Tashjian v. Invictus Residential Pooler - 2A

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION [7] 8 VAHE TASHJIAN, Lead Case No. 19-cv-01536-EJD Plaintiff, Member Case No. 20-cv-08816-EJD [9] v. ORDER GRANTING PLANET HOME 10 LENDING, LLC'S MOTION FOR 11 I eN t aV l.I ,C TUS RESIDENTIAL POOLER - 2A, S AU S M MM OA OR TY M J OU TD IG OM N E TN OT E; XD CE LN UY DIN EG EXPERT REPORTS AND TESTIMONY 12 Defendants. OF DOUGLAS A. MINOR [13] VAHE TASHJIAN, Re: ECF Nos. 221, 222 [14] Plaintiff, [15] v. [16] PLANET HOME LENDING, LLC, et al., [17] Defendants. [19] 20 This action consolidates two lawsuits brought by Plaintiff Vahe Tashjian (“Mr. Tashjian”) 21 against various mortgage lenders and mortgage loan servicers in connection with payments on a 22 mortgage loan of over $3,300,000 issued to Mr. Tashjian in January 2018. In his second lawsuit, 23 Mr. Tashjian sued Planet Home Lending, LLC (“Planet Home”), Sprout Mortgage Asset Trust 24 (“Sprout Mortgage”), and Prestige Default Services (“Prestige”), alleging the following 10 claims: 25 (1) breach of written contract; (2) breach of the covenant of good faith and fair dealing; (3) unfair 26 business practices in violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. 27 Code § 17,200, et seq.; (4) violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1 1681, et seq.; (5) intentional misrepresentation; (6) negligent misrepresentation; (7) violation of 2 the California Homeowner Bill of Rights (“HBOR”), Cal. Civ. Code §§ 2923.5 , 2924.9, and 3 2924.17; (8) violation of the HBOR, Cal. Civ. Code § 2923.55 ; (9) wrongful foreclosure; and (10) 4 injunctive relief. See First Am. Compl. (“FAC”), ECF No. 3-1 (N.D. Cal., No. 20-cv-088165 EJD).1 Sprout Mortgage Asset Trust and Prestige Default Services are no longer parties to this 6 action. See ECF Nos. 109, 201. Now pending before the Court is Planet Home’s motion for 7 summary judgment on all claims in the FAC, see Mot. Summ. J. (“MSJ”), ECF No. 222, as well as 8 Planet Home’s Daubert motion to exclude the reports and testimony of Mr. Tashjian’s damages 9 expert, see Mot. to Exclude Reports and Testimony of Douglas A. Minor (“Daubert Mot.”), ECF 10 No. 221. Mr. Tashjian opposed both the summary judgment motion, see Opp’n to Mot. Summ. J. 11 (“MSJ Opp’n”), ECF No. 225, and the Daubert motion, see Opp’n to Daubert Mot. (“Daubert 12 Opp’n”), ECF No. 226. Planet Home filed a reply in support of each motion. See Reply in Supp. 13 of Mot. Summ. J. (“MSJ Reply”), ECF No. 232; Reply in Supp. of Daubert Mot. (“Daubert 14 Reply”), ECF No. 231. The Court took both motions under submission without oral argument 15 pursuant to Civil Local Rule 7-1(b). See ECF Nos. 239, 241. 16 Having considered the parties’ arguments, factual evidence, and the relevant law, the Court 17 hereby GRANTS Planet Home’s Motion for Summary Judgment and DENIES AS MOOT its 18 Motion to Exclude Expert Reports and Testimony for the reasons below. 19 I. BACKGROUND 20 A. Factual Background 21 The following facts are undisputed unless otherwise noted. 22 1. Loan Terms and Modifications 23 On January 31, 2018, Mr. Tashjian entered into a loan agreement (the “Loan”) with 24 Recovco Mortgage Management, LLC (“Recovco”) under which Recovco agreed to provide a 25 mortgage loan to Mr. Tashjian in the principal sum of $3,307,500. See FAC ¶ 16 & Exh. A; Decl. [27] 1 Unless otherwise stated, as here, all docket citations refer to the lead case. 1 of Michael A. Iannucci in Supp. of Mot. (“Iannucci Decl.”), Exh. 2, at 2, ECF No. 222-5. The 2 Loan was secured by a Deed of Trust in favor of Recovco for a residential property located at 901 3 Loyola Drive, Los Altos Hills, CA 94024 (the “Property”), and evidence by a Fixed/Adjustable 4 Rate Note (the “Note”). See FAC, Exh. A; Iannucci Decl., Exh. 2, at 2; see also Decl. of Vahe 5 Tashjian in Opp’n to Mot. (“Tashjian Decl.”) ¶ 3, ECF No. 225-1.2 The terms of the Loan 6 included a letter from Recovco to Mr. Tashjian, executed on January 30, 2018 (the “January 30 7 Letter”), under which Mr. Tashjian would owe interest-only payments for the first seven years of 8 the Loan. See FAC, Exh. A; Iannucci Decl., Exh. 2, at 3; Tashjian Decl. ¶ 4. The amount of each 9 monthly interest-only payment was $17,226.56. See Tashjian Decl. ¶ 15. 10 On December 21, 2018, Mr. Tashjian executed a modification agreement regarding the 11 Loan (the “Modification Agreement” and, with the Loan, the Deed of Trust, the Note, and the 12 January 30 Letter, the “Loan Documents”) with the then-servicer of the Loan. See Iannucci Decl., 13 Exh. 6 (“Mod. Agr.”), ECF No. 222-9. According to the Modification Agreement, the principal 14 balance on the Loan remained $3,307,500. See id. at 1 . Further, Mr. Tashjian owed an arrearage 15 balance on the Loan of $155,039.04—composed of nine months of non-payment of the 16 $17,226.56 interest-only payments—and that the arrearage would be deferred and owed in full at 17 the occurrence of any of the following events: the end of the Loan term; the refinancing of the 18 Loan; an acceleration of the Loan balance pursuant to a default on the Loan; or the sale of the 19 Property. See id. The Modification Agreement set forth a payment schedule under which Mr. 20 Tashjian was responsible for monthly payments consisting of both the interest-only payments and 21 an “Estimated Monthly Escrow Payment Amount.” See id. at 2 . Mr. Tashjian further agreed: “I 22 will be in default if I do not comply with the terms of the Loan Documents, as modified by this 23 [Modification] Agreement.” Id. 24 Mr. Tashjian asserts that on January 22, 2019, he—through counsel—notified the then25 servicer of the Loan of a mistake in the Modification Agreement. See Tashjian Decl. ¶ 20 & Exh. [26] 27 2 The Court addresses Planet Home’s objection to the admissibility of the Tashjian Declaration in Part III of this order. 1 A. Planet Home disputes the admissibility of this evidence. See infra, at Part III. 2 2. Mr. Tashjian’s Payment History 3 Between May 29, 2019, and May 31, 2019, Mr. Tashjian made seven separate payments to 4 the then-loan servicer. See Iannucci Decl., Exh. 17 (“O’Connell TRO Decl.”) ¶¶ 6–7, ECF No. 5 222-20. These payments were applied to the amounts due for the months of December 2018 6 through June 2019. See id. The seven payments included four payments of $19,391.24 and three 7 payments of $22,235.10, and were consistent with the payment amounts due under the 8 Modification Agreement. See id. ¶¶ 6–8. Mr. Tashjian has not made any other payments on the 9 Loan. See Iannucci Decl., Exh. 1-A, ECF No. 222-4. 10 3. Planet Home’s Actions Regarding Loan 11 The Loan has been repeatedly sold or otherwise reassigned, and the servicers of the Loan 12 have also changed over time. See generally Iannucci Decl., Exhs. 8–16, ECF Nos. 222-11–22213 19. Planet Home became the Loan servicer on November 8, 2019. See Iannucci Decl., Exh. 10, 14 ECF No. 222-13; id. at Exh. 9 (“Tashjian Dep. Tr.”) 234:15–235:3, ECF No. 222-12. The prior 15 loan servicer informed Mr. Tashjian of the transfer to Planet Home in a letter dated October 23, 16 2019. See id. at Exh. 10. Mr. Tashjian states that Planet Home notified him of its status as the 17 new Loan servicer in December 2019. See Tashjian Decl. ¶ 14. 18 On December 17, 2019, Planet Home issued Mr. Tashjian a document titled “Mortgage 19 Loan Statement” indicating a “Regular Monthly Payment” of $0.00 in principal, $17,226.56 in 20 interest, and $5,008.54 in escrow for “[t]axes and [i]nsurance.” See O’Connell TRO Decl. ¶ 12 & 21 Exh. 3. Mr. Tashjian asserts that he, through counsel, “offered the correct interest only payment 22 due of $17,226.56,” and that the offer was rejected. Tashjian Decl. ¶ 16. Mr. Tashjian further 23 states that Planet Home subsequently “threatened to commence foreclosure proceedings against 24 the Property, based in part on the accrued principal erroneously claims by prior lenders.” Id. 25 On December 26, 2019, Planet Home sent Mr. Tashjian a document titled “Notice of [27] 1 Default and Intent to Accelerate” (the “Default Notice”). See O’Connell TRO Decl., Exh. 43; 2 Tashjian Decl. ¶ 17. The Default Notice stated that the Loan was in default and due from July 1, 3 2019, and that curing the default required a payment of $292,610.49—consisting of $133,410.60 4 in “Total Past Due Payments,” $155,039.04 in “Other Fees,” and $4,160.85 in “Corporate 5 Advance Balance”—to be received by Planet Home on or before January 25, 2020. See 6 O’Connell TRO Decl., Exh. 4, at 1. The Default Notice further stated that if payment was not 7 timely received, Planet Home “may accelerate the maturity date of your note” and the “entire 8 principal balance may be declared due without further demand and the noteholder may proceed to 9 foreclosure and sell the property in accordance with the terms” of the Loan and applicable law. Id. 10 The Default Notice additionally stated that Mr. Tashjian had “the right to assert in the foreclosure 11 proceeding or to bring a court action to assert, the non-existence of a default or any other defense 12 you may have to acceleration and sale.” Id. at 2 . 13 On April 2, 2020, Planet Home sent Mr. Tashjian a letter requesting that Mr. Tashjian 14 contact Planet Home “to assess [Mr. Tashjian’s] financial situation and explore potential options 15 that may be available to you to avoid foreclosure.” Id. at Exh. 5. Mr. Tashjian asserts that: 16 [o]n or around Spring of 2020, [he], through . . . counsel, demanded that [Planet Home] correct the error of claiming allegedly accrued 17 principal[] [and] accept [his] correct and proper monthly loan payments, and notified [Planet Home] to cease any foreclosure 18 activities based upon its error in determining the amounts due under the Loan, and demanded that it cease and/or immediately correct 19 reporting any derogatory or incorrect default reporting against [him] to credit reporting agencies. [20] Tashjian Decl. ¶ 18. [21] On May 18, 2020, Planet Home, as the Loan servicer for Sprout Mortgage, recorded a [22] Substitution of Trustee naming Prestige Default as the substituted trustee for the Deed of Trust. [23] See Iannucci Decl., Exh. 14, ECF No 222-17. Mr. Tashjian has stated he has no reason to dispute [24] the authenticity of this document. See Tashjian Dep. Tr. 247:12–23. On May 21, 2020, Planet [26] 3 Although the parties and the original declaration to which this exhibit is attached all state that the 27 declaration is titled “Notice of Default and Intent to Foreclose,” see, e.g., MSJ 4; Tashjian Decl. ¶ 17; O’Connell TRO Decl. ¶ 13, a review of the exhibit indicates the correct title. 1 Home recorded a Notice of Default on the Loan. See Tashjian Decl. ¶ 7. 2 On August 11, 2020, an attorney purporting to act on behalf of Mr. Tashjian sent a letter to 3 Planet Home seeking information and documentation on Planet Home’s “attempt to claim a notice 4 of default or a right to foreclose.” FAC, Exh. C, at 4–5. Planet Home responded the next day, 5 stating that it was “reviewing the loan to ensure a thorough response.” Id. at 10 . 6 A signed Notice of Trustee’s Sale of the Property was recorded on September 10, 2020 in 7 Santa Clara County. See Iannucci Decl., Exh. 5, ECF No. 222-8. The Notice of Trustee’s Sale 8 indicated a sale date of October 26, 2020. See id. Mr. Tashjian asserts that a Notice of Trustee’s 9 Sale for the Property with a sale date of October 26, 2020 was “tacked to [his] door” at the 10 Property on September 14, 2020, but that the Notice was unsigned. See Tashjian Decl. ¶ 7. Mr. 11 Tashjian further asserts that he received an unsigned Notice of Sale on November 4, 2020, and that 12 at some point in time, the Property was scheduled to be sold at a foreclosure auction on November 13 9, 2020. See id. ¶¶ 2, 8 . 14 4. Enjoinment of Foreclosure 15 As discussed below, see infra, at Part I(B), Mr. Tashjian first sued Planet Home in 16 connection with the Loan and the Property on October 9, 2020 in state court in an action titled 17 Vahe Tashjian v. Planet Home Lending, LLC, et al. (Superior Court of California, County of Santa 18 Clara, No. 20-cv-371971). On November 13, 2020, Mr. Tashjian filed a motion in that state court 19 action seeking a preliminary injunction enjoining Planet Home, Sprout Mortgage, and Prestige 20 from foreclosing on or taking any other action with respect to the Property. See Iannucci Decl. ¶ 21 4. The state court granted the injunction on December 9, 2020. See id. Planet Home then 22 canceled an ongoing foreclosure proceeding on the Property. See id. Although this Court later 23 granted Planet Home’s motion to dissolve the state court’s preliminary injunction, see ECF No. 24 118, Planet Home has not foreclosed on the Property to date. See id. Mr. Tashjian continues to 25 reside at the Property. See Tashjian Decl. ¶ 27; Tashjian Dep. Tr. 227:23–24. [27] 1 B. Procedural History 2 1. Filing of Suits, Removal to Federal Court, Relation, and Consolidation 3 This consolidated action began on March 11, 2019, when Mr. Tashjian brought a suit in 4 state court titled Vahe Tashjian v. Invictus Residential Pooler – 2A, et al. (Superior Court of 5 California, County of Santa Clara, No. 19-cv-344317), relating to the Loan and the Property. The 6 action was removed to this Court on March 25, 2019. See Not. Of Removal, ECF No. 1. Planet 7 Home, Sprout Mortgage, and Prestige were not named as defendants in that action. See Compl., 8 ECF No. 1. Rather, Mr. Tashjian sued Planet Home, Sprout Mortgage, and Prestige on October 9, 9 2020 in state court in the Vahe Tashjian v. Planet Home Lending, LLC action. See Compl., ECF 10 No. 3-1 (N.D. Cal., No. 20-cv-08816-EJD). Mr. Tashjian then filed the FAC against Planet 11 Home, Sprout Mortgage, and Prestige in state court on November 13, 2020, i.e., the same day he 12 filed the motion for preliminary injunction. See FAC. That state court action was subsequently 13 removed to federal court on December 11, 2020. See Not. of Removal, ECF No. 3 (N.D. Cal., No. 14 20-cv-08816-EJD). Planet Home answered the FAC on December 18, 2020. See Answer, ECF 15 No. 9 (N.D. Cal., No. 20-cv-08816-EJD). 16 The Court related the Invictus and Planet Home suits brought by Mr. Tashjian on January 17 6, 2021, and consolidated them on March 29, 2021. See ECF Nos. 75, 84. Mr. Tashjian has not 18 filed a consolidated amended complaint; accordingly, the operative complaint against Planet 19 Home is the FAC filed in the Planet Home state court action prior to removal to federal court. 20 2. Status of Sprout Mortgage and Prestige 21 The two other defendants named in the Planet Home action were Sprout Mortgage and 22 Prestige. See FAC. On December 1, 2021, pursuant to a stipulation submitted by Prestige and 23 Mr. Tashjian, the Court issued an order holding that (1) the FAC names Prestige as a defendant 24 based upon its “limited role handling non-judicial foreclosure . . . and solely for the purpose of 25 having all necessary parties before the Court”; (2) that the FAC does not allege any misconduct by 26 Prestige; (3) that Prestige is not liable to Mr. Tashjian for any monetary damages, attorney fees, or 27 costs; and (4) that Prestige was not required to participate further in this action—except by 1 responding to any discovery as a non-party—although it would be bound by any Court order 2 relating to the relevant Deed of Trust on the Property. See ECF No. 109. On July 6, 2023, the 3 Clerk of Court entered default as to Sprout Mortgage. See ECF No. 201. 4 3. The Instant Motions 5 On October 30, 2023, Planet Home moved for summary judgment of all claims in the 6 FAC. See MSJ. Planet Home also filed a concurrent Daubert motion to exclude the reports and 7 testimony of Mr. Tashjian’s damages expert, Douglas A. Minor. See Daubert Mot. Both motions 8 were fully briefed on December 4, 2023. The Court took both motions under submission. See 9 ECF Nos. 239, 241. 10 The Court first addresses the Daubert motion and then reviews other evidentiary 11 objections before evaluating Planet Home’s motion for summary judgment. 12 II. MOTION TO EXCLUDE EXPERT REPORTS AND TESTIMONY 13 Planet Home moves to exclude the reports and testimony of Douglas A. Minor. See 14 Daubert Mot. Mr. Tashjian opposes the motion, arguing that Mr. Minor’s opinions on credit 15 impact and damages are admissible. See Daubert Opp’n. Because the Court finds that none of 16 Mr. Tashjian’s claims survive summary judgment—a result independent of the contents of Mr. 17 Minor’s reports—it will deny as moot Planet Home’s motion to exclude Mr. Minor’s reports and 18 testimony. 19 III. EVIDENTIARY OBJECTIONS 20 Mr. Tashjian makes no objections to the evidence presented by Planet Home. See 21 generally MSJ Opp’n. Planet Home objects to two items of evidence submitted in support of Mr. 22 Tashjian’s opposition to the summary judgment motion: (1) a letter dated January 22, 2019 from 23 Brendan J. Dooley, Esq. to the then-servicer of the Loan, Shellpoint Mortgage Servicing (the 24 “Letter”); and (2) Mr. Tashjian’s declaration to which the letter is attached (the “Tashjian 25 Declaration”). See MSJ Reply 11–13. Because the Court finds that none of Mr. Tashjian’s claims 26 survive summary judgment, even considering these items of evidence, it DENIES AS MOOT 27 Planet Home’s evidentiary objections. 1 IV. MOTION FOR SUMMARY JUDGMENT 2 A. Legal Standard 3 Summary judgment is proper where the pleadings and evidence demonstrate “there is no 4 genuine issue as to any material fact and . . . the movant is entitled to judgment as a matter of 5 law.” Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving 6 party “always bears the initial responsibility of informing the district court of the basis for its 7 motion, and identifying those portions of the pleadings and admissions on file, together with the 8 affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” [9] Id. at 323 . If the moving party makes such a showing, the burden then shifts to the nonmoving 10 party to produce evidence supporting its claims or defenses. Nissan Fire & Marine Ins. Co. v. 11 Fritz Cos., Inc., 210 F.3d 1099 , 1103 (9th Cir. 2000). In evaluating evidence at the summary 12 judgment stage, the Court “does not assess credibility or weigh the evidence, but simply 13 determines whether there is a genuine factual issue for trial.” House v. Bell, 547 U.S. 518 , 559–60 14 (2006). A fact is “material” if it “might affect the outcome of the suit under the governing law,” 15 and a “genuine” dispute of material fact exists if there is sufficient evidence for a reasonable trier 16 of fact to decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 , 17 248 (1986). Summary judgment must be denied if “a fair-minded jury could return a verdict for 18 the [non-moving party] on the evidence presented.” Id. at 252 . 19 B. Discussion 20 Mr. Tashjian brings 10 claims against Planet Home4: (1) breach of written contract; (2) 21 breach of the covenant of good faith and fair dealing; (3) unfair business practices in violation of 22 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17 ,200, et seq.; (4) 23 violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 , et seq.; (5) intentional 24 misrepresentation; (6) negligent misrepresentation; (7) violation of the California Homeowner Bill 25 of Rights (“HBOR”), Cal. Civ. Code §§ 2923.5 , 2924.9, and 2924.17; (8) violation of the HBOR, [26] 27 4 Although the claims do not name Planet Home specifically, each claim is brought against either “Lenders” or “Defendants,” and Planet Home is included in both terms. See FAC at 1; id. ¶¶ 7–8. [1] Cal. Civ. Code § 2923.55 ; (9) wrongful foreclosure; and (10) injunctive relief. See FAC ¶¶ 89– 2 242. Planet Home moves for summary judgment on each of the ten claims. See generally MSJ. 3 The Court addresses these claims in turn. 4 1. Claim 1: Breach of Written Contract 5 Mr. Tashjian alleges that Planet Home breached the written terms of the Loan by 6 demanding incorrect payments under Loan, failing to accept correct monthly, wrongfully initiating 7 foreclosure proceedings on the Property, incorrectly reporting to credit reporting agencies that Mr. 8 Tashjian had defaulted on the Loan, and failing to ensure that the credit reporting agencies’ 9 records were corrected. See FAC ¶¶ 89–92. Under California law, a breach of contract claim 10 requires “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, 11 (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. 12 Goldman, 51 Cal. 4th 811, 821 (2011). Planet Home argues that Mr. Tashjian cannot prove the first 13 three elements of a breach of contract claim. See MSJ 7–12. Mr. Tashjian does not address this claim 14 in his opposition papers. See generally MSJ Opp’n. Planet Home argues that Mr. Tashjian has 15 thereby abandoned this claim and the seven other claims not addressed in the opposition, see MSJ 16 Reply 1–2, but Mr. Tashjian indicates that he challenges the summary judgment motion in its entirety, 17 see MSJ Opp’n 1, 13. As such, the Court will review each claim under the standard summary 18 judgment lens and evaluate whether there exists a material dispute of fact as to any element of the 19 claim based on the evidence submitted by the parties. 20 As noted by Planet Home, none of the Loan Documents—i.e., the Loan, the Deed of Trust, 21 the Note, the January 30 Letter, and the Modification Agreement—name Planet Home as a party. 22 See FAC Exh. A; Mod. Agr. Further, although Mr. Tashjian appended two items of 23 correspondence between his counsel and Planet Home—a letter and a response—neither document 24 indicates anything other than Planet Home’s role as a servicer on the Loan. See Tashjian Decl., 25 Exh. B, at 4–5, 10–11. 26 “The general rule in California is that ‘only a signatory to a contract may be liable for any 27 breach.’” St. Vincent Med. Ctr. v. Mega Life & Health Ins. Co., 585 F. App’x 417, 419 (9th Cir. 1 2014) (quoting Clemens v. Am. Warranty Corp., 193 Cal. App. 3d 444, 452 (1987)); see also, e.g., 2 Tri-Continent Int’s Corp. v. Paris Sav. & Loan Ass’n, 12 Cal. App. 4th 1354, 1359 (1993) (“Tri– 3 Continent cannot assert a claim for breach of contract against one who is not a party to the 4 contract.”). As such, Mr. Tashjian may not bring a claim against Planet Home for breach of 5 contract based on the Loan Documents. See, e.g., Howard v. First Horizon Home Loan Corp., No. 6 12–cv–05735, 2013 WL 3146792 , at *2 (N.D. Cal. June 18, 2013) (“Under California law, a 7 mortgagor cannot bring a claim for breach of contract against a servicer premised on the deed of 8 trust because a loan servicer is not a party to the deed of trust.”) (citing cases); Lomboy v. SCME 9 Mortg. Bankers, No. 09-cv-1160, 2009 WL 1457738 , at *5 (N.D. Cal. May 26, 2009) (dismissing 10 borrower’s California breach of contract claim against loan servicer after rejecting argument that 11 servicing fee implied existence of contract between borrower and loan servicer); Conder v. Home 12 Savs. of Am., 680 F. Supp. 2d 1168, 1174 (C.D. Cal. 2010) (“The fact that [Loan Servicer] entered 13 into a contract with [Lender] to service Plaintiff’s loan does not create contractual privity between 14 [Loan Servicer] and Plaintiff.”) (citing Lomboy, 2009 WL 1457738 , at *5). 15 At least two California appellate courts have approved of this line of reasoning, albeit in 16 unpublished decisions. See Brooks v. Quantum Servicing Corp., No. __, 2012 WL 1898941 , at *3 17 (Cal. Ct. App. May 25, 2012) (“[F]ederal courts applying California law have brusquely dismissed 18 the notion that loan servicers, as agents for the holder of the loan, are parties to deeds of trust or 19 the mortgage, or that a loan servicer is in privity with the holder of the loan. . . . No contrary 20 conclusion is required here.”) (citations omitted); Bundick v. Penny Mac Loan Servs. LLC, No. 21 C079577, 2021 WL 2309954 , at *22 (Cal. Ct. App. June 7, 2021) (finding no contractual 22 relationship between borrower and loan servicer after noting that “we have not readily found 23 California appellate cases directly on point, [but] those federal courts applying California law that 24 have considered the issue have concluded that, under California law, a loan servicer is not party to 25 a deed of trust”). 26 Accordingly, in light of the Loan Documents supplied by Planet Home, the lack of 27 opposition by Mr. Tashjian, and the Court’s analysis of the governing law, the Court finds that 1 there is no genuine dispute of fact that no contract existed between Mr. Tashjian and Planet Home. 2 The Court will grant summary judgment on Mr. Tashjian’s breach of contract claim. 3 2. Claim 2: Breach of Implied Covenant of Good Faith and Fair Dealing 4 Mr. Tashjian alleges that Planet Home breached the implied covenant of good faith and 5 fair dealing. See FAC ¶¶ 89–92. Planet Home argues that summary judgment must be granted on 6 this claim as a matter of law, see MSJ 12–13, and Mr. Tashjian does not address Planet Home’s 7 arguments, see generally MSJ Opp’n. Because the Court has found that no contract exists between 8 Mr. Tashjian and Planet Home, see supra, at Part IV(B)(1), the claim for breach of the implied 9 covenant of good faith and fair dealing cannot survive. See, e.g., Rosal v. First Fed. Bank of Cal., [10] 671 F. Supp. 2d 1111, 1129 (N.D. Cal. 2009) (“To establish a breach of an implied covenant of 11 good faith and fair dealing, a plaintiff must establish the existence of a contractual obligation, 12 along with conduct that frustrates the other party's rights to benefit from the contract.”) (citing 13 Racine & Laramie, Ltd. v. Dep’t of Parks & Rec., 11 Cal. App. 4th 1026, 1031 (1992)). The 14 Court will therefore grant summary judgment on this claim. 15 3. Claim 3: UCL Violation 16 “The UCL proscribes three varieties of competition: ‘acts or practices which are unlawful, 17 or unfair, or fraudulent.’” Henard v. HSBC Bank USA, N.A., No. 5:17-cv-01222, 2017 WL 18 4809750, at *7 (N.D. Cal. Oct. 25, 2017) (quoting Khoury v. Maly’s of California, Inc., 14 Cal. 19 App. 4th 612, 618–19 (1993)). Mr. Tashjian’s third claim alleges that Planet Home violated each 20 of the unfair, unlawful, and fraudulent prongs of the UCL. See FAC ¶¶ 100–122. 21 For purposes of the UCL, “unlawful” business practices are those that are “forbidden by 22 law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made.” 23 Saunders v. Super. Ct., 27 Cal. App. 4th 832, 838 (1999). “Unfair” practices constitute “conduct 24 that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of 25 those laws because its effects are comparable to or the same as a violation of the law, or otherwise 26 significantly threatens or harms competition.” Cal-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., [27] 20 Cal. 4th 163, 187 (1999); see also Ticconi v. Blue Shield of Cal. Life & Health Ins. Co., 160 1 Cal. App. 4th 528 , 539 (2008) (“An ‘unfair’ business practice occurs when that practice ‘offends 2 an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous 3 or substantially injurious to consumers.”) (citation and internal alterations omitted). Lastly, a 4 “fraudulent” business practice “is one which is likely to deceive the public.” McKell v. Wash. 5 Mut., Inc., 142 Cal. App. 4th 1457 , 1471 (2006) (citations omitted). The Court addresses each of 6 the three prongs in turn. 7 a. Unlawful Conduct Under the UCL 8 Mr. Tashjian’s first UCL claim alleges that Planet Home engaged in unlawful business 9 practices by “violat[ing] various state and federal laws, including but not limited to those alleged 10 herein,” most concretely by “providing false or misleading information” and “failing to honor 11 proper state law mandated foreclosure proceedings.” FAC ¶ 104; see also id. ¶ 103. A claim 12 under the “unlawful” prong of the UCL “hinges upon whether a plaintiff can formulate a claim 13 under the predicate law.” Eidmann v. Walgreen Co., 522 F. Supp. 3d 634 , 647 (N.D. Cal. 2021) 14 (citing Hadley v. Kellogg Sales Co., 243 F. Supp. 3d 1074, 1094 (N.D. Cal. 2017)). Planet Home 15 argues that Mr. Tashjian is unable to identify any specific act that violated any particular law, and 16 that to the extent this claim is premised on a violation of the FCRA, the HBOR, or a wrongful 17 foreclosure, he is unable to establish the predicate violations. See MSJ 13–14. Mr. Tashjian 18 argues that his claim is “tethered to Defendant’s violation of [Cal.] Civ[.] Code § 2924.17.” MSJ 19 Opp’n 12. 20 Because the Court finds that Mr. Tashjian is unable to state a claim for a violation of 21 California Civil Code § 2924.17, see infra, at Part IV(B)(6), and that none of his other claims 22 survive, this UCL claim must also fail for lack of a predicate violation. See Eidmann, 522 F. 23 Supp. at 647 (“Thus, if the plaintiff cannot state a claim under the predicate law[,] the UCL claim 24 also fails.”) (internal alterations and citation omitted). The Court will grant summary judgment on 25 this claim. 26 b. Unfair Conduct Under the UCL 27 Mr. Tashjian alleges that Planet Home violated the UCL’s prohibition of unfair business 1 practices to the extent Planet Home (1) failed to properly notify Mr. Tashjian of his rights to 2 dispute an alleged default per the signed Deed of Trust, California law, and California public 3 policy,” FAC ¶ 107; (2) failed to permit him to cure the alleged default in a timely manner, see id.; 4 (3) failed to notify and allow Mr. Tashjian to seek legally permissible alternatives to foreclosure, 5 id.; (4) subjected Mr. Tashjian to wrongful foreclosure, id.; (5) “failed to record Substitutions of 6 Trustee, not only for Plaintiff, but for a large part of the general public, as required by the Deed of 7 Trust, California law, and California public policy,” id. ¶ 108 ; (6) failed to notify Mr. Tashjian of 8 the acceleration of his debt, id. ¶ 109 ; and (7) unfairly held itself out as having proper authority to 9 file publicly recorded documents and foreclose on the Property even though it was not a “lawful 10 agent[], beneficiar[y], or trustee[] for the true and legal owner of the [N]ote,” id. ¶ 110 . Planet 11 Home argues that the undisputed facts require summary judgment on this claim. See MSJ 14–15. 12 Mr. Tashjian counters that he rescinded the Modification Agreement on January 22, 2019, based 13 on a mutual mistake, so that Planet Home’s foreclosure enforcement based on a purported default 14 under the terms of the Modification Agreement constituted an unfair business practice. See MSJ 15 Opp’n 10–11. 16 i. Challenged Practices (1), (2), (3), & (6) 17 The facts before the Court are as follows. The prior loan servicer informed Mr. Tashjian of 18 the transfer to Planet Home in a letter dated October 23, 2019. See Iannucci Decl., Exh. 10. Mr. 19 Tashjian states that Planet Home notified him of its status as the new Loan servicer in December 20 2019. See Tashjian Decl. ¶ 14. Mr. Tashjian does not dispute that Planet Home is the Loan 21 servicer. See FAC ¶ 12; Tashjian Decl. ¶ 5. On December 26, 2019, Planet Home sent Mr. 22 Tashjian a document titled “Notice of Default and Intent to Accelerate” (the “Default Notice”). 23 See O’Connell TRO Decl., Exh. 4; Tashjian Decl. ¶ 17. The Default Notice stated that the Loan 24 was in default and due from July 1, 2019, and that curing the default required a payment of 25 $292,610.49, to be received by Planet Home on or before January 25, 2020. See O’Connell TRO 26 Decl., Exh. 4, at 1. The Default Notice further stated that if payment was not timely received, 27 Planet Home “may accelerate the maturity date of your note” and the “entire principal balance 1 may be declared due without further demand and the noteholder may proceed to foreclosure and 2 sell the property in accordance with the terms” of the Loan and applicable law. Id. The Default 3 Notice additionally stated that Mr. Tashjian had “the right to assert in the foreclosure proceeding 4 or to bring a court action to assert, the non-existence of a default or any other defense you may 5 have to acceleration and sale.” Id. at 2 . Mr. Tashjian does not submit any contradictory evidence. 6 As such, the undisputed facts foreclose Mr. Tashjian’s claim for unfair conduct based on the first, 7 second, third, and sixth practices listed above. 8 ii. Challenged Practices (4), (5), & (7) 9 The evidence further shows that the Loan was secured by a Deed of Trust for the Property. 10 See Tashjian Decl. ¶ 3. Pursuant to the Modification Agreement, Mr. Tashjian was responsible for 11 monthly payments consisting of both the interest-only payments and an “Estimated Monthly 12 Escrow Payment Amount.” See Mod. Agr. 2. In executing the Modification Agreement, Mr. 13 Tashjian agreed, “I will be in default if I do not comply with the terms of the Loan Documents, as 14 modified by this [Modification] Agreement.” Id. Although Mr. Tashjian argues that Planet Home 15 unfairly foreclosed on the Property because the Modification Agreement had been rescinded due 16 to mutual mistake, his position fails for multiple reasons. First, the FAC does not allege the 17 rescission as a theory of liability for a violation of the UCL. See FAC ¶¶ 105–110. In fact, 18 although Mr. Tashjian does allege that the Modification Agreement was rescinded, see id. ¶¶ 38– 19 40 & Exh. B, there is no allegation anywhere in the FAC as to the theory of mutual mistake. A 20 plaintiff generally may not raise a new theory of liability for the first time in opposition to 21 summary judgment. See, e.g., Lavin v. United Techs. Corp., No. 13–cv–09384, 2015 WL 847392 , 22 at *20 (C.D. Cal. Feb. 23, 2015) (citing Patel v. City of Long Beach, 564 F. App’x 881, 882 (9th 23 Cir. 2014)). Further, even if the Court considers the rescission allegations and Exhibit B to the 24 FAC—i.e., the January 22, 2019 letter—to constitute a sufficient basis for the present argument, 25 and assuming the letter accomplished a valid rescission, Mr. Tashjian subsequently made seven 26 payments in May 2019 pursuant to the terms of the Modification Agreement. See O’Connell TRO 27 Decl. ¶¶ 6–8. Such conduct ratified the Modification Agreement. See Monfort v. Adomani, No. 1 18-CV-05211, 2019 WL 6311378 , at *6 (N.D. Cal. Nov. 25, 2019) (“Ratification occurs when the 2 [] party, ‘with full knowledge of the material facts permitting rescission, has engaged in some 3 unequivocal conduct giving rise to a reasonable inference that he or she intended the conduct to 4 amount to a ratification.’”) (citation omitted). 5 The evidence additionally shows that the payments demanded by Planet Home only sought 6 interest and escrow fees, i.e., Planet Home did not demand payment of any portion of the principal 7 amount of the Loan. See Tashjian Dep. Tr. 257:10–258:17; O’Connell TRO Decl. ¶ 12 & Exh. 3. 8 The interest payment on the loan was $17,226.56, and the escrow fee was $5,008.54. See 9 O’Connell TRO Decl., Exh. 3. Mr. Tashjian tendered a payment of $17,226.56, which was 10 rejected. Tashjian Decl. ¶ 16. As such, Mr. Tashjian has not made any payments on the Loan 11 since May 31, 2019, including since Planet Home became the Loan servicer in November 2019. 12 See Iannucci Decl., Exh. 1-A. 13 Planet Home recorded a Substitution of Trustee on May 18, 2020, see Iannucci Decl., Exh. 14 14, and Mr. Tashjian does not dispute its authenticity, see Tashjian Dep. Tr. 247:12–23. Planet 15 Home then recorded a Notice of Default on the Loan on May 21, 2020, see Tashjian Decl. ¶ 7, and 16 recorded a signed Notice of Trustee’s sale on September 10, 2020, see Iannucci Decl., Exh. 5. 17 Based on the foregoing facts, the Court finds there is no genuine dispute of fact that Planet 18 Home did not engage in the fourth, fifth, and seventh unfair practices described above. 19 iii. Conclusion 20 In sum, Mr. Tashjian has provided no evidence that Planet Home acted in a manner 21 consistent with the concept of unfairness under the UCL, i.e., there is no evidence of immoral, 22 unscrupulous, or otherwise unethical behavior on the part of Planet Home. Accordingly, the Court 23 will grant summary judgment on this claim. 24 c. Fraudulent Conduct Under the UCL 25 Mr. Tashjian also alleges a violation of the “fraudulent” prong of the UCL, based on 26 allegations that Planet Home’s actions—such as “making material misrepresentations or 27 omissions, knowingly filing false instruments for the general public to view . . . [and/or] without 1 requiring declarations, failing to properly notify Plaintiff of his rights to dispute alleged defaults 2 and wrongful foreclosure[,] . . . unlawfully fil[ing] public documents . . . without the authority to 3 do so,” FAC ¶¶ 112–113—were undertaken as part of a fraudulent scheme to attempt to “sell 4 property in order to profit,” id. ¶ 114 . He further alleges that Planet Home’s actions were “likely 5 to not only deceive Plaintiff, but [were] likely to deceive the public in general.” Id. ¶ 112 . Planet 6 Home argues that Mr. Tashjian does not identify any specific misrepresentation by Planet Home, 7 and that no evidence supports this claim. See MSJ 15–16. Mr. Tashjian does not address these 8 arguments. See generally MSJ Opp’n. 9 As described in more detail above, see supra, at Part IV(B)(3)(b), the evidence before the 10 Court indicates that Planet Home properly notified Mr. Tashjian of his rights and that Mr. Tashjian 11 does not dispute Planet Home’s status as the Loan servicer or the authenticity of the documents 12 recorded by Planet Home with respect to the Property. Mr. Tashjian has provided no evidence to 13 the contrary. Therefore, the Court will grant summary judgment on this claim. 14 4. Claim 4: FCRA Violation 15 Mr. Tashjian’s fourth claim alleges that Planet Home violated the FCRA by failing to 16 conduct a reasonable investigation into the accuracy of the payments due under the Loan 17 Documents and thus reporting that the Loan was in default, and by failing to update incomplete or 18 inaccurate information it had previously reported to credit reporting agencies. See FAC ¶¶ 123– 19 132. “To state a claim under the FCRA, a plaintiff must show that: (1) he found an inaccuracy in 20 his credit report; (2) he notified a credit reporting agency; (3) the credit reporting agency notified 21 the furnisher of the information about the dispute; and (4) the furnisher failed to investigate the 22 inaccuracies or otherwise failed to comply with the requirements of 15 U.S.C. § 1681s– 23 2(b)(1)(A)–(E).” Biggs v. Experian Info. Sols., Inc., 209 F. Supp. 3d 1142, 1144 (N.D. Cal. 2016) 24 (citation omitted). An FCRA violation may be either negligent or willful. See Moran v. Screening 25 Pros, LLC, 25 F.4th 722, 728 (9th Cir. 2022) (citation omitted). A negligent violation involves a 26 defendant’s objectively unreasonable interpretation of the statute, and a willful violation requires 27 either a knowing or reckless violation of a statutory standard. See id. (citations omitted). Planet 1 Home argues that Mr. Tashjian’s FCRA claim “fails because (1) he has no evidence from which a 2 trier of fact could reasonably infer that Planet Home committed a willful or negligent violation of 3 the FCRA, and (2) his alleged damages are unrecoverable as a matter of law.” MSJ 18; see id. at 4 16–22. Mr. Tashjian does not address Planet Home’s arguments as to this claim. 5 The undisputed evidence submitted by Planet Home establishes that Mr. Tashjian made 6 seven payments pursuant to the terms of the Modification Agreement, after which he failed to 7 make any payments on the Loan. See O’Connell TRO Decl. ¶¶ 6–10. Planet Home notified Mr. 8 Tashjian of his status of default in December 2019, and Mr. Tashjian did not cure the default. See [9] id. ¶¶ 10–13; Tashjian Dep. Tr. 254:15–16. In August 2020, Mr. Tashjian, through counsel, 10 sought documentation from Planet Home regarding its right to attempt to enforce a default or 11 foreclosure, and Planet Home responded the next day stating it was reviewing its documents to 12 make a thorough response. See FAC, Exh. C, at 4–5, 10. To the extent Mr. Tashjian’s declaration 13 states otherwise, see, e.g., Tashjian Decl. ¶ 10, it consists of legal conclusions, contradicts his 14 sworn testimony, and provides no supporting evidence, and thus does not create a genuine dispute 15 of material fact. See Nilsson v. City of Mesa, 503 F.3d 947 , 952 n.2 (9th Cir. 2007) (“[A] 16 conclusory, self-serving affidavit, lacking detailed facts and any supporting evidence, is 17 insufficient to create a genuine issue of material fact.”) (citation omitted); Monfort, 2019 WL 18 6311378, at *7 (“Courts need not consider a new affidavit that contradicts sworn testimony or 19 interrogatory answers.”) (citation omitted). 20 The Court accordingly finds that the undisputed facts show that Planet Home’s report of 21 Mr. Tashjian’s default was accurate, and that no evidence indicates some other violation of the 22 FCRA. The Court therefore need not and does not address Planet Home’s arguments as to Mr. 23 Tashjian’s lack of damages, see MSJ 20–22, and will grant summary judgment on this claim. 24 5. Claims 5 & 6: Intentional and Negligent Misrepresentation 25 Mr. Tashjian’s fifth claim alleges that Planet Home intentionally misrepresented that it was 26 a valid servicer of the Loan and valid authority to foreclose on the Property. See FAC ¶¶ 139– 27 140; see generally id. ¶¶ 133–160. His sixth claim alleges that Planet Home made unspecified 1 negligent misrepresentations “more fully set forth in the First Cause of Action [for breach of 2 contract]” and related to the “unlawful acceleration of debt instrument.” See id. ¶¶ 163, 168 ; see 3 generally id. ¶¶ 161–174. Planet Home argues that these claims fail because no link exists 4 between Planet Home’s attempted foreclosure on the Property and any alleged false 5 representation. See MSJ 22–23. Mr. Tashjian does not address these arguments. 6 As noted above, see supra, at Parts IV(B)(1), IV(B)(3), the undisputed evidence indicates 7 that Mr. Tashjian does not have a breach of contract claim against Planet Home, and that Planet 8 Home is the valid Loan servicer and followed proper procedures in notifying Mr. Tashjian of his 9 default and subsequently attempting to foreclose on the Property. Mr. Tashjian has provided no 10 evidence creating a genuine issue of material fact suggesting any false representation made by 11 Planet Home. Accordingly, the Court will grant summary judgment on the claims for intentional 12 and negligent misrepresentation. 13 6. Claims 7–8: HBOR Violations ( Cal. Civ. Code §§ 2923.5 , 2923.55, 2924.9, & 2924.17) [14] Mr. Tashjian’s seventh claim alleges that Planet Home violated the HBOR as to California [15] Civil Code §§ 2923.5, 2924.9, and 2924.17, and his eight claim alleges an HBOR violation as to [16] California Civil Code § 2923.55. See FAC ¶¶ 175–225. As relevant here, the four challenged [17] sections of the HBOR require servicers, prior to a foreclosure, to timely communicate with the [18] homeowner both prior and subsequent to recording a notice of default, see Cal. Civil Code §§ 19 2923.5, 2923.55, 2924.9, and to ensure the accuracy and completeness of all foreclosure [20] documents, see Cal. Civil Code § 2924.17 . Planet Home argues that no evidence supports Mr. [21] Tashjian’s claims that it did not comply with the HBOR, including to the extent that the theory of [22] liability is based on the validity of Planet Home’s status as the Loan servicer. See MSJ 24. Planet [23] Home further argues that Mr. Tashjian’s claims under the HBOR are effectively moot because [24] Planet Home is statutorily barred from using the September 2020 Notice of Default as the basis for [25] a foreclosure, so that any alleged flaws with the relevant notices are inconsequential. See id. [26] (citing Cal. Civ. Code § 2924g(c)(2)). Mr. Tashjian responds only as to § 2924.17, and argues that [27] 1 Planet Home’s foreclosure notice documents were inaccurate because they were based on a 2 purported default under the Modification Agreement, which Mr. Tashjian argues was rescinded. 3 See MSJ Opp’n 12–13. 4 Mr. Tashjian’s sole argument fails because the Court has found his May 2019 payments 5 ratified the Modification Agreement. See supra, at Part IV(B)(3)(b)(ii). In considering the 6 claimed HBOR violations as a whole, the undisputed evidence before the Court indicates that 7 Planet Home was the valid servicer of the Loan and acted in accordance with the requirements of 8 the HBOR. Mr. Tashjian has provided no evidence to the contrary except for his declaration, 9 which, as the Court has noted, does not create a genuine dispute of fact because it is full of legal 10 conclusions, contradicts Mr. Tashjian’s sworn testimony and the documentary evidence before the 11 Court, and is unsupported by any other documentation. See supra, at Part IV(B)(4) (citing 12 Monfort, 2019 WL 6311378 , at *7). Accordingly, the Court need not reach Planet Home’s 13 mootness argument, and will grant summary judgment on these claims. 14 7. Claim 9: Wrongful Foreclosure 15 Mr. Tashjian’s ninth claim alleges wrongful foreclosure based on the alleged falsity of 16 statements in the recorded instruments related to the attempted foreclosure of the Property. This 17 claim is not yet ripe, as a wrongful foreclosure claim cannot be asserted prior to a completed 18 trustee’s sale. See Henard, 2017 WL 4809750 , at *3 (citing cases); see also, e.g., Saterbak v. 19 JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808, 814 (2016) (“California courts do not allow 20 such preemptive suits [to prevent a foreclosure sale] because they would result in the 21 impermissible interjection of the courts into a nonjudicial scheme enacted by the California 22 Legislature.”) (internal quotation marks and citation omitted). Here, the undisputed facts show 23 that the Property has not been sold and that Mr. Tashjian continues to reside therein. See Iannucci 24 Decl. ¶ 4; Tashjian Dep. Tr. 227:23–228:3, 254:4–16. The Court will therefore grant summary 25 judgment on this claim. 26 8. Claim 10: Injunctive Relief 27 Lastly, Mr. Tashjian brings a claim for injunctive relief to preliminarily and permanently 1 enjoin Planet Home from foreclosing on or taking any other action with respect to the Property. 2 || See FAC 4] 238-242. California law does not permit a standalone claim for injunctive relief. See, 3 e.g., Ivanoff v. Bank of Am., N.A., 9 Cal. App. 5th 719, 734 (2017) (“Injunctive relief is a remedy, 4 || nota cause of action.”). Accordingly, Mr. Tashjian’s claim for injunctive relief must fail. 5 || V. ORDER 6 For the foregoing reasons, the Court hereby ORDERS as follows: 7 1. Planet Home’s motion for summary judgment is GRANTED IN FULL; 8 2. Planet Home’s motion to exclude the expert reports and testimony of Douglas A. 9 Minor is DENIED AS MOOT; 10 3. Planet Home’s evidentiary objections are DENIED AS MOOT; and 11 4. The status conference set for April 4, 2024 regarding trial scheduling for Mr. 12 Tashjian’s case against Planet Home is TERMINATED AS MOOT. IT IS SO ORDERED. 3 15 Dated: February 26, 2024 [16] aD. EDWARD J. DAVILA 2 18 United States District Judge [27] 28 || Case No.: 19-cv-01536-EJD ORDER GRANTING PHL’S MOT. SUMM. J -, DENYING AS MOOT DAUBERT MOT.