Demurrer (Judge Ross Klein)


Case Number: NC060418??? Hearing Date: July 07, 2016??? Dept: S27

INTRODUCTION
Defendant Nationstar Mortgage, LLC (?Nationstar?) demurs to each of the three Causes of Action in Plaintiffs? complaint:
1. Violation of CC section 2924.7;
2. Violation of CC section 2924.9 and 2924.10; and
3. Unfair Business Practices.

Neither an opposition nor a First Amended Complaint were timely filed when due on June 24, 2016. A late opposition was received on June 28, 2016. The Court exercises its discretion and will not consider this late opposition. The demurrer was served on March 16, 2016. There is no excuse offered for a late filing since the Plaintiffs had four months to prepare one. The Court will allow oral argument and offers for amendment at the time of hearing.

The Court does consider the argument that Defendant did not comply with the meet and confer requirement of CCP section 430.41. That statute also provides that failure to adequately meet and confer is not a basis to either sustain or overrule a demurrer. With a nearly four month window of advance notice, Plaintiff could have initiated the process if truly concerned. After a review of the substance of the demurrer and the opposition, the Court finds it highly unlikely a meet and confer conference would have resolved these issues.

COMPLAINT?S FACTUAL SUMMARY
Plaintiffs allege Nationstar became the servicer of their mortgage on October 24, 2013.

Plaintiffs allege they received a loan modification in November, 2013. They also began to ?experiencing a hardship in or around 2013 and reached out to Defendant for assistance.? This allegation is unclear whether they experienced the hardship and ?reached out? after they had already received a modification.

Plaintiffs submitted a ?complete packet? to Nationstar in 2013 and did not receive a letter confirming receipt. The application was rejected as incomplete, but Plaintiffs were never contacted by their ?single point of contact? to inform them of missing documents.

A second application was submitted in ?early 2014.? They did not receive a letter from Nationstar confirming receipt of the second application. On April 2, 2014 Plaintiffs? application was denied ?on the basis of insufficient income.?

A third application was attempted and denied on October 7, 2014. Plaintiffs were never contacted by a single point on contact during this process.

Plaintiffs conclude they ?have been denied the benefits of a fair lien loan review.?

REQUEST FOR JUDICIAL NOTICE
Defendant?s request for Judicial Notice of a Deed of Trust recorded on April 3, 2006 is granted.

DEMURRER
The First Cause of Action is for violation of CC section 2923.7 which states, in relevant part: ?Upon request from a borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.? This requirement is modified by section 2923.7(c): ?The single point of contact shall remain assigned to the borrower?s account until the mortgage servicer determines that all loss mitigation options offered by, or through, the mortgage servicer have been exhausted or the borrower?s account becomes current.?

Plaintiffs expressly allege they received a modification in November, 2013. In their opposition Plaintiffs claim this was a typographical error, a fact they assert Defendant knew. The Court is left to question why Plaintiffs did not take the opportunity to amend the complaint.

Defendants argue that Plaintiffs have not alleged they are delinquent on their account and are not entitled to a single point of contact.

Even if the modification was in 2007, they were previously evaluated. Absent an offer of how this can be amended, the demurrer will be sustained without leave to amend.

The Second Cause of Action is based on the failure to comply with CC section 2924.10 requirements that:
?When a borrower submits a complete first lien modification application or any document, the mortgage servicer shall provide written acknowledgment of the receipt of the documentation within five business days of receipt.?

Defendant specifically raises CC section 2923.6(g):
?In order to minimize the risk of borrowers submitting multiple applications for first lien loan modifications for the purpose of delay, the mortgage servicer shall not be obligated to evaluate applications from borrowers who have already been evaluated or afforded a fair opportunity to be evaluated for a first lien loan modification prior to January 1, 2013, or who have been evaluated or afforded a fair opportunity to be evaluated consistent with the requirements of this section, unless there have been a material change in the borrower?s financial circumstances since the date of the borrower?s previous application and that change is documented by the borrower and submitted to the mortgage servicer.?

The complaint admits that Plaintiffs were previously evaluated and given a modification. There is no allegation of a material change in Plaintiffs? financial condition.

The demurrer is sustained without leave to amend.

The Third Cause of Action is for violation of Business and Professions Code section 17200 et seq.

The required elements include an unfair or fraudulent practice. Plaintiffs must have suffered actual injury in order to have standing.

Plaintiffs make a conclusory allegation of monetary damages and also pray for punitive damages. These remedies are not available. Business and Professions Code section 17203:
?Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction. The court may make such orders or judgments, including the appointment of a receiver, as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.?

The opposition did not address this defect.

The demurrer is sustained without leave to amend.

ORDER
If this tentative ruling becomes final, Defendant must lodge and serve a proposed judgment of dismissal within five court days.