Davenport v. Servicing, No. C 10-0679 RS.

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Writing for the CourtRICHARD SEEBORG, District Judge.
Citation725 F.Supp.2d 862
PartiesKarol DAVENPORT, Plaintiff, v. LITTON LOAN SERVICING, LP, et al., Defendants.
Docket NumberNo. C 10-0679 RS.
Decision Date16 July 2010

725 F.Supp.2d 862

Karol DAVENPORT, Plaintiff,
v.
LITTON LOAN SERVICING, LP, et al., Defendants.

No. C 10-0679 RS.

United States District Court,N.D. California,
San Francisco Division.

July 16, 2010.


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Hermin Adella Dowe, Dowe Law Firm, San Pablo, CA, for Plaintiff.

Erik Wayne Kemp, John B. Sullivan, Regina Jill McClendon, Esq., Severson & Werson, San Francisco, CA, Renee Reyes de Golier, McCarthy and Holthus, San Diego, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
RICHARD SEEBORG, District Judge.
I. INTRODUCTION

This is a case about a home. The parties are before this Court because they fundamentally disagree as to who may claim the legal entitlement to it. Plaintiff advances twenty-six causes of action against her original lender, First Financial & Real Estate Services (“First Financial”), the current servicer of her loan, Litton Loan Servicing, LP (“Litton”), the original trustee, Credit-Based Asset Servicing and Securitization, LLC (“C-BASS”), the company who purchased her home at foreclosure sale, U.S. Bank, North America (“U.S. Bank”), and others. Among her federal claims are alleged violations of the Truth In Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and the Federal Regulations thereto as well as the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq. She also raises numerous other claims grounded on California statutory and common law. Defendants Litton, C-Bass and U.S. Bank move to dismiss.

II. RELEVANT FACTS

The property in dispute is located at 2836 Canterbury Drive in Richmond, California. Plaintiff Karol Davenport resides

725 F.Supp.2d 870

there. In 2006, Davenport was sixty-two years old. She was then and has remained unmarried. Davenport explains that she is a medical examiner by trade. Through this work, she grosses roughly $1,000 each month. A Social Security payment of $1,197 augments her monthly income. In September of 2006, she recounts in her First Amended Complaint (“FAC”) that her then-lender Citigroup (who, incidentally, is not a party in this case) contacted her by telephone. A representative of that bank apparently warned her that, should she refuse to refinance her existing loan, she would likely lose her home. The representative duly referred Davenport to the services of another lender, First Financial, a named defendant which has not as yet made an appearance in this action.

Davenport dealt largely with a First Financial employee named Kruger. In their first telephone conversation, she suggests Kruger responded to her desire to refinance with great enthusiasm. He gathered personal information, including her age, race, marital status and income. She avers she responded truthfully. Even so, she notes that Kruger overstated her monthly income by $2,200 on a loan application form. Kruger also explained that she would be eligible for a fixed rate loan for three years at 6.125%. While he noted that the rate would eventually adjust, she insists he assured her that it would be possible-indeed, easy-to refinance in the future. Soon after, First Financial sent a packet of information detailing the prospective loan to Davenport by fax. Kruger then explained the meaning of each page to Davenport over the telephone. She contends she emphasized that she would not agree to prepayment penalties or a balloon payment option; according to Davenport, Kruger assured her that such requests would “not be a problem.” (Compl. ¶ 24.) Attached to the final loan documents that she ultimately signed is a balloon payment rider.

Three days later, Davenport received by mail a thirty page loan agreement with explicit instructions from First Financial requiring her signature within seventy-two hours. She contends she found the language in the document baffling and overwrought; she says she was, at the very least, unsure if its terms were identical to those she discussed with Kruger. When she tried to contact him, he responded only on the third and last day. At that time, she insists he assured her that the longer document reflected their telephone conversation. When Davenport pointed out that several pages were not filled out, Kruger explained it was customary for the lender to complete the missing information after the borrower signed and returned the paperwork. Davenport did sign the loan (in the presence not of anyone from First Financial-she points out-but an impatient and fidgety notary instead) and returned the paperwork within the seventy-two hour period. A week later, the loan closed. It was secured by a deed of trust on the property and duly recorded in Contra Costa County on December 5, 2010. Upon subsequent consultation with a forensic accountant in 2009, Davenport contends she only then learned that First Financial failed to provide certain disclosures required by TILA and RESPA. 1

Plaintiff insists she faithfully satisfied her monthly loan obligations for three

725 F.Supp.2d 871

years until January of 2009, at which point she was not able to do so. Davenport admits she defaulted. She does explain, however, that she attempted to negotiate a refinance agreement with Litton, the loan servicer. According to Davenport, Litton “in bad faith” refused. On April 9, 2009, Quality Loan Service recorded a notice of default on behalf of C-BASS; it recorded a notice of sale on July 13, 2009. Davenport suggests that, while she did receive copies of these notices by mail, defendants did not fully comply with the requirements of California Civil Code section 2924. Specifically, she points out that the notices were not sent via certified mail. Moreover, Davenport claims that Litton also did not discuss alternatives to foreclosure as required by California Civil Code section 2923.5 and the federal Homeowner Affordable Modification Program (“HAMP”) guidelines. Litton counters that it did consider Davenport's options and insists that no law, cited or otherwise, requires a lender to refinance.

The defendants held a trustee's sale on August 13, 2009 and U.S. Bank purchased the property. On September 2, 2009, U.S. Bank served Davenport with a notice to vacate. She commenced this action on December 7, 2009.

III. DISCUSSION
A. Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6)

When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court accepts a plaintiff's factual allegations as true and construes the complaint in the light most favorable to the plaintiff. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969). Dismissal is appropriate where a complaint lacks “a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir.2008) (citation omitted). In the context of a Rule 12(b)(6) motion, a district court generally may not consider material beyond the pleadings. Fort Vancouver Plywood Co. v. United States, 747 F.2d 547, 552 (9th Cir.1984). The exception is material which is properly submitted as part of the complaint. Amfac Mtg. Corp. v. Arizona Mall of Tempe, 583 F.2d 426, 429-30 (9th Cir.1978). Here, a copy of the deed of trust and a notice of foreclosure were submitted as part of the FAC.

To state a claim for relief, Federal Rule of Civil Procedure 8(a)(2) demands that a pleading include a “short and plain statement of the claim showing that the pleader is entitled to relief.” The Supreme Court has instructed that this mandate does not require “detailed factual allegations,” but “demands more than an unadorned, the-defendant-harmed-me accusation” or “naked assertion[s] devoid of further factual enhancement.” Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). “A pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.’ ” Id. ( quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The tenet that allegations are construed in a light favorable to the plaintiff does not apply, however, to bare legal conclusions. Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Even

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where the plaintiff alleges something more than a bare legal conclusion, Twombly requires a statement of a plausible claim for relief. Id. at 544, 127 S.Ct. 1955. Weighing a claim's plausibility is ordinarily a task well-suited to the district court but, where the well-pleaded facts do not permit the court to infer more than a mere possibility of misconduct, the complaint has not shown the pleader is entitled to relief. Iqbal, 129 S.Ct. at 1950.

B. Federal Rule of Civil Procedure 9(b)

Federal Rule of Civil Procedure 9(b) provides that “[i]n allegations of fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” To satisfy the rule, a plaintiff must allege the “who, what, where, when, and how” of the charged misconduct. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997). In other words, “the circumstances constituting the alleged fraud must be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong.” Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097, 1106 (9th Cir.2003). By contrast, “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed. R. Civ. Pro. 9(b). Moreover, “[i]n the context of a fraud suit involving multiple defendants, a plaintiff must, at a minimum, identif[y] the role of...

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214 practice notes
  • Jara v. Aurora Loan Servs. LLC, No. C 11-00419 LB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • December 14, 2011
    ...Financial Co., Inc., No. C10-05338 HRL, 2011 WL 2784548, at *2-3 (N.D. Cal. July 13, 2011); Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 877-78 (N.D. Cal. 2010); Aguilera v. Hilltop lending Corp., No. C 10-0184 JL, 2010 WL 3340566, at *4-5 (N.D. Cal. Aug. 25, 2010); Atkins v......
  • Kham v. Executive Tr. Servs., LLC, CASE NO. CV F 12-0321 LJO BAM
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • March 20, 2012
    ...of the wrongful acts); and (3) damage resulting from operation of a conspiracy." Davenport v. Litton Loan Servicing, LP, 725 F.Supp.2d 862, 881 (N.D. Cal. 2010). "The conspiring defendants must also have actual knowledge that a tort is planned and concur in the tortious scheme wit......
  • Khomich v. Bank Of Am., No. CIV S-10-1866 KJM DAD PS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • March 23, 2011
    ...to state a cognizable claim under federal pleading standards. Twombly, 550 U.S. at 556-57; Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 881 (N.D. Cal. 2010) (plaintiff's conclusory allegation that defendants "agreed to hoodwink her with an unconscionable loan" did ......
  • Dougherty v. Bank of Am., N.A., No. 2:15-cv-01226-TLN-CKD
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • April 1, 2016
    ...v. J.C. Penney Co. , 24 Cal.3d 579, 593, 156 Cal.Rptr. 198, 595 P.2d 975 (1979) ); see also Davenport v. Litton Loan Servicing, LP , 725 F.Supp.2d 862, 884 (N.D.Cal.2010) (the lender's act of foreclosure, alleged certified mail failure, and refusal to modify plaintiff's loan were not outrag......
  • Request a trial to view additional results
214 cases
  • Jara v. Aurora Loan Servs. LLC, No. C 11-00419 LB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • December 14, 2011
    ...Financial Co., Inc., No. C10-05338 HRL, 2011 WL 2784548, at *2-3 (N.D. Cal. July 13, 2011); Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 877-78 (N.D. Cal. 2010); Aguilera v. Hilltop lending Corp., No. C 10-0184 JL, 2010 WL 3340566, at *4-5 (N.D. Cal. Aug. 25, 2010); Atkins v......
  • Kham v. Executive Tr. Servs., LLC, CASE NO. CV F 12-0321 LJO BAM
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • March 20, 2012
    ...(commission of the wrongful acts); and (3) damage resulting from operation of a conspiracy." Davenport v. Litton Loan Servicing, LP, 725 F.Supp.2d 862, 881 (N.D. Cal. 2010). "The conspiring defendants must also have actual knowledge that a tort is planned and concur in the tortious scheme w......
  • Khomich v. Bank Of Am., No. CIV S-10-1866 KJM DAD PS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • March 23, 2011
    ...to state a cognizable claim under federal pleading standards. Twombly, 550 U.S. at 556-57; Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 881 (N.D. Cal. 2010) (plaintiff's conclusory allegation that defendants "agreed to hoodwink her with an unconscionable loan" did not state ......
  • Dougherty v. Bank of Am., N.A., No. 2:15-cv-01226-TLN-CKD
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • April 1, 2016
    ...v. J.C. Penney Co. , 24 Cal.3d 579, 593, 156 Cal.Rptr. 198, 595 P.2d 975 (1979) ); see also Davenport v. Litton Loan Servicing, LP , 725 F.Supp.2d 862, 884 (N.D.Cal.2010) (the lender's act of foreclosure, alleged certified mail failure, and refusal to modify plaintiff's loan were not outrag......
  • Request a trial to view additional results

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