| Re: | Kahn v. Deutsche Bank National Trust Company |
| ??????????? ??????????? ?
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Court Case No. 16CECG01242 |
| Hearing Date:
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December 21, 2017 (Dept. 403) |
| Motion: | Motion by Defendants Deutsche Bank National Trust, as Trustee of the Residential Asset Securitization Trust Series 2003-A10 Mortgage Pass-Through Certificate Series 2003-J and Ocwen Loan Servicing, LLC, for Judgment on the Pleadings |
Tentative Ruling:
To grant as to defendant Ocwen Loan Servicing, LLC (?Ocwen?) without leave to amend. Defendant Ocwen is directed to submit to this court, within 7 days of service of the minute order, a proposed judgment dismissing the action as to it. To deny as to defendant Deutsche Bank National Trust, as Trustee of the Residential Asset Securitization Trust Series 2003-A10 Mortgage Pass-Through Certificate Series 2003-J (?Deutsche Bank?).
Explanation:
Causes of Action against Ocwen:
The cases plaintiffs cite finding that a loan servicer could be treated as the beneficiary under the Deed of Trust (?DOT?) due to its role as servicer are not California cases, and no California authority supports the conclusion that a servicer is an equitable beneficiary to claims involving the issues concerning title to the Property. Instead, California authorities have held that a servicer is not a party to actions involving title disputes because they have no adverse claim to title. (Watson v. Bank of America, N.A. 2016 WL 3552061, at *20; Levy v. Residential Credit Solutions Inc. 2010 WL 3470656, at *3 (failure to allege loan servicer ?possesses an interest, let alone an adverse interest in the Property,? and generic allegation of adverse interest was insufficient); Bunag v. Aegis Wholesale Corp. 2009 WL 2245688, at *5?Plaintiff had not, ?and cannot? allege loan servicer had an adverse interest, and conspiracy allegations were unavailing to do so.)
Since Ocwen cannot be deemed and treated as the beneficiary under the DOT, the Wrongful Foreclosure count fails as to it. Likewise, the Quiet Title count requires plaintiffs to allege the adverse claims to the title against which a determination is sought (Code Civ. Proc. ? 761.020; Deutsche Bank National Trust Company v. Pyle (2017) 13 Cal.App.5th 513, 524), and as noted in Levy v. Residential Credit Solutions, Inc., supra, as loan servicer it has no such adverse claim. (Id., 2010 WL 3470656, at *3.)
The count for Cancellation of Instruments is not an independent basis of liability, but is an equitable remedy dependent on being paired with a viable substantive basis for liability, such as a quiet title claim. (Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn 3.) Since the quiet title count fails against Ocwen, so does the cancellation of instruments cause of action.? Likewise, the Declaratory Relief claim (Third cause of action) is based on the contention that Ocwen, with the other defendants, is asserting a competing interest in the three parcels of property, and established above, it is not. There is no basis for declaratory relief as against Ocwen, since plaintiff has not, and cannot allege that it is asserting any competing interests or title claims against plaintiffs.
Wrongful Foreclosure, as to Deutsche Bank:
Even if the court ignores the Debt Validation Notice and the CMC Statement proffered by plaintiffs, there is sufficient basis to find that defendant Deutsche Bank was involved in the commencement of foreclosure against plaintiffs? property, since the Notice of Trustee?s Sale (?NOS?) stated, ?The beneficiary of the Deed of Trust has executed and delivered to the undersigned [Western Progressive, LLC] a written request to commence foreclosure?.?
The authority cited by plaintiff supports allowing a preemptive wrongful foreclosure action here. (Nguyen v. JP Morgan Chase Bank N.A. (N.D. Cal., May 15, 2013) 2013 WL 2146606; Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250 (plaintiffs allowed to ?seek to enjoin the lenders from proceeding with a nonjudicial foreclosure?); Shwurong Lee v. Bank of New York Mellon (N.D. Cal., Dec. 9, 2016) 2016 WL 8729924.) In Shwurong Lee, the court found it ?illogical? to require a plaintiff to ?sit by idly until an allegedly improper foreclosure sale was completed before bringing her otherwise valid challenge in court,? and it noted that this ?may explain why numerous courts have allowed pre-foreclosure [wrongful foreclosure] claims to proceed.? (Id. at *6, citation and internal quotes omitted.) Noting that the California Supreme Court had yet to decide whether pre-sale wrongful foreclosure claims are permissible, the court concluded that if the Supreme Court had been confronted with the issue, ?it would allow wrongful foreclosure claims to proceed absent an actual foreclosure provided that a specific factual basis for undermining the authority of the party or parties initiating the foreclosure is alleged.? (Id. at *6, fn 4.) This point was also made in the body of the opinion, since the court found that it was the lack of sufficient factual basis that went against plaintiff, rather than the fact that no sale had yet occurred. (Id. at *6??Although the lack of a sale is not fatal to Plaintiff’s claim, the lack of facts supporting wrongful foreclosure is? (emphasis added).)
If there are situations where California courts have found it appropriate to allow a borrower to maintain a preemptive wrongful foreclosure action rather than to ?sit by idly? until after the foreclosure sale was completed, there is support for allowing it here, where: 1) the plaintiff property owners are not the borrowers, so they were not the parties who encumbered (or attempted to encumber) the property; 2) plaintiffs allege they had no notice of the subject DOT when they purchased the property; 3) the property description on the DOT does not describe the property defendants have attempted to foreclose; and 4) as strangers to the DOT, they were not responsible for the events leading to the default and attempted foreclosure.? Defendant?s intent to foreclose has been made evident, and plaintiffs have alleged a sufficient factual basis to support finding the sale would be wrongful. They will be allowed to maintain their wrongful foreclosure cause of action against defendant Deutsche Bank.
Pursuant to California Rules of Court, rule 3.1312 and Code of Civil Procedure section 1019.5(a), no further written order is necessary.? The minute order adopting this ruling will serve as the order of the court, and service by the clerk of the minute order will constitute notice of the order.
Tentative Ruling
Issued By: ???????????????KCK?????????? on 12/20/17
(Judge?s initials) ?????? (Date)