Green v. Cent. Mortg. Co.

• Decision Date: 01 December 2015
• Docket Number: Case No. 3:14-cv-04281-LB
• Citation: 148 F.Supp.3d 852
• Parties: Angelia Green, Plaintiff, v. Central Mortgage Company, et al., Defendants.
• Court: U.S. District Court — Northern District of California

148 F.Supp.3d 852

Angelia Green, Plaintiff,

v.Central Mortgage Company, et al., Defendants.

Case No. 3:14-cv-04281-LB

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

Signed December 01, 2015

Nelson W. Goodell, The Goodell Law Firm, San Francisco, CA, for Plaintiff.

Jonathan Douglas Fink, Joshua Ryan Hernandez, Robin Prema Wright, Wright Finlay & Zak, LLP, Newport Beach, CA, Benjamin Rafael Levinson, Law Office of Benjamin Levinson, Campbell, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART THE DEFENDANTS' MOTION TO DISMISS THE SECOND AMENDED COMPLAINT

[Re: ECF No. 55]

LAUREL BEELER

, United States Magistrate Judge

INTRODUCTION

The three plaintiffs—Angelia Green in both her individual capacity and her capacity as trustee of the Robert J. Tregre Jr. & Rosia L. Tregre Family Revocable Living Trust (“the Trust”), and the Trust itself—sued three defendants—Central Mortgage Company (“CMC”), PLM Loan Management Services, Inc. (“PLM”), and Deutsche Bank National Trust Company as Trustee for Harborview Mortgage Loan Trust 2007-2 (“Deutsche Bank”)—for violating federal and California law in relation to the denial of her loan modification applications and the foreclosure on her home. (Second Amended Complaint (“SAC”), ECF No. 54.¹ ) The court approved the parties' stipulation that PLM has non-monetary status pursuant to California Civil Code § 2924l

and does not have to participate as a party to this action at this time. (Stipulation and Order, ECF No. 45.) CMC and Deutsche Bank now have moved to dismiss Ms. Green's Second Amended Complaint (Motion, ECF No. 55.) Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument. The court grants in part and denies in part their motion.

STATEMENT

1. The Plaintiffs' Allegations

In 1977, Ms. Green's parents, Robert Tregre and Rosia Tregre (the “Tregres”), purchased property at 823 Templeton Avenue, Daly City, California 94104 (the “Property”). (SAC, ECF No. 54, ¶¶ 3, 14, 24.) On September 15, 2006, the Tregres created the Robert J. Tregre & Rosia L. Tregre Family Revocable Living Trust (the “Trust”), and they placed the Property into it. (Id. ¶¶ 5, 27-28.) Upon the death of the Tregres, all of the Trust's assets—including the Property—were to be distributed to Ms. Green, the Trust's beneficiary. (Id. ¶ 29.)

On January 11, 2007, the Trust entered into a refinance loan transaction (the “Loan”) and secured the Loan with the Property through a deed of trust (the “Deed of Trust”). (Id. ¶ 34; Request for Judicial Notice (“RJN”), ECF No. 36, Ex. 1.) The Trust was listed as the “borrower” on the Deed of Trust. (RJN, ECF No. 56, Ex. 1.) And Paragraph 13 of the Deed of Trust states in relevant part: “[A]ny 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 Security Instrument.” (Id. )

Sometime thereafter, CMC became the servicer of the Loan, and Deutsche Bank became the beneficiary under the Deed of Trust. (SAC, ECF No. 54, ¶ 34.)

Then, in June 2013, the Tregres each died. (Id. ¶ 35.) As a result, pursuant to the terms of the Trust, title to the Property was conveyed to Ms. Green. (Id. ¶¶ 29, 36, 40.) Ms. Green then “automatically became the trustee” of the Trust. (Id. ¶¶ 30-31, 41.) The plaintiffs allege that, according to the Trust,

the trustee's powers include, but are not limited to: The power to sell [T]rust property, and to borrow money and to encumber property, specifically including [T]rust real estate, by mortgage, deed of trust, or other method... The power to manage [T]rust real estate as if the trustee were the absolute owner of it, including the power to lease (even if the lease term may extend beyond the period of any trust) or grant options to lease the property, to make repairs or alterations and to insure against loss...The power to employ and pay reasonable fees to accountants, lawyers or investment experts for information or advice relating to the [T]rust...The power to continue any business of either grantor...The power to execute any documents necessary to administer any trust created in this Declaration of Trust...[and] The power to institute or defend legal actions concerning the [T]rust or the grantors' affairs.

(Id. ¶ 32.) At that point, Ms. Green “was authorized to act on behalf of the [T]rust immediately upon her parents' passing,” including by “making payments on the...[L]oan and applying for loss mitigation opportunities on behalf of” the Trust. (Id. ¶ 42.)

“The [p]laintiffs” thereafter made three payments on the Loan from July 2013 to September 2013, but thereafter the Loan fell into default after Ms. Green's daycare business closed that summer and she suffered a loss of income. (Id. ¶¶ 37, 43.) CMC and Deutsche Bank accepted all three of these payments. (Id. ¶ 43.)

In September 2013, Ms. Green contacted CMC about a loan modification. (Id. ¶ 38.) She informed CMC that both of her parents died and that she had obtained title to the Property. (Id. ¶ 38-39.) She also told CMC that she wished to inquire about a loan modification. (Id. ¶ 38.) She subsequently sent CMC the Trust documents. (Id. ¶ 39.)

CMC never questioned Ms. Green's ability to apply for a loan modification, and it asked “the [p]laintiffs” to send various documents to be considered for one. (Id. ¶¶ 44-45.) No one at CMC, however, discussed “loss mitigation options” with “the [p]laintiffs,” whether in person or by telephone, about how to save the home. (Id. ¶ 45.)

In December 2013 and early January 2014, Ms. Green sent to CMC all of the documents it requested to be considered for a loan modification. (Id. ¶ 47.) CMC acknowledged receiving the “documents to be considered for a loan modification” and also acknowledged that Ms. Green's application was “under review.” (Id. ¶ 46.) CMC subsequently denied her application on the basis that it had not received all of the documents it requested. (Id. ¶ 47.) Even though Ms. Green sent her bank statements, CMC claimed that it had not received them. (Id. ) CMC denied Ms. Green's loan modification application on this basis. (Id. )

On January 24, 2014, CMC sent “the [p]laintiffs” a letter addressed to the “Mortgagor” and which thanked the “Mortgagor” “for contacting us about your mortgage.” (Id. ¶ 48.) The letter stated that the “Mortgagor” was ineligible to receive a loan modification because the loan modification application packet was incomplete. (Id. ) “The [p]laintiffs,” though, “had already sent in all requested information.” (Id. )

On March 7, 2014, PLM recorded a Notice of Default stating that the Trust was $19,910.59 in arrears on the Loan. (RJN, Ex. 4, ECF No. 56-1 at 28-31.) Exhibit A to the Notice of Default is a “Declaration Per CA Civil Code Section 2923.5(c)

.” (RJN, Ex. 4, ECF No. 56-1 at 31.) It states that the mortgage servicer, CMC, “was unable to make contact with the Borrower” but that “the following efforts were made”:

[x] Sent a First-Class letter to Borrower's last known mailing address advising Borrower (a) that Borrower is in default under the Loan, (b) that Borrower should contact Servicer regarding alternative options to avoid foreclosure, (c) of Servicer's toll-free number with access to a live representative during Servicer's business hours, (d) of a toll-free number to a HUD certified counseling agency, and € that Borrower's failure to contact Servicer may result in commencement of a foreclosure action;

[x] Attempted to contact Borrower by telephone at least 3 times at 3 different hours on 3 different days at the primary telephone number on file;

[x] Two weeks after last telephone contact was completed and no contact having been made, Servicer sent a letter via Certified Mail Return Receipt Requested to Borrower's last known mailing address advising Borrower (a) that Borrower is in default under the Loan, (b) that Borrower should contact Servicer regarding alternative options to avoid foreclosure, (c) of Servicer's toll-free number with access to a live representative during Servicer's business hours, (d) of a toll-free number to a HUC certified counseling agency, and € that Borrower's failure to contact Servicer within 30 days of receipt of this letter will result in commencement of a foreclosure action.

(RJN, Ex. 4, ECF No. 56-1 at 31.)

Ms. Green received the Notice of Default in the mail at the Property in mid-March 2014. (SAC, ECF No. 54, ¶ 49.) She had not previously received written denial of her loan modification application “on the merits.” (Id. ) Before the Notice of Default was recorded, Ms. Green had never been able to speak with a CMC representative, whether in person or by telephone, regarding her options to avoid foreclosure. (Id. )

On June 12, 2014, PLM recorded a Notice of Trustee's Sale. (RJN, Ex. 5, ECF No. 56-1 at 33-34.)

In late June 2014, CMC acknowledged that it received all necessary documents to consider the “[p]laintiffs” for a loan modification. (SAC, ECF No. 54, ¶ 50.) And on June 26, 2014, CMC thanked the “[p]laintiffs” for their “timely submission of your Borrower Response Package.” (Id. ¶ 51.) On July 1, 2014, CMC sent the “[p]laintiffs” another letter thanking them for submitting a borrower response package and requesting addition information. (Id. ¶ 52.)

CMC subsequently denied the “[p]laintiffs' ” loan modification application “on the basis of insufficient income.” (Id. ¶ 53.) CMC's “denial letter,” however, made no mention of what her gross income was. (Id. ) The plaintiffs allege that this denial was improper because Ms. Green and her family had sufficient income pursuant to federal guidelines and thus should have been approved for a loan modification. (Id. ) Her income was approximately $3,400 per month, and her children pledged to contribute $2,300 toward the payments. (Id. )

The “[p]laintiffs” apparently appealed CMC's decision, (see id. ¶ 55),...