Opinion
19-cv-01536-EJD 20-cv-08816-EJD
02-26-2024
VAHE TASHJIAN, Plaintiff, v. INVICTUS RESIDENTIAL POOLER-2A, et al., Defendants. VAHE TASHJIAN, Plaintiff, v. PLANET HOME LENDING, LLC, et al., Defendants.
ORDER GRANTING PLANET HOME LENDING, LLC'S MOTION FOR SUMMARY JUDGMENT; DENYING AS MOOT MOTION TO EXCLUDE EXPERT REPORTS AND TESTIMONY OF DOUGLAS A. MINOR
RE: ECF NOS. 221, 222
EDWARD J. DAVILA, UNITED STATES DISTRICT JUDGE
This action consolidates two lawsuits brought by Plaintiff Vahe Tashjian (“Mr. Tashjian”) against various mortgage lenders and mortgage loan servicers in connection with payments on a mortgage loan of over $3,300,000 issued to Mr. Tashjian in January 2018. In his second lawsuit, Mr. Tashjian sued Planet Home Lending, LLC (“Planet Home”), Sprout Mortgage Asset Trust (“Sprout Mortgage”), and Prestige Default Services (“Prestige”), alleging the following 10 claims: (1) breach of written contract; (2) breach of the covenant of good faith and fair dealing; (3) unfair business practices in violation of California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17,200, et seq.; (4) violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq.; (5) intentional misrepresentation; (6) negligent misrepresentation; (7) violation of the California Homeowner Bill of Rights (“HBOR”), Cal. Civ. Code §§ 2923.5, 2924.9, and 2924.17; (8) violation of the HBOR, Cal. Civ. Code § 2923.55; (9) wrongful foreclosure; and (10) injunctive relief. See First Am. Compl. (“FAC”), ECF No. 3-1 (N.D. Cal., No. 20-cv-08816-EJD). Sprout Mortgage Asset Trust and Prestige Default Services are no longer parties to this action. See ECF Nos. 109, 201. Now pending before the Court is Planet Home's motion for summary judgment on all claims in the FAC, see Mot. Summ. J. (“MSJ”), ECF No. 222, as well as Planet Home's Daubert motion to exclude the reports and testimony of Mr. Tashjian's damages expert, see Mot. to Exclude Reports and Testimony of Douglas A. Minor (“Daubert Mot.”), ECF No. 221. Mr. Tashjian opposed both the summary judgment motion, see Opp'n to Mot. Summ. J. (“MSJ Opp'n”), ECF No. 225, and the Daubert motion, see Opp'n to Daubert Mot. (“Daubert Opp'n”), ECF No. 226. Planet Home filed a reply in support of each motion. See Reply in Supp. of Mot. Summ. J. (“MSJ Reply”), ECF No. 232; Reply in Supp. of Daubert Mot. (“Daubert Reply”), ECF No. 231. The Court took both motions under submission without oral argument pursuant to Civil Local Rule 7-1(b). See ECF Nos. 239, 241.
Unless otherwise stated, as here, all docket citations refer to the lead case.
Having considered the parties' arguments, factual evidence, and the relevant law, the Court hereby GRANTS Planet Home's Motion for Summary Judgment and DENIES AS MOOT its Motion to Exclude Expert Reports and Testimony for the reasons below.
I. BACKGROUND
A. Factual Background
The following facts are undisputed unless otherwise noted.
1. Loan Terms and Modifications
On January 31, 2018, Mr. Tashjian entered into a loan agreement (the “Loan”) with Recovco Mortgage Management, LLC (“Recovco”) under which Recovco agreed to provide a mortgage loan to Mr. Tashjian in the principal sum of $3,307,500. See FAC ¶ 16 & Exh. A; Decl. of Michael A. Iannucci in Supp. of Mot. (“Iannucci Decl.”), Exh. 2, at 2, ECF No. 222-5. The Loan was secured by a Deed of Trust in favor of Recovco for a residential property located at 901 Loyola Drive, Los Altos Hills, CA 94024 (the “Property”), and evidence by a Fixed/Adjustable Rate Note (the “Note”). See FAC, Exh. A; Iannucci Decl., Exh. 2, at 2; see also Decl. of Vahe Tashjian in Opp'n to Mot. (“Tashjian Decl.”) ¶ 3, ECF No. 225-1. The terms of the Loan included a letter from Recovco to Mr. Tashjian, executed on January 30, 2018 (the “January 30 Letter”), under which Mr. Tashjian would owe interest-only payments for the first seven years of the Loan. See FAC, Exh. A; Iannucci Decl., Exh. 2, at 3; Tashjian Decl. ¶ 4. The amount of each monthly interest-only payment was $17,226.56. See Tashjian Decl. ¶ 15.
The Court addresses Planet Home's objection to the admissibility of the Tashjian Declaration in Part III of this order.
On December 21, 2018, Mr. Tashjian executed a modification agreement regarding the Loan (the “Modification Agreement” and, with the Loan, the Deed of Trust, the Note, and the January 30 Letter, the “Loan Documents”) with the then-servicer of the Loan. See Iannucci Decl., Exh. 6 (“Mod. Agr.”), ECF No. 222-9. According to the Modification Agreement, the principal balance on the Loan remained $3,307,500. See id. at 1. Further, Mr. Tashjian owed an arrearage balance on the Loan of $155,039.04-composed of nine months of non-payment of the $17,226.56 interest-only payments-and that the arrearage would be deferred and owed in full at the occurrence of any of the following events: the end of the Loan term; the refinancing of the Loan; an acceleration of the Loan balance pursuant to a default on the Loan; or the sale of the Property. See id. The Modification Agreement set forth a payment schedule under which Mr. Tashjian was responsible for monthly payments consisting of both the interest-only payments and an “Estimated Monthly Escrow Payment Amount.” See id. at 2. Mr. Tashjian further agreed: “I will be in default if I do not comply with the terms of the Loan Documents, as modified by this [Modification] Agreement.” Id.
Mr. Tashjian asserts that on January 22, 2019, he-through counsel-notified the then-servicer of the Loan of a mistake in the Modification Agreement. See Tashjian Decl. ¶ 20 & Exh. A. Planet Home disputes the admissibility of this evidence. See infra, at Part III.
2. Mr. Tashjian's Payment History
Between May 29, 2019, and May 31, 2019, Mr. Tashjian made seven separate payments to the then-loan servicer. See lannucci Decl., Exh. 17 (“O'Connell TRO Decl.”) ¶¶ 6-7, ECF No. 222-20. These payments were applied to the amounts due for the months of December 2018 through June 2019. See id. The seven payments included four payments of $19,391.24 and three payments of $22,235.10, and were consistent with the payment amounts due under the Modification Agreement. See id. ¶¶ 6-8. Mr. Tashjian has not made any other payments on the Loan. See Iannucci Decl., Exh. 1-A, ECF No. 222-4.
3. Planet Home's Actions Regarding Loan
The Loan has been repeatedly sold or otherwise reassigned, and the servicers of the Loan have also changed over time. See generally Iannucci Decl., Exhs. 8-16, ECF Nos. 222-11-22219. Planet Home became the Loan servicer on November 8, 2019. See Iannucci Decl., Exh. 10, ECF No. 222-13; id. at Exh. 9 (“Tashjian Dep. Tr.”) 234:15-235:3, ECF No. 222-12. The prior loan servicer informed Mr. Tashjian of the transfer to Planet Home in a letter dated October 23, 2019. See id. at Exh. 10. Mr. Tashjian states that Planet Home notified him of its status as the new Loan servicer in December 2019. See Tashjian Decl. ¶ 14.
On December 17, 2019, Planet Home issued Mr. Tashjian a document titled “Mortgage Loan Statement” indicating a “Regular Monthly Payment” of $0.00 in principal, $17,226.56 in interest, and $5,008.54 in escrow for “[t]axes and [i]nsurance.” See O'Connell TRO Decl. ¶ 12 & Exh. 3. Mr. Tashjian asserts that he, through counsel, “offered the correct interest only payment due of $17,226.56,” and that the offer was rejected. Tashjian Decl. ¶ 16. Mr. Tashjian further states that Planet Home subsequently “threatened to commence foreclosure proceedings against the Property, based in part on the accrued principal erroneously claims by prior lenders.” Id.
On December 26, 2019, Planet Home sent Mr. Tashjian a document titled “Notice of Default and Intent to Accelerate” (the “Default Notice”). See O'Connell TRO Decl., Exh. 4; Tashjian Decl. ¶ 17. The Default Notice stated that the Loan was in default and due from July 1, 2019, and that curing the default required a payment of $292,610.49-consisting of $133,410.60 in “Total Past Due Payments,” $155,039.04 in “Other Fees,” and $4,160.85 in “Corporate Advance Balance”-to be received by Planet Home on or before January 25, 2020. See O'Connell TRO Decl., Exh. 4, at 1. The Default Notice further stated that if payment was not timely received, Planet Home “may accelerate the maturity date of your note” and the “entire principal balance may be declared due without further demand and the noteholder may proceed to foreclosure and sell the property in accordance with the terms” of the Loan and applicable law. Id. The Default Notice additionally stated that Mr. Tashjian had “the right to assert in the foreclosure proceeding or to bring a court action to assert, the non-existence of a default or any other defense you may have to acceleration and sale.” Id. at 2.
Although the parties and the original declaration to which this exhibit is attached all state that the 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.
On April 2, 2020, Planet Home sent Mr. Tashjian a letter requesting that Mr. Tashjian contact Planet Home “to assess [Mr. Tashjian's] financial situation and explore potential options that may be available to you to avoid foreclosure.” Id. at Exh. 5. Mr. Tashjian asserts that:
[o]n or around Spring of 2020, [he], through . . . counsel, demanded that [Planet Home] correct the error of claiming allegedly accrued principal[] [and] accept [his] correct and proper monthly loan payments, and notified [Planet Home] to cease any foreclosure activities based upon its error in determining the amounts due under the Loan, and demanded that it cease and/or immediately correct reporting any derogatory or incorrect default reporting against [him] to credit reporting agencies.Tashjian Decl. ¶ 18.
On May 18, 2020, Planet Home, as the Loan servicer for Sprout Mortgage, recorded a Substitution of Trustee naming Prestige Default as the substituted trustee for the Deed of Trust. See Iannucci Decl., Exh. 14, ECF No 222-17. Mr. Tashjian has stated he has no reason to dispute the authenticity of this document. See Tashjian Dep. Tr. 247:12-23. On May 21, 2020, Planet Home recorded a Notice of Default on the Loan. See Tashjian Decl. ¶ 7.
On August 11, 2020, an attorney purporting to act on behalf of Mr. Tashjian sent a letter to Planet Home seeking information and documentation on Planet Home's “attempt to claim a notice of default or a right to foreclose.” FAC, Exh. C, at 4-5. Planet Home responded the next day, stating that it was “reviewing the loan to ensure a thorough response.” Id. at 10.
A signed Notice of Trustee's Sale of the Property was recorded on September 10, 2020 in Santa Clara County. See Iannucci Decl., Exh. 5, ECF No. 222-8. The Notice of Trustee's Sale indicated a sale date of October 26, 2020. See id. Mr. Tashjian asserts that a Notice of Trustee's Sale for the Property with a sale date of October 26, 2020 was “tacked to [his] door” at the Property on September 14, 2020, but that the Notice was unsigned. See Tashjian Decl. ¶ 7. Mr. Tashjian further asserts that he received an unsigned Notice of Sale on November 4, 2020, and that at some point in time, the Property was scheduled to be sold at a foreclosure auction on November 9, 2020. See id. ¶¶ 2, 8.
4. Enjoinment of Foreclosure
As discussed below, see infra, at Part I(B), Mr. Tashjian first sued Planet Home in connection with the Loan and the Property on October 9, 2020 in state court in an action titled Vahe Tashjian v. Planet Home Lending, LLC, et al. (Superior Court of California, County of Santa Clara, No. 20-cv-371971). On November 13, 2020, Mr. Tashjian filed a motion in that state court action seeking a preliminary injunction enjoining Planet Home, Sprout Mortgage, and Prestige from foreclosing on or taking any other action with respect to the Property. See Iannucci Decl. ¶ 4. The state court granted the injunction on December 9, 2020. See id. Planet Home then canceled an ongoing foreclosure proceeding on the Property. See id. Although this Court later granted Planet Home's motion to dissolve the state court's preliminary injunction, see ECF No. 118, Planet Home has not foreclosed on the Property to date. See id. Mr. Tashjian continues to reside at the Property. See Tashjian Decl. ¶ 27; Tashjian Dep. Tr. 227:23-24.
B. Procedural History
1. Filing of Suits, Removal to Federal Court, Relation, and Consolidation
This consolidated action began on March 11, 2019, when Mr. Tashjian brought a suit in state court titled Vahe Tashjian v. Invictus Residential Pooler - 2A, et al. (Superior Court of California, County of Santa Clara, No. 19-cv-344317), relating to the Loan and the Property. The action was removed to this Court on March 25, 2019. See Not. Of Removal, ECF No. 1. Planet Home, Sprout Mortgage, and Prestige were not named as defendants in that action. See Compl., ECF No. 1. Rather, Mr. Tashjian sued Planet Home, Sprout Mortgage, and Prestige on October 9, 2020 in state court in the Vahe Tashjian v. Planet Home Lending, LLC action. See Compl., ECF No. 3-1 (N.D. Cal., No. 20-cv-08816-EJD). Mr. Tashjian then filed the FAC against Planet Home, Sprout Mortgage, and Prestige in state court on November 13, 2020, i.e., the same day he filed the motion for preliminary injunction. See FAC. That state court action was subsequently removed to federal court on December 11, 2020. See Not. of Removal, ECF No. 3 (N.D. Cal., No. 20-cv-08816-EJD). Planet Home answered the FAC on December 18, 2020. See Answer, ECF No. 9 (N.D. Cal., No. 20-cv-08816-EJD).
The Court related the Invictus and Planet Home suits brought by Mr. Tashjian on January 6, 2021, and consolidated them on March 29, 2021. See ECF Nos. 75, 84. Mr. Tashjian has not filed a consolidated amended complaint; accordingly, the operative complaint against Planet Home is the FAC filed in the Planet Home state court action prior to removal to federal court.
2. Status of Sprout Mortgage and Prestige
The two other defendants named in the Planet Home action were Sprout Mortgage and Prestige. See FAC. On December 1, 2021, pursuant to a stipulation submitted by Prestige and Mr. Tashjian, the Court issued an order holding that (1) the FAC names Prestige as a defendant based upon its “limited role handling non-judicial foreclosure . . . and solely for the purpose of having all necessary parties before the Court”; (2) that the FAC does not allege any misconduct by Prestige; (3) that Prestige is not liable to Mr. Tashjian for any monetary damages, attorney fees, or costs; and (4) that Prestige was not required to participate further in this action-except by responding to any discovery as a non-party-although it would be bound by any Court order relating to the relevant Deed of Trust on the Property. See ECF No. 109. On July 6, 2023, the Clerk of Court entered default as to Sprout Mortgage. See ECF No. 201.
3. The Instant Motions
On October 30, 2023, Planet Home moved for summary judgment of all claims in the FAC. See MSJ. Planet Home also filed a concurrent Daubert motion to exclude the reports and testimony of Mr. Tashjian's damages expert, Douglas A. Minor. See Daubert Mot. Both motions were fully briefed on December 4, 2023. The Court took both motions under submission. See ECF Nos. 239, 241.
The Court first addresses the Daubert motion and then reviews other evidentiary objections before evaluating Planet Home's motion for summary judgment.
II. MOTION TO EXCLUDE EXPERT REPORTS AND TESTIMONY
Planet Home moves to exclude the reports and testimony of Douglas A. Minor. See Daubert Mot. Mr. Tashjian opposes the motion, arguing that Mr. Minor's opinions on credit impact and damages are admissible. See Daubert Opp'n. Because the Court finds that none of Mr. Tashjian's claims survive summary judgment-a result independent of the contents of Mr. Minor's reports-it will deny as moot Planet Home's motion to exclude Mr. Minor's reports and testimony.
III. EVIDENTIARY OBJECTIONS
Mr. Tashjian makes no objections to the evidence presented by Planet Home. See generally MSJ Opp'n. Planet Home objects to two items of evidence submitted in support of Mr. Tashjian's opposition to the summary judgment motion: (1) a letter dated January 22, 2019 from Brendan J. Dooley, Esq. to the then-servicer of the Loan, Shellpoint Mortgage Servicing (the “Letter”); and (2) Mr. Tashjian's declaration to which the letter is attached (the “Tashjian Declaration”). See MSJ Reply 11-13. Because the Court finds that none of Mr. Tashjian's claims survive summary judgment, even considering these items of evidence, it DENIES AS MOOT Planet Home's evidentiary objections.
IV. MOTION FOR SUMMARY JUDGMENT
A. Legal Standard
Summary judgment is proper where the pleadings and evidence demonstrate “there is no genuine issue as to any material fact and . . . the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Id. at 323. If the moving party makes such a showing, the burden then shifts to the nonmoving party to produce evidence supporting its claims or defenses. Nissan Fire & Marine Ins. Co. v. Fritz Cos., Inc., 210 F.3d 1099, 1103 (9th Cir. 2000). In evaluating evidence at the summary judgment stage, the Court “does not assess credibility or weigh the evidence, but simply determines whether there is a genuine factual issue for trial.” House v. Bell, 547 U.S. 518, 559-60 (2006). A fact is “material” if it “might affect the outcome of the suit under the governing law,” and a “genuine” dispute of material fact exists if there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment must be denied if “a fair-minded jury could return a verdict for the [non-moving party] on the evidence presented.” Id. at 252.
B. Discussion
Mr. Tashjian brings 10 claims against Planet Home: (1) breach of written contract; (2) breach of the covenant of good faith and fair dealing; (3) unfair business practices in violation of California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17,200, et seq.; (4) violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq.; (5) intentional misrepresentation; (6) negligent misrepresentation; (7) violation of the California Homeowner Bill of Rights (“HBOR”), Cal. Civ. Code §§ 2923.5, 2924.9, and 2924.17; (8) violation of the HBOR, Cal. Civ. Code § 2923.55; (9) wrongful foreclosure; and (10) injunctive relief. See FAC ¶¶ 89242. Planet Home moves for summary judgment on each of the ten claims. See generally MSJ. The Court addresses these claims in turn.
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. Claim 1: Breach of Written Contract
Mr. Tashjian alleges that Planet Home breached the written terms of the Loan by demanding incorrect payments under Loan, failing to accept correct monthly, wrongfully initiating foreclosure proceedings on the Property, incorrectly reporting to credit reporting agencies that Mr. Tashjian had defaulted on the Loan, and failing to ensure that the credit reporting agencies' records were corrected. See FAC ¶¶ 89-92. Under California law, a breach of contract claim requires “(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 821 (2011). Planet Home argues that Mr. Tashjian cannot prove the first three elements of a breach of contract claim. See MSJ 7-12. Mr. Tashjian does not address this claim in his opposition papers. See generally MSJ Opp'n. Planet Home argues that Mr. Tashjian has thereby abandoned this claim and the seven other claims not addressed in the opposition, see MSJ Reply 1-2, but Mr. Tashjian indicates that he challenges the summary judgment motion in its entirety, see MSJ Opp'n 1, 13. As such, the Court will review each claim under the standard summary judgment lens and evaluate whether there exists a material dispute of fact as to any element of the claim based on the evidence submitted by the parties.
As noted by Planet Home, none of the Loan Documents-i.e., the Loan, the Deed of Trust, the Note, the January 30 Letter, and the Modification Agreement-name Planet Home as a party. See FAC Exh. A; Mod. Agr. Further, although Mr. Tashjian appended two items of correspondence between his counsel and Planet Home-a letter and a response-neither document indicates anything other than Planet Home's role as a servicer on the Loan. See Tashjian Decl., Exh. B, at 4-5, 10-11.
“The general rule in California is that ‘only a signatory to a contract may be liable for any breach.'” St. Vincent Med. Ctr. v. Mega Life & Health Ins. Co., 585 Fed.Appx. 417, 419 (9th Cir. 2014) (quoting Clemens v. Am. Warranty Corp., 193 Cal.App.3d 444, 452 (1987)); see also, e.g., Tri-ContinentInt's Corp. v. Paris Sav. & Loan Ass'n, 12 Cal.App.4th 1354, 1359 (1993) (“TriContinent cannot assert a claim for breach of contract against one who is not a party to the contract.”). As such, Mr. Tashjian may not bring a claim against Planet Home for breach of contract based on the Loan Documents. See, e.g., Howard v. First Horizon Home Loan Corp., No. 12-cv-05735, 2013 WL 3146792, at *2 (N.D. Cal. June 18, 2013) (“Under California law, a mortgagor cannot bring a claim for breach of contract against a servicer premised on the deed of trust because a loan servicer is not a party to the deed of trust.”) (citing cases); Lomboy v. SCME Mortg. Bankers, No. 09-cv-1160, 2009 WL 1457738, at *5 (N.D. Cal. May 26, 2009) (dismissing borrower's California breach of contract claim against loan servicer after rejecting argument that servicing fee implied existence of contract between borrower and loan servicer); Conder v. Home Savs. of Am., 680 F.Supp.2d 1168, 1174 (C.D. Cal. 2010) (“The fact that [Loan Servicer] entered into a contract with [Lender] to service Plaintiff's loan does not create contractual privity between [Loan Servicer] and Plaintiff.”) (citing Lomboy, 2009 WL 1457738, at *5).
At least two California appellate courts have approved of this line of reasoning, albeit in unpublished decisions. See Brooks v. Quantum Servicing Corp., No. __, 2012 WL 1898941, at *3 (Cal.Ct.App. May 25, 2012) (“[F]ederal courts applying California law have brusquely dismissed the notion that loan servicers, as agents for the holder of the loan, are parties to deeds of trust or the mortgage, or that a loan servicer is in privity with the holder of the loan....No contrary conclusion is required here.”) (citations omitted); Bundick v. Penny Mac Loan Servs. LLC, No. C079577, 2021 WL 2309954, at *22 (Cal.Ct.App. June 7, 2021) (finding no contractual relationship between borrower and loan servicer after noting that “we have not readily found California appellate cases directly on point, [but] those federal courts applying California law that have considered the issue have concluded that, under California law, a loan servicer is not party to a deed of trust”).
Accordingly, in light of the Loan Documents supplied by Planet Home, the lack of opposition by Mr. Tashjian, and the Court's analysis of the governing law, the Court finds that there is no genuine dispute of fact that no contract existed between Mr. Tashjian and Planet Home. The Court will grant summary judgment on Mr. Tashjian's breach of contract claim.
2. Claim 2: Breach of Implied Covenant of Good Faith and Fair Dealing
Mr. Tashjian alleges that Planet Home breached the implied covenant of good faith and fair dealing. See FAC ¶¶ 89-92. Planet Home argues that summary judgment must be granted on this claim as a matter of law, see MSJ 12-13, and Mr. Tashjian does not address Planet Home's arguments, see generally MSJ Opp'n. Because the Court has found that no contract exists between Mr. Tashjian and Planet Home, see supra, at Part IV(B)(1), the claim for breach of the implied covenant of good faith and fair dealing cannot survive. See, e.g., Rosal v. First Fed. Bank of Cal., 671 F.Supp.2d 1111, 1129 (N.D. Cal. 2009) (“To establish a breach of an implied covenant of good faith and fair dealing, a plaintiff must establish the existence of a contractual obligation, along with conduct that frustrates the other party's rights to benefit from the contract.”) (citing Racine & Laramie, Ltd. v. Dep't of Parks & Rec., 11 Cal.App.4th 1026, 1031 (1992)). The Court will therefore grant summary judgment on this claim.
3. Claim 3: UCL Violation
“The UCL proscribes three varieties of competition: ‘acts or practices which are unlawful, or unfair, or fraudulent.'” Henard v. HSBC Bank USA, N.A., No. 5:17-cv-01222, 2017 WL 4809750, at *7 (N.D. Cal. Oct. 25, 2017) (quoting Khoury v. Maly's of California, Inc., 14 Cal.App.4th 612, 618-19 (1993)). Mr. Tashjian's third claim alleges that Planet Home violated each of the unfair, unlawful, and fraudulent prongs of the UCL. See FAC ¶¶ 100-122.
For purposes of the UCL, “unlawful” business practices are those that are “forbidden by law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made.” Saunders v. Super. Ct., 27 Cal.App.4th 832, 838 (1999). “Unfair” practices constitute “conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” Cal-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 187 (1999); see also Ticconi v. Blue Shield of Cal. Life & Health Ins. Co., 160 Cal.App.4th 528, 539 (2008) (“An ‘unfair' business practice occurs when that practice ‘offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.”) (citation and internal alterations omitted). Lastly, a “fraudulent” business practice “is one which is likely to deceive the public.” McKell v. Wash. Mut., Inc., 142 Cal.App.4th 1457, 1471 (2006) (citations omitted). The Court addresses each of the three prongs in turn.
a. Unlawful Conduct Under the UCL
Mr. Tashjian's first UCL claim alleges that Planet Home engaged in unlawful business practices by “violat[ing] various state and federal laws, including but not limited to those alleged herein,” most concretely by “providing false or misleading information” and “failing to honor proper state law mandated foreclosure proceedings.” FAC ¶ 104; see also id. ¶ 103. A claim under the “unlawful” prong of the UCL “hinges upon whether a plaintiff can formulate a claim under the predicate law.” Eidmann v. Walgreen Co., 522 F.Supp.3d 634, 647 (N.D. Cal. 2021) (citing Hadley v. Kellogg Sales Co., 243 F.Supp.3d 1074, 1094 (N.D. Cal. 2017)). Planet Home argues that Mr. Tashjian is unable to identify any specific act that violated any particular law, and that to the extent this claim is premised on a violation of the FCRA, the HBOR, or a wrongful foreclosure, he is unable to establish the predicate violations. See MSJ 13-14. Mr. Tashjian argues that his claim is “tethered to Defendant's violation of [Cal.] Civ[.] Code § 2924.17.” MSJ Opp'n 12.
Because the Court finds that Mr. Tashjian is unable to state a claim for a violation of California Civil Code § 2924.17, see infra, at Part IV(B)(6), and that none of his other claims survive, this UCL claim must also fail for lack of a predicate violation. See Eidmann, 522 F.Supp. at 647 (“Thus, if the plaintiff cannot state a claim under the predicate law[,] the UCL claim also fails.”) (internal alterations and citation omitted). The Court will grant summary judgment on this claim.
b. Unfair Conduct Under the UCL
Mr. Tashjian alleges that Planet Home violated the UCL's prohibition of unfair business practices to the extent Planet Home (1) failed to properly notify Mr. Tashjian of his rights to dispute an alleged default per the signed Deed of Trust, California law, and California public policy,” FAC ¶ 107; (2) failed to permit him to cure the alleged default in a timely manner, see id.; (3) failed to notify and allow Mr. Tashjian to seek legally permissible alternatives to foreclosure, id.; (4) subjected Mr. Tashjian to wrongful foreclosure, id.; (5) “failed to record Substitutions of Trustee, not only for Plaintiff, but for a large part of the general public, as required by the Deed of Trust, California law, and California public policy,” id. ¶ 108; (6) failed to notify Mr. Tashjian of the acceleration of his debt, id. ¶ 109; and (7) unfairly held itself out as having proper authority to file publicly recorded documents and foreclose on the Property even though it was not a “lawful agent[], beneficiar[y], or trustee[] for the true and legal owner of the [N]ote,” id. ¶ 110. Planet Home argues that the undisputed facts require summary judgment on this claim. See MSJ 14-15. Mr. Tashjian counters that he rescinded the Modification Agreement on January 22, 2019, based on a mutual mistake, so that Planet Home's foreclosure enforcement based on a purported default under the terms of the Modification Agreement constituted an unfair business practice. See MSJ Opp'n 10-11.
i. Challenged Practices (1), (2), (3), & (6)
The facts before the Court are as follows. The prior loan servicer informed Mr. Tashjian of the transfer to Planet Home in a letter dated October 23, 2019. See Iannucci Decl., Exh. 10. Mr. Tashjian states that Planet Home notified him of its status as the new Loan servicer in December 2019. See Tashjian Decl. ¶ 14. Mr. Tashjian does not dispute that Planet Home is the Loan servicer. See FAC ¶ 12; Tashjian Decl. ¶ 5. On December 26, 2019, Planet Home sent Mr. Tashjian a document titled “Notice of Default and Intent to Accelerate” (the “Default Notice”). See O'Connell TRO Decl., Exh. 4; Tashjian Decl. ¶ 17. The Default Notice stated that the Loan was in default and due from July 1, 2019, and that curing the default required a payment of $292,610.49, to be received by Planet Home on or before January 25, 2020. See O'Connell TRO Decl., Exh. 4, at 1. The Default Notice further stated that if payment was not timely received, Planet Home “may accelerate the maturity date of your note” and the “entire principal balance may be declared due without further demand and the noteholder may proceed to foreclosure and sell the property in accordance with the terms” of the Loan and applicable law. Id. The Default Notice additionally stated that Mr. Tashjian had “the right to assert in the foreclosure proceeding or to bring a court action to assert, the non-existence of a default or any other defense you may have to acceleration and sale.” Id. at 2. Mr. Tashjian does not submit any contradictory evidence. As such, the undisputed facts foreclose Mr. Tashjian's claim for unfair conduct based on the first, second, third, and sixth practices listed above.
ii. Challenged Practices (4), (5), & (7)
The evidence further shows that the Loan was secured by a Deed of Trust for the Property. See Tashjian Decl. ¶ 3. Pursuant to the Modification Agreement, Mr. Tashjian was responsible for monthly payments consisting of both the interest-only payments and an “Estimated Monthly Escrow Payment Amount.” See Mod. Agr. 2. In executing the Modification Agreement, Mr. Tashjian agreed, “I will be in default if I do not comply with the terms of the Loan Documents, as modified by this [Modification] Agreement.” Id. Although Mr. Tashjian argues that Planet Home unfairly foreclosed on the Property because the Modification Agreement had been rescinded due to mutual mistake, his position fails for multiple reasons. First, the FAC does not allege the rescission as a theory of liability for a violation of the UCL. See FAC ¶¶ 105-110. In fact, although Mr. Tashjian does allege that the Modification Agreement was rescinded, see id. ¶¶ 3840 & Exh. B, there is no allegation anywhere in the FAC as to the theory of mutual mistake. A plaintiff generally may not raise a new theory of liability for the first time in opposition to summary judgment. See, e.g., Lavin v. United Techs. Corp., No. 13-cv-09384, 2015 WL 847392, at *20 (C.D. Cal. Feb. 23, 2015) (citing Patel v. City of Long Beach, 564 Fed.Appx. 881, 882 (9th Cir. 2014)). Further, even if the Court considers the rescission allegations and Exhibit B to the FAC-i.e., the January 22, 2019 letter-to constitute a sufficient basis for the present argument, and assuming the letter accomplished a valid rescission, Mr. Tashjian subsequently made seven payments in May 2019 pursuant to the terms of the Modification Agreement. See O'Connell TRO Decl. ¶¶ 6-8. Such conduct ratified the Modification Agreement. See Monfort v. Adomani, No. 18-CV-05211, 2019 WL 6311378, at *6 (N.D. Cal. Nov. 25, 2019) (“Ratification occurs when the [] party, ‘with full knowledge of the material facts permitting rescission, has engaged in some unequivocal conduct giving rise to a reasonable inference that he or she intended the conduct to amount to a ratification.'”) (citation omitted).
The evidence additionally shows that the payments demanded by Planet Home only sought interest and escrow fees, i.e., Planet Home did not demand payment of any portion of the principal amount of the Loan. See Tashjian Dep. Tr. 257:10-258:17; O'Connell TRO Decl. ¶ 12 & Exh. 3. The interest payment on the loan was $17,226.56, and the escrow fee was $5,008.54. See O'Connell TRO Decl., Exh. 3. Mr. Tashjian tendered a payment of $17,226.56, which was rejected. Tashjian Decl. ¶ 16. As such, Mr. Tashjian has not made any payments on the Loan since May 31, 2019, including since Planet Home became the Loan servicer in November 2019. See Iannucci Decl., Exh. 1-A.
Planet Home recorded a Substitution of Trustee on May 18, 2020, see Iannucci Decl., Exh. 14, and Mr. Tashjian does not dispute its authenticity, see Tashjian Dep. Tr. 247:12-23. Planet Home then recorded a Notice of Default on the Loan on May 21, 2020, see Tashjian Decl. ¶ 7, and recorded a signed Notice of Trustee's sale on September 10, 2020, see Iannucci Decl., Exh. 5.
Based on the foregoing facts, the Court finds there is no genuine dispute of fact that Planet Home did not engage in the fourth, fifth, and seventh unfair practices described above.
iii. Conclusion
In sum, Mr. Tashjian has provided no evidence that Planet Home acted in a manner consistent with the concept of unfairness under the UCL, i.e., there is no evidence of immoral, unscrupulous, or otherwise unethical behavior on the part of Planet Home. Accordingly, the Court will grant summary judgment on this claim.
c. Fraudulent Conduct Under the UCL
Mr. Tashjian also alleges a violation of the “fraudulent” prong of the UCL, based on allegations that Planet Home's actions-such as “making material misrepresentations or omissions, knowingly filing false instruments for the general public to view . . . [and/or] without requiring declarations, failing to properly notify Plaintiff of his rights to dispute alleged defaults and wrongful foreclosure[,] . . . unlawfully fil[ing] public documents . . . without the authority to do so,” FAC ¶¶ 112-113-were undertaken as part of a fraudulent scheme to attempt to “sell property in order to profit,” id. ¶ 114. He further alleges that Planet Home's actions were “likely to not only deceive Plaintiff, but [were] likely to deceive the public in general.” Id. ¶ 112. Planet Home argues that Mr. Tashjian does not identify any specific misrepresentation by Planet Home, and that no evidence supports this claim. See MSJ 15-16. Mr. Tashjian does not address these arguments. See generally MSJ Opp'n.
As described in more detail above, see supra, at Part IV(B)(3)(b), the evidence before the Court indicates that Planet Home properly notified Mr. Tashjian of his rights and that Mr. Tashjian does not dispute Planet Home's status as the Loan servicer or the authenticity of the documents recorded by Planet Home with respect to the Property. Mr. Tashjian has provided no evidence to the contrary. Therefore, the Court will grant summary judgment on this claim.
4. Claim 4: FCRA Violation
Mr. Tashjian's fourth claim alleges that Planet Home violated the FCRA by failing to conduct a reasonable investigation into the accuracy of the payments due under the Loan Documents and thus reporting that the Loan was in default, and by failing to update incomplete or inaccurate information it had previously reported to credit reporting agencies. See FAC ¶¶ 123132. “To state a claim under the FCRA, a plaintiff must show that: (1) he found an inaccuracy in his credit report; (2) he notified a credit reporting agency; (3) the credit reporting agency notified the furnisher of the information about the dispute; and (4) the furnisher failed to investigate the inaccuracies or otherwise failed to comply with the requirements of 15 U.S.C. § 1681s-2(b)(1)(A)-(E).” Biggs v. Experian Info. Sols., Inc., 209 F.Supp.3d 1142, 1144 (N.D. Cal. 2016) (citation omitted). An FCRA violation may be either negligent or willful. See Moran v. Screening Pros, LLC, 25 F.4th 722, 728 (9th Cir. 2022) (citation omitted). A negligent violation involves a defendant's objectively unreasonable interpretation of the statute, and a willful violation requires either a knowing or reckless violation of a statutory standard. See id. (citations omitted). Planet Home argues that Mr. Tashjian's FCRA claim “fails because (1) he has no evidence from which a trier of fact could reasonably infer that Planet Home committed a willful or negligent violation of the FCRA, and (2) his alleged damages are unrecoverable as a matter of law.” MSJ 18; see id. at 16-22. Mr. Tashjian does not address Planet Home's arguments as to this claim.
The undisputed evidence submitted by Planet Home establishes that Mr. Tashjian made seven payments pursuant to the terms of the Modification Agreement, after which he failed to make any payments on the Loan. See O'Connell TRO Decl. ¶¶ 6-10. Planet Home notified Mr. Tashjian of his status of default in December 2019, and Mr. Tashjian did not cure the default. See id. ¶¶ 10-13; Tashjian Dep. Tr. 254:15-16. In August 2020, Mr. Tashjian, through counsel, sought documentation from Planet Home regarding its right to attempt to enforce a default or foreclosure, and Planet Home responded the next day stating it was reviewing its documents to make a thorough response. See FAC, Exh. C, at 4-5, 10. To the extent Mr. Tashjian's declaration states otherwise, see, e.g., Tashjian Decl. ¶ 10, it consists of legal conclusions, contradicts his sworn testimony, and provides no supporting evidence, and thus does not create a genuine dispute of material fact. See Nilsson v. City of Mesa, 503 F.3d 947, 952 n.2 (9th Cir. 2007) (“[A] conclusory, self-serving affidavit, lacking detailed facts and any supporting evidence, is insufficient to create a genuine issue of material fact.”) (citation omitted); Monfort, 2019 WL 6311378, at *7 (“Courts need not consider a new affidavit that contradicts sworn testimony or interrogatory answers.”) (citation omitted).
The Court accordingly finds that the undisputed facts show that Planet Home's report of Mr. Tashjian's default was accurate, and that no evidence indicates some other violation of the FCRA. The Court therefore need not and does not address Planet Home's arguments as to Mr. Tashjian's lack of damages, see MSJ 20-22, and will grant summary judgment on this claim.
5. Claims 5 & 6: Intentional and Negligent Misrepresentation
Mr. Tashjian's fifth claim alleges that Planet Home intentionally misrepresented that it was a valid servicer of the Loan and valid authority to foreclose on the Property. See FAC ¶¶ 139140; see generally id. ¶¶ 133-160. His sixth claim alleges that Planet Home made unspecified negligent misrepresentations “more fully set forth in the First Cause of Action [for breach of contract]” and related to the “unlawful acceleration of debt instrument.” See id. ¶¶ 163, 168; see generally id. ¶¶ 161-174. Planet Home argues that these claims fail because no link exists between Planet Home's attempted foreclosure on the Property and any alleged false representation. See MSJ 22-23. Mr. Tashjian does not address these arguments.
As noted above, see supra, at Parts IV(B)(1), IV(B)(3), the undisputed evidence indicates that Mr. Tashjian does not have a breach of contract claim against Planet Home, and that Planet Home is the valid Loan servicer and followed proper procedures in notifying Mr. Tashjian of his default and subsequently attempting to foreclose on the Property. Mr. Tashjian has provided no evidence creating a genuine issue of material fact suggesting any false representation made by Planet Home. Accordingly, the Court will grant summary judgment on the claims for intentional and negligent misrepresentation.
6. Claims 7-8: HBOR Violations (Cal. Civ. Code §§ 2923.5, 2923.55, 2924.9, & 2924.17)
Mr. Tashjian's seventh claim alleges that Planet Home violated the HBOR as to California Civil Code §§ 2923.5, 2924.9, and 2924.17, and his eight claim alleges an HBOR violation as to California Civil Code § 2923.55. See FAC ¶¶ 175-225. As relevant here, the four challenged sections of the HBOR require servicers, prior to a foreclosure, to timely communicate with the homeowner both prior and subsequent to recording a notice of default, see Cal. Civil Code §§ 2923.5, 2923.55, 2924.9, and to ensure the accuracy and completeness of all foreclosure documents, see Cal. Civil Code § 2924.17. Planet Home argues that no evidence supports Mr. Tashjian's claims that it did not comply with the HBOR, including to the extent that the theory of liability is based on the validity of Planet Home's status as the Loan servicer. See MSJ 24. Planet Home further argues that Mr. Tashjian's claims under the HBOR are effectively moot because Planet Home is statutorily barred from using the September 2020 Notice of Default as the basis for a foreclosure, so that any alleged flaws with the relevant notices are inconsequential. See Id. (citing Cal. Civ. Code § 2924g(c)(2)). Mr. Tashjian responds only as to § 2924.17, and argues that Planet Home's foreclosure notice documents were inaccurate because they were based on a purported default under the Modification Agreement, which Mr. Tashjian argues was rescinded. See MSJ Opp'n 12-13.
Mr. Tashjian's sole argument fails because the Court has found his May 2019 payments ratified the Modification Agreement. See supra, at Part IV(B)(3)(b)(ii). In considering the claimed HBOR violations as a whole, the undisputed evidence before the Court indicates that Planet Home was the valid servicer of the Loan and acted in accordance with the requirements of the HBOR. Mr. Tashjian has provided no evidence to the contrary except for his declaration, which, as the Court has noted, does not create a genuine dispute of fact because it is full of legal conclusions, contradicts Mr. Tashjian's sworn testimony and the documentary evidence before the Court, and is unsupported by any other documentation. See supra, at Part IV(B)(4) (citing Monfort, 2019 WL 6311378, at *7). Accordingly, the Court need not reach Planet Home's mootness argument, and will grant summary judgment on these claims.
7. Claim 9: Wrongful Foreclosure
Mr. Tashjian's ninth claim alleges wrongful foreclosure based on the alleged falsity of statements in the recorded instruments related to the attempted foreclosure of the Property. This claim is not yet ripe, as a wrongful foreclosure claim cannot be asserted prior to a completed trustee's sale. See Henard, 2017 WL 4809750, at *3 (citing cases); see also, e.g., Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal.App.4th 808, 814 (2016) (“California courts do not allow such preemptive suits [to prevent a foreclosure sale] because they would result in the impermissible interjection of the courts into a nonjudicial scheme enacted by the California Legislature.”) (internal quotation marks and citation omitted). Here, the undisputed facts show that the Property has not been sold and that Mr. Tashjian continues to reside therein. See Iannucci Decl. ¶ 4; Tashjian Dep. Tr. 227:23-228:3, 254:4-16. The Court will therefore grant summary judgment on this claim.
8. Claim 10: Injunctive Relief
Lastly, Mr. Tashjian brings a claim for injunctive relief to preliminarily and permanently enjoin Planet Home from foreclosing on or taking any other action with respect to the Property. See FAC ¶¶ 238-242. California law does not permit a standalone claim for injunctive relief. See, e.g., Ivanoff v. Bank of Am., N.A., 9 Cal.App. 5th 719, 734 (2017) (“Injunctive relief is a remedy, not a cause of action.”). Accordingly, Mr. Tashjian's claim for injunctive relief must fail.
V. ORDER
For the foregoing reasons, the Court hereby ORDERS as follows:
1. Planet Home's motion for summary judgment is GRANTED IN FULL;
2. Planet Home's motion to exclude the expert reports and testimony of Douglas A. Minor is DENIED AS MOOT;
3. Planet Home's evidentiary objections are DENIED AS MOOT; and
4. The status conference set for April 4, 2024 regarding trial scheduling for Mr. Tashjian's case against Planet Home is TERMINATED AS MOOT.
IT IS SO ORDERED.