1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALI POORSINA, Case No. 20-cv-08282-WHO
8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS WITH PREJUDICE
10 PEAK FORCLOSURE SERVICES, INC, Re: Dkt. No. 6 Defendant. 11
12 13 Pro se plaintiff Ali Poorsina brings this action against defendant Peak Foreclosure 14 Services, Inc. (“Peak”) for claims arising out a foreclosure sale. Peak had previously interpleaded 15 the surplus funds from its foreclosure of real property in San Francisco in an action before 16 Magistrate Judge Laurel Beeler, In re 1563 28th Ave., San Francisco, CA 94112, Case No. 3:19- 17 cv-01385-LB, in which Poorsina was a claimant and raised causes of action similar to the ones in 18 this case that Judge Beeler rejected before she entered judgment. 19 Poorsina’s claims under California’s Rosenthal Fair Debt Collection Practices Act 20 (“Rosenthal Act”) and the Fair Debt Collection Practices Act (“FDCPA”) are meritless because 21 they are barred by the one-year statute of limitations and because Poorsina only alleges 22 foreclosure-related activities, which are not cognizable under either statute. His declaratory relief 23 claim and claim under California Business and Professions Code section 17200 (the “UCL”) 24 necessarily fail because they are wholly derivative of the Rosenthal Act and FDCPA claims. 25 Amendment would be futile, and I will VACATE the hearing on February 3, 2021 and GRANT 26 Peak’s motion to dismiss the Complaint with prejudice. 27 BACKGROUND 1 property located at 1563 28th Avenue, San Francisco, California 94122 (“Property”). Complaint 2 (“Compl.”) [Dkt. No. 1] ¶ 14; Defendant’s Request for Judicial Notice in Support of Motion to 3 Dismiss (“RJN”) [Dkt. No. 6-2], Ex. 1.1 On or about February 27, 2017, Peak was substituted in 4 as the foreclosure trustee under the deed of trust. RJN, Ex. 2. 5 On May 4, 2017, Peak recorded a Notice of Default. Compl. ¶ 16; RJN, Ex. 3. Poorsina 6 failed to cure the default and a Notice of Trustee’s Sale was recorded on August 8, 2017. Compl. 7 ¶ 17; RJN, Ex. 4. Poorsina did not reinstate the loan and the foreclosure sale went forward on 8 September 7, 2017 with Peak as the foreclosure trustee. Id., Ex. 5. The Property was sold to 9 Steppingstone Assets Group LLC 100% Interest. Id. 10 After paying the foreclosing creditor, trustee’s fees and expenses, and court costs, Peak 11 was left with $273,331.73 in surplus proceeds (“Surplus Proceeds”) available to potential 12 claimants. RJN, Ex. 6; see In re 1563 28th Ave., San Francisco, CA 94112, No. 3:19-cv-01385- 13 LB, 333 F.R.D. 630, 632 (N.D. Cal. 2019). Peak filed an interpleader petition in San Francisco 14 County Superior Court. Id. at 633. The United States, which was a claimant on the federal tax 15 lien, removed the action to federal court. Id. 16 Six claimants made claims on the Surplus Proceeds, including Poorsina who claimed the 17 entirety of the Surplus Proceeds. Id. at 634. Judge Beeler granted Peak’s motion for an order 18 depositing $273,331.73 in Surplus Proceeds with the court and discharged it of liability with 19 respect to the Surplus Proceeds. Id. at 638. She denied Poorsina’s motions and objections 20 opposing the other parties’ claims. Id. 21 Ultimately, Poorsina filed a motion for summary judgment, alleging FDCPA and Federal 22
23 1 Peak requests that I take judicial notice of several documents related to the underlying loan and related surplus funds proceedings: Deed of Trust recorded on May 12, 2005 (Ex. 1); Substitution 24 of Trustee recorded on May 4, 2017 (Ex. 2); Notice of Default recorded on May 4, 2017 (Ex. 3); Notice of Trustee’s Sale recorded on August 8, 2017 (Ex. 4); Trustee’s Deed Upon Sale recorded 25 on September 15, 2017 (Ex. 5); October 17, 2019 Order Granting Interpleader Plaintiff’s Motion for an Order Depositing Surplus Proceeds with Court and Discharging Plaintiff (Ex. 6); February 26 6, 2020 Order Dismissing Poorsina’s Motion for Summary Judgment (Ex. 7).
27 Courts routinely take judicial notice of similar public records. See Woodruff v. Mason McDuffie 1 Trade Commission Act claims against Peak for making “false, deceptive, or misleading 2 representation . . . in connection with the collection of any debt.” Poorsina Motion for Summary 3 Judgment, In re 1563 28th Ave., San Francisco, CA 94112, No. 3:19-cv-01385-LB, (N.D. Cal. 4 Sept. 30, 2020), Dkt. No. 198. Judge Beeler denied Poorsina’s motion, noting that Peak was 5 discharged of liability with respect to the Surplus Proceeds. See Order Denying Mr. Poorsina’s 6 Motions for Summary Judgment, In re 1563 28th Ave., San Francisco, CA 94112, No. 3:19-cv- 7 01385-LB, (N.D. Cal. Oct. 1, 2020), Dkt. No. 200. On October 6, 2020, judgment was entered in 8 favor of Poorsina in the amount of $1,719.98; the remaining amounts went to the other claimants. 9 On November 23, 2020, Poorsina filed the Complaint in this action, bringing similar 10 claims against Peak for violating the Rosenthal Act, the FDCPA, and the UCL by making “false 11 representations or [using] deceptive means to collect or attempt to collect any debt,” and 12 “misrepresent[ing] the status of the loan and [Poorsina’s] obligation to pay,” Compl. ¶ 29, 35. 13 LEGAL STANDARD 14 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss if a claim 15 fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 16 dismiss, the claimant must allege “enough facts to state a claim to relief that is plausible on its 17 face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when 18 the plaintiff pleads facts that “allow the court to draw the reasonable inference that the defendant 19 is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation 20 omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. 21 While courts do not require “heightened fact pleading of specifics,” a claim must be supported by 22 facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 23 570. 24 DISCUSSION 25 Peak moves to dismiss the Complaint on grounds that Poorsina’s Rosenthal Act and 26 FDCPA claims fail because they are barred by the one-year statute of limitations, and because they 27 would fail regardless because Peak was carrying out the foreclosure process, which is not a 1 [Dkt. No. 6] 4. Additionally, Peak argues that the UCL claim fails because it is predicated solely 2 upon the failed Rosenthal Act and FDCPA claims and the request for declaratory relief is 3 duplicative and based upon the other defective claims. Id. 4 I. ROSENTHAL ACT CLAIM 5 Poorsina alleges that Peak violated the Rosenthal Act in connection with the nonjudicial 6 foreclosure process by making false representations regarding the debt owed on his mortgage 7 loan and to collect upon the debt. Compl. ¶ 29. As Peak argues, this claim has two fatal flaws. 8 First, the applicable statute of limitations provides plaintiffs one year from the alleged 9 violation to bring suit against a defendant. See Cal. Civ. Pro. § 1788.30(f); see also Huy Thanh Vo 10 v. Nelson & Kennard, 931 F. Supp. 2d 1080, 1085 (E.D. Cal. 2013). Poorsina’s claim is based 11 upon the foreclosure sale that occurred on September 7, 2017. He had until September 7, 2018 to 12 file suit based upon a Rosenthal Act violation. He did not commence this lawsuit until November 13 23, 2020, which is more than two years after the statute of limitations ran.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALI POORSINA, Case No. 20-cv-08282-WHO
8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS WITH PREJUDICE
10 PEAK FORCLOSURE SERVICES, INC, Re: Dkt. No. 6 Defendant. 11
12 13 Pro se plaintiff Ali Poorsina brings this action against defendant Peak Foreclosure 14 Services, Inc. (“Peak”) for claims arising out a foreclosure sale. Peak had previously interpleaded 15 the surplus funds from its foreclosure of real property in San Francisco in an action before 16 Magistrate Judge Laurel Beeler, In re 1563 28th Ave., San Francisco, CA 94112, Case No. 3:19- 17 cv-01385-LB, in which Poorsina was a claimant and raised causes of action similar to the ones in 18 this case that Judge Beeler rejected before she entered judgment. 19 Poorsina’s claims under California’s Rosenthal Fair Debt Collection Practices Act 20 (“Rosenthal Act”) and the Fair Debt Collection Practices Act (“FDCPA”) are meritless because 21 they are barred by the one-year statute of limitations and because Poorsina only alleges 22 foreclosure-related activities, which are not cognizable under either statute. His declaratory relief 23 claim and claim under California Business and Professions Code section 17200 (the “UCL”) 24 necessarily fail because they are wholly derivative of the Rosenthal Act and FDCPA claims. 25 Amendment would be futile, and I will VACATE the hearing on February 3, 2021 and GRANT 26 Peak’s motion to dismiss the Complaint with prejudice. 27 BACKGROUND 1 property located at 1563 28th Avenue, San Francisco, California 94122 (“Property”). Complaint 2 (“Compl.”) [Dkt. No. 1] ¶ 14; Defendant’s Request for Judicial Notice in Support of Motion to 3 Dismiss (“RJN”) [Dkt. No. 6-2], Ex. 1.1 On or about February 27, 2017, Peak was substituted in 4 as the foreclosure trustee under the deed of trust. RJN, Ex. 2. 5 On May 4, 2017, Peak recorded a Notice of Default. Compl. ¶ 16; RJN, Ex. 3. Poorsina 6 failed to cure the default and a Notice of Trustee’s Sale was recorded on August 8, 2017. Compl. 7 ¶ 17; RJN, Ex. 4. Poorsina did not reinstate the loan and the foreclosure sale went forward on 8 September 7, 2017 with Peak as the foreclosure trustee. Id., Ex. 5. The Property was sold to 9 Steppingstone Assets Group LLC 100% Interest. Id. 10 After paying the foreclosing creditor, trustee’s fees and expenses, and court costs, Peak 11 was left with $273,331.73 in surplus proceeds (“Surplus Proceeds”) available to potential 12 claimants. RJN, Ex. 6; see In re 1563 28th Ave., San Francisco, CA 94112, No. 3:19-cv-01385- 13 LB, 333 F.R.D. 630, 632 (N.D. Cal. 2019). Peak filed an interpleader petition in San Francisco 14 County Superior Court. Id. at 633. The United States, which was a claimant on the federal tax 15 lien, removed the action to federal court. Id. 16 Six claimants made claims on the Surplus Proceeds, including Poorsina who claimed the 17 entirety of the Surplus Proceeds. Id. at 634. Judge Beeler granted Peak’s motion for an order 18 depositing $273,331.73 in Surplus Proceeds with the court and discharged it of liability with 19 respect to the Surplus Proceeds. Id. at 638. She denied Poorsina’s motions and objections 20 opposing the other parties’ claims. Id. 21 Ultimately, Poorsina filed a motion for summary judgment, alleging FDCPA and Federal 22
23 1 Peak requests that I take judicial notice of several documents related to the underlying loan and related surplus funds proceedings: Deed of Trust recorded on May 12, 2005 (Ex. 1); Substitution 24 of Trustee recorded on May 4, 2017 (Ex. 2); Notice of Default recorded on May 4, 2017 (Ex. 3); Notice of Trustee’s Sale recorded on August 8, 2017 (Ex. 4); Trustee’s Deed Upon Sale recorded 25 on September 15, 2017 (Ex. 5); October 17, 2019 Order Granting Interpleader Plaintiff’s Motion for an Order Depositing Surplus Proceeds with Court and Discharging Plaintiff (Ex. 6); February 26 6, 2020 Order Dismissing Poorsina’s Motion for Summary Judgment (Ex. 7).
27 Courts routinely take judicial notice of similar public records. See Woodruff v. Mason McDuffie 1 Trade Commission Act claims against Peak for making “false, deceptive, or misleading 2 representation . . . in connection with the collection of any debt.” Poorsina Motion for Summary 3 Judgment, In re 1563 28th Ave., San Francisco, CA 94112, No. 3:19-cv-01385-LB, (N.D. Cal. 4 Sept. 30, 2020), Dkt. No. 198. Judge Beeler denied Poorsina’s motion, noting that Peak was 5 discharged of liability with respect to the Surplus Proceeds. See Order Denying Mr. Poorsina’s 6 Motions for Summary Judgment, In re 1563 28th Ave., San Francisco, CA 94112, No. 3:19-cv- 7 01385-LB, (N.D. Cal. Oct. 1, 2020), Dkt. No. 200. On October 6, 2020, judgment was entered in 8 favor of Poorsina in the amount of $1,719.98; the remaining amounts went to the other claimants. 9 On November 23, 2020, Poorsina filed the Complaint in this action, bringing similar 10 claims against Peak for violating the Rosenthal Act, the FDCPA, and the UCL by making “false 11 representations or [using] deceptive means to collect or attempt to collect any debt,” and 12 “misrepresent[ing] the status of the loan and [Poorsina’s] obligation to pay,” Compl. ¶ 29, 35. 13 LEGAL STANDARD 14 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss if a claim 15 fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 16 dismiss, the claimant must allege “enough facts to state a claim to relief that is plausible on its 17 face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when 18 the plaintiff pleads facts that “allow the court to draw the reasonable inference that the defendant 19 is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation 20 omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. 21 While courts do not require “heightened fact pleading of specifics,” a claim must be supported by 22 facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 23 570. 24 DISCUSSION 25 Peak moves to dismiss the Complaint on grounds that Poorsina’s Rosenthal Act and 26 FDCPA claims fail because they are barred by the one-year statute of limitations, and because they 27 would fail regardless because Peak was carrying out the foreclosure process, which is not a 1 [Dkt. No. 6] 4. Additionally, Peak argues that the UCL claim fails because it is predicated solely 2 upon the failed Rosenthal Act and FDCPA claims and the request for declaratory relief is 3 duplicative and based upon the other defective claims. Id. 4 I. ROSENTHAL ACT CLAIM 5 Poorsina alleges that Peak violated the Rosenthal Act in connection with the nonjudicial 6 foreclosure process by making false representations regarding the debt owed on his mortgage 7 loan and to collect upon the debt. Compl. ¶ 29. As Peak argues, this claim has two fatal flaws. 8 First, the applicable statute of limitations provides plaintiffs one year from the alleged 9 violation to bring suit against a defendant. See Cal. Civ. Pro. § 1788.30(f); see also Huy Thanh Vo 10 v. Nelson & Kennard, 931 F. Supp. 2d 1080, 1085 (E.D. Cal. 2013). Poorsina’s claim is based 11 upon the foreclosure sale that occurred on September 7, 2017. He had until September 7, 2018 to 12 file suit based upon a Rosenthal Act violation. He did not commence this lawsuit until November 13 23, 2020, which is more than two years after the statute of limitations ran. Accordingly, 14 Poorsina’s Rosenthal Act claim is barred by the statute of limitations. 15 Second, the Rosenthal Act does not apply to this case at all. Courts in this district have 16 held that unless the claim arises from activities “beyond the scope of the ordinary foreclosure 17 process,” the Rosenthal Act does not apply to foreclosure proceedings. See Reyes v. Wells Fargo 18 Bank, N.A., No. C-10-01667 JCS, 2011 WL 30759, at *19 (N.D. Cal. Jan. 3, 2011); Collins v. 19 Power Default Servs., Inc., No. 09-4838 SC, 2010 WL 234902, at *3 (N.D. Cal. Jan. 14, 2010) 20 (“the law is clear that foreclosing on a deed of trust does not invoke the statutory protections of the 21 [Rosenthal Act]” (citations omitted)). Poorsina’s Rosenthal Act claim does not allege conduct 22 beyond the ordinary foreclosure process, nor does he allege any damages based on the purported 23 Rosenthal Act violation. Poorsina’s opposition brief fails to address this argument, or any of the 24 arguments discussed below. Opposition to Motion to Dismiss [Dkt. No. 16]. Instead, he simply 25 reiterates the motion to dismiss standard and conclusorily argues that his Complaint has met that 26 standard. It has not. 27 Peak’s motion to dismiss the Rosenthal Act claim is GRANTED. II. FDCPA CLAIM 1 The same two reasons doom Poorsina’s FDCPA claim. Like the Rosenthal Act, the 2 FDCPA’s statute of limitations is “one year from the date on which the violation occurs.” See 15 3 U.S.C. § 1692k(d); see also Huy Thanh Vo, 931 F. Supp. 2d at 1085. Poorsina’s FDCPA claim is 4 based upon the foreclosure sale that occurred on September 7, 2017 and is similarly time-barred. 5 Compl., second labelled ¶¶ 1–6. 6 Additionally, the law is well settled that FDCPA’s definition of debt collector “does not 7 include the consumer’s creditors, a mortgage servicing company, or any assignee of the debt.” 8 Woodruff v. Mason McDuffie Mortg. Corp., No. 19-CV-04300-WHO, 2020 WL 5210920, at *7 9 (N.D. Cal. Sept. 1, 2020) (citation omitted). Acts of foreclosing on a property pursuant to a deed 10 of trust are not “debt collection” within the meaning of the FDCPA. Id. (citing Nera v. Am. Home 11 Mortg. Servicing, Inc., No. C-09-2025 RMW, 2009 WL 2423109, at *4 (N.D. Cal. Aug. 5, 2009) 12 (citation omitted)). “[C]reditors, mortgagors and mortgage servicing companies are not ‘debt 13 collectors’ and are exempt from liability under the Act. Id. (citation omitted); see Castellanos v. 14 Countrywide Bank NA, No. 15-CV-00896-BLF, 2015 WL 3988862, at *3 (N.D. Cal. Jun. 30, 15 2015) (“[T]to the extent that [p]laintiff alleges [d]efendants violated the FDCPA or RFDCPA 16 through foreclosure-related activities, such claims are not cognizable under either statute.”). 17 Peak’s motion to dismiss the FDCPA claim is GRANTED. 18 III. UCL CLAIM 19 Poorsina bases his UCL claim upon Rosenthal Act and FDCPA violations. See Compl. ¶ 20 37. By proscribing “any unlawful” business practice, “section 17200 ‘borrows’ violations of other 21 laws and treats them as unlawful practices” that the unfair competition law makes independently 22 actionable. Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 23 (1999). A plaintiff must have sufficiently “tethered” his unfair business practices claim to a 24 “specific constitutional, statutory, or regulatory provisions.” Valencia v. Wells Fargo Home 25 Mortg. Inc., No. C 14-3354 CW, 2014 WL 5812578, at *6 (N.D. Cal. Nov. 7, 2014). “A plaintiff 26 alleging unfair business practices under these statutes must state with reasonable particularity the 27 facts supporting the statutory elements of the violation.” Khoury v. Maly’s of California, Inc., 14 1 Cal. App. 4th 612, 619 (1993). A plaintiff may thus not “plead around” an “absolute bar to relief” 2 || simply “by recasting the cause of action as one for unfair competition.” Manufacturers Life Ins. 3 Co. v. Superior Court, 10 Cal.4th 257, 283 (1995). 4 Because Poorsina’s UCL claim is tethered to the meritless Rosenthal Act and FDCPA 5 claims, it necessarily fails as well. Peak’s motion to dismiss the UCL claim is GRANTED. 6 || IV. DECLARATORY RELIEF CLAIM 7 Poorsina’s declaratory relief claim is merely derivative of his Rosenthal Act and FDCPA 8 claims, asserting no independent theories. Compl., second labelled 4] 7—9. It falls with the rest of 9 || his insufficiently pleaded Complaint. 10 In sum, Poorsina fails to state a claim upon which relief can be granted under Rule 11 12(b)(6). If a Rule 12(b)(6) motion is granted, “leave to amend need not be granted where 12 amendment would be futile.” Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002). I find 13 that amendment would be futile given the applicable statutes of limitation. Poorsina made similar 14 allegations in the surplus action before Judge Beeler, and they were rejected by her as they are 15 rejected by me. Peak has been discharged of liability as it relates to the Surplus Funds. Peak’s a 16 || motion to dismiss the Complaint is GRANTED with prejudice. CONCLUSION 18 Peak’s motion to dismiss the Complaint is GRANTED with prejudice. Judgment will be 19 || entered accordingly. 20 IT IS SO ORDERED. 21 Dated: January 29, 2021 V.Q2 23 ° William H. Orrick 24 United States District Judge 25 26 27 28