Flores v. EMC Mortgage Co. (997 F. Supp. 2d 1088, 2014)

ORDER TO DISMISS CERTAIN DEFENDANTS AND JUDGMENT THEREON (Doc. 5.)

LAWRENCE J. O’NEILL, District Judge.

PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

Judges in the Eastern District of California carry the heaviest caseload in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. This Court must best manage its voluminous caseload without incurring needless delay and misuse of its limited resources. As such, this Court cannot address all arguments, evidence and matters raised by parties and addresses only the arguments, evidence and matters necessary to reach the decision in this order given the shortage of district judges and staff. The parties and counsel are encouraged to contact United States Senators Dianne Feinstein and Barbara Boxer to address this Court’s inability to accommodate the parties and this action.

INTRODUCTION

Defendants Bank of New York Mellon (“Mellon”), National Default Servicing (“NDS”) and Mortgage Electronic Registration Systems Inc. (“MERS”) seek to dismiss as meritless and legally barred plaintiffs Vincent Elijah Flores (“Mr. Flores”) and Joe Flores’ (collectively “plaintiffs’ ”) wrongful foreclosure and related claims arising from Mr. Flores’ loan default and foreclosure of his Visalia, California property (“property”). Plaintiffs respond that invalid assignment of Mr. Flores’ loan documents entitles plaintiffs to pursue their claims. This Court considered defendants’ F.R.Civ.P. 12(b)(6) motion to dismiss on the record and VACATES the February 20, 2014 hearing, pursuant to Local Rule 230(g). This Court construes plaintiffs’ action as an attempt to thwart, delay and complicate property foreclosure and, for further reasons discussed below, DISMISSES this action against defendants.

BACKGROUND

Mr. Flores’ Property Loan And Default

. Mr. Flores obtained from BSM Financial, L.P. (“BSM Financial”) a $208,000 loan secured by a deed of trust (“DOT”) record August 19, 2005 against the property. The DOT identifies Mr. Flores as borrower, BSM Financial as lender, First American Title Company as trustee, and MERS as beneficiary. By an assignment of deed of trust recorded on May 19, 2010, MERS assigned to Mellon all beneficial interest under the DOT.

After Mr. Flores defaulted on his loan, a notice of default and election to sell under deed of trust was recorded on June 19, 2012. On September 24, 2012, a substitution of trustee was recorded to substitute NDS as DOT trustee and a notice of trustee’s sale of the property was recorded. On October 29, 2012, a Trustee’s Deed Upon Sale was recorded to grant the property to Mellon after an October 17, 2012 auction.

Plaintiffs’ Claims

On November 4, 2013, prior to removal to this Court, plaintiffs filed their 86-page complaint (“complaint”), excluding exhibits, to purport to allege “unlawful conduct” and “illegal practices” committed by defendants and others. The complaint appears to take issue with assignment of the DOT to Mellon and in turn the trustee’s sale to Mellon. The complaint appears to assert that DOT assignment violated a consent judgment (“consent judgment”) entered in a U.S. District Court action in the District of Columbia and that Mr. Flores is a third-party beneficiary to the consent judgment. The complaint further appears to allege that Mellon violated a pooling and servicing agreejnent (“PSA”) because Mellon lacks possession of Mr. Flores’ promissory note and DOT and/or failed to securitized the promissory note. The complaint concludes that the “Property was wrongfully was [sic] sold at a non-judicial foreclosure auction” and alleges federal and California statutory claims and common law claims which will be addressed below.

DISCUSSION

F.R.Civ.P. 12(b)(6) Motion To Dismiss Standards

A F.R.Civ.P. 12(b)(6) dismissal is proper where there is either a “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1990); Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7th Cir.1995). A F.R.Civ.P. 12(b)(6) motion “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001).

In addressing dismissal, a court must: (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir.1996). Nonetheless, a court is not required “to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Sciences Securities Litig., 536 F.3d 1049, 1055 (9th Cir.2008) (citation omitted). A court “need not assume the truth of legal conclusions cast in the form of factual allegations,” U.S. ex rel Chunie v. Ringrose, 788 F.2d 638, 643, n. 2 (9th Cir.1986), and must not “assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated ... laws in ways that have not been alleged.” Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). A court need not permit an attempt to amend if “it is clear that the complaint could not be saved by an amendment.” Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir.2005).

A plaintiff is obliged “to provide the ‘grounds’ of his ‘entitlement to relief [which] requires more than labels and con-elusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Alt. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (internal citations omitted). Moreover, a court “will dismiss any claim that, even when construed in the light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action.” Student Loan Marketing Ass’n v. Hanes, 181 F.R.D. 629, 634 (S.D.Cal.1998). In practice, a complaint “must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory.” Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984)).

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), the U.S. Supreme Court explained:

... a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” ... A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.... The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. (Citations omitted.)

After discussing Iqbal, the Ninth Circuit summarized: “In sum, for a complaint to survive [dismissal], the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir.2009) (quoting Iqbal, 556 U.S. 662, 129 S.Ct. at 1949).

The U.S. Supreme Court applies a “two-prong approach” to address dismissal:

First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.... Second, only a complaint that states a plausible claim for relief survives a motion to dismiss .... Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.... But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not “show[n]”-“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Iqbal, 556 U.S. 662, 129 S.Ct. at 1949-1950.

Moreover, a court may consider exhibits submitted with the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.1987); Van Winkle v. Allstate Ins. Co., 290 F.Supp.2d 1158, 1162, n. 2 (C.D.Cal.2003). A “court may consider evidence on which the complaint ‘necessarily relies’ if: (1) the complaint refers to the document; (2) the document is central to the plaintiffs claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.” Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.2006). A court may treat such a document as “part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). Such consideration prevents “plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting reference to documents upon which their claims are based.” Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.1998) A “court may disregard allegations in the complaint if contradicted by facts established by exhibits attached to the complaint.” Sumner Peck Ranch v. Bureau of Reclamation, 823 F.Supp. 715, 720 (E.D.Cal.1993) (citing Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.1987)).

Lastly, under F.R.Evid. 201, a court may take judicial notice of “matters of public record.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986) (“On a motion to dismiss, we may take judicial notice of matters of public record outside the pleadings”); Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir.1986).

With these standards in mind, this Court turns to defendants’ challenges to the complaint’s claims against them.

Failure To Satisfy F.R.Civ.P. 8

The complaint is subject to global attack for failure to satisfy F.R.Civ.P. 8, which requires a plaintiff to “plead a short and plain statement of the elements of his or her claim, identifying the transaction or occurrence giving rise to the claim and the elements of the prima facie case.” Bautis-ta v. Los Angeles County, 216 F.3d 837, 840 (9th Cir.2000).

F.R.Civ.P. 8(d)(1) requires each allegation to be “simple, concise, and direct.” This requirement “applies to good claims as well as bad, and is the basis for dismissal independent of Rule 12(b)(6).” McHenry v. Renne, 84 F.3d 1172, 1179 (9th Cir.1996). “Something labeled a complaint but written more as a press release, prolix in evidentiary detail, yet without simplicity, conciseness and clarity as to whom plaintiffs are suing for what wrongs, fails to perform the essential functions of a complaint.” McHenry, 84 F.3d at 1180. “Prolix, confusing complaints ... impose unfair burdens on litigants and judges.” McHenry, 84 F.3d at 1179.

Moreover, a pleading may not simply allege a wrong has been committed and demand relief. The underlying requirement is that a pleading give “fair notice” of the claim being asserted and the “grounds upon which it rests.” Yamaguchi v. United States Department of Air Force, 109 F.3d 1475, 1481 (9th Cir.1997). Despite the flexible pleading policy of the Federal Rules of Civil Procedure, a complaint must give fair notice and state the elements of the claim plainly and succinctly. Jones v. Community Redev. Agency, 733 F.2d 646, 649 (9th Cir.1984). A plaintiff must allege with at least some degree of particularity overt facts which defendant engaged in to support plaintiffs claim. Jones, 733 F.2d at 649. A complaint does not suffice “if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). The U.S. Supreme Court has explained:

While, for most types of cases, the Federal Rules eliminated the cumbersome requirement that a claimant “set out in detail the facts upon which he bases his claim,” Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) (emphasis added), Rule 8(a)(2) still requires a “showing,” rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only “fair notice” of the nature of the claim, but also “grounds” on which the claim rests.

Twombly, 550 U.S. at 556, n. 3, 127 S.Ct. 1955.

The complaint fails to satisfy F.R.Civ.P. 8 and lacks requisite simplicity, conciseness and clarity to assert claims against defendants. The complaint’s 86 pages of text is duplicative and lacks necessary cohesion and organization to decipher claims against defendants and others. The rambling complaint lacks facts of defendants’ specific wrongdoing to provide fair notice as to what each defendant is to defend. The complaint lacks cognizable claims or legal theories upon which to support defendants’ liability and rests on over-broad conclusions that defendants were prohibited to foreclose on the property. The complaint makes passing references and conclusions without supporting facts as to “pattern and practice of defrauding plaintiff,” failure “to properly credit payments,” “robo-signers,” “illegal, deceptive, and unlawful collection,” “fabricated substitution of trustees,” “fraudulent lien claim,” and “fabricated assignment.”

The complaint lumps defendants (and apparently others) together and fails to distinguish adequately claims and alleged wrongs among defendants and others. A plaintiff suing multiple defendants “must allege the basis of his claim against each defendant to satisfy Federal Rule of Civil Procedure 8(a)(2), which requires a short and plain statement of the claim to put defendants on sufficient notice of the allegations against them.” Gauvin v. Trombatore, 682 F.Supp. 1067, 1071 (N.D.Cal.1988). “Specific identification of the parties to the activities alleged by the plaintiffs is required in this action to enable the defendant to plead intelligently.” Van Dyke Ford, Inc. v. Ford Motor Co., 399 F.Supp. 277, 284 (D.Wis.1975).

The complaint lacks specific, clearly defined allegations of each defendant’s alleged wrongs to give fair notice of claims plainly and succinctly to warrant dismissal of this action. Moreover, the complaint’s claims are subject to defenses and are based on legally deficient theories to further warrant dismissal, as discussed below.

Loan Securitization — Standing

Defendants globally attack the complaint’s claims based on securitization of Mr. Flores’ loan given plaintiffs’ lack of standing to pursue such claims. Plaintiffs assert that they have standing because they question the validity of assignment of Mr. Flores’ loan documents.

“Because a promissory note is a negotiable instrument, a borrower must anticipate it can and might be transferred to another creditor.” Herrera v. Federal Nat. Mortg. Assn., 205 Cal.App.4th 1495, 1507, 141 Cal.Rptr.3d 326 (2012) (“As to plaintiff, an assignment merely substituted one creditor for another, without changing her obligations under the note”).

The “request for declaratory relief is based on the erroneous theory that all defendants lost their power of sale pursuant to the deed of trust when the original promissory note was assigned to a trust pool. This argument is both unsupported and incorrect.” Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F.Supp.2d 1039, 1043 (N.D.Cal.2009). “[C]ourts have uniformly rejected that securitization of a mortgage loan provides the mortgagor a cause of action.” Velez v. The Bank of New York Mellon, 2011 WL 572523, at *4 (D.Hi.2011) (“The court also rejects Plaintiffs contention that securitization in general somehow gives rise to a cause of action — Plaintiff points to no law or provision in the mortgage preventing this practice, and otherwise cites to no law supporting that securitization can be the basis of a cause of action”).

Plaintiffs appear to assert standing to challenge void assignment of Mr. Flores’ loan.in that “the entity claiming to be the noteholder was not the true owner of the note,” “foreclosure was not concluded at the direction of the correct party,” and “the assignment to the securitized trust was at the outset invalid.” Plaintiffs rely on Glaski v. Bank of America, National Association, 218 Cal.App.4th 1079, 1082-1083, 160 Cal.Rptr.3d 449 (2013):

We conclude that, although the borrower’s allegations are somewhat confusing and may contain contradictions, he nonetheless has stated a wrongful foreclosure claim under the lenient standards applied to demurrers. We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date. Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.

Plaintiffs’ reliance on Glaski is unavailing. Glaski addressed neither federal pleading requirements nor a F.R.Civ.P. 12(b)(6) challenge. Glaski addressed New York trust law, which plaintiffs fail to demonstrate applies here. Of key importance, numerous courts disagree with and refuse to follow Glaski, including this Court. See Snell v. Deutsche Bank Nat. Trust Co., 2014 WL 325147, at *5 (E.D.Cal.2014) (“Until either the California Supreme Court, the Ninth Circuit, or other appellate courts follow Glaski or address the discrepancy between Glaski and Jenkins, this Court will continue to follow the Jenkins rule. Therefore, Plaintiffs claims based on alleged violation of the PSA [pooling and servicing agreement] are not viable”); Newman v. Bank of New York Mellon, 2013 WL 5603316, at *3, n. 2 (E.D.Cal.2013) (“the court held that a borrower like Newman has standing to assert a violation of a PSA. However, no courts have yet followed Glaski and Glaski is in a clear minority on the issue. Until either the California Supreme Court, the Ninth Circuit, or other appellate courts follow Glaski, this Court will continue to follow the majority rule”).

Defendants validly challenge plaintiffs’ standing to pursue claims arising from sec-uritization of Mr. Flores’ loan. “As an unrelated third party to the alleged securi-tization, and any other subsequent transfers of the beneficial interest under the promissory note, Jenkins [plaintiff borrower] lacks standing to enforce any agreements, including the investment trust’s pooling and servicing agreement, relating to such transactions.” Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal.App.4th 497, 515, 156 Cal.Rptr.3d 912 (2013); see In re Correia, 452 B.R. 319, 324-325 (1st Cir. BAP 2011) (debtors lacked standing to raise violations of pooling and service agreement). “To the extent Plaintiff challenges the securitization of his loan because Freddie Mac [defendant] failed to comply with the terms of its securitization agreement, Plaintiff has no standing to challenge the validity of the securitization of the loan as he is not an investor of the loan trust.” Bascos v. Federal Home Loan Mortg. Corp., 2011 WL 3157063, at *6 (C.D.Cal.2011).

The complaint’s claims arising from allegations as to securitization of Mr. Flores’ loans fail as legally deficient given plaintiffs’ absence of standing. Neither the complaint nor plaintiffs’ opposition papers point to facts to suggest improper transfer of Mr. Flores’ loan or breach of a relevant pooling and servicing agreement. Plaintiffs’ attempt to contest assignment of Mr. Flores’ loan fails to invoke their standing in the absence of meaningful legal authority for their position.

Consent Judgment — Standing

The complaint asserts claims based on defendants’ purported violation of the consent judgment, which was among the United States and several financial institutions. Defendants challenge plaintiffs’ standing to pursue such claims in that plaintiffs are neither parties to nor third-party beneficiaries of the consent judgment.

“[A] well-settled line of authority from this Court establishes that a consent decree is not enforceable directly or in collateral proceedings by those who are not parties to it even though they were intended to be benefitted by it.” Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975). “Only the Government can seek enforcement of its consent decrees ... therefore, even if the Government intended its consent decree to benefit a third party, that party could not enforce it unless the decree so provided.” Beckett v. Air Line Pilots Ass’n, 995 F.2d 280, 288 (D.C.Cir.1993). “Parties that benefit from a government contract are generally assumed to be incidental beneficiaries, and may not enforce the contract absent a clear intent to the contrary. Government contracts often benefit the public, but individual members of the public are treated as incidental beneficiaries unless a different intention is manifested.” Klamath Water Users Protective Ass’n v. Patterson, 204 F.3d 1206, 1211 (9th Cir.1999) (quotation omitted). More recently, the Ninth Circuit stated:

[P]arties that benefit from a government contract are generally assumed to be incidental beneficiaries, rather than intended ones, and so may not enforce the contract absent a clear intent to the contrary. This clear intent hurdle is not satisfied by a contract’s recitation of interested constituencies, vague, hortatory pronouncements, statements of purpose, explicit reference to a third party, or even a showing that the contract operates to the third parties’ benefit and was entered into with them in mind. Rather, we examine the precise language of the contract for a clear intent to rebut the presumption that the third parties are merely incidental beneficiaries.

County of Santa Clara v. Astra USA, Inc., 588 F.3d 1237, 1244 (9th Cir.2009) (quotations omitted), rev’d on other grounds by Astra USA, Inc. v. Santa Clara County, Cal, — U.S. —, 131 S.Ct. 1342, 179 L.Ed.2d 457 (2011).

Turning to the consent judgment at issue here, a fellow district court concluded that “individual borrowers are merely incidental beneficiaries of the National Mortgage Settlement, and so have no right to bring third-party suits to enforce the Consent Judgment. Thus, any claims that allege a violation of the Consent Judgment should be dismissed.” Rehbein v. Citi- Mortgage, Inc., 937 F.Supp.2d 753, 762 (E.D.Va.2013); see Jurewitz v. Bank of America, N.A., 938 F.Supp.2d 994, 998 (S.D.Cal.2013) (“Plaintiff has failed to allege sufficient facts indicating that she has standing to enforce the Consent Judgment”).

The complaint’s claims arising out of the consent judgment are legally barred to warrant their dismissal. Plaintiffs offer no legitimate points to support their standing in connection with the consent judgment.

Failure To Tender Indebtedness

Defendants assert as a global defense the complaint’s failure to allege credibly plaintiffs’ ability to tender the amount due under Mr. Flores’ loan to invoke plaintiffs’ standing to challenge the foreclosure sale of the property. Plaintiffs assert that they are relieved of the tender requirement because the trustee’s deed upon sale was “void on its face when the foreclosure [was] conducted without authorization to sell.”

“When a debtor is in default of a home mortgage loan, and a foreclosure is either pending or has taken place, the debtor must allege a credible tender of the amount of the secured debt to maintain any cause of action for wrongful foreclosure.” Alicea v. GE Money Bank, 2009 WL 2136969, at *3 (N.D.Cal.2009).

“A tender is an offer of performance made with the intent to extinguish the obligation.” Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575, 580, 205 Cal.Rptr. 15 (1984) (citing Cal. Civ.Code, § 1485; Still v. Plaza Marina Commercial Corp., 21 Cal.App.3d 378, 385, 98 Cal.Rptr. 414 (1971)). “A tender must be one of full performance ... and must be unconditional to be valid.” Arnolds Management, 158 Cal.App.3d at 580, 205 Cal.Rptr. 15. “Nothing short of the full amount due the creditor is sufficient to constitute a valid tender, and the debtor must at his peril offer the full amount.” Rauer’s Law etc. Co. v. S. Proctor Co., 40 Cal.App. 524, 525, 181 P. 71 (1919).

A defaulted borrower is “required to allege tender of the amount of [the lender’s] secured indebtedness in order to maintain any cause of action for irregularity in the sale procedure.” Abdallah v. United Savings Bank, 43 Cal.App.4th 1101, 1109, 51 Cal.Rptr.2d 286 (1996), cert. denied, 519 U.S. 1081, 117 S.Ct. 746, 136 L.Ed.2d 684 (1997). “A party may not without payment of the debt, enjoin a sale by a trustee under a power conferred by a deed of trust, or have his title quieted against the purchaser at such a sale, even though the statute of limitations has run against the indebtedness.” Sipe v. McKenna, 88 Cal.App.2d 1001, 1006, 200 P.2d 61 (1948).

In FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal.App.3d 1018, 1021, 255 Cal.Rptr. 157 (1989), the California Court of Appeal explained:

... generally “an action to set aside a trustee’s sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security.” .... This rule ... is based upon the equitable maxim that a court of equity will not order a useless act performed. ... “A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust.” ... The rationale behind the rule is that if plaintiffs could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the plaintiffs. (Citations omitted.)

An action to set aside a foreclosure sale, unaccompanied by an offer to redeem, does not state a cause of action which a court of equity recognizes. Karl- sen v. American Sav. & Loan Assn., 15 Cal.App.3d 112, 117, 92 Cal.Rptr. 851 (1971). The basic rule is that an offer of performance is of no effect if the person making it is not able to perform. Karlsen, 15 Cal.App.3d at 118, 92 Cal.Rptr. 851 (citing Cal. Civ.Code, § 1495). Simply put, if the offeror “is without the money necessary to make the offer good and knows it” the tender is without legal force or effect. Karlsen, 15 Cal.App.3d at 118, 92 Cal.Rptr. 851 (citing several cases). “It would be futile to set aside a foreclosure sale on the technical ground that notice was improper, if the party making the challenge did not first make full tender and thereby establish his ability to purchase the property.” United States Cold Storage v. Great Western Savings & Loan Assn., 165 Cal.App.3d 1214, 1224, 212 Cal.Rptr. 232 (1985). “A cause of action ‘implicitly integrated’ with the irregular sale fails unless the trustor can allege and establish a valid tender.” Arnolds Management, 158 Cal.App.3d at 579, 205 Cal.Rptr. 15.

“It is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured.” Shimpones v. Stickney, 219 Cal. 637, 649, 28 P.2d 673 (1934); see Mix v. Sodd, 126 Cal.App.3d 386, 390, 178 Cal.Rptr. 736 (1981) (“a mortgagor in possession may not maintain an action to quiet title, even though the debt is unenforceable”); Aguilar v. Bocci, 39 Cal.App.3d 475, 477, 114 Cal.Rptr. 91 (1974) (trustor is unable to quiet title “without discharging his debt”).

Moreover, to obtain “rescission or cancellation, the rule is that the complainant is required to do equity, as a condition to his obtaining relief, by restoring to the defendant everything of value which the plaintiff has received in the transaction.... The rule applies although the plaintiff was induced to enter into the contract by the fraudulent representations of the defendant.” Fleming v. Kagan, 189 Cal.App.2d 791, 796, 11 Cal.Rptr. 737 (1961). “A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust.” Karlsen, 15 Cal.App.3d at 117, 92 Cal.Rptr. 851. Analyzing “trust deed nonjudicial foreclosure sales issues in the context of common law contract principles” is “unhelpful” given “the comprehensive statutory scheme regulating nonjudicial foreclosure sales.” Residential Capital v. Cal-Westem Reconveyance Corp., 108 Cal.App.4th 807, 820, 821, 134 Cal.Rptr.2d 162 (2003).

“The rules which govern tenders are strict and are strictly applied.” Nguyen v. Calhoun, 105 Cal.App.4th 428, 439, 129 Cal.Rptr.2d 436 (2003). “The tenderer must do and offer everything that is necessary on his part to complete the transaction, and must fairly make known his purpose without ambiguity, and the act of tender must be such that it needs only acceptance by the one to whom it is made to complete the transaction.” Gaffney v. Downey Savings & Loan Assn., 200 Cal. App.3d 1154, 1165, 246 Cal.Rptr. 421 (1988). The debtor bears “responsibility to make an unambiguous tender of the entire amount due or else suffer the consequence that the tender is of no effect.” Gaffney, 200 Cal.App.3d at 1165, 246 Cal.Rptr. 421.

Neither the complaint nor record references plaintiffs’ credible, legitimate tender of indebtedness or meaningful ability to do so. The complaint attempts to obscure tender by alleging “Plaintiff is ready, willing, and able to unconditionally tender his obligation to the true holder in due course of Note and Deed of Trust.” Plaintiffs cannot avoid tender requirements by relying on invalid claims as to loan securitization as an excuse from tender requirements. As discussed more fully below, plaintiffs fail to demonstrate that the property foreclosure was void or unauthorized. Plaintiffs’ failure to indicate a credible, legitimate tender of or ability to tender amounts outstanding is construed as their concession of inability to do so. Given Mr. Flores’ continuing default, the ability to tender is unsupported. Without plaintiffs’ credible, legitimate tender, they seek empty remedies, not capable of being granted.

Plaintiffs point to nothing to avoid tender requirements, and failure to require a tender of Mr. Flores’ indebtedness would provide plaintiffs an unjustified windfall. Moreover, the complaint’s purported attack on the underlying debt does not excuse tender given the complaint’s admission that “Mr. Flores does not dispute that he owes money on his mortgage obligation.” Without plaintiffs’ credible, legitimate tender, the complaint’s purported claims are doomed.

Presumption Of Foreclosure Propriety/Absence Of Prejudice

The complaint’s claims fail given the un-rebutted presumption of foreclosure propriety and absence of facts to support prejudice to plaintiffs.

Comprehensive Statutory Framework

Under California law, a lender may pursue non-judicial foreclosure upon default with a deed of trust with a power of sale clause. “Financing or refinancing of real property is generally accomplished in California through a deed of trust. The borrower (trustor) executes a promissory note and deed of trust, thereby transferring an interest in the property to the lender (beneficiary) as security for repayment of the loan.” Bartold v. Glendale Federal Bank, 81 Cal.App.4th 816, 821, 97 Cal.Rptr.2d 226 (2000). A deed of trust “entitles the lender to reach some asset of the debtor if the note is not paid.” Alliance Mortgage Co. v. Rothwell, 10 Cal.4th 1226, 1235, 44 Cal.Rptr.2d 352, 900 P.2d 601 (1995).

If a borrower defaults on a loan and the deed of trust contains a power of sale clause, the lender may non-judicially foreclose. See McDonald v. Smoke Creek Live Stock Co., 209 Cal. 231, 236-237, 286 P. 693 (1930). “California’s nonjudicial foreclosure scheme is set forth in Civil Code sections 2924[, et seq.], which provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.” Moeller v. Lien, 25 Cal.App.4th 822, 830, 30 Cal.Rptr.2d 777 (1994). The California Court of Appeal has explained nonjudicial foreclosure’s comprehensiveness:

The comprehensive statutory framework established to govern nonjudicial foreclosure sales is intended to be exhaustive .... It includes a myriad of rules relating to notice and right to cure. It would be inconsistent with the comprehensive and exhaustive statutory scheme regulating nonjudicial foreclosures to incorporate another unrelated cure provision into statutory nonjudicial foreclosure proceedings.

Moeller v. Lien, 25 Cal.App.4th 822, 834, 30 Cal.Rptr.2d 777 (1994); see I.E. Assoc. v. Safeco Title Ins. Co., 39 Cal.3d 281, 285, 216 Cal.Rptr. 438, 702 P.2d 596 (1985) (“These provisions cover every aspect of exercise of the power of sale contained in a deed of trust.”)

Authority To Foreclose

Under California Civil Code section 2924(a)(1), a “trustee, mortgagee or beneficiary or any of their authorized agents” may conduct the foreclosure process. Under California Civil Code section 2924b(4), a “person authorized to record the notice of default or the notice of sale” includes “an agent for the mortgagee or beneficiary, an agent of the named trustee, any person designated in an executed substitution of trustee, or an agent of that substituted trustee.” “Upon default by the trustor, the beneficiary may declare a default and proceed with a nonjudicial foreclosure sale.” Moeller, 25 Cal.App.4th at 830, 30 Cal.Rptr.2d 777.

Lack of authorization to initiate foreclosure does not support a wrongful foreclosure claim. In Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149, 1154, 121 Cal.Rptr.3d 819 (2011), the California Court of Appeal explained:

By asserting a right to bring a court action to determine whether the owner of the Note has authorized its nominee to initiate the foreclosure process, Gomes [plaintiff borrower] is attempting to interject the courts into this comprehensive nonjudicial scheme. As Defendants correctly point out, Gomes has identified no legal authority for such a lawsuit. Nothing in the statutory provisions establishing the nonjudicial foreclosure process suggests that such a judicial proceeding is permitted or contemplated.

California Civil Code section 2924(a) does not “provide for a judicial action to determine whether the person initiating the foreclosure process is indeed authorized, and we see no ground for implying such an action.” Gomes, 192 Cal.App.4th at 1155, 121 Cal.Rptr.3d 819. “The recognition of the right to bring a lawsuit to determine a nominee’s authorization to proceed with foreclosure on behalf of the noteholder would fundamentally undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely for the purpose of delaying valid foreclosures.” Gomes, 192 Cal.App.4th at 1155, 121 Cal.Rptr.3d 819.

Presumption Of Propriety

“A properly conducted nonjudicial foreclosure sale constitutes a final adjudication of the rights of the borrower and lender.” Moeller, 25 Cal.App.4th at 831, 30 Cal.Rptr.2d 777. “As a general rule, a trustee’s sale is complete upon acceptance of the final bid.” Nguyen v. Calhoun, 105 Cal.App.4th 428, 440-441, 129 Cal.Rptr.2d 436 (2003). “If the trustee’s deed recites that all statutory notice requirements and procedures required by law for the conduct of the foreclosure have been satisfied, a rebuttable presumption arises that the sale has been conducted regularly and properly; this presumption is conclusive as to a bona fide purchaser.” Moeller, 25 Cal.App.4th at 831, 30 Cal.Rptr.2d 777 (citations omitted). “A nonjudicial foreclosure sale is accompanied by a common law presumption that it ‘was conducted regularly and fairly.’ ” Melendrez v. D & I Investment, Inc., 127 Cal.App.4th 1238, 1258, 26 Cal.Rptr.3d 413 (2005) (quoting Brown v. Busch, 152 Cal.App.2d 200, 204, 313 P.2d 19 (1957)). “This presumption may only be rebutted by substantial evidence of prejudicial procedural irregularity.” Melendrez, 127 Cal.App.4th at 1258, 26 Cal.Rptr.3d 413.

To challenge foreclosure, “it is necessary for the complaint to state a case within the code sections for which reason it is essential to allege the facts affecting the validity and invalidity of the instrument which is attacked.” Kroeker v. Hurlbert, 38 Cal.App.2d 261, 266, 101 P.2d 101 (1940).

Prejudice

Moreover, the California Court of Appeal has explained that prejudice is required for a wrongful foreclosure claim:

We also note a plaintiff in a suit for wrongful foreclosure has generally been required to demonstrate the alleged imperfection in the foreclosure process was prejudicial to the plaintiffs interests.... Even if MERS lacked authority to transfer the note, it is difficult to conceive how plaintiff was prejudiced by MERS’s purported assignment, and there is no allegation to this effect. Because a promissory note is a negotiable instrument, a borrower must anticipate it can and might be transferred to another creditor. As to plaintiff, an assignment merely substituted one creditor for another, without changing her obligations under the note.... If MERS indeed lacked authority to make the assignment, the true victim was not plaintiff but the original lender, which would have suffered the unauthorized loss of a $1 million promissory note.

Fontenot v. Wells Fargo Bank, N.A., 198 Cal.App.4th 256, 272, 129 Cal.Rptr.3d 467 (2011); see Knapp v. Doherty, 123 Cal.App.4th 76, 86, n. 4, 20 Cal.Rptr.3d 1 (2004) (“A nonjudicial foreclosure sale is presumed to have been conducted regularly and fairly; one attacking the sale must overcome this common law presumption ‘by pleading and proving an improper procedure and the resulting prejudice.’ ”); Angell v. Superior Court, 73 Cal.App.4th 691, 700, 86 Cal.Rptr.2d 657 (1999) (failure to comply with procedural requirements must cause prejudice to plaintiff).

Prejudice is not presumed from “mere irregularities” in the process. Meux v. Trezevant, 132 Cal. 487, 490, 64 P. 848 (1901).

A “trustee or mortgagee may be liable to the trustor or mortgagor for damages sustained where there has been an illegal, fraudulent or wilfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust.” Hunger v. Hoore, 11 Cal.App.3d 1, 7, 89 Cal.Rptr. 323 (1970).

The complaint lacks meaningful facts of a specific statutory irregularity or misconduct in foreclosure proceedings attributable specifically to defendants. The complaint’s unsupported conclusory claims to the effect of absence of authority to foreclose fail to substantiate a discrepancy in the foreclosure process. Nothing in the record indicates that defendants engaged in conduct to cause Mr. Flores prejudice to preclude foreclosure. Plaintiffs’ claim of prejudice resulting from foreclosure in illogical in that their failure to pay Mr. Flores’ loan resulted in foreclosure. Nothing relieved plaintiffs to make Mr. Flores’ payments, for which the complaint acknowledges Mr. Flores was responsible. Thei'e are no facts that Mr. Flores was current on his loan payments or could have become current had defendants not committed wrongdoing. The complaint fails to allege facts that Mr. Flores was not credited for made payments or attempted payments or that more than one entity attempted to foreclose on the property concurrently. There are no allegations that plaintiffs were not provided notice of the foreclosure sale. In fact, the complaint alleges that plaintiffs’ counsel submitted correspondence to challenge the foreclosure sale to indicate their notice of it.

Moreover, the complaint’s claims as to securitization of Mr. Flores’ promissory note are an improper attempt to interject this Court into comprehensive non-judicial foreclosure devised by the California Legislature. “Because of the exhaustive nature of this scheme, California appellate courts have refused to read any additional requirements into the non-judicial foreclosure statute.” Lane v. Vitek Real Estate Industries Group, 713 F.Supp.2d 1092, 1098 (E.D.Cal.2010); see also Moeller, 25 Cal.App.4th at 834, 30 Cal.Rptr.2d 777 (“It would be inconsistent with the comprehensive and exhaustive statutory scheme regulating nonjudicial foreclosures to incorporate another unrelated cure provision into statutory nonjudicial foreclosure proceedings”). The complaint lacks allegations to overcome the presumption of foreclosure validity. As such, the complaint’s claims attacking property foreclosure are barred.

Moreover, the complaint’s individual claims are subject to dismissal for additional reasons discussed below.

Declaratory Relief

The complaint’s (first) declaratory relief claim appears to seek a determination whether defendants are authorized to foreclose on the property.

General Principles

The Declaratory Judgment Act (“DJA”), 28 U.S.C. §§ 2201, 2202, provides in pertinent part:

In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

28 U.S.C. § 2201(a).

The DJA’s operation “is procedural only.” Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240, 57 S.Ct. 461, 463, 81 L.Ed. 617 (1937). “A declaratory judgment is not a theory of recovery.” Commercial Union Ins. Co. v. Walbrook Ins. Co., Ltd., 41 F.3d 764, 775 (1st Cir.1994). The DJA “merely offers an additional remedy to litigants.” Nat’l Union Fire Ins. Co. v. Karp, 108 F.3d 17, 21 (2nd Cir.1997) (italics in original). A DJA action requires a district court to “inquire whether there is a case of actual controversy within its jurisdiction.” American States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir.1994).

Declaratory relief is appropriate “(1) when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and (2) when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.” Bilbrey by Bilbrey v. Brown, 738 F.2d 1462, 1470 (9th Cir.1984). A declaratory relief claim operates “prospectively,” not to redress past wrongs. Britz Fertilizers, Inc. v. Bayer Corp., 665 F.Supp.2d 1142, 1173 (E.D.Cal.2009).

As to a controversy to invoke declaratory relief, the question is whether there is a “substantial controversy, between parties having adverse legal rights, or sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941). The U.S. Supreme Court has further explained:

A justiciable controversy is thus distinguished from a difference or dispute of a hypothetical or abstract character; from one that is academic or moot.... The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests.... It must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.

Haworth, 300 U.S. at 240-241, 57 S.Ct. at 464 (citations omitted).

A declaratory relief action “brings to the present a litigable controversy, which otherwise might only be tried in the future.” Societe de Conditionnement v. Hunter Eng. Co., Inc., 655 F.2d 938, 943 (9th Cir.1981). As an equitable remedy, declaratory relief is “dependent upon a substantive basis for liability” and has “no separate viability” if all other causes of action are barred. Glue-Fold, Inc. v. Slautterback Corp., 82 Cal.App.4th 1018, 1023, n. 3, 98 Cal.Rptr.2d 661 (2000).

The complaint seeks to redress past alleged wrongs in connection with authority to foreclose on the property, not prospective wrongdoing. The complaint fails to allege facts to support an actual controversy and in turn fails to support declaratory relief subject to the DJA. Moreover, purported declaratory relief fails given dismissal of other claims. “[Declaratory relief does not serve to ‘furnish a litigant with a second cause of action for the determination of identical issues.’ ” Gayduchik v. Countrywide Home Loans, Inc., 2010 WL 1737109, at *4 (E.D.Cal.2010) (quoting General of Am. Ins. Co. v. Lilly, 258 Cal.App.2d 465, 470, 65 Cal.Rptr. 750 (1968)). The complaint fails to substantiate an independent claim for declaratory relief, and such claim is subject to dismissal.

Note Possession

Defendants fault an attempt at declaratory relief based on a claim that possession of Mr. Flores’ original note is a prerequisite to property foreclosure. According to plaintiffs, although “possession of the note may not be a statutory prerequisite to conduct foreclosure in California, in order for the defendants to have standing and be the real party in interest in any legal action to enforce those terms they must be in possession of the note.”

“Under California law, there is no requirement for the production of an original promissory note prior to initiation of a nonjudicial foreclosure.... Therefore, the absence of an original promissory note in a nonjudicial foreclosure does not render a foreclosure invalid.” Pantoja v. Countrywide Home Loans, Inc., 640 F.Supp.2d 1177, 1186 (N.D.Cal.2009). “Pursuant to section 2924(a)(1) of the California Civil Code, the trustee of a Deed of Trust has the right to initiate the foreclosure process. Production of the original note is not required to proceed with a non-judicial foreclosure.” Hafiz, 652 F.Supp.2d at 1043 (citation omitted).

“Under Civil Code section 2924, no party needs to physically possess the promissory note.” Sicairos v. NDEX West, LLC, 2009 WL 385855, *3 (S.D.Cal.2009) (citing Cal.Civ.Code, § 2924(a)(1)). Rather, “[t]he foreclosure process is commenced by the recording of a notice of default and election to sell by the trustee.” Moeller, 25 Cal.App.4th at 830, 30 Cal.Rptr.2d 777. “The trustee has the power and the duty to initiate foreclosure proceedings on the property upon the trustor’s default, resulting in a sale of the property.” Hafiz, 652 F.Supp.2d at 1043 (citation omitted). An “allegation that the trustee did not have the original note or had not received it is insufficient to render the foreclosure proceeding invalid.” Neal v. Juarez, 2007 WL 2140640, *8 (S.D.Cal.2007).

Plaintiffs’ suggestions as to inability to foreclose are unavailing given the absence of need to produce Mr. Flores’ original promissory note. Plaintiffs’ assertion that note possession is required to pursue legal action is nonsensical as defendants pursued nonjudicial foreclosure, not court action. The clear authority is that production of original promissory notes is unnecessary to initiate foreclosure. Purported declaratory relief based on promissory note possession fails.

In sum, the complaint’s (first) declaratory relief claim is legally barred and subject to dismissal with prejudice.

Negligence

The complaint’s (second) negligence claim appears to allege that by foreclosing on the property, defendants breached duties “to abide by the Consent Judgment,” “to exercise reasonable care and skill to follow Federal and California law with regard to enforcement of monetary obligations, and to refrain from taking or failing to take any action against Plaintiff that they did not have the legal authority to do.”

Defendants challenge the complaint’s failure to allege facts that breach of an actionable duty caused plaintiffs damages.

“The elements of a cause of action for negligence are (1) a legal duty to use reasonable care, (2) breach of that duty, and (3) proximate [or legal] cause between the breach and (4) the plaintiffs injury.” Mendoza v. City of Los Angeles, 66 Cal.App.4th 1333, 1339, 78 Cal.Rptr.2d 525 (1998) (citation omitted). “The existence of a duty of care owed by a defendant to a plaintiff is a prerequisite to establishing a claim for negligence.” Nymark v. Heart Fed. Sav. & Loan Assn., 231 Cal.App.3d 1089, 1095, 283 Cal.Rptr. 53 (1991). “[A]bsent a duty, the defendant’s care, or lack of care, is irrelevant.” Software Design & Application, Ltd. v. Hoefer & Arnett, Inc., 49 Cal.App.4th 472, 481, 56 Cal.Rptr.2d 756 (1996), “The existence of a legal duty to use reasonable care in a particular factual situation is a question of law for the court to decide.” Vasquez v. Residential Investments, Inc., 118 Cal.App.4th 269, 278, 12 Cal.Rptr.3d 846 (2004) (citation omitted).

“The ‘legal duty’ of care may be of two general types: (a) the duty of a person to use ordinary care in activities from which harm might reasonably be anticipated[, or] (b) [a]n affirmative duty where the person occupies a particular relationship to others.... In the first situation, he is not liable unless he is actively careless; in the second, he may be liable for failure to act affirmatively to prevent harm.” McGettigan v. Bay Area Rapid Transit Dist., 57 Cal.App.4th 1011, 1016-1017, 67 Cal.Rptr.2d 516 (1997).

There is no actionable duty between a lender and borrower in that loan transactions are arms-length. A lender “owes no duty of care to the [borrowers] in approving their loan. Liability to a borrower for negligence arises only when the lender ‘actively participates’ in the financed enterprise ‘beyond the domain of the usual money lender.’ ” Wagner v. Benson, 101 Cal.App.3d 27, 35, 161 Cal.Rptr. 516 (1980) (citing several cases). “[A]s a general rule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” Nymark, 231 Cal.App.3d at 1096, 283 Cal.Rptr. 53; see Meyers v. Guarantee Sav. & Loan Assn., 79 Cal.App.3d 307, 312, 144 Cal.Rptr. 616 (1978) (no lender liability when lender did not engage “in any activity outside the scope of the normal activities of a lender of construction monies”).

“Public policy does not impose upon the Bank absolute liability for the hardships which may befall the [borrower] it finances.” Wagner, 101 Cal.App.3d at 34, 161 Cal.Rptr. 516. The success of a borrower’s investment “is not a benefit of the loan agreement which the Bank is under a duty to protect.” Wagner, 101 Cal.App.3d at 34, 161 Cal.Rptr. 516 (lender lacked duty to disclose “any information it may have had”). “It is simply not tortious for a commercial lender to lend money, take collateral, or to foreclose on collateral when a debt is not paid.” Sierra-Bay Fed. Land Bank Assn. v. Superior Court, 227 Cal.App.3d 318, 334, 277 Cal.Rptr. 753 (1991).

Moreover, “loan servicers do not owe a duty to the borrowers of the loans they service.” Shepherd v. American Home Mortg. Services, Inc., 2009 WL 4505925, at *2 (E.D.Cal.2009); see Huerta v. Ocwen Loan Servicing, Inc., 2010 WL 728223, at *4 (N.D.Cal.2010) (“a loan servi-cer has no fiduciary duty to a borrower when its involvement in the transaction does not exceed the scope of its conventional role as a loan servicer”).

Turning to loan modification, “[n]umerous cases have characterized a loan modification as a traditional money lending activity, warranting application of the rule articulated in Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal.App.3d 1089, 283 Cal.Rptr. 53 (1991), that a. financial institution in general owes no duty of care to a borrower.” Settle v. World Sav. Bank, F.S.B., 2012 WL 1026103, at *8 (C.D.Cal.2012). In Alvarado v. Aurora Loan Services, LLC, 2012 WL 4475330, at *6 (C.D.Cal.2012), a fellow district judge explained:

... offering loan modifications is sufficiently entwined with money lending so as to be considered within the scope of typical money lending activities. If money lending institutions were held to a higher standard of care by offering a service that could benefit borrowers whose circumstances have changed, the money lender[s] would be discouraged from leniency and would assert their rights to reclaim the property upon the borrower’s default. The conventional-moneylender test shall be sufficient to determine that there is no duty of care owed in servicing Plaintiffs mortgage loan and loan modification. As the Plaintiff is unable to establish a duty, it is unnecessary to discuss the elements of breach, causation, and damages.

Plaintiffs lack a negligence claim based on defendants’ lender and/or servicer roles, particularly in the absence of a duty to forego foreclosure or to provide loan modification. “No such duty exists ... to determine the borrower’s ability to repay the loan.... The lender’s efforts to determine the creditworthiness and ability to repay by a borrower are for the lender’s protection, not the borrower’s.” Renteria v. United States, 452 F.Supp.2d 910, 922-923 (D.Ariz.2006) (borrowers “had to rely on their own judgment and risk assessment to determine whether or not to accept the loan”). “A commercial lender is not to be regarded as the guarantor of a borrower’s success and is not liable for the hardships which may befall a borrower.” Sierra-Bay Fed., 227 Cal.App.3d at 334, 277 Cal.Rptr. 753. Defendants had “no interest in the loan” in a role as loan servicer. See Cleveland v. Deutsche Bank Nat. Trust Co., 2009 WL 250017, at *3 (S.D.Cal.2009).

Defendants owed no actionable duty of care to plaintiffs arising from Mr. Flores’ loan and default to support a negligence claim. The complaint lacks facts of special circumstances to impose duties on defendants in that the complaint depicts no more than an arms-length loan transaction, Mr. Flores’ subsequent default, and the ensuing property foreclosure. The complaint fails to substantiate a special lending or other relationship or an actionable breach of duty to substantiate a negligence claim.

The complaint’s reliance on the consent judgment as a source of defendants’ duty is unavailing. A fellow district court dismissed negligence claims based on the consent judgment and observed:

The Consent Judgment’s enforcement provisions never reference the possibility of an enforcement proceeding being brought by an individual borrower as a third-party beneficiary. Instead they allow enforcement actions to be brought by parties to the Consent Judgment or by the monitoring committee that the Consent Judgment establishes. See Consent Judgment at 18-20, 22; see generally Settlement Terms. The Court therefore finds that the decree’s precise language does not establish “a clear intent to rebut the presumption that the third parties [to the Consent Judgment] are merely incidental beneficiaries.” Astra USA 588 F.3d at 1244. The Consent Judgment does not provide a basis for Plaintiffs’ claims.

Sanguinetti v. CitiMortgage, Inc., 2013 WL 4838765, at *6 (N.D.Cal.2013).

In short, the consent judgment provides no basis for a negligence claim against defendants. The complaint insufficiently attempts to allege defendants’ cognizable duty of care let alone its breach to cause plaintiffs damage. Nothing remotely supports a purported claim that defendants provided “substantial assistance” to a tort-feasor which somehow injured plaintiffs.

The complaint’s (second) negligence claim fails and is subject to dismissal with prejudice.

Real Estate Settlement Procedures Act

The complaint’s (fourth) claim appears to allege that defendants violated the Real Estate Settlement Procedures Act (“RES-PA”), 12 U.S.C. §§ 2601 et seq., based on unsatisfactory responses to correspondence of plaintiffs’ counsel near the time of the trustee’s sale of the property. The complaint appears to equate the correspondence of plaintiffs’ counsel as a qualified written request (“QWR”) under RES-PA. The RESPA claim faults defendants’ failure “to prove up the validity of the notice of trustee sale” given alleged invalidity of the notice of default and election to sell under deed of trust.

Sending QWR To Servicer

RESPA addresses loan servicer duties to respond to borrower inquiries. A QWR is a “written request from the borrower (or an agent of the borrower) for information relating to the servicing of such loan” received by a “servicer of a federally related mortgage loan.” 12 U.S.C. § 2605(e)(1)(A). Among other things, a QWR must include information to identify the borrower’s name and account and a “statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.” 12 U.S.C. § 2605(e)(l)(B)(ii).

The complaint bases its RESPA claims on correspondence of plaintiffs counsel to NDS, the DOT trustee. NDS was not the servicer of Mr. Flores’ loan and not obligated under RE SPA to respond to a purported QWR. Moreover, as defendants note, plaintiffs did not direct correspondence to the loan servicer until after the foreclosure sale and thus the extinguishment of Mr. Flores’ loan. After foreclosure, Mr. Flores’ loan was subject neither to servicing nor a QWR.

Qualiñcation As A QWR

Defendants challenge that the correspondence of plaintiffs’ counsel qualified as a QWR. Defendants note that a QWR must address loan servicing, which is defined “as receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan, including amounts for escrow accounts described in [12 U.S.C.] section 2609 of this title, and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the loan.”

The complaint fails to allege facts that the correspondence of plaintiffs’ counsel qualifies as a QWR in that the correspondence addressed authority to foreclose on the property, not plaintiffs’ “scheduled periodic payments” or “making the payments of principal and interest.” The complaint’s conclusory allegations as to a QWR are insufficient. See Lemperle v. Washington Mut. Bank, 2011 WL 197590, at *2 (S.D.Cal.2011) (dismissing as factually insufficient a RESPA claim which offered “no factual basis for his claim, merely reciting the elements of the cause of action and the general required content of a QWR”); Lopez v. U.S. Bank Nat. Ass’n, 2010 WL- 3463622, at *2 (S.D.Cal.2010) (plaintiff “does not allege when she sent the QWR, to whom, or what she asked for, and for these reasons fails to state a claim under RESPA”); Walker v. Equity 1 Lenders Group, 2009 WL 1364430, at *5 (S.D.Cal.2009) (“The Complaint does not otherwise allege facts to support that Plaintiff sent Aurora a qualified written request”). The complaint lacks supporting facts of a sufficient or credible QWR to doom further RESPA claims.

In sum, the complaint’s (fourth) RESPA claim is subject to dismissal with prejudice, and plaintiffs appear to concede as much in their opposition papers.

Fair Debt Collection Practices Act

The complaint’s fifth claim purports to allege violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq., based on assertions that defendants “[fjalsely rep