May 31. 2011) (" ... requiring plaintiff to tender the amount due on his
loan at this time would be illogical and inequitable given that he disputes that Wells Fargo has any
rights under the loan."). In light of the fact that Plaintiff contests the legitimacy of the Defendants'
claim to the mortgage payments, it would be illogical and inequitable to require Plaintiff to actually
tender the amount given that Plaintiff disputes whether Defendants have any rights under the loan. See
Onofrio v. Rice, 55 Cal. App. 4th 413,424 (1997).
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trade area country (as defined in section 516A( )(10) of the
Tariff Act of 1930), as detennined by the administering
authority, any court of the United States, upon the filing of an
aRpropnate pleading, may declare the rights and other legal
rerations of any interested party seeking such declaration,
whether or not further relief IS or could be sought. Any such
declaration shall have the force and effect of a final judgment or
decree and shall be reviewable as such.
46. Section 2202 of Title 28 of the United States Code states:
Further necessary or proper relief based on a declaratory
judgment or decree may be granted, after reasonable notice and
hearing, against any adverse 4 party whose rights have been
detennmed by such Judgment.
47. Plaintiff alleges that U.S. Bank does not have a secured or unsecured legal,
10 equitable, or pecuniary interest in the lien evidenced by the Deed of Trust and that its
11 purported assignment has no value since the Deed of Trust is wholly unsecured.
12 48. On May 25,2010, Defendants claimed they were assigned and transferred a
13 secured enforceable interest in, and a perfected lien against the Plaintiff s Note, Deed of
14 Trust, and Property.
15 49. Thus, the competing allegations made by Plaintiff and Defendants, above,
16 establish that a real and actual controversy exists as to the respective rights of the parties
17 to this matter, including ownership of the Property.s
18 50. Accordingly, Plaintiff requests that the Court make a finding and issue
19 appropriate orders stating that none of the named Defendants or Doe Defendants, have
20 any right or interest in Plaintiffs Note, Deed of Trust, or the Property which authorizes
21 them, in fact or as a matter of law, to collect Plaintiffs mortgage payments or enforce
22 the tenns of the Note or Deed of Trust in any manner whatsoever.
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4 It is axiomatic that a cause of action for declaratory relief serves the purpose of adjudicating
future rights and liabilities between parties. See Cardellini v. Casey, 181 Cal. App. 3d 389 (1986)
[Emphasis added]; Bachis v. State Farm Mutual Auto. Ins. Co., 265 Cal. App. 2d 722 (1968).
5 "Declaratory relief is only appropriate '(1) when 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 uncertaintr' insecurity, and controversy giving rise to the proceeding. '" Guerra v. Sutton, 783 F.2d
1371,1376 (9
h
Cir. 1986).
1 51. Plaintiff will suffer prejudice if the Court does not determine the rights and
2 obligations of the parties because: (1) Plaintiff will be denied the opportunity to identify
3 her true and current creditor/lender and negotiate with them; (2) she will be denied the
4 right to conduct discovery and have U.S. Bank's and JPMorgan's claims verified by a
5 custodian of records who has personal knowledge of the loan and all transactions related
6 to it; and (3) she will be denied the opportunity to discover the true amount she still
7 owes minus any illegal costs, fees, and charges.
8 52. Due to the actual case and controversy regarding competing claims and
9 allegations, it is necessary that the Court declare the actual rights and obligations of the
10 parties and make a determination as to whether U.S. Bank's and JPMorgan's claims
11 against Plaintiff are enforceable and whether they are secured or unsecured by any right,
12 title, or interest in Plaintiff's Property.
13 53. Furthermore, the conduct of U.S. Bank, JPMorgan, and/or one or more of
14 the Doe Defendants, and each of them, as herein described, was so malicious and
15 contemptible that it would be looked down upon and despised by ordinary people.
16 Plaintiff is therefore entitled to punitive damages in an amount appropriate to punish
1 7 Defendants and to deter others from engaging in similar conduct.
18 SECOND CAUSE OF ACTION - NEGLIGENCE
19 [Against U.S. Bank, JPMorgan, and Doe Defendants]
22 55. At all times relevant herein, JPMorgan was acting as purported agent for
23 U.S. Bank.
24 56. U.S. Bank and JPMorgan, as the purported agent and mortgage servicer for
25 U.S. Bank, have a duty to exercise reasonable care
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and skill to follow California law
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6 Nonnally lenders and servicers do not owe a borrower a duty of care. Nymark v. Heart Fed.
Savings & Loan Assn., 231 Cal. App. 3d 1089, 1093 (1991). However, a bank may be liable in
negligence if it fails to discharge its contractual duties with reasonable care. Das v. Bank of Am., 186
Cal. App. 4th 727, 741 (2010). Additionally, a bank may be liable for aiding and abetting a tort when
it renders "substantial assistance" to a tortfeasor during a business transaction that it knowingly aided
1 with regard to enforcement of monetary obligations, and to refrain from taking or failing
2 to take any action against Plaintiff that they did not have the legal authority to do. This
3 includes not collecting or demanding mortgage payments when they do not have the
4 right to enforce the obligation, causing the Plaintiff to overpay in interest, making
5 derogatory credit reports to credit bureaus, and failing to keep an accurate accounting of
6 Plaintiffs mortgage payments, credits, and debits (if JPMorgan is in fact the legally
7 authorized mortgage servicer for Plaintiff).
8 57. U.S. Bank and JPMorgan have a duty to exercise reasonable care and skill
9 to refrain from taking any action against Plaintiff that they do not have the legal
10 authority to do. As a direct and proximate result of the reckless negligence, utter
11 carelessness, and blatant fraud of the Defendants as set forth above, the chain of title to
12 Plaintiffs Property has been rendered unmarketable and fatally defective and has caused
13 Plaintiff to lose saleable title to the subject property.
14 58. U.S. Bank and/or JPMorgan breached that duty when they failed to follow
15 the guidelines established in the PSA requiring the transfer of the Note and Deed of
16 Trust into the W AMU Trust by the Closing Date.
17 59. As a direct and proximate result of the negligence and carelessness of the
18 Defendants as set forth above, Plaintiff suffered, and continues to suffer, general and
19 special damages in an amount to be determined at trial, including attorneys' fees and
20 costs of bringing suit to dispute, validate, and challenge said Defendants' purported
21 rights to enforce their debt obligation against them.
22 THIRD CAUSE OF ACTION - QUASI CONTRACT
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in the commission of the tort. Id. citing Casey v. Us. Bank Nat. Assn., 127 Cal. App. 4th 1138, 1144-
45).
1 61. U.S. Bank attempted but failed to become a party to the Note and Deed of
2 Trust when it was purportedly assigned SBMC Mortgage's interest in Plaintiffs Note
3 and Deed of Trust. U.S. Bank and/or JPMorgan demanded monthly mortgage payments
4 from Plaintiff starting in February 21,2006 and continued to collect payments from
5 Plaintiff for over five and a half years. Plaintiff reasonably relied upon U.S. Bank
6 and/or JPMorgan' s assertion that they were entitled to payments.
7 62. U.S. Bank and/or JPMorgan knowingly accepted payments and retained
8 them for their own use knowing that U.S. Bank andlor JPMorgan did not acquire an
9 interest in Plaintiff s Note, such that they could accept or keep Plaintiff s payments. It
10 would be inequitable for U.S. Bank and/or JPMorgan to retain the payments it received
11 from Plaintiff which they did not have legal authority to collect. The equitable remedy
12 of restitution when unjust enrichment has occurred is an obligation created by the law
13 without regard to the intention of the parties, and is designed to restore the aggrieved
14 party to his or her former position by return of the thing or its equivalent in money.
15 63. Section 23 of the Deed of Trust states that: "Upon payment of all sums
16 secured by this Security Instrument, Lender shall request Trustee to reconvey the
17 Property and shall surrender this Security Instrument and all notes evidencing debt
18 secured by this Security Instrument to Trustee. Trustee shall reconvey the Property
19 without warranty to the person or persons legally entitled to it." The obligations to
20 Countrywide under the Deed of Trust were fulfilled when Countrywide received the
21 balance on the Note as proceeds of the sale of Plaintiffs Note and Mortgage to a
22 presently unknown entity. U.S. Bank and/or JPMorgan have been unjustly enriched by
23 collecting monthly payments from Plaintiff when they have no interest his Note or Deed
24 of Trust.
25 64. Plaintiff seeks restitution for any payments they made to U.S. Bank and
26 JPMorgan that were not paid to the lender or beneficiary, if any.
27 III
28 III
1 FOURTH CAUSE OF ACTION - VIOLATION OF 15 U.S.C. 1692, et seq.
2 [Against U.S. Bank and Doe Defendants]
5 66. Defendant U.S. Bank has attempted to collect Plaintiffs debt obligation
6 and thus is a debt collector pursuant to the Federal Debt Collection Practices Act
7 ("FDCPA"). "The term 'debt collector' means any person who uses any instrumentality
8 of interstate commerce or the mails in any business the principal purpose of which is the
9 collection of any debts, or who regularly collects or attempts to collect, directly or
10 indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C.
11 1692a(6).
12 67. Federal law prohibits the use of "any false, deceptive, or misleading
13 representation or means in connection with the collection of any debt. .. [including]the
14 false representation of ... the character, amount, or legal status of any debt ... or [t]he
15 threat to take any action that cannot legally be taken .... " 15 U.S.C. 1692e(2)(A), (5).
16 68. Defendants attempted to collect on the Note under false pretenses, namely
17 that U.S. Bank was assigned Plaintiffs debt when in fact they were not.
18 69. JPMorgan, acting as Plaintiffs mortgage servicer, has been acting in a
19 manner to mislead Ms. Naranjo into believing that JPMorgan had the authority to
20 demand payments from him.
21 70. JPMorgan, acting as Plaintiffs mortgage servicer, threatened to take action,
22 namely engaging in collection activities that cannot legally be taken by them.
23 71. As alleged herein, Plaintiffs Note was not properly transferred to U.S.
24 Bank, who seeks to cause their purported authorized agent( s) to collect mortgage
25 payments and engage in other unlawful collection practices.
26 72. On information and belief, U.S. Bank does not have a perfected security
27 interest in Plaintiffs Note such that they can enforce Plaintiffs obligation and/or collect
28 mortgage payments.
1 73. Plaintiff alleges that U.S. Bank falsely represented the status of her debt
2 and Defendants' ability to enforce Plaintiffs debt obligation, in which they have no
3 pecuniary, equitable, or legal interest.
4 74. The conduct described above by U.S. Bank, was malicious because
5 Defendants knew that they were not acting on behalf of the current pecuniary
6 beneficiary of the Note and Mortgage. However, despite such knowledge, Defendants
7 continued to demand and collect Plaintiff s mortgage payments.
8 75. On information and belief, U.S. Bank engaged and is engaging in a pattern
9 and practice of defrauding Plaintiff, in that during the entire life of the mortgage Loan,
10 U.S. Ban..l( failed to properly credit payments made, incorrectly calculated interest on the
11 account, and failed to accurately debit fees.
12 76. On information and belief, at all times material, U.S. Bank had, and has,
13 actual knowledge that Plaintiffs account was not accurate, but that Plaintiff would
14 continue to make further payments based on Defendants' inaccurate account. Plaintiff
15 made payments based on these improper, inaccurate, and fraudulent representations.
16 77. The foregoing acts and omissions of each and every Defendant and their
17 agents constitute numerous and multiple violations of the FDCP A including, but not
18 limited to, each and every one of the above-cited provisions of the FDCPA, 15 U.S.C.
19 1692 et seq., with respect to Plaintiff.
20 78. Plaintiff could not have reasonably known of the existence of a claim for
21 violation of 15 U.S.C. 1692(e) because Defendants fraudulently concealed the fact that
22 they were not entitled to enforce Plaintiffs debt obligation and that they were falsely
23 representing to Plaintiff that the character and amount of money Plaintiff still owed on
24 her debt.
7
25
26
27
28
7 "If a reasonable plaintiff would not have known of the existence of a possible claim within the
limitations period, then equitable tolling will serve to extend the statute of limitations for filing suit
until the plaintiff can gather what information he needs." Garcia v. Wachovia Mortg. Corp., 676
F.Supp.2d 895, 905 (2009) citing Santa Maria, 202 F.3d at 1178; see also Stoll v. Runyon, 165 F.3d
1238, 1242 (9th Cir.1999) ("Equitable tolling applies when the plaintiff is prevented from asserting a
1 79. As a result of each and every Defendant's violations of the FDCPA,
2 Plaintiff is entitled to actual damages pursuant to 15 U.S.C. 1692k(a)(1); statutory
3 damages in an amount up to $1,000.00 pursuant to 15 U.S.C. 1692k(a)(2)(A);
4 reasonable attorneys' fees and costs pursuant to 15 U.S.C. 1692k(a)(3); and
5 declaratory relief, from each and every Defendant herein.
6 80. Plaintiff relied on U.S. Bank's misrepresentations and has been damaged in
7 the following ways: (1) multiple parties may seek to enforce her debt obligation against
8 her; (2) the title to her home has been clouded and its salability has been rendered
9 unmarketable, as any buyer of Plaintiff s home will find themselves in legal limbo,
10 unable to know whether they can safely buy Plaintiff's home or get title insurance; (3)
11 she has been paying the wrong party for an undetermined amount of time and overpaid
12 in interest that was over calculated; (4) she is unable to determine whether she sent her
13 monthly mortgage payments to the right party; (5) her credit and credit score have been
14 damaged; and (6) she has expended significant funds to cover the cost of attorneys' fees
15 and related costs.
16 FIFTH CAUSE OF ACTION - VIOLATION OF 12 U.S.C. 2605 (RESPA)
17 [As Against JPMorgan and one or more of the Doe Defendants]
20 82. Plaintiff's Loan is a federally regulated mortgage loan and is subject to the
21 federal Real Estate Settlement Procedures Act and its implementing regulation,
22 Regulation X, and the Dodd-Frank Act.
23 83. On or about August 8, 2011, Plaintiff sent a Qualified Written Request
24 ("QWR") to JPMorgan, via U.S. Post Certified Mail. See Exhibit "C."
25
26
27
28
claim by wrongful conduct on the part of the defendant, or when extraordinary circumstances beyond
the Plaintiff s control made it impossible to file a claim on time.") (citation omitted).
1 84. On infonnation and belief, JPMorgan received the QWR on or about
2 August 23,2011.
3 85. The QWR contained infonnation to enable JPMorgan to identify Plaintiff's
4 Loan including the borrower's name, loan number, and property address. Also, the
5 QWR contained requests for infonnation of the loan, specifically the identity and
6 contact infonnation of the creditor of Plaintiff's Note, a complete loan history,
7 accumulated late fees and charges, and requested infonnation to verify the validity of
8 the purported debt owed to U.S. Banle
9 86. JPMorgan acknowledged the receipt of Plaintiffs QWR within five (5) day
10 of receipt, as required by section 1463(c) of the Dodd-Frank Act.
11 87. However, JPMorgan's response to Plaintiff's QWR concerned the same
12 borrower; but it did not concern the same loan number or property address as identified
13 in the QWR. As a result, JPMorgan failed to provide a substantive response to
14 Plaintiff's QWR within thirty (30) business days of receipt, as required by the Dodd-
15 Frank Act. See Exhibit "D", attached hereto is a true and correct copy of JPMorgan's
16 substantive response to Plaintiff's QWR.
17 88. Because the Loan is subject to RESPA, the Dodd-Frank Act, and
18 Regulation X, all Defendants were required to comply with section 1463 of the Dodd-
19 Frank Act.
20 89. Defendants violated Section 6 of Regulation X upon receipt of Plaintiff's
21 QWR by their actions including, but not limited to: (a) failure to make appropriate
22 corrections in the account of the borrower, including the crediting of any late charges or
23 penalties, and transmitting to the borrower a written notification of the correction; and
24 (b) failure to protect Plaintiff's credit rating upon receipt of Plaintiff's QWR by
25 furnishing adverse infonnation regarding payment to credit reporting agencies as
26 defined in section 603 of the Fair Credit Reporting Act, 15 U.S.C. 1681(a).
27 90. JPMorgan violated 12 U.S.C. 2605 and is subject to statutory damages,
28 civil liability, penalties, attorneys' fees, and actual damages. See 12 U.S.C. 2605.
-20-
1 91. The actual pecuniary damages include, but are not limited to, the over
2 calculation and overpayment of interest on Plaintiff's Loan, the costs of repairing
3 Plaintiff's credit, the reduction and/or elimination of Plaintiff's credit limits, costs
4 associated with removing the cloud on his Property title and setting aside the trustee's
5 sale, and attorneys' fees and costs, in an amount to be proven at trial.
6 92. As a direct and proximate result of the violations ofRESPA, Dodd-Frank
7 Act, and Regulation X by JPMorgan, Plaintiff has suffered actual pecuniary damages,
8 including but not limited to statutory damages, civil liability, and attorneys' fees, in an
9 amount to be proven at trial.
10 93. As a result of JPMorgan's violations of 12 U.S.C. 2605, RESPA, the
11 Dodd-Frank Act, and Regulation X, Plaintiff has been damaged in the following ways:
12 (1) multiple parties may seek to enforce her debt obligation against her; (2) the title to
13 her home has been clouded and its salability has been rendered unmarketable, as any
14 buyer of Plaintiff's home will find themselves in legal limbo, unable to know whether
15 they can safely buy Plaintiff's home or get title insurance; (3) she has been paying the
16 wrong party for an undetermined amount of time and overpaid in interest that was over
17 calculated; (4) she is unable to determine whether he sent his monthly mortgage
18 payments to the right party; (5) her credit and credit score have been damaged; and (6)
19 she has expended significant funds to cover the cost of attorneys' fees and related costs.
20 SIXTH CAUSE OF ACTION -
21 VIOLATION OF BUS. AND PROF. CODE SECTION 17200, ET SEQ.
25 95. Defendants have engaged in unfair, unlawful, and fraudulent business
26 practices in the State of California, as set forth above.
27
28
1 96. By engaging in the above-described acts and practices, Defendants have
2 committed one or more acts of unfair competition within the meaning of Bus. and Prof.
3 Code section 17200, et seq.
4 97. Cal. Bus. and Prof. Code section 17200, et seq., prohibits acts of unfair
5 competition, which means and includes any unlawful, unfair or fraudulent business act
6 and conduct that is likely to deceive and is fraudulent in nature.
7 98. U.S. Bank's conduct, for the reasons stated herein, is in direct violation of
8 15 U.S.C. 1692, et seq.
9 99. JPMorgan's conduct, for the reasons stated herein, is in direct violation of
10 12 U.S.C. 2605.
11 100. Defendants U.S Bank's and/or JPMorgan's conduct, for the reasons stated
12 herein, is in direct violation of Cal. Penal Code section 532(f)(a)( 4).
13 101. Defendants U.S. Bank and/or JPMorgan engaged in unfair, unlawful,s and
14 fraudulent business practices with respect to mortgage loan servicing and related
15 matters.
16 102. Defendants failed to disclose the principal for which documents were being
17 executed and recorded in violation of Cal. Civ. Code section 1095.
18 103. Defendants demanded and accepted payments for debts that were non-
19 existent.
20 104. Defendants reported payments as late to credit bureaus without the legal
21 right or authority to do so.
22 105. Defendants acted as a beneficiary without the legal authority to do so.
23 106. Defendants facilitated, aided, and abetted the illegal, deceptive, and
24 unlawful enforcement of Plaintiff's Note and Mortgage and engaged in other illegal debt
25 collection activities.
26
27
28
8 "Unlawful" acts or practices are those forbidden by law, be it civil or criminal, federal, state,
or municipal, statutory, or court-made. Saunders v. Superior Court, 27 Cal. 4th 832 (1994); Hewlett v.
Squaw Valley, 54 Cal. 4th 499 (1997).
1 107. JPMorgan, acting as Plaintiff s mortgage servicer, has been acting in a
2 manner to mislead Ms. Naranjo into believing that JPMorgan had the authority to
3 demand payments from them.
4 108. As alleged herein, Plaintiffs Note was not properly transferred to U.S.
5 Bank, who seek to cause their purported authorized agent(s) to collect mortgage
6 payments and engage in other unlawful collection practices.
7 109. On information and belief, U.S. Bank does not have a perfected security
8 interest in Plaintiffs Note such that they can enforce Plaintiffs obligation and/or collect
9 mortgage payments.
10 110. Plaintiff alleges, on information and belief, U.S. Bank fraudulently
11 enforced a debt obligation in which they had no pecuniary, equitable, or legal interest.
12 U.S. Bank's conduct is part of a fraudulent debt collection scheme.
13 111. The conduct described above by U.S. Bank, was malicious because
14 Defendants knew that they were not acting on behalf of the current pecuniary
15 beneficiary of the Note and Mortgage. However, despite such knowledge, Defendants
16 continued to demand and collect Plaintiff s mortgage payments.
17 112. On information and belief, at all times material, U.S. Bank had, and has,
18 actual knowledge that Plaintiff s account was not accurate, but that Plaintiff would
19 continue to make further payments based on Defendants' inaccurate account. Plaintiff
20 made payments based on these improper, inaccurate, and fraudulent representations.
21 113. As more fully described above, Defendants' acts and practices are
22 unlawful. This conduct is ongoing and continues to this date.
23 114. As more fully described above, Defendants' acts and practices are likely to
24 deceive members of the public. This conduct is ongoing and continues to this date.
25 115. As more fully described above, Defendants' acts and practices are unfair
26 and the harm caused by their conduct outweighs any benefit that their conduct may
27 have. This conduct is ongoing and continues to this date.
28
1 116. Plaintiff alleges that by engaging in the above described acts and/or
2 practices as alleged herein; Defendants violated several laws including Cal. Bus. and
3 Prof. Code section 17200, et seq. and must be required to disgorge all profits related to
4 their unfair, unlawful, and deceptive business practices.
5 117. Plaintiff alleges that Defendants' misconduct, as alleged herein, gave
6 Defendants an unfair competitive advantage over their competitors. The scheme
7 implemented by Defendants is designed to defraud California consumers and enrich the
8 Defendants.
9 118. The foregoing acts and practices have caused substantial harm to California
10 consumers, including Plaintiff.
11 119. By reason of the foregoing, Defendants have been unjustly enriched, by
12 collecting payments that they are not entitled to, and should be required to make
13 restitution to Plaintiff and other California consumers who have been harmed, and/or be
14 enjoined from continuing in such practices pursuant to Cal. Bus. and Prof. Code sections
15 17203 and 17204.
16 120. As a direct and proximate result of the actions of Defendants, and each of
17 them, stated above, Plaintiff has been injured in that a cloud has been placed upon the
18 title to Plaintiff s Property and Defendants have failed to remove this cloud from
19 Plaintiff s title.
20 121. Plaintiff requests the Court to issue an order compelling JPMorgan, U. S.
21 Bank, and any other Defendants claiming an interest in and to the Property to take any
22 and all actions necessary to remove the cloud they have placed upon his title and an
23 order enjoining such Defendants from taking such actions again in the future.
24 122. As a direct and proximate result of the violations of Cal. Bus. and Prof.
25 Code section 17200 by U.S. Bank, Plaintiff has suffered actual pecuniary damages,
26 including, but not limited to civil liability, restitution, injunctive relief preventing
27 Defendants from continuing to collect mortgage payments, and attorneys' fees, in an
28 amount to be proven at trial.
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1 123. As a result of U.S. Bank's and JPMorgan's violations of Cal. Bus. and Prof.
2 Code section 17200, Plaintiff has been damaged in the following ways: (1) multiple
3 parties may seek to enforce her debt obligation against her; (2) the title to her home has
4 been clouded and its salability has been rendered unmarketable, as any buyer of
5 Plaintiffs home will find themselves in legal limbo, unable to know whether they can
6 safely buy Plaintiff s home or get title insurance; (3) she has been paying the wrong
7 party for an undetermined amount of time and overpaid in interest that was over
11 SEVENTH CAUSE OF ACTION - ACCOUNTING
15 125. U.S. Bank, and JPMorgan as its purported agent, have held themselves out
16 to be Plaintiff s creditor and mortgage servicer. As a result of this purported
17 relationship with Plaintiff, said Defendants have a fiduciary duty to Plaintiff to properly
18 account for payments made by Plaintiff. 9
19 126. As a result of the aforementioned fraudulent conduct, Plaintiff paid U.S.
20 Bank and JPMorgan his mortgage payments for a period of approximately five years.
21 However, for the reasons stated herein, none of this money was actually owed to U.S.
22 Bank or JPMorgan. For that reason, these monies are due to be either credited back to
23 Plaintiff in full or credited to the rightful owner of Plaintiff s Note and Mortgage.
24
25
26
27
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9 To state a cause of action for accounting, a plaintiff must allege the existence of a fiduciary
relationship, or accounts so complicated that an ordinary legal action demanding a fixed sum is
impracticable. 5 Witkin, Cal. Proc. 4th (1997) Pleading, section 775, p. 233. The elements for a claim
for accounting are: (1) fiduciary relationship or other circumstances appropriate to the remedy; and (2)
a balance due from the defendant to the plaintiff that can only be ascertained by an accounting. See
Witkin, California Procedure, Pleadings, section 776, p. 233 (4
th
ed.).
1 127. The amount of the money due from Defendants to Plaintiff is unknown to
2 Plaintiff and cannot be ascertained without an accounting of the receipts and
3 disbursements of the aforementioned transactions. Plaintiff is informed and believes
4 and thereon alleges that the amount due to her exceeds $75,000.00.
5 EIGHTH CAUSE OF ACTION - BREACH OF CONTRACT
9 129. In the alternative, if the Court finds that U.S. Bank is a successor in interest
10 to the Deed of Trust pursuant to the terms of the Deed of Trust, Plaintiff alleges that
11 Defendants U.S. Bank and/or JPMorgan breached the Deed of Trust by improperly
12 crediting and debiting her account.
13 130. On February 21,2006, Plaintiff obtained the Loan from SBMC Mortgage
14 and executed a Note and Deed of Trust.
15 131. U.S. Bank allegedly became a party to this contract when it was
16 purportedly assigned MERS's interest in Plaintiff's Note and Deed of Trust.
17 132. The Deed of Trust sets forth the dates that the monthly principal and
18 interest payments were due and when late fees and other charges could be assessed.
19 133. Section 2 of the Deed of Trust states that: "Except as otherwise described in
20 this Section 2, all payments accepted and applied by Lender shall be applied in the
21 following order of priority: (a) interest due under the Note; (b) principal due under the
22 Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic
23 Payment in the order in which it became due." See Exhibit "E," attached hereto, a true
24 and correct copy of the Deed of Trust.
25 134. Plaintiff substantially performed all of her conditions in the Deed of Trust,
26 including timely paying his mortgage to Defendants.
27 135. Defendants JPMorgan and/or U.S. Bank breached the Deed of Trust by
28 failing to apply the payments made by Plaintiff in the order of priority set forth in
1 Section 2, and this resulted in improper fees and taxes being added to the balance of the
2 Loan.
3 136. Plaintiff was unaware that Defendants were failing to apply the payments in
4 the way set forth in the Deed of Trust because Defendants fraudulently concealed this
5 practice of applying Plaintiff s mortgage payments to Plaintiff s account. Plaintiff could
6 not have reasonably discovered the impropriety of Defendants behavior because these
7 facts were hidden from him and were not disclosed throughout the servicing of his Loan.
8 137. Plaintiff could not have reasonably known of the existence of a breach of
9 the Deed of Trust because Defendants fraudulently concealed the improperly applied
10 mortgage payments, the incorrect calculation of interest, and the improper fees added to
11 Plaintiffs account that did not comply with Section 2 of Plaintiffs Deed of Trust.
12 138. As a proximate result of Defendants' breaches, Plaintiff has suffered
13 compensatory damages in an amount to be proven at trial. Plaintiff relied on JPMorgan
14 and/or U.S. Bank's misrepresentations and has been damaged in the following ways: (1)
15 multiple parties may seek to enforce her debt obligation against her; (2) the title to her
16 home has been clouded and its salability has been rendered unmarketable, as any buyer
17 of Plaintiffs home will find themselves in legal limbo, unable to know whether they can
18 safely buy Plaintiff s home or get title insurance; (3) she has been paying the wrong
19 party for an undetermined amount of time and overpaid in interest that was over
23 NINTH CAUSE OF ACTION - BREACH OF THE IMPLIED COVENANT OF
24 GOOD FAITH AND FAIR DEALING
28
1 140. In the alternative, if the Court finds that U.S. Bank is a successor in interest
2 to the Deed of Trust pursuant to the tenns of the Deed of Trust, Plaintiff alleges that
3 Defendants U.S. Bank and JPMorgan breached the implied promise of good faith and
4 fair dealing by making it impossible for Plaintiff to carry out his obligations under the
5 contract because of the improperly applied payments and addition of interest and
6 improper fees to his account.
7 141. In every contract or agreement there is an implied promise of good faith
8 and fair dealing. Each party agrees to refrain from any action that would render
9 perfonnance of the contract impossible, and to do everything that the contract
10 presupposes that each party will do to accomplish its purpose.
lO
The implied promise of
11 good faith and fair dealing cannot create obligations that are inconsistent with the tenns
12 of the contract. 11
13 142. As alleged above, Plaintiff entered into a contract (Deed of Trust) with
14 SBMC Mortgage and substantially perfonned the conditions under the Deed of Trust.
15 143. U.S. Bank allegedly became a party to this contract when it was
16 purportedly assigned MERS' interest in Plaintiffs Note and Deed of Trust.
17 144. Defendants enjoyed substantial discretionary power affecting the Plaintiffs
18 rights under the Deed of Trust as detailed throughout this Complaint. Defendants are
19 required to exercise such power in good faith.
20 145. Defendants breached their duty of good faith by interfering with Plaintiff s
21 ability to perfonn his obligations under the contract because Defendants improperly
22
23
24
25
26
27
28
10 April Enters., Inc. v. KTTV, 147 Cal. App. 3d 805,816 (1983); Harm v. Frasher, 181 Cal.
App. 2d 405,417 (1960).
11 "There is an implied covenant of good faith and fair dealing in every contract that neither
party will do anything which will iniure the right of the other to receive the benefits of the agreement."
Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654,658 (internal citation omitted). "The
covenant of good faith and fair dealing, implied by law in every contract. exists merely to prevent one
contracting party from unfairly frustrating the other Party'S right to receive the benefits of the
azreement actuallv made. The covenant thus cannot" 'be endowed with an existence independent of
its contractual underpinnings.' " " It cannot impose substantive duties or limits on the contracting
parties beyond those incorporated in the specific terms oftheir agreement." Guz v. Bechtel National,
Inc., 24 Cal. 4th 317, 349-350 (2000) (citations omitted).
1 applied mortgage payments, incorrectly calculated interest, and improperly added fees to
2 Plaintiffs account making it impossible for Plaintiff to ever fulfill her obligations.
3 Defendants' failure to cooperate allowed them to collect more money from Plaintiff than
4 they were owed.
12
5 146. Plaintiff could not have reasonably known of the existence of a breach of
6 the implied covenant of good faith and fair dealing claim because Defendants
7 fraudulently concealed the fact that they were not applying payments in accordance with
8 the Deed of Trust thereby interfering with the Plaintiff s ability to perform under the
9 contract. Defendants concealed the improperly applied mortgage payments, the
10 incorrect calculation of interest, and the improper fees added to Plaintiff's account and
11 continued to render Plaintiff s performance of the contract impossible.
12 147. As a proximate result of Defendants' breaches, Plaintiff has suffered
13 general and special damages in an amount to be proven at trial.
14 148. Plaintiff relied on JPMorgan and/or U.S. Bank's misrepresentations and has
15 been damaged in the following ways: (1) multiple parties may seek to enforce her debt
16 obligation against her; (2) the title to her home has been clouded and its salability has
17 been rendered unmarketable, as any buyer of Plaintiff s home will find themselves in
18 legal limbo, unable to know whether they can safely buy Plaintiffs home or get title
19 insurance; (3) she has been paying the wrong party for an undetermined amount of time
20 and overpaid in interest that was over calculated; (4) she is unable to determine whether
21 she sent her monthly mortgage payments to the right party; (5) her credit and credit
22 score have been damaged; and (6) she has expended significant funds to cover the cost
23 of attorneys' fees and related costs.
24 / / /
25 / / /
26
27
12 Witkin, Summary of Cali fomi a Law, Contracts, 744 (8th ed.); see also Sutherland v.
28
Barclays American/Mortgage Corp., 53 Cal. App. 4th 299,314 (1997); Harm v. Frasher, 181 Cal.
App. 2d 405,415 (1960).
1 WHEREFORE, Plaintiff prays as follows:
2 1. For compensatory, special, and general damages in an amount according to
3 proof at trial, but not less than $5,000,000, against all Defendants;
4 2. For punitive and exemplaf'j damages in an amount to be determined by the
5 Court against all Defendants;
6 3. For an order compelling Defendants to remove any instrument, including
7 the Assignment of Deed of Trust, which does or could be construed as constituting a
8 cloud upon Plaintiff's title to the Property;
9 4. For a declaratory judgment finding that Defendants do not have any legally
10 cognizable rights as to Plaintiff, the Property, Plaintiff's Promissory Note, Plaintiff's
11 Deed of Trust, or any other matter based on contract or any of the documents prepared
12 by Defendants, tendered to and executed by Plaintiff;
13 5. For the Court to issue an order restraining Defendants, their agents, or
14 employees from continuing or initiating any action against the Property and enjoining
15 Defendants, their agents, or employees from doing so during the pendency of this
16 matter;
17 6. For an order compelling Defendants to disgorge all amounts wrongfully
18 taken from Plaintiff and returning the same to Plaintiff's interest thereon at the statutory
19 rate from the date the funds were first received from Plaintiff;
20
21
22
23
7.
8.
9.
24 Dated:
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26
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28
For costs of suit incurred herein;
For reasonable attorneys' fees incurred; and
F or such other and further relief as the Court may deem proper.
November 16, 2011 PROSPER LAW GROUP, LLP
By:
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1 DEMAND FOR JURY TRIAL
2 Plaintiff Carmen R. Naranjo hereby demands a trial by jury on all claims.
3
4 Dated:
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November 16,2011
. FIRST AMENDED COMPLAINT
PROSPER LA \V GROUP, LLP
By:
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1 PROOF OF SERVICE
2 Carmen Naranjo v. SBMC Mortgage, et al.
United States District Court- Southern District of California case no. llCV2229 L (MVGx)
3
I am a resident of the State of California, over the age of eighteen years, and not a party
4 to the within action. My business address is Prosper Law Group, LLP, 6100 Center Drive, Suite
1050, Los Angeles, CA 90045. On November 16,2011, I served the following document(s) by
5 the method indicated below:
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11
[ ]
[X]
12 []
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14 []
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by transmitting via facsimile on this date the documents listed above to the facsimile
numbers set forth below. The transmission was completed before the close of business
and was reported complete and without error.
by placing the document(s) listed above in a sealed envelope via U.S. mail with postage
thereon fully prepaid, in the United States Office at Los Angeles, California addressed as
set forth below. I am readily familiar with the firm's practice of collection and
processing of correspondence for mailing. I am aware that on motion of the party served,
service is presumed invalid if the postal cancellation date on postage meter date is more
than one day after the date of deposit in this Declaration.
BY CMlECF ELECTRONIC DELIVERY: In accordance with the registered case
participants and in accordance with the procedures set forth at the United States District
Court, Central District of California website https:llecf.cacd.uscourts.gov.
by placing the document(s) listed above in a sealed envelope(s) and consigning it to an
express mail service for guaranteed delivery on the next business day following the date
of consignment to the address( es) set forth below. A copy of the consignment slip is
attached to this proof of service.
(See attached service list)
I declare under penalty of perjury under the laws of the United States that the above is
18 true and correct.
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Executed on November 16,2011, Los Angeles, California.
PROOF OF SERVICE
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Service List
Carmen Naranjo v. SBMC Mortgage, et al.
United States District Court- Southern District of California case no. CVll-2229 L
(MVGx)
Attorney for Defendant JPMorgan Chase and u.s. Bank: N.A. As Trustee for WAMU Mortgage
Pass-Through Certificates WMALT Series 2006-AR4 Trust
BRYAN CAVE LLP
Irvine, CA 92612
2
PROOF OF SERVICE
EXHIBIT A
Securitization Structure
PARTY A
ORIGINATOR/LENDER
SECURITY NATIONAL
PARTYD
ISSUING ENTITY
PARTY A
ORIGINATOR/LENDER
SECURITY NATIONAL
MORTGAGE COMPANY, A
UTAH CORPORATION
PARTYD
ISSUING ENTITY
THE CORRECT PROCESS OF SECURITIZATION
TRUE SALE
1) LEGAL OPINIONS
2) ASSET PURCHASE I SALE
AGREEMENTS
3) DELIVERY & ACCEPTANCE
RECEIPTS
4) COMPENSATION / MONEY
S) CAPACITY OF PARTIES TO BUY
AND SELL
HOW LENDERS "SIDE-STEPPED" THE PROCESS
TRUE SALE
1) LEGAL OPINIONS
2) ASSET PURCHASE lSALE
AGREEMENTS
3) DELIVERY & ACCEPTANCE
RECEIPTS
4) COMPENSATION / MONEY
5) CAPACITY OF PARTIES TO BUY
AND SELL
PARTYB
SPONSOR/SELLER
LEHMAN BROTHERS HOLDINGS
INC.
PARTYC
DEPOSITOR.
STRUCTURED ASSET SECURITIES.
CORPORATION
PARTYB
SPONSOR/SELLER
LEHMAN BROTHERS HOLDINGS
PARTYC
DEPOSITOR
STRUCTURED ASSET SECURITIES
CORPORATION
EXHIBIT B
Section 2.04. Conveyance of Mortgage Pool Assets; Assignment of Countrywide
Agreement; Security Interest.
The Company does hereby irrevocably sell, transfer, assign, set over and otherwise
convey to the Trust, without recourse, all the Company's right, title and interest in
and to the Mortgage Pool Assets. In addition, the Company does hereby assign to
the Trust, without recourse, the Company's rights (as assignee of the rights of
Washington Mutual Mortgage Securities Corp.) under the Countrywide Agreement
with respect to the servicing of the Countrywide Loans. The Trust, as payment of
the purchase price of the Mortgage Pool Assets, shall, on the Closing Date, (i)
issue the REMIC I Regular Interests and the Class R-I Residual Interest to the
Company and (ii) issue the Class PPP Certificates to the Company or the
Company's designee in Authorized Denominations. The REMIC I Regular
Interests, the Class PPP Certificates and the Class R-I Residual Interest shall
together be a separate series of beneficial interests in the assets of the Trust
consisting of the Mortgage Pool Assets pursuant to Section 3806(b )(2) of the
Statutory Trust Statute.
It is the express intent of the parties hereto that the conveyance of the Mortgage
Pool Assets to the Trust by the Company as provided in this Section 2.04 be, and
be construed as, an absolute sale of the Mortgage Pool Assets. It is, further, not the
intention of the parties that such conveyance be deemed the grant of a security
interest in the Mortgage Pool Assets by the Company to the Trust to secure a debt
or other obligation of the Company. However, in the event that, notwithstanding
the intent of the parties, the Mortgage Pool Assets are held to be the property of the
Company, or if for any other reason this Agreement is held or deemed to create a
security interest in the Mortgage Pool Assets, then
(a) this Agreement shall constitute a security agreement;
(b) the conveyance provided for in this Section 2.04 shall be deemed to be a
grant by the Company to the Trust of, and the Company hereby grants to the Trust,
to secure all of the Company's obligations hereunder, a security interest in all of
the Company's right, title, and interest, whether now owned or hereafter acquired,
in and to:
(1) The Mortgage Pool Assets;
(II) All accounts, chattel paper, deposit accounts, documents, general
intangibles, goods, instruments, investment property, letter-of-credit rights, letters
of credit, money, and oil, gas, and other minerals, consisting of, arising from, or
relating to, any of the foregoing; and
(III) All proceeds of the foregoing.
The Company shall file such financing statements, and the Company, the Servicer
and the Trustee acting on behalf of the Trust at the direction of the Company shall,
to the extent consistent with this Agreement, take such other actions as may be
necessary to ensure that, if this Agreement were found to create a security interest
in the Mortgage Pool Assets, such security interest would be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Agreement. In connection herewith, the Trust shall have
all of the rights and remedies of a secured party under the Uniform Commercial
Code as in force in the relevant jurisdiction.
Section 2.05. Delivery of Mortgage Files.
On the Closing Date, the Company shall deliver to and deposit with, or cause to be
delivered to and deposited with, the Trustee the Mortgage Files, which shall at all
times be identified in the records of the Trustee as being held by or on behalf of the
Trust.
Concurrently with the execution and delivery hereof, the Company shall cause to
be filed with respect to each Cooperative Loan the UCC assignment or amendment
referred to in clause (Y)(vii) of the definition of "Mortgage File." In connection
with its servicing of Cooperative Loans, the Servicer shall use its best efforts to file
timely continuation statements, if necessary, with regard to each financing
statement relating to a Cooperative Loan.
The Trustee is authorized, with the Servicer's consent, to appoint on behalf of the
Trust any bank or trust company approved by each of the Company and the
Servicer as Custodian of the documents or instruments referred to in this Section
2.05 or in Section 2.12, and to enter into a Custodial Agreement for such purpose;
provided, however, that the Trustee shall be and remain liable for the acts and
omissions of any such Custodian to the extent (and only to the extent) that it would
have been liable for such acts and omissions hereunder had such acts and
omissions been its own acts and omissions. Any documents delivered by the
Company or the Servicer to the Custodian, if any, shall be deemed to have been
delivered to the Trustee for all purposes hereunder; and any documents held by the
Custodian, if any, shall be deemed to be held by the Trustee for all purposes
hereunder. There shall be a written Custodial Agreement between the Trustee and
each Custodian. Each Custodial Agreement shall contain an acknowledgment by
the Custodian that all Mortgage Pool Assets, Mortgage Files, and other documents
and property held by it at any time are held by it for the benefit of the Trust. Each
Custodial Agreement shall, if such reports are required to be filed with the
Commission as an exhibit to a Report on Form 10-K, require the Custodian (i) if
determined by the Servicer to be a party participating in the servicing function
within the meaning of Item 1122 of Regulation AB, to deliver to the Servicer the
report on assessment of compliance with applicable servicing criteria and the
accounting firm's attestation report described in Section 3.13(c) and (ii) if
determined by the Servicer to meet the criteria in Item 11 08( a )(2)(i) through (iii) of
Regulation AB, to deliver to the Servicer the statement of compliance described in
Section 3.13(e).
On or promptly after the Closing Date, the Servicer shall cause the MERS
System to indicate that each WMB Loan that is a MERS Loan, if any, has been
assigned to the Trustee or to the Trust, by including in the MERS System
computer files ( a) the code necessary to identify the Trustee and (b) the code
necessary to identify the series of the Certificates issued in connection with such
Mortgage Loans. The Servicer shall not alter the codes referenced in this
paragraph with respect to any WMB Loan that is a MERS Loan during the term of
this Agreement except in connection with an assignment of such MERS Loan or
de-registration thereof from the MERS System in accordance with the terms of
this Agreement.
EXHIBIT C
PROSPER LAW
GORDON F. DICKSON
DEBORAH P. GUTIERREZ
PROSPER LAW CORPORATION
5301 BEETHOVEN STREET
SUITE 109
LOS ANGELES, CALIFORNIA 90066
TELEPHONE: (800) 808-9798
FAX: (800) 808-0428
RICHARD M. GEE.
KEITH R. OLIVER
CARLOS A. LLARENA
MICHAEL KIM
WEBSITE: www.prosperlawcorp.com
DIRECTOR OF FIRM OPERATIONS
ROBYN NAKAGAWA
August 8, 2011
Via US Certified Mail #7010 2780 0000 8337 1874
J.P. Morgan Chase Legal Department
CT Corporation System
1801 West Bay Drive NE, Ste 206
Olympia, W A 98502
Re: QUALIFIED WRITTEN REQUEST
loan Number: 5303563919
Our Client: Carmen Naranjo
Property Address: 5331 Calumet Avenue La Jolla, CA 92037
SAN FRANCISCO OFFICE
450 HARRISON STREET, SUITE 310
SAN FRANCISCO, CALIFORNIA 94105
SAN DIEGO OFFICE
701 B STREET, SUITE 234
SAN DIEGO, CALIFORNIA 92101
SEN DER'S E-MAIL:
gfdickson@prosperlawcorp.com
Telephone (310) 893-6207
This letter is a "qualified written request" in compliance with and under the Real Estate Settlement
Procedures Act, 12 U.S.c. Section 2605(e).
To Whom It May Concern:
Please be advised this office has been retained by Carmen Naranjo ("Ms. Naranjo") in regards to the
accounting and servicing of this loan and the need for understanding and clarification of various sales,
transfers, funding sources, legal and beneficial ownership, charges, credits, debits, transactions, reversals,
actions, payments, analyses and records related to the servicing of this account from its origination to the
present date. The subject property is located at 5331 Calumet Avenue La Jolla, CA 92037.
This letter concerns sales and transfers of mortgage servicing rights; deceptive and fraudulent
servicing practices to enhance balance sheets; deceptive, abusive, and fraudulent accounting tricks and
practices that may have also negatively affected any credit rating, mortgage account and/or the debt or
payments that my clients may be legally obligated to.
Please provide the following information:
1. A true and present copy of the promissory note and deed of trust;
Page 2 of 4
2. A complete life of loan transactional historYi
3. The Transaction Codes for the software platform of the Serviceri
4. The Code definitions in plain Englishi
5. The Key Loan Transaction history, bankruptcy work sheet (if any), or any summary of all of the
accounts in an XL spreadsheet formati
6. The MERS Milestone Reports and the Edgar website address for the Pooling and Servicing
Agreement, Prospectus and Prospectus Supplement;
7. The name, address, name of a contact person and telephone number of the current holder in due
course and owner of the mortgage notei
8. Copies of all collection notes and communications filesi
9. An itemized statement of the amount needed to fully reinstate the loani
10. All communications with any non-lawyer third-party providersi and
11. All Form P-309 screen shots of all system accounts (principal, interest, escrow, late charges, legal
fees, property inspection fees, property preservation fees, broker price opinion fees, statutory
expense fees, miscellaneous fees, corporate advance fees, trustee suspense accounts, debtor
suspense accounts) associated with the loan.
Under RESPA, this information must be provided and cannot be claimed as "confidential,"
"proprietary," or otherwise private. Failure to disclose the requested information will be considered failure to
comply with this Qualified Written Request and thus a violation of 15 U.s.c. section 1601.
I also hereby demand that a chain of transfer from J.P. Morgan Chase to wherever the security
currently is be promptly sent to my office. Absent the actual evidence of the security, Ms. Naranjo has no
choice but to dispute the validity of J.P. Morgan Chase's lawful ownership, funding, entitlement right, and the
current debt J.P. Morgan Chase claims Ms. Naranjo owes. By debt I am referring to the principal balance J.P.
Morgan Chase claims Ms. Naranjo oweSi the calculated monthly payment, calculated escrow payment and
any fees claimed to be owed by J.P. Morgan Chase or any trust or entity J.P. Morgan Chase may service or
sub-service for.
To independently validate this debt, my office needs to conduct a complete exam, audit, review and
accounting of this mortgage account from its inception through the present date. Upon receipt of this letter,
please refrain from reporting any negative credit information (if any) to any credit-reporting agency until
responses are provided to each of the requests.
I also request that J.P. Morgan Chase conduct J.P. Morgan Chase's own investigation and audit of this
account since its inception to validate the debt J.P. Morgan Chase currently claims Ms. Naranjo owes. I
would like J.P. Morgan Chase to validate the debt so that it is accurate.
Please be aware that potential abuses by J.P. Morgan Chase or previous servicing companies could have
deceptively, wrongfully, unlawfully, and/or illegally:
Increased the amounts of monthly paymentsi
Los Angeles San Francisco San Diego
Page 3 of 4
Increased the principal balance Ms. Naranjo owes;
Increased the escrow payments;
Increased the amounts applied and attributed toward interest on this account;
Decreased the proper amounts applied and attributed toward the principal on this account;
and/or;
Assessed, charged and/or collected fees, expenses and miscellaneous charges Ms. Naranjo is not
legally obligated to pay under this mortgage, note and/or deed of trust.
Again, this is a Qualified Written Request under the Real Estate Settlement Procedures Act, codified
as Title 12 section 2605(e) of the United States Code as well as a request under the Truth In Lending Act 15
U.s.c. section 1601. RESPA provides substantial penalties and fines for non-compliance or failure to answer
the questions provided in this letter within sixty (60) days of its receipt.
Upon receipt of the documents and answers, an exam and audit will be conducted that may lead to a
further document request and answers to questions under an additional RESPA Qualified Written Request
letter.
Default Provisions under this QUALIFIED WRITTEN REQUEST
J.P. Morgan Chase or any agents, transfers, or assigns' omissions of, or agreement by silence to this
RESPA REQUEST via certified rebuttal of any and all points herein this RESPA REQUEST, agrees and consents
to, including but not limited by, any violations of law and/or immediate termination and/or removal of any
and all right, title and interest (liens) in Ms. Naranjo's, or any property or collateral, connected to Ms.
Naranjo's or loan number 5303563919, and waives any and all immunities and/or defenses to claims and/or
violations agreed to in this RESPA REQUEST, including but not limited to:
1. Ms. Naranjo's right to, by J.P. Morgan Chase's breach of fiduciary responsibility, fraud, and/or
misrepresentation, revoke and rescind any and all power of attorney or appointment J.P. Morgan
Chase may have or may have had in connection with loan number 5303563919, and any property
and/or real estate connected with loan number 5303563919;
2. Ms. Naranjo's right to have any certificated or uncertificated security re-registered inMs. Naranjo's,
and only Ms. Naranjo's name;
3. Ms. Naranjo's right of collection via J.P. Morgan Chase's liability insurance and/or bond;
4. Ms. Naranjo's entitlement in filing and executing any instruments, as power of attorney for and by
J.P. Morgan Chase ,including but not limited to a new certificated security or any security agreement
perfected by filing a UCC Financing Statement with the Secretary of State in the State where J.P.
Morgan Chase is located;
5. J.P. Morgan Chase's right to damages because of J.P. Morgan Chase's wrongful registration and
breach of intermediary responsibility with regard to Ms. Naranjo's asset, by way of J.P. Morgan
Chase issuing to Ms. Naranjo a certified check for the original value of Ms. Naranjo's monetary
instrument;
los Angeles San Francisco San Diego
Page 4 of 4
6. Ms. Naranjo's right to have loan number 5303563919 completely set off because of J.P. Morgan
Chase's wrongful registration and breach of intermediary responsibility with regard to Ms. Naranjo's
monetary instrument/asset by J.P. Morgan Chase's sending confirmation of set off of wrongful !iability
of Ms. Naranjo and issuing a certified check for the difference between the original value of Ms.
Naranjo's monetary instrument/asset and what Ms. Naranjo mistakenly sent to J.P. Morgan Chase as
a payment for such wrongful liability.
J.P. Morgan Chaseor any of J.P. Morgan Chase's transfers, agents or assigns offering a rebuttal of this
RESPA REQUEST must do so in the manner of this RESPA REQUEST in accordance of and in compliance with
current statutes and/or laws - signing in the capacity of a fully liable man or woman being responsible and
liable under the penalty of perjury, while offering direct testimony with the official capacity as appointed
agent for J.P. Morgan Chase in accordance with J.P. Morgan Chase's Articles of Incorporation, by-laws duly
signed by a current and duly sworn under oath director(s) of such corporation/ Holding Corporation/ National
Association.
Any direct rebuttal with certified true and complete accompanying proof must be posted with the
Notary address herein within sixty days. When no verified rebuttal of this RESPA REQUEST is made in a
timely manner, a "Certificate of Non-Response" serves as J.P. Morgan Chase's judgment and
consent/agreement by means of silence with any and all claims and/or violations herein-stated in the default
provisions or any other law.
Power of Attorney: When J.P. Morgan Chase fails by not rebutting to any part of this RESPA
REQUEST, J.P. Morgan Chase agrees with the granting unto Ms. Naranjo unlimited Power of Attorney and
any and all full authorization in signing and endorsing J.P. Morgan Chase's name upon any instruments in
satisfaction of the obligations of this RESPA REQUEST/Agreement or any agreement arising from this
agreement. Pre-emption of or to any Bankruptcy proceeding shall not discharge any obligations of this
agreement. Consent and agreement with this Power of Attorney by J.P. Morgan Chase waives any and all
claims and/or defenses of J.P. Morgan Chase, and remains in effect until the satisfaction of all obligations by
J.P. Morgan Chase have been satisfied.
If you have any questions, please do not hesitate to contact my office.
Sincerely,
Gordon F. Dickson, Esq.
Managing Attorney
los Angeles San Francisco San Diego
EXHIBIT E
RECORDING REQUESTED BY
FIDELI"'-, NATmNAL TiTLE
SAN DIEGO OFF!CE
AND WHEN RECORDED MAIL TO':
SBMC MORTGAGE
14761 CALlFA STREET
VAN NUYS, CA 91411-3107
DOC # 2006-0137353
J 111111/1 III Jilll ifill IIJII 11111 11111 Ifill 11111111111111111111 1111/111
FEB 28, 2006 8:00 AM
OFFICIAL RECORDS
S.t..N DIEGO COUNTY RECORDER'S OFFICE
GREGORY J. SMJTH. COUNTY RECORDER
FEES: 57.00
PAGES; 17 DA:
111111/0111 UJIlI/111 lUll II/II 11111111111111111111 11111 11111 flJJIIIIIIIIIIlffl
20
06-0'1.37353
'-------

4360

------------'-----.i-------ISpace Above This Line For Recording Da!IlJ------
DEED OF TRUST
100033309910058159
DEFINITIONS
Words used in multiple sections of this document are defined below and other words are defined in Sections 3. 1I, 13, 18,20
and 21. Certain rules regarding the u&age of words used in this document are also provided in Section 16 ..
(A) "Security Instrument" means this document, which is dated FebrJary 21. 2005
Riders to this document.
, together with all
(B) "Borrower" is CARMEN R NARANJO, A MARRIED WOMAN AS HER SOLE AND SEPARATE PROPERTY
Borrower is the trustor under this Security Instrument.
(C) "Lender" is SBMC MORTGAGE
Lender is a A GENERAL PARTNERSHIP
the laws of CALIFORNIA
14761 CAlIFA STREET, VAN NUYS, Calffomia 91411
(D) "Trustee" is T.D. SERVICE CO" A CALIFORNIA CORPORATION
organized and existing under
" . Lender's address is
(E) "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that.is acting solely as a
nominee for Lender and Lender's successors and assigns. MERS Is the beneficiary under this Security Instrument. MERS
is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI
48501-2026, tel. (888) 679-MERS.
(F) "Note" means the promissory note signed by Borrower and dated February 21, 2006 . The Note
states that Borrower owes Lender Eight Hundred Twenty Five Thousand and nol100
Dollars (U.S. $ 825,000.00 ) plus interest. Borrower has promised
to pay this debt in regular Periodic Payments and to pay the debt in full not later than March 01, 2036 ". .
(G) "Property" means the property that is described below under the heading "Transfer of Rights in the Property."
CALIFORNIA-Single Family-Fannie M.elFreddle Mae UNIFORM lNSTRUMENT
ITEM 1lS26Ll (OD11)-IIER8 (Page I of 12
MFCA3114
Form 3005 1101
GREATlAND.
ToQdoratt 81&-7911131
99W1D05815
4361
(II) "Loan" means the debt evidenced by the Note. plus interest, any prepayment charges and late charges due under the
Note, and all sums due under this Security Instrument, plus interest.
<n "Riders" means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be
ex.ecuted by Borrower [check box as applicable]:
[K] Adjustable Rate Rider
o Balloon Rider
o 1-4 Family Rider
D Condominium Rider
D Planned Unit Rider
o Biweekly Payment Rider
D Second Home Rider
D OL.ier(s} [specify]
(J) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and
rules and orders (that have the effect oflaw) as welI as all applicable final, non-appealable judicial opinions.
(K) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments and other charges that are
imposed on Borrower or the Property by a condominium association, homeowners association or similar organization.
(L) "Electronic Funds Transfer" means any transfer of fWlds, other than a transaction originated by check., draft, or similar
paper instrument., which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to
order, instruct, or authorize a financial institution to debit or credit an account. Such tenn includes, but is not limited to, point-
of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated
clearinghouse transfers.
(M) "Escrow Items" means those items that are described in Section 3.
(N) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party
(other than insurance proceeds paid Wlder the coverages described in Section 5) for: (i) damage to, or destruction of, the
Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or
(iv) misrepresentations of, or omissions as to, value and/or condition of the Property.
(0) "Mortgage Insurance" means insurance protecting Lender against the nonpayment of, or default on, the Loan.
(P) "Periodic Payment" means the regularly scheduled amount due for (i) principal and interest under the Note, plus
(li) any amounts under Section 3 of this Security Instrument.
(Q) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.c. 2601 et seq.) and its implementing regulation,
Regulation X (24 C.F.R. Part 3500), as they might be amended from time to time, or any additional or successor legislation or
regulation that governs the same subject matter. As used in this Security Instrument, "RESPA" refers to all requirements and
restrictions that are imposed in regard to a "federally related mortgage loan" even if the Loan does not qualify as a "federally
related mortgage loan" under RESPA.
(R) "Successor in Interest of Borrower" means any party that has taken title to the Property, whether. or not that party has
assumed Borrower's obligations under the Note and/or this Security InstrumenL
CAUFORNIA-5ingIc Family-Fannie MulFreddie Mae UNIFORM INSTRUMENT
ITEM m6L2 (OO11}-IIER8 (page 2 of 11 pages)
Form 30051101
GREATu.ND.
To om on: 1-3s:J).939301Sc 816-791-1131
'-.
4362
TRANSFER OF RIGHTS IN THE PROPERTY
The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) and
the successors and assigns of MERS. This Security Instrument secures to Lender: (i) the repayment of the Loan, and all
renewals, extensions and modifications of the Note; and (ii) tlle performance of Borrower's covenants and agreements under
this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with
power of sale, the following described property located in the COUNTY
[Type of Recording Jurisdiction]
of SAN DIEGO
[Name of Recording Jurisdiction]
LOT 42 OF SAN GOLD POINT IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO 3216, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, APRIL 14, 1955
which currently has the address of
LA JOLLA
[Cityl
,California
5331 CALUMET AVENUE
[Street]
92037
{zip Code]
("Property Address"):
TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and
fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security
Instrument. All of the foregoing is referred to in this Security Instrument as the "Property." Borrower underStands and agrees
that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply
with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of
those interests. including, but not limited to, the right to foreclose and sell the Property; and to take any action required of
Lender including, but not limited to, releasing and canceling this Securirj Instrument
BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant
and convey the Property and that the Property is unencumbered, except far encumbrances of recot:i. Borrower warrants and
will defend generally the title to the Property against all claims and demands, subject to any encwnorances of record.
THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited
variations by jurisdiction to constitute a unifonn security instrument covering real property.
UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:
1. Payment of Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay
when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late 'cnarges due
under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this
Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment
under the Note or this Security Instrument is returned ta Lender unpaid, Lender may require that any or all subsequent
payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by
Lender: (a) cash; (b) money order; ec) certified check, bank. check, treasurer's check or cashier's check, provided any such
check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or
(d) Electronic Funds Transfer.
CALlFORNlA-5il1gle Family-Fannie MaeIFrtddie Mac UNIFORM lNSTRUMENT Form JOOS 1/01
> GREATlJ\NO.
ITEM 1l926L3 (OO11)-IIERS To O'Il!rQlI:
4363
Payments are deemed received by Lender when received at the location designated in the Note or at such other location as
may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial
payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or
partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prej udice to its rights to refuse
such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments
are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied
funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not
do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied
earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No
offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments
due under the Note and this Security Instnnnent or performing the covenants and agreements secured by this Security
Instrument.
2. Application of Payments or Proceeds. Except as otherwise descnoed in this Section 2, all payments accepted ani
applied by Lender shall be applied in the following order of priority; (a) interest due under the Note; (b) principal due under the
Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it
became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security
Instrument, and then to reduce the principal balance of the Note.
If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay
any Jate charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic
Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if,
and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the
full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments
shall be applied first to any prepayment charges and then as described in the Note.
Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not
extend or postpone the due date, or change the amount, of the Periodic Payments.
3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until
the Note is paid in full, a sum (the "Funds") to provide for payment of amOlmts due for. (a) taxes and assessments and other
items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments
or ground rents on the Property, jf any; (c) premiums for any and all insurance required by Lender under Section 5; and
(d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage
Insurance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or
at any time during the term of the Loan, Lender may require that CommW'lity Association Dues, Fees, and Assessments, if any.
be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to
Lender ali notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless
Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to
pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing: In !be event of such
waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of
Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within
such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts .shall for all
purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase "covenant and
agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower
fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and
Borrower shall then be obligated under Section 9 to repay to Lender any such amOW'lt. Lender may r e v o ~ e the waiver as to any
or all Escrow Items at any time by a notice given in accordance with Section 15 and. upon such revocation, Borrower sluiIl pay
to Lender all Funds, and in such amounts, that are then required under this Section 3. .. ..
Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to apply the Funds at the
time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall
estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditW'Cs of future Escrow Items
or otherwise in accordance with Applicable Law.
The Funds shall be held in an institution whose deposits are insured by a federal agency, instrwnentaJity, or entity
(including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender shall
apply the Funds to pay the Escrow Items no later than the time specified under RESP A. Lender shall not charge Borrower for
holding and applying the Funds, annually analyzing the escrow account, 0;- verifYing the Escrow Items, unless Lender pays
Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in
CALIFORNIA-Single Family-Fannie MaeIFreddie Mae UNIFORM INSTRUMENT
ITI:M 992Bl. (OO11)-IIERS (Puge 4 of 12 pages)
Form J60s 1101
. :. GREATLANO.
To Qmr OIt !-lrJI).SI)..9393011oc 91IH91-1131
. I
-. ,
4364
writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest
or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender
shall give to Borrower, wit.i.out charge, an annual accounting of the Funds as required by RESPA.
If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess
funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify
Borrower as required by RESPA, and Borrower shall pay to Lender the amount to make up the shortage in
accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined
under RESP A, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to
make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments.
Upon payment in full of ali sums secured by this Security Instrument, Lender shall promptly refund to Borrower any
Flmds held by Lender.
4. Charges; Liens. Borrower shall pay all taxes, assessments, charges. fines, and impositions attributable to the
Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property. if any,
and Community Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items, Borrower
shall pay them in the manner provided in Section 3.
Borrower shall promptly discharge any lien which has priority over this Security Instrument UI'lJess"8orrower: (a) agrees
in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower
is perfonning such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal
proceedings which in Lender's opinion operate to prevent the enforcement of the lien while. those are pending, but
only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender
subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which
can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within Iq days of the
date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this
Section 4.
Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by
Lender in connection with this Loan.
S. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property
insured against loss by fire, hazards included within the term "extended coverage," and any other hazaids inCluding, but not
limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts
(including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding
sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be' chosen by Borrower
subject to Lender's right to msapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require
Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and
tracking services; or (b) a one.time charge for flood zone determination and certification services and subsequent charges each
time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall
also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with
the review of any flood zone detennination resulting from an objection by Borrower.
If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lep.der's
option and Borrower's expense. Lender is under no obligation to purchase any particular type- or amount of coverage.
Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or
the contents of the Property. against any risk., hazard or liability and might provide greater or lesser coverage than was
previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the
cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this SeCtion 5 shall become
additional debt of Borrower secured by this Security Instrument These amounts shall bear interest at the Note rate from the
date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.
All insurance policies required by Lender and renewals of such policies shall be subject to Lender"s right to disapprove
such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee andlor as an additional loss payee
and Borrower further agrees to generally assign rights to insurance proceeds to the holder of the Note up to the amount of the
outstanding loan balance. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower
shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any fann of insurance
coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall incl!Jde a standard
mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee and Borrower further agrees to
generally assign rights to insurance to the holder of the Note up to the amount of the outstanding loan balance.
CALlFORNIA-5ing[e Family-Fannie MaeIFreddie Mac UNrFORM INSTRUME.NT
ITEM 992SL.5 (OO11)-IIERS (Page 5 off:1 page.r)
,
CY
Form 1101
GREATLANO.
ToQderQtI: 1:ffiO"53).939:lorsc 816-1911131
4365
In the event of loss, Borrower shall give prompt notice to the insw-ance carrier and Lender. Lender may make proof of
loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds,
whether or Dot the underlying insw-allce was required by Lender. shall be applied to restoration or repair of the Property, if the
restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restomtion period,
Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to
ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly.
Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the
work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insw-ance
proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or
other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of
Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance
proceeds shall be applied to the sums secw-ed by this Security Instrument, whether or not then due, with the excess, if any, paid
to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2.
If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related
matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a
claim, then Lender may negotiate arId settle the claim. The 30-day period will begi'l when the notice is given. In either event,
or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to
any insw-ance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and
(b) any other of Borrower's rights (other than the right to any refund of Wleamed premiums paid by Borrower) under all
insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use
the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security
Instrument, whether or not then due.
6. Occupancy. Borrower shall occupy. estabiish, and use the Property as Borrower's principal residence within 60
days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower-'s principal residence
for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not he
unreasonably withheld. or unless extenuating circumstances exist which are beyond Borrower's control.
7. Preservation, Maintenance and Protection oCthe Property; Inspections. Borrower shall not d<;stroy, damage or
impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in
the Property, Borrower shall maintain the Property in order to prevent the Property from deteriomting or decreasing in value
due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible,
Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurmce or condenmation
proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repah-ing or
restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs
and restoration in a single payment or in a series of progress payments as the work is completed If the insurance or
condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation
for the completion of such repair or restoration. ., .
Lender or its agent may make reasonable entries upon and inspections of the Property. lfit has reasonable cause, Lender
may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such
an interior inspection specifying such reasonable cause. !
8. Borrower's Loan Application. Borrower shall be in default if, during the Ulan application process, Borrower or
any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false.
misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in
cor'Jlect!on with the Loan. Material representations include, but are not limited to, representations concerning Borrower's
occupancy of the Property as Borrower's principal residence.
9. Protection of Lender's Interest In the Property and Rights Under this Security Instrument. If (a) Borrower
fails to perform the covenants and agreenlents contained in this Security Instrument, (b) there is a legal proceeding that might
significantly affect Lender's interest in the Property and/or rights WIder this Security Instrument '(such as a proceeding in
bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security
Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for
whatever is reasonable or appropriate to protect Lender's interest in the Property and rights WIder this, Security Instrument,
including protecting andlor assessing the value of the Property, and securing andlor repairing the Property. 'Lender's actions
can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument;
(b) appearing in court; and (c) paying reasonable attorneys' fees to protect i ~ interest in the Property and/or rights under this
CALlFORNIA-Singlc Family-Fannie MaeIFrec!c!ie Mac UNIFORM INSTRUMENT
ITEM 9926lS (0011 }-IIERS
M i i ~ A . ~ 1 1 A .
(Page 6 of / 2 page.tJ
Form 300S ]JOt
GreatDaca'"
To Ord .. Calt l-a()()'9M-S77S
4366
Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not
limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes,
eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may
take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that
Lender incurs no liability for not taking any or all actions authorized under this Section 9.
Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security
Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such
interest, upon notice from Lender to Borrower requesting payment.
If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower
acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing.
10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall
pay the premiums required to maintain the Mortgage Insurance in effect If, for any reason, the Mortgage Insurance coverage
required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was
required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the
premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost
substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage
insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall contfuue to
pay to Lender the amount of the separately designated payments that were due when the itlsurance coverage ceased to be in
effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such
loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be
required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require losS reserve payments if
Mortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender
again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage
Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make
separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to
maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage
Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until
termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate
provided in the Note.
Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower
does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance.
Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements
with other parties that share or modify their risk, or reduce losses. These agreements are on'terms anti conditions that are
satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the
mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may
include funds obtained from Mortgage Insurance premiums). .
. As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any
affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or might be characterized as) a
portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or
reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in ex.change for a share
of the premiums paid to the insurer, the arrangement is often tenned "captive reinsurance." Further: :
(a) Ally such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or
any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance.
and they will not entitle Borrower to any refund.
(b) Any such agreements will not arred the rights Borrower bas--if any-with respect to tbe Mortgage
Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may Include the right to receive
certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance
terminated automatically, andlor to receive a refund of any Mortgage Insurance premiums thin were unearned at the
time of such cancellation or termination.
1I. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall
be paid to Lender.
If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property,' if the
restoration or repair is economically feasible and Lender's security is not During such repair and restoration period,
CALIFORNlA-Single Family-Fannie MaeIFreddle Mac UNIFORM INSTRUMENT
ITEM (0011)-MERB

(Page 7 oj 12 pages)
Form 3005 llOI
t GrqtDoca
TV
To Om., Col!:

4367
Lender shall have the right to hold such Miscellaneous Proceeds Wltil Lender has had an opportlUlity to inspect such Property
to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be Wldertaken promptly.
Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is
completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous
Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the
restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be
applied to the sums secured by this Security Instrument. whether or not then due, with the excess, if any, paid to Borrower.
Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2.
In the event of a total taking, destruction, or loss in value ofllie Property, the Miscellaneous Proceeds shall be applied to
the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower.
In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property
immediately before the partial taking, destruction, or loss in value is equal to or greater than the 8moWlt of the sums secured by
this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender
otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amoWlt of the Miscellaneous
Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking,
destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking.
destruction, or loss in value. Any balance shall be paid to Borrower.
In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property
immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately
before the partial taking, destruction. or loss in value, Wlless Borrower and Lender otherwise agree in writing, the
Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are
then due.
If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in
the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond'to within 30 days
after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or
repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the
third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to
Miscellaneous Proceeds. '
Borrower shall be in default if any action or proceeding, whether civil or criminal, is begWl that, in Lender's judgment,
could result in forfeiture of the Property or other material impainnent of Lender's interest in the Property or rights Wlder this
Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 19, by
causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property
or other material impairment of Lender's interest in the Property or rights under this Security Instrument The proceeds of any
award or claim for damages that are attributable to the impainnent of Lender's interest in the Property are hereby assigned and
shalJ be paid to Lender. ,
All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be:applied in the order
provided for in Section 2.
12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or
modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor
in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest. of Borrower. Lender
shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for
payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by
the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any rigl1t or remedy
including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of
Borrower or in amoWlts less than the BmoWlt then due, shall not be a waiver of or preclude the exercise of any right or remedy.
13, Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower coven.ants and agrees that
Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument
but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage;:grant and convey the
co-signer's interest in the Property under' the tenns of this Security Instrument; (b) is not personally obligated to pay
the sums secured by titis Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend,
modify, forbear or make any accommodations with regard to the terms of this Security Instrument or 7'l0te without the
co-signer's consent.
Subject to the provisions of Section IS, any Successor in Interest of Borrower who assumes Borrower's obligations under
this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and' benefits under this
CALIFORNIA-Single Family-FaDDle MaeIFreddle Mac UNIFORM INSTRUMENT
ITEM 99261.8 (00l1)-IIER8
MFr.A::I114
(Page 8 of / 2
Form 30DS 1/01
GrN100ca."'"
To Order Coli: 1.aoo.96!1-SnS

4368
Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Secu.";ty Instrument
unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as
provided in Section 20) and benefit the successors and assigns of Lender.
14. LOlill Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for
the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited
to, attorneys' fees. property inspection and valuation fees. In regard to any other fees, the absence of express authority in this
Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee.
Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.
If the Loan is subject to a law which sets maximum loan charges, and that law is fmally interpreted so that the interest or
other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan
charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected
from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by
reducing the principai owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the
reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is
provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a
waiver of any right of action Borrower might have arising out of such overcharge.
15. Notices, All notices given by Borrower or Lender in connection with this Security Instru.'nent must be in writing.
Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when
mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to anyone
Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall
be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall
promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of
address, then Borrower shall only report a change of address through that specified procedure. There may be only one
designated notice address tmder this Security Instrument at anyone time. Any notice to Lender shall be given by delivering it
or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to
Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until
actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the
Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.' .
16. Governing Law; Severability; Rules of Construction. This Security Instnnnent shall be governed by federal law
and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument
are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the
parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against Ilgreement'by
contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such
conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the
conflicting provision.
As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter
words or words of the feminine gender, (b) words in the singular shall mean and include the plural and vice versa; and (c) the
word "may" gives sole discretion without any obligation to take any action.
17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument."
18. Transfer of the Property or a BenefIcial Interest in Borrower. As used in this Section 18, "Intere'st in the
Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests
transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the
transfer of title by Borrower at a future date to a purchaser. '
If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural perSon
and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require
immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by
Lender ifsuch exercise is prohibited by Applicable Law.
If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not
less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums
secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may
invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. .
19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the
right to have enforcement of this Security Instnnnent discontinued at any time prior to the earliest of: (a) five days before sale
CALIFORNlA-Singlc Family-FlUlDie MaeIFreddle Mac UNIFORM INSTRUMENT
Form lll05 i/OI
ITEM 9926L9 (OO11)-,1tERS
(page 90/12 page.f)
'. . GREA TlANO
TGOdoo Ott 11!(X).!5:!).!J3930Aoc 816-7911131
MFCA3114
99W1005815
4369
of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law
might specify for the tennination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument.
Those conditions are that Borrower: (a) pays Lender all sums which then would be due WIder this Security Instrument and the
Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses
incurred in enforcing this Security Instrument. including, but not limited to, reasonable attorneys' fees, property inspection and
valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this
Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest m. the Property
and rights WIder this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrwnent, shall
continue WIchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the
foHowing forms, as selected by Lender: (a) cash; (b) money order; (c) certified check., bank check., treasurer's check or
cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency,
instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and
obligations secured hereby shall remain fully effective as ifno acceleration had occurred. However, this right to reinstate shall
not apply in the case of acceleration under Section 18.
20. Sale of Note; Change of Loan Sen'icerj Notice of Grievance. The Note or a partial interest in the Note (together
with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change
in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument
and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There
also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a of the Ulan
Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer,
the address to which payments should be made and any other information RESPA requires. in connection with a notice of
transfer of servicing. 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 Borrower will remain with the Loan Servicer or be transferred to a successor
Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purcbaser.
Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or
the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the
other party has breached any provision of, or any duty owed by reason of, this Security Instrument, WItil such Borrower or
Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged
breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If
Applicable Law provides a time period wbich must elapse before certain action can be taken, .that time peri!)d will be deemed
to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant
to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and
opportunity to take corrective action provisions of this Section 20. ..' .
21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as
toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene,
other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or
formaldehyde, and radioactive materials; (b) "Environmental Law" means federa11aws and laws of the jurisdiction where the
Property is located that relate to health, safety or environmental protection; (c) "Environmental includes any response
action.. remedial action, or removal action, as defined in Environmental Law; and (d) an "Enviromnental Condition;' means 8
condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup.
Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or
threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do,
anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Envirorunental
Condition, or (c) which, due to the presence, use, or release ofa Hazardous Substance, creates a condition that adversely affects
the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property; of small
quantities of Hazardous Substances that are generally recognized to be appropriate to nonnal residential uses and to
maintenance of the Property (including, but not limited to, hazardous substances in consumer products).
Borrower shall promptly give Lender written notice of (a) any investigation. claim, demand, lawsuit or other action by
any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental
Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling,
leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use
or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any
governmental or regulatory authority, or any private party, that any removal or other remediation of any Substance
CALIFORNIA-Single Family-Fannie MaeIFreddle Mac UNIFORM INSTRUMENT
ITEM 9928L10 (Page IO afIl page')
MFCA3114
Form 300S IJOI
GREATi.AlIO.
Toom-Ott
99W1005815
4370
affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with
Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Oeanup.
NON-UNIFORM COVENAl'1TS. Borrower and Lender further covenant and agree as follows:
22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's
breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless
Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default;
(c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and
(d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums
secured by this Security Instrument and sale of the Property. The Dotice shall further IDiorm Borrower of the right to
reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other
defense oC Borrower to acreleratioD and sale. If the deCault is not cured on or before the date specified in the notice,
Lender at its option may require immediate payment In Cull of all sums secured by this Security Instrument without
further demand and may Invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall
be entitled to collect aU expenses Incurred in pursuing the remedies provided in this SectioD 22, including, but not
limited to, reasonable attorneys' fees and costs of title evidence.
If Lender Invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the
occurrence of an event of default and of Lender's election to cause the Property to be soid. Trustee shall cause this
notice to be recorded in each county in wbich any part of the Property Is located. Lender or Trustee shall mail copies of
the notice as prescribed by Applicable Law to Borrower and to the other persons prescribed by Applicable Law.
Trustee shall give public notice of sale to the persons and in the manner prescribed by Applicable Law. After the time
requirt!d by Applicable Law, Trustee, without demand on Borrower, shall sell the Property at public auction to the
highest bidder at the time and place and under the terms designated in the notice of sale In one or mo're parcels and in
any order TrJstee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement
at the time and place of any previously scheduled sale. Lender or its designee may purchase the Proper!y at any sale.
Trustee sball deliver to tbe purchaser Trustee's deed conveying the Property without any covenant'or warranty,
expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements
made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all expenses of the sale,
including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured ,by this Security
Instrument; and (c) any excess to the person or personslegaUy entitled to It.
23. Reconveyance. Upon payment of all sums secured by this Security Instrument, Lender shallrequest Trustee to
reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt secured by this Security
Instrument to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled to it.
Lender may charge such person or persons a reasonable fee for reconveying the Property, but only if the fee is paid to a third
party (such as the Trustee) for services rendered and the charging of the fee is permitted under Applicable Law. If the fee
charged does not exceed the fee set by Applicable Law, the fee is conclusively presumed to be reasonable.
24. Substitute Trustee. Lender, at its option, may from time to time appoint a successor trustee to any Trustee
appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the
county in which the Property is located. The instrument sha1l contain the name of the original Lender, Trustee and Borrower,
the book and page where this Security Instrument is recorded and the name and address of the successor trustee. Without
conveyance of the Property, the successor trustee shall succeed to all the title, powers and duties conferred upon the Trustce
herein and by Applicable Law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions
for substitution. .
25. Statement of Obligation Fee. Lender may collect a fee not to exceed the maximum amount permitted by
Applicable Law for furnishing the statement of obligation as provided by Section 2943 of the Civil Code, ofCalifomia.
CALIFORNlA-Singlc Family-FllllDle MaeIFreddie Mac UNIFORM INSTRUMENT
ITEM (OO11r-MER8 (Page Ii o!J2page.l)

Form Ja05 1101
Groa100". no
roOn!trCaII: 1.a001l158-6775
4371
BY SIGNING BELOW, BOlTower accepts and agrees to the tenns and covenants contained in pages 1 through 12 of this
Security Instrument and in any Rider executed by Borrower and recorded with it.

________________ (Seal)
-Borrower
_______________ (Seal) (Seal)
-Borrower -Borrower
________________ (Seal) (Seal)
-Borrower ' -BorrowCl'
Witness: Witness:
State of Cali fomi a
County of S"", 'Oll'::)O
On 'J.hJ-/Ob before me, fJrtJV", N':},'rw-y ,ovbllc.
personally appeared r( NMM'jO
Plmgna1b!. known,lo me- (or proved to me on the basis of satisfactory evidence) to be the whose is/a.:e.
subscribed to the within instrument and acknowledged to me that -he/she!they executed the same in authorized
capacity(Wi), and that by Mslherfthe!r on the instrument the person(ltt, or the entity upon behalf of which the
acted, executed the instrument.
CALIFORNIA-Single Family-Fannie MaeIFreddle Mac UNIFORM INSTRUMENT
ITEM 1l928L12 (001 1 }-MERS (Page 12 of 12 pages)

J t) ROBERT BROWN '
- Cemm.' 1$46194
rJ) /l()TARY PUBliC-CAlifORNIA IJl
Sill Diego Covnt: -
JO Jill, 23, 20091
Form JOOS 1101
G_Do ..
To omar Call: 1./l00.Q/l8.,5ns
4372
ADJUSTABLE RATE RIDER
(12 Mo. Average 1 Yr CMT ARM Payment and Rate Caps)
THIS ADJUSTABLE RATE RIDER is made this 21st day of February 2006 ,and is
incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust or
Security Deed (the "Security Instrument") of the same date given by the undersigned (the'
"Borrower") to secure Borrower's Adjustable Rate Note (the "Note") to
SBMC MORTGAGE, A GENERAL PARTNERSHIP
(the "Lender") of the same date and covering the Property described in the Security Instrument and
located at:
5331 CALUMET AVENUE
LA JOLLA, CA 92037
THE NOTE CONTAINS PROVISIONS THAT Will CHANGE THE INTEREST
RATE AND THE MONTHLY PAYMENT. THERE MAY BE A LIMIT ON THE
AMOUNT THAT THE MONTHLY PAYMENT CAN INCREASE OR 'DECREASE.
THE PRINCIPAL AMOUNT TO REPAY COULD BE GREATER :THAN tHE
AMOUNT ORIGINALLY BORROWED, BUT NOT MORE THAN THE LIMIT
STATED IN THE NOTE.
ADDITIONAL COVENANTS. In addition to the covenants and agreements 'made in the
Security Instrument, Borrower and Lender further covenant and agree as follows:
A. INTEREST RATE AND MONTHLY PAYMENT CHANGES
I will make all payments under this Note in the form of cash, check or money order.
2. INTEREST
(A) Interest Rate
Interest will be charged on unpaid principal until the full amount of principal has been paid. I
will pay interest at a yearly rate of 1.000 %. The interest I will pay may
The interest rate required by this Section 2 is the rate I will pay both before and after any default
described in Section 7(8) of this Note.
(B) Interest Rate Change Dates
The interest rate I will pay may change on the 1st day of April 2006
and on that day every month thereafter. Each date on which my interest rate could change is called
MULTfSTATE ADJUSTABLE RATE RlDER
SBMC FORM CD5289 Page 1 of 5
Initials: _-=-' _____
Fonn 3004 4/2000
4373
an "Interest Rate Change Date." The new rate of interest will become effective on each Interest Rate
Change Date.
(C) Interest Rate Limit
My interest rate will never be greater than 9.950%.
(D) Index
Beginning with the first Rate Change Date, my interest rate will be based on an Index. The
"Index" is the twelve-month average of monthly yields on actively traded United States Treasury
Securities, adjusted to a constant maturity of one year.
My Index is calculated by adding together the monthly yields on one-year Treasury Constant
Maturities (as published in the Federal Reserve Statistical Release G 13) for the preceding twelve
months available as of the date 15 days before each Rate Change Date, and dividing the result by
twelve. The result of the calculation is called the "Current Index."
If the Index is no longer available, the Note Holder will choose a new Index that is based upon
comparable information. The Note Holder will give me notice of this choice.
(E) Calculation of Interest Rate Cbanges
Before each Interest Rate Change Date, the Note Holder will calculate my new interest rate by
adding Three and One Tenth percentage point(s) ( 3.100%) to the Current Index.
Subject to the limit stated in Section 2(C) above, the result of this addition will be my new interest
rate until the next Interest Rate Change Date. -
3. PAYMENTS
(A) Time and Place of Payments
I will pay principal and interest by making payments every month.
I will make my monthly payments on the 1 sl day of each month beginning on
A ril 1 2006 . I will make these payments every month until I have paid all the
principal and interest and any other charges described below that I may owe under tliis' Note .. Each.
monthly payment will be applied as of its scheduled due date and will be applied to interest before
principal. If, on March 1, 2036 , 1 still owe amounts under this Note, I will pay these
amounts in full on that date, which is called the "Maturity Date."
I will make my monthly payments at 14761 CALIFA STREET, VAN NUYS, CA 91411
Or at a different place if required by the Note Holder.
MULTISTATE ADJUSTABLE RATE RIDER
SBMe FORM C03289 Page 2 of 5
Initials: ~ . .
oml3004 4/2000
4374
(B) Amount of My Initial Monthly Payments
Each of my initial monthly payments will be in the amount of U.S. $ 2,653.53
amount may change.
(C) Payment Change Dates
. This
My monthly payment may change as required by Section 3(D) below beginning on the 1st
day of April 2007 , and on that day every 12th month thereafter. Each of these dates is
called a "Payment Change Date." My monthly payment also will change at any time Section 3(F) or
3(G) below requires me to pay a different monthly payment.
I will pay the amount of my new monthly payment each month beginning on each Payment
Change Date or as provided in Section 3(F) or 3(G) below.
(D) Calculation of Monthly Payment Changes
Before each Payment Change Date, the Note Holder will calculate the amount of the monthly
payment that would be sufficient to repay the unpaid principal that I am expected to owe at the
Payment Change Date in full on the Maturity Date in substantially equal installments at the interest
rate effective during the month preceding the Payment Change Date. The result of this calculation is
called the "Full Payment" Unless Section 3(F) or 3(G) below requires me to pay a different
amount, my new monthly payment will be in the amount of the Full Payment, except that my new
monthly payment will be limited to an amount that will not be more than 7.5% greater or less than
the amount of my last monthly payment due before the Payment Change Date.
(E) Additions to My Unpaid Principal
My monthly payment could be less than the amount of the interest portion of the monthly
payment that would be sufficient to repay the unpaid principal I owe at the monthly p a y m ~ n t date in
full on the Maturity Date in substantially equal payments. If so, each month that my monthly .
payment is less than the interest portion, the Note Holder will subtract the amOll..'lt of my monthly
payment from the amount of the interest portion and will add the difference to my unpaid principal.
The Note Holder also will add interest on the amount of this difference to my unpaid principal eacQ
month. The interest rate on the interest added to principal will be the rate required .by Section 2
above.
(F) Limit on My Unpaid Principal; Increased Monthly Payment J
My unpaid principal can never exceed a maximum amount equal to ONE HUNDRED TEN
percent ( 110.000 %) of the principal amount I originally borrowed. Because of my paying only
limited monthly payments, the addition of unpaid interest to my unpaid principal under Section 3(E)
above could cause my unpaid principal to exceed that maximum amount when interest rates
increase. In that event, on the date that my paying my monthly payment would' cause me to exceed
that limit, I will instead pay a new monthly payment. The new monthly payment will be in an
amount that would be sufficient to repay my then unpaid Principal in full on the Maturity Date in
MULTISTATEAOTIJSTABLERATERIOER
SBMe FORM CD5289 Page 3 of5
Initials: ~
Fonn 3004 412000
I
..
4375
substantially equal installments at the interest rate effective during the preceding month.
(G) Required Full Payment
On the 5th Payment Change Date and on each succeeding 5th Payment Change Date thereafter, I
will begin paying the Full Payment as my monthly payment until my monthly payment changes
again. I also will begin paying the Full Payment as my monthly payment on the final Payment
Change Date.
4. NOTICE OF CHANGES
The Note Holder will deliver or mail to me a notice of any changes in the amount of my monthly
payment before the effective date of any change. The notice will include infonnation required by
law to be given me and also the title and telephone number of a person who will answer any question
I may have regarding the notice.
B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER
Section 18 of the Security Instrument is amended to read as follows: .
Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18,
"Interest in the Property" means any legal or beneficial interest in the Property, including, but not
limited to, those beneficial interests transferred in a bond for deed, contract for deed, instaUment
sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future
date to a purchaser.
If all or any part of the Property or any interest in it is sold or transferred (or if Borrower is not a
natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior
written consent, Lender may require immediate payment in full of all sums secured by this SecuritY
Instrument. However, this option shall not be exercised by Lender if such exercise is 'prohibited by
federal law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to
Lender information required by Lender to evaluate the intended transferee as if a new loan were
being made to the transferee; and (b) Lender reasonably determines that Lender's securitY will not
be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in .
this Security Instrument is acceptable to Lender.
To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition
to Lender's consent to the loan assumption. Lender may also require the transferee to sign an
assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the
promises and agreements made in the Note and in this Security Instrument. Borrower will cCintinue
to be obligated under the Note and this Security Instrument unless Lender releases Borrower in
writing.
MULTISTATE ADJUSTABLR RATE RIDER
SBMC FORM CD5289 Page 40f5
CA2
Initials: --""'Fo""'nn-3"::'O-04--4/2":":"O-:-:-()()
-
If Lender exercises the option to require immediate payment in fun, Lender shall give Borrower
notice of acceleration. The notice shall provide a period of not less than 30 days from the date the
notice is given in accordance with Section 15 within which Borrower must pay all swns secured byt
this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period,
Lender may invoke any remedies permitted by this Security Instrument without further notice or
demand on Borrower.
BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in
this Adjustable Rate Pider.

CARMEN R. NARANJO V
_____________ ---'{Seal)
_______________ (Seal)
______________ {Seal)
_____________ (Seal)
______________ {Seal)
InitialS:'_.:-:cY-='-- __
Fonn 3004 4/2000
MUL TISTA TE ADJUST ABLE RATE RIDER
SBMC FORM CD5289 Page 5 of 5

Case File California FDCPA RESPA UCL QUASI CONTRACT Decl Relief M-T-D DENIED Naranjo v. SBMC Mortgage

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Case File California FDCPA RESPA UCL QUASI CONTRACT Decl Relief M-T-D DENIED Naranjo v. SBMC Mortgage

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