Wolfson v. Bayview Loan Servicing LLC

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Ronald Wolfson, No. CV-17-08258-PCT-DWL 10 Wolfson, ORDER 11 v. 12 Bayview Loan Servicing LLC, et al., 13 Defendants. [14] 15 Pending before the Court are (1) a motion to withdraw and amend Rule 36 responses 16 filed by Plaintiff Ronald Wolfson (Doc. 57) and (2) a motion for summary judgment filed 17 by Defendants Bayview Loan Servicing, LLC (“Bayview”) and Bank of New York Mellon 18 (“BONY”) (collectively “Defendants”) (Doc. 55). Both motions are fully briefed and 19 nobody has requested oral argument. For the following reasons, both motions will be 20 granted. 21 BACKGROUND 22 I. Factual History 23 Defendants filed various exhibits in support of their motion for summary judgment 24 (Doc. 55 at 21-104) and Wolfson filed various exhibits in support of his opposition (Doc. 25 56 at 19-125). Additionally, Wolfson attached various documents as exhibits to his 26 amended complaint (Doc. 33-1). The summary below is derived from those materials. 27 Any disputed facts are resolved in Wolfson’s favor, because he is the party opposing 28 summary judgment. 1 In May 2007, Wolfson executed a $272,000 promissory note that was secured by a 2 deed of trust on his home in Prescott, Arizona. (Doc. 55 at 28-30.) The deed lists Quicken 3 Loans as the lender and Mortgage Electronic Registration Systems, Inc. (“MERS”), a 4 nominee for the lender and its successors, as the beneficiary. (Doc. 55 at 33-34.) 5 On September 27, 2007, Wolfson filed for Chapter 7 bankruptcy. (Doc. 33 ¶ 14.) 6 On June 20, 2008, the bankruptcy court entered a discharge order. (Doc. 33-1 at 6.) 7 Between May 2007 and May 2010, Wolfson made the scheduled monthly payments 8 on his mortgage. (Doc. 55 at 25 ¶ 9; Doc. 56 at 51.) However, on June 1, 2010, Wolfson 9 defaulted by failing to make the required monthly payment. (Id.) 10 Wolfson testified during his deposition that he was instructed by a Bank of America 11 representative to miss the June 2010 payment because this was the only way he could 12 qualify for a loan modification. (Doc. 56 at 66.) Wolfson then applied to Bank of America 13 for a loan modification, but this request was denied because “it didn’t meet investor 14 guidelines.” (Id.) 15 On July 19, 2010, Wolfson received a letter from Bank of America entitled “Notice 16 of Intent to Accelerate.” (Doc. 56 at 69.) Among other things, this letter stated that 17 Wolfson’s loan was currently “in default,” that Wolfson had “the right to cure the default,” 18 that Wolfson could do so by paying $2,856.29 by August 18, 2010, and that “[i]f the default 19 is not cured on of before August 18, 2010, the mortgage payments will be accelerated with 20 the full amount remaining accelerated and becoming due and payable in full, and 21 foreclosure proceedings will be initiated at that time.” (Id.) 22 On November 18, 2010, the Yavapai County Recorder recorded a “Corporation 23 Assignment of Deed of Trust Arizona” under which MERS assigned all beneficial interest 24 in the note and deed of trust to BONY. (Doc. 55 at 25 ¶ 10, 53.) 25 In March 2011, Wolfson filed a lawsuit in state court in which he sought to 26 challenge, inter alia, the validity of the 2010 assignment. (Doc. 33 ¶ 24.) In March 2012, 27 the trial court dismissed Wolfson’s complaint, and on March 11, 2014, the Arizona Court 28 of Appeals affirmed. (Doc. 33 ¶ 27; Doc. 55 at 88-94.) 1 On February 9, 2012, MERS made a second assignment to BONY of Wolfson’s 2 note and deed of trust. (Doc. 33-1 at 13.)1 3 On October 16, 2012, Bayview obtained the servicing rights for the note. (Doc. 334 1 at 15-17; Doc. 55 at 25 ¶ 11.) 5 On November 28, 2012, Wolfson received a letter from Bayview. (Doc. 56 at 95.) 6 Among other things, it apologized to Wolfson for erroneously sending him a “Debt 7 Validation Letter” and stated that “we are aware that your loan has been discharged through 8 Bankruptcy Chapter 7.” (Id.) 9 On September 4, 2014, Bayview sent a letter concerning Wolfson to the Arizona 10 Attorney General’s Public Advocacy and Civil Rights Division. (Doc. 56 at 97.) This 11 letter acknowledged that because Wolfson had gone through bankruptcy in 2008, he “may 12 no longer have personal liability on the Note,” but also noted that “the property is still 13 subject to the lien of the security instrument and is subject to foreclos[ure] if unpaid.” (Id.) 14 On April 27, 2016, Bayview sent Wolfson a “Notice of Default and Intent to 15 Accelerate,” which informed Wolfson that if he failed to cure the default by June 1, 2016, 16 Bayview intended to initiate foreclosure. (Doc. 33-1 at 27-29.) 17 In response, Wolfson sent various letters to Bayview disputing the debt. (Doc. 3318 1 at 31 [response letter from Bayview, acknowledging that it was in response to “recent 19 correspondence” from Wolfson]; Doc. 56 at 99-101 [Wolfson’s May 2016 letter].) 20 On June 22, 2017, Joseph Tirello Jr. (“Tirello”) was appointed to serve as the new 21 trustee of Wolfson’s deed of trust via a document entitled “Substitution of Trustee,” which 22 was recorded on July 3, 2017. (Doc. 33-1 at 41; Doc. 55 at 55.) 23 On July 3, 2017, a “Notice of Trustee’s Sale” with recorded with the Yavapai 24 1 Defendants didn’t file a copy of this document as an attachment to their summary judgment motion and Wolfson didn’t file a copy as an attachment to his opposition to the 25 summary judgment motion. Therefore, the only copy in the record is an unauthenticated copy attached to the amended complaint, which has the phrase “Unofficial Copy” stamped 26 across it. (Doc. 33-1 at 13.) Nevertheless, Wolfson referred to the 2012 assignment during his deposition, and the relevant portion of his deposition transcript is part of the summary 27 judgment record (Doc. 56 at 85-87), and Defendants acknowledged in their reply that the 2012 assignment did occur. (Doc. 62 at 3 [“[T]he 2012 Assignment had no effect on title 28 because MERS had already transferred the beneficial interest in the Deed of Trust to BONYM in the 2010 Assignment.”].) 1 County Recorder. (Doc. 33-1 at 37-38; Doc. 55 at 57-58.) This document identifies BONY 2 as the beneficiary. (Id.) 3 II. Procedural Background 4 On November 7, 2017, Wolfson initiated this action by filing a complaint in state 5 court. (Doc. 1 at 7-21.) 6 On November 30, 2017, Defendants removed the case to this Court. (Doc. 1.) 7 On January 8, 2018, Wolfson filed an amended complaint. (Doc. 33.) It asserts six 8 causes of action. The first four claims are asserted against both BONY and Bayview: (1) 9 false recordings; (2) breach of the implied covenant of good faith and fair dealing; (3) 10 fraudulent misrepresentation; and (4) breach of contract. (Id. ¶¶ 50–115.) The final two 11 claims are asserted only against Bayview: (5) violation of the Fair Debt Collections 12 Practices Act (“FDCPA”); and (6) violation of the Real Estate Settlement Procedures Act 13 (“RESPA”). (Id. ¶¶ 116-72.) 14 On January 19, 2018, Defendants served Wolfson with the First Set of Request for 15 Admissions, First Set of Production of Documents and Non-Uniform Interrogatories. 16 (Doc. 38 [notice of filing]; Doc. 58 at 5-12 [actual request].) 17 On March 27, 2018, Wolfson’s counsel wrote an email to Defendants’ counsel 18 stating that “[t]oday I discovered to my horror that we are late in responding to Bayview’s 19 written discovery propounded January 19th, it appears. I had a significant medical issue 20 and missed the date. I will have full responses to you by Friday. Please advise if you will 21 agree to this belated request for an extension.” (Doc. 58 at 17.) 22 Later that day, Defendants’ counsel sent an email to Wolfson’s counsel denying the 23 extension request. (Doc. 58 at 15-16.) 24 On March 28, 2018, Wolfson’s counsel responded via email by asking Defendants’ 25 counsel “to reconsider your harsh position on the RFAs. I will object to the court to them 26 being deemed admitted. I had a medical emergency involving hospitalization that I can 27 verify, but I would not think that professionalism would allow such an invasion of privacy.” 28 (Doc. 58 at 15.) Wolfson’s counsel also enclosed with this email a completed response to 1 the request for admissions. (Id. at 20-26.) 2 On January 25, 2019, Defendants moved for summary judgment. (Doc. 55.) 3 On February 25, 2019, Wolfson filed an opposition to the summary judgment 4 motion. (Doc. 56.) 5 On February 25, 2019, Wolfson separately filed a formal motion to amend and 6 withdraw his Rule 36 responses. (Doc. 57.) This motion was supported by a declaration 7 from Wolfson’s counsel. (Doc. 58.) 8 On March 8, 2019, Defendants filed an opposition to Wolfson’s motion to withdraw. 9 (Doc. 60.)2 10 On March 12, 2019, Defendants filed a reply in support of their summary judgment 11 motion. (Doc. 62.) 12 DISCUSSION 13 I. Motion to Withdraw 14 Defendants sent a request for admissions (“RFA”) to Wolfson on January 19, 2018. 15 Wolfson’s response was due within 30 days. See Fed. R. Civ. P. 36(a)(3) (“A matter is 16 admitted unless, within 30 days after being served [with a request for admissions], the party 17 to whom the request is directed serves on the requesting party a written answer or objection 18 addressed to the matter and signed by the party or its attorney.”). Unfortunately, Wolfson 19 did not comply with this deadline. On March 27, 2018—about a month after the RFA 20 response was due—Wolfson’s counsel sent an email to Defendants’ counsel apologizing 21 for the error (which, according to Wolfson’s counsel, was due to a “significant medical 22 issue”) and asking for an extension. Defendants’ counsel rejected this request. The 23 following day (March 28, 2018), Wolfson’s counsel sent the completed RFA response to 24 Defendants’ counsel. Nothing happened on the RFA front for the next year or so. Finally, 25 after Defendants sought to rely on Wolfson’s “deemed admissions” in their summary 26 judgment motion, Wolfson quickly filed a formal motion to withdraw those admissions. 27 Wolfson’s request is governed by Rule 36(b) of the Federal Rules of Civil [28] 2 Wolfson never filed a reply in support of his motion to withdraw. 1 Procedure, which provides that “[a] matter admitted under this rule is conclusively 2 established unless the court, on motion, permits the admission to be withdrawn or amended. 3 . . . [T]he court may permit withdrawal or amendment if it would promote the presentation 4 of the merits of the action and if the court is not persuaded that it would prejudice the 5 requesting party in maintaining or defending the action on the merits.” As the Ninth Circuit 6 has summarized: “Two requirements, therefore, must be met before an admission may be 7 withdrawn: (1) presentation of the merits of the action must be subserved, and (2) the party 8 who obtained the admission must not be prejudiced by the withdrawal.” Hadley v. United 9 States, 45 F.3d 1345, 1348 (9th Cir. 1995). Additionally, “[t]he party seeking withdrawal 10 . . . bears the burden of showing that granting the motion will promote the presentation of 11 the merits,” while “[t]he party opposing the motion bears the burden of showing that it will 12 be prejudiced if the admission is allowed to be withdrawn.” S. Gensler, 1 Federal Rules 13 of Civil Procedure, Rules and Commentary, Rule 36, at 1029-30 (2018) (hereinafter 14 “Gensler”). 15 The Ninth Circuit has further emphasized that “[t]he text of Rule 36(b) is 16 permissive.” Conlon v. United States, 474 F.3d 616, 624 (9th Cir. 2007). Thus, even 17 “when a district court finds that the merits of the action will be subserved and the 18 nonmoving party will not be prejudiced, it ‘may’ allow withdrawal, but is not required to 19 do so . . . .” Id. at 625 . Also, a “district court may consider other factors, including whether 20 the moving party can show good cause for the delay and whether the moving party appear 21 to have a strong case on the merits.” Id. 22 Here, the first factor under Rule 36(b) favors Wolfson. The topics addressed in the 23 RFA—among other things, whether MERS had the authority to assign the deed of trust, 24 whether Quicken Loans and its successors had the authority to substitute the trustee, and 25 whether BONY is the current beneficiary under the deed of trust—go to the heart of the 26 first and second causes of action in the amended complaint. Indeed, Defendants have asked 27 the Court to grant summary judgment in their favor on those two claims based solely on 28 Wolfson’s deemed admissions. (Doc. 55 at 9-10.) This is a textbook example of a situation 1 where the withdrawal of admissions would “promote the presentation of the merits of the 2 action.” See Fed. R. Civ. P. 36(b). 3 Defendants disagree, arguing that upholding Wolfson’s admissions would “not 4 practically eliminate any presentation of the merits of the case” because Wolfson’s 5 complaint contains six causes of action and his admissions would only eliminate two of his 6 claims. (Doc. 60 at 2.) This argument is unavailing. In Gallegos v. City of Los Angeles, [7] 308 F.3d 987 (9th Cir. 2002), the Ninth Circuit held that the first Rule 36(b) factor was 8 satisfied where the admissions merely threatened to prevent the merits-based resolution of 9 “[o]ne of the issues in this case.” Id. at 993 (emphasis added). This undermines any 10 suggestion that the admissions must affect every issue in the case for the first Rule 36(b) 11 factor to be satisfied. 12 The second factor under Rule 36(b)—prejudice—also favors Wolfson. Notably, in 13 their March 27, 2018 email denying Wolfson’s extension request, Defendants didn’t 14 articulate any reasons why a one-month extension would be prejudicial to them. Instead, 15 Defendants’ counsel essentially stated that he was tired of extending professional courtesy 16 to other attorneys: “To date, we have worked in a professional matter. We both have 17 extended professional courtesies to each other. And I appreciate such professional 18 courtesies. Unfortunately, any proposed courtesy or extension will not reverse the fact that 19 the requests for admissions are deemed admitted.” (Doc. 58 at 16.) This is a disappointing, 20 to put it mildly, display of professionalism and falls far short of what is expected of 21 attorneys practicing before this Court. Cf. Ahanchian v. Xenon Pictures, Inc., 624 F.3d 22 1253, 1263 (9th Cir. 2010) (faulting attorney for refusing to agree to a one-week extension 23 request by opposing counsel and emphasizing that “[o]ur adversarial system relies on 24 attorneys to treat each other with a high degree of civility and respect”). 25 Defendants’ response to the motion to withdraw fares no better. Although the 26 heading on page three of Defendants’ response states that “Defendants will be Prejudiced 27 by Withdrawal or Amendment of the Admissions,” the text underneath this heading doesn’t 28 touch upon the issue of prejudice at all. Instead, it identifies various reasons why the Court 1 should conclude Wolfson lacked “good cause” for the delay. (Doc. 60 at 3-4.) Such 2 conflation is unhelpful—whether Defendants were prejudiced by a one-month delay in 3 receiving Wolfson’s response to their RFA is an entirely separate issue from whether 4 Wolfson had good cause for missing the initial deadline. Indeed, any consideration of 5 “good cause” is discretionary and comes only after the Court has completed its analysis of 6 the two factors (merits-based resolution and prejudice) set forth in the text of Rule 36. 7 Conlon, 474 F.3d at 624 . Because Defendants haven’t offered any arguments touching 8 upon the issue of prejudice, they haven’t met their burden of proving prejudice. 3 9 Finally, there is the discretionary factor of “good cause,” which Defendants argue 10 is lacking because Wolfson “say on his hands for almost one year” before making a 11 withdrawal request. (Doc. 60 at 3-4.) This argument misses the mark. Although Wolfson 12 didn’t file a formal motion to withdraw his admissions until February 2019, Defendants 13 have been on notice since March 2018 that Wolfson was contesting their “deemed 14 admitted” theory. Defendants haven’t identified any authority holding that Wolfson was 15 required to file a formal withdrawal motion at that time. To the contrary, the relevant cases 16 suggest that Wolfson’s conduct here—first, stating in his opposition to the summary 17 judgment motion that he was disputing Defendants’ admission theory, and second, filing a 18 separate motion to withdraw—was more than sufficient to safeguard his rights. See, e.g., 19 Friedman v. Live Nation Merchandise, Inc., 833 F.3d 1180, 1185 (9th Cir. 2016) (holding 20 that “a request for relief under Rule 36(b)” need not “be brought in a separate motion”); 21 Bergemann v. United States, 820 F.2d 1117, 1121 (10th Cir. 1987) (holding that district 22 court properly granted withdrawal request and rejecting as “overly technical” the opposing 23 3 Moreover, even if Defendants had attempted to show prejudice, such an attempt would have been unsuccessful. Wolfson delivered his completed RFA response to 24 Defendants on March 28, 2018. This document showed that Wolfson was disputing many of the issues that Defendants wish to deem admitted. And at the time this document was 25 provided to Defendants, the discovery cutoff was still many months away. Courts have declined to find prejudice under analogous circumstances. See, e.g., Johnson v. Target 26 Corp., 487 Fed. App’x 298, 300 (7th Cir. 2012) (“There is no prejudice if the withdrawing party’s submissions have otherwise consistently denied the admitted facts, the party 27 opposing the withdrawal conducted thorough discovery, or the withdrawal is made before trial and discovery may be reopened.”). See also Conlon, 474 F.3d at 624 (“[R]eliance on 28 a deemed admission in preparing a summary judgment motion does not constitute prejudice.”). 1 party’s argument that the request was improper because it was not raised in a formal 2 withdrawal motion). See generally Gensler at 1028 (“[W]hen parties file other papers that 3 seek action inconsistent with the admissions, many courts will construe those filings as a 4 motion to withdraw . . . even though no formal motion to withdraw . . . was made.”). 5 On the other hand, the Court does acknowledge that Wolfson’s counsel’s excuses 6 for missing the February 2018 response deadline are not particularly compelling. 7 Specifically, although Wolfson’s counsel contends that an office move in December 2017 8 and brief hospitalization in January 2018 explain why she didn’t initially realize the RFA 9 had been mailed to her (Doc. 58 at 2 ¶ 2), both of these events occurred before the RFA 10 was mailed on January 19, 2018. Additionally, she received electronic notice of the 11 mailing via the Court’s docketing system on January 23, 2018. (Doc. 38.) And other 12 filings by Wolfson’s attorney show she attended a meeting with Defendants’ counsel on 13 January 24, 2018. (Doc. 41 at 1.) All of this suggests Wolfson should have been able to 14 respond to the RFA within 30 days. Nevertheless, because Wolfson’s counsel was 15 experiencing a fair degree of upheaval around the time the RFA was sent to her, the Court 16 concludes the “good cause” factor is, on balance, neutral. 17 In sum, because both of the Rule 36(b) factors favor allowing Wolfson to withdraw 18 his admissions and the discretionary “good cause” factor is neutral, the Court will exercise 19 its discretion to grant Wolfson’s withdrawal motion. 20 II. Motion for Summary Judgment 21 A party moving for summary judgment “bears the initial responsibility of informing 22 the district court of the basis for its motion, and identifying those portions of ‘the pleadings, 23 depositions, answers to interrogatories, and admissions on file, together with the affidavits, 24 if any,’ which it believes demonstrate the absence of a genuine issue of material 25 fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “In order to carry its burden of 26 production, the moving party must either produce evidence negating an essential element 27 of the nonmoving party’s claim or defense or show that the nonmoving party does not have 28 enough evidence of an essential element to carry its ultimate burden of persuasion at 1 trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099 , 1102 (9th Cir. 2000). 2 “If . . . [the] moving party carries its burden of production, the nonmoving party must 3 produce evidence to support its claim or defense.” Id. at 1103. 4 “Summary judgment is appropriate when ‘there is no genuine dispute as to any 5 material fact and the movant is entitled to judgment as a matter of law.’” Rookaird v. BNSF 6 Ry. Co., 908 F.3d 451, 459 (9th Cir. 2018) (quoting Fed. R. Civ. P. 56(a)). “A genuine 7 dispute of material fact exists if ‘there is sufficient evidence favoring the nonmoving party 8 for a jury to return a verdict for that party.’” United States v. JP Morgan Chase Bank 9 Account No. Ending 8215 in Name of Ladislao V. Samaniego, VL: $446,377.36, 835 F.3d 10 1159, 1162 (9th Cir. 2016) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242 , 249– 11 50 (1986)). The court “must view the evidence in the light most favorable to the 12 nonmoving party and draw all reasonable inference in the nonmoving party’s 13 favor.” Rookaird, 908 F.3d at 459 . Summary judgment is also appropriate against a party 14 who “fails to make a showing sufficient to establish the existence of an element essential 15 to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 16 477 U.S. at 322. 17 A. Count One: False Recordings 18 In Count One of the amended complaint, Wolfson asserts a claim for “False 19 Recordings” in violation of A.R.S. § 33-420. (Doc. 33 ¶¶ 50-92.) In a nutshell, Wolfson 20 alleges that three documents that were recorded with the county recorder—(1) the 21 “Assignment of Deed of Trust” recorded in February 2012 (Doc. 33-1 at 13), (2) the 22 “Substitution of Trustee” recorded on July 3, 2017 (Doc. 33-1 at 41), and (3) the “Notice 23 of Trustee’s Sale” recorded on July 3, 2017 (Doc. 33-1 at 37-38)—contain certain false 24 statements. 25 Defendants first seek summary judgment on Count One based on the doctrine of res 26 judicata—specifically, due to the fact that, in 2014, the Arizona Court of Appeals rejected 27 an earlier lawsuit by Wolfson that included a false recordings claim under A.R.S. § 3328 420. (Doc. 55 at 6–8.) This argument is unavailing. Res judicata is applicable when “there 1 is (1) an identity of claims, (2) a final judgment on the merits, and (3) privity between 2 parties.” United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1139 , 1150 3 (9th Cir. 2011). In determining if there is an identity of claims, the Court considers 4 “whether the two suits arise out of the same transactional nucleus of facts.” Id. (quotation 5 and citations omitted). Here, the two lawsuits do not arise out of the same transactional 6 nucleus of facts because this lawsuit seeks to challenge various documents that were 7 recorded between 2012-17 whereas Wolfson’s earlier lawsuit sought to challenge a 8 different document that was recorded in 2010. Thus, although the Court is free to consider 9 (for persuasive purposes) the Arizona Court of Appeals’ rationale for rejecting Wolfson’s 10 earlier claim, his defeat in that lawsuit does not foreclose him (for res judicata purposes) 11 from attempting to dust off the legal theory that failed in that case and advance it here with 12 respect to a different set of facts. 13 Defendants next seek summary judgment on Count One based on Wolfson’s failure 14 to timely respond to—and thus admit—the portions of their RFA addressing his false 15 recordings claim. (Doc. 55 at 9 [“Count One . . . Fails Because Plaintiff Admitted The 16 Recordings Are Valid . . . .”].) But as noted in Part I above, the Court has granted 17 Wolfson’s request to withdraw those admissions. 18 On the merits, Wolfson’s false recordings claim hinges on the notion that the 2012 19 assignment was invalid because (1) the note and deed of trust were previously assigned, by 20 no later than June 2007, to a mortgage-backed security trust, so the 2012 assignment “could 21 not have occurred as represented by the [2012] recording[]” (Doc. 33 ¶ 56), and (2) MERS 22 cannot convey an interest greater than what it owns, and MERS admitted in a previous 23 lawsuit that it does not have any interest in promissory notes (id. ¶ 57.) 24 These arguments lack merit. In Wolfson’s previous lawsuit, the Arizona Court of 25 Appeals rejected his false recordings claim pertaining to the 2010 assignment in part 26 because it concluded that MERS had the authority to make such an assignment. (Doc. 55 27 at 93 [“We also reject Wolfson’s contention that material misrepresentation or false claims 28 exist in the recorded documents because that contention stems from Wolfson’s argument 1 that MERS did not have authority to assign the note to Mellon. This argument fails for the 2 reasons stated above. Thus, Wolfson has not established that the recorded documents 3 contained misrepresentations (material or otherwise) or false claims.”].) The Court agrees 4 with this analysis, which undermines Wolfson’s challenge to the 2012 assignment (and the 5 2017 recordings based on the 2012 assignment). Furthermore, Wolfson’s challenge rests 6 on a general misunderstanding of the securitization process that has been repeatedly 7 rejected by other courts. See, e.g., Kuc v. Bank of Am., NA, 2012 WL 1268126 , *3 (D. 8 Ariz. 2012 ) (“[T]he theory that securitization renders the Deed of Trust unenforceable has 9 been repeatedly rejected.”); White v. IndyMac Bank, FSB, 2012 WL 966638 , *6 (D. Haw. 10 2012) (“The argument that parties lose their interest in a loan when it is assigned to a 11 securitization trust or REMIC has been rejected by numerous courts.”); Washburn v. Bank 12 of Am., N.A., 2011 WL 7053617 , *5 (D. Idaho 2011) (“This is not a new battlefield. Several 13 courts have rejected various theories that ‘securitization of a loan somehow diminishes the 14 underlying power of sale that can be exercised upon a trustor’s breach.’”) (citation 15 omitted); Lane v. Vitek Real Estate Indus. Group, 713 F. Supp. 2d 1092, 1099 (E.D. Cal. 16 2010) (“The argument that parties lose their interest in a loan when it is assigned to a trust 17 pool has also been rejected by many district courts.”). Defendants are therefore entitled to 18 summary judgment on Count One. 19 B. Count Two: Implied Covenant Of Good Faith And Fair Dealing 20 In Count Two of the amended complaint, Wolfson asserts a claim for breach of the 21 implied covenant of good faith and fair dealing. (Doc. 33 ¶¶ 93-102.) In paragraph 100 of 22 the amended complaint, Wolfson identifies a laundry list of reasons why Defendants’ 23 conduct was purportedly unfair and improper. Most of the reasons relate to Wolfson’s 24 theory that the 2010 and 2012 assignments were invalid—a theory that is unavailing for 25 the reasons discussed in Part II.A above. Additionally, Wolfson accuses Defendants of 26 violating the implied covenant by (1) pursuing foreclosure even though he obtained a 27 bankruptcy discharge in 2008 and (2) pursuing foreclosure despite the expiration of the 28 six-year statute of limitations for doing so. 1 As an initial matter, the Court rejects Defendants’ argument that they are entitled to 2 summary judgment on Count Two based on Wolfson’s admissions in response to the RFA. 3 (Doc. 55 at 10.) Because Wolfson has now been allowed to withdraw those admissions, 4 they do not help Defendants’ case. 5 Defendants’ next argument is that the implied covenant claim “fails as a matter of 6 law” because such a claim must be based on “the terms of the contract at issue” but none 7 of Wolfson’s theories are based on “the terms of the Note or Deed of Trust.” (Doc. 55 at 8 11.) Notably, Wolfson does not address—much less attempt to rebut—this argument in 9 his response to the summary judgment motion. (Doc. 56 at 13-15.) Instead, he simply 10 plunges into a discussion of why the statute of limitations should be deemed to have 11 expired. (Id.) 12 The Court agrees that Defendants are entitled to summary judgment on this basis. 13 By failing to respond to Defendants’ argument, Wolfson effectively conceded it. 14 Additionally, many courts have concluded that a homeowner attempting to challenge a 15 foreclosure may not do so under the guise of an implied covenant claim—there are other, 16 more appropriate legal theories by which to raise such a challenge. See, e.g., Moenig v. 17 Bank of America, N.A., 2014 WL 5473554 , *7 (E.D. Cal. 2014) (rejecting homeowner’s 18 argument that a deed of trust “has an implied covenant not to pursue a wrongful 19 foreclosure,” emphasizing that “the underlying purposes of the promissory note and deed 20 of trust are (1) that [plaintiff] shall be able to use the loaned funds on the terms and at the 21 interest rate specified in the promissory note, and (2) that [the bank] shall have the security 22 provided by the deed of trust,” and concluding that such purposes do not “give rise to an 23 implied covenant not to foreclose wrongfully”); Aghajanyan v. Greenpoint Mortgage 24 Funding, 2014 WL 4748277 , * 5 (C.D. Cal. 2014) (rejecting homeowner’s argument that 25 an allegedly invalid foreclosure proceeding “constitutes a breach of the covenant” because 26 “plaintiff has not pointed to a specific contractual provision that was frustrated”). See 27 generally Carter v. HSBC Mortgage Corp., 2010 WL 4792638 , *3 (D. Ariz. 2010) (in 28 Arizona, “the covenant . . . ‘does not extend beyond the express terms of the contract at 1 issue’”) (citation omitted).4 2 C. Count Three: Fraudulent Misrepresentation 3 In Count Three of the amended complaint, Wolfson asserts a claim for fraudulent 4 misrepresentation. (Doc. 33 ¶¶ 103-110.) The theory underlying this claim is that 5 Defendants committed fraud by acknowledging in 2012 that his debts had been discharged 6 via bankruptcy but then making subsequent efforts to collect delinquent payments from 7 him. (Id.) 8 In their motion, Defendants argue that Count Three should be rejected because 9 Wolfson “is confusing a discharge of his obligation to pay a debt in bankruptcy with 10 satisfaction of the debt itself.” (Doc. 55 at 14-15.) In response, Wolfson argues that “[t]he 11 crux of the fraud is that Defendants misrepresented in writing the status of the loan and the 12 actions that Defendants would take to collect the loan.” (Doc. 56 at 15.) In support of this 13 assertion, he points to two documents: (1) a November 2012 letter he received from 14 Bayview, which told him to “disregard” a debt validation letter he’d received a few weeks 15 earlier because “we are aware that your loan has been discharged through Bankruptcy 16 Chapter 7” (Doc. 56 at 95), and (2) an undated and unsigned letter that he apparently wrote 17 to Bayview, which he purportedly wrote after receiving a “Notice of Default and Intention [18] 4 Given this conclusion, it is unnecessary to decide whether Defendants’ pursuit of 19 foreclosure proceedings was wrongful. Nevertheless, Wolfson’s bankruptcy-related theory of wrongfulness is easily rejected. A bankruptcy extinguishes only the debtor’s personal 20 obligations, leaving intact the creditor’s right to proceed against the debtor in rem. Johnson v. Home State Bank, 501 U.S. 78, 84 (1991) (“Even after the debtor’s personal obligations 21 have been extinguished, the mortgage holder still retains a ‘right to payment’ in the form of its right to the proceeds from the sale of the debtor’s property.”). As for Wolfson’s 22 statute-of-limitations theory of wrongfulness, the “Notice of Intent to Accelerate” he received from Bank of America in July 2010 (Doc. 56 at 69) didn’t trigger the statute of 23 limitations because it didn’t say that acceleration had occurred—it merely noted the possibility that the right to accelerate could be exercised in the future. See, e.g., Hummel, [24] 2018 WL 3744858 at *4 (finding defendant’s “notice of default and intent to accelerate does not ‘make clear’ that the debt had in fact been accelerated”); Gard v. Ocwen Loan 25 Servicing LLC, 2019 WL 3718972 , *6 (D. Ariz. 2019) (same). As for the “Notice of Trustee’s Sale” that was purportedly recorded in November 2010, although the recording 26 of such a document can constitute acceleration under Arizona law, Wolfson didn’t attach a copy of this document to his complaint or response to the summary judgment motion and 27 Defendants included, as an attachment to their motion, a declaration from a Bayview employee averring that “[m]y review of the Loan records reflects that the Loan has never 28 been accelerated.” (Doc. 55 at 26 ¶ 16.) 1 to Accelerate” in May 2016 (Doc. 56 at 99-101). 2 Defendants are entitled to summary judgment on Count Three. In the letters at issue, 3 Defendants acknowledged that Wolfson’s personal liability had been extinguished by his 4 bankruptcy but stated they were still intent on pursuing foreclosure. There is nothing 5 inconsistent or contradictory (let alone fraudulent) about taking those positions. Johnson, [6] 501 U.S. at 84 . Indeed, Wolfson’s bankruptcy order expressly noted that although “[t]he 7 discharge prohibits any attempt to collect from the debtor a debt that has been discharged 8 . . . a creditor may have the right to enforce a valid lien, such as a mortgage or security 9 interest, against the debtor’s property after the bankruptcy.” (Doc. 33-1 at 7.) 10 D. Count Four: Breach Of Contract 11 In Count Four of the amended complaint, Wolfson asserts a claim for breach of 12 contract. (Doc. 33 ¶¶ 111-115.) The theory underlying this claim is if BONY and/or 13 Bayview received an insurance payment to compensate them for the losses associated with 14 his default, they were required by three different contracts—“The PSA, the Servicing 15 Agreement, and the Master Purchase Agreement”—to release the deed. (Id.) 16 In their motion, Defendants argue that Count Four fails because Wolfson “has not 17 asserted any facts to support th[e] wild conclusion” that they already received insurance 18 proceeds to pay off the loan. (Doc. 55 at 15.) They further note that “[t]he Loan records 19 clearly reflect that the loan has not been paid off . . . from insurance or otherwise.” (Id.) 20 In support of this claim, Defendants point to a declaration from a Bayview employee 21 averring that “the Loan has not been paid off, satisfied or otherwise settled.” (Doc. 55 at 22 26 ¶ 18.) In his response, Wolfson sole argument concerning Count Four is that “Bayview 23 relies on deemed admissions.” (Doc. 56 at 15.) 24 Defendants are entitled to summary judgment on Count Four. That claim is 25 premised on the notion that an insurance company paid off Wolfson’s loan after he 26 defaulted. Defendants argued in their motion that Wolfson doesn’t have any evidence to 27 support that contention—which is a permissible basis for seeking summary judgment under 28 Rule 56 and Celotex—and Wolfson offered nothing in response. Cf. In re Brazier Forest 1 Products, Inc., 921 F.2d 221 , 223-24 (9th Cir. 1990) (“[I]f the nonmoving party bears the 2 burden of proof on an issue at trial, the moving party need not produce affirmative evidence 3 of an absence of fact to satisfy its burden. The moving party may simply point to the 4 absence of evidence to support the nonmoving party’s case. The nonmoving party must 5 then make a sufficient showing to establish the existence of all elements essential to their 6 case on which they will bear the burden of proof at trial. If the nonmoving party fails to 7 make such a showing, summary judgment will be granted.”). 8 E. Count Five: FDCPA 9 In Count Five of the amended complaint, Wolfson asserts a claim against Bayview 10 for violations of the FDCPA. (Doc. 33 ¶¶ 116-135.) This claim is premised on a series of 11 letters that Wolfson sent to Bayview disputing whether he owed a debt5 and a series of 12 letters from Bayview to Wolfson on that topic.6 13 Bayview argues that (1) many of the documents at issue fall outside the FDCPA’s 14 one-year statute of limitations and (2) the few remaining documents don’t violate the 15 FDCPA because they were “required by the Deed of Trust statutes as part of a non-judicial 16 foreclosure proceeding” and the “non-judicial foreclosure of a deed of trust is not debt 17 collection under the FDCPA.” (Doc. 55 at 15-17.) In response, Wolfson argues that (1) 18 under Dowers v. Nationstar Mortgage, LLC, 852 F.3d 964 (9th Cir. 2017), attempts to 19 enforce a non-judicial foreclosure can violate the FDCPA, and (2) the Montana Supreme 20 Court’s decision in Jacobsen v. Bayview Loan Servicing, LLC, 371 P.3d 397 (Mont. 2016), 21 shows that foreclosure-related correspondence can violate the FDCPA if it goes beyond [22] 5 The letters were allegedly sent on the following dates: November 20, 2012 (Doc. 33 23 ¶ 30); November 21, 2012 (Doc. 33 ¶ 31); May 20, 2013 (Doc. 33 ¶ 33); June 27, 2013 (Doc. 33 ¶ 34; Doc. 33-1 at 21-23); July 8, 2013 (Doc. 33 ¶ 34); October 8, 2013 (Doc. 33 24 ¶ 34); August 1, 2017 (Doc. 33 ¶ 48); and October 2017 (Doc. 33 ¶ 49). The amended complaint also mentions another letter Wolfson sent to Bayview but doesn’t specify when 25 it was sent. (Doc. 33 ¶ 39.) 26 6 These include Bayview’s response to Wolfson’s inquiry dated November 28, 2012 (Doc. 33 ¶ 32; Doc. 33-1 at 19); Bayview’s letter to the Attorney General’s office dated 27 September 4, 2014 (Doc. 33 ¶ 36; Doc. 33-1 at 25); the Notice of Default and Intent to Accelerate dated April 27, 2016 (Doc. 33 ¶ 120; Doc. 33-1 at 27-29); Bayview’s response 28 dated June 7, 2016 (Doc. 33 ¶ 41; Doc. 33-1 at 31-33); and a “Debt Validation Notice,” which was sent by Bayview’s law firm, dated July 7, 2017 (Doc. 33 ¶ 121; Doc. 56 at 118). 1 the foreclosure and seeks “collection of a money debt.” (Doc. 56 at 15-16.) 2 As an initial matter, Bayview is correct that many of the documents at issue fall 3 outside the statute of limitations. An action under the FDCPA is subject to a one-year 4 statute of limitations. 15 U.S.C. § 1692k. Because Wolfson commenced this action on 5 November 7, 2017, claims based on communications before November 7, 2016 are time6 barred. Thus, the Court considers only communications that occurred within the statute of 7 limitations. Specifically, the only post-November 2016 communications identified in the 8 amended complaint are (1) Wolfson’s letter to Bayview of August 1, 2017 (Doc. 33 ¶ 48), 9 (2) Wolfson’s letter to Bayview in October 2017 (Doc. 33 ¶ 49), and (3) the “Debt 10 Validation Notice” that was sent to Wolfson on July 7, 2017 (Doc. 33 ¶ 121; Doc. 56 at 11 118). Additionally, Bayview argues in its motion (Doc. 55 at 16) that the FDCPA claim is 12 premised on three additional post-November 2016 documents: (1) the “Statement of 13 Breach or Non-Performance” sent from Bayview to Wolfson on July 3, 2017 (Doc. 33-1 at 14 35); (2) the “Notice of Trustee’s Sale” dated July 3, 2017 (Doc. 33-1 at 37-38); and (3) the 15 “Substitution of Trustee” dated July 3, 2017 (Doc. 33-1 at 40-41). 16 The Court further notes that, although the amended complaint alleges that Bayview 17 violated an array of different provisions within the FDCPA, many of those claims are 18 foreclosed by the Supreme Court’s recent decision in Obduskey v. McCarthy & Holthus 19 LLP, 139 S. Ct. 1029, 1038 (2019). Specifically, the statutory provisions on which 20 Wolfson relies apply only to the conduct of a “debt collector” (see 15 U.S.C. §§ 1692e–g), 21 and the Supreme Court held in Obduskey that, “but for § 1692f(6), those who engage in 22 only nonjudicial foreclosure proceedings are not debt collectors within the meaning of the 23 [FDCPA].” Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029, 1038 (2019). Thus, 24 Wolfson’s claims under 15 U.S.C. §§ 1692e(2), 1692e(5), and 1692g(a)(1) necessarily 25 fail—Bayview, a servicer facilitating a non-judicial foreclosure, does not fall under the 26 FDCPA’s general definition of a “debt collector.” 27 This leaves Wolfson’s claim under § 1692f(6). Wolfson’s theory with respect to 28 that claim is that Bayview improperly “threaten[ed] to foreclose even though Bayview and 1 BNYM as Trustee had no present right to possession of the property under its security 2 agreement, and by threatening to take other action prohibited by law.” (Doc. 33 ¶ 128.) 3 Bayview is entitled to summary judgment on this claim. Section 1692f(6) of the 4 FDCPA prohibits “[t]aking or threatening to take any nonjudicial action to effect 5 dispossession or disablement of property” if one of three conditions is present: (A) “there 6 is no present right to possession of the property claimed as collateral through an 7 enforceable security interest”; (B) “there is no present intention to take possession of the 8 property”; or (C) “the property is exempt by law from such dispossession or disablement.” 9 See 15 U.S.C. § 1692f(6). Here, subdivision (A) isn’t applicable because Bayview had a 10 right to seek non-judicial foreclosure—Wolfson’s arguments to the contrary have been 11 rejected in other portions of this order—and Wolfson doesn’t contend that subdivisions (B) 12 or (C) are applicable. 13 F. Count Six: RESPA 14 In Count Six of the amended complaint, Wolfson asserts a claim against Bayview 15 for violations of the RESPA. (Doc. 33 ¶¶ 136-172.) Specifically, Wolfson alleges the 16 following violations: (1) violation of 12 U.S.C. § 2605 (d) by improper assessment of a late 17 fee during the transfer period; (2) violation of 12 U.S.C. § 2605 (e) and 12 C.F.R. § 1024.35 18 by failure to correct account errors; and (3) misapplication of Wolfson’s payments. (Id.) 19 Bayview argues that Wolfson’s first claim is barred by the statute of limitations. 20 (Doc. 55 at 17.) Wolfson does not address this argument in his response (Doc. 56 at 1621 17) and the Court, in any event, agrees with Bayview. There is a three-year statute of 22 limitations for violations of § 2605. See 12 U.S.C. § 2614 . Bayview obtained the servicing 23 rights in 2012, so any claim related to its assessment of late fees during the transfer period 24 had to be filed by 2015. This lawsuit, initiated in November 2017, came too late. 25 As for Wolfson’s second claim, Bayview argues that some of the letters discussed 26 in the amended complaint were sent between 2012-14 (and thus fall outside the statute of 27 limitations) and the remaining letters show that it did, in fact, conduct a reasonable 28 investigation in response to those letters, including compiling an “account activity 1 statement detailing all transactions and their effective dates, and copies of the Note, Deed 2 of Trust and Assignment.” (Doc. 55 at 17, citing Doc. 33-1 at 31-33.) In response, Wolfson 3 argues that Bayview “did not perform a reasonable investigation of the errors” because it 4 “did not investigate, did not give reasons for its determination that there was no error, did 5 not explain its prior misstatement or the new charges that exceeded $100,000.00 on a loan 6 it had referred to as discharged. With fact issues disputed regarding the reasonableness 7 and scope of Bayview’s investigation, summary judgment must be denied.” (Doc. 56 at 8 17.) 9 Bayview is entitled to summary judgment on this portion of Count Six. RESPA 10 requires the “servicer of a federally related mortgage loan to provide a timely response to 11 inquiries from borrowers regarding the servicing of their loans.” Medrano v. Flagstar 12 Bank, FSB, 704 F.3d 661, 665 (9th Cir. 2012) (citations omitted). However, this duty “does 13 not arise with respect to all inquiries or complaints from borrowers to servicers”; rather, an 14 inquiry triggers such a duty only when it seeks “information relating to the servicing of 15 [the] loan.” Id. at 666 (citation omitted). In contrast, “letters challenging only a loan’s 16 validity or its terms [do not] give rise to a duty to respond . . . .” Id. at 667 . 17 Here, Wolfson’s written inquiries did not trigger a statutory duty to respond. In the 18 letter dated May 21, 2016, Wolfson stated “[t]his is not my debt,” challenged the validity 19 of the 2012 assignment, and requested a “full accounting of this account.” (Doc. 56 at 9920 101.) In the letter dated August 1, 2017, Wolfson stated that he was “disputing this debt 21 and claiming the pending Trustee Sale is illegal and fraudulent.” (Doc. 56 at 120-125.) 22 These statements challenge the validity of the debt—they do not identify servicing issues. 23 Finally, as for Wolfson’s third claim, Bayview argues that any allegation of 24 miscredited payments “can be summarily rejected because [Wolfson] did not make any 25 payments on the loan while Bayview was servicing the loan.” (Doc. 55 at 18.) Bayview 26 further contends that Wolfson has not proffered any evidence in support of his allegation 27 of mis-credited payments. (Id.) In his response, Wolfson doesn’t address these arguments. 28 The Court concludes that Bayview is entitled to summary judgment on this portion of Count Six, too. It is undisputed that Wolfson made his last payment on May 1, 2010, 2|| which is more than two years before Bayview obtained the servicing rights. Without || additional evidence, the Court cannot see how Bayview could have misapplied his 4|| payments. 5 hak 6 Accordingly, IT IS ORDERED that: 7 (1) Wolfson’s Motion to Withdraw (Doc. 57) is granted; 8 (2) Defendants’ Motion for Summary Judgment (Doc. 55) is granted; and 9 (3) The Clerk of Court should enter judgment accordingly and terminate this 10 action. 11 Dated this 9th day of September, 2019. [12] 13 La 15 United States District Judge [28] -20 -