# Choudhuri v. Specialized Loan Servicing

> District Court, N.D. California · January 26, 2024

URL: https://www.frixlaw.com/law-library/cases/10077834

## Case

- **Court:** District Court, N.D. California
- **Decided:** January 26, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10077834

## How later opinions describe it (automated extraction)

- holding that “[a] court may take judicial notice 9 of matters of public record”
- finding no error to deny amendment where 3 amendment would be futile

## Opinion text

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4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 KABITA CHOUDHURI, Case No. 22-cv-06993-JST

8 Plaintiff,
ORDER GRANTING MOTIONS TO
9 v. DISMISS

10 SPECIALISED LOAN SERVICING, et al., Re: ECF Nos. 77, 78
Defendants.
11

12
13 Before the Court are motions to dismiss by Defendants Dryden Capital, Inc. (“Dryden”)
14 and Zillow Group, Inc. (“Zillow”). ECF Nos. 77, 78. The Court will grant the motions.1
15 I. BACKGROUND
16 On November 7, 2023, Plaintiff Kabita Choudhuri filed her second amended complaint
17 (“SAC”) in this action against Defendants Specialized Loan Servicing, LLC., Bosco Credit LLC.,
18 Zillow Group, Inc., and Dryden Capital, Inc., whom she claims engaged in a conspiracy to defraud
19 her by illegally foreclosing on her home. ECF No. 72. Because the facts are well-known to the
20 parties and the Court has summarized Choudhuri’s allegations in detail in its prior motion to
21 dismiss order, ECF No. 66, the Court will not elaborate them here.
22 In its prior order, the Court found that Choudhuri sufficiently plead claims for violation of
23 Cal. Civ. Code §§ 2923.3 and 2924b against Specialized and Bosco. The Court, however,
24 dismissed Choudhuri’s claims against all Defendants for promissory estoppel; tortious
25 interference; unjust enrichment; nuisance; violations of the Holder Rule; 15 U.S.C. § 77q; 31
26 U.S.C. § 3729; California’s Unfair Competition Law (“UCL”); the Fair Debt Collection Practices
27
1 Act (“FDCPA”); the Rosenthal Act; the Truth in Lending Act (“TILA”) and Regulation Z with
2 prejudice. Choudhuri’s Racketeering Influenced and Corrupt Organizations (“RICO”) Act claims
3 against Zillow, as well as all other claims brought under the Homeowner Bill of Rights
4 (“HBOR”), federal Real Estate Settlement Procedures Act (“RESPA”), and Regulation Z, were
5 also dismissed with prejudice. Choudhuri was granted leave to amend only her claims against
6 Specialized and Bosco for fraud; violation of the RICO Act; violation of the HBOR, Cal. Civ.
7 Code. § 2923.6; violation of RESPA, 12 U.S.C. § 2605(e)(1)(A); and violation of Regulation X,
8 12 C.F.R. § 1024.41(g).
9 Like her first amended complaint, Choudhuri’s SAC is difficult to comprehend.
10 Choudhuri’s SAC adds a new Defendant, Dryden, who is the current legal owner of the property
11 that is the subject of this dispute. ECF No. 77 at 2. Once again, Choudhuri has grouped various
12 causes of action into three “counts.” ECF No. 72. It appears that Choudhuri has alleged claims
13 for violation of RESPA, 12 U.S.C.§ 2605(e)(l)(A); and HBOR, Cal. Civ. Code §§ 2923, 2924
14 against all Defendants in Count I. Id. at 6. Choudhuri has also plead claims for violation of
15 RICO, 18 U.S.C. § 1961; RESPA, 12 U.S.C. § 2605(f); implementing Regulation X, 12 C.F.R §§
16 1024.41(g); HBOR, Cal. Civ. Code §§ 2923.3 and 2924b; California’s UCL, Cal Bus. & Prof.
17 Code §§ 17200, et seq.; and the federal False Claims Act, 31 U.S.C. § 3729 against only
18 Defendants Specialized, Dryden, and Bosco. Id. at 10, 17. Additionally, Choudhuri asks that the
19 Court enter default judgment against Zillow. Id. at 19.
20 Dryden and Zillow now move to dismiss all claims brought against them in the SAC
21 pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF Nos. 77, 78.
22 II. JURISDICTION
23 The Court has jurisdiction over Choudhuri’s federal claims under 28 U.S.C. § 1331 and
24 supplemental jurisdiction over her state law claims under 28 U.S.C. § 1367.
25 III. LEGAL STANDARD
26 “Dismissal under [Federal Rule of Civil Procedure] 12(b)(6) is appropriate only where the
27 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.”
1 motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a
2 claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
3 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Threadbare recitals of the elements of a
4 cause of action, supported by mere conclusory statements, do not suffice.” Id.
5 When ruling on a motion to dismiss, courts “accept all factual allegations in the complaint
6 as true and construe the pleadings in the light most favorable to the nonmoving party.” Knievel v.
7 ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). Pro se complaints must be liberally construed and
8 held to a less stringent standard than formal pleadings drafted by attorneys. Erickson v. Pardus,
9 551 U.S. 89, 94 (2007) (per curiam).
10 Leave to amend a complaint “shall be freely given when justice so requires.” Fed. R. Civ.
11 P. 15(a)(2). “[A] district court should grant leave to amend even if no request to amend the
12 pleading was made, unless it determines that the pleading could not possibly be cured by the
13 allegation of other facts.” Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995) (quoting Cook,
14 Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990)). “Nevertheless,
15 the ‘general rule that parties are allowed to amend their pleadings . . . does not extend to cases in
16 which any amendment would be an exercise in futility.’” Novak v. United States, 795 F.3d 1012,
17 1020 (9th Cir. 2015) (alteration in original) (quoting Stechman v. Hart Brewing, Inc., 143 F.3d
18 1293, 1298 (9th Cir. 1998)).
19 IV. JUDICIAL NOTICE
20 “Generally, district courts may not consider material outside the pleadings when assessing
21 the sufficiency of a complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure.”
22 Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018). Judicial notice,
23 however, is an exception to this rule. Id. Pursuant to Federal Rule of Evidence 201(b), “[t]he
24 court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is
25 generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily
26 determined from sources whose accuracy cannot reasonably be questioned.” If a fact is not
27 subject to reasonable dispute, the court “must take judicial notice if a party requests it and the
1 Although Dryden has not formally requested that the Court take judicial notice of the
2 exhibits attached to its motion, the Court does so sua sponte. Fed. R. Evid. 201(c). These
3 documents include the trustee’s deed for the property at issue recorded on December 20, 2022, and
4 a grant deed issued by the County of Marin on May 11, 2023. ECF No. 77-2. Because these
5 documents are “generally known” within this court’s territorial jurisdiction, and because they can
6 “be accurately and readily determined from sources whose accuracy cannot reasonably be
7 questioned,” they are proper subjects of judicial notice. Fed. R. Evid. 201(b); see also Lee v. City
8 of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (holding that “[a] court may take judicial notice
9 of matters of public record”).2
10 V. DISCUSSION
11 A. Dryden
12 Choudhuri’s SAC asserts various claims against Dryden on the ground that Dryden has
13 recently “appear[ed] on the scene” and “inherits all of the liability of the previous owner of
14 Plaintiff’s loan.” ECF No. 72 at 18. In moving to dismiss, Dryden contends that it is a bona fide
15 purchaser (“BFP”) for value with no prior knowledge of Choudhuri’s dispute, and therefore, it
16 cannot be held liable in this action. ECF No. 77 at 3.
17 “It is black-letter law that a [BFP] who acquires his or her interest in real property without
18 knowledge or notice of another’s prior rights or interest in the property takes the property free of
19 such unknown interests.” In re Marriage of Cloney, 91 Cal. App. 4th 429, 437 (2001) (internal
20 quotations omitted). Furthermore, California Civil Code Section 2924 creates a “conclusive
21 presumption . . . in favor of a BFP who receives a trustee’s deed that contains a recital that the
22 trustee has fulfilled its statutory notice requirements.” Melendrez v. D & I Inv., Inc., 127 Cal.
23 App. 4th 1238, 1250 (2005). Section 2924 reads in relevant part:

24 A recital in the deed executed pursuant to the power of sale of
compliance with all requirements of law regarding the mailing of
25

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2 The Court declines to take judicial notice of Dryden’s privately-obtained preliminary title report.
ECF No. 84-2. See Time Warner Entm’t–Advance/Newhouse P’ship v. Steadfast Orchard Park,
27
L.P., 2008 WL 4350054, at *6 (C.D. Cal. Sept.23, 2008) (A privately obtained title report
copies of notices or the publication of a copy of the notice of default
1 or the personal delivery of the copy of the notice of default or the
posting of copies of the notice of sale or the publication of a copy
2 thereof shall constitute prima facie evidence of compliance with
these requirements and conclusive evidence thereof in favor of bona
3 fide purchasers and encumbrancers for value and without notice.
4 Id. (quoting Cal. Civ. Code § 1294(c)). The accompanying exhibits to Dryden’s motion
5 demonstrate that Dryden is a BFP who acquired legal title of the property at issue pursuant to a
6 trustee’s deed recorded on December 20, 2022. ECF No. 77-2 at 3–6. A grant deed was thereafter
7 issued to Dryden on May 11, 2023. ECF No. 77-2 at 7.
8 Nothing in either Choudhuri’s complaint or her opposition brief undermines Dryden’s
9 status as a BFP who cannot be held liable in this action. Choudhuri’s opposition brief consists
10 primarily of conclusory allegations that Dryden has made false claims and attached “fraudulent
11 document[s]” to its motion. ECF No. 82 at 1. Choudhuri also avers that liability must be imputed
12 to Dryden because “it is incumbent upon the purchaser to conduct due diligence” before
13 purchasing property. Id. at 2. These assertions are not grounded in the caselaw, and In re
14 Marriage of Cloney, cited by Choudhuri, does not help her position. In re Marriage of Cloney
15 concerned whether a “purchaser of real property” could “be charged with constructive notice of a
16 valid judgment lien” recorded against a seller of the property, where the purchaser’s escrow agent
17 had “actual notice the seller ha[d] used more than one name,” and that “the name of the seller
18 appearing on the instruments of title [differed from] that appearing on the seller’s identification.”
19 91 Cal. App. 4th at 436. In answering this question, the court noted that “any purchaser of real
20 property acquires the property subject to prior interests of which he or she has actual or
21 constructive notice.” Id. at 437 (emphasis omitted). Here, Choudhuri pleads no facts establishing
22 that Dryden had notice of her claims prior to its purchase of the property. Indeed, the trustee’s
23 deed and grant deed demonstrate that Dryden undertook some level of due diligence before
24 purchasing the property, and that Dryden was not on notice of any adverse interest in the property
25 by Choudhuri.
26 Because the Court agrees with Dryden that it can neither be held directly nor vicariously
27 liable in this dispute, all claims against Dryden are dismissed. Further, because Choudhuri does
1 be cured by amendment, all such claims are dismissed with prejudice. See McQuillion v.
2 Schwarzenegger, 369 F.3d 1091, 1099 (9th Cir. 2004) (finding no error to deny amendment where
3 amendment would be futile).
4 B. Zillow
5 1. RESPA, Regulation X, and HBOR Claims
6 Choudhuri alleges that Zillow has committed violations of RESPA, Regulation X, and
7 HBOR. ECF No. 72 at 6. The Court has previously dismissed with prejudice Choudhuri’s
8 RESPA, Regulation X, and HBOR claims against Zillow.3 ECF No. 66 at 19 (“Choudhuri’s RICO
9 claims against Zillow, as well as all other claims brought under the HBOR, RESPA, or Regulation
10 X, are also dismissed with prejudice.”). Accordingly, Choudhuri’s RESPA, Regulation X, and
11 HBOR claims against Zillow will again be dismissed with prejudice.
12 2. Remaining Claims Against Zillow
13 Although the SAC is difficult to comprehend, Choudhuri appears to allege that Zillow
14 “illegally” published information regarding the property at issue on its website, including listing it
15 “for auction.” ECF No. 72 at 4. Zillow contends that, to the extent that any claim can be
16 deciphered from this allegation, such claims are “barred as a matter of law by Section 230(c).”
17 ECF No. 78 at 10. The Court agrees.
18 “Section 230 of the Communications Decency Act (“CDA”) ‘immunizes providers of
19 interactive computer services against liability arising from content created by third parties.’”
20 Kimzey v. Yelp! Inc., 836 F.3d 1263, 1265 (9th Cir. 2016) (quoting Fair Hous. Council of San
21 Fernando Valley v. Roommates.Com, LLC, 521 F.3d 1157, 1162 (9th Cir. 2008) (en banc)).
22 Section 230(c)(1) of the CDA makes clear that it “only protects from liability (1) a provider or
23 user of an interactive computer service (2) whom a plaintiff seeks to treat, under a state law cause
24 of action, as a publisher or speaker (3) of information provided by another information content
25 provider.” Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1100–01 (9th Cir. 2009), as amended (Sept. 28,
26

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3 While the Court granted Choudhuri leave to amend her RESPA, Regulation X, and HBOR
1 2009).
2 Beginning with the first element, under the CDA, the term “interactive computer service”
3 is interpreted “expansively.” Kimzey, 836 F.3d at 1268 (internal quotations and modifications
4 omitted). Zillow “operates an online database of real estate properties.” ECF No. 78 at 11. Its
5 website states that it is “reimagining the traditional rules of real estate to make it easier than ever
6 to move from one home to the next.”4 Zillow clearly meets the definition of an internet service
7 provider.
8 Turning to the second and third elements, it appears that Choudhuri seeks to hold Zillow
9 liable for posting “auction notices” of her property on its website, allegedly at the behest of
10 Defendant Bosco. ECF No. 72 at 5. Construing the allegations in the light most favorable to
11 Choudhuri, it seems that her claims are directed against Zillow in its capacity as a publisher or
12 speaker of the auction notices. However, Choudhuri has not demonstrated—nor does the Court
13 believe that Choudhuri could demonstrate—that the auction notices on Zillow’s website stemmed
14 from “content development or creation” by Zillow. Kimzey, 836 F.3d at 1270. As stated on
15 Zillow’s website, Zillow collects information from public sources; it does not engage in content
16 creation.5 And further, Choudhuri’s SAC admits that Zillow did not develop content itself, but
17 rather allegedly “host[ed] . . . property searches . . . showing only the Plaintiff’s property as listed
18 for auction.” ECF No. 72 at 4.
19 Thus, to the extent that Choudhuri seeks to hold Zillow liable for posting auction notices
20 on its website, the Court finds that these claims fall squarely within the purview of Section 230
21 and are barred as a matter of law.
22 3. Default Judgment
23 Read liberally, Choudhuri’s SAC requests that the Court reconsider her prior motion for
24
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4 The court takes judicial notice of this fact, as it is available on Zillow’s website page and it is not
26
subject to reasonable dispute, https://investors.zillowgroup.come/investors/overview/default.aspx.
See Fed. R. Evid. 201.
27
5 The court takes judicial notice of this fact, as it is available on Zillow’s website page and it is not
1 entry of default against Zillow. ECF No. 72 at 19; see ECF No. 23.6 As the Court explained in its
2 prior order:

3 On November 8, 2022, Choudhuri requested that Zillow waive
service of the initial complaint; Zillow agreed, which established a
4 deadline for response of January 7, 2023. ECF No. 18. On
December 15, 2022, this Court dismissed Choudhuri’s initial
5 complaint. ECF No. 16. On January 17, 2023, Choudhuri filed her
first amended complaint. ECF No. 17. The proof of service filed
6 with the first amended complaint indicates it was served on Zillow
using the Court’s CM/ECF system. Id. at 18. Because the Court’s
7 dismissal of the initial complaint eliminated Zillow’s deadline to
respond to it, Zillow had not yet appeared in this case, such that the
8 first amended complaint could not be served via CM/ECF.
9 ECF No. 66 at 17–18. In denying Choudhuri’s motion for default, the Court reasoned that there
10 was not “proof of sufficient service of the first amended complaint.” Id. at 18. Choudhuri’s
11 amended complaint includes an edited proof of service document with handwritten modifications
12 stating that proof of service was not issued by CM/ECF, but rather was issued “by mail.” ECF
13 No. 72-2 at 5. The Court is not persuaded that this is proof of sufficient service of the first
14 amended complaint, in part because it directly contravenes Choudhuri’s previous affidavit. See
15 ECF No. 17 at 18. Further, the Court agrees with Zillow that there is a “strong policy underlying
16 the Federal Rules of Civil Procedure favoring decisions on the merits.” ECF No. 78 at 15 (quoting
17 Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986)). Accordingly, the Court declines to grant
18 Choudhuri’s motion for default against Zillow.
19 CONCLUSION
20 Dryden and Zillow’s motions to dismiss are granted. Because Choudhuri cannot cure the
21 basic flaws in her pleading against Dryden, the Court dismisses her claims without leave to
22 amend. See Chaset v. Fleer/Skybox Int’l, LP, 300 F.3d 1083, 1088 (9th Cir. 2002) (“Because any
23 amendment would be futile, there is no need to prolong the litigation by permitting further
24 / / /
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6 Zillow argues that Choudhuri has failed to file either a Rule 59(e) or Rule 60 motion to
1 amendment.”). Furthermore, because the Court has already dismissed Choudhuri’s claims against
2 || Zillow, those claims will again be dismissed with prejudice.
3 IT IS SO ORDERED.

4 Dated: January 26, 2024
5
JON S. TIGAR
6 nited States District Judge
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10077834. Public record. Not legal advice.