Walters v. Fid. Mortgage of Cal. Inc.

• Decision Date: 04 August 2010
• Docket Number: Civ. No. S-09-3317 FCD/KJM
• Citation: 730 F.Supp.2d 1185
• Court: U.S. District Court — Eastern District of California
• Parties: Deanna WALTERS, Plaintiff, v. FIDELITY MORTGAGE OF CALIFORNIA, Inc.; Cal-Western Reconveyance Corp; James York; Ocwen Loan Servicing, LLC; HSBC Bank U.S.A., N.A.; and Does 1 Through 50, Inclusive, Defendants.

730 F.Supp.2d 1185

Deanna WALTERS, Plaintiff,

v.FIDELITY MORTGAGE OF CALIFORNIA, Inc.; Cal-Western Reconveyance Corp; James York; Ocwen Loan Servicing, LLC; HSBC Bank U.S.A., N.A.; and Does 1 Through 50, Inclusive, Defendants.

Civ. No. S-09-3317 FCD/KJM.

United States District Court, E.D. California.

Aug. 4, 2010.

Andrew Peter Rausch, Jr., Law Offices of A. Peter Rausch, Jr., Lodi, CA, for Plaintiff.

Eric Ray Garner, Thomas Blaine Sheridan, Wagner Kirkman Blaine Klomparens & Youmans LLP, Mather, CA, Lukasz Iwo Wozniak, Houser & Allison, APC, Irvine, CA, for Defendants.

MEMORANDUM AND ORDER

FRANK C. DAMRELL, JR., District Judge.

This matter is before the court on motions by defendants Ocwen Loan Servicing, LLC ("Ocwen") and HSBC Bank U.S.A., N.A. ("HSBC") (collectively, "defendants"), pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f), to dismiss and to strike certain claims alleged in plaintiff Deanna Walters' ("plaintiff") second amended complaint ("SAC"). In conjunction with their motion to dismiss, defendants request that the court take judicial notice of eight exhibits. Plaintiff opposes defendants' motions. For the reasons set forth below,¹ defendants' motion to dismiss is GRANTED in part and DENIED in part, and their motion to strike is DENIED.

BACKGROUND

Plaintiff's claims arise out of conduct related to a residential mortgage loan transaction. (SAC, filed May 6, 2010, ¶ 10.) ² On or around October 22, 2004, plaintiff obtained a loan in the amount of $159,000 from Fidelity Mortgage of California, Inc. ("Fidelity") on property located at 3602 Portage Circle South, Stockton, California (the "Property"). ( Id. ¶¶ 10-12.) The loan was evidenced by a writtenpromissory note and secured by a deed of trust, which named Cal-Western ReConveyance Corp. ("Cal-Western") as trustee and Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for Fidelity and beneficiary. ( Id. ¶ 11-12.)

After the closing of the loan transaction, the servicing rights to plaintiff's loan were transferred to Ocwen. ( Id. ¶ 14.) Plaintiff alleges that Ocwen acted as an agent of Fidelity, or alternatively, that Ocwen directly assumed by assignment or transfer all of Fidelity's rights and obligations under the promissory note and deed of trust. ( Id. ¶ 15.) From December 2004 through January 2009, plaintiff dealt only with Ocwen in connection with the promissory note and deed of trust. ( Id. ¶ 17.) Plaintiff asserts that Ocwen acted "on its own behalf, without advising her or suggesting in any way that it was acting as an agent for any other party or entity." ( Id.)

Plaintiff alleges that after Ocwen acquired rights in or began servicing the loan, it began to engage in a pattern of unlawful and fraudulent conduct. ( Id. ¶ 21.) Plaintiff claims, inter alia, that Ocwen (1) failed to credit and misapplied timely payments; (2) failed to provide timely or clear payment information; (3) prematurely referred plaintiff's loan to collections; (4) increased monthly payment amounts and added costs, fees, and interest charges in violation of the terms of the original mortgage note; (5) charged plaintiff's account for hazard insurance for the Property when it was already insured; and (6) inaccurately claimed plaintiff was in default and threatened foreclosure when plaintiff was not in default. ( Id.)

Plaintiff alleges that from January 2005 through January 2009, Ocwen mailed her "monthly statements, reminder notices, past due notices, notices of default and other written communications, as well as communications via the internet and through electronic mail and by telephone that were materially false and misleading and known by Ocwen to be false." ( Id. ¶ 22.)

On December 28, 2004, plaintiff paid a monthly installment on her loan that was due on January 1, 2005, but Ocwen failed to apply the payment correctly and instead applied it to a payment due December 1, 2004 that plaintiff had already paid. ( Id. ¶ 26.) On or about January 21, 2005, Ocwen sent plaintiff a notice stating that her current payment had not been received and was past due. ( Id. ¶ 28.) Ocwen listed late charges of $77.72 in monthly statements mailed to plaintiff for the months of January, February, and March 2005, when it knew or should have known that plaintiff's payments had not been late. ( Id.) Plaintiff states that in "virtually every written monthly account statement" that Ocwen sent her between 2005 and 2007, Ocwen falsely claimed that plaintiff owed additional late fees, even though her payments were not late. ( Id. ¶ 38.)

On or around January 1, 2005, Ocwen falsely claimed in a written notice mailed to plaintiff that it had not received proof of hazard insurance on the Property, despite the fact that Ocwen was or should have been aware that the premium for the insurance had been paid in October 2004. ( Id. ¶ 30.) In a written notice mailed to plaintiff, dated February 6, 2005, Ocwen stated that it had procured hazard insurance because, it asserted, plaintiff had failed to do so. ( Id.) On or around April 18, 2005, Ocwen charged plaintiff $1,068.00 for the insurance. ( Id.) Ocwen then reversed the charge on May 5, 2005. ( Id.)

In April 2005, Ocwen sent plaintiff a written notice of default even though all the amounts allegedly outstanding were the result of charges improperly posted to plaintiff's account. ( Id. ¶ 29.) Ocwen reflected additional late charges to plaintiff'saccount in monthly statements dated June 17, 2005, July 5, 2005, and August 3, 2005, although plaintiff had not been late in making her payments. ( Id. ¶ 31.) On August 1, 2005, plaintiff telephoned Ocwen and spoke to an employee named Mary, who told plaintiff that the late charges were the result of errors by the "old" Ocwen and that these errors would be corrected. ( Id. ¶ 32.) Despite these assurances, and subsequent telephone requests by plaintiff in September and October 2005, the account was not corrected. ( Id. ¶ 33.)

In October 2005, an unidentified Ocwen employee told plaintiff by telephone that Ocwen would not accept plaintiff's payments because she was in default. ( Id. ¶ 34.) On or around November 29, 2005, plaintiff spoke by telephone to an Ocwen employee who identified herself as "J. Roberson" and who allowed plaintiff to make three payments that Ocwen had previously refused to accept. ( Id.) Plaintiff made a payment on November 29, 2005. ( Id.) J. Roberson told plaintiff that the payment would bring her loan current, including all disputed late charges. ( Id.)

In January 2006, plaintiff learned that the payment she made on November 29, 2005 had not been credited, and Ocwen returned the check for plaintiff's January 2006 payment, falsely claiming that the check was insufficient. ( Id. ¶ 35.)

On or around February 10, 2006, Ocwen caused Cal-Western to issue a notice of default and election to sell. ( Id. ¶ 36.) Plaintiff spoke to an Ocwen representative who told plaintiff that she needed to pay $7,772.00 to bring her loan current through March 2006. ( Id. ¶ 37.) Although plaintiff paid this amount by wire transfer on February 22, 2006, she received a reinstatement quote dated February 28, 2006, falsely stating that she owed additional money. ( Id.)

In June 2006, plaintiff was falsely informed that she owed a monthly payment of $1,660.29, when the actual amount owed was $1,295.00. ( Id. ¶ 39.) Plaintiff paid $1,660.29 in the expectation that she would receive a credit toward the following month's payment. ( Id.) In or around June 2006, plaintiff's on-line account statement reflected that her next payment due would be in the amount of $807.50, but a written account statement mailed to plaintiff, dated June 26, 2006, falsely stated that she owed more than $6,000, including late charges and fees that plaintiff did not owe and that Ocwen had repeatedly refused to correct. ( Id. ¶ 40.)

In October 2006, Ocwen issued another notice of default in which it falsely claimed that no payments had been made, when in fact Ocwen was holding plaintiff's payments in a suspense account or escrow account. ( Id. ¶ 41.) Ocwen also falsely claimed that plaintiff had not maintained insurance on the Property. ( Id.)

Throughout 2006, plaintiff repeatedly telephoned Ocwen and was told by Ocwen representatives that Ocwen's errors would be corrected, but despite these assurances, Ocwen failed to correct its errors. ( Id. ¶ 42.) Plaintiff alleges that Ocwen never intended to correct its errors, but "sought deliberately to cause [plaintiff] to appear to be in default so that it could continue to charge improper and inflated fees." ( Id. ¶ 43.) Plaintiff further alleges that Ocwen falsely informed credit reporting agencies that plaintiff "was in default on her loan when Ocwen knew and should have known that any defaults were the result of Ocwen's inaccurate and fraudulent accounting." ( Id. ¶ 44.)

In December 2006, Ocwen and/or HSBC caused Cal-Western to issue a "Notice of Default and Election to Sell." ( Id. ¶ 46.) Ocwen returned plaintiff's payment checks for December 2006 and January 2007,claiming falsely that the payments were not sufficient when it knew or should have known that the payments were sufficient. ( Id. ¶ 45.)

In or around March 2007, Ocwen informed plaintiff both orally and in writing that the only way for her to prevent the foreclosure of her home was to sign a "forbearance agreement" that required plaintiff to acknowledge owing additional fees and charges, to make an immediate "down payment" of $1,661.00, and to accept an increase in monthly payments from $1,295.00 to $1,700.00 per month. ( Id. ¶ 47.) Faced with Ocwen's false claims of default and believing she had no choice, plaintiff signed the agreement and made payments of $1,700.00 per month according to its terms until approximately October 2008. ( Id.)

In February 2008, Ocwen sent plaintiff a letter offering her a "loan modification" that would increase plaintiff's balance to more than $166,000.00, even though according to a ...