Chancellor v. OneWest Bank
| Decision Date | 22 May 2012 |
| Docket Number | No. C 12-01068 LB,C 12-01068 LB |
| Parties | ANDREA CHANCELLOR, Plaintiffs, v. ONEWEST BANK, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS
Plaintiff Andrea Chancellor brought this action against OneWest Bank ("OneWest") and Cal-Western Reconveyance Corporation ("Cal-Western") (collectively, "Defendants") stemming from OneWest's failure to permanently modify her mortgage loan and Cal-Western's initiation of foreclosure proceedings. OneWest now has moved to dismiss Ms. Chancellor's First Amended Complaint. Upon consideration of the papers submitted and applicable legal authorities, the court GRANTS IN PART and DENIES IN PART OneWest's motion.1
Ms. Chancellor purchased a condominium at 930 Blosson Way in Hayward, California in 1993.First Amended Complaint ("FAC"), ECF No. 11 at 5, ¶ 13.2 Many years later, in February 2007, she obtained from IndyMac Bank an adjustable rate mortgage that is secured by a first deed of trust in the amount of $400,000 and a second deed of trust in the amount of $50,000 for her condominium. Id. at 6, ¶ 14, Ex. A. In March 2009, OneWest acquired IndyMac's loans and servicing rights. See Failed Bank Information, Information for IndyMac Bank, F.S.B., and IndyMac Federal Bank, F.S.B., Pasadena, CA, http://www.fdic.gov/bank/individual/failed/IndyMac.html (last visited May 22, 2012).
By April 2009, Ms. Chancellor was having difficulty staying current on her loan payments, so she sought either a special forbearance agreement or a loan modification from OneWest. FAC, ECF No. 11 at 8, ¶ 23. Eventually, in October 2009, OneWest offered her a temporary loan modification through a Trial Period Plan ("TPP") under the Home Affordable Modification Program ("HAMP") (the "HAMP TPP"). Id. at 8, ¶ 24, Ex. B at 61-62. Ms. Chancellor signed and executed the HAMP TPP on October 9, 2009. Id. at 8, ¶ 24, Ex. B at 62. Under the its terms, Ms. Chancellor was to make three monthly payments of $1,159.15 on or before November 1, 2009, December 1, 2009, and January 1, 2010. Id. at 8, ¶ 24, Ex. B. at 61. The HAMP TPP also provides:
Except as set forth in Section 2.C. below [which is applicable only to property located in Georgia, Hawaii, Missouri, or Virginia], the Lender [OneWest] will suspend any scheduled foreclosure sale, provided I [Ms. Chancellor] continue to meet the obligations under this Plan [the HAMP TPP], but any pending foreclosure action will not be dismissed and may be immediately resumed from the point at which it was suspended if this Plan terminates, and no new notice of default, notice of intent to accelerate, notice of acceleration, or similar notice will be necessary to continue the foreclosure action. . . .
Ms. Chancellor made the first payment by November 1, 2009. Id. at 18, ¶ 89. Nevertheless, on November 4, 2009, OneWest, through its trustee Cal-Western, recorded a Notice of Default with respect to Ms. Chancellor's property. Id. at 9, ¶ 26. The Notice of Default stated that she was $15,296 in default on her loan. Id. Ms. Chancellor contends that the filing of the Notice of Default (and, thus, the institution of foreclosure proceedings) violated both the HAMP TPP and oralpromises made by OneWest's representatives, whom she alleges told her that Defendants would not initiate any foreclosure proceedings unless she failed to comply with the terms of the HAMP TPP. Id. at 9, ¶ 27. Ms. Chancellor alleges that she not only made the three payments by November 1, 2009, December 1, 2009, and January 1, 2010, but also made seven additional payments through September 2010. Id. OneWest accepted all of these payments and applied them to the balance of her loan but never approved Ms. Chancellor for a permanent loan modification. Id.
On January 28, 2010, "in fear that ONEWEST would proceed with a foreclosure sale," Ms. Chancellor filed a Chapter 13 bankruptcy petition (the "First Bankruptcy Case") in this district. Id. at 9, ¶ 28; see In re Chancellor, No. 10-bk-40906 EDJ 13 (Bankr. N.D. Cal. Jan. 28, 2010).
Notwithstanding its acceptance of Ms. Chancellor's monthly payments, OneWest, through Cal-Western, recorded a Notice of Trustee's Sale on February 5, 2010. FAC, ECF No. 11 at 9-10, ¶ 29. Because the Notice of Trustee's Sale was recorded in violation of the automatic stay due to the First Bankruptcy Case, OneWest rescinded it. Id. at 9-10, ¶ 29.
On March 17, 2010, the bankruptcy court dismissed the First Bankruptcy Case because Ms. Chancellor failed to file certain required documents. Order of Dismissal, ECF No. 27, In re Chancellor, No. 10-bk-40906 EDJ 13 (Bankr. N.D. Cal. Mar. 17, 2010); Order Denying Motion to Vacate Dismissal and Reopen Case, ECF No. 34, In re Chancellor, No. 10-bk-40906 EDJ 13 (Bankr. N.D. Cal. July 8, 2010). On March 25, 2010, Ms. Chancellor filed another Chapter 13 bankruptcy petition (the "Second Bankruptcy Case"), which was later converted to a Chapter 7 bankruptcy petition. Id. at 10, ¶ 31; see In re Chancellor, No. 10-bk-43311 MEH 7 (Bankr. N.D. Cal. Mar. 2, 2010). On September 29, 2010. OneWest obtained relief from the automatic stay put in place by the Second Bankruptcy Case. Id. at 10, ¶ 31; Order Terminating Automatic Stay, ECF No. 32, In re Chancellor, No. 10-bk-43311 MEH 7 (Bankr. N.D. Cal. Sep. 29, 2010).
Around this time, Ms. Chancellor alleges that she "was orally informed that she did not qualify for a permanent loan modification" and "was told by ONEWEST that she could not longer continue making the monthly payments she had made in good faith for the last ten (10) months." FAC, ECF No. 11 at 10, ¶ 32. She further alleges that "ONEWEST did not give a reason for the denial"; rather, a "representative from ONEWEST merely stated that they recommended that she 'save her money.'"Id. "Although [she] was ready and willing to make additional payments, she stopped making payments as instructed." Id. OneWest, through Cal-Western, recorded another Notice of Trustee's Sale on November 10, 2011, and Ms. Chancellor alleges that it may have filed two more since then. Id. at 10, ¶ 35.
Plaintiff filed a third Chapter 13 bankruptcy petition (the "Third Bankruptcy Case" on January 31, 2011. In re Chancellor, No. 11-bk-41061 EDJ 13 (Bankr. N.D. Cal. Jan. 31, 2011). Because the Second Bankruptcy Case was (and is) open and pending, the bankruptcy court dismissed the third one on February 10, 2011. Order of Dismissal, ECF No. 11, In re Chancellor, No. 11-bk-41061 EDJ 13 (Bankr. N.D. Cal. Feb. 10, 2011).
Plaintiff filed the instant civil action on January 5, 2012 in Alameda County Superior Court. Notice of Removal, ECF No. 1, Ex. 1; see Chancellor v. OneWest Bank, No. HG12610995 (Jan. 5, 2012). Both OneWest and Cal-Western was served with the complaint and summons. Proof of Service (Onewest), No. HG12610995 (Feb. 3, 2012); Proof of Service (Cal-Western), No. HG12610995 (Feb. 3, 2012). Cal-Western responded on February 16, 2012 by filing a declaration of non-monetary status pursuant to California Civil Code § 2924(b), so it is no longer considered a party to this action. Declaration Non-Monetary, No. HG12610995 (Feb. 22, 2012).3
OneWest did not answer the complaint. Instead, on March 2, 2012, OneWest removed the action to this court on federal question grounds. Id. at 2, ¶¶ 3-5. Then, on March 9, 2012, OneWest movedto dismiss Plaintiff's complaint. First Motion, ECF No. 4. In response, Ms. Chancellor filed a First Amended Complaint on March 23, 2010, in accordance with Federal Rule of Civil Procedure 15(a)(1)(B). FAC, ECF No. 11. The First Amended Complaint contains claims for the following: (1) wrongful foreclosure in violation of California Civil Code § 2923.5; (2) violation of California Civil Code § 2923.6; (3) breach of contract; (4) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605; (5) breach of the covenant of good faith and fair dealing; (6) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200; (7) violation of the "Unfair and Deceptive Business Act Practices (UDAP)"; (8) negligence; (9) intentional misrepresentation; (10) negligent misrepresentation; (11) "preliminary and permanent injunction"; and (12) quiet title. See generally FAC, ECF No. 11.
OneWest has now moved to dismiss Ms. Chancellor's First Amended Complaint. Second Motion, ECF No. 12. Ms. Chancellor opposes the motion, Opposition, ECF No. 15. OneWest did not file a reply.
A court may dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "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. (quoting Twombly, 550 U.S. at 557.). Twombly, 550 U.S. at 555 ().
In considering a motion to dismiss, a court must accept all of the plaintiff's allegations as true and construe them in the light most favorable to the plaintiff. See id. at 550; Erickson v. Pardus, 551U.S. 89, 93-94 (2007); Vasquez v. Los Angeles County, 487 F.3d...
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