LAUREL BEELER, United States Magistrate Judge.
Plaintiff Jose Jara sued Defendants Aurora Loan Services, LLC ("Aurora") and Mortgage Electronic Registration Systems ("MERS") (collectively, "Defendants") for violation of federal and state law in connection with the foreclosure and sale of his property in South San Francisco, California. Fourth Amended Complaint ("Fourth AC"), ECF No. 72.
Before the court is Defendants' motion to dismiss Mr. Jara's Fourth Amended Complaint. Motion to Dismiss ("MTD"), ECF No. 74-1. Pursuant to Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument and vacates the April 5, 2012 hearing. For the reasons explained below, the court GRANTS Defendants' motion and DISMISSES WITH PREJUDICE all of Mr. Jara's claims.
On January 18, 2006, Mr. Jara purchased property at 330 Arbor Drive in South San Francisco, California. Fourth AC, ECF No. 72, ¶¶ 1, 5; Request for Judicial Notice ("RJN"), ECF No. 62, Ex. 3. To fund the purchase, he borrowed $865,000 from Pacific Community Mortgage, Inc. ("Pacific"), which packaged the loan as two separate notes. Fourth AC, ECF No. 72, ¶¶ 5, 6; RJN, ECF No. 62, Exs. 1, 2.
In 2008, Mr. Jara "sustained substantial personal problems that qualified as a hardship under the [Home Affordable Modification Program] requiring modification of the terms of the subject obligation and security instruments." Fourth AC, ECF No. 72, ¶ 7; see also RJN, ECF No. 62, Ex. 10 (notice of default). Thereafter, Mr. Jara entered into agreements to modify the terms of his loan. Fourth AC, ECF No. 72, ¶ 15.
On August 25, 2010, Cal Western conducted a trustee's sale at which Aurora purchased the property. RJN, ECF No. 62, Ex. 13 (trustee's deed upon sale).
Mr. Jara filed the present lawsuit against Aurora, MERS, and Cal Western in San Mateo County Superior Court on November 10, 2010. Notice of Removal, ECF No. 1, Ex. 1 at 5-36 ("Complaint"). Thirteen days later, on November 23, 2010, he filed a First Amended Complaint as a matter of right. Notice of Removal, ECF No. 1, Ex. 2 at 40-49 ("FAC"). The First Amended Complaint added attorneys' fees and costs to the relief previously sought in the original complaint. Compare Notice of Removal, ECF No. 1, Ex. 1 at 13 with Notice of Removal, ECF No. 1, Ex. 2 at 48. On January 28, 2011, Aurora and MERS removed the case to this court. Notice of Removal, ECF No. 1 at 1-4. The court denied Mr. Jara's motion to remand on June 6, 2011. 06/06/2011 Order, ECF No. 30, 2011 WL 2197659.
Aurora, MERS, and Cal Western filed motions to dismiss the First Amended Complaint on June 28, 2011. Motion to Dismiss (Aurora and MERS), ECF No. 33; Joinder and Motion (Cal Western), ECF No. 34. Mr. Jara did not file an opposition to either motion. Instead, on August 16, 2011, he filed a Second Amended Complaint (titled as a "First Amended Complaint in Federal Court"), which the court struck from the record because he had neither the defendants' consent nor the court's permission to file it. Second Amended Complaint, ECF No. 41; Order Striking Second Amended Complaint, ECF No. 43. The court's order did, though, allow Mr. Jara to file a motion for leave to file another amended complaint, and he did so on August 29, 2011. Order Striking Second Amended Complaint, ECF No. 43 at 3; Motion for Permission to File Amended Complaint, ECF No. 44. On September 30, 2011, the court granted Mr. Jara's motion for leave to file another amended complaint. 09/30/2011 Order, ECF No. 48, 2011 WL 4536898.
Mr. Jara did so on January 20, 2012. Fourth AC, ECF No. 72. In his Fourth Amended Complaint, which is only brought against Aurora and MERS, he brings the following claims: (1) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq.; (2) violation of the Federal Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692; (3) quiet title; (4) cancellation of instrument; (5) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof.Code § 17200 et seq.; and (6) declaratory relief. See Fourth AC, ECF No. 72.
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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (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, 127 S.Ct. 1955.). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations and parentheticals omitted).
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
If the court dismisses the complaint, it should grant leave to amend even if no request to amend is made "unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (quoting Cook, Perkiss and Liehe, Inc. v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir.1990)). But when a party repeatedly fails to cure deficiencies, the court may order dismissal without leave to amend. See Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir.1992) (affirming dismissal with prejudice where district court had instructed pro se plaintiff regarding deficiencies in prior order dismissing claim with leave to amend).
Mr. Jara brings a claim against Aurora for violation of TILA. TILA aims to "avoid the uninformed use of credit." 15 U.S.C. § 1601(a). It "has the broad purpose of promoting `the informed use of credit' by assuring `meaningful disclosure of credit terms' to consumers." Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559, 100 S.Ct. 790, 63 L.Ed.2d 22 (1980) (quoting 15 U.S.C. § 1601). It "requires creditors to provide borrowers with clear and accurate disclosures of terms dealing with things like finance charges, annual percentage rates of interest, and the borrower's rights." Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998) (citing 15 U.S.C. §§ 1631, 1632, 1635 & 1638).
Mr. Jara alleges that Aurora failed to notify him of the "the identity of the actual owner" of his loans in violation of 15 U.S.C. § 1641(g). Fourth AC, ECF No. 72, ¶ 11. Subsection (g), which was added to § 1641 as part of the Helping Families Save Their Homes Act and which became effective on May 19, 2009, provides in relevant part:
15 U.S.C. § 1641(g)(1) (emphasis added).
This TILA claim, which is new to Mr. Jara's Fourth Amended Complaint, fails. 15 U.S.C. § 1641(g) only applies to creditors who are new owners or assignees of mortgage loan, and Mr. Jara does not allege that Aurora is a new owner or assignee of his loan. He states that, although he believes Pacific transferred ownership of his loan at some point in time, he does not know to whom it was transferred. Fourth AC, ECF No. 72, ¶¶ 2, 10, 12. In fact, he uses his Fourth Amended Complaint to ask Aurora who the owner is. Id., ¶ 10, 12. Moreover, publicly-filed documents submitted by Defendants suggest that Aurora became a servicer, not an owner or assignee, of Mr. Jara's loan. See RJN, ECF No. 62, Ex. 4. Without an allegation that Aurora, as owner or assignee of his loan, failed to notify him in writing of a transfer of ownership
To the extent that Mr. Jara attempts to allege a claim for violation of 15 U.S.C. § 1641(f)(2) (as he attempted to do in his previous complaints), his claim still fails. As Defendants correctly point out, 15 U.S.C. § 1641(f)(2) provides in relevant part: "Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation." 15 U.S.C. § 1641(f)(2). However, a servicer is not to be treated as the assignee of an obligation unless the servicer is also the owner of that obligation. 15 U.S.C. §§ 1641(f)(1) ("A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for purposes of this section unless the servicer is or was the owner of the obligation."), 1641(f)(2) ("A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as the owner of the obligation for purposes of this section on the basis of an assignment of the obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation ...."); see also Consumer Solutions REO, LLC v. Hillery, No. C-08-4357 EMC, 2010 WL 144988, at *3 (N.D.Cal. Jan. 8, 2010) ("With respect to Saxon, a TILA damages claim predicated on a violation of § 1641(f)(2) cannot stand because TILA allows for a suit against a creditor or an assignee but not a servicer except under narrow circumstances not applicable here."); Fullmer v. JPMorgan Chase Bank, NA, No. 2:09-cv-1037 JFM, 2010 WL 95206, at *3 (E.D.Cal. Jan. 6, 2010) ("Civil liability under TILA applies to creditors.").
Despite alleging that "Aurora refused to advise [him] whether it is a the actual owner of the obligation and security instruments, or merely the servicer of agent for unspecified and unidentified true owners," Fourth AC, ECF No. 74-1, ¶ 2, Mr. Jara never alleges that he sent any written request, as required by the statute, to Aurora to obtain any of the information he lacks, nor does he even address this problem — pointed out by Defendants in their motion to dismiss — in his opposition. See generally Fourth AC, ECF No. 74-1; Opposition, ECF No. 78.
In the first three iterations of his complaint, Mr. Jara brought a claim for violation of the FDCPA against Cal Western, the company that filed the foreclosure-related documents and conducted the trustee's sale. See Notice of Removal, ECF No. 1, Ex. 1 at 11; id. at 46; TAC, ECF No. 49, ¶¶ 13-18. Although he did not specify it, his claim against Cal Western was for violation of 15 U.S.C. § 1692g(a), which provides that within five days of making initial contact with a debtor "in connection with the collection of any debt," a debt collector must send the debtor a written notice containing the amount of the debt, the name of the creditor, the time period in which the validity of the debt may be challenged, and instructions explaining how the debtor may obtain further evidence of the debt and information about the creditor. Because Mr. Jara did not sufficiently allege that Cal Western was a "debt collector" and could not sufficiently allege that Cal Western engaged in debt collection activity, the court dismissed his claim under 15 U.S.C. § 1692g(a) with prejudice. 12/14/2011 Order, ECF No. 68 at 5-9.
In his Fourth Amended Complaint, Mr. Jara, for the first time, alleges a FDCPA against Aurora. Fourth AC, ECF No. 72, ¶¶ 13-18. Mr. Jara alleges that "[a]fter this loan went into default, the unidentified true owner retained Aurora to engage in debt collection activities" and that "[d]ebt collection of delinquent loans is a principal part of the business of Aurora." Fourth AC, ECF No. 72, ¶ 14. He goes on to allege that he and Aurora entered into a loan modification and that he was current on his payments (as modified by the agreement) when Aurora instructed Cal Western to begin foreclosure proceedings. Id., ¶¶ 15-16. Mr. Jara alleges that Aurora "instructed Cal Western not to provide [Mr.] Jara [with] the Debt Validation Notice required by the FDCPA." Id., ¶ 16. He further alleges that Aurora engaged in false, deceptive, and misleading representations by preparing "forbearance and modification agreements" (which he alleges were abusive and misleading) and presenting them to him "with the express oral representation [that he] would avoid a non-judicial trustee sale and foreclosure if he complied with [their terms]," when, in reality, Aurora would go on to instruct Cal Western to proceed with foreclosure anyway. Id.
But there is a fatal problem with Mr. Jara's claim: He does not, and cannot, sufficiently allege that Aurora was a "debt collector." To be held liable for violation of the FDCPA, a defendant must fall within the FDCPA's definition of "debt collector." See Heintz v. Jenkins, 514 U.S. 291, 294, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995); see also Romine v. Diversified Collection Servs., 155 F.3d 1142, 1146 (9th Cir.1998). The court previously explained that a "debt collector" is defined, in relevant part, as:
15 U.S.C. § 1692a(6). "The term does not include," however, "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity ... concerns a debt which was originated by such person [or] ... concerns a debt which was not in default at the time it was obtained by such person." 15 U.S.C. § 1692a(6)(F)(iii) & (iii). Indeed, "[t]he legislative history of section 1692a(6) indicates conclusively that a debt collector does not include the consumer's creditors, a mortgage servicing company, or an assignee of a debt, as long as the debt was not in default at the time it was assigned." Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir.1985) (citing S.Rep. No. 95-382, 95th Cong., 1st Sess. 3, reprinted in 1977 U.S.Code Cong. & Ad. News 1695, 1698; Kizer v. Finance America Credit Corp., 454 F.Supp. 937, 939 (N.D.Miss.1978)).
Mr. Jara never specifically alleges that Aurora was a "debt collector," but he does allege that Aurora was retained to engage in debt collection activities after he defaulted on his loan. Fourth AC, ECF No. 72, ¶ 14. This allegation — which contradicts Mr. Jara's attempts in his previous complaints to allege that it was Cal Western who was retained as a "debt collector" — is belied by the notice submitted by Defendants (and of which this court took judicial notice) that shows that Aurora became the servicer of Mr. Jara's loan well before he defaulted on it. RJN, ECF No. 62, Ex. 4.
Mr. Jara previously alleged a claim for quiet title. TAC, ECF No. 49, ¶ 26-30. In its 12/14/2011 Order, the court explained:
12/14/2011 Order, ECF No. 68 at 18. Because Mr. Jara failed to allege any ability or willingness to tender the amount owed, the court dismissed his claim. Id.
Mr. Jara again alleged a quiet title claim in his Fourth Amended Complaint, and he again failed to allege a valid and viable tender offer. See generally Fourth AC, ECF No. 72.
Once again Mr. Jara brings a claim against Defendants for "cancellation of instrument."
In its 12/14/2011 Order, the court dismissed with prejudice Mr. Jara's claims under the National Housing Act and Cal. Civ.Code §§ 2923.5 and 2923.6. 12/14/2011 Order, ECF No. 68 at 11-15. And because his FDCPA claim once again fails and is dismissed with prejudice, his claim for cancellation of instrument fails and is DISMISSED WITH PREJUDICE, too. See Lopez, 203 F.3d at 1127.
Mr. Jara previously alleged, with few particulars, that Aurora violated the "unfair" and "fraudulent" prongs of California's Unfair Competition Law. TAC, ECF No. 49, pp. 42-43.
12/14/2011 Order, ECF No. 68 at 16-17.
Aside from changing some of the paragraph numbering, Mr. Jara's UCL allegations — which again are for claims for violation of the "unfair" and "fraudulent" prongs of the statute — are identical to the ones that the court previously dismissed. Compare Fourth AC, ECF No. 72, pp. 30-31 with TAC, ECF No. 49, ¶ 42-43. As he made no attempt to cure the previously-noted deficiencies, and as his other claims all fail, his UCL claim must fail again. Because he has had multiple opportunities to allege a viable UCL claim and has yet to do so, his UCL claim is DISMISSED WITH PREJUDICE. See Ferdik, 963 F.2d at 1261.
Mr. Jara brought a claim for a declaratory judgment against Aurora in his Third Amended Complaint. See TAC, ECF No. 49, ¶¶ 36-41. He alleged that "Aurora instructed its agent, the original nominal lender Pacific Community Mortgage, Inc., to divide the loan into two parts" "to avoid the California anti-deficiency laws and to deny [him] a proper TILA disclosure statement that accurately defined the financial terms of the entire obligation." TAC, ECF No. 49 at ¶ 37. Mr. Jara suggested that Aurora denies his allegations, creating "[a]n actual controversy ... regarding whether the loan was structured illegally." TAC, ECF No. 49 at ¶¶ 37, 38.
The court dismissed Mr. Jara's claim because his allegations were vague and unsupported. The court explained:
12/14/2011 Order, ECF No. 68 at 19-20 (footnote omitted). With respect to the lack of clarity about which statutes were violated and how, the court wrote:
Id. at 19 n. 16.
Mr. Jara again brought a claim for a declaratory judgment in his Fourth Amended Complaint. Fourth AC, ECF No. 72, ¶¶ 24-29. His allegations in that regard are nearly identical to those in his Third Amended Complaint, compare Fourth AC, ECF No. 72, ¶¶ 24-29 with TAC, ECF No. 49, ¶¶ 36-41, although he did provide a few more allegations in the "General Allegations" section of his complaint:
Fourth AC, ECF No. 72, ¶ 6.
It is true that under California law a nonjudicial foreclosure is subject to the antideficiency statutes, so a foreclosing lender cannot obtain a judgment for any difference between the debt and the proceeds
Cal.Civ.Proc.Code § 580d. But Mr. Jara's claim is still deficient. Like he did in his Third Amended Complaint, he again implies that there is something nefarious about dividing a mortgage into two loans, but he again provides only speculation why this would be true. Moreover, he still does not allege how dividing a mortgage loan into two loans violates § 580d; § 580d, after all, says nothing about that.
In addition, Mr. Jara's allegation that Aurora divided the loan into two is belied by the relevant documents, which identify Pacific as the lender and First Priority Financial, Inc. as the mortgage broker. RJN, ECF No. 62, Exs. 1 (adjustable rate note for $648,750 identifying Pacific as lender), 2 (note for $216,250 identifying Pacific as lender), 3 (deed of trust identifying Pacific as lender), 5 (fee disclosure identifying First Priority Financial, Inc. as mortgage broker). In light of these documents, Mr. Jara's allegations that Aurora was responsible for the structure of the loans does not "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955.
Because Mr. Jara has had multiple attempts to sufficiently allege a claim for a declaratory judgment with respect to his split-the-loans theory but has yet to do so, his claim is DISMISSED WITH PREJUDICE. See Ferdik, 963 F.2d at 1261.
Based on the foregoing, the court GRANTS Defendants' motion to dismiss Mr. Jara's Fourth Amended Complaint. All of his claims are DISMISSED WITH PREJUDICE.
The court may take judicial notice of matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir.2001). Because Exhibits 3, 9, 10, 11, 12, and 13 are public records, the court took judicial notice of the undisputable facts contained in them. See Hotel Employees & Rest. Employees Local 2 v. Vista Inn Mgmt. Co., 393 F.Supp.2d 972, 978 (N.D.Cal.2005); Fed.R.Evid. 201(b); see also Fontenot v. Wells Fargo Bank, N.A., 198 Cal.App.4th 256, 264-67, 129 Cal.Rptr.3d 467 (2011). And although several other documents (Exs. 1, 2, 4, 5, 6, 7, and 8) are not public records, the court took judicial notice of them because they are documents whose authenticity was not challenged and Mr. Jara's complaint relied upon them. See Knievel v. ESPN, 393 F.3d 1068, 1076-77 (9th Cir.2005). The court did not, though, take judicial notice of Exhibits 14 and 15 because Mr. Jara's complaint did not rely upon them.
