Case Number: BC672040 Hearing Date: March 02, 2018 Dept: 47

Rupert Julien v. The Bank of New York Mellon, fka The Bank of New York, . . ., et al.

MOTION FOR JUDGMENT ON THE PLEADINGS[1]

MOVING PARTY: Defendants Bank of America, N.A. and The Bank of New York Mellon, fka, The Bank of New York, as Successor Indenture Trustee to JP Morgan Chase Bank, N.A., as Indenture Trustee for the CWABS Revolving Home Equity Loan Trust, Series 2004-L

RESPONDING PARTY(S): Plaintiff Rupert Julien

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff seeks to enjoin a non-judicial foreclosure due to Defendants’ failure to contact Plaintiff to assess his financial situation or to explore his foreclosure prevention alternatives.

Defendants Bank of America, N.A. and The Bank of New York Mellon, fka, The Bank of New York, as Successor Indenture Trustee to JP Morgan Chase Bank, N.A., as Indenture Trustee for the CWABS Revolving Home Equity Loan Trust, Series 2004-L move for judgment on the pleadings.

TENTATIVE RULING:

Defendants Bank of America, N.A. and The Bank of New York Mellon, fka, The Bank of New York, as Successor Indenture Trustee to JP Morgan Chase Bank, N.A., as Indenture Trustee for the CWABS Revolving Home Equity Loan Trust, Series 2004-L motion for judgment on the pleadings is DENIED as to the first through fourth causes of action.

DISCUSSION:

Motion For Judgment On The Pleadings

Request For Judicial Notice

Defendants’ request for judicial notice of the Deeds of Trust recorded on October 2, 2003 and on January 7, 2004 is GRANTED. The Court may take judicial notice of recorded documents (Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 263, 274).

Analysis

1. First Cause of Action (Violation of Civil Code § 2924.17); Second Cause of Action (Violation of Civil Code § 2924.12).

Citing Civil Code § 2924.15, Defendants argue that a HELOC is not subject to the Homeowner Bill of Rights, which only pertains to first lien mortgages or deeds of trust secured by a borrower’s principal residence. The version of Civil Code § 2924.15 in effect during the relevant time period[2] alleged in the Complaint filed on August 10, 2017 reads:

(a) Unless otherwise provided, paragraph (5) of subdivision (a) of Section 2924, and Sections 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and 2924.18 shall apply only to first lien mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units. For these purposes, “owner-occupied” means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes.

(b) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.

Civil Code § 2924.15 (bold emphasis added).

Thus, Civil Code § 2924.15 does not exclude Civil Code § 2924.17, nor Civil Code § 2924.12 from its operation. Defendants’ argument is not persuasive.

Defendants also argue that Civil Code § 2924.12 is simply an implementing provision for other HBOR Code sections and not its own separate basis for asserting a statutory violation cause of action. However, this is labeled as a cause of action for declaratory relief pursuant to Civil Code § 2924.12 to obtain injunctive relief to enjoin a material violation of Civil Code § 2924.17. Complaint, ¶¶ 27 – 31. While this may or may not technically be a separate cause of action, the Court will permit this cause of action to stand.

The motion for judgment on the pleadings as to the first and second causes of action is DENIED.

2. Third Cause of Action (Negligence Per Se).

Defendants’ argument that 12 CFR 1024.33 does not apply because the subject loan is a HELOC relies upon matters not pled in the Complaint, nor reflected in judicially-noticed documents[3]. “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.” Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482. Defendants’ argument that 24 CFR 203.604 only applies to loans that are HUD insured is in the nature of an affirmative defense, not an element of Plaintiff’s cause of action.

Defendants’ argument that it owes no duty to Plaintiff is belied by the language of 24 CFR 203.604(b) and 12 CFR 1024.33(b)(1)—as pled in ¶¶ 33, 35 of the Complaint—which impose statutory duties owed to mortgagors/borrowers. Defendants’ argument is not persuasive.

The motion for judgment on the pleadings as to the third cause of action is DENIED.

2. Fourth Cause of Action (Unfair Business Practice)

For the reasons discussed above, the Civil Code § 2924.17 and § 2924.12 support the “unlawful” prong of B & P Code § 17200.

“By defining unfair competition to include any ‘unlawful … business act or practice’ [citation], the UCL permits violations of other laws to be treated as unfair competition that is independently actionable. [Citation.]” (Citation omitted.) In addition, under the UCL, “‘a practice may be deemed unfair even if not specifically proscribed by some other law.’ [Citation.]” (Citation omitted.) The remedies available under the UCL are “cumulative … to the remedies or penalties available under all other laws of this state.” (Bus. & Prof. Code, § 17205.)

Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 485-86.

Defendants argue that Plaintiff cannot plead standing because no foreclosure is alleged to have taken place and Plaintiff’s default preceded any misconduct by Defendants. However, Civil Code §§ 2924.17 and 2924.12 specifically impose post-default obligations which must be satisfied prior to recording a notice of default and notice of sale, and thus, Defendant’s post-default argument is not persuasive. Moreover, although foreclosure may not have yet taken place, recent case law has recognized that a diminishment in a future property interest, i.e., loss of property due to pending foreclosure proceedings, satisfies the standing requirement for purposes of B & P Code § 17200. However, there is also a causation element that must be pled:

In the present case, Jenkins’s third cause of action asserts the economic injury she has suffered is the impending foreclosure of her home. It is undisputed nonjudicial foreclosure proceedings have been initiated on Jenkins’s home. If such proceedings are pursued to their completion, Jenkins’s interest in her property will be extinguished. Thus, in light of the minimal pleading requirements with regard to the economic injury prong of Business and Professions Code section 17204, and the Kwikset Corp. court’s affirmation of an alleged diminishment of a future property interest as a sufficiently pled economic injury under the statute (Kwikset Corp., supra, 51 Cal.4th at p. 323), we conclude Jenkins’s third cause of action satisfies the economic injury prong of Business and Professions Code section 17204.

Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 522 (bold emphasis and underlining added), overruled on other grounds in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939 n.13.

Accordingly, the motion for judgment on the pleadings as to the fourth cause of action is DENIED.

Plaintiff to give notice, unless waived.

IT IS SO ORDERED.

Dated: March 2, 2018 ___________________________________

Randolph M. Hammock

Judge of the Superior Court