Guzman v. Nationstar Mortg. LLC
| Decision Date | 11 June 2019 |
| Docket Number | Case No.: 18cv2531-WQH-RBB |
| Court | U.S. District Court — Southern District of California |
| Parties | MARY D. GUZMAN, an individual; LUIS GUZMAN, and individual, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, doing business as Mr. Cooper; WILMINGTON TRUST, NATIONAL ASSOCIATION, as successor trustee for Bear Stearns alt-a-trust, mortgage pass-through certificates, Series 2006-6; THE MORTGAGE LAW FIRM PLC; and DOES 1-10, inclusive, Defendants. |
The matter before the Court is the motion to dismiss filed by Defendant Nationstar (ECF No. 17) and joined by Defendant Wilmington Trust (ECF No. 24).
On June 28, 2018, Plaintiffs Mary Guzman and Luis Guzman initiated this action by filing a complaint in the Superior Court of California for the County of San Diego, case number 37-2018-00048717-CU-OR-NC, naming as defendants Mr. Cooper and Does 1 through 5, inclusive.
On November 5, 2018, Defendant Nationstar Mortgage, doing business as Mr. Cooper (Defendant Nationstar) removed the case to this Court based on diversity jurisdiction. (ECF No. 1).
On December 10, 2018, Plaintiffs filed an amended complaint, the operative complaint in this action. (ECF No. 8). Plaintiffs bring claims against Defendant Nationstar; Defendant Wilmington Trust, National Association, as successor trustee for Bear Stearns alt-a-trust, mortgage pass-through certificates, Series 2006-6 (Wilmington Trust); Defendant The Mortgage Law Firm PLC; and Does 1 through 10, inclusive. Plaintiffs bring the following causes of action: (1) quiet title; (2) wrongful foreclosure in violation of Cal. Civ. Code §§ 2923.6, 2924.11; (3) failure to substantiate foreclosure documents in violation of Cal. Civ. Code § 2924.17; (4) negligence; (5) negligent misrepresentation; (6) cancellation of instruments; (7) violation of the federal Real Estate Settlement Procedures Act (RESPA), 12 C.F.R. § 1024.33(a)-(b); (8) violation of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692; and (9) violation of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200. Plaintiffs claim that Defendants failed to uphold legal obligations to provide Plaintiffs with mortgage-related information and that Defendants failed to meet statutory requirements before recording foreclosure-related documents. Plaintiffs seek damages, injunctive relief, rescission of foreclosure documents, "[a] judgment quieting title in Highland Oaks Court finding that Plaintiffs are the owner in fee simple thereof," and a judicial declaration that Defendant Nationstar must rescind the notices of default and trustee's sale from county records and proceed with a lawful nonjudicial foreclosure by which Plaintiffs receive written approval or denial of their loan modification application. (ECF No. 8 at 34).
On December 31, 2018, Defendant Nationstar filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), on the grounds that that Plaintiffs lack standing to bring the claims and fail to allege sufficient facts to state any claim. (ECF No. 17).
On January 3, 2019, the Court approved a joint motion filed by Plaintiffs and Defendant The Mortgage Law Firm PLC (Defendant Mortgage Law Firm) stipulating that Defendant Mortgage Law Firm will be bound by non-monetary orders or judgments related to the Deed of Trust, and will not be not subject to any monetary awards in this case. (ECF Nos. 15, 18).
On January 14, 2019, Plaintiffs filed a response in opposition to the motion to dismiss. (ECF No. 19).
On January 28, 2019, Defendant Nationstar filed a reply in support of the motion to dismiss. (ECF No. 20).
On March 25, 2019, Defendant Wilmington Trust joined the motion to dismiss filed by Defendant Nationstar. (ECF No. 24).
Plaintiffs own and occupy a residential property located at 4675 Highland Oaks Court, Fallbrook, California 92028 (Highland Oaks Court). (ECF No. 8 at 2). Plaintiffs are trustors and borrowers on a June 14, 2006 Deed of Trust that shows Highland Oaks Court as security for a $650,000 loan. Id. ¶ 8; see also ECF No. 8-2 at 1-3. The lender on the June 14, 2006 Deed of Trust is Countrywide Bank FSB (Countrywide). (ECF No. 8 ¶ 2; ECF No. 8-2 at 2). The beneficiary on the June 14, 2006 Deed of Trust is Mortgage Electronic Registration Systems Inc (MERS), acting as nominee for Countrywide. Id. The trustee is Recontrust Company, N.A. (Recontrust). Id. Defendant Nationstar is a non-bank mortgage servicer. (ECF No. 8 ¶ 3).
In 2010, Plaintiffs obtained a mortgage modification with the assistance of Diane Cassidy, a loan modification underwriter. Id. ¶ 9. On February 20, 2015, Plaintiffs obtained a mortgage modification with Cassidy's assistance. Id. ¶ 10; see also ECF No. 8-10 at 1. Under the 2015 modification, Plaintiffs were required to pay $2,663.11, "which was a combination of their mortgage payment plus an escrow payment." (ECF No. 8 ¶10). From March 2015 to March 2017, Plaintiffs1 called Defendant Nationstar and made monthly payments between $2,633.11 and $2,800 depending on the amount Defendant Nationstar requested. Id. ¶¶ 11-12. Plaintiffs understood that the variation in payment amount resulted from taxes and insurance or the variable interest rate. Id. On April 1, 2017, Plaintiffs called Defendant Nationstar to make a regular monthly payment, and Defendant Nationstar informed Plaintiffs that the payment amount was $7,221. Id. ¶ 14. Defendant Nationstar stated that Plaintiffs were sent notice of the increased payment amount. Id. Defendant Nationstar informed Plaintiffs that servicing would change from Nationstar to Mr. Cooper. Id. Defendant Nationstar sent the notice and other bills and correspondence for Plaintiffs to 1666 Madrone Glen, Escondido, CA 92027 (the Escondido address), a property owned and occupied by John and Claudia Bossaller since May 31, 2012. Id. at 4 & n.1; see also ECF No. 8-2 at 1-2.
On May 23, 2017, Cassidy submitted to Defendant Nationstar a completed loan modification application on Plaintiff's behalf and a third-party authorization she had obtained from Defendant Nationstar. (ECF No. 8 ¶¶ 15-17).
On June 15, 2017, Defendant Nationstar informed Cassidy that additional information was needed to prove that Plaintiffs resided at Highland Oaks Court and not the Escondido address. Id. ¶ 18.
On June 20, 2017, Cassidy submitted a cable bill and IRA statement as proof of Plaintiffs' residence at Highland Oaks Court. Id. ¶ 19.
On June 30, 2017, Cassidy called Defendant Nationstar regarding the status of Plaintiffs' application. Id. ¶ 20. Defendant Nationstar stated that Cassidy was not authorized to speak on Plaintiffs' behalf and Defendant Nationstar refused to speak to Cassidy. Id. The same day, Cassidy resent the third-party authorization to Defendant Nationstar. Id. ¶ 22. The same day, Plaintiffs called Defendant Nationstar. Id. ¶ 21.Plaintiffs were informed that the application was being transferred from Nationstar to Mr. Cooper, which would take thirty to sixty days and would delay the application. Id.
On August 8, 2017, "Citibank, N.A., as trustee for the holders of Bear Stearns Alt-A Trust 2006-6, Mortgage Pass-Through Certificates, Series 2006-6, by Nationstar Mortgage LLC, it[]s attorney-in-fact," transferred all interests in the June 14, 2006 Deed of Trust to Wilmington Trust. ECF No. 8-3 at 1; see also ECF No. 8 ¶ 4 (). On August 17, 2017, Defendant Mortgage Law Firm was substituted as trustee for the June 14, 2006 Deed of Trust. (ECF No. 8 ¶ 5).
On August 28, 2017, Defendant Nationstar "sent a loan modification letter to Plaintiffs about exploring loss mitigation options." Id. ¶ 23; see also ECF No. 8-12 at 1 (). The letter did not reference Plaintiffs' submitted application. (ECF No. 8 ¶ 23). The same day, Defendant Mortgage Law Firm recorded a Notice of Default claiming $38,410.90 in arrears. Id. ¶¶ 5, 24; see also ECF No. 8-6 at 1. The August 28, 2017 Notice of Default included a false statement by Defendant Nationstar stating that thirty or more days had passed since initial contact, as required by Cal. Civ. Code § 2923.55(c). (ECF No. 8 ¶ 24; ECF No. 8-6 at 3).
On September 21, 2017, Defendant Nationstar reapproved Cassidy to speak on Plaintiffs' behalf. (ECF No. 8 ¶ 35).
On October 6, 2017, Cassidy sent a new modification application to Defendant Nationstar. Id. ¶ 26. Defendant Nationstar had not approved or denied the previous application in writing to Cassidy or Plaintiffs. Id.
On November 13, 2017, Defendant Nationstar requested additional information regarding Plaintiffs' occupancy of Highland Oaks Court rather than the Escondido address. Id. ¶ 27.
On November 28, 2017, Cassidy resent Plaintiffs' cable bill and IRA statement to Defendant Nationstar. Id. ¶ 28.
On multiple occasions in December 2017, Cassidy and Plaintiffs contacted Defendant Nationstar and were told that the October 6, 2017 modification application was under review. Id. ¶ 29.
On January 17, 2018, Cassidy contacted Defendant Nationstar and was told the offices were closed for inclement weather. Id. ¶ 30.
On January 25, 2018, Defendant Mortgage Law Firm recorded a Notice of Trustee's Sale with a sale date of February 16, 2018. Id. ¶ 31; see also ECF No. 8-7 at 2.
On January 27, 2018, Cassidy called Defendant Nationstar. (ECF No. 8 ¶ 32). Defendant Nationstar stated that Cassidy was not authorized to speak on Plaintiffs' behalf and Defendant Nationstar refused to speak to Cassidy. Id. The same day, Plaintiffs called Defendant Nationstar and were told that no modification application had been approved because of the "'proof of residence' issue." Id. ¶ 33.
On February 15, 2018, Plaintiffs filed for bankruptcy. Id. ¶ 34.
On June 15, 2018, Plaintiffs'...
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