affirming dismissal, in part, because plaintiff’s “complaint makes no factual 9 allegations from which we could plausibly infer that Wells Fargo regularly collects debts owed to 10 someone other than Wells Fargo”
How later courts described this case
- affirming dismissal, in part, because plaintiff’s “complaint makes no factual 9 allegations from which we could plausibly infer that Wells Fargo regularly collects debts owed to 10 someone other than Wells Fargo”
- “[t]o the extent 9 that [the borrower] challenges the validity of the purported securitization of her loan, she lacks 10 standing to raise such a challenge”
- “[A] ‘creditor’ is not a ‘debt collector’ under the FDCPA.”
- “[T]he person who originated the debt, such as a creditor to whom the debt was 12 originally owed, is not considered a debt collector”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
10
11 ARTHUR HARRIS, No. 2:20-cv-2340-KJM-CKD PS
12 Plaintiff,
13 v. ORDER AND FINDINGS AND
RECOMMENDATIONS RECOMMENDING
14 NEW REZ. LLC, et al., DISMISSAL WITHOUT LEAVE TO AMEND
15 Defendants.
16
17 Plaintiff proceeds pro se in this action. Presently before the court is the motion to dismiss
18 plaintiff’s first amended complaint filed by defendant New Rez, LLC, D/B/A Shellpoint
19 Mortgage Servicing. (ECF No. 15.) Defendant’s motion to dismiss came on regularly for hearing
20 on March 24, 2021. Plaintiff appeared pro se at the hearing; attorney Johnathan Cahill appeared
21 on behalf of defendant. For the reasons set forth below, it is recommended that defendant’s
22 motion be granted and plaintiff’s complaint be dismissed without leave to amend.
23 I. BACKGROUND
24 A grant deed evidencing plaintiff’s purchase of the property located at 617 Daniels
25 Avenue, Vallejo, California 94590 was recorded on August 31, 2015.1 (ECF No. 15-2 at 4.) On
26
1 Defendant requested judicial notice of five exhibits: the grant deed recorded on August 31,
27 2015, the deed of trust, the assignment of deed of trust, the Pacer document for a case filed by
plaintiff in the Western District of Washington, and the case docket for a case filed by plaintiff in
28 the Superior Court of California, County of Solano. (ECF No. 15-2.) As a general rule, “a district
1 the same day, a deed of trust in favor of Pinnacle Capital Mortgage LLC (“Pinnacle”) in the
2 amount of $202,500.00 was recorded. (Id. at 8.) The deed of trust stated interest in the promissory
3 note and deed of trust could be assigned and transferred without notice to plaintiff. (Id. at 17.) On
4 July 14, 2020, the deed of trust was transferred and assigned to defendant Shellpoint. (Id. at 29.)
5 On or about February 4, 2020, plaintiff received notice that his mortgage had been
6 transferred and assigned to defendant. (ECF No. 1 at 68.) Plaintiff alleges that because he signed
7 a contract only with Pinnacle, defendant does not have standing to enforce the mortgage loan.
8 (ECF No. 1 at 63, 68.)
9 Plaintiff initiated this action2 with the filing of a complaint on November 23, 2020. (ECF
10 No. 1.) On December 11, 2020, plaintiff filed a first amended complaint3 which he titled a
11 “supplemental complaint.” (ECF No. 6.) Plaintiff’s original complaint and first amended
12 complaint make related and overlapping arguments.
13 Defendant initially moved to dismiss plaintiff’s original complaint more than a week after
14 plaintiff filed his amended (or supplemental) complaint. (ECF No. 8.) On February 19, 2021,
15 defendant filed a second motion to dismiss which addresses both the initial complaint and
16 plaintiff’s amended (or supplemental) complaint, referring to them collectively as the
17 “Complaint.” (ECF No. 15-1 at 4.)
18 Plaintiff is cautioned that the court does not normally allow piecemeal amendments or
19 piecemeal supplements to complaints. Because an amended complaint supersedes and replaces
20 the original complaint, an amended complaint must stand on its own. See Loux v. Rhay, 375 F.2d
21 court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.”
Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). An exception exists, however, for
22
matters of public record not subject to reasonable dispute. See Id.; Fed. R. Evid. 201(b). Given
23 the nature of these public documents, the court grants defendant’s request for judicial notice.
24 2 Plaintiff previously filed a complaint against defendant in the Western District of Washington,
assigned case number 20-cv000642-JCC, which was ultimately dismissed without prejudice.
25
(ECF No. 15-1 at 4.) Plaintiff also filed an action naming Shellpoint as a defendant in the
Superior Court of California, County of Solano, assigned case number FCS055677. (Id.) That
26
case was pending when defendant filed the pending motion. (Id.)
27
3 Fed. R. Civ. P. 15(a) provides that a party may amend his pleading as a matter of course before
28 a responsive pleading is served and prior to entry of an order of dismissal.
1 55, 57 (9th Cir. 1967). Unless prior approval to the contrary is obtained from the court, every
2 pleading to which an amendment or supplement is permitted as a matter of right or has been
3 allowed by the court shall be filed so that it is complete in itself without reference to the prior or
4 superseded pleading. See Local Rule 220.
5 As set forth, however, defendant’s second motion to dismiss has addressed both
6 complaints together as a single complaint. (ECF No. 15-1 at 4.) The court will allow plaintiff’s
7 piecemeal pleading on this occasion. The undersigned has reviewed and considered the
8 allegations of both complaints in making the findings and recommendations set forth herein.
9 The undersigned now considers the motion to dismiss filed on February 19, 2021. (ECF
10 No. 15.) Plaintiff opposes the motion. (ECF Nos. 20, 22.) Defendant filed a reply. (ECF No. 21.)
11 II. LEGAL STANDARD
12 The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal
13 sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir.
14 1983). A dismissal may be warranted where there is “the lack of a cognizable legal theory or the
15 absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police
16 Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff must allege “enough facts to state a claim to
17 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A
18 claim is plausible on its face “when the plaintiff pleads factual content that allows the court to
19 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
20 Iqbal, 556 U.S. 662, 678 (2009).
21 In evaluating whether a complaint states a claim on which relief may be granted, the court
22 accepts as true the allegations in the complaint and construes the allegations in the light most
23 favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United
24 States, 915 F.2d 1242, 1245 (9th Cir. 1989). The court will not, however, assume the truth of
25 legal conclusions cast in the form of factual allegations. United States ex rel. Chunie v. Ringrose,
26 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual
27 allegations, “[t]hreadbare recitals of the elements of a cause of action, supported by mere
28 conclusory statements, do not suffice.” Iqbal, 556 U.S. at 676. A complaint must do more than
1 allege mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of
2 action.” Twombly, 550 U.S. at 555.
3 In ruling on a motion to dismiss, the court is permitted to consider material that is properly
4 submitted as part of the complaint, documents that are not physically attached to the complaint if
5 their authenticity is not contested and the plaintiff’s complaint necessarily relies on them, and
6 matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688–89 (9th Cir. 2001). The
7 court may also consider matters properly subject to judicial notice. Outdoor Media Group, Inc. v.
8 City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007).
9 III. DISCUSSION
10 Plaintiff alleges the transfer of his mortgage loan from Pinnacle to defendant was
11 unlawful. Plaintiff appears to allege defendant lacks standing to enforce the terms of the loan
12 because plaintiff did not sign a contract with defendant. Plaintiff also alleges defendant has
13 demanded mortgage payments from plaintiff for months for which plaintiff had already made
14 mortgage payments.
15 Defendant requests the court to dismiss the case with prejudice, arguing that, to the extent
16 plaintiff attempts to bring a fraud claim, such a claim is baseless and not met with the requisite
17 specificity. (ECF No. 15-1 at 7.) Defendant next argues plaintiff lacks standing to contest the
18 assignment of the loan from Pinnacle to defendant. (Id. at 8-9.) Defendant next argues plaintiff’s
19 claims fail to the extent he alleges violations of the Fair Debt Collection Practices Act
20 (“FDCPA”); Rosenthal Fair Debt Collection Practices Act (“RFDCPA”); various constitutional
21 challenges; California Penal Code §§ 484 and 118-1131; California Civil Code § 2923.5; 18
22 U.S.C. §§ 1341, 1343, 1621, and 12 U.S.C. § 2605. (Id. at 9-14.) Finally, defendant argues
23 plaintiff’s claims for injunctive relief and punitive damages are improper. (Id. at 14.)
24 A. Standing to Contest Assignment of Loan to Defendant
25 Plaintiff appears to claim defendant does not have legal standing to enforce plaintiff’s
26 mortgage loan because plaintiff did not execute a contract with defendant and did not agree for
27 the loan to be assigned to defendant. (ECF No. 1 at 63, 68; ECF No. 6 at 5-6.) On the other hand,
28 plaintiff appears to acknowledge the loan could be transferred in the manner of which he
1 complains under the terms of the deed of trust he signed. (ECF No. 1 at 69.) Defendant asserts
2 plaintiff lacks standing to challenge the assignment of the deed of trust to defendant. (ECF No. 1-
3 1 at 8-9.)
4 As a borrower, plaintiff “does not have standing under California law to challenge
5 irregularities in the assignment of [his] Note or Deed of Trust because those instruments are
6 negotiable and [his] obligations thereunder remain unchanged even if [his] creditor changes.”
7 Christie v. Bank of New York Mellon, N.A., 617 F. App’x 680, 681 (9th Cir. 2015); see also
8 Nationwide Ins. Co. of Am. v. Brown, 689 F. App’x 474, 475 (9th Cir. 2017) (“[t]o the extent
9 that [the borrower] challenges the validity of the purported securitization of her loan, she lacks
10 standing to raise such a challenge”); Lial v. Bank of Am. Corp., 633 F. App’x 406 (9th Cir. 2016)
11 (borrowers “lack standing to enforce the terms of any pooling and service agreement and
12 therefore cannot challenge any assignment into a securitized trust”); Bascos v. Fed. Home Loan
13 Mortg. Corp., No. CV 11-3968-JFW JCX, 2011 U.S. Dist. LEXIS 86248, at *18-19 (C.D. Cal.
14 July 22, 2011) (borrower “has no standing to challenge the validity of the securitization of the
15 loan as he is not an investor of the loan trust”).
16 Plaintiff cannot challenge the assignment of the loan to defendant. Amendment of any
17 claim based on the assignment of the loan would be futile. The undersigned will recommend that
18 this claim be dismissed without leave to amend.
19 B. Violations of the FDCPA and RFDCPA
20 Plaintiff makes conclusory allegations that he brings his claims under the FDCPA and
21 RFDCPA. (ECF No. 1 at 47.) To state a claim for violation of FDCPA, “a plaintiff must allege
22 facts that establish the following: (1) the plaintiff has been the object of collection activity arising
23 from a consumer debt; (2) the defendant attempting to collect the debt qualifies as a ‘debt
24 collector’ under the FDCPA; and (3) the defendant engaged in a prohibited act or has failed to
25 perform a requirement imposed by the FDCPA.” Gomez v. Wells Fargo Home Mortg., 2011 U.S.
26 Dist. LEXIS 134092, at *15-16 (N.D. Cal. Nov. 21, 2011) (internal citations omitted).
27 ////
28 ////
1 “Debt collector” as used in the FDCPA
2 means any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose of which
3 is the collection of any debts, or who regularly collects or attempts
to collect, directly or indirectly, debts owed or due or asserted to be
4 owed or due another.
5 15 U.S.C. § 1692(a)(6) (emphasis added).
6 Courts have consistently held that creditors, even assignees from the original creditor, are
7 not “debt collectors” under the FDCPA. Schlegel v. Wells Fargo Bank, NA, 720 F.3d 1204, 1209
8 (9th Cir. 2013) (affirming dismissal, in part, because plaintiff’s “complaint makes no factual
9 allegations from which we could plausibly infer that Wells Fargo regularly collects debts owed to
10 someone other than Wells Fargo”); De Dios v. Int’l Realty & Investments, 641 F.3d 1071, 1074
11 (9th Cir. 2011) (“[T]he person who originated the debt, such as a creditor to whom the debt was
12 originally owed, is not considered a debt collector”); Rowe v. Educ. Credit Mgmt. Corp., 559
13 F.3d 1028, 1031 (9th Cir. 2009) (“[A] ‘creditor’ is not a ‘debt collector’ under the FDCPA.”).
14 In particular, mortgage servicing companies are not “debt collectors” and are exempt from
15 liability under the FDCPA. Caballero v. Ocwen Loan Serv., No. C 09-01021 RMW 2009 U.S.
16 Dist. LEXIS 45213, *2-3 (N.D. Cal. 2009); Scott v. Wells Fargo Home Mortg., 326 F. Supp. 2d
17 709, 718 (E.D. Va. 2003). Because defendant is an assignee from the original creditor, defendant
18 is not a “debt collector” within the meaning of the FDCPA and no claim can be stated against
19 defendant under the FDCPA. Accordingly, it is recommended that this claim be dismissed
20 without leave to amend.
21 Because it is being recommended that all federal claims be dismissed, the undersigned
22 will further recommend that the court decline to exercise supplemental jurisdiction over the state-
23 law RFDCPA claim.4 Depending on the resolution of these findings and recommendations and
24
4 The RFDCPA similarly applies only to a “debt collector,” but is defined more broadly as “any
25
person who, in the ordinary course of business, regularly, on behalf of himself or herself or
others, engaged in debt collection.” Cal. Civ. Code § 1788.2(c) (emphasis added). Defendant
26
asserts the definition of debt collector under the RFDCPA is equal in scope to the definition under
27 the FDCPA. (ECF No. 15-1 at 10.) This does not appear to be the case. E.g., Mohanna v.
Carrington Mortg. Servs. LLC, No. 18-cv-02563-WHO, 2018 U.S. Dist. LEXIS 132053, *13, n.4
28 (noting in response to a similar argument the RFDCPA is broader than the FDCPA).
1 the ultimate resolution of the screening of plaintiff’s claims, it is possible no claims will proceed
2 that provide this court with subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1343. If
3 it is determined that plaintiff sufficiently alleged a federal claim, then the court will consider
4 exercising supplemental jurisdiction over plaintiff's state law RFDCPA claim. (See also sections
5 E and F, infra (recommending the court decline to exercise supplemental jurisdiction over other
6 state law claims).)
7 C. Constitutional Claims
8 Plaintiff appears to claim his due process rights under the Fifth and Fourteenth
9 Amendments rights have been violated by the loan being transferred to defendant without his
10 consent. (ECF No. 1 at 31-32, 43-45, 55; ECF No. 6 at 8.)
11 The Fifth Amendment provides, in pertinent part, “[n]o person shall . . . be deprived of
12 life, liberty, or property, without due process of law.” U.S. Const., Amend. 5. The Fourteenth
13 Amendment provides, in pertinent part, “no State shall . . . deprive any person of life, liberty, or
14 property, without due process of law.” U.S. Const., Amend. 14, § 1. The touchstone of due
15 process is the protection of individuals against arbitrary actions by the government. See Cty. of
16 Sacramento v. Lewis, 523 U.S. 833, 845 (1998). “[T]he Due Process Clause protects individuals
17 only from governmental and not from private action.” Lugar v. Edmondson Oil Co., 457 U.S.
18 922, 930 (1982).
19 Defendant is not a governmental agency, entity, municipality, or the “State” for purposes
20 of a due process claim. Accordingly, the undersigned will recommend this claim be dismissed
21 without leave to amend.
22 D. 18 U.S.C. §§ 1341, 1343, 1621, and 12 U.S.C. § 2605
23 Plaintiff appears to allege causes of action for violations of 18 U.S.C. §§ 1341 and 1343.
24 These code sections pertain to mail and wire fraud, and, as noted below, plaintiff fails to meet the
25 heightened pleading requirements for a claim based on fraud. Moreover, “[t]he majority of
26 published decisions. . . have declined to find a private civil cause of action created by a bare
27 criminal statute.” Black v. Sciver, No. 1:16-CV-00841-DAD-JLT, 2016 U.S. Dist. LEXIS
28 119309, at *12 (E.D. Cal. Sept. 2, 2016) (citing cases finding that there is no private cause of
1 action for sections 1341 and 1343).
2 Title 18 U.S.C. § 1621 is related to perjury by a defendant. This is a criminal statute with
3 no private right of action. See Brown v. California, No. 18-CV-07826-EMC, 2019 U.S. Dist.
4 LEXIS 99542, at *9 (N.D. Cal. June 13, 2019).
5 Plaintiff appears to claim defendant violated 12 U.S.C. § 2605. This statute provides, in
6 pertinent part, “[e]ach servicer of any federally related mortgage loan shall notify the borrower in
7 writing of any assignment, sale, or transfer of the servicing of the loan to any other person.” 12
8 U.S.C. §2605(b)(1). This claim fails on the allegations in the complaint because plaintiff admits
9 he received a notice of the service transfer of the loan to defendant. (ECF No. 6 at 6 (complaining
10 that the notices he received over a “10 month[] period” regarding the “decision to transfer his
11 contract” were insufficient). Because plaintiff acknowledges he had notice of the transfer, there is
12 no basis for a violation of this statute.
13 Accordingly, the undersigned will recommend dismissal of these claims without leave to
14 amend.
15 E. Fraud
16 Plaintiff refers to various billing statements sent by defendant as fraud or fraudulent. (ECF
17 No. 1 at 2, 39-40, 61-62, 65.) The elements to show fraud or intentional misrepresentation under
18 California law are “false representation, knowledge of its falsity, intent to defraud, justifiable
19 reliance, and damages.” Moore v. Brewster, 96 F.3d 1240, 1245 (9th Cir. 1996) (quotations
20 omitted). Under Fed. R. Civ. P. 9(b), a plaintiff must plead claims for fraud with particularity: “In
21 all averments of fraud . . ., the circumstances constituting fraud . . . shall be stated with
22 particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred
23 generally.” This rule requires the identification of the circumstances constituting fraud so the
24 defendant can prepare an adequate answer from the allegations. Schreiber Distrib. Co. v. Serv-
25 Well Furniture Co., 806 F.2d 1393, 1400 (9th Cir. 1986). “[T]he pleader must state the time,
26 place, and specific content of the false representations as well as the identities of the parties to the
27 misrepresentation.” Id. at 1401; see also Moore v. Kayport Package Express, Inc., 885 F.2d 531,
28 541 (9th Cir. 1989).
1 Plaintiff alleges defendant sent him mortgage bills corresponding to months for which
2 plaintiff had already paid his mortgage, and that defendant continued to do so even after plaintiff
3 proved he had previously made those payments. (See ECF No. 1 at 2, 39-40, 61-62, 65.) These
4 allegations do not suffice to state a fraud claim because plaintiff has not alleged with specificity
5 the content of false representations made knowingly by defendant, or plaintiff’s justifiable
6 reliance and damages suffered.
7 In addition, fraud is a state-law claim. See Moore, 96 F.3d at 1245. Although plaintiff
8 states he brings fraud claims under both state and federal law (ECF No. 1 at 72), he identifies no
9 factual basis for a fraud claim under federal law. Since it is being recommended that all federal
10 claims be dismissed, the undersigned will recommend the court decline to exercise supplemental
11 jurisdiction over the state-law fraud claim.
12 F. Supplemental Jurisdiction for other State Law Claims
13 To the extent plaintiff brings claims under California Penal Code §§ 484, and 118-1131;
14 and California Civil Code § 2923.5, the undersigned will recommend the court decline to exercise
15 supplemental jurisdiction. A court may decline to exercise supplemental jurisdiction over state-
16 law claims if it “has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. §
17 1367(c)(3). The Supreme Court has stated that if “the federal claims are dismissed before trial . . .
18 the state claims should be dismissed as well.” United Mine Workers v. Gibbs, 383 U.S. 715, 726
19 (1966).
20 IV. LEAVE TO AMEND
21 “A district court should grant leave to amend even if no request to amend the pleading
22 was made, unless it determines that the pleading could not possibly be cured by the allegation of
23 other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc). If, however, after
24 careful consideration, it is clear that a complaint cannot be cured by amendment, the court may
25 dismiss without leave to amend. See Gardner v. Marino, 563 F.3d 981, 990 (9th Cir. 2009)
26 (finding no abuse of discretion in denying leave to amend when amendment would be futile).
27 The underlying basis for plaintiff’s federal claims is that he believes the transfer of his
28 loan was unlawful. Such claims cannot be cured by amendment. Because leave to amend would
1 | be futile, the undersigned will recommend plaintiff's complaint and his amended (or
2 | supplemental) complaint be dismissed without leave to amend.
3] V. CONCLUSION
4 Accordingly, IT IS HEREBY ORDERED that defendant’s request for judicial notice
5 | (ECF No. 2) is GRANTED.
6 It is FURTHER RECOMMENDED that:
7 1. Defendant’s motions to dismiss (ECF Nos. 8 & 15) be GRANTED and plaintiff's
8 | complaints (ECF No. | & 6) be DISMISSED WITHOUT LEAVE TO AMEND.
9 2. The Clerk of the Court be directed to close this case.
10 These findings and recommendations are submitted to the United States District Judge
11 | assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(). Within fourteen days
12 | after being served with these findings and recommendations, any party may file written
13 | objections with the court and serve a copy on all parties. Such a document should be captioned
14 | “Objections to Magistrate Judge's Findings and Recommendations.” Any response to the
15 | objections shall be served and filed within fourteen days after service of the objections. The
16 | parties are advised that failure to file objections within the specified time may waive the right to
17 || appeal the District Court’s order. Martinez v. YIst, 951 F.2d 1153 (9th Cir. 1991).
18 | Dated: March 25, 2021 dp. A. fe
19 CAROLYN K DELANEY
20 UNITED STATES MAGISTRATE JUDGE
21 8.Harris.20cv2340.dismiss
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