Archive | July, 2013

Buying Real Estate after Foreclosure or Bankruptcy or Short Sale Underwriting guidelines

24 Jul
McCandless’ Law Firm
5:23 PM (13 hours ago)

to TIMOTHY, me

Loan Type

Credit Event

Foreclosure

Short Sale/Deed in Lieu of Foreclosure

Chapter 7

Bankruptcy

Chapter 13

Bankruptcy

Conventional

(Determined by Date  of application)

 ~ 7yrs from completion date

  ~ 3 yrs from completion date if borrower puts 10%  down.

 ~ 7  yrs if borrower puts down 10%  less

~ 4 yrs if the borrower puts down 10%

~ 2 yrs if the borrower puts  down 20%

~ *2 yrs if the borrower puts down 20%

 ~ 4 yrs from the date bankruptcy is completed

~  2yrs from the date bankruptcy is completed

 ~ 2 yrs from the date bankruptcy is completed

~ 4  yrs from the date of dismissal by a Judge

FHA

(Determined by date of Credit Approval)

 ~ 3 years from completion date  ~ Less than 2 years but not less than 12 months from completion date*

 ~ 3 years from completion date

Wait period not required if borrower is current on mortgage/debts & is not taking advantage of declining market conditions

 ~ 2 years from date bankruptcy was completed ~ Less than 2 years, but no less than 12 months the date bankruptcy was completed*

 ~ 1 year payout has elapsed & payment performance is satisfactory

 VA

(Determined by date of credit approval)

 ~ 2 years from completion date ~ Between 12-23 months from completion date*

 ~ 2 years from completion date ~ Wait period not required if borrower is current on mortgage/debts & is not taking advantage of declining market conditions

 ~ 2 years from date bankruptcy was completed ~ Between 12-23 months from the date bankruptcy was completed*

 ~ 1 year payout has elapsed & payment performance is satisfactory

 USDA

(Determined by date of credit approval)

 ~ 3 years from completion date

~ Less than 3 years *

 ~ 3 years from completion date

~ Less than 3 years from completion date*

 ~ 3 years from date bankruptcy was completed

~ Less than 3 years from date bankruptcy was completed*

 ~ 1 year from date of repayment was completed and bankruptcy completed

~ Less than 1 year*

 What events might qualify as extenuating circumstances?

 * Extenuating circumstance are temporary events that are beyond a borrower’s control, such as the loss of a job, medical bills or the death of a wage earner. Divorce and the inability to sell the house after a job relocation do not qualify. These events must be verified and documented, and they are subject to review by an underwriter.

Tenants in rentals that is forclosed have rights to a new agreement with new owner Civil code 1962 if they evict they are liable wrongful eviction = Punative damages !!!

23 Jul

Civil Code – CIV

DIVISION 3. OBLIGATIONS [1427. – 3272.9.]

( Heading of Division 3 amended by Stats. 1988, Ch. 160, Sec. 14. )

PART 4. OBLIGATIONS ARISING FROM PARTICULAR TRANSACTIONS [1738. – 3272.9.]

( Part 4 enacted 1872. )

TITLE 5. HIRING [1925. – 1997.270.]

( Title 5 enacted 1872. )

 

CHAPTER 4. Identification of Property Owners [1961. – 1962.7.]

( Chapter 4 added by Stats. 1972, Ch. 941. )

 

1961.

This chapter shall apply to every dwelling structure containing one or more units offered to the public for rent or for lease for residential purposes.

(Amended by Stats. 1987, Ch. 769, Sec. 1.)

1962.

(a) Any owner of a dwelling structure specified in Section 1961 or a party signing a rental agreement or lease on behalf of the owner shall do all of the following:

(1) Disclose therein the name, telephone number, and usual street address at which personal service may be effected of each person who is:

(A) Authorized to manage the premises.

(B) An owner of the premises or a person who is authorized to act for and on behalf of the owner for the purpose of service of process and for the purpose of receiving and receipting for all notices and demands.

(2) Disclose therein the name, telephone number, and address of the person or entity to whom rent payments shall be made.

(A) If rent payments may be made personally, the usual days and hours that the person will be available to receive the payments shall also be disclosed.

(B) At the owner’s option, the rental agreement or lease shall instead disclose the number of either:

(i) The account in a financial institution into which rent payments may be made, and the name and street address of the institution; provided that the institution is located within five miles of the rental property.

(ii) The information necessary to establish an electronic funds transfer procedure for paying the rent.

(3) Disclose therein the form or forms in which rent payments are to be made.

(4) Provide a copy of the rental agreement or lease to the tenant within 15 days of its execution by the tenant. Once each calendar year thereafter, upon request by the tenant, the owner or owner’s agent shall provide an additional copy to the tenant within 15 days. If the owner or owner’s agent does not possess the rental agreement or lease or a copy of it, the owner or owner’s agent shall instead furnish the tenant with a written statement stating that fact and containing the information required by paragraphs (1), (2), and (3).

(b) In the case of an oral rental agreement, the owner, or a person acting on behalf of the owner for the receipt of rent or otherwise, shall furnish the tenant, within 15 days of the agreement, with a written statement containing the information required by paragraphs (1), (2), and (3) of subdivision (a). Once each calendar year thereafter, upon request by the tenant, the owner or owner’s agent shall provide an additional copy of the statement to the tenant within 15 days.

(c) The information required by this section shall be kept current and this section shall extend to and be enforceable against any successor owner or manager, who shall comply with this section within 15 days of succeeding the previous owner or manager. A successor owner or manager shall not serve a notice pursuant to paragraph (2) of Section 1161 of the Code of Civil Procedure or otherwise evict a tenant for nonpayment of rent that accrued during the period of noncompliance by a successor owner or manager with this subdivision. Nothing in this subdivision shall relieve the tenant of any liability for unpaid rent.

(d) A party who enters into a rental agreement on behalf of the owner who fails to comply with this section is deemed an agent of each person who is an owner:

(1) For the purpose of service of process and receiving and receipting for notices and demands.

(2) For the purpose of performing the obligations of the owner under law and under the rental agreement.

(3) For the purpose of receiving rental payments, which may be made in cash, by check, by money order, or in any form previously accepted by the owner or owner’s agent, unless the form of payment has been specified in the oral or written agreement, or the tenant has been notified by the owner in writing that a particular form of payment is unacceptable.

(e) Nothing in this section limits or excludes the liability of any undisclosed owner.

(f) If the address provided by the owner does not allow for personal delivery, then it shall be conclusively presumed that upon the mailing of any rent or notice to the owner by the tenant to the name and address provided, the notice or rent is deemed receivable by the owner on the date posted, if the tenant can show proof of mailing to the name and address provided by the owner.

(Amended by Stats. 2012, Ch. 695, Sec. 1. Effective January 1, 2013.)

1962.5.

(a) Notwithstanding subdivisions (a) and (b) of Section 1962, the information required by paragraph (1) of subdivision (a) of Section 1962 to be disclosed to a tenant may, instead of being disclosed in the manner described in subdivisions (a) and (b) of Section 1962, be disclosed by the following method:

(1) In each dwelling structure containing an elevator a printed or typewritten notice containing the information required by paragraph (1) of subdivision (a) of Section 1962 shall be placed in every elevator and in one other conspicuous place.

(2) In each structure not containing an elevator, a printed or typewritten notice containing the information required by paragraph (1) of subdivision (a) of Section 1962 shall be placed in at least two conspicuous places.

(3) In the case of a single unit dwelling structure, the information to be disclosed under this section may be disclosed by complying with either paragraph (1) or (2).

(b) Except as provided in subdivision (a), all the provisions of Section 1962 shall be applicable.

(Amended by Stats. 2001, Ch. 729, Sec. 4. Effective January 1, 2002.)

1962.7.

In the event an owner, successor owner, manager, or agent specified in Section 1961 fails to comply with the requirements of this chapter, service of process by a tenant with respect to a dispute arising out of the tenancy may be made by registered or certified mail sent to the address at which rent is paid, in which case the provisions of Section 1013 of the Code of Civil Procedure shall apply.

(Amended by Stats. 2001, Ch. 729, Sec. 5. Effective January 1, 2002.)

1159.  Every person is guilty of a forcible entry who either:
   1. By breaking open doors, windows, or other parts of a house, or
by any kind of violence or circumstance of terror enters upon or into
any real property; or,
   2. Who, after entering peaceably upon real property, turns out by
force, threats, or menacing conduct, the party in possession.
   The "party in possession" means any person who hires real property
and includes a boarder or lodger, except those persons whose
occupancy is described in subdivision (b) of Section 1940 of the
Civil Code.

1160.  Every person is guilty of a forcible detainer who either:
   1. By force, or by menaces and threats of violence, unlawfully
holds and keeps the possession of any real property, whether the same
was acquired peaceably or otherwise; or,
   2. Who, in the night-time, or during the absence of the occupant
of any lands, unlawfully enters upon real property, and who, after
demand made for the surrender thereof, for the period of five days,
refuses to surrender the same to such former occupant.
   The occupant of real property, within the meaning of this
subdivision, is one who, within five days preceding such unlawful
entry, was in the peaceable and undisturbed possession of such lands.

1161.  A tenant of real property, for a term less than life, or the
executor or administrator of his or her estate heretofore qualified
and now acting or hereafter to be qualified and act, is guilty of
unlawful detainer:
   1. When he or she continues in possession, in person or by
subtenant, of the property, or any part thereof, after the expiration
of the term for which it is let to him or her; provided the
expiration is of a nondefault nature however brought about without
the permission of his or her landlord, or the successor in estate of
his or her landlord, if applicable; including the case where the
person to be removed became the occupant of the premises as a
servant, employee, agent, or licensee and the relation of master and
servant, or employer and employee, or principal and agent, or
licensor and licensee, has been lawfully terminated or the time fixed
for occupancy by the agreement between the parties has expired; but
nothing in this subdivision shall be construed as preventing the
removal of the occupant in any other lawful manner; but in case of a
tenancy at will, it must first be terminated by notice, as prescribed
in the Civil Code.
   2. When he or she continues in possession, in person or by
subtenant, without the permission of his or her landlord, or the
successor in estate of his or her landlord, if applicable, after
default in the payment of rent, pursuant to the lease or agreement
under which the property is held, and three days' notice, in writing,
requiring its payment, stating the amount which is due, the name,
telephone number, and address of the person to whom the rent payment
shall be made, and, if payment may be made personally, the usual days
and hours that person will be available to receive the payment
(provided that, if the address does not allow for personal delivery,
then it shall be conclusively presumed that upon the mailing of any
rent or notice to the owner by the tenant to the name and address
provided, the notice or rent is deemed received by the owner on the
date posted, if the tenant can show proof of mailing to the name and
address provided by the owner), or the number of an account in a
financial institution into which the rental payment may be made, and
the name and street address of the institution (provided that the
institution is located within five miles of the rental property), or
if an electronic funds transfer procedure has been previously
established, that payment may be made pursuant to that procedure, or
possession of the property, shall have been served upon him or her
and if there is a subtenant in actual occupation of the premises,
also upon the subtenant.
   The notice may be served at any time within one year after the
rent becomes due. In all cases of tenancy upon agricultural lands,
where the tenant has held over and retained possession for more than
60 days after the expiration of the term without any demand of
possession or notice to quit by the landlord or the successor in
estate of his or her landlord, if applicable, he or she shall be
deemed to be holding by permission of the landlord or successor in
estate of his or her landlord, if applicable, and shall be entitled
to hold under the terms of the lease for another full year, and shall
not be guilty of an unlawful detainer during that year, and the
holding over for that period shall be taken and construed as a
consent on the part of a tenant to hold for another year.
   3. When he or she continues in possession, in person or by
subtenant, after a neglect or failure to perform other conditions or
covenants of the lease or agreement under which the property is held,
including any covenant not to assign or sublet, than the one for the
payment of rent, and three days' notice, in writing, requiring the
performance of such conditions or covenants, or the possession of the
property, shall have been served upon him or her, and if there is a
subtenant in actual occupation of the premises, also, upon the
subtenant. Within three days after the service of the notice, the
tenant, or any subtenant in actual occupation of the premises, or any
mortgagee of the term, or other person interested in its
continuance, may perform the conditions or covenants of the lease or
pay the stipulated rent, as the case may be, and thereby save the
lease from forfeiture; provided, if the conditions and covenants of
the lease, violated by the lessee, cannot afterward be performed,
then no notice, as last prescribed herein, need be given to the
lessee or his or her subtenant, demanding the performance of the
violated conditions or covenants of the lease.
   A tenant may take proceedings, similar to those prescribed in this
chapter, to obtain possession of the premises let to a subtenant or
held by a servant, employee, agent, or licensee, in case of his or
her unlawful detention of the premises underlet to him or her or held
by him or her.
   4. Any tenant, subtenant, or executor or administrator of his or
her estate heretofore qualified and now acting, or hereafter to be
qualified and act, assigning or subletting or committing waste upon
the demised premises, contrary to the conditions or covenants of his
or her lease, or maintaining, committing, or permitting the
maintenance or commission of a nuisance upon the demised premises or
using the premises for an unlawful purpose, thereby terminates the
lease, and the landlord, or his or her successor in estate, shall
upon service of three days' notice to quit upon the person or persons
in possession, be entitled to restitution of possession of the
demised premises under this chapter. For purposes of this
subdivision, a person who commits or maintains a public nuisance as
described in Section 3482.8 of the Civil Code, or who commits an
offense described in subdivision (c) of Section 3485 of the Civil
Code, or subdivision (c) of Section 3486 of the Civil Code, or uses
the premises to further the purpose of that offense shall be deemed
to have committed a nuisance upon the premises.
   5. When he or she gives written notice as provided in Section 1946
of the Civil Code of his or her intention to terminate the hiring of
the real property, or makes a written offer to surrender which is
accepted in writing by the landlord, but fails to deliver possession
at the time specified in that written notice, without the permission
of his or her landlord, or the successor in estate of the landlord,
if applicable.
   As used in this section, tenant includes any person who hires real
property except those persons whose occupancy is described in
subdivision (b) of Section 1940 of the Civil Code.
   This section shall become operative on January 1, 2012.

1161.1.  With respect to application of Section 1161 in cases of
possession of commercial real property after default in the payment
of rent:
   (a) If the amount stated in the notice provided to the tenant
pursuant to subdivision (2) of Section 1161 is clearly identified by
the notice as an estimate and the amount claimed is not in fact
correct, but it is determined upon the trial or other judicial
determination that rent was owing, and the amount claimed in the
notice was reasonably estimated, the tenant shall be subject to
judgment for possession and the actual amount of rent and other sums
found to be due. However, if (1) upon receipt of such a notice
claiming an amount identified by the notice as an estimate, the
tenant tenders to the landlord within the time for payment required
by the notice, the amount which the tenant has reasonably estimated
to be due and (2) if at trial it is determined that the amount of
rent then due was the amount tendered by the tenant or a lesser
amount, the tenant shall be deemed the prevailing party for all
purposes. If the court determines that the amount so tendered by the
tenant was less than the amount due, but was reasonably estimated,
the tenant shall retain the right to possession if the tenant pays to
the landlord within five days of the effective date of the judgment
(1) the amount previously tendered if it had not been previously
accepted, (2) the difference between the amount tendered and the
amount determined by the court to be due, and (3) any other sums as
ordered by the court.
   (b) If the landlord accepts a partial payment of rent, including
any payment pursuant to subdivision (a), after serving notice
pursuant to Section 1161, the landlord, without any further notice to
the tenant, may commence and pursue an action under this chapter to
recover the difference between the amount demanded in that notice and
the payment actually received, and this shall be specified in the
complaint.
   (c) If the landlord accepts a partial payment of rent after filing
the complaint pursuant to Section 1166, the landlord's acceptance of
the partial payment is evidence only of that payment, without waiver
of any rights or defenses of any of the parties. The landlord shall
be entitled to amend the complaint to reflect the partial payment
without creating a necessity for the filing of an additional answer
or other responsive pleading by the tenant, and without prior leave
of court, and such an amendment shall not delay the matter from
proceeding. However, this subdivision shall apply only if the
landlord provides actual notice to the tenant that acceptance of the
partial rent payment does not constitute a waiver of any rights,
including any right the landlord may have to recover possession of
the property.
   (d) "Commercial real property" as used in this section, means all
real property in this state except dwelling units made subject to
Chapter 2 (commencing with Section 1940) of Title 5 of Part 4 of
Division 3 of the Civil Code, mobilehomes as defined in Section 798.3
of the Civil Code, or recreational vehicles as defined in Section
799.24 of the Civil Code.
   (e) For the purposes of this section, there is a presumption
affecting the burden of proof that the amount of rent claimed or
tendered is reasonably estimated if, in relation to the amount
determined to be due upon the trial or other judicial determination
of that issue, the amount claimed or tendered was no more than 20
percent more or less than the amount determined to be due. However,
if the rent due is contingent upon information primarily within the
knowledge of the one party to the lease and that information has not
been furnished to, or has not accurately been furnished to, the other
party, the court shall consider that fact in determining the
reasonableness of the amount of rent claimed or tendered pursuant to
subdivision (a).

1161.2.  (a) The clerk may allow access to limited civil case
records filed under this chapter, including the court file, index,
and register of actions, only as follows:
   (1) To a party to the action, including a party's attorney.
   (2) To any person who provides the clerk with the names of at
least one plaintiff and one defendant and the address of the
premises, including the apartment or unit number, if any.
   (3) To a resident of the premises who provides the clerk with the
name of one of the parties or the case number and shows proof of
residency.
   (4) To any person by order of the court, which may be granted ex
parte, on a showing of good cause.
   (5) Except as provided in paragraph (6), to any other person 60
days after the complaint has been filed, unless a defendant prevails
in the action within 60 days of the filing of the complaint, in which
case the clerk may not allow access to any court records in the
action, except as provided in paragraphs (1) to (4), inclusive.
   (6) In the case of a complaint involving residential property
based on Section 1161a as indicated in the caption of the complaint,
as required in subdivision (c) of Section 1166, to any other person,
if 60 days have elapsed since the complaint was filed with the court,
and, as of that date, judgment against all defendants has been
entered for the plaintiff, after a trial. If judgment is not entered
under the conditions described in this paragraph, the clerk shall not
allow access to any court records in the action, except as provided
in paragraphs (1) to (4), inclusive.
   (b) For purposes of this section, "good cause" includes, but is
not limited to, the gathering of newsworthy facts by a person
described in Section 1070 of the Evidence Code. It is the intent of
the Legislature that a simple procedure be established to request the
ex parte order described in subdivision (a).
   (c) Upon the filing of any case so restricted, the court clerk
shall mail notice to each defendant named in the action. The notice
shall be mailed to the address provided in the complaint. The notice
shall contain a statement that an unlawful detainer complaint
(eviction action) has been filed naming that party as a defendant,
and that access to the court file will be delayed for 60 days except
to a party, an attorney for one of the parties, or any other person
who (1) provides to the clerk the names of at least one plaintiff and
one defendant in the action and provides to the clerk the address,
including any applicable apartment, unit, or space number, of the
subject premises, or (2) provides to the clerk the name of one of the
parties in the action or the case number and can establish through
proper identification that he or she lives at the subject premises.
The notice shall also contain a statement that access to the court
index, register of actions, or other records is not permitted until
60 days after the complaint is filed, except pursuant to an order
upon a showing of good cause therefor. The notice shall contain on
its face the following information:
   (1) The name and telephone number of the county bar association.
   (2) The name and telephone number of any entity that requests
inclusion on the notice and demonstrates to the satisfaction of the
court that it has been certified by the State Bar as a lawyer
referral service and maintains a panel of attorneys qualified in the
practice of landlord-tenant law pursuant to the minimum standards for
a lawyer referral service established by the State Bar and Section
6155 of the Business and Professions Code.
   (3) The following statement:

   "The State Bar of California certifies lawyer referral services in
California and publishes a list of certified lawyer referral
services organized by county. To locate a lawyer referral service in
your county, go to the State Bar's website at www.calbar.ca.gov or
call 1-866-442-2529."

   (4) The name and telephone number of an office or offices funded
by the federal Legal Services Corporation or qualified legal services
projects that receive funds distributed pursuant to Section 6216 of
the Business and Professions Code that provide legal services to
low-income persons in the county in which the action is filed. The
notice shall state that these numbers may be called for legal advice
regarding the case. The notice shall be issued between 24 and 48
hours of the filing of the complaint, excluding weekends and
holidays. One copy of the notice shall be addressed to "all occupants"
and mailed separately to the subject premises. The notice shall not
constitute service of the summons and complaint.
   (d) Notwithstanding any other provision of law, the court shall
charge an additional fee of fifteen dollars ($15) for filing a first
appearance by the plaintiff. This fee shall be added to the uniform
filing fee for actions filed under this chapter.
   (e) This section does not apply to a case that seeks to terminate
a mobilehome park tenancy if the statement of the character of the
proceeding in the caption of the complaint clearly indicates that the
complaint seeks termination of a mobilehome park tenancy.

1161.3.  (a) Except as provided in subdivision (b), a landlord shall
not terminate a tenancy or fail to renew a tenancy based upon an act
or acts against a tenant or a tenant's household member that
constitute domestic violence as defined in Section 6211 of the Family
Code, sexual assault as defined in Section 1219, stalking as defined
in Section 1708.7 of the Civil Code or Section 646.9 of the Penal
Code, or abuse of an elder or a dependent adult as defined in Section
15610.07 of the Welfare and Institutions Code, if both of the
following apply:
   (1) The act or acts of domestic violence, sexual assault,
stalking, or abuse of an elder or a dependent adult have been
documented by one of the following:
   (A) A temporary restraining order, emergency protective order, or
protective order lawfully issued within the last 180 days pursuant to
Section 527.6, Part 3 (commencing with Section 6240), Part 4
(commencing with Section 6300), or Part 5 (commencing with Section
6400) of Division 10 of the Family Code, Section 136.2 of the Penal
Code, or Section 213.5 or 15657.03 of the Welfare and Institutions
Code that protects the tenant or household member from domestic
violence, sexual assault, stalking, or abuse of an elder or a
dependent adult.
   (B) A copy of a written report, written within the last 180 days,
by a peace officer employed by a state or local law enforcement
agency acting in his or her official capacity, stating that the
tenant or household member has filed a report alleging that he or she
or the household member is a victim of domestic violence, sexual
assault, stalking, or abuse of an elder or a dependent adult.
   (2) The person against whom the protection order has been issued
or who was named in the police report of the act or acts of domestic
violence, sexual assault, stalking, or abuse of an elder or dependent
adult is not a tenant of the same dwelling unit as the tenant or
household member.
   (b) A landlord may terminate or decline to renew a tenancy after
the tenant has availed himself or herself of the protections afforded
by subdivision (a) if both of the following apply:
   (1) Either of the following:
   (A) The tenant allows the person against whom the protection order
has been issued or who was named in the police report of the act or
acts of domestic violence, sexual assault, stalking, or abuse of an
elder or a dependent adult to visit the property.
   (B) The landlord reasonably believes that the presence of the
person against whom the protection order has been issued or who was
named in the police report of the act or acts of domestic violence,
sexual assault, stalking, or abuse of an elder or dependent adult
poses a physical threat to other tenants, guests, invitees, or
licensees, or to a tenant's right to quiet possession pursuant to
Section 1927 of the Civil Code.
   (2) The landlord previously gave at least three days' notice to
the tenant to correct a violation of paragraph (1).
   (c) Notwithstanding any provision in the lease to the contrary,
the landlord shall not be liable to any other tenants for any action
that arises due to the landlord's compliance with this section.
   (d) For the purposes of this section, "tenant" means tenant,
subtenant, lessee, or sublessee.
   (e) The Judicial Council shall, on or before January 1, 2014,
develop a new form or revise an existing form that may be used by a
party to assert in the responsive pleading the grounds set forth in
this section as an affirmative defense to an unlawful detainer
action.

1161.5.  When the notice required by Section 1161 states that the
lessor or the landlord may elect to declare the forfeiture of the
lease or rental agreement, that declaration shall be nullified and
the lease or rental agreement shall remain in effect if the lessee or
tenant performs within three days after service of the notice or if
the breach is waived by the lessor or the landlord after service of
the notice.

1161a.  (a) As used in this section:
   (1) "Manufactured home" has the same meaning as provided in
Section 18007 of the Health and Safety Code.
   (2) "Mobilehome" has the same meaning as provided in Section 18008
of the Health and Safety Code.
   (3) "Floating home" has the same meaning as provided in
subdivision (d) of Section 18075.55 of the Health and Safety Code.
   (b) In any of the following cases, a person who holds over and
continues in possession of a manufactured home, mobilehome, floating
home, or real property after a three-day written notice to quit the
property has been served upon the person, or if there is a subtenant
in actual occupation of the premises, also upon such subtenant, as
prescribed in Section 1162, may be removed therefrom as prescribed in
this chapter:
   (1) Where the property has been sold pursuant to a writ of
execution against such person, or a person under whom such person
claims, and the title under the sale has been duly perfected.
   (2) Where the property has been sold pursuant to a writ of sale,
upon the foreclosure by proceedings taken as prescribed in this code
of a mortgage, or under an express power of sale contained therein,
executed by such person, or a person under whom such person claims,
and the title under the foreclosure has been duly perfected.
   (3) Where the property has been sold in accordance with Section
2924 of the Civil Code, under a power of sale contained in a deed of
trust executed by such person, or a person under whom such person
claims, and the title under the sale has been duly perfected.
   (4) Where the property has been sold by such person, or a person
under whom such person claims, and the title under the sale has been
duly perfected.
   (5) Where the property has been sold in accordance with Section
18037.5 of the Health and Safety Code under the default provisions of
a conditional sale contract or security agreement executed by such
person, or a person under whom such person claims, and the title
under the sale has been duly perfected.
   (c) Notwithstanding the provisions of subdivision (b), a tenant or
subtenant in possession of a rental housing unit which has been sold
by reason of any of the causes enumerated in subdivision (b), who
rents or leases the rental housing unit either on a periodic basis
from week to week, month to month, or other interval, or for a fixed
period of time, shall be given written notice to quit pursuant to
Section 1162, at least as long as the term of hiring itself but not
exceeding 30 days, before the tenant or subtenant may be removed
therefrom as prescribed in this chapter.
   (d) For the purpose of subdivision (c), "rental housing unit"
means any structure or any part thereof which is rented or offered
for rent for residential occupancy in this state.

1161b.  (a) Notwithstanding Section 1161a, a tenant or subtenant in
possession of a rental housing unit under a month-to-month lease or
periodic tenancy at the time the property is sold in foreclosure
shall be given 90 days' written notice to quit pursuant to Section
1162 before the tenant or subtenant may be removed from the property
as prescribed in this chapter.
   (b) In addition to the rights set forth in subdivision (a),
tenants or subtenants holding possession of a rental housing unit
under a fixed-term residential lease entered into before transfer of
title at the foreclosure sale shall have the right to possession
until the end of the lease term, and all rights and obligations under
the lease shall survive foreclosure, except that the tenancy may be
terminated upon 90 days' written notice to quit pursuant to
subdivision (a) if any of the following conditions apply:
   (1) The purchaser or successor in interest will occupy the housing
unit as a primary residence.
   (2) The lessee is the mortgagor or the child, spouse, or parent of
the mortgagor.
   (3) The lease was not the result of an arms' length transaction.
   (4) The lease requires the receipt of rent that is substantially
less than fair market rent for the property, except when rent is
reduced or subsidized due to a federal, state, or local subsidy or
law.
   (c) The purchaser or successor in interest shall bear the burden
of proof in establishing that a fixed-term residential lease is not
entitled to protection under subdivision (b).
   (d) This section shall not apply if any party to the note remains
in the property as a tenant, subtenant, or occupant.
   (e) Nothing in this section is intended to affect any local just
cause eviction ordinance. This section does not, and shall not be
construed to, affect the authority of a public entity that otherwise
exists to regulate or monitor the basis for eviction.
   (f) This section shall remain in effect only until December 31,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before December 31, 2019, deletes or extends
that date.

1161c.  (a) In the case of any foreclosure on a residential
property, the immediate successor in interest in the property
pursuant to the foreclosure shall attach a cover sheet, in the form
as set forth in subdivision (b), to any notice of termination of
tenancy served on a tenant of that property within the first year
after the foreclosure sale. This notice shall not be required if any
of the following apply:
   (1) The tenancy is terminated pursuant to Section 1161.
   (2) The successor in interest and the tenant have executed a
written rental agreement or lease or a written acknowledgment of a
preexisting rental agreement or lease.
   (3) The tenant receiving the notice was not a tenant at the time
of the foreclosure.
   (b) The cover sheet shall consist of the following notice, in at
least 12-point type:

   Notice to Any Renters Living At
   [street address of the unit]
   The attached notice means that your home was recently sold in
foreclosure and the new owner plans to evict you.
   You should talk to a lawyer NOW to see what your rights are. You
may receive court papers in a few days. If your name is on the papers
it may hurt your credit if you do not respond and simply move out.
   Also, if you do not respond within five days of receiving the
papers, even if you are not named in the papers, you will likely lose
any rights you may have. In some cases, you can respond without
hurting your credit. You should ask a lawyer about it.
   You may have the right to stay in your home for 90 days or longer,
regardless of any deadlines stated on any attached papers. In some
cases and in some cities with a "just cause for eviction law," you
may not have to move at all. But you must take the proper legal steps
in order to protect your rights.
   How to Get Legal Help
   If you cannot afford an attorney, you may be eligible for free
legal services from a nonprofit legal services program. You can
locate these nonprofit groups at the California Legal Services
Internet Web site (www.lawhelpca.org), the California Courts Online
Self-Help Center (www.courtinfo.ca.gov/selfhelp), or by contacting
your local court or county bar association.

   (c) If the notice to quit specifies an effective date of at least
90 days after the notice is served, without qualification, no cover
sheet shall be required, provided that the notice incorporates the
text of the cover sheet, as set forth in subdivision (b) in at least
10-point type. The incorporated text shall omit the caption and the
first paragraph of the cover sheet and the fourth paragraph of the
cover sheet shall be replaced by the following language:

   You may have the right to stay in your home for longer than 90
days. If you have a lease that ends more than 90 days from now, the
new owner must honor the lease under many circumstances. Also, in
some cases and in some cities with a "just cause for eviction law,"
you may not have to move at all. But you must take the proper legal
steps in order to protect your rights.

   (d) This section shall remain in effect only until December 31,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before December 31, 2019, deletes or extends
that date.

1162.  (a) Except as provided in subdivision (b), the notices
required by Sections 1161 and 1161a may be served by any of the
following methods:
   (1) By delivering a copy to the tenant personally.
   (2) If he or she is absent from his or her place of residence, and
from his or her usual place of business, by leaving a copy with some
person of suitable age and discretion at either place, and sending a
copy through the mail addressed to the tenant at his or her place of
residence.
   (3) If such place of residence and business cannot be ascertained,
or a person of suitable age or discretion there can not be found,
then by affixing a copy in a conspicuous place on the property, and
also delivering a copy to a person there residing, if such person can
be found; and also sending a copy through the mail addressed to the
tenant at the place where the property is situated. Service upon a
subtenant may be made in the same manner.
   (b) The notices required by Section 1161 may be served upon a
commercial tenant by any of the following methods:
   (1) By delivering a copy to the tenant personally.
   (2) If he or she is absent from the commercial rental property, by
leaving a copy with some person of suitable age and discretion at
the property, and sending a copy through the mail addressed to the
tenant at the address where the property is situated.
   (3) If, at the time of attempted service, a person of suitable age
or discretion is not found at the rental property through the
exercise of reasonable diligence, then by affixing a copy in a
conspicuous place on the property, and also sending a copy through
the mail addressed to the tenant at the address where the property is
situated. Service upon a subtenant may be made in the same manner.
   (c) For purposes of subdivision (b), "commercial tenant" means a
person or entity that hires any real property in this state that is
not a dwelling unit, as defined in subdivision (c) of Section 1940 of
the Civil Code, or a mobilehome, as defined in Section 798.3 of the
Civil Code.

1162a.  In any case in which service or exhibition of a receiver's
or levying officer's deed is required, in lieu thereof service of a
copy or copies of the deed may be made as provided in Section 1162.

1164.  No person other than the tenant of the premises and
subtenant, if there be one, in the actual occupation of the premises
when the complaint is filed, need be made parties defendant in the
proceeding, nor shall any proceeding abate, nor the plaintiff be
nonsuited for the nonjoinder of any person who might have been made
party defendant, but when it appears that any of the parties served
with process, or appearing in the proceeding, are guilty of the
offense charged, judgment must be rendered against him or her. In
case a defendant has become a subtenant of the premises in
controversy, after the service of the notice provided for by
subdivision 2 of Section 1161 of this code, upon the tenant of the
premises, the fact that such notice was not served on each subtenant
shall constitute no defense to the action. All persons who enter the
premises under the tenant, after the commencement of the suit, shall
be bound by the judgment, the same as if he or they had been made
party to the action.

1165.  Except as provided in the preceding section, the provisions
of Part II of this Code, relating to parties to civil actions, are
applicable to this proceeding.

1166.  (a) The complaint shall:
   (1) Be verified and include the typed or printed name of the
person verifying the complaint.
   (2) Set forth the facts on which the plaintiff seeks to recover.
   (3) Describe the premises with reasonable certainty.
   (4) If the action is based on paragraph (2) of Section 1161, state
the amount of rent in default.
   (5) State specifically the method used to serve the defendant with
the notice or notices of termination upon which the complaint is
based. This requirement may be satisfied by using and completing all
items relating to service of the notice or notices in an appropriate
Judicial Council form complaint, or by attaching a proof of service
of the notice or notices of termination served on the defendant.
   (b) The complaint may set forth any circumstances of fraud, force,
or violence that may have accompanied the alleged forcible entry or
forcible or unlawful detainer, and claim damages therefor.
   (c) In an action regarding residential real property based on
Section 1161a, the plaintiff shall state in the caption of the
complaint "Action based on Code of Civil Procedure Section 1161a."
   (d) (1) In an action regarding residential property, the plaintiff
shall attach to the complaint the following:
   (A) A copy of the notice or notices of termination served on the
defendant upon which the complaint is based.
   (B) A copy of any written lease or rental agreement regarding the
premises. Any addenda or attachments to the lease or written
agreement that form the basis of the complaint shall also be
attached. The documents required by this subparagraph are not
required to be attached if the complaint alleges any of the
following:
   (i) The lease or rental agreement is oral.
   (ii) A written lease or rental agreement regarding the premises is
not in the possession of the landlord or any agent or employee of
the landlord.
   (iii) An action based solely on subdivision (2) of Section 1161.
   (2) If the plaintiff fails to attach the documents required by
this subdivision, the court shall grant leave to amend the complaint
for a five-day period in order to include the required attachments.
   (e) Upon filing the complaint, a summons shall be issued thereon.

1166a.  (a) Upon filing the complaint, the plaintiff may, upon
motion, have immediate possession of the premises by a writ of
possession of a manufactured home, mobilehome, or real property
issued by the court and directed to the sheriff of the county or
marshal, for execution, where it appears to the satisfaction of the
court, after a hearing on the motion, from the verified complaint and
from any affidavits filed or oral testimony given by or on behalf of
the parties, that the defendant resides out of state, has departed
from the state, cannot, after due diligence, be found within the
state, or has concealed himself or herself to avoid the service of
summons. The motion shall indicate that the writ applies to all
tenants, subtenants, if any, named claimants, if any, and any other
occupants of the premises.
   (b) Written notice of the hearing on the motion shall be served on
the defendant by the plaintiff in accordance with the provisions of
Section 1011, and shall inform the defendant as follows: "You may
file affidavits on your own behalf with the court and may appear and
present testimony on your own behalf. However, if you fail to appear,
the plaintiff will apply to the court for a writ of possession of a
manufactured home, mobilehome, or real property."
   (c) The plaintiff shall file an undertaking in a sum that shall be
fixed and determined by the judge, to the effect that, if the
plaintiff fails to recover judgment against the defendant for the
possession of the premises or if the suit is dismissed, the plaintiff
will pay to the defendant those damages, not to exceed the amount
fixed in the undertaking, as may be sustained by the defendant by
reason of that dispossession under the writ of possession of a
manufactured home, mobilehome, or real property.
   (d) If, at the hearing on the motion, the findings of the court
are in favor of the plaintiff and against the defendant, an order
shall be entered for the immediate possession of the premises.
   (e) The order for the immediate possession of the premises may be
enforced as provided in Division 3 (commencing with Section 712.010)
of Title 9 of Part 2.
   (f) For the purposes of this section, references in Division 3
(commencing with Section 712.010) of Title 9 of Part 2 and in
subdivisions (e) to (m), inclusive, of Section 1174, to the "judgment
debtor" shall be deemed references to the defendant, to the
"judgment creditor" shall be deemed references to the plaintiff, and
to the "judgment of possession or sale of property" shall be deemed
references to an order for the immediate possession of the premises.

1167.  The summons shall be in the form specified in Section 412.20
except that when the defendant is served, the defendant's response
shall be filed within five days, including Saturdays and Sundays but
excluding all other judicial holidays, after the complaint is served
upon him or her. If the last day for filing the response falls on a
Saturday or Sunday, the response period shall be extended to and
including the next court day.
   In all other respects the summons shall be issued and served and
returned in the same manner as a summons in a civil action.

1167.3.  In any action under this chapter, unless otherwise ordered
by the court for good cause shown, the time allowed the defendant to
answer the complaint, answer the complaint, if amended, or amend the
answer under paragraph (2), (3), (5), (6), or (7) of subdivision (a)
of Section 586 shall not exceed five days.

1167.4.  Notwithstanding any other provision of law, in any action
under this chapter:
   (a) Where the defendant files a notice of motion as provided for
in subdivision (a) of Section 418.10, the time for making the motion
shall be not less than three days nor more than seven days after the
filing of the notice.
   (b) The service and filing of a notice of motion under subdivision
(a) shall extend the defendant's time to plead until five days after
service upon him of the written notice of entry of an order denying
his motion, except that for good cause shown the court may extend the
defendant's time to plead for an additional period not exceeding 15
days.

1167.5.  Unless otherwise ordered by the court for good cause shown,
no extension of time allowed in any action under this chapter for
the causes specified in Section 1054 shall exceed 10 days without the
consent of the adverse party.

1169.  If, at the time appointed, any defendant served with a
summons does not appear and defend, the clerk, upon written
application of the plaintiff and proof of the service of summons and
complaint, shall enter the default of any defendant so served, and,
if requested by the plaintiff, immediately shall enter judgment for
restitution of the premises and shall issue a writ of execution
thereon. The application for default judgment and the default
judgment shall include a place to indicate that the judgment includes
tenants, subtenants, if any, named claimants, if any, and any other
occupants of the premises. Thereafter, the plaintiff may apply to the
court for any other relief demanded in the complaint, including the
costs, against the defendant, or defendants, or against one or more
of the defendants.

1170.  On or before the day fixed for his appearance, the defendant
may appear and answer or demur.

1170.5.  (a) If the defendant appears pursuant to Section 1170,
trial of the proceeding shall be held not later than the 20th day
following the date that the request to set the time of the trial is
made. Judgment shall be entered thereon and, if the plaintiff
prevails, a writ of execution shall be issued immediately by the
court upon the request of the plaintiff.
   (b) The court may extend the period for trial upon the agreement
of all of the parties. No other extension of the time for trial of an
action under this chapter may be granted unless the court, upon its
own motion or on motion of any party, holds a hearing and renders a
decision thereon as specified in subdivision (c).
   (c) If trial is not held within the time specified in this
section, the court, upon finding that there is a reasonable
probability that the plaintiff will prevail in the action, shall
determine the amount of damages, if any, to be suffered by the
plaintiff by reason of the extension, and shall issue an order
requiring the defendant to pay that amount into court as the rent
would have otherwise become due and payable or into an escrow
designated by the court for so long as the defendant remains in
possession pending the termination of the action.
   The determination of the amount of the payment shall be based on
the plaintiff's verified statement of the contract rent for rental
payment, any verified objection thereto filed by the defendant, and
the oral or demonstrative evidence presented at the hearing. The
court's determination of the amount of damages shall include
consideration of any evidence, presented by the parties, embracing
the issue of diminution of value or any set off permitted by law.
   (d) If the defendant fails to make a payment ordered by the court,
trial of the action shall be held within 15 days of the date payment
was due.
   (e) Any cost for administration of an escrow account pursuant to
this section shall be recoverable by the prevailing party as part of
any recoverable cost in the action.
   (f) After trial of the action, the court shall determine the
distribution of the payment made into court or the escrow designated
by the court.
   (g) Where payments into court or the escrow designated by the
court are made pursuant to this section, the court may order that the
payments be invested in an insured interest-bearing account.
Interest on the account shall be allocated to the parties in the same
proportions as the original funds are allocated.
   (h) If any provision of this section or the application thereof to
any person or circumstances is held invalid, such invalidity shall
not affect other provisions or applications of the section which can
be given effect without the invalid provision or application, and to
this end the provisions of this section are severable.
   (i) Nothing in this section shall be construed to abrogate or
interfere with the precedence given to the trial of criminal cases
over the trial of civil matters by Section 1050 of the Penal Code.

1170.7.  A motion for summary judgment may be made at any time after
the answer is filed upon giving five days notice. Summary judgment
shall be granted or denied on the same basis as a motion under
Section 437c.

1170.8.  In any action under this chapter, a discovery motion may be
made at any time upon giving five days' notice.

1170.9.  The Judicial Council shall adopt rules, not inconsistent
with statute, prescribing the time for filing and serving opposition
and reply papers, if any, relating to a motion under Section 1167.4,
1170.7, or 1170.8.

1171.  Whenever an issue of fact is presented by the pleadings, it
must be tried by a jury, unless such jury be waived as in other
cases. The jury shall be formed in the same manner as other trial
juries in an action of the same jurisdictional classification in the
Court in which the action is pending.

1172.  On the trial of any proceeding for any forcible entry or
forcible detainer, the plaintiff shall only be required to show, in
addition to the forcible entry or forcible detainer complained of,
that he was peaceably in the actual possession at the time of the
forcible entry, or was entitled to the possession at the time of the
forcible detainer. The defendant may show in his defense that he or
his ancestors, or those whose interest in such premises he claims,
have been in the quiet possession thereof for the space of one whole
year together next before the commencement of the proceedings, and
that his interest therein is not then ended or determined; and such
showing is a bar to the proceedings.

1173.  When, upon the trial of any proceeding under this chapter, it
appears from the evidence that the defendant has been guilty of
either a forcible entry or a forcible or unlawful detainer, and other
than the offense charged in the complaint, the Judge must order that
such complaint be forthwith amended to conform to such proofs; such
amendment must be made without any imposition of terms. No
continuance shall be permitted upon account of such amendment unless
the defendant, by affidavit filed, shows to the satisfaction of the
Court good cause therefor.

1174.  (a) If upon the trial, the verdict of the jury, or, if the
case be tried without a jury, the findings of the court be in favor
of the plaintiff and against the defendant, judgment shall be entered
for the possession of the premises; and if the proceedings be for an
unlawful detainer after neglect, or failure to perform the
conditions or covenants of the lease or agreement under which the
property is held, or after default in the payment of rent, the
judgment shall also declare the forfeiture of that lease or agreement
if the notice required by Section 1161 states the election of the
landlord to declare the forfeiture thereof, but if that notice does
not so state that election, the lease or agreement shall not be
forfeited.
   Except as provided in Section 1166a, in any action for unlawful
detainer brought by a petroleum distributor against a gasoline
dealer, possession shall not be restored to the petroleum distributor
unless the court in the unlawful detainer action determines that the
petroleum distributor had good cause under Section 20999.1 of the
Business and Professions Code to terminate, cancel, or refuse to
renew the franchise of the gasoline dealer.
   In any action for unlawful detainer brought by a petroleum
distributor against the gasoline dealer, the court may, at the time
of request of either party, require the tenant to make rental
payments into the court, for the lessor, at the contract rate,
pending the resolution of the action.
   (b) The jury or the court, if the proceedings be tried without a
jury, shall also assess the damages occasioned to the plaintiff by
any forcible entry, or by any forcible or unlawful detainer, alleged
in the complaint and proved on the trial, and find the amount of any
rent due, if the alleged unlawful detainer be after default in the
payment of rent. If the defendant is found guilty of forcible entry,
or forcible or unlawful detainer, and malice is shown, the plaintiff
may be awarded statutory damages of up to six hundred dollars ($600),
in addition to actual damages, including rent found due. The trier
of fact shall determine whether actual damages, statutory damages, or
both, shall be awarded, and judgment shall be entered accordingly.
   (c) When the proceeding is for an unlawful detainer after default
in the payment of rent, and the lease or agreement under which the
rent is payable has not by its terms expired, and the notice required
by Section 1161 has not stated the election of the landlord to
declare the forfeiture thereof, the court may, and, if the lease or
agreement is in writing, is for a term of more than one year, and
does not contain a forfeiture clause, shall order that a writ shall
not be issued to enforce the judgment until the expiration of five
days after the entry of the judgment, within which time the tenant,
or any subtenant, or any mortgagee of the term, or any other party
interested in its continuance, may pay into the court, for the
landlord, the amount found due as rent, with interest thereon, and
the amount of the damages found by the jury or the court for the
unlawful detainer, and the costs of the proceedings, and thereupon
the judgment shall be satisfied and the tenant be restored to the
tenant's estate. If payment as provided in this subdivision is not
made within five days, the judgment may be enforced for its full
amount and for the possession of the premises. In all other cases the
judgment may be enforced immediately.
   (d) Subject to subdivision (c), the judgment for possession of the
premises may be enforced as provided in Division 3 (commencing with
Section 712.010) of Title 9 of Part 2.
   (e) Personal property remaining on the premises which the landlord
reasonably believes to have been lost shall be disposed of pursuant
to Article 1 (commencing with Section 2080) of Chapter 4 of Title 6
of Part 4 of Division 3 of the Civil Code. The landlord is not liable
to the owner of any property which is disposed of in this manner. If
the appropriate police or sheriff's department refuses to accept
that property, it shall be deemed not to have been lost for the
purposes of this subdivision.
   (f) The landlord shall give notice pursuant to Section 1983 of the
Civil Code to any person (other than the tenant) reasonably believed
by the landlord to be the owner of personal property remaining on
the premises unless the procedure for surrender of property under
Section 1965 of the Civil Code has been initiated or completed.
   (g) The landlord shall store the personal property in a place of
safekeeping until it is either released pursuant to subdivision (h)
or disposed of pursuant to subdivision (i).
   (h) The landlord shall release the personal property pursuant to
Section 1965 of the Civil Code or shall release it to the tenant or,
at the landlord's option, to a person reasonably believed by the
landlord to be its owner if the tenant or other person pays the costs
of storage as provided in Section 1990 of the Civil Code and claims
the property not later than the date specified in the writ of
possession before which the tenant must make his or her claim or the
date specified in the notice before which a person other than the
tenant must make his or her claim.
   (i) Personal property not released pursuant to subdivision (h)
shall be disposed of pursuant to Section 1988 of the Civil Code.
   (j) Where the landlord releases personal property to the tenant
pursuant to subdivision (h), the landlord is not liable with respect
to that property to any person.
   (k) Where the landlord releases personal property pursuant to
subdivision (h) to a person (other than the tenant) reasonably
believed by the landlord to be its owner, the landlord is not liable
with respect to that property to:
   (1) The tenant or to any person to whom notice was given pursuant
to subdivision (f); or
   (2) Any other person, unless that person proves that, prior to
releasing the property, the landlord believed or reasonably should
have believed that the person had an interest in the property and
also that the landlord knew or should have known upon reasonable
investigation the address of that person.
   (l) Where personal property is disposed of pursuant to Section
1988 of the Civil Code, the landlord is not liable with respect to
that property to:
   (1) The tenant or to any person to whom notice was given pursuant
to subdivision (f); or
   (2) Any other person, unless that person proves that, prior to
disposing of the property pursuant to Section 1988 of the Civil Code,
the landlord believed or reasonably should have believed that the
person had an interest in the property and also that the landlord
knew or should have known upon reasonable investigation the address
of that person.
   (m) For the purposes of subdivisions (e), (f), (h), (k), and (l),
the terms "owner," "premises," and "reasonable belief" have the same
meaning as provided in Section 1980 of the Civil Code.

1174.2.  (a) In an unlawful detainer proceeding involving
residential premises after default in payment of rent and in which
the tenant has raised as an affirmative defense a breach of the
landlord's obligations under Section 1941 of the Civil Code or of any
warranty of habitability, the court shall determine whether a
substantial breach of these obligations has occurred. If the court
finds that a substantial breach has occurred, the court (1) shall
determine the reasonable rental value of the premises in its
untenantable state to the date of trial, (2) shall deny possession to
the landlord and adjudge the tenant to be the prevailing party,
conditioned upon the payment by the tenant of the rent that has
accrued to the date of the trial as adjusted pursuant to this
subdivision within a reasonable period of time not exceeding five
days, from the date of the court's judgment or, if service of the
court's judgment is made by mail, the payment shall be made within
the time set forth in Section 1013, (3) may order the landlord to
make repairs and correct the conditions which constitute a breach of
the landlord's obligations, (4) shall order that the monthly rent be
limited to the reasonable rental value of the premises as determined
pursuant to this subdivision until repairs are completed, and (5)
except as otherwise provided in subdivision (b), shall award the
tenant costs and attorneys' fees if provided by, and pursuant to, any
statute or the contract of the parties. If the court orders repairs
or corrections, or both, pursuant to paragraph (3), the court's
jurisdiction continues over the matter for the purpose of ensuring
compliance. The court shall, however, award possession of the
premises to the landlord if the tenant fails to pay all rent accrued
to the date of trial, as determined due in the judgment, within the
period prescribed by the court pursuant to this subdivision. The
tenant shall, however, retain any rights conferred by Section 1174.
   (b) If the court determines that there has been no substantial
breach of Section 1941 of the Civil Code or of any warranty of
habitability by the landlord or if the tenant fails to pay all rent
accrued to the date of trial, as required by the court pursuant to
subdivision (a), then judgment shall be entered in favor of the
landlord, and the landlord shall be the prevailing party for the
purposes of awarding costs or attorneys' fees pursuant to any statute
or the contract of the parties.
   (c) As used in this section, "substantial breach" means the
failure of the landlord to comply with applicable building and
housing code standards which materially affect health and safety.
   (d) Nothing in this section is intended to deny the tenant the
right to a trial by jury. Nothing in this section shall limit or
supersede any provision of Chapter 12.75 (commencing with Section
7060) of Division 7 of Title 1 of the Government Code.

1174.21.  A landlord who institutes an unlawful detainer proceeding
based upon a tenant's nonpayment of rent, and who is liable for a
violation of Section 1942.4 of the Civil Code, shall be liable to the
tenant or lessee for reasonable attorneys' fees and costs of the
suit, in an amount to be fixed by the court.

1174.25.  (a) Any occupant who is served with a prejudgment claim of
right to possession in accordance with Section 415.46 may file a
claim as prescribed in Section 415.46, with the court within 10 days
of the date of service of the prejudgment claim to right of
possession as shown on the return of service, which period shall
include Saturday and Sunday but excluding all other judicial
holidays. If the last day for filing the claim falls on a Saturday or
Sunday, the filing period shall be extended to and including the
next court day. Filing the prejudgment claim of right to possession
shall constitute a general appearance for which a fee shall be
collected as provided in Section 70614 of the Government Code.
Section 68511.3 of the Government Code applies to the prejudgment
claim of right to possession.
   (b) At the time of filing, the claimant shall be added as a
defendant in the action for unlawful detainer and the clerk shall
notify the plaintiff that the claimant has been added as a defendant
in the action by mailing a copy of the claim filed with the court to
the plaintiff with a notation so indicating. The claimant shall
answer or otherwise respond to the summons and complaint within five
days, including Saturdays and Sundays but excluding all other
judicial holidays, after filing the prejudgment claim of possession.
Thereafter, the name of the claimant shall be added to any pleading,
filing or form filed in the action for unlawful detainer.

1174.3.  (a) Unless a prejudgment claim of right to possession has
been served upon occupants in accordance with Section 415.46, any
occupant not named in the judgment for possession who occupied the
premises on the date of the filing of the action may object to
enforcement of the judgment against that occupant by filing a claim
of right to possession as prescribed in this section. A claim of
right to possession may be filed at any time after service or posting
of the writ of possession pursuant to subdivision (a) or (b) of
Section 715.020, up to and including the time at which the levying
officer returns to effect the eviction of those named in the judgment
of possession. Filing the claim of right to possession shall
constitute a general appearance for which a fee shall be collected as
provided in Section 70614 of the Government Code. Section 68511.3 of
the Government Code applies to the claim of right to possession. An
occupant or tenant who is named in the action shall not be required
to file a claim of right to possession to protect that occupant's
right to possession of the premises.
   (b) The court issuing the writ of possession of real property
shall set a date or dates when the court will hold a hearing to
determine the validity of objections to enforcement of the judgment
specified in subdivision (a). An occupant of the real property for
which the writ is issued may make an objection to eviction to the
levying officer at the office of the levying officer or at the
premises at the time of the eviction.
   If a claim of right to possession is completed and presented to
the sheriff, marshal, or other levying officer, the officer shall
forthwith (1) stop the eviction of occupants at the premises, and (2)
provide a receipt or copy of the completed claim of right of
possession to the claimant indicating the date and time the completed
form was received, and (3) deliver the original completed claim of
right to possession to the court issuing the writ of possession of
real property.
   (c) A claim of right to possession is effected by any of the
following:
   (1) Presenting a completed claim form in person with
identification to the sheriff, marshal, or other levying officer as
prescribed in this section, and delivering to the court within two
court days after its presentation, an amount equal to 15 days' rent
together with the appropriate fee or form for proceeding in forma
pauperis. Upon receipt of a claim of right to possession, the
sheriff, marshal, or other levying officer shall indicate thereon the
date and time of its receipt and forthwith deliver the original to
the issuing court and a receipt or copy of the claim to the claimant
and notify the plaintiff of that fact. Immediately upon receipt of an
amount equal to 15 days' rent and the appropriate fee or form for
proceeding in forma pauperis, the court shall file the claim of right
to possession and serve an endorsed copy with the notice of the
hearing date on the plaintiff and the claimant by first-class mail.
The court issuing the writ of possession shall set and hold a hearing
on the claim not less than five nor more than 15 days after the
claim is filed with the court.
   (2) Presenting a completed claim form in person with
identification to the sheriff, marshal, or other levying officer as
prescribed in this section, and delivering to the court within two
court days after its presentation, the appropriate fee or form for
proceeding in forma pauperis without delivering the amount equivalent
to 15 days' rent. In this case, the court shall immediately set a
hearing on the claim to be held on the fifth day after the filing is
completed. The court shall notify the claimant of the hearing date at
the time the claimant completes the filing by delivering to the
court the appropriate fee or form for proceeding in forma pauperis,
and shall notify the plaintiff of the hearing date by first-class
mail. Upon receipt of a claim of right to possession, the sheriff,
marshal, or other levying officer shall indicate thereon the date and
time of its receipt and forthwith deliver the original to the
issuing court and a receipt or copy of the claim to the claimant and
notify the plaintiff of that fact.
   (d) At the hearing, the court shall determine whether there is a
valid claim of possession by the claimant who filed the claim, and
the court shall consider all evidence produced at the hearing,
including, but not limited to, the information set forth in the
claim. The court may determine the claim to be valid or invalid based
upon the evidence presented at the hearing. The court shall
determine the claim to be invalid if the court determines that the
claimant is an invitee, licensee, guest, or trespasser. If the court
determines the claim is invalid, the court shall order the return to
the claimant of the amount of the 15 days' rent paid by the claimant,
if that amount was paid pursuant to paragraph (1) or (3) of
subdivision (c), less a pro rata amount for each day that enforcement
of the judgment was delayed by reason of making the claim of right
to possession, which pro rata amount shall be paid to the landlord.
If the court determines the claim is valid, the amount equal to 15
days' rent paid by the claimant shall be returned immediately to the
claimant.
   (e) If, upon hearing, the court determines that the claim is
valid, then the court shall order further proceedings as follows:
   (1) If the unlawful detainer is based upon a curable breach, and
the claimant was not previously served with a proper notice, if any
notice is required, then the required notice may at the plaintiff's
discretion be served on the claimant at the hearing or thereafter. If
the claimant does not cure the breach within the required time, then
a supplemental complaint may be filed and served on the claimant as
defendant if the plaintiff proceeds against the claimant in the same
action. For the purposes of this section only, service of the
required notice, if any notice is required, and of the supplemental
complaint may be made by first-class mail addressed to the claimant
at the subject premises or upon his or her attorney of record and, in
either case, Section 1013 shall otherwise apply. Further proceedings
on the merits of the claimant's continued right to possession after
service of the Summons and Supplemental Complaint as prescribed by
this subdivision shall be conducted pursuant to this chapter.
   (2) In all other cases, the court shall deem the unlawful detainer
Summons and Complaint to be amended on their faces to include the
claimant as defendant, service of the Summons and Complaint, as thus
amended, may at the plaintiff's discretion be made at the hearing or
thereafter, and the claimant thus named and served as a defendant in
the action shall answer or otherwise respond within five days
thereafter.
   (f) If a claim is made without delivery to the court of the
appropriate filing fee or a form for proceeding in forma pauperis, as
prescribed in this section, the claim shall be immediately deemed
denied and the court shall so order. Upon the denial of the claim,
the court shall immediately deliver an endorsed copy of the order to
the levying officer and shall serve an endorsed copy of the order on
the plaintiff and claimant by first-class mail.
   (g) If the claim of right to possession is denied pursuant to
subdivision (f), or if the claimant fails to appear at the hearing
or, upon hearing, if the court determines that there are no valid
claims, or if the claimant does not prevail at a trial on the merits
of the unlawful detainer action, the court shall order the levying
officer to proceed with enforcement of the original writ of
possession of real property as deemed amended to include the
claimant, which shall be effected within a reasonable time not to
exceed five days. Upon receipt of the court's order, the levying
officer shall enforce the writ of possession of real property against
any occupant or occupants.
   (h) The claim of right to possession shall be made on the
following form:

* * * * * * * * * * * * * * * * *

NOTICE OF INCOMPLETE TEXT: The Claim of Right to Possession form
appears in the hard-copy publication of the chaptered bill.
See Sec. 43 of Chapter 75, Statutes of 2005.

* * * * * * * * * * * * * * * * *

1174.5.  A judgment in unlawful detainer declaring the forfeiture of
the lease or agreement under which real property is held shall not
relieve the lessee from liability pursuant to Section 1951.2 of the
Civil Code.

1176.  (a) An appeal taken by the defendant shall not automatically
stay proceedings upon the judgment. Petition for stay of the judgment
pending appeal shall first be directed to the judge before whom it
was rendered. Stay of judgment shall be granted when the court finds
that the moving party will suffer extreme hardship in the absence of
a stay and that the nonmoving party will not be irreparably injured
by its issuance. If the stay is denied by the trial court, the
defendant may forthwith file a petition for an extraordinary writ
with the appropriate appeals court. If the trial or appellate court
stays enforcement of the judgment, the court may condition the stay
on whatever conditions the court deems just, but in any case it shall
order the payment of the reasonable monthly rental value to the
court monthly in advance as rent would otherwise become due as a
condition of issuing the stay of enforcement. As used in this
subdivision, "reasonable rental value" means the contract rent unless
the rental value has been modified by the trial court in which case
that modified rental value shall be used.
   (b) A new cause of action on the same agreement for the rental of
real property shall not be barred because of an appeal by any party.

1177.  Except as otherwise provided in this Chapter the provisions
of Part II of this Code are applicable to, and constitute the rules
of practice in the proceedings mentioned in this Chapter.

1178.  The provisions of Part 2 of this code, relative to new trials
and appeals, except insofar as they are inconsistent with the
provisions of this chapter or with rules adopted by the Judicial
Council, apply to the proceedings mentioned in this chapter.

1179.  The court may relieve a tenant against a forfeiture of a
lease or rental agreement, whether written or oral, and whether or
not the tenancy has terminated, and restore him or her to his or her
former estate or tenancy, in case of hardship, as provided in Section
1174. The court has the discretion to relieve any person against
forfeiture on its own motion.
   An application for relief against forfeiture may be made at any
time prior to restoration of the premises to the landlord. The
application may be made by a tenant or subtenant, or a mortgagee of
the term, or any person interested in the continuance of the term. It
must be made upon petition, setting forth the facts upon which the
relief is sought, and be verified by the applicant. Notice of the
application, with a copy of the petition, must be served at least
five days prior to the hearing on the plaintiff in the judgment, who
may appear and contest the application. Alternatively, a person
appearing without an attorney may make the application orally, if the
plaintiff either is present and has an opportunity to contest the
application, or has been given ex parte notice of the hearing and the
purpose of the oral application. In no case shall the application or
motion be granted except on condition that full payment of rent due,
or full performance of conditions or covenants stipulated, so far as
the same is practicable, be made.

1179a.  In all proceedings brought to recover the possession of real
property pursuant to the provisions of this chapter all courts,
wherein such actions are or may hereafter be pending, shall give such
actions precedence over all other civil actions therein, except
actions to which special precedence is given by law, in the matter of
the setting the same for hearing or trial, and in hearing the same,
to the end that all such actions shall be quickly heard and
determined.


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 FIRST CAUSE OF ACTION Plaintiff alleges:

1.
[Capacity
and residence. See § 334.58(1}, 9 1.]

2.   [Plaintiff s former residence. See §
334.58[1], 9 2. ]

3.   [Fictitious name allegation, if
appropriate. See § 334.50(1}, 9 2. \

4.   On or about_______ [date], defendant landlord,___________ [name],

with the intent to terminate plaintiffs occupancy of the premises, did

willfully and maliciously, directly and indirectly,__________ [specify
action

proscribed by Civ. Code § 789.3(b), e.g., prevent plaintiff from gaining reasonable
access to the premises by changing the locks on all the doors without giving
plaintiff keys for the new locks].

5.
[Specify
length of time during which interference with occupancy of premises continued,
e.g.,
Plaintiff was prevented reasonable access to the premises for a period of seven days.]

6.  As a direct and proximate result of defendant’s actions, plaintiff has suffered and
is suffering general damages in the amount of $_____________________________________________

7.Plaintiff is entitled to statutory punitive damages under Civil Code Section 789.3(c) in
the amount of $100 for each day or part of a day that defendant remains in
violation of Civil Code Section 789.3(b) and in no event is plaintiff entitled
to less than $250 for each cause of action.

8.  Plaintiff is entitled to receive from defendant______________
[name]

punitive damages.

SECOND CAUSE OF ACTION Plaintiff alleges:

9.Plaintiff hereby incorporates Paragraphs 1, 2, and 3 of his/her First
Cause of Action.

10.The written tenancy agreement mentioned above created a periodic estate in
plaintiffs favor in           [street address and city ], California.

11.  On or about_______ [date], defendant landlord,__________ [name],

willfully and maliciously trespassed on plaintiffs estate for the purpose of

________ [specify,
e.g.,
changing the locks on all the doors and windows


12.                                                   As
a direct and proximate result thereof, plaintiff has suffered general
damages in the amount of $———–

THIRD CAUSE OF ACTION
Plaintiff alleges:

13.Plaintiff
hereby incorporates Paragraphs 1, 2, and 3 of his/her First Cause of Action.

14.On or about______ [date ], defendant landlord,__________ [name ],

with
the intent to terminate plaintiffs occupancy of the premises, did

willfully and maliciously, directly and indirectly,_________ [specify action

proscribed by Civ. Code § 789.3(b), e.g., prevent plaintiff from gaining reasonable
access to the premises by changing the locks on all the doors and windows
without giving plaintiff keys for the new locks].

[15. If
the landlord ceased interfering with plaintiffs use and occupancy of the
premises, specify when this occurred, e.g.,
Plaintiff received keys for

the new locks
from defendant landlord,__________ {name),
on or about

______ [date),
following a demand letter from plaintiffs attorney.]

[16. Specify
length of time during which interference with occupancy continued, e.g.,
Plaintiff
was prevented reasonable access to the premises

from_______
[date), to and including__________
[date), or a total of

________ [e.g.,
seven) days or fraction thereof.]

17.As a further direct and
proximate result of defendant’s actions,

plaintiff_________ [specify
loss or damages, e.g„
was forced to pay fines

for_________ [e.g.,
20)
library books which were overdue since he/she

could not gain
access to them to return them on the due date, all to his/her
special damage in the amount of $_______ 1.

18.  As a direct and proximate result of
defendant’s actions, plaintiff has suffered and is suffering damages in the
amount of $_________________________________________

19.  Plaintiff is entitled to statutory
punitive damages under Civil Code Section 789.3(c) in the amount of $100 for
each day or part of a day that defendant remains in violation of Civil Code
Section 789.3(b) and in no event is plaintiff entitled to less than $250 for
each cause of action.

20.  Plaintiff is entitled to receive from
defendant landlord,___________

[name ], punitive damages.

FOURTH CAUSE OF
ACTION
Plaintiff
alleges:

21.  Plaintiff hereby incorporates Paragraphs
1, 2, and 3 of his/her First Cause of Action; and Paragraphs 14,15,16, and 17
of his/her Third Cause of Action.

22.  Plaintiff is entitled to appropriate
injunctive relief during the pen­dency of this action under Civil Code Section
789.3(c) and without this injunctive relief will suffer irreparable injury in
that     [specify

facts that wUl constitute great and irreparable injury, e.g., plaintiff will continue to be without a home and
without access to his/her, personal possessions and will be forced to stay in a
motel and buy new personal possessions such as clothes and cooking utensils).
Plaintiff has no plain,

speedy, and adequate remedy at law because__________ [specify facts in

addition to those
previously alleged that tend to show the inadequacy of any legal remedy that plaintiff might pursue, e.g.,
it will be
impossible for
plaintiff
to determine the precise amount of damage that he/she will suffer if
defendant’s conduct is not restrained].

WHEREFORE, Plaintiff prays for judgment as
follows:

1.
For
an order requiring defendant to show cause, if any he/she has, why he/she
should not be enjoined as hereinafter set forth, during the pendency of this
action;

2.
For a
temporary restraining order and preliminary injunction enjoin­ing defendant and
his/her agents, servants, and employees, and all per­sons acting under, in
concert with, or for defendant from         

[specify, e.g., interfering with plaintiffs reasonable
access to the premises by changing the locks].

3.
For
general damages on the First Cause of Action in the amount of

4.
For
punitive damages on the First Cause of Action.

5.
For
general damages on the Second Cause of Action in the amount of$         

6.
For
punitive damages on the Second Cause of Action.

7.
For
general damages on the Third Cause of Action in the amount of
$

8.
For
punitive damages on the Third Cause of Action.

9.
For
reasonable attorney’s fees as provided in Civil Code Section 789.3(d).

 

10.
For
costs of suit.

11.
For
such other and further relief as the court may deem just and proper and
according to equity.

___________________________ [firm
name, if any]

By:_______________________________ [signature]

________________________________ [typed
name]

Attorney
for Plaintiff





















IT DOES WORK SEE ORDER ON LINK

23 Jul

stanko.order_.0307111

Protecting tenants from FORECLOSURE

23 Jul

HBOR Tenant Webinar PPT Final

Ellis v Chase RICO

19 Jul

2012 WL 4294143 (N.D.Cal.) (Trial Motion, Memorandum and Affidavit)

United States District Court, N.D. California.

Diana ELLIS, James Schillinger, and Ronald Lazar, individually, and on behalf of other members of the general public similarly situated, Plaintiffs,

v.

J.P. MORGAN CHASE & CO., a Delaware corporation, J.P. Morgan Chase Bank, N.A., a national association, and Chase Home Finance LLC, a Delaware limited liability company, Defendants.

No. 4:12-cv-03897-YGR.

September 4, 2012.

Plaintiffs’ Opposition to Chase Defendants’ Motion to Dismiss Plaintiffs’ Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6)

Daniel Alberstone (SBN 105275), dalberstone@baronbudd.com, Roland Tellis (SBN 186269), rtellis@baronbudd.com, Mark Pifko (SBN 228412), mpifko @baronbudd.com, Baron & Budd, P.C., 15910 Ventura Boulevard, Suite 1600, Encino, California 91436, Telephone: (818) 839-2333, Facsimile: (818)986-9698, Attorneys for Plaintiffs, Diana Ellis, James Schillinger, and Ronald Lazar, individually, and on behalf of other members of the public similarly situated.

Judge: Hon. Yvonne Gonzalez Rogers.

CLASS ACTION

[Filed Concurrently With Declaration of Roland Tellis in Support]

Date: October 9, 2012

Time: 2:00 p.m.

Location: Oakland Division

1301 Clay Street

Action Filed: July 24, 2012

Trial Date: None Set

TABLE OF CONTENTS
I. NEITHER THE OCC CONSENT ORDER NOR SECTION 1818(1) OF THE NATIONAL BANK ACT BAR THIS COURT’S SUBJECT MATTER JURISDICTION 1
A. The Limited Scope of the OCC’s Consent Order 1
B. Section 1818(i) of the National Bank Act Only Prohibits a Court from Modifying or Countermanding a Federal Banking Agency Order 4
C. Plaintiffs’ Complaint Does Not Seek Any Relief that Would Affect the Issuance or Enforcement of the OCC Consent Order 6
II. NEITHER THE DOCTRINE OF PRIMARY JURISDICTION NOR EQUITABLE ABSTENTION APPLY HERE 8
III. THE NATIONAL BANK ACT DOES NOT PREEMPT PLAINTIFFS’ CLAIMS 10
IV. PLAINTIFFS HAVE STANDING TO SUE THE CHASE DEFENDANTS 14
A. Plaintiffs Indisputably Have Article III Standing to Sue 14
B. Plaintiffs Have Satisfied the Standing Requirements Under RICO and the UCL 16
V. THE CHASE DEFENDANTS’ MOTION IMPROPERLY CONFLATES STANDARDS OF PLEADING AND PROOF 17
VI. PLAINTIFFS HAVE ADEQUATELY ALLEGED THEIR RICO CLAIMS 18
A. Plaintiffs Have Adequately Alleged a Claim Under 28 U.S.C. Section 1962(c) 18
1. RICO Enterprise 19
2. Plaintiffs Have Adequately Alleged Mail and Wire Fraud 21
3. Plaintiffs Have Adequately Alleged a Pattern of Racketeering 22
B. Plaintiffs Have Adequately Alleged a Claim under Section 1962(d) 23
VII. PLAINTIFFS STATE A CLAIM FOR UNJUST ENRICHMENT 24
VIII. PLAINTIFFS STATE A CLAIM FOR FRAUD 25
IX. CONCLUSION 25
TABLE OF AUTHORITIES
CASES
A.G. Becker, Inc. v. Board of Governors of Fed. Reserve Sys., 519 F. Supp, 602 (D.D.C. 1981) 4
Abercrombie v. OCC, 833 F.2d 672 (7th Cir. 1987) 4
Allen v. Wright, 468 U.S. 737(1984) 15
Allwaste Inc. v. Hecht, 65 F.3d 1523 (9th Cir. 1995) 22
American Fair Credit Ass’n v. United Credit National Bank, 132 F. Supp. 2d 1304 (D. Colo. 2001) 5
Arce v. Kaiser Found. Health Plan, Inc. 181 Cal. App. 4th 471 10
Bakenie v. JP Morgan Chase Bank, N.A., U.S.D.C. Case No. SACV 12-60 JVS 5
Brooks v. ComUnity Lending, Inc., 2010 U.S. Dist. LEXIS 67116 (N.D. Cal. Jul. 6, 2010) 18
Brown v. MCI Worldcom Network Servs., Inc., 277 F.3d 1166 (9th Cir. 2002) 8
Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001) 19, 20, 21
Clark v. Time Warner Cable, 523 F.3d 1110 (9th Cir. 2008) 8
Clayworth v. Pfizer, Inc., 49 Cal. 4th 758 (2010) 17
Cuomo v. Clearing House Ass’n, 129 S. Ct. 2710 (2009) 11
Davel Commc’ns, Inc. v. Qwest Corp., 460 F.3d 1075 (9th Cir. 2006) 9
Desert Healthcare Dist. v. Pacificare FHP, Inc., 94 Cal. App. 4th 623 (2001) 9, 10
Diaz v. Kay-Dix Ranch, 9 Cal. App. 3d 588 (1970) 9, 16
Edwards v. The First American Corp., 610 F.3d 514 (9th Cir. 2010) 16
Eminence Capital LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003) 25
Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088 (N.D. Cal. 2007) 18
Foman v. Davis, 371 U.S. 178(1962) 25
Gibson v. World Sav. & Loan Ass’n, 103 Cal. App. 4th 1291 (2002) 14
Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979) 15
Gottreich v. San Francisco Investment Corp., 552 F.2d 866 (9th Cir. 1977) 18, 20, 25
Groos Nat’l Bank v. United States, 573 F.2d 889 (5th Cir. 1978) 4
Gutierrez v. Wells Fargo Bank, N.A., 730 F. Supp. 2d 1080 (N.D. Cal. 2010) 13
H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229(1989) 22
Hood v. Santa Barbara Bank & Trust, 143 Cal. App. 4th 526 (2006) 11, 14
In re Chase Bank USA, N.A. “Check Loan” Contract Litigation, 2009 U.S. Dist. Lexis 108636 (N.D. Cal. 2009) 11
In re Countrywide Fin. Corp. Mortg. Mktg & Sales Prac. Litig., 601 F. Supp. 2d 1201 (S.D. Cal. 2009) 19, 21, 24
In Re JPMorgan Chase Mortgage Modification Litigation, 2012 U.S. Dist. LEXIS 104486 (July 27, 2012) 6
In re Static Random Access Memory (SRAM) Antitrust Litig, 580 F. Supp. 2d 890 (N.D. Cal. 2008) 20, 23
In re TFT-LCD Antitrust Litig., 586 F. Supp. 2d 1109 (9th Cir. 2005) 18
In re TFT-LCD Antitrust Litig., 599 F. Supp. 2d 1179 (N.D. Cal. 2009) 20
Jefferson v. Chase Home Finance, 2007 U.S. Dist. LEXIS 94652 (N.D. Cal. Dec. 14, 2007) 13
Jefferson et al v. Chase Home Finance, 2008 U.S. Dist. LEXIS 101031 (N.D. Cal. Apr. 29, 2008) 11
Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) 18, 20, 25
Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723 (2000) 24
Martinez v. Wells Fargo Home Mortgage, Inc., 598 F.3d 549 (9th Cir. 2010) 12, 13, 14
Martinez v. Wells Fargo Home Mortgage, Inc., 598 F.3d 549 (9th Cir. 2010) 12, 13, 14
Medallion Television Enters, v. SelecTV of Cal., 833 F. 2d 1360 (9th Cir. 1987) 22
Nader v. Allegheny Airlines, 426 U.S. 290(1976) 8
Newcal Indus., Inc. v. IKON Office Solution, 513 F.3d 1038 (9th Cir. 2007) 19
Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir. 2007) 18, 19, 21, 22
Oscar v. University Students Co-operative Ass’n, 965 F.2d 783 (9th Cir. 1992) 16
Payne v. United California Bank, 23 Cal. App. 3d 850 (1972) 17
People ex rel. Dept. of Transportation v. Naegele Outdoor Advertising Co., 38 Cal.3d 509 (1985) 10
Phillips v. Crocker-Citizens Nat’l Bank, 38 Cal. App. 3d 901 (1974) 17
Pom Wonderful LLC v. The Coca-Cola Company, 679 F.3d. 1170 (9th Cir. 2012) 17
Rhoades v. Casey, 196 F.3d 592 (5th Cir. 1999) 4
Rubio v. Capital One Bank 613 F.3d 1195 (9th Cir. 2010) 17
Salinas v. United States, 522 U.S. 52 (1997) 24
Shamsian v. Department of Conservation, 136 Cal. App. 4th 621 (2006) 10
SOAProjects, Inc. v. SCM Microsystems, Inc., 2010 U.S. Dist. LEXIS 133596 (N.D. Cal. Dec. 7, 2010) 24
Starnet Int’l AMC Inc. v. Kafash, 2011 U.S. Dist. LEXIS 25062 (N.D. Cal. Mar. 8, 2011) 24
State Farm Mut. Automobile Ins. Co. v. Grafman, 655 F. Supp. 2d 212 (E.D.N. Y. 2009) 21
Swartz v. KPMG LLP, 476 F. 3D 756 (2007) 18
Turner v. Cook, 362 F.3d 1219 (9th Cir. 2004) 22
United States of America et ah v. Bank of America Corp. et al., U.S.D.C. Dist. of Columbia 7
United States v. Fernandez, 388 F.3d 1199 (9th Cir. 2004) 23
United States v. Gen. Dynamics Corp., 828 F.2d 1356 (9th Cir. 1987) 9
Washington v. Baenziger, 673 F. Supp. 1478 (N.D. Cal. 1987) 18
Walters v. Wachovia Bank, N.A. 550 U.S. 1(2007) 10
Wyeth v. Levine, 555 U.S. 555, 129 S. Ct. 1187 (2009) 11
Young et al. v. Wells Fargo & Company et al., 671 F. Supp. 2d 1006 (S.D. Iowa 2009) 11, 12, 20
STATUTES
12 U.S.C. § 24 10
12 U.S.C. § 1818(i)(1) 4, 6
18 U.S.C. § 1961(4) 19

28 U.S.C. § 1962(c) … 18, 23

OTHER AUTHORITIES
12 C.F.R. § 7.4008(e) 12, 14
Fed R. Civ. P. 9(b) 17, 18, 21, 25
Fed R. Civ. P. 15(a) 26

I. NEITHER THE OCC CONSENT ORDER NOR SECTION 1818(I) OF THE NATIONAL BANK ACT BAR THIS COURT’S SUBJECT MATTER JURISDICTION

A. The Limited Scope of the OCC’s Consent Order

In early 2011, in the wake of revelations that certain banks were engaging in rampant “robo-signings,” federal regulators began investigating the banks’ foreclosure practices, The investigations revealed significant “errors” in the banks’ foreclosure processing, including the filing of inaccurate affidavits and the failure to effectively coordinate loan modifications and foreclosures. (See Declaration of Roland Tellis (“Tellis Decl.”), Ex. 1, Congressional Testimony of Mark Pearce, Director, Division of Depositor and Consumer Protection, F.D.I.C.) As a result, the Office of the Comptroller of Currency (“OCC”) issued enforcement orders to fourteen financial institutions designed to improve the foreclosure process. (Id.) Notably, “[h]owever, these consent orders do not fully identify and remedy past errors in mortgage-servicing operations of large institutions. In fact, the scope of the interagency review did not include a review of … the fees charged in the servicing process, Much work remains to identify and correct past errors and to ensure that the servicing process functions effectively, efficiently, and fairly going forward.” ((emphasis added); see also Compl. ¶ 12.)

In April 2011, the OCC entered into a Consent Order with JPMorgan Chase Bank, N.A., which addressed the bank’s foreclosure practices and, in broad strokes, required it to create a foreclosure compliance program and improve the administration of its foreclosure activities. With respect to its historical foreclosure practices, the Consent Order required the bank to retain an “independent” consultant to review a limited set of foreclosures that were pending between January 1, 2009 and December 31, 2010 and, with respect to those foreclosures only, to make certain findings, including whether the foreclosures were accompanied by proper documentation, whether the bank had charged fees that were predicated on a legitimate foreclosure and the propriety of the frequency of certain of those fees, including Broker Price Opinions and late fees, imposed during the foreclosure (i.e. whether the bank continually charged late fees and BPO fees even though a default was cured or a foreclosure was aborted). (See Chase Request for Judicial Notice (“RJN”) at Ex. A, Art. VII.)

The Chase Defendants seize superficially upon the Consent Order’s reference to the term “broker price opinions” in the section on foreclosure review and erroneously contend that this case is “subsumed” by the Consent Order.

As a threshold matter, the Consent Order refers to the “frequency” of the broker price opinion fees charged, not whether they were lawfully assessed, Furthermore, what the Chase Defendants conveniently ignore is that: (1) the Consent Order addresses only a narrow pool of loans serviced by JPMorgan Chase Bank that were in foreclosure proceedings pending during the period January 1, 2009 to December 31, 2010; and (2) as to those loans only, certain eligible borrowers may receive compensation if they are deemed to have suffered a “financial injury.” However, for purposes of the Consent Order, “financial injury” is defined as monetary harm directly caused by a servicer’s error” (See Chase’s RJN, Ex. E, p. 12) (“Not all errors result in financial injury.”). Here, Plaintiffs’ claims do not concern an error; they concern the Chase Defendants’ fraud, (Compl. ¶ 46.) To that end, even as to the small subset of loans that might be included in the class definition here, the Consent Order does not require or contemplate that the independent consultant investigate or compensate for the fraudulent conduct at issue here.

A clear indication of the narrow scope of the Consent Order can be found on the OCC’s website, in which the OCC provided “[a]nticipated questions and answers,” Among those, is the following:

Does requesting a review prevent me from suing the servicer? Will 1 be required to waive my rights to sue by accepting compensation?

Submitting a request for review does not preclude borrowers from pursuing other legal remedies available related to their foreclosure. Servicers may not ask a borrower to release any claims in order to receive compensation.

(See Tellis Decl., Ex. 2, p. 2.) (emphasis added)

Quite simply, this case is not “subsumed” by the Consent Order. Indeed, under the OCC’s edict, even borrowers who might receive compensation under the Consent Order nevertheless retain the right to pursue other legal remedies related to their loans.

The Chase Defendants’ argument is further undermined by the OCC’s release, just months ago, of a document entitled “Financial Remediation Framework For Use in the Independent Foreclosure Review.” (See Chase’s RJN, Ex, F (the “Framework”).) According to the OCC, in connection with the Consent Order, “independent consultants will use the Framework to recommend remediation for financial injury identified during the Independent Foreclosure Review.” (Id.) The Framework, however, clearly states that the independent consultants are not examining foreclosure files to find the fraud at issue here. Instead, a reimbursement of fees occurs when, for example, the consultant determines that a borrower was not actually in default when a foreclosure occurred. (See id., p. 2, category No. 2.) In such an instance, the consultant can recommend that the foreclosure be rescinded and to “correct servicer record for late fees, foreclosure fees, and/or any other improper amounts, and correct credit reports.” In other words, under the Framework, a “financial injury” occurs when fees were charged to a borrower in error. The Framework does not provide compensation to borrowers for the bank’s practice of “padding” third party costs, assessing such padded costs to borrowers’ accounts, and concealing the padding on borrower’s loan statements.

Additionally, and most critically, just recently, the OCC also issued an Interim Status Report addressing the status of the foreclosure review process under the Consent Order. (Chase’s RJN, Ex. E (the “June Status Report”).) Among other things, the June Status Report further elaborated on the ability of borrowers to pursue private litigation as follows:

The OCC will not permit servicers to require borrowers to sign a waiver of their ability to pursue claims against the servicer in order to receive compensation under the Independent Foreclosure Review. A court could determine, however, that the amount received under the Independent Foreclosure Review should offset any future amount the court awards to a borrower if the borrower separately pursues a claim against the servicer.

(Id. at p. 13 (emphasis added).)

Thus, even if one credited Chase’s argument, any amounts paid by the Chase Defendants to the handful of eligible borrowers under the Consent Order, who might also be in the class here, could be “offset” against any future amounts awarded in this case.1 Significantly, the OCC recognizes that the Consent Order does not divest this Court of subject matter jurisdiction simply because there may be some overlap in the subject matter. Any such overlap can be dealt with at the class certification stage; it does not provide a basis to dismiss this case. To conclude otherwise would violate the Plaintiffs’ due process rights.

In any event, as set forth below, the central inquiry for purposes of the Chase Defendants’ jurisdiction challenge is whether the relief sought by Plaintiffs here is in “direct contravention” of the Consent Order and, thus, violates Section 1818(i) of the National Bank Act (the “NBA”). It is not.

B. Section 1818(i) of the National Bank Act Only Prohibits a Court from Modifying or Countermanding a Federal Banking Agency Order

Section 1818(i) of the NBA “is a narrow statute, applying only to ‘an order issued under this section.’ ” A.G. Becker, Inc. v. Board of Governors of Fed. Reserve Sys., 519 F. Supp. 602, 607 (D.D.C. 1981). It states that “except as otherwise provided in this section,” the courts have “no jurisdiction to affect by injunction or otherwise the issuance or enforcement of any [such] order … or to review, modify, suspend, terminate, or set aside any such notice or order.” 12 U.S.C. § 1818(i)(l), The clause narrowly prohibits a court from modifying or countermanding orders issued thereunder. However, it does not cast a broad net over any matter that might remotely touch on an order – such as a class action lawsuit. To that end, an as demonstrated below, it does not preclude this Court from exercising parallel or co-extensive subject matter jurisdiction. Indeed, Plaintiffs are unaware of any case, and the Chase Defendants cite none, that has applied Section 1818(i) to bar subject matter jurisdiction over a lawsuit where, as here, no party seeks to modify or countermand a regulatory consent order.

Rather, courts have held that Section 1818(i) bars subject matter jurisdiction where the parties expressly seek to set aside or modify federal banking agency orders or to enjoin regulatory proceedings. See e.g., Groos Nat’l Bank v. United States, 573 F.2d 889, 894 (5th Cir. 1978) (no jurisdiction to hear action to invalidate an agreement with the OCC and to enjoin any action by the OCC because plaintiffs’ action sought to “circumvent” the statute); Rhoades v. Casey, 196 F.3d 592, 597 (5th Cir. 1999) (no jurisdiction to rule on the legal effect of an OTS order because “if the district court had … declared the OTS order void and therefore unenforceable, that decision would have been tantamount to the district court’s modifying or terminating the OTS order.”); Abercrombie v. OCC, 833 F.2d 672 (7th Cir. 1987) (no jurisdiction to enjoin the OCC from assessing civil penalties against a bank for violating an OCC cease and desist order). Unlike those cases, Plaintiffs here do not seek to set aside, modify or otherwise interfere with the Consent Order.

The Chase Defendants rely erroneously on American Fair Credit Ass’n v. United Credit National Bank, 132 F. Supp. 2d 1304 (D. Colo. 2001). (See Mot. at 11.) There, the defendant bank had entered into a broad consent order with the OCC that, among other things, required the bank to “cease and desist all activity and transactions relating to the products of [plaintiff], including but not limited to payment of funds for any reason to [plaintiff].” Id. at 1306-07 (emphasis added). Despite the consent order, plaintiff filed suit against the bank seeking recovery of monetary and equitable relief. The court found that seven of the plaintiff’s claims for monetary relief were in “direct contravention” of the OCC’s consent order’s prohibition on the payment of funds “for any reason” to the plaintiff. Id. at 1312. Even as to those claims, however, although the court found that they directly contradicted the OCC’s consent order, the court still examined whether Section 1818(i) violated the Due Process Clause thereby triggering the “statutory authority” exception.

The Chase Defendants conveniently ignore that the court also found that it had parallel or co-extensive subject matter jurisdiction over the plaintiff’s eighth claim for declaratory relief. Id, That claim sought an order that the bank defendant was bound by an agreement with plaintiff involving the same general subject matter addressed in the consent order. Thus, for purposes of determining subject matter jurisdiction, the central question was whether plaintiff’s claims were in “direct contravention” of the consent order. Id. Here, of course, the Chase Defendants cannot establish that the relief sought by Plaintiffs’ claims is in “direct contravention” of the Consent Order.

The Chase Defendants also rely on an unpublished trial court opinion from the Central District of California in a case styled Bakenie v. JP Morgan Chase Bank, N.A., Case NO. SACV 12-60 JVS. That case dealt with Plaintiff’s challenges to Chase’s foreclosure practices, including the use of un-notarized foreclosure documents and the use of improper endorsements and assignments. Plaintiffs sought declaratory and injunctive relief, as well as restitution. Because such claims were squarely covered by the Consent Order, the district court found that Plaintiff’s claims “affect” enforcement of such order, The Bakenie case is obviously inapposite.

The more appropriate district court case to review is In Re JPMorgan Chase Mortgage Modification Litigation, 2012 U.S. Dist. LEXIS 104486 (July 27, 2012). There, the Massachusetts district court rejected Chase’s subject matter jurisdiction argument. That case concerned a number of homeowner lawsuits claiming that Chase had, inter alia, made false and misleading promises to homeowners about the prospects of a mortgage modification and managed the modification process with gross ineptitude. Id. at * 2. The district court took note of the scope of the Consent Order and the Framework’s Frequently Asked Questions, including that “borrowers were told that ‘[s]ubmitting a request for an Independent Foreclosure Review will not preclude borrowers from pursuing any other legal remedies available related to their foreclosure.” Id at * 19.

In finding subject matter jurisdiction, the district court noted “[t]he jurisdictional bar of § 1818(i)(l) must, however, be read in the context of the entire statute, the primary purpose of which is to prevent federal courts from usurping the OCC’s power to enforce its own consent order against parties to the orders. Congress did not intend to also prohibit non-parties from exercising their separate remedies at law.” Id. (emphasis in original). The district court noted the OCC’s FAQs which assure borrowers that their participation in the review process will not result in a waiver of their right to pursue legal remedies and concluded “[i]t follows that the jurisdictional bar is not meant to displace a non-party’s right to present its claims to a federal court, or the jurisdiction of the court to hear those claims.” Id. Finally, the district court observed “[i]t is telling that Chase can point to no case that lends support for its reading of the statute. The cases Chase does cite are readily distinguishable as they each involve a party attempting an end run around a consent order.” Id. at * 23

C. Plaintiffs’ Complaint Does Not Seek Any Relief that Would Affect the Issuance or Enforcement of the OCC Consent Order

Because the Consent Order does not address the fraudulent conduct that forms the basis of Plaintiffs’ claims, it follows that the relief sought does not modify or interfere with the terms of the Consent Orders. This case implicates, among other things, all loans serviced by Chase Home Finance LLC (before it merged into J.P. Morgan Chase Bank). It is not limited to loans serviced by J.P. Morgan Chase Bank that went into a foreclosure proceeding during the period January 1, 2009 and December 31, 2010, as the Consent Order plainly covers. Additionally, this case concerns the banks’ practice of padding fees charged for services performed by third parties, assessing those padded fees to borrowers’ accounts, and then, concealing the “profits” from borrowers. That conduct appears nowhere in the Consent Order. It is hard to understand how an independent consultant reviewing foreclosure files could have even addressed the conduct at issue in this case, Absent an admission of wrongdoing by the Chase Defendants — which is conspicuously missing from the Consent Order — the legal system, and not an independent consultant must determine if the Chase Defendants violated the law, as Plaintiffs allege.

Finally, it should be obvious to the Chase Defendants that Plaintiffs do not seek any remedies that are inconsistent with the Consent Order, and they certainly do not seek an order setting aside or modifying the Consent Order, Plaintiffs seek damages, restitution and disgorgement as a result of Defendants fraudulently marking-up and concealing default-related fees. (Compl. at Prayer.) Plaintiffs also seek to enjoin Defendants from engaging in such conduct. (Id.) The Chase Defendants have not identified a single instance of how this relief would contradict the terms of the Consent Order.

The Chase Defendants also repeatedly note that the Consent Order prohibits Chase from “taking any action that would constitute a significant deviation from, or material change to, the requirements of the Action Plan or this Order, unless and until the Bank has received a prior written determination of no supervisory objection from the Deputy Comptroller” and that the Consent Order also prohibits any person from asserting “any benefit or any legal or equitable right, remedy or claim” under the Consent Order. (Mot. at 7:15-16 citing Consent Order (Art. III, §(1) & Art. XIII, §(10)).) But, this lawsuit neither requires Chase to take any action that would constitute a significant deviation from, or change to, the Consent Order, nor does it assert any legal rights thereunder.

Tellingly, in April 2012, one-year after issuance of the OCC Consent Order, the federal government, fifty state attorneys general, and five major financial institutions, including J,P. Morgan Chase, Wells Fargo and Citigroup, entered into a National Mortgage Settlement Consent Judgment (the “NMS”) in a case styled United States of America et al. v. Bank of America Corp. et al., filed in the United States District Court for the District of Columbia, The lawsuit concerned the propriety of the banks’ foreclosure practices. The NMS required certain mortgage servicing reforms, including changes to fees charged for broker price opinions and, to that end, each bank agreed that it “shall not impose its own mark-up on [s]ervicer initiated third-party default or foreclosure-related services.” (See Tellis Decl., Ex. 3, Ex, A-37(C.5).) The NMS made absolutely clear, however, that it did not release the banks from class action claims or individual claims by individual borrowers and mortgage holders. (Id. at Ex. F at ¶ 12 & Ex. G at ¶ 19.) Notably, the Chase Defendants did not, and do not, contend that the court’s entry of the NMS in the above-described case violated Section 1818(i) of the NBA. If the Chase Defendants’ subject matter jurisdiction arguments here are extended to their logical end, Section 1818(i) of the NBA would have likewise prohibited the district court from doing so in that case. The Chase Defendants made no such argument then, and their attempt to do so now smacks of gamesmanship.

II. NEITHER THE DOCTRINE OF PRIMARY JURISDICTION NOR EQUITABLE ABSTENTION APPLY HERE

Perhaps not completely convinced by their subject matter jurisdiction challenge, the Chase Defendants also contend that “the doctrines of primary jurisdiction and equitable abstention warrant abstention from adjudicating Plaintiffs’ claims.” (Mot. at 14:18-20.) Neither applies here.

The doctrine of primary jurisdiction does not require that all claims within an agency’s purview be decided by the agency. Brown v. MCI Worldcom Network Servs., Inc., 277 F.3d 1166, 1172 (9th Cir. 2002) (refusing to refer consumer’s claims that telephone service provider violated a tariff to the FCC). And primary jurisdiction “is not designed to secure expert advice from agencies every time a court is presented with an issue conceivably within the agency’s ambit,” rather, it “is to be used only if a claim requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency.” Clark v. Time Warner Cable, 523 F,3d 1110, 1114 (9th Cir. 2008). To that end, the “standards to be applied in an action for fraudulent misrepresentation are within the conventional competence of the courts, and the judgment of a technically expert body is not likely to be helpful in the application of these standards to the facts of this case.” Nader v. Allegheny Airlines, 426 U.S. 290, 305-06(1976).

Here, the Chase Defendants argue that the doctrine of primary jurisdiction is triggered because “the need for uniform and consistent treatment of the complex and comprehensive issues involving home loan servicing practices is paramount to the OCC’s ability to implement and enforce its orders.” (Mot. at 14:20-22.) Nowhere, however, does Chase identify the “complex and comprehensive issues” involved in this case that would impact the OCC’s ability to “implement and enforce its orders.” This is a fraud case. (See e.g., Compl. ¶ 39.) It neither seeks enforcement of the Consent Order, nor does it require this Court to interpret a complex regulatory scheme. And it does not impact the OCC’s ability to enforce its regulatory orders. In fact, the Consent Order expressly contemplates private litigation against the banks.

Chase’s cited authority Davel Commc’ns, Inc. v. Qwest Corp., 460 F.3d 1075, 1089 (9th Cir. 2006) is instructive. There, a payphone service provider sued Qwest, a telephone exchange carrier. The plaintiff claimed that, under certain FCC orders which set standards for rates and services, it was entitled to a refund for periods in which Qwest failed to implement the new FCC standards. Id. at 1080. The Ninth Circuit noted the following four-factor test under which the doctrine of primary jurisdiction applies: where there is “(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in administration.” Id. (citing United States v. Gen. Dynamics Corp., 828 F.2d 1356, 1363 (9th Cir. 1987)).

The Qwest court found that a threshold issue required interpretation by the FCC — specifically, whether Qwest had received a limited waiver of certain provisions of the new FCC orders and the scope of such waiver (the “Waiver Order”). Id. at 1087. Thus, the Court held that “[h]ow the Waiver Order applies here involves questions of policy best left to the FCC, the agency that adopted the Waiver Order in the first place pursuant to its regulatory authority in this arena.” Id. at 1089-90. Because the plaintiffs’ claims were based on Qwest’s alleged violation of the Waiver Order and the application of the Waiver Order was best left to the FCC, the case triggered the doctrine of primary jurisdiction.

Here, Plaintiffs’ claims are neither based on violations of the Consent Order, nor do they involve questions of policy best left to the OCC.

The Chase Defendants next urge this Court to exercise its discretion to “abstain” from this case. “The notion of abstention in the context of the UCL originally arose in cases involving the intersection of federal and state law.” Desert Healthcare Dist. v. Pacificare FHP, Inc., 94 Cal, App. 4th 623 (2001) (citing Diaz v. Kay-Dix Ranch, 9 Cal. App. 3d 588 (1970)). In Diaz, migratory farmworkers filed a class action seeking to enjoin the employment of illegal immigrants. The Court of Appeal found that the plaintiffs improperly sought the aid of the state courts of equity “because the national government ha[d] breached the commitment implied by national immigration policy.” Id. In affirming the decision to abstain, the Court found that “[i]t is more orderly, more effectual, less burdensome to the affected interests, that the national government redeem its commitment.” Id.; see also People ex rel. Dept. of Transportation v. Naegele Outdoor Advertising Co., 38 Cal.3d 509, 523 (1985) (case involving the intersection of federal and state law in the regulation of billboards on Indian lands).

The underlying rationale of these cases is that “because the remedies available under the UCL, namely injunctions and restitution, are equitable in nature, courts have the discretion to abstain from employing them. Where a UCL action would drag a court of equity into an area of complex economic policy, equitable extension is appropriate, In such cases, it is primarily a legislative and not a judicial function to determine the best economic policy.” Desert Healthcare, 91 Cal. App. 4th at 634.

Again, the Chase Defendants’ cited authority, Shamsian v. Department of Conservation, 136 Cal. App. 4th 621 (2006) is instructive. There, plaintiff filed suit against the Department of Conservation and certain of its directors claiming that they failed to provide appropriate beverage container redemption opportunities for California consumers. In approving of the trial court’s discretion to abstain, the Court of Appeal noted “[i]n this case, the complex statutory arrangement of requirements and incentives involving participants in the beverage container recycling scheme is to be administered and enforced by the department consistent with the Legislature’s goals.” Id. at 642.

In sum, this is not a case that requires the Court to “meddle in” a statutory scheme to be administered by a regulatory agency or that otherwise pulls the Court “deep into the thicket” of complex economic policy that the Court is ill-equipped to decide. Rather, it involves a straightforward act of deception and there exists no basis to abstain.

III. THE NATIONAL BANK ACT DOES NOT PREEMPT PLAINTIFFS’ CLAIMS

Determined to include the kitchen sink in its jurisdictional arguments, the Chase Defendants lastly contend that the NBA and “related OCC regulations” preempt Plaintiffs’ claims. (Mot. at 16:7.) As a threshold matter, although the argument is made collectively by Defendants J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A, and Chase Home Financial LLC, the NBA only regulates the affairs of a “national bank” and its “operating subsidiary.” See 12 U.S.C. § 24; Walters v. Wachovia Bank, N.A. 550 U.S. 1,18 (2007). Defendant J.P. Morgan Chase & Co. is neither a “national bank,” nor an “operating subsidiary” of a national bank. Nevertheless, the preemption arguments made by defendants J.P. Morgan Chase Bank, N.A. and Chase Home Finance LLC fare no better.2 Indeed, Chase’s efforts to challenge this Court’s subject matter jurisdiction have been previously rejected, See e.g. Jefferson et al. v. Chase Home Finance, 2008 U.S. Dist. LEXIS 101031 (N.D. Cal. Apr. 29, 2008) (Hon. Thelton E. Henderson rejected Chase’s argument that NBA and OCC regulations preempt consumer protection laws in connection with Chase’s improper application of loan prepayments); see also In re Chase Bank USA, N.A. “Check Loan” Contract Litigation, 2009 U.S. Dist. Lexis 108636 (N.D. Cal. 2009) (Hon. Maxine M. Chesney rejected Chase’s argument that plaintiffs’ state law claims concerning the bank’s practice of issuing “convenience checks” on credit card accounts was preempted by the NBA).

Notably, the Wells Fargo Defendants in the related Bias case were unsuccessful in making similar jurisdictional arguments in a case involving excessive late fees and drive-by property inspection fees pending in the Southern District of Iowa. See Young et al. v. Wells Fargo & Company et al., 671 F. Supp. 2d 1006 (S.D. Iowa 2009). There, the court held that “when Congress enacted the NBA, it created a ‘mixed state/federal regime[] in which the Federal Government exercises general oversight while leaving state substantive law in place.” Id. at 1019.3 The court found that the OCC regulations regarding preemption expressly provide that “State laws on the following subjects are not inconsistent with the real estate lending powers of national banks and apply to national banks to the extent that they only incidentally affect the exercise of national banks’ real estate lending powers: (1) Contracts; (2) Torts;,… ” Id. at 1020. Specifically, the OCC regulations expressly permit the enforcement of state laws relating to contracts, torts, and any other law that only incidentally affects or is otherwise consistent with a bank’s non-real estate lending powers. 12 C.F.R. § 7.4008(e). The court explained that, as the OCC regulations indicate, “the presumption is that a claim brought under state tort law, and by extension, under general state consumer protection statutes, will not be preempted unless the Court has reason to conclude the claim will have more than an incidental effect on the exercise of the national bank’s real estate lending powers.” Id. To that end, the court held:

Here, Plaintiffs’ claims are premised on the theory that Wells Fargo had a legal duty not to employ procedures designed to defraud borrowers by charging unreasonable fees. Numerous courts considering similar suits have concluded that claims brought under state “laws of general application, which merely require all businesses (including banks) to refrain from fraud [and] misrepresentations do not impair a bank’s ability to exercise its lending powers and only incidentally affect the exercise of a national bank’s powers,”

Id. at 1022 (citing Chase Home Finance, 2008 U.S. Dist. LEXIS 101031).

Notwithstanding the foregoing, the Chase Defendants rely erroneously on Martinez v. Wells Fargo Home Mortgage, Inc., 598 F.3d 549 (9th Cir. 2010) for the proposition that Plaintiffs’ claims are preempted. In Martinez, Plaintiffs alleged that Wells Fargo’s charging of an $800 underwriting fee for the refinancing of a loan was not reasonably related to the value of the services performed by the bank and, thus, violated California’s UCL. The Ninth Circuit held that that because plaintiffs were challenging the bank’s setting of the amount of the underwriting fee, such claims were preempted the NBA. However, the Ninth Circuit cautioned that “[t]he Act (and OCC regulations thereunder) does not ‘preempt the field’ of banking.” Id. at 555. Moreover:

State laws of general application, which merely require all business (including national banks) to refrain from fraudulent, unfair, or illegal behavior, do not necessarily impair a bank’s ability to exercise its real estate lending powers. Such laws are not designed to regulate real estate lending, nor do they have a disproportionate or other substantial effect on lending. In fact, the OCC has specifically cited the UCL in an advisory letter cautioning banks that they may be subject to such laws that prohibit unfair or deceptive acts or practices.

Id. To that end, the Ninth Circuit observed that “various district courts have held that the Act does not preempt a claim of express deception asserted under state law.” Id. (emphasis added) (citing, among other cases, Jefferson v. Chase Home Finance 2007 U.S. Dist. LEXIS 94652 (N.D. Cal. Dec. 14, 2007) (UCL claim regarding a Chase’s misrepresentations in crediting loan prepayments was not preempted)).

The Martinez court expressly distinguished between the claims at issue there (i.e. the amount of the underwriting and tax fees) and claims of fraud and deception, See also, Gutierrez v. Wells Fargo Bank, N.A., 730 F. Supp. 2d 1080, 1131 (N.D. Cal. 2010) (“there is a material difference between the bank’s authority to establish overdraft fees … versus bank practices aimed at multiplying the number of overdrafts during the posting process.”). At issue in the Martinez case was plaintiffs’ allegation that Wells Fargo’s failed to disclose the real cost of its services on a HUD-1 settlement statement. However, unlike this case, in Martinez, Wells Fargo had not made any prior disclosures to plaintiffs concerning the amount of the fees at issue. Instead, plaintiffs argued that, under the Real Estate Settlement Procedures Act, Wells Fargo was required to “conspicuously and clearly itemize all charges imposed on borrower.” However, the Martinez court held that this language means that Wells Fargo must list the amounts it is charging the plaintiffs, “not that it must list the costs it incurred in providing those services.” 598 F.3d at 557. Thus, the Court found that the plaintiffs were, in essence, complaining that the underwriting fee was too high; and they “ask the court to decide how much an appropriate fee would be.” Id. at 556.

Determined to draw a parallel between Martinez and this case, the Chase Defendants erroneously suggest that Plaintiffs’ claims mirror those asserted in the Martinez case. Not so. Here, plaintiffs do not ask this Court to determine how much an appropriate BPO or inspection fee should be, nor do they challenge the banks’ ability to charge a BPO or inspection fee. Unlike Martinez, Plaintiffs here allege that in their service agreements with borrowers, the banks disclose that, in the event of a default, the banks will pay for costs associated with protecting the property, including “protecting and/or assessing the value of the property.” (Comp. ¶ 41.) The banks further disclose they “will have the right to be paid back by [the borrower] for all of its costs and expenses in enforcing” the loan. (Id. ¶ 42.) Notwithstanding these disclosures, the banks omit and conceal the fact that they seek far more than the right to be “paid back.” Instead, using sophisticated loan servicing software programs, they uniformly, routinely and repeatedly inflate the third-party costs they incurred in connection with inspecting and valuing a property, and they assess such inflated costs to borrowers. In so doing, the banks cryptically identify such fees on borrowers’ statements so as to conceal the true nature of these “fees.” (See e.g., Compl. ¶¶ 10, 48-49.)

In sum, Plaintiffs’ claims do not have more than an “incidental affect”, if any, on the banks’ lending activities and, thus, are not preempted. 12 C.F.R, § 7.4008(e); see also Martinez, supra, 598 F,3d at 555. In this context, “incidental” does not mean de minimus. Instead, a claim has an “incidental affect” on a national bank if the law underlying the claim is not directed exclusively against the bank that is, if it is a law of general applicability which governs all persons or entities, some of whom happen to include national banks. As noted by the California Court of Appeal in Gibson v. World Sav. & Loan Ass’n, 103 Cat. App. 4th 1291, 1303-04 (2002):

The duties to comply with contracts and the laws governing them and to refrain from misrepresentation, together with the more general provisions of the UCL, are principles of general application. They are not designed to regulate lending and do not have a disproportionate or otherwise substantial effect on lending, To the contrary, they are part of the legal infrastructure that undergird all contractual and commercial transactions. Therefore, their effect is incidental and they are not preempted.

see also Hood v. Santa Barbara Bank & Trust, 143 Cal. App, 4th 526, 538-40 (2006) (rejecting banks’ argument that UCL claim was preempted by NBA or OCC regulations). Because Plaintiffs’ claims apply to all businesses, and not merely to banks, and because such claims pertain to acts of fraud and deception, such claims are incidental to the Chase Defendants’ lending functions, and are plainly not preempted,

IV. PLAINTIFFS HAVE STANDING TO SUE THE CHASE DEFENDANTS

The Chase Defendants erroneously claim that none of the plaintiffs allege that they “actually paid” the improper fees at issue here and, thus, they lack standing to sue under Article III, RICO and the UCL, The Chase Defendants omit certain of Plaintiffs’ allegations and misunderstand the applicable law. To be sure, Plaintiffs unambiguously allege that they “paid some or all of the unlawful fees assessed on [their] account[s].” (Compl, 62, 65, 68.) (emphasis added). This allegation alone is dispositive of the Chase Defendants’ “standing” arguments.

A. Plaintiffs Indisputably Have Article III Standing to Sue

The Chase Plaintiffs expressly alleged that their loan statements included unlawful marked-up fees for default related services, that such statements concealed the true nature of these fees (Compl. ¶¶ 39, 48-49, 53), that they “paid some or all of the unlawful fees assessed on [their] account[s],” (id. ¶¶ 62, 65, 68), that they “have been injured in fact and suffered a loss of money or property” (id. ¶ 100), and that they “would not have paid Chase[‘s] … unlawful fees or they would have challenged the assessment of such fees on their accounts had it not been for Chase[‘s] … concealment of material facts” (id.). (emphasis added). These allegations alone satisfy Article III standing.

Conveniently omitting that the Chase Plaintiffs have, in fact, alleged that they “paid” some or all of the unlawful fees, the Chase Defendants nevertheless argue “No Plaintiff alleges that he or she made any actual payments to any Defendant related to any allegedly improper fees.” (Mot at 19:13-14). Plaintiffs can only assume that such a statement was made in error.

On a related matter, it is important to emphasize that the Chase Defendants alone possess the information necessary to determine how many of the improper fees that were assessed to the Plaintiffs’ accounts were actually paid by the Plaintiffs. And the Chase Defendants alone possess the information necessary to determine whether the banks applied the Plaintiffs’ loan payments to the improper fees first, before they were applied to loan principal balances. (See e.g., Compl. ¶¶ 62, 65, 68, “Defendants alone maintain a complete accounting of all fees assessed and paid, and the details of each and every fee assessed and paid cannot be alleged with complete precision without access to Defendants’ records.”) Conveniently, the Chase Defendants have resisted providing Plaintiffs with any meaningful discovery necessary to ascertain such facts. Nevertheless, this is the pleading stage, not summary judgment. The nature and extent of the actual payment history here does not determine Article III standing.

Article III standing addresses “whether the particular plaintiff is entitled to an adjudication of the particular claims asserted.” Allen v. Wright, 468 U.S. 737, 752 (1984). A plaintiff must show she suffered a loss or injury, or is threatened with impairment of her own interests. See Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 100 (1979) (finding that plaintiffs had standing to sue real estate firms even though they did not actually purchase homes, the court held “In order to satisfy Art. III, the plaintiff must show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant.”) (emphasis added). Thus, even if the Chase Plaintiffs never actually paid any of the improper fees that were assessed to their accounts, they would still have Article III standing to sue. See Edwards v. The First American Corp., 610 F.3d 514 (9th Cir. 2010) (Ninth Circuit held that class action plaintiffs had Article III standing to sue because of the invasion of the plaintiffs’ legal rights under the statutes at issue. “Essentially, the standing question in such cases is whether the constitutional or statutory provisions on which the claims rests properly can be understood as granting persons in the plaintiff’s position a right to judicial relief.”)

Here, each of the Chase Plaintiffs alleges that they paid some or all of the improper fees that were assessed to their accounts. Nevertheless, for purposes of Article III standing, it is important only that the Chase Plaintiffs had a direct financial relationship with the Chase Defendants, grounded on the Plaintiffs’ purchase or use of Chase’s loan products, and that the Chase Defendants assessed such fees, As noted above, it is indisputable that the Chase Plaintiffs have satisfied both.

B. Plaintiffs Have Satisfied the Standing Requirements Under RICO and the UCL

The Chase Defendants also contend that Plaintiffs’ purported failure to allege “actual payment” of the improper BPO and inspection fees also bars their standing to bring a RICO and UCL claim. The Chase Defendants first argue that “[a] civil RICO plaintiff must allege ‘harm to a specific business or property interest – a categorical inquiry typically determined by reference to state law.’ ” (Mot. at 19:20-21 (quoting Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 2005)).) Then, they argue that “[b]ecause no Plaintiff has alleged any business or property injury, Plaintiffs lack standing to bring a civil RICO claim.” (Id. at 19:24-25,) Again, Plaintiffs have alleged payment of the unlawful fees at issue here (Compl. ¶¶ 62, 65, 68).

In Diaz, the Ninth Circuit noted its earlier opinion in Oscar v. University Students Co-operative Ass’n, 965 F,2d 783 (9th Cir. 1992) and held that a RICO plaintiff could also allege an injury to a property interest even in the absence of financial injury; the Court found that a “property interest” included the legal entitlement to business relations unhampered by schemes prohibited by RICO. The Diaz court noted that courts should typically look to state law to determine whether “a legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes” exists. Here, California law unquestionably protects the legal entitlement to business relations unhampered by fraudulent schemes and unfair business practices. See Gibson v. World Sav. & Loan Ass’n, 103 Cal. App. 4th 1291 (2002) (“The duties to refrain from misrepresentation, together with the more general provisions of the UCL, are principles of general application. They are part of the legal infrastructure that undergird all contractual and commercial transactions.”)

The Chase Defendants next claim that Plaintiff Diana Ellis failed to satisfy the revised statutory standing requirements of the UCL because she too purportedly failed to allege payment of the improper fees. (Mot. at 19-26.) Again, given the allegations of Paragraphs 62, 65 and 68 of the Complaint, the Chase Defendants must have made this argument in error. Nevertheless, it is important to emphasize that the California Supreme Court has made clear that “standing under section 17204 (the UCL standing provision) does not depend on [plaintiff’s] eligibility for restitution:” Pom Wonderful LLC v. The Coca-Cola Company, 679 F.3d. 1170, 1179 (9th Cir. 2012) (emphasis added); Clayworth v. Pfizer, Inc., 49 Cal. 4th 758 (2010). These decisions illustrate that concept of standing to sue and eligibility for restitutionary damages are distinct; the central inquiry for standing purposes is whether there exists a “transactional nexus” between the parties. See e.g. Phillips v. Crocker-Citizens Nat’l Bank, 38 Cal. App. 3d 901, 910 (1974) (“The question of standing to sue is one of the right to relief and goes to the existence of a cause of action against the defendant.”); see also Payne v. United California Bank, 23 Cal. App. 3d 850 (1972) (plaintiff must have had dealings with defendant bank). Indeed, in Clayworth, the California Supreme Court noted: “That a party may ultimately be unable to prove a right to damages (or, here, restitution) does not demonstrate that it lacks standing to argue for its entitlement to them.” Id. at 789, The Court held that plaintiffs could also seek injunctive relief without the need to show any entitlement to restitution. Id. at 790; see also Rubio v. Capital One Bank 613 F.3d 1195 (9th Cir. 2010) (Ninth Circuit found that a credit card customer, who was forced to close a credit card account or pay a higher interest rate, had UCL standing to sue even though she did not allege which choice she accepted).

V. THE CHASE DEFENDANTS’ MOTION IMPROPERLY CONFLATES STANDARDS OF PLEADING AND PROOF

The Chase Defendants’ Rule 9(b) arguments conveniently ignore that, “a plaintiff in a fraud by omission suit will not be able to specify the time, place, and specific content of an omission as precisely as would a plaintiff in a false representation claim … [Accordingly,] a fraud by omission claim can succeed without the same level of specificity required by a normal fraud claim.” Falk v. Gen. Motors Corp., 496 F. Supp. 2d 1088, 1098-99 (N.D. Cal. 2007); Washington v. Baenziger, 673 F. Supp. 1478, 1482 (N.D. Cal. 1987). As a result, courts have held that “it is generally inappropriate to resolve the fact-intensive allegations of fraudulent concealment at the motion to dismiss stage.” In re TFT-LCD Antitrust Litig., 586 F. Supp. 2d 1109, 1120 (9th Cir. 2005).

Rule 9(b) requires only that the allegations of fraud be “specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Brooks v. ComUnity Lending, Inc., 2010 U.S. Dist. LEXIS 67116 at *27 (N.D. Cal. Jul. 6, 2010) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007)). A pleading “is sufficient under Rule 9(b) if it identifies the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations.” Gottreich v. San Francisco Investment Corp., 552 F.2d 866 (9th Cir. 1977) (citations omitted). Here, Plaintiffs’ thirty-six page Complaint provides more than enough information to permit the Chase Defendants to answer the claims against them. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009).

VI. PLAINTIFFS HAVE ADEQUATELY ALLEGED THEIR RICO CLAIMS

A. Plaintiffs Have Adequately Alleged a Claim Under 28 U.S.C. Section 1962(c)

“To state a claim under § 1962(c), a plaintiff must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir. 2007) (“we should not read the statutory terms of RICO narrowly. Rather, … RICO should be liberally construed to effectuate its remedial purpose.”)

Plaintiffs’ Complaint addresses each of these elements, alleging, with great detail, the participants in the enterprise and the nature of the fraudulent conduct. Plaintiffs also provide examples of the fraudulent concealment, explanations for what was concealed, and the reason for the concealment. In particular, Plaintiffs allege that the Chase Defendants, their property preservation vendors and the real estate brokers who provide BPOs for the Chase Defendants formed an association-in-fact enterprise (the “Chase Enterprise”), and that the Chase Defendants conducted the affairs of the Chase Enterprise through a pattern of racketeering consisting of multiple, continuing acts of wire and mail fraud, (Compl. ¶¶ 105-124.) Additionally, Plaintiffs allege that the policies and procedures established for the enterprise by “Chase’s executives include providing statements that fail to disclose the true nature of the marked-up or unnecessary fees, cryptically identifying default-related service fees as ‘Miscellaneous Fees,’ or ‘Corporate Advances,’ [and] using mortgage loan management software designed to increase the fees assessed on borrowers’ accounts.” (Id. ¶ 109) The Chase Defendants’ contention that Plaintiffs have not properly alleged their RICO claims is without merit.

1. RICO Enterprise

A RICO “ ‘enterprise’ includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” Newcal Indus., Inc. v. IKON Office Solution, 513 F.3d 1038, 1056 (9th Cir. 2007) {quoting 18 U.S.C. § 1961(4)). Notwithstanding this simple and straightforward definition, the Chase Defendants argue that Plaintiffs cannot show any RICO enterprise because Plaintiffs “fail to allege the existence of an enterprise distinct from the Defendants.” (Mot. at 20:24-25.) The Chase Defendants assert that subsidiaries and affiliates of a corporation “generally” do not constitute an association-in-fact enterprise and that there is no allegation “that any non-Chase entity” has taken action in support of the enterprise. (Id. at 20:28; 21:8.) The Chase Defendants’ position is unsupported by the facts and the law.

Plaintiffs allege that the Chase Defendants participated in the conduct of the enterprise’s affairs by establishing policies and procedures and directing the other members of the enterprise, including the non-Chase “property preservation vendors” and the real estate brokers who performed BPOs, to carry out the scheme. {See e.g., Compl. ¶ 106.) The alleged enterprise unambiguously does not consist solely of the Chase Defendants. And Plaintiffs are not required to allege any more than they have about the nature of the enterprise. The Ninth Circuit has made it clear that “an associated-in-fact enterprise under RICO does not require any particular organizational structure, separate or otherwise.” Odom, 486 F.3d at 551,

Additionally, citing Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163 (2001), the Chase Defendants argue that RICO liability requires a showing that defendants participated in the conduct of the enterprise’s affairs, not just their own affairs. (Mot. at 21:14-16.) The Chase Defendants, however, mischaracterize the nature of the Court’s holding. See In re Countrywide Fin. Corp. Mortg. Mktg & Sales Prac. Litig, 601 F. Supp. 2d 1201, 1214 n.3 (S.D. Cal. 2009) (finding Cedric Kushner Promotions, Ltd. inappropriate for purposes of addressing parent-subsidiary distinctiveness under RICO). At bottom, Cedric Kushner Promotions, Ltd., held “simply that the need for two distinct entities is satisfied; hence the RICO provision before us applies when a corporate employee unlawfully conducts the affairs of the corporation of which he is the sole owner — whether he conducts those affairs within the scope, beyond the scope, of corporate authority.” 533 U.S. at 166. It is undeniable that RICO was intended to apply to circumstances such as those at issue here. As the Court held in Cedric Kushner Promotions, Ltd., the RICO statute is designed “to protect the public from those who would run organizations in a manner detrimental to the public interest.” Id. at 165 (internal citations omitted).

The Chase Defendants, however, cannot explain how Plaintiffs’ allegations leave them unable to “defend against the charge[s]” or “prepare an adequate answer from the allegations.” Kearns, 567 F.3d at 1124; Gottreich, 552 F.2d at 866. Accordingly, for this reason, numerous other courts in the Northern District have considered, and expressly rejected, this same argument. See In re TFT-LCD Antitrust Litig., 599 F. Supp. 2d 1179, 1184 (N.D. Cal. 2009) (court rejected defendants’ argument that “the complaints continue to ‘lump together’ the twenty-six different named defendants in general allegations referring to ‘defendants,’ or groups of defendants sorted by country or corporate family.”).

In In re Static Random Access Memory (SRAM) Antitrust Litig., 580 F. Supp. 2d 896, 904 (N.D. Cal. 2008), “[d]efendants also argue[d] even if [p]aintiffs’ overall allegations are sufficient to survive a motion to dismiss, the complaint should be dismissed because [p]laintiffs have failed to allege how each individual [d]efendant participated in the alleged conspiracy.” Denying this argument, the court held: “[d]efendants’ arguments fail because they rely upon the standard for a motion for summary judgment. Although [p]aintiffs will need to provide evidence of each [d]efendants’ participation in any conspiracy, they now only need to make allegations that plausibly suggest that each [d]efendant participated in the alleged conspiracy. Id.

The same result is appropriate here. Plaintiffs’ Complaint adequately alleges the Chase Defendants’ participation in the enterprise. In fact, other courts have found similar allegations concerning banks, their subsidiaries, and their outside real estate-related vendors to be sufficient. See e.g., Young, 617 F. Supp. 2d at 1028 (finding RICO enterprise allegations adequate where plaintiffs alleged “that Wells Fargo conducted the affairs of the enterprise by ordering the property inspections, used its association-in-fact business arrangement with the property inspection vendors to conduct its unlawful practice of imposing excessive fees on the mortgagors, and engaged in mail and wire fraud.”) (citing Cedric Kushner Promotions, Ltd., 533 U.S. at 164-65). Similarly, in In re Countrywide Fin. Corp. Mortg. Mktg & Sales Prac. Litig., 601 F. Supp. 2d at 1212, the court found plaintiffs’ allegations sufficient where the alleged enterprise was made up of (1) Countrywide, including its LandSafe loan closing services subsidiaries, and (2) Mid Atlantic Capital, One Source Mortgage, and other mortgage brokers not named as defendants who had contracts with Countrywide pursuant to which they arranged, promoted, or otherwise assisted Countrywide in directing borrowers into loans issued by Countrywide.

Plaintiffs’ Complaint sets forth, in great detail, how the Chase Defendants used the mail and wire to engage in a scheme to conceal the unlawful assessment of improperly marked-up or padded fees for default-related services. Plaintiffs allege that “[t]hrough mail and wire, the Chase Enterprise provided mortgage invoices, loan statements, payoff demands, or proofs of claims to borrowers, demanding that borrowers pay fraudulently concealed marked-up or unnecessary fees.” (Compl. ¶ 112.) “Using false pretenses, identifying the fees on mortgage invoices, loan statements, or proofs of claims only as ‘Miscellaneous Fees’ or ‘Corporate Advances’ to obtain full payments from borrowers, Defendants disguised the true nature of these fees and omitted the fact that the fees include undisclosed mark-ups or were unnecessary.” (Id. ¶ 114.) In a “civil RICO action involving multiple defendants, Rule 9(b) does not require that the temporal or geographic particulars of each mailing be stated with particularity, but only that the plaintiff delineate, with adequate particularity in the body of the complaint, the specific circumstances constituting the overall fraudulent scheme.” State Farm Mut. Automobile Ins. Co. v. Grafman, 655 F. Supp. 2d 212, 227 (E.D.N.Y. 2009). In short, the Chase Defendants demand a level of detail that is simply not required.

2. Plaintiffs Have Adequately Alleged Mail and Wire Fraud

“A wire fraud violation consists of (1) the formation of a scheme or artifice to defraud; (2) use of the United States wires or causing a use of the United States wires in furtherance of the scheme; and (3) specific intent to deceive or defraud.” Odom, 486 F.3d at 554 (internal references omitted). A defendant’s state of mind can be alleged generally, “[t]he only aspects of wire fraud that require particularized allegations are the factual circumstances of the fraud itself.” Id.

The Chase Defendants argue that Plaintiffs do not adequately allege mail or wire fraud because, “the failure to disclose an allegedly fraudulent scheme cannot serve as the basis for a civil RICO claim predicated upon mail or wire fraud ‘[a]bsent an independent duty’ … owed to the claimant by the alleged wrongdoer.” (Mot. at 22:5-6, quoting In re Countrywide Fin. Corp. Mortg. Mktg., 601 F. Supp. 2d at 1218.) This argument, however, ignores the plain and unambiguous allegations in Plaintiffs’ Complaint. Among other things, Plaintiffs allege that the mortgage contracts between lenders and borrowers “contain disclosures regarding what occurs if borrowers default on their loans.” (Compl. ¶ 41.) In particular, “the mortgage contract discloses to borrowers that the servicer will pay for default-related services when necessary, and will be reimbursed by the borrower. Nowhere is it disclosed to borrowers that the servicer may mark-up the actual cost of those services to make a profit.” (Id. ¶ 42.) “Nevertheless … using false pretenses to conceal the truth from borrowers, that is precisely what Defendants do.” (Id. ¶ 3.)

3. Plaintiffs Have Adequately Alleged a Pattern of Racketeering

To prove a “pattern of racketeering activity,” a plaintiff must show, at a minimum, two related predicate acts of racketeering, including mail or wire fraud, occurring within a ten-year period. H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989). “Continuity does not require a showing that the defendants were engaged in more than one ‘scheme.’ ” Turner v. Cook, 362 F.3d 1219, 1230 (9th Cir, 2004) (quoting Medallion Television Enters. V. SelecTV of Cal., 833 F.2d 1360, 1363 (9th Cir. 1987)). Two or more related predicated acts occurring over at least a twelve month period easily meets the duration requirement. Allwaste Inc. v. Hecht, 65 F.3d 1523, 1528 (9th Cir. 1995).

Nevertheless, the Chase Defendants argue that Plaintiffs failed to allege a pattern of racketeering with adequate specificity, because the communications giving rise to the fraud at issue in this case fall within a period that is “too close together in time to create a closed-ended pattern.” (Mot. at 23:13-14.) The Chase Defendants’ construction of the statements at issue to limit the communications to an eight month period plays fast and loose with the facts. As set forth in the Complaint, the Chase Defendants’ repeated violations of mail and wire fraud over many years easily meets RICO’s pattern requirement. With respect to the named Chase Plaintiffs, they specifically allege that Plaintiff Lazar’s account was assessed the fees at issue in 2010 (Compl, ¶ 68) and that Plaintiff Schillinger’s account was assessed such fees as recently as February 18, 2012 (id. ¶ 65), covering an approximately two-year period. Furthermore, the Chase Defendants’ argument ignores the fact that the scheme at issue here relates to a class of borrowers who had loans serviced by the Chase Defendants over many, many years. Each act using the mail and wire to conceal the assessment of marked-up and unnecessary default service fees is a violation of the mail and wire fraud statutes. The Chase Defendants fail to cite a single case that suggests a different outcome.

B. Plaintiffs Have Adequately Alleged a Claim under Section 1962(d)

The Ninth Circuit has held that a defendant can “be convicted of conspiracy under § 1962(d) for his role in the scheme even though he neither committed nor agreed to commit the predicate acts that are required for a substantive violation of § 1962(c).” United States v. Fernandez, 388 F.3d 1199, 1229-1230 (9th Cir. 2004) (“remov[ing] any requirement that the defendant [in a Section 1962(d) case] have actually conspired to operate or manage the enterprise”).

The Chase Defendants argue that Plaintiffs’ claim under Section 1962(d) fails because Plaintiffs did not allege that the Chase Defendants were aware of the nature and scope of the enterprise and intended to participate in it. (Mot, at 23:28.) As discussed above, the Chase Defendants’ position is inconsistent with the law. See e.g., In re Static Random Access Memory (SRAM) Antitrust Litig., 580 F. Supp. 2d 890, 904 (N.D. Cal. 2008) (“[d]efendants’ arguments fail because they rely upon the standard for a motion for summary judgment…. [plaintiffs] now only need to make allegations that plausibly suggest that each [d]efendant participated in the alleged conspiracy.”)

Plaintiffs expressly allege that by directing and controlling the affairs of the enterprise, the Chase Defendants, “were aware of the nature and scope of the enterprise’s unlawful scheme and they agreed to participate in it.” (Compl, ¶ 128.) Furthermore, that the Chase Defendants were aware of the nature and scope and intended to participate in the enterprise is implicit in Plaintiffs’ allegation that the Chase Defendants were active participants in the enterprise’s unlawful scheme. (See e.g., Compl. ¶ 109 “J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC control and direct the affairs of the Chase Enterprise.”) The Chase Defendants’ argument elevates form over substance. “One can be a conspirator by agreeing to facilitate only some of the acts leading to the substantive offense.” Salinas v. United States, 522 U.S. 52, 65 (1997).

Moreover, Plaintiffs allege, “[i]n an effort to pursue their fraudulent scheme, Defendants knowingly fraudulently concealed or omitted material information from Plaintiffs and members of the Class” and that such knowledge “is evidenced by, among other things, the fact that they did not disclose the mark-ups or unnecessary nature of the fees in their communications to borrowers.” (Compl. ¶ 119.) Plaintiffs further allege that “Defendants knowingly, affirmatively, and actively concealed the true character, quality, and nature of their assessment of marked-up fees against borrowers’ accounts.” (Id. at 1171.)

VII. PLAINTIFFS STATE A CLAIM FOR UNJUST ENRICHMENT

The Chase Defendants incorrectly argue that Plaintiffs’ claim for unjust enrichment fails because it is purportedly a quasi-contract claim for restitution and there can be no such claim when there is an existing contract that governs the relationship between the parties. (Mot. at 24:7-13.) In California, “the elements for a claim of unjust enrichment [are] receipt of a benefit and unjust retention of the benefit at the expense of another.” Monet v. Chase Home Fin. LLC, 2011 U.S. Dist. LEXIS 94362 at *17 (N.D. Cal. Aug. 23, 2011) (quoting Lectrodryer v. Seoulbank, 77 Cal. App. 4th 723, 726 (2000)); SOAProjects, Inc. v. SCM Microsystems, Inc., 2010 U.S. Dist. LEXIS 133596 at *25-26 (N.D. Cal. Dec. 7, 2010) (“[t]o make out a claim for unjust enrichment [plaintiff] must show that [defendant] received a benefit and that [defendant] unjustly retained the benefit at [plaintiff’s] expense”); Starnet Int’l AMC Inc. v. Kafash, 2011 U.S. Dist. LEXIS 25062 at *34 n. 16 (N.D. Cal. Mar. 8, 2011) (“elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another”),

Plaintiffs allege that the Chase Defendants assessed the mortgage accounts of Plaintiffs and members of the putative class for unlawful fees using deceptive mortgage statements based on fraudulent omissions. (See e.g., Compl. ¶¶ 10, 114, 119, 136.) Plaintiffs’ claims are based on the Chase Defendants’ fraudulent concealment. The contract between the parties is of no moment. See In re Countrywide Fin. Corp. Mortg.Mktg & Sales Prac. Litig., 601 F. Supp. 2d at 1220-21 (“Although there are contracts at issue in this case, none appears to provide for the specific recovery sought by Plaintiffs’ unjust enrichment claim.”)

VIII. PLAINTIFFS STATE A CLAIM FOR FRAUD

The Chase Defendants half-heartedly challenge Plaintiff’s common law fraud claim. They first argue that Plaintiffs “have not sufficiently identified ‘the who, what, when, where, and how of the misconduct charged,’ as required when pleading fraud under Rule 9(b).” (Mot. at 24:15-16.) The Chase Defendants, however, do not, and cannot, explain how Plaintiffs’ allegations leave them unable to “defend against the charge[s]” or “prepare an adequate answer from the allegations.” Kearns, 567 F.3d at 1124; Gottreich, 552 F.2d at 866. Plaintiffs’ allegations are more than sufficient to permit the Chase Defendants to prepare an adequate answer. In satisfaction of Rule 9(b), the Complaint contains a detailed description of the Chase Defendants’ scheme to create a profit center from default-related fees generated on the backs of financially distressed borrowers, all under the guise of protecting their security.

The Chase Defendants also argue that Plaintiffs have failed to adequately allege a duty to disclose. (Mot. at 24:22-28.) This argument, however, ignores the plain and unambiguous allegations in Plaintiffs’ Complaint. Among other things, Plaintiffs allege that the mortgage contracts between lenders and borrowers “contain disclosures regarding what occurs if borrowers default on their loans.” (Compl. ¶ 41.) In particular, “the mortgage contract discloses to borrowers that the servicer will pay for default-related services when necessary, and will be reimbursed by the borrower. Nowhere is it disclosed to borrowers that the servicer may mark-up the actual cost of those services to make a profit.” (Id. ¶ 42.) “Nevertheless … using false pretenses to conceal the truth from borrowers, that is precisely what Defendants do.” (Id. ¶ 3.)

IX. CONCLUSION

For all the foregoing reasons, Plaintiffs respectfully request that the Chase Defendants’ Motion to Dismiss be denied in its entirety,4

Dated: September 4, 2012

BARON & BUDD, P.C.

Daniel Alberstone

Roland Tellis

Mark Pifko

By: <<signature>>

Roland Tellis

Attorneys for Plaintiffs

DIANA ELLIS, JAMES SCHILLINGER, and RONALD LAZAR, individually, and on behalf of the public

Footnotes

1

The Chase Defendants boast that, pursuant to the Consent Order, all of the eight participating banks mailed foreclosure review forms to more than four million borrowers. However, as of May 2012, only 193,630 forms had been completed and returned for review. (See Chase RJN, Ex. E, at p. 3) And, of those returned forms, only 11,939 file reviews have been completed. Id.

2

The party asserting preemption bears a heavy burden of demonstrating that a state claim is preempted by federal law. See Wyeth v. Levine, 555 U.S. 555, 129 S. Ct. 1187, 1194-95 (2009) (citations omitted) (“[w]e start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress,”); Hood v. Santa Barbara Bank & Trust, 143 Cal. App. 4th 526, 536-37 (2006).

3

Recent Supreme Court authority confirms that banking regulation is a “mixed state/federal regime[] in which the Federal Government exercises general oversight while leaving state substantive law in place” Cuomo v. Clearing House Ass’n, 129 S. Ct. 2710, 2718-21 (2009) (emphasis added); Walters v. Wachovia Bank, N.A., 550 U.S. 1,12 (2007) (“[s]tates are permitted to regulate the activities of national banks where doing so does not prevent or significantly interfere with the national bank’s or the national bank regulator’s exercise of its powers”).

4

If this Court is inclined to grant any portion of the Chase Defendants’ motion, Plaintiffs request leave to amend. Leave to amend should be “freely granted when justice so requires.” Fed R. Civ. P. 15(a), This policy is to be applied with “extreme liberality.” Eminence Capital LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). Policy strongly favors determination of cases on their merits, so leave to amend is freely granted unless the opposing party can make a showing of undue prejudice, bad faith, or dilatory motive. Foman v. Davis, 371 U.S, 178, 182 (1962), No such showing can be made here.

2012 WL 4294144 (N.D.Cal.) (Trial Motion, Memorandum and Affidavit)

United States District Court, N.D. California.

Diana ELLIS, James Schillinger, and Ronald Lazar, individually, and on behalf of other members of the general public similarly situated, Plaintiffs,

v.

J.P. MORGAN CHASE & CO., a Delaware corporation, J.P. Morgan Chase Bank, N.A., a national association, and Chase Home Finance LLC, a Delaware limited liability company, Defendant.

No. 4:12-cv-03897-YGR.

September 11, 2012.

Defendants’ Reply in Support of Motion to Dismiss Complaint

Bingham McCutchen LLP, Peter Obstler (SBN 171623), peter.obstler @bingham.com, Zachary J. Alinder (SBN 209009), zachary.alinder@bingham.com, John A. Polito (SBN 253195), john.polito@bingham.com, Three Embarcadero Center, San Francisco, California 94111-4067, Telephone: 415.393.2000, Facsimile: 415.393.2286, Attorneys for Defendants JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A., on behalf of itself and as successor by merger to Chase Home Finance LLC.

TABLE OF CONTENTS
I. INTRODUCTION 1
II. SECTION 1818(I) PRECLUDES SUBJECT MATTER JURISDICTION BECAUSE ADJUDICATION OF PLAINTIFFS’ PARALLEL PROCEEDING WOULD “AFFECT” THE CONSENT ORDER 3
A. The Consent Order Is Broad And Covers Plaintiffs’ Claims 3
B. Plaintiffs’ Action Need Not Directly “Countermand” A Consent Order 3
III. THE COURT SHOULD ABSTAIN OR ORDER AN EQUITABLE STAY 8
IV. PLAINTIFFS’ CLAIMS ARE PREEMPTED BY THE NATIONAL BANK ACT 9
V. PLAINTIFFS HAVE NOT SUFFICIENTLY ALLEGED INJURY HERE 10
A. Plaintiffs Fail to Plead Article III Standing For Their Actual Claims 11
B. Plaintiffs Lack Standing To Seek Restitution Under The UCL 12
C. Plaintiffs Do Not Allege “Harm To A Specific Business Or Property Interest” 12
VI. PLAINTIFFS FAIL TO SATISFY RICO’S PLEADING REQUIREMENTS 13
VII. PLAINTIFFS’ UNJUST ENRICHMENT CLAIM FAILS 15
VIII. PLAINTIFFS HAVE FAILED TO PLEAD FRAUD WITH SPECIFICITY 15
IX. JPMORGAN CHASE & CO. SHOULD BE DISMISSED 15
TABLE OF AUTHORITIES
CASES
Allen v. Wright, 468 U.S. 737 (1984) 11
Am. Fair Credit Ass’n v. United Credit Nat’l Bank, 132 F. Supp. 2d 1304 (D. Colo. 2001) 2, 6, 7
Ashcroft v. Iqbal, 556 U.S. 662 (2008) 13
Bakenie v. JPMorgan Chase Bank, N.A., slip opinion, Case No. SACV-12-60 (C.D. Cal. Aug. 6, 2012) (Selna, J.) 2, 7
Baytree Leasing Co., LLC, et al. v. Alliance Investors, LLC, et al., No. 11-cv-6619, 2012 WL 1016016 (N.D. Ill. March 21, 2012) 2, 7
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) 11, 12
Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969 (9th Cir. 2008) 13
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) 11
Davel Commc’ns, Inc., v. Qwest Corp., 460 F.3d 1075 (9th Cir. 2006) 8
Diaz v. Gates, 420 F.3d 897 (9th Cir. 2005) 12, 13
Edwards v. First Am. Corp., 610 F.3d 514 (9th Cir. 2010) 12
Gladstone Realtors v. Village of Bellwood, 441 U.S. 91 (1979) 11
In re Chase Bank USA, N.A. “Check Loan” Contract Litig., 2009 WL 4063349 (N.D. Cal. Nov. 20, 2009) 10
In re JPMorgan Chase Mortg. Modification Litig., — F. Supp. 2d —-, 2012 WL 3059377 (D. Mass. July 27, 2012) 5
Jefferson v. Chase Home Finance, 2007 U.S. Dist. LEXIS 94652 (N.D. Cal. Dec 14, 2007) 10
Jefferson v. Chase Home Finance, 2008 U.S. Dist. LEXIS 101031 (N.D. Cal. Apr. 29, 2008) 10
Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) 15
Martinez v. Wells Fargo Home Mortg., Inc., 598 F.3d 549 (9th Cir. 2010) 3, 8, 9, 10
Moore v. Kayport Package Express, Inc., 885 F.2d 531 (9th Cir. 1989) 13, 14
Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir. 2007) 13
Paracor Fin., Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151 (9th Cir. 1996) 15
Pom Wonderful LLC v. The Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012) 12
Reves v. Ernst & Young, 507 U.S. 170 (1993) 14
Rose v. Chase Bank USA, N.A., 513 F.3d 1032 (9th Cir. 2008) 9, 10
Ruhrgas Ag v. Marathon Oil Co., 526 U.S. 574 (1999) 3
Shroyer v. New Cingular Wireless Svcs., Inc., 622 F. 3d 1035 (9th Cir. 2010) 11
Theme Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991 (9th Cir. 2008) 12
United States v. Fernandez, 338 F.3d 1199 (9th Cir. 2004) 15
United States v. Fiander, 547 F.3d 1036 (9th Cir. 2008) 15
Young v. Wells Fargo & Co., 671 F. Supp.2d 1006 (S.D. Iowa 2009) 10
STATUTES
12 U.S.C. § 18 18(i) passim
18 U.S.C.
§ 1961(a) 1 3
§ 1962(c) 13, 14
OTHER AUTHORITIES
Black’s Law Dict., 2009 ed 6
Fed. R. Civ. P.
9 11, 13, 14, 15
56 15

Defendants JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A., on behalf of itself and as successor by merger to Chase Home Finance LLC (collectively “Chase”) respectfully submit this Reply in support of their Motion to Dismiss Plaintiffs’ Complaint.

I. INTRODUCTION

Plaintiffs make two arguments to avoid the preclusion of subject matter jurisdiction mandated by Section 1818(i) and the Consent Order: (1) the Consent Order does not cover the default-related fees that are the subject of their Complaint; and (2) Section 1818(i) allows for any “parallel” third party proceeding that does not seek to “countermand” a consent order because the jurisdictional bar on third party actions is strictly limited to cases in which a plaintiff seeks to “expressly set aside” the OCC order. Plaintiffs are wrong on both accounts.

First, regardless of whether Plaintiffs characterize the underlying conduct as “fraud,” criminal racketeering, “padding” fees, or unjust enrichment, all of their claims arise from alleged conduct that is subsumed and regulated by the OCC under its Consent Order: that Chase (and/or its vendors) “unlawfully marked up default-related fees” charged to borrowers and “conceal[ed] these fees on borrowers’ accounts…by identifying them on mortgage statements … as ‘Miscellaneous Fees’ or ‘Corporate Advances.’ ” (Compl., ¶¶ 9-10.) Plaintiffs do not dispute that Chase’s fee-related conduct is regulated by the Consent Order. Plaintiffs argue, however, that Consent Order is somehow “limited” in its regulation of Chase’s conduct because the Order only covers the “frequency” of the fees and related “servicer errors.” (See Opp’n at 1-2.)

The language of the Consent Order reveals that no such limitation exists. By entering the Consent Order with Chase, pursuant to its exclusive regulatory enforcement authority under the National Bank Act, the OCC now directly regulates default-related fee charges, ensuring they comply with applicable federal and state laws. Specifically, the Consent Order mandates the creation of comprehensive claims review procedures intended to determine and redress “whether a delinquent borrower’s account was only charged fees and/or penalties that were permissible under the terms of the borrower’s loan documents, applicable state and federal law, and were reasonable and customary.” (Chase’s Request for Judicial Notice, Dkt. 7 (“RJN”), Ex. A (Consent Order) at Art. VII, §3(e).) That claims review process covers conduct by Chase’s subsidiaries and its “Third-Party Providers.” (Id., Arts. V & XIII.)

Second, Plaintiffs’ argument that, notwithstanding the direct overlap between the conduct alleged in their Complaint and the Consent Order, Section 1818(i)’s jurisdictional bar does not apply to “parallel” third party actions as long as they do not directly “countermand” the Consent Order is wrong as a matter of law. (Opp’n at 4:16-18.) Under Section 1818(i), “a district court is precluded from making a determination which would ‘affect’ or ‘review’ the Consent Order,” including adjudicating conduct covered by that order, even where the third party does not “seek to ‘change’ or affect the Consent Order” directly. Baytree Leasing Co., LLC, et al. v. Alliance Investors, LLC, et al., No. 11-cv-6619, 2012 WL 1016016, *3-4 (N.D. Ill. March 21, 2012). Nothing in Section 1818(i), or the case law applying it, suggests that Congress intended to exempt a parallel third-party lawsuit from its jurisdictional mandate in any proceeding that does not “countermand” the provisions of the consent order. Rather, the application of Section 1818(i)’s jurisdictional bar turns entirely on whether the parallel proceeding would “affect” or require “review” of the OCC’s ongoing administration, implementation and/or enforcement of conduct subject to the Consent Order. See Bakenie v. JPMorgan Chase Bank, N.A., slip opinion, Case No. SACV-12-60 (C.D. Cal. Aug. 6, 2012) (Selna, J.) (“Bakenie slip op.”) at 5, attached to RJN as Ex. H; Am. Fair Credit Ass’n v. United Credit Nat’l Bank, 132 F. Supp. 2d 1304, 1311 (D. Colo. 2001). Were that not the case, Section 1818(i) would be rendered meaningless and courts would be required to make findings and issue decrees that would overlap, duplicate, or conflict with the administration and enforcement of an OCC order. Here, the OCC has created an on-going review and remediation process to determine whether default-related fee charges imposed on borrowers comply with all “applicable legal requirements” under “federal and state law.” Not only would parallel adjudication by this Court “affect” the Consent Order, but they would violate the Consent Order’s express prohibition that no third party shall have “any legal or equitable right, remedy or claim under” the Order. (See RJN, Ex. A, Art. XIII, (10)).

Plaintiffs’ commencement of parallel proceedings to review and redress the same loan default fee conduct now regulated by the OCC under the Consent Order also results in a variety of other substantive problems. With respect to abstention principles, adjudication of Plaintiffs’ parallel claims would bump up against an on-going administrative claims process, requiring the Court to apply and determine complex “offset” provisions to each and every borrower who receives monetary relief under claims review procedures of the Consent Order as well as the recently enacted National Mortgage Settlement (the “NMS”). Such borrower-specific fact finding cannot take place until the claims review processes provided for under the OCC and NMS Orders are allowed to run their respective courses. Plaintiffs’ parallel proceeding would also run afoul of the preemptive sphere of the National Bank Act. See Martinez v. Wells Fargo Home Mortg., Inc., 598 F.3d 549, 556-58 (9th Cir. 2010) Finally, Plaintiffs attempt to transform individual fee disputes that are the subject of an administrative review process into a series of federal and state law tort claims suffers from a number of substantive pleading defects.

II. SECTION 1818(i) PRECLUDES SUBJECT MATTER JURISDICTION BECAUSE ADJUDICATION OF PLAINTIFFS’ PARALLEL PROCEEDING WOULD “AFFECT” THE CONSENT ORDER

“The requirement that jurisdiction be established as a threshold matter is inflexible and without exception; for jurisdiction is power to declare the law, and without jurisdiction the court cannot proceed at all in any cause.” Ruhrgas Ag v. Marathon Oil Co., 526 U.S. 574, 577 (1999) (citation and internal quotations omitted). The threshold jurisdictional issue before the Court is whether the adjudication of Plaintiffs’ claims that Chase unlawfully charged marked-up default-related service fees overlaps with the conduct regulated by the Consent Order so as to “affect” the OCC and Chase’s ability to administer, comply with, and enforce the Consent Order. The answer is YES because the alleged default-related service fees are already being regulated and remediated by the OCC Consent Order. (RJN, Ex. A, Art. IV, § (l)(h), Art. VII, § (3)(e)-(h).)

A. The Consent Order Is Broad And Covers Plaintiffs’ Claims

Plaintiffs’ contention that default-related fee claims will not “affect” the Consent Order because that Order is purportedly “limited” to regulating only servicing “errors” in the amount of fees charged by Chase is fiction. The Consent Order provides broad review and relief for any claim by any borrower who claims to have been wronged or injured by the imposition of an excessive, default-related fee. Plaintiffs’ attempt to distinguish their claims from the conduct governed by the Consent Order by labeling the former “fraud” and the latter “errors” is semantics. Whether labeled as “errors” or “fraud,” the conduct that Plaintiffs seek to adjudicate is entirely subsumed and regulated by the Consent Order.

The Consent Order requires comprehensive action by Chase to remediate foreclosure and mortgage servicing-related problems, including the charging of improper fees. To that end, the Consent Order expressly requires that Chase hire an “independent consultant” to investigate default-related issues, including “whether a delinquent borrower’s account was only charged fees and/or penalties that were permissible under the terms of the borrower’s loan documents, applicable state and federal law, and were reasonable and customary” and “whether the frequency that fees were assessed to any delinquent borrower’s account (including broker price opinions) was excessive under the terms of the borrower’s loan documents, and applicable state and federal law” (RJN, Ex. A, at Art. VII, § (3)(e)-(f)). The engagement letter between Chase and Deloitte, the independent consultant for Chase approved by the OCC to conduct the foreclosure review required by Article VII of the Consent Order, sets forth objective “criteria for evaluating the reasonableness of fees and penalties” assessed (id. at Art. VII, § (2)(a)), including (1) determining whether “amounts charged were more that 10% over the amounts indicated in the applicable … guideline” from Fannie Mae or HUD (Request for Judicial Notice in Support of Reply (“Reply RJN”), Ex. A (Deloitte engagement letter) at 57, 59); (2) confirming that third-party invoices correspond to actual services actually rendered (id. at 56, 57); (3) comparing “internal … fee amounts to the fees permitted in the borrowers’ mortgage documents” (id. at 57); and, (4) confirming that the “amount of [each] fee is within the appropriate frequency” per Fannie Mae or HUD guidelines (id. at 59).

Fees for one hundred percent of claims submitted by individual borrowers will be reviewed for compliance with these standards. (See id. at 10.) The OCC has “reviewed and accepted” these criteria by which Deloitte is evaluating the fees that Chase charged to borrowers, (RJN, Ex. E (OCC Interim Status Report, June 2012) at 5 & nn.4-5), and Deloitte’s review is “subject to the monitoring, oversight, and direction of the OCC.” (Reply RJN, Ex. A at 4.) After Deloitte has finished its review and submitted a report to the OCC, Chase must submit a plan to the OCC “to remediate all financial injury to borrowers caused by any errors, misrepresentations, or other deficiencies” identified in Deloitte’s report, including remediation for any improper fees. (RJN, Art VII., §(5).) The Order provides borrower-specific claims review and relief for any borrower who believes he or she suffered any financial injury as a result of fees that were not “permissible … under applicable state and federal law ..” (Id., Arts. IV, §1(h) & VII, §3(e).)

In addition to claims for monetary relief, the overlap with the Consent Order includes claims seeking to enjoin Defendants “from continuing the[ir] unlawful practices” regarding excessive fees, and to “direct[] [Chase] … to identify, with Court supervision, victims of its conduct and pay them restitution and disgorgement …. [and] engage in corrective advertising.” (Compl., Prayer for Relief ¶¶ 6-7). The Consent Order also requires Chase to formulate and implement an acceptable “Action Plan” regarding such fees. Because “the OCC consent orders [have already] required comprehensive change to mortgage servicing and foreclosure processes to correct practices going forward” (RJN, Ex. E at 14), including elimination of any improper fee practices and creation of new communications regarding service fees, Plaintiffs’ requested injunctive and declaratory relief would necessarily “affect by injunction” the OCC’s “enforcement” of the Consent Order. 12 U.S.C. § 1818(i). As such, “it would be improper for this court … to award any injunctive relief that relates to prospective servicing practices that are anticipated by the OCC’s Order.” In re JPMorgan Chase Mortg. Modification Litig., — F. Supp. 2d —-, 2012 WL 3059377, at 19 n.19 (D. Mass. July 27, 2012) (emphasis omitted).

Plaintiffs’ reliance on the NMS exposes the weakness in Plaintiffs’ position. (Opp’n at 7:21-8:7.) The NMS was expressly negotiated with Chase and the OCC so as to not “affect” the OCC Consent Order. (See Reply RJN, Ex. B (NMS Consent Judgment), ¶ 1 l(m) (reserving and not releasing “any action by the [OCC] to enforce the Consent Order issued against [Chase] by the [OCC] on April 13, 2011”).) In so doing, the OCC worked directly with the Department of Justice, State Attorneys General, and Chase to ensure that the Consent Order and the NMS were “complementary.” (Reply RJN (Walsh Remarks), Ex. D at 4.) Unlike the NMS, Plaintiffs’ claims, like those dismissed in Bakenie, would obstruct the ongoing, comprehensive action plan developed by the OCC and Chase under the Consent Order. (RJN, Ex. A, Art. III, § 1.)

Further, Plaintiffs’ suggestion that the OCC has indirectly given its approval to their lawsuit through statements by the FDIC and a website containing answers to FAQs is meritless. With respect to the former, the FDIC testimony confirms in the first sentence that the FDIC is not the primary federal regulator for National Banks-the OCC is. (Tellis Decl., Ex. 1 (Dkt. 11-2) at 1.) Even if the FDIC testimony were precedential, the testimony supports Chase, confirming that the Consent Orders required a robust look-back and claims review precisely because the inter-agency review did not address all mortgage servicing and foreclosure issues. (See id.) The FDIC testimony also confirms: “If implemented effectively, these orders will put servicers on a path to having the staffing, management and operational controls necessary to work effectively with homeowners to fairly and efficiently resolve mortgage defaults.” (Id.) Similarly, Plaintiffs’ reliance on an FAQ stating that “[s]ubmitting a request for review does not preclude borrowers from pursuing other legal remedies available related to their foreclosures” (Opp’n at 2:16-22) does not address whether Section 1818(i) precludes their claims. The FAQ begs the question as to whether the default-related legal remedies that Plaintiffs seek to pursue in this action are “available” under Section 1818(i) in the first place. (Id.; Compl., ¶¶ 9-10.) Because the same conduct is subject to an ongoing comprehensive remedial process under the Consent Order, the answer is NO. An FAQ that merely preserves “available” remedies is not sufficient to overturn the express congressional mandate limiting subject matter jurisdiction here.

B. Plaintiffs’ Action Need Not Directly “Countermand” A Consent Order

Notwithstanding the direct overlap between the allegations of the Complaint and the Consent Order, Plaintiffs argue that the Court is nonetheless free to adjudicate the same fee based conduct in a “parallel” third party proceeding because Plaintiffs are not seeking to “countermand” the underlying Consent Order. (Opp’n at 4:8-6:20.) Plaintiffs are mistaken because the express language and intent of Section 1818(i) precludes lawsuits, like Plaintiffs’, that would require a piecemeal adjudication of conduct that overlaps with and would necessarily “affect” an OCC consent order. Am. Fair Credit, 132 F. Supp. 2d at 1311.

Black’s Law Dictionary defines “affect” as action that will “produce an effect on; to influence in some way.” (Black’s Law Dict., 2009 ed.) Applying the term “affect,” Judge Selna found in Bakenie that Section 1818(i) barred jurisdiction over the plaintiff’s claims because the adjudication of those claims involved subject matter that was squarely within this same Consent Order and, as a result, would require the Court to conduct legal proceedings and order relief that would “affect” the Consent Order. Bakenie slip. op. at 5-6 (citing Am. Fair Credit, 132 F. Supp. 2d at 1311). Plaintiffs’ claims are no exception.

Plaintiffs’ contention that they are not aware of any case “that has applied Section 1818(i) to bar subject matter jurisdiction over a lawsuit where, as here, no party seeks to modify or countermand a regulatory consent order” is refuted by Bakenie, Baytree, and American Fair Credit. In Bakenie, Judge Selna made clear that “Plaintiffs’ request for relief need not be in direct contravention of the Consent Order to affect the enforcement of an order.’ ” See Bakenie slip op. at 6 n.5 (internal punctuation omitted; emphasis added). Similarly, the Court in Baytree rejected jurisdiction even to adjudicate claims alleged to be consistent with the Consent Order, “rather than seeking to specifically ‘change’ or affect the Consent Order.” Baytree, 2012 WL 1016016, *3-*4. And in American Fair Credit, the Court found, despite objection of the OCC, that Congress intended to preclude jurisdiction over any third party action that fell within Section 1818(i)‘s broad jurisdictional reach because they could “affect” a consent order, even though the claims did not directly or indirectly seek to enforce that order. Am. Fair Credit, 132 F. Supp. 2d at 1311. Whether Plaintiffs seek to “countermand” the Consent Order is irrelevant, because their claims must only “affect” or require “review” of conduct governed by the Consent Order.

Conceding that this the case here, Plaintiffs contend this Court may nonetheless conduct parallel proceedings and thereby exercise concurrent jurisdiction with the OCC. (Opp’n at 4:9-6:20.) Plaintiffs’ novel contention is unsupported by any law, and is flatly contradicted by the plain language of Section 1818(i). See 12 U.S.C. § 1818(i). A parallel proceeding adjudicating the legality of the same conduct governed by the Consent Order would eviscerate both the letter and purpose behind Section 1818(i). See Bakenie slip op. at 6 n.5; Baytree, 2012 WL 1016016 at *3-*4; Am. Fair Credit, 132 F. Supp. 2d at 1311. It would also undermine the central goal of the Consent Order to provide uniform and consistent relief to similarly situated borrowers within each bank and across banks and duplicate and call into question the extensive fact-finding and claims-review processes already underway. (RJN, Ex. C at 3-16.) Allowing this Action to proceed would disrupt and delay relief for the class of borrowers Plaintiffs purport to represent.

III. THE COURT SHOULD ABSTAIN OR ORDER AN EQUITABLE STAY

No good can come from the continued prosecution of this Action, because it will only interfere with the comprehensive claims relief that is already available to borrowers under the Consent Order and the NMS. As Plaintiffs concede, the NMS seeks to remedy the very same default-related service fee claims in this Action. (Opp’n at 7:26-8:1). Plaintiffs have two separate, complementary remedial processes available to adjudicate the same conduct they allege harmed borrowers. Equitable abstention or a stay is particularly appropriate here to allow the OCC and NMS claims review processes to run their courses for borrowers without the confusion, interference, or obstruction that will result from “parallel” proceedings before this Court.

Plaintiffs’ assertion that there are no “complex and comprehensive issues involved in this case that would impact the OCC’s ability to implement and enforce its order” is both wrong and beside the point. (Opp’n at 8:27-28.) “[A] threshold issue requir[ing] interpretation by the [OCC]” exists in this case (Opp’n at 9:13 (citing Davel Commc’ns, Inc., v. Qwest Corp., 460 F.3d 1075, 1087 (9th Cir. 2006)), namely, determining whether a given fee was excessive or otherwise improper. (See RJN, Ex. A at Art. VII). “[T]he [OCC] has the primary responsibility for the surveillance of the ‘business of banking’ authorized by the Act.” See Martinez, 598 F.3d at 555. As such, review and remediation of default-related fees is an issue that the OCC has decided, under its special competence and unique expertise, is best and most effectively handled through administrative, claims-review processes. Further, Plaintiffs’ suggestion that this is a “straightforward” case about “deception” that is separate from the OCC’s statutory responsibilities (see Opp’n at 10:17-20) is nonsense. Indeed, the OCC already found that these fees were within its statutory responsibility, requiring Chase to determine whether such fees “were permissible under the terms of the borrower’s loan documents, applicable state and federal law, and were reasonable and customary.” (RJN, Ex. A at Art. VII, §3(e).)

The NMS, referred to in Plaintiffs’ Opposition, provides an additional reason for the Court to abstain from hearing this Action. Borrowers who receive payments through the NMS process “must agree that such payment shall offset and operate to reduce any other obligation [Chase] has to the borrowers to provide compensation or other payments.” (Reply RJN, Ex. C (Exhibit C to the NMS Consent Judgment) ¶ 5.) As such, Plaintiffs and every member of the putative class whose homes were foreclosed upon or sold in 2008-2011 may seek compensation through the NMS which would offset any dollars that they could recover in this action. (Id.)

In other words, the OCC and NMS proceedings provide two complementary claims processes for Plaintiffs and their putative class of borrowers to remediate alleged financial injury that resulted from any improper default-related service fees. In addition to the parallel fact finding that this Court would have to perform, the OCC process invites and NMS process requires offsets to preclude duplicative recovery. At a minimum, Plaintiffs should not be allowed to proceed before the OCC and NMS processes run their course. Only then can the Court determine (and offset) compensation for improper fees already provided to each borrower.

IV. PLAINTIFFS’ CLAIMS ARE PREEMPTED BY THE NATIONAL BANK ACT

Under Martinez, the National Bank Act expressly preempts Plaintiffs’ state law claims against Chase.1 Plaintiffs’ reliance on three district court cases, one of which Martinez expressly rejected, does not alter the preemption analysis, especially as preemption here arises from a specific enforcement and regulatory proceeding under Section 1818(b) of the National Bank Act.

Plaintiffs’ core contention that NBA preemption does not apply to state-law fraud claims is wrong as a matter of law. (Opp’n at 12:23-13:27.) National Bank Act preemption applies to claims sounding in fraud where the alleged fraud is a purported failure to make disclosures not required under federal law. See Martinez, 598 F.3d at 556-57 (preempting a claim under the UCL’s “fraudulent” prong where the “allege[d] ‘fraudulent’ conduct … [was] [a bank]’s failure to disclose the costs it incurs for services, instead of just its charges for rendering those services to borrowers.”); Rose v. Chase Bank USA, N.A., 513 F.3d 1032, 1038 (9th Cir. 2008) (preempting a claim under the UCL’s “fraudulent” prong based upon failure to comply with state disclosure requirements for “convenience checks”). In holding that even claims of express deception could be preempted under the National Bank Act, Martinez rejected Jefferson v. Chase Home Finance, 2007 U.S. Dist. LEXIS 94652 (N.D. Cal. Dec 14, 2007), mod’d upon reconsideration, 2008 U.S. Dist. LEXIS 101031 (N.D. Cal. Apr. 29, 2008), a case upon which Plaintiffs rely. See Martinez, 598 F.3d at 556 (finding preemption “notwithstanding” Jefferson).

“Regardless of the nature of the state law claim alleged .., the proper inquiry is whether the ‘legal duty that is the predicate of’ Plaintiffs’ state law claim falls within the preemptive power of the NBA or regulations promulgated thereunder.” Rose, 513 F.3d at 1038 (citation omitted). The gravamen of Plaintiffs’ claims is that Chase purportedly marked up default-related service fees and then did not disclose them properly in their bills. (See, e.g., Compl. ¶¶ 9-10.) As such, Martinez establishes that the OCC’s regulations concerning fee-setting and fee-related disclosures preempt Plaintiffs’ claims. Martinez, 598 F.3d at 556-57.

And the cases cited by Plaintiff do not suggest otherwise. First, the Ninth Circuit has rejected Jefferson. Martinez, 598 F.3d at 556; (cf. Opp’n at 12:25-27.) Next, Young v. Wells Fargo & Co., 671 F. Supp.2d 1006 (S.D. Iowa 2009) is an out-of-circuit, district court opinion decided before Martinez. Young considered whether claims regarding late fees were preempted as usury claims, an issue not relevant here. Cf. Young, 671 F. Supp. 2d at 1018-22. Last, In re Chase Bank USA, N.A. “Check Loan” Contract Litig., 2009 WL 4063349 (N.D. Cal. Nov. 20, 2009) was also decided before Martinez and is inapposite. Check Loan involved convenience check fees in the context of a claim for breach of an implied covenant of good faith and fair dealing under Delaware law, a claim not alleged in this Action. Id. at *8-*9. In any event, the controlling case involving convenience check fees is Rose, in which the Ninth Circuit confirmed that state law could not impose disclosure requirements on convenience checks beyond those required by federal law, even when such claims were pled as a “fraudulent” business practice under the UCL. Rose, 513 F.3d at 1037-38.

V. PLAINTIFFS HAVE NOT SUFFICIENTLY ALLEGED INJURY HERE

Plaintiffs fail to allege facts sufficient to support even a non-speculative inference of Article III standing, let alone to fulfill the heightened standards under the UCL and civil RICO.

A. Plaintiffs Fail to Plead Article III Standing For Their Actual Claims

Plaintiffs argue that they have met their burden to establish constitutional standing on two grounds: (1) Plaintiffs claim to have alleged payment of the allegedly unlawful fees here (Opp’n at 14:18-15:8), and (2) Plaintiffs claim that they need not show injury in fact so long as the allegedly unlawful fees were assessed and there is a relevant, “direct financial relationship” between the parties (id. at 16:5-8.). Plaintiffs are wrong on both counts.

First, Plaintiffs’ contention that they have alleged actual payment is pure fiction. Each Plaintiff alleges payment only on information and belief: “Plaintiffs are informed and believe, and on that basis allege, that [each] Plaintiff… paid some or all of the unlawful fees assessed on [his or her] account.” (Compl. ¶¶ 62, 65, 69.) Statements on information and belief do not “raise a right to relief above the speculative level” and thus should be disregarded on a motion to dismiss. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Shroyer v. New Cingular Wireless Svcs., Inc., 622 F. 3d 1035, 1042 (9th Cir. 2010) (“Claims made on information and belief are not usually sufficiently particular [to satisfy Rule 9(b)], unless they accompany a statement of facts on which the belief is founded.”). Plaintiffs’ further allegations that they “would not have paid … or would have challenged” the fees at issue in this case (Compl. ¶¶ 99, 100, 116, 148) lack specific facts and thus “come[] up short” as “merely legal conclusions resting on the prior allegations.” Twombly, 550 U.S. at 564.

Second, Plaintiffs are wrong as a matter of law when they contend that “for purposes of Article III standing, it is important only that the Chase Plaintiffs had a direct financial relationship with the Chase Defendants, grounded on the purchase or use of Chase’s loan products, and that the Chase Defendants assessed such fees.” (Opp’n at 16:5-8.) Plaintiffs “must demonstrate standing for each claim [t]he[y] seek[] to press,” and the injury must be “personal” to Plaintiffs and “fairly traceable” to Plaintiffs’ actual claims. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342, 352 (2006). The racial discrimination cases that Plaintiffs cite in fact support a finding that Plaintiffs have no standing without allegation of the “personal” injury of payment. Allen v. Wright, 468 U.S. 737, 755 (1984) (no standing for plaintiffs who had not tried to enroll children in discriminatory schools); accord Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 111-13 & n.25 (1979) (no standing for plaintiffs outside injured community).

And, unlike the plaintiffs in Edwards v. First Am. Corp., 610 F.3d 514 (9th Cir. 2010), Plaintiffs here are not suing under RESPA or any other statutory scheme where Congress specifically intended to allow for financial recovery without a showing of economic injury. See Edwards, 610 F.3d at 516-18. Each of Plaintiffs’ claims here arises from claims of marked-up fees, not violations of a statutory right. (See Compl. ¶¶ 62, 65, 68 (alleging that fees for default-related services assessed against each Plaintiff.) Therefore, if Plaintiffs have not actually paid any allegedly improper fee, Plaintiffs have no standing for their actual claims.

Plaintiffs’ contention that they could plead with more specificity if only they were allowed discovery turns the pleading burden on its head. Compare Twombly, 550 U.S. at 559 with Opp’n at 15:9-18. The “potentially enormous expense of discovery” militates against permitting RICO and RICO conspiracy claims to proceed on such thin allegations. See Twombly, 550 U.S. at 559 (discussing conspiracy allegations under the Sherman Act).

B. Plaintiffs Lack Standing To Seek Restitution Under The UCL

Plaintiffs’ insistence that they need not show eligibility for restitution to bring their UCL claim is baffling. The California Supreme Court did recognize that a “plaintiff [who] seeks only injunctive relief” need not show eligibility for restitution. Pom Wonderful LLC v. The Coca-Cola Co., 679 F.3d 1170, 1178 (9th Cir. 2012) (emphasis added). But Plaintiffs seek “restitution and disgorgement of Defendants’ revenues or profits” in addition to injunctive relief under their UCL claim, (Compl., Prayer for Relief ¶ 4), and thus must allege sufficient facts to show that they have “lost money or property.” Theme Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991, 1008-09 (9th Cir. 2008).

C. Plaintiffs Do Not Allege “Harm To A Specific Business Or Property Interest”

With respect to the civil RICO requirement that Plaintiffs show “harm to a specific business or property interest,” Plaintiffs do not carry their burden. See Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 2005) (en banc; per curiam). Plaintiffs’ Complaint concerns alleged fees arising from Chase’s “home mortgage loan servicing business[].” (Compl. ¶ 2.) Plaintiffs have alleged no facts to suggest that Plaintiffs have a business interest in their residential mortgages. Therefore, as a matter of law, they must allege “concrete financial harm” to a specific property interest. Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th Cir. 2008).

Plaintiffs propose that this Court deem “legal entitlement to business relations unhampered by fraudulent schemes and unfair business practices” (Opp’n at 15:23-28) to be such a property interest, and suggest that they have pled injury to this hypothesized interest. This is wrong for three reasons. First, this is a generalized allegation, not a “concrete” one. Canyon County, 519 F.3d at 9753 Second, Diaz held that “legal entitlement to business relations unhampered by schemes prohibited by the RICO predicate statutes” was a property interest under California law; neither common-law fraud nor unfair business practices are in the statutory list of RICO predicates. See Diaz, 420 F.3d at 899 (emphasis added); 18 U.S.C. § 1961(a) (listing the RICO predicate statutes). Third, the “business relations” in the Diaz test are “current and prospective contractual relations,” and Plaintiffs have not identified any such relations with which Chase’s conduct has allegedly interfered. Diaz, 420 F.3d at 900.

VI. PLAINTIFFS FAIL TO SATISFY RICO’S PLEADING REQUIREMENTS

Plaintiffs’ RICO claims suffer from additional substantive pleading defects. In their opposition, Plaintiffs assert in conclusory fashion that they have alleged a claim under § 1962(c) “with great detail.” (Opp’n at 18:18-19:3 (paraphrasing Compl. ¶¶ 105-124).) Not so. Plaintiffs’ RICO allegations may be chock full of “naked assertions devoid of further factual enhancement,” but they lack “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2008). In particular, Plaintiffs fail to plead mail and wire fraud with the specificity required under Rule 9(b), fail to show a pattern of racketeering, do not allege that any Defendant conducted the affairs of the alleged enterprise, and do not make out a conspiracy claim.

First, even if “the only aspects of [mail or] wire fraud that require [] particularized allegations are the factual circumstances of the fraud itself” (Opp’n at 21:24-26 (quoting Odom v. Microsoft Corp., 486 F.3d 541, 554 (9th Cir. 2007)), Plaintiffs’ allegations still fail: they must identify “the time, place and specific content of the false representations as well as the identities of the parties to the misrepresentation.” Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir. 1989). Plaintiffs protest that fraudulent concealment claims need not satisfy Rule 9(b) at the pleading stage. (See Opp’n at 17:22-18:2.) But Plaintiffs do not allege that no communications occurred; they allege that Chase charged allegedly unlawful fees to Plaintiffs, and did not include certain disclosures to that effect on their bills. (Compl. ¶¶ 49-50.) Plaintiffs therefore need to identify, per Plaintiff, the fees that they challenge, the specific bills at issue, and the Defendant that sent those bills. Moore, 885 F.2d at 541.

Second, also under Rule 9(b), Plaintiffs cannot claim to have shown a two-year pattern of racketeering where their alleged endpoints are a “Miscellaneous Fee” on a mortgage statement sent to Plaintiff Lazar “in 2010” with no specified month, day, or amount (Compl. ¶ 68); and, a fee with no specified description or amount on a mortgage statement sent to Plaintiff Schillinger on February 18, 2012 (id. ¶ 65.) Plaintiffs suggest, repeatedly, that Defendants “cannot explain how Plaintiffs’ allegations leave them unable to ‘defend against the charge[s]’ or ‘prepare an adequate answer from the allegations.’ ” (See, e.g., Opp’n at 20:7-9 (citation omitted).) The answer is simple: Without knowing which specific fees are alleged to be improper or insufficiently disclosed, Chase cannot investigate and rebut Plaintiffs’ charges.

Third, Plaintiffs fail to allege that any Defendant conducted the business of the enterprise, rather than its own business. Plaintiffs claim that Defendants, “non-Chase ‘property preservation vendors’ and the real estate brokers who performed BPOs” comprise a RICO enterprise. (Opp’n at 19:14-17.) Under 18 U.S.C. § 1962(c), “liability depends on showing that the defendants conducted or participated in the conduct of the ‘enterprise’s affairs,’ not just their own affairs.” Reves v. Ernst & Young, 507 U.S. 170, 185 (1993) (emphasis in original). Here, JPMorgan Chase & Co. is a non-operating holding company, which cannot have performed (and thus cannot be liable for) the alleged enterprise’s affairs. (See Mot. at 25:2-14.) And JPMorgan Chase Bank, N.A., and its predecessor, Chase Home Loan Finance, LLC, directed the actions of the non-Chase vendors no more and no less than any outsourcer of default-related services.

Fourth, Plaintiffs fail to plead a RICO conspiracy because they “have failed to plead a cognizable RICO enterprise.” (Mot. at 23:26-24:3.) As such, they necessarily have failed to allege that Chase was aware of such an enterprise or intended to participate in one (id. (citing United States v. Fiander, 547 F.3d 1036, 1042 (9th Cir. 2008)), and have failed to allege that Chase “knowingly agreed to facilitate a scheme which includes the operation or management of” the (insufficiently alleged) enterprise. United States v. Fernandez, 338 F.3d 1199, 1230 (9th Cir. 2004) (cited in Opp’n at 23:9-13). Under either test, Plaintiffs’ RICO conspiracy claim fails.

VII. PLAINTIFFS’ UNJUST ENRICHMENT CLAIM FAILS

Plaintiffs unjust enrichment claim fails, for among other reasons, because there is a loan contract governing the relationship between the Parties. Plaintiffs’ argument that “[t]he contract between the parties is of no moment” is unpersuasive for two reasons. (See Opp’n at 24:24-28.) First, the alleged contract at issue permits charges for default-related services, and thus disallows Plaintiffs’ requested recovery. (See Compl. ¶ 41.) Second, Plaintiffs’ unjust enrichment claim is based upon the contract. (See id. at ¶¶ 132-33.) Accordingly, Plaintiffs cannot plead a quasi-contractual claim for unjust enrichment claim where a written contract already controls. See Paracor Fin., Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151, 1167 (9th Cir. 1996).

VIII. PLAINTIFFS HAVE FAILED TO PLEAD FRAUD WITH SPECIFICITY

Contrary to Plaintiffs’ suggestion, Rule 9 of the Federal Rules of Civil Procedure is a stand-alone pleading rule, not a summary judgment rule that operates as part of Rule 56 procedures. See Fed. R. Civ. P. 9; Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Because, as discussed in Section VI, above, Plaintiffs have failed to plead with specificity as to the time, date, and amount of allegedly improper fees charged to the named Plaintiffs, and have alleged no facts sufficient to show payment of any allegedly improper fees by the named Plaintiffs, Plaintiffs’ Complaint, which is Plaintiffs’ third bite at the apple, should be dismissed under Rule 9(b). See id. at 1125-27 (dismissing claims sounding in fraud, including nondisclosure, for failure to “state with particularity” the facts giving rise to plaintiff’s claims).

IX. JPMORGAN CHASE & CO. SHOULD BE DISMISSED

Finally, Plaintiffs fail to dispute that JPMorgan Chase & Co. is a non-operating holding corporation that could not conceivably have taken any action ascribed to “Chase” or the “Chase Enterprise.” In failing to oppose this portion of Chase’s motion, Plaintiffs concede that dismissal of JPMorgan Chase & Co. is appropriate here.

DATED: September 11, 2012

Bingham McCutchen LLP

By: /s/ Peter Obstler

Peter Obstler

Attorneys for Defendants JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A., on behalf of itself and as successor by merger to Chase Home Finance LLC

Footnotes

1

Plaintiffs argues that National Bank Act preemption does not apply to JPMorgan Chase & Co. This argument is irrelevant. Plaintiffs did not oppose dismissal of JPMorgan Chase & Co., a non-operating holding company that could not have been involved in any purported conduct here. See Section IX, below.

2012 WL 3065393 (N.D.Cal.) (Trial Pleading)

United States District Court, N.D. California.

Diana ELLIS, James Schillinger, and Ronald Lazar individually, and on behalf of other members of the public similarly situated, Plaintiffs,

v.

J.P. Morgan CHASE & Co., a Delaware corporation, J.P. Morgan Chase Bank, N.A., a national association, for itself and as successor by merger to Chase Home Finance, LLC, and Chase Home Finance LLC, a Delaware limited liability company, Defendants.

No. CV 12 3897.

July 24, 2012.

Jury Trial Demanded

Class Action Complaint For: (1) Violations of California’s Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200 et seq.); (2) Violations of the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1962(c)); (3) violations of the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1962(d)); (4) Unjust Enrichment; and (5) Fraud

Daniel Alberstone (SBN 105275), dalberstone@baronbadd.com, Roland Tellis(SBN 186269), rtellis@baronbudd.com, Mark Pifko(SBN 228412), mpifko @baronbudd.com, Baron & Budd, P.C., 15910 Ventura Boulevard, Suite 1600, Encino, California 91436, Telephone: (818)839-2333, Facsimile: (818)986-9698, Attorneys for Plaintiffs, Diana Ellis, James Schillinger, and Ronald Lazar, individually, and on, behalf of other members of the public, similarly situated.

For their complaint against J.P. Morgan Chase & Co., LP. Morgan Chase Bank, N.A., and Chase Home Finance LLC (collectively “Defendants”), Plaintiffs Diana Ellis, James Schillinger, and Ronald Lazar (“Plaintiffs”), individually, and on behalf of all other members of the public similarly situated, based on information and belief, allege as follows:

NATURE OF THE ACTION

1. Plaintiffs’ claims against Defendants in this action were originally brought as part of the action captioned as Bias et al., v. Wells Fargo & Company et al., case no. 4:12-cv-00664-YGR (N.D. Cal., filed Feb. 10, 2012). However, by Order dated July 13, 2012, this Court, the Honorable Yvonne Gonzalez Rogers presiding, found, on the Court’s own motion, that the claims with respect to the Defendants in this action were not properly joined in a single action with the claims against the other defendants in the Bias action. As a result, the Court ordered Plaintiffs “to re-file their claims against [Defendants as an] additional, separate action.”1 Accordingly, consistent with the Court’s order, Plaintiffs hereby bring this separate action against J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC.

2. This case concerns fraudulent practices committed by Defendants in connection with their home mortgage loan servicing businesses. Taking advantage of economic downturn and the increasing number of loans in default, Defendants seivice these loans according to uniform practices designed to maximize fees assessed on borrowers’ accounts when they are behind on their payments. Consistent with these practices, Defendants use automated mortgage loan management systems, made up of an enterprise of subsidiaries, inter-company departments, divisions, and third-party “property preservation” vendors, to engage in a scheme to conceal the unlawful assessment of improperly marked-up or unnecessary third party fees for default-related services, cheating borrowers who can least afford it.

3. More specifically, when home mortgage borrowers get behind on their payments and go into “default,” Defendants assess fees on borrowers’ accounts for various default-related services, typically performed by third parties, purportedly designed to protect the lender’s interest in the property. However, Defendants are not permitted to mark-up the fees for such services to earn a profit. Nor are Defendants permitted to assess borrowers’ accounts for default-related service fees that are unnecessary. Nevertheless, as discussed in detail below, using false pretenses to conceal the truth from borrowers, that is precisely what Defendants do.

4. In effect, to generate hefty profits, the lending industry has substituted inflated interest rates with inflated fees. Defendants formed enterprises, associations of subsidiaries, affiliated companies, and “property preservation” vendors, and designed schemes to disguise hidden, marked-up, or unnecessary fees so that they could earn additional, undisclosed profits. Through these unlawful enterprises, Defendants mark-up the fees charged by vendors, often by 100% or more, and then, without disclosing the mark-up, assess borrowers’ accounts for the hidden profits. Furthermore, in connection with their schemes, Defendants also have a practice of routinely assessing fees for default-related services, even when they are unnecessary. Employing this strategy, Defendants are able to quietly profit from assessing borrowers’ accounts for third party default-related service fees at the expense of struggling consumers.

5. Many borrowers reasonably believe the lender from whom they obtained their mortgage will hold and service their loan until it is paid off. Instead, however, through relatively recent mortgage industry practices, such as securitization and the sale of mortgage backed securities, that is often not the case. In today’s market, loans and the rights to service them are bought and sold at will, multiple times over.

6. A borrower’s relationship is typically with the mortgage servicer rather than the lender who originated the loan. Defendants Chase Home Finance LLC, and now its successor, J.P. Morgan Chase Bank, N.A., are some of the largest mortgage servicers in the United States. As mortgage servicers, Defendants J.P. Morgan Chase Bank, N.A. and Chase Home Finance LLC are responsible for the day-to-day management of loan accounts, including handling customer inquiries, collecting and crediting loan payments, sending default notices to delinquent borrowers, negotiating loan modifications, and directing foreclosure activities, including engaging the services of foreclosure counsel, even if the foreclosure is brought in the name of the owner of the loan, rather than the servicer.

7. Borrowers depend on their mortgage servicers to handle servicing-related tasks accurately and with skill. Because financial institutions like Defendants who generate loan servicing revenue through operating subsidiaries like Chase Home Finance LLC, and subsidiaries like J.P. Morgan Chase Bank, N. A., do not profit directly from interest payments made by borrowers, rather than ensuring that borrowers stay current on their loans, Defendants are more concerned with generating revenue from fees assessed against the mortgage accounts they service. According to one member of the Board of Governors of the Federal Reserve System, “a foreclosure almost always costs the investor [who owns the loan] money, but [it] may actually earn money for the servicer in the form of fees.”2

8. Financial institutions like Defendants see opportunity where investors see failure because borrowers are captives to companies who service their loans. Accordingly, when borrowers go into default and Defendants unilaterally decide to instruct third parties to perform default-related services, borrowers have no option but to accept Defendants’ choice of providers.

9. Taking advantage of these circumstances, the Defendants formed an enterprise with their respective subsidiaries, affiliates, and “property preservation” vendors, and then, developed a uniform practice of unlawfully marking up default-related fees charged by third parties and assessing them against borrowers’ accounts so that Defendants can earn undisclosed profits in connection with these services.

10. Defendants are aware that it is improper to mark-up the fees assessed on borrowers’ accounts for default-related services. Therefore, Defendants fraudulently conceal these fees on borrowers’ accounts, omitting any information about Defendants’ additional profits, by identifying them on mortgage statements with cryptic descriptions, such as “Miscellaneous Fees” or “Corporate Advances.”

11. Indeed, Defendants’ practices are designed to avoid detection even when examined in bankruptcy proceedings. As one court has explained, “[1]enders have apparently been operating under the assumption that the fees and costs in their proofs of claim are invulnerable to challenge because debtors lack the sophistication, the debtors’ bar lacks the financial motivation, and bankruptcy courts lack the time.”3 “[T]he Court believes that certain members of the mortgage industry are intentionally attempting to game the system by requesting undocumented and potentially excessive fees.”4

12. The rampant abuses by mortgage servicers have led federal regulators to enter into numerous Consent Orders, but according to Mark Pearce, Director, Division of Depositor and Consumer Protection, Federal Deposit Insurance Corporation, “these consent orders do not fully identify and remedy past errors in mortgage-servicing operations of large institutions; in fact, the scope of the interagency review did not include a review of…the fees charged in the servicing process. Much work remains to identify and correct past errors and to ensure that the servicing process functions effectively, efficiently, and fairly going forward.”5 Moreover, the Consent Orders do not reach the type of conduct at issue here.

13. Plaintiffs bring this action, seeking injunctive relief and damages on behalf of themselves and the thousands of borrowers who have been victimized by the Defendants’ uniform schemes.

JURISDICTION AND VENUE

14. Jurisdiction is proper in this Court under 28 U.S.C. § 1332(d)(2). The matter in controversy, exclusive of interest and costs, exceeds the sum or value of $5,000,000 and is a class action in which members of the class of plaintiffs are citizens of states different from Defendants. Further, greater than two-thirds of the members of the Class reside in states other than the states in which Defendants are a citizens.

15. This Court also has jurisdiction over this matter under 28 U.S.C. §§ 1331, 1961, 1962 and 1964. This Court has personal jurisdiction over Defendants under 18 U.S.C. §1965. In addition, under 28 U.S.C. § 1367, this Court may exercise supplemental jurisdiction over the state law claims because all of the claims are derived from a common nucleus of operative facts and are such that Plaintiffs ordinarily would expect to try them in one judicial proceeding.

16. Venue lies within this judicial district under 28 U.S.C. § 1391(b)(1) and (c)(2) because Defendants’ contacts are sufficient to subject them to personal jurisdiction in this District, and therefore, Defendants reside in this District for purposes of venue, or under 28 U.S.C. § 1391(b)(2) because certain acts giving rise to the claims at issue in this Complaint occurred, among other places, in this District.

Intradistrict Assignment

17. Consistent with Northern District of California Civil Local Rule 3-5(b), assignment to the San Francisco or Oakland Division is appropriate under Civil Local Rules 3-2(c) and 3-2(d), because acts giving rise to the claims at issue in this Complaint occurred, among other places, in this District, in San Francisco and Oakland.

PARTIES

18. Plaintiff Diana Ellis is an individual and a citizen of California.

19. Plaintiff James Schillinger is an individual and a citizen of Tennessee.

20. Plaintiff Ronald Lazar is an individual and a citizen of Oregon.

21. Defendant J.P. Morgan Chase & Co. is a corporation organized under the laws of Delaware, with its principal place of business in New York, New York.

22. Defendant J.P. Morgan Chase Bank, N.A. is a subsidiary of J.P. Morgan Chase & Co., is a successor by merger to Chase Home Finance LLC, and is a national bank organized and existing as a national association under the National Bank Act, 12 U.S.C. §§ 21 et seq., with its principal place of business in Columbus, Ohio.

23. Defendant Chase Home Finance LLC, was, during relevant times at issue in this Complaint, a subsidiary of J.P. Morgan Chase & Co. and J.P. Morgan Chase Bank, N.A., and a Delaware limited liability company, with its principal place of business in Iselin, New Jersey.

24. Whenever, in this Complaint, reference is made to any act, deed, or conduct of Defendants committed in connection with the enterprise, the allegation means that Defendants engaged in the act, deed, or conduct by or through one or more of their officers, directors, agents, employees or representatives, each of whom was actively engaged in the management, direction, control or transaction of the ordinary business and affairs of Defendants and the enterprise.

25. Plaintiffs are informed and believe, and based thereon, allege that, at all material times herein, each Chase defendant, J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC (collectively, “Chase”), was the agent, servant, or employee of the other Chase defendants, and acted within the purpose, scope, and course of said agency, service, or employment, and with the express or implied knowledge, permission, and consent of the other Chase defendants, and ratified and approved the acts of the other Chase defendants.

26. J.P. Morgan Chase & Co. exercised, and exercises, specific and financial control over the operations of J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC, and it dictates, and dictated, the policies and practices of J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC. J.P. Morgan Chase & Co. also exercises power and control over the specific activities at issue in this lawsuit, and it is the ultimate recipient of the ill-gotten gains described herein. The fraudulent scheme at issue in this case was organized by executives working at the highest levels of J.P. Morgan Chase & Co. and J.P. Morgan Chase Bank, N.A., and carried out by both executives and subordinate employees working for J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC.

FACTUAL BACKGROUND

27. America’s lending industry is in turmoil, and the lending community has divorced itself from the borrowers it once served. Traditionally, when people wanted to borrow money, they went to a bank or a “savings and loan.” Banks loaned money and borrowers promised to repay the bank, with interest, over a specific period of time. The originating bank kept the loan on its balance sheet, and serviced the loan — processing payments, and sending out applicable notices and other information — until the loan was repaid. The originating bank had a financial interest in ensuring that the borrower was able to repay the loan.

28. Today, however, the process has changed. Mortgages are now packaged, bundled, and sold to investors on Wall Street through what is referred to in the financial industry as mortgage backed securities or MBS. This process is called securitization. Securitization of mortgage loans provides financial institutions like Defendants with the benefit of immediately being able to recover the amounts loaned. Securitization essentially eliminates the financial institution’s risk from potential default. But, by eliminating the risk of default, mortgage backed securities have disassociated the lending community from borrowers. Numerous unexpected consequences have resulted from the divide between lenders and borrowers.

29. Among other things, securitization has created an industry of companies in the lending industry like Defendants, who no longer make money primarily from interest on the loans they originate. Thus, lenders no longer have the financial interest in the repayment of loans that they once did. Instead, financial institutions like Defendants, through their network of subsidiaries, operating entities and divisions, service or administer mortgages for hedge funds and investment houses who own the loans. Rather than earn income from the interest on these loans, financial institutions like Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. are paid a fee for their loan administration services.

30. Additionally, under agreements with investors (pooling and service agreements), loan servicers like Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. assess fees on borrowers’ accounts for default-related services in connection with their administration of borrowers’ loans. These fees include Broker’s Price Opinion fees and appraisal fees. Defendants’ collection of these fees, however, exemplifies how America’s lending industry has run off the rails.

31. As one Member of the Board of Governors of the Federal Reserve System has explained, “[w]hile an investor’s financial interests are tied more or less directly to the performance of a loan, the interests of a third-party servicer are tied to it only indirectly, at best. The servicer makes money, to oversimplify it a bit, by maximizing fees earned and minimizing expenses while performing the actions spelled out in its contract with the investor…. The broad grant of delegated authority that servicers enjoy under pooling consumers, creates an environment ripe for abuse.”6

32. For financial institutions like Defendants, who are determined to maximize the money they earn from loans serviced by Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A., the right to charge third party fees has opened the door to a world of exploitation. As a result of the disassociation between loan servicers and the monies generated from the interest borrowers pay on their loans, Defendants have been incentivized to find other ways to grow their profits.

33. Defendants, with their subsidiaries, affiliated companies, intercompany divisions, and third-party “property preservation” vendors, each formed an unlawful enterprise and decided to game the system, under the guise of collecting default-related service fees purportedly incurred by third parties, and then, they sought to increase mortgage servicing revenues by fraudulently concealing marked-up or unnecessary fees assessed on borrowers’ accounts.

34. In short, as explained by Adam J. Levitin, Associate Professor of Law at the Georgetown University Law Center, in testimony to the United States House Financial Services Committee, Subcommittee on Housing and Community Opportunity, “Servicers’ business model also encourages them to cut costs wherever possible, even if this involves cutting corners on legal requirements, and to lard (sic) on junk fees and in-sourced expenses at inflated prices.”7

DEFENDANTS’ AUTOMATED LOAN SERVICING PRACTICES

35. To maximize profits, Defendants assign the complex task of administering the millions of loans serviced by Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. to computer software programs. The software programs are designed to manage borrowers’ accounts and assess fees, according to protocols and policies designed by the executives at J.P. Morgan & Company and J.P. Morgan Chase Bank, N.A.

36. Defendants automate Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A.’s loan servicing businesses through a computer software program provided by Fidelity National Information Services, Inc., which is called Mortgage Servicing Package (“Fidelity MSP”). Fidelity MSP is a sophisticated home loan management program, and is one of the most widely used such programs in the United States.

37. When a loan is originated, guidelines for managing the loan are imported into Fidelity MSP. Loans serviced by Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. are then automatically managed by the software according to those guidelines. For example, among other things, if a loan in the system is past due, the guidelines instruct the computer when to impose default-related fees. Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. also assess other charges and fees against borrowers’ accounts by using “wrap around” software packages that work with the Fidelity MSP system. Based on parameters inputted into these programs, Defendants’ computer systems automatically implement decisions about how to manage borrowers’ accounts based on internal software logic. Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. assess fees for default-related services on borrowers’ accounts through these systems.

38. The Fidelity MSP software used by Defendants also has a platform called Bankruptcy Work Station (“BWS”) that is purportedly infused with computer logic designed to manage a loans during a pending bankruptcy. Additionally, to manage loans in default, Defendants also use a software program called “FORTRACS.” “FORTRACS automates default management processing, decisioning and documentation of a loan. With fully integrated modules and synchronization of activities, it supports the lender’s credit and collateral risk management through loss mitigation, foreclosure processing, bankruptcy monitoring, claims processing and REO management.”8

MARKED-UP AND UNNECESSARY FEES FOR DEFAULT-RELATED SERVICES

39. In their loan servicing operations, Defendants follow a strategy to generate fraudulently concealed default-related fee income. Rather than simply obtain default-related services directly from independent third-party vendors, and charge borrowers for the actual cost of these services, Defendants assess borrowers’ accounts for services that are unnecessary and they unlawfully add additional, undisclosed profits on to the third party charges before they are assessed on borrowers’ accounts.

40. Defendants’ scheme works as follows. Defendants order default-related services from their subsidiaries and affiliated companies, who, in turn, obtain the services from third-party vendors. The third-party vendors charge Defendants for their services. Defendants, in turn, assess borrowers a fee that is significantly marked-up from the third-party vendors’ actual fees for the services. As a result, even though the mortgage market has collapsed, and more and more borrowers are falling into delinquency, Defendants continue to earn substantial profits by assessing undisclosed, marked-up fees for default-related services on borrowers’ accounts.

41. The mortgage contract between a lender and a borrower generally consists of two documents: the promissory note (“Note”) and the mortgage or deed of trust (“Security Instrument”). The mortgage contacts serviced by Defendants are substantially similar because they conform to the standard Fannie Mae/Freddie Mac form contract. These contracts contain disclosures regarding what occurs if borrowers default on their loans. The Security Instrument discloses to borrowers that, in the event of default, the loan servicer will:

pay for whatever is reasonable or appropriate to protect the note holder’s interest in the property and rights under the security instrument, including protecting and/or assessing the value of the property, and securing and/or repairing the property.

42. The Security Instrument further discloses that any such amounts disbursed by the servicer shall become additional debt of the borrower secured by the Security Instrument and shall bear interest at the Note rate from the date of disbursement. The Note further discloses that the note holder:

will have the right to be paid back by [the borrower] for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorneys’ fees.

Thus, the mortgage contract discloses to borrowers that the servicer will pay for default-related services when necessary, and will be reimbursed by the borrower. Nowhere is it disclosed to borrowers that the servicer may mark-up the actual cost of those services to make a profit, nor does it permit such fees to be assessed on borrowers’ accounts when they are unnecessary.

43. Broker’s Price Opinions (“BPOs”) are a significant category of default-related service fees that, in furtherance of Defendants’ unlawful enterprises, are assessed on borrowers’ accounts with substantial, undisclosed mark-ups, fraudulently generating revenue in the loan servicing business.

44. As discussed above, by charging marked-up fees for BPOs, Defendants violate the disclosures made to borrowers. Furthermore, the wrongful nature of the marked-up fees is demonstrated by the fact that Defendants conceal the marked-up profits assessed on borrowers’ accounts.

45. Although Defendants assess fees for BPOs on borrowers’ accounts in amounts ranging from approximately $95 to $125, as of December 2010, under Fannie Mae guidelines, the maximum reimbursable rate for an exterior BPO is $80,9 and in practice, the actual cost is much less. According to the National Association of BPO Professionals, the actual cost of a BPO may be as little as $30.10

46. Defendant J.P. Morgan Chase & Co., its subsidiaries, defendant J.P. Morgan Chase Bank, N.A., and defendant Chase Home Finance LLC, their “property preservation” vendors, and the real estate brokers who provide BPOs for Chase, formed an enterprise and devised a scheme to defraud borrowers and obtain money from them by means of false pretenses. Chase Home Finance LLC, and now, its successor, J.P. Morgan Chase Bank, N.A., service approximately 9 million mortgage loans, which is about 12% of the loans in the United States.11

47. According to defendant J.P. Morgan Chase & Co.’s 2010 Annual Report, “[w]hen it becomes likely that a borrower is either unable or unwilling to pay, the Firm obtains a broker’s price opinion of the home based on an exterior-only valuation.”12

48. Plaintiffs are informed and believe, and on that basis, allege that using the enterprise and Defendants’ computerized automated mortgage loan management system, Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. unlawfully charged and continue to charge marked-up or unnecessary fees for default-related services. Furthermore, to fraudulently conceal their actions and mislead borrowers about the true nature of its actions, Defendants employs a corporate practice that omits true nature of the fees that are being assessed on borrowers’ accounts.

49. Plaintiffs are informed and believe, and on that basis, allege that Defendants conceal these marked-up fees for default-related services on borrowers accounts, by identifying the charges only as “Miscellaneous Fees,” “Corporate Advances,” “Other Fees,” or “Advances” on borrowers’ statements. Under the these categories, Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. assess fees for BPOs on borrowers’ accounts, charging from $95 to $125, when in fact, on information and belief, the actual cost of each BPO is approximately $50 or less. Plaintiffs are informed and believe, and on that basis, allege that a significant number of these BPOs are ordered by Chase’s Bankruptcy Processing team and Collection Department in San Diego, California.

50. Plaintiffs are informed and believe, and on that basis, allege that under the “Miscellaneous Fees,” “Corporate Advances,” “Other Fees,” or “Advances” categories on borrowers’ statements, Chase also assesses unnecessary fees for property inspections. In order to generate profits from these fees, Chase’s automated loan management system is set up to order property inspections and assess fees against borrowers when they are a certain number of days late on their mortgage, regardless of whether the assessment of such fees is necessary. Although such inspections purportedly are conducted to guard against property loss, Defendants’ practices are designed to ensure that these fees are charged to as many accounts as possible, even if the inspections are unnecessary.

51. When a loan is delinquent, Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. repeatedly contacts borrowers by telephone and by letter. In these communications, Chase determines whether the property is occupied. Nevertheless, Plaintiffs are informed and believe, and on that basis, allege that guidelines inputted into Chase’s loan management software system automatically trigger property inspections if a loan is past due by a certain number of days. After a borrower’s account is past due by a set number of days, as inputted into the software, Chase’s computer automatically generates a work order for a property inspection without human intervention. Moreover, so long as a borrower’s account is past due by the requisite number of days inputted into the loan management software, Chase’s system automatically continues to order inspections, regardless of whether they are necessary.

52. Plaintiffs are informed and believe, and on that basis, allege that even if the property inspections were properly performed and actually reviewed by someone at the bank, Chase’s continuous assessment of fees for these inspections on borrowers accounts is still improper because of the frequency with which they are performed. If the first inspection report shows that the property is occupied and in good condition, it is unnecessary and inappropriate for Chase’s system to automatically continue to order monthly inspections. Nothing in the reports justifies continued monitoring.

53. In order to further lull borrowers into a sense of trust, conceal Chase’s unlawful fees, and dissuade borrowers from challenging Chase’s unlawful fee assessments, Chase falsely represents on statements provided to borrowers that “Other Fees” and “Advances,” which are charges for BPOs and property inspections, include “amounts allowed by [borrowers’] Note and Security Instrument.”

54. As a result of Chase’s unlawful enterprise, hundreds of thousands of unsuspecting borrowers are cheated out of millions of dollars.

BORROWERS SUFFER HARM AS A RESULT OF DEFENDANTS’ PRACTICES

55. In addition to the direct monetary damages caused to borrowers, in the form of the difference between the actual cost of the services provided and the marked-up fees assessed on borrowers’ accounts, borrowers suffer other, less obvious injuries as a result of the practices described herein.

56. The assessment of these marked-up fees can make it impossible for borrowers to become current on their loan. Charges for default-related services can add hundreds or thousands of dollars to borrowers’ loans over time, driving them further into default.

57. When borrowers get behind on their mortgage, and fees for these default-related services are stacked on to the past-due principal and interest payments, Defendants’ practices make it increasingly difficult for borrowers to ever bring their loan current. Even if borrowers pay the delinquent principal and interest payments, the marked-up fees for default-related services ensure that borrowers stay in default. After paying delinquent principal and interest, although the next payment comes in on time, often through automatic payment deductions from borrowers’ bank accounts, part of the payment is applied to the fees first, so there is not enough to cover the entire monthly payment. This makes that payment late, creating a cascade of more fees, and more arrears, that keeps borrowers in delinquency. By the time borrowers are aware, Defendants are threatening to foreclose unless a huge payment is made, and the weight of these unnecessary fees drops borrowers into a financial abyss.

58. As a result of Defendants’ practices, which force borrowers to move deeper into default, borrowers suffer damage to their credit score. Defendants provide information about borrowers’ payment history to credit reporting companies, including whether they have been late with a payment or missed any payments. By keeping borrowers in default with these practices, Defendants affect whether borrowers can get a loan in the future — and what borrowers’ interest rate will be on such loans.

59. Additionally, as a result of Defendants’ practices, which force borrowers to move deeper into default, borrowers are driven into foreclosure.

PLAINTIFFS’ CLAIMS AGAINST CHASE

60. Plaintiff Ellis is a resident of Los Angeles County, California.

61. Plaintiff Ellis has a mortgage serviced by Chase.

62. A “Mortgage Loan Statement,” dated July 1, 2011, issued to Plaintiff Ellis by defendant Chase included an assessment of $154.24 for “Miscellaneous Fees.” Plaintiff is informed and believes, and on that basis, alleges that these fees included unlawful marked-up and unnecessary fees for default-related services, and that over the history of her loan, her account was assessed numerous other unlawful and unnecessary fees for default-related services. Defendants alone maintain a complete accounting of all fees assessed and paid, and the details of each and every fee assessed and paid cannot be alleged with complete precision without access to Defendants’ records. Nevertheless, Plaintiffs are informed and believe, and on that basis allege, that Plaintiff Ellis paid some or all of the unlawful fees assessed on her account.

63. Plaintiff Schillinger is a resident of Shelby County, Tennessee.

64. Plaintiff Schillinger has a mortgage serviced by Chase.

65. Chase continually assessed fees for default-related services, including property inspections, on the mortgage account of Plaintiff Schillinger, including on October 18, 2011, October 28, 2011, and February 18, 2012. Defendants alone maintain a complete accounting of all fees assessed and paid, and the details of each and every fee assessed and paid cannot be alleged with complete precision without access to Defendants’ records. Nevertheless, Plaintiffs are informed and believe, and on that basis allege, that Plaintiff Schillinger paid some or all of the unlawful fees assessed on his account.

66. Plaintiff Lazar is a resident of Coos County, Oregon.

67. Plaintiff Lazar has a mortgage serviced by Chase.

68. Chase continually assessed fees for default-related services, including property inspections, on the mortgage account of Plaintiff Lazar. On mortgage statements provided to Plaintiff Lazar in 2010 and 2011, these assessments were identified as “Miscellaneous Fees.” Chase sent Plaintiff Lazar an “Acceleration Warning” letter dated June 2, 2011, demanding that Plaintiff Lazar pay Chase $86.80 for “Other Fees,” and $28.00 for “Advances.” The June 2, 2011 letter further stated, “Other Fees and Advances include those amounts allowed by your Note and Security Instrument.”

69. Defendants alone maintain a complete accounting of all fees assessed and paid, and the details of each and every fee assessed and paid cannot be alleged with complete precision without access to Defendants’ records. Nevertheless, Plaintiffs are informed and believe, and on that basis allege, that Plaintiff Lazar paid some or all of the unlawful fees assessed on his account.

STATUTE OF LIMITATIONS

70. Any applicable statutes of limitations have been tolled by Defendants’ knowing and active concealment, denial, and misleading actions, as alleged herein. Plaintiffs and members of the Class, as defined below, were kept ignorant of critical information required for the prosecution of their claims, without any fault or lack of diligence on their part. Plaintiffs and members of the Class could not reasonably have discovered the true nature of the Defendants’ marked-up fee scheme.

71. Defendants are under a continuous duty to disclose to Plaintiffs and members of the classes the true character, quality, and nature of the fees they assess on borrowers’ accounts. Defendants knowingly, affirmatively, and actively concealed the true character, quality, and nature of their assessment of marked-up fees against borrowers’ accounts. Plaintiffs and members of the Class reasonably relied upon Defendants’ knowing, affirmative, and active concealment. Based on the foregoing, Defendants are estopped from relying on any statutes of limitation as a defense in this action.

72. The causes of action alleged herein did or will only accrue upon discovery of the true nature of the charges assessed against borrowers’ accounts, as a result of Defendants’ fraudulent concealment of material facts. Plaintiffs and members of the Class did not discover, and could not have discovered, through the exercise of reasonable diligence, the true nature of the unlawful fees assessed against their accounts.

73. Legal scholars have explained that, as a result of these deceptive practices, it is impossible for borrowers to determine that they are victims of these violations, because “without a true itemization that identifies the nature of each fee, parties cannot verify that a mortgage claim is correctly calculated … the servicer could be overreaching and charging fees that are not permitted by law or by the terms of the contract…. By obscuring the information needed to determine the alleged basis for the charges, servicers thwart effective review of mortgage claims. The system can only function as intended if complete and appropriate disclosures are made.”13

74. Additionally, judges examining similar conduct have found that, “[a]t the heart of the problem is [the loan servicer’s] failure to disclose to its borrowers/debtors, the trustee, or the Court, the nature or amount of fees and charges assessed … [l]ack of disclosure facilitates the injury. Naive borrowers/debtors, trustees and creditors rightly assume that [the loan servicer] is complying with the plain meaning of its notes, mortgages, court orders and confirmed plans. Why would anyone assume otherwise? … How are they to challenge a practice or demand correction of an error they do not know exists.”14

CLASS ACTION ALLEGATIONS

75. Plaintiffs bring this action, on behalf of themselves and all others similarly situated, as a class action under Rule 23 of the Federal Rules of Civil Procedure.

76. The classes Plaintiffs seek to represent (collectively, the “Class”) are defined as follows:

All residents of the United States of America who had a loan serviced by Chase Home Finance LLC at any time, or a loan serviced by J.P. Morgan Chase Bank, N.A. from May 1, 2011 continuing through the date of final disposition of this action, and whose accounts were assessed fees for default-related services, including Broker’s Price Opinions, and inspection fees, at any time, continuing through the date of final disposition of this action (the “Nationwide Subclass”).

All residents of the State of California who had a loan serviced by Chase Home Finance LLC at any time, or a loan serviced by J.P. Morgan Chase Bank, N.A. from May 1, 2011 continuing through the date of final disposition of this action, and whose accounts were assessed fees for default-related services, including Broker’s Price Opinions, and inspection fees, at any time, continuing through the date of final disposition of this action (the “California Subclass”).

77. Plaintiffs reserve the right to amend the Class definitions if discovery and further investigation reveals that the Class should be expanded or otherwise modified.

78. Plaintiffs reserve the right to establish sub-classes as appropriate.

79. This action is brought and properly may be maintained as a class action under the provisions of Federal Rules of Civil Procedure 23(a)(l)-(4) and 23(b)(1), (b)(2) or (b)(3), and satisfies the requirements thereof. As used herein, the term “Class Members” shall mean and refer to the members of the Class.

80. Community of Interest, There is a well-defined community of interest among members of the Class, and the disposition of the claims of these members of the Class in a single action will provide substantial benefits to all parties and to the Court.

81. Numerosity, While the exact number of members of the Class is unknown to Plaintiffs at this time and can only be determined by appropriate discovery, membership in the Class is ascertainable based upon the records maintained by Defendants. At this time, Plaintiffs are informed and believe that the Class includes hundreds of thousands of members. Therefore, the Class is sufficiently numerous that joinder of all members of the Class in a single action is impracticable under Federal Rule of Civil Procedure Rule 23(a)(1), and the resolution of their claims through the procedure of a class action will be of benefit to the parties and the Court.

82. Ascertainablity, Names and addresses of members of the Class are available from Defendants’ records. Notice can be provided to the members of the Class through direct mailing, publication, or otherwise using techniques and a form of notice similar to those customarily used in consumer class actions arising under California state law and federal law.

83. Typicality, Plaintiffs’ claims are typical of the claims of the other members of the Class which they seek to represent under Federal Rule of Civil Procedure 23(a)(3) because each Plaintiff and each member of the Class has been subjected to the same deceptive and improper practices and has been damaged in the same manner thereby.

84. Adequacy, Plaintiffs will fairly and adequately represent and protect the interests of the Class as required by Federal Rule of Civil Procedure Rule 23(a)(4). Plaintiffs are adequate representatives of the Class, because they have no interests which are adverse to the interests of the members of the Class. Plaintiffs are committed to the vigorous prosecution of this action and, to that end, Plaintiffs have retained counsel who are competent and experienced in handling class action litigation on behalf of consumers.

85. Superiority, A class action is superior to all other available methods of the fair and efficient adjudication of the claims asserted in this action under Federal Rule of Civil Procedure 23(b)(3) because:

(a) The expense and burden of individual litigation make it economically unfeasible for members of the Class to seek to redress their claims other than through the procedure of a class action.

(b) If separate actions were brought by individual members of the Class, the resulting duplicity of lawsuits would cause members to seek to redress their claims other than through the procedure of a class action; and

(c) Absent a class action, Defendants likely would retain the benefits of their wrongdoing, and there would be a failure of justice.

86. Common questions of law and fact exist as to the members of the Class, as required by Federal Rule of Civil Procedure 23(a)(2), and predominate over any questions which affect individual members of the Class within the meaning of Federal Rule of Civil Procedure 23(b)(3).

87. The common questions of fact include, but are not limited to, the following:

(a) Whether Defendants engaged in unlawful, unfair, misleading, or deceptive business acts or practices in violation of California Business & Professions Code sections 17200 et seq.;

(b) Whether Defendants’ practice of charging marked-up fees to borrowers, as alleged herein, is illegal;

(c) Whether Defendants were members of, or participants in the conspiracy alleged herein;

(d) Whether Defendants engaged in a pattern or practice of racketeering, as alleged herein;

(e) Whether documents and statements provided to Plaintiffs and members of the Class omitted material facts;

(f) Whether Plaintiffs and members of the class sustained damages, and if so, the appropriate measure of damages; and

(g) Whether Plaintiffs and members of the Class are entitled to an award of reasonable attorneys’ fees, pre-judgment interest, and costs of this suit.

88. In the alternative, this action is certifiable under the provisions of Federal Rule of Civil Procedure 23(b)(1) and/or 23(b)(2) because:

(a) The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for Defendants;

(b) The prosecution of separate actions by individual members of the Class would create a risk of adjudications as to them which would, as a practical matter, be dispositive of the interests of the other members of the Class not parties to the adjudications, or substantially impair or impede their ability to protect their interests; and

(c) Defendants have acted or refused to act on grounds generally applicable to the Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the Class as a whole and necessitating that any such relief be extended to members of the Class on a mandatory, class-wide basis.

89. Plaintiffs are not aware of any difficulty which will be encountered in the management of this litigation which should preclude its maintenance as a class action

FIRST CAUSE OF ACTION BROUGHT ON BEHALF OF THE CALIFORNIA SUBCLASS

Violation of Unfair Business Practices Act (California Business & Professions Code §§ 17200 et seq.)

90. Plaintiffs incorporate by reference in this cause of action each and every allegation of the preceding paragraphs, with the same force and effect as though fully set forth herein.

91. Plaintiff Ellis brings this cause of action on behalf of herself and the members of the California Subclasses.

92. California Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” For the reasons described above, Defendants have engaged in unfair, or fraudulent business acts or practices in violation of California Business and Professions Code sections 17200 et seq.

93. In the course and conduct of their loan servicing and collection, Defendants omit a true itemization that identifies the nature of each fee, and they fail to disclose the nature of the charges and fees assessed. Defendants conceal the fact the category identified as “Miscellaneous Fees” reflects marked-up and/or unnecessary fees that were never incurred by Defendants. Relying on Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A., Plaintiff Ellis, and members of the California Subclass believe they are obligated to pay the amounts specified in Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A.’s communications.

94. In truth and in fact, borrowers are not obligated to pay the amounts that have been specified in Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A.’s communications concerning default-related services, such as BPOs. Defendants omit the fact that the amounts they represent as being owed have been marked-up beyond the actual cost of the services, or they are unnecessary, in violation of disclosures in the mortgage contract. Contrary to Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A.’s communications, Defendants are not legally authorized to assess and collect these fees.

95. Defendants’ omissions of material facts, as set forth herein, constitutes an unlawful practice because they violate Title 18 United States Code sections 1341, 1343, and 1962, as well as California Civil Code sections 1572, 1573, 1709, 1710, and 1711, among others, and the common law.

96. Defendants’ omissions of material facts, as set forth herein, also constitute “unfair” business acts and practices within the meaning of California Business and Professions Code sections 17200 et seq., in that Defendants’ conduct was injurious to consumers, offended public policy, and was unethical and unscrupulous. Plaintiff Ellis also asserts a violation of public policy by withholding material facts from consumers. Defendants’ violation of California’s consumer protection and unfair competition laws in California resulted in harm to consumers.

97. There were reasonable alternatives available to Defendants to further Defendants’ legitimate business interests, other than the conduct described herein.

98. California Business and Professions Code section 17200 also prohibits any “fraudulent business act or practice.” Defendants’ concealment of material facts, as set forth above, was false, misleading, or likely to deceive the public within the meaning of California Business and Professions Code section 17200. Defendants’ concealment was made with knowledge of its effect, and was done to induce Plaintiff Ellis and members of the California Subclass to pay the marked-up and/or unnecessary fees for default-related services.

99. Plaintiff Ellis and members of the California Subclass relied on their reasonable expectation that Defendants would comply with the disclosures set forth in the mortgage agreement, Notes, and Security Instruments, and as a result, Plaintiff Ellis and members of the California Subclass relied on Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A.’s disclosures about the fees on their statements, reasonably believing the “Miscellaneous Fees” or “Corporate Advances” to be valid charges that were not unlawfully marked-up and/or unnecessary. Indeed, to lull borrowers into a sense of trust and dissuade them from challenging Defendants’ unlawful fee assessments, Defendants further conceal their scheme by telling borrowers, in statements and other documents from Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A., that such fees are “allowed by [borrowers’] Note and Security Instrument.” Had the true nature of the fees been disclosed to Plaintiff Ellis and the members of the California Subclass, they would have been aware of the mark-ups, or unnecessary nature of the fees, and Plaintiff Ellis and the members of the California Subclass would have disputed the charges and not paid them.

100. Plaintiff Ellis and the members of the California Subclass have been injured in fact and suffered a loss of money or property as a result of Defendants’ fraudulent, unlawful, and unfair business practices. Plaintiff Ellis and the members of the California Subclass would not have paid Defendants’ unlawful fees or they would have challenged the assessment of such fees on their accounts had it not been for Defendants’ concealment of material facts.

101. Defendants have thus engaged in unlawful, unfair, and fraudulent business acts entitling Plaintiff Ellis and the members of the California Subclass to judgment and equitable relief against Defendants, as set forth in the Prayer for Relief.

102. Additionally, under Business and Professions Code section 17203, Plaintiff Ellis and members of the California Subclass seek an order requiring Defendants to immediately cease such acts of unlawful, unfair, and fraudulent business practices, and requiring Defendants to correct their actions.

SECOND CAUSE OF ACTION

Violations of the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C.§ 1962(c))

103. Plaintiffs incorporate by reference in this cause of action each and every allegation of the preceding paragraphs, with the same force and effect as though fully set forth herein.

104. Plaintiffs bring this cause of action on behalf of themselves and the members of the Nationwide Subclass.

THE ENTERPRISE

105. Defendants J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC are each persons within the meaning of Title 18 United States Code section 1961(3).

106. At all relevant times, in violation of Title 18 United States Code section 1962(c), J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., Chase Home Finance LLC, including their directors, employees, and agents, along with their “property preservation” vendors — including Safeguard Real Estate Properties, LLC d/b/a of Safeguard Properties, LLC, Mortgage Contracting Seivices, LLC, and LPS Field Services, Inc. — and the real estate brokers who provide BPOs for Chase conducted the affairs of an association-in-fact enterprise, as that term is defined in Title 18 United States Code section 1961(4) (the “Chase Enterprise”). The affairs of the Chase Enterprise affected interstate commerce through a pattern of racketeering activity.

107. The Chase Enterprise is an ongoing, continuing group or unit of persons and entities associated together for the common purpose of limiting costs and maximizing profits by fraudulently concealing assessments for unlawfully marked-up and/or unnecessary fees for default-related services on borrowers’ accounts.

108. While the members of the Chase Enterprise participate in and are part of the enterprise, they also have an existence separate and distinct from the enterprise. The Chase Enterprise has a systematic linkage because there are contractual relationships, agreements, financial ties, and coordination of activities between Defendants, the real estate brokers who perform BPOs, and the vendors that perform property inspections.

109. Operating the Chase Enterprise according to policies and procedures developed and established by their executives, J.P. Morgan Chase & Co., and J.P. Morgan Chase Bank, N.A. control and direct the affairs of the Chase Enterprise and use the other members of the Chase Enterprise as instrumentalities to carry out Chase’s fraudulent scheme. These policies and procedures established by Chase’s executives include providing statements that fail to disclose the true nature of the marked-up or unnecessary fees, cryptically identifying default-related service fees as “Miscellaneous Fees,” or “Corporate Advances,” using mortgage loan management software designed to increase the fees assessed on borrowers’ accounts, without consideration for whether the assessment of such fees is necessary, failing to provide borrowers with documentation to support assessments of fees for BPOs, and directing property preservation vendors to conduct services without consideration for whether they are necessary.

THE PREDICATE ACTS

110. Defendants’ systematic schemes to fraudulently conceal assessments of unlawfully marked-up or unnecessary third party fees on the accounts of borrowers who have mortgage loans administered Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A., as described above, was facilitated by the use of the United States Mail and wire. Defendants’ schemes constitute “racketeering activity” within the meaning of Title 18 United States Code section 1961(1), as acts of mail and wire fraud, under Title 18 United States Code sections 1341 and 1343.

111. In violation of Title 18 United States Code sections 1341 and 1343, Defenants utilized the mail and wire in furtherance of their scheme to defraud borrowers whose loans are serviced by Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. by obtaining money from borrowers using false or fraudulent pretenses.

112. Through the mail and wire, the Chase Enterprise provided mortgage invoices, loan statements, payoff demands, or proofs of claims to borrowers, demanding that borrowers pay fraudulently concealed marked-up or unnecessary fees for default-related services, such as BPOs or property inspections. Defendants also accepted payments and engaged in other correspondence in furtherance of their scheme through the mail and wire.

113. Defendants fraudulently and unlawfully marked-up fees in violation of borrowers’ mortgage agreements because the fees exceed the actual cost of the services, and therefore, they violate the disclosures made to borrowers.

114. The mortgage invoices, loan statements, or proofs of claims provided to borrowers fraudulently concealed the true nature of assessments made on borrowers’ accounts. Using false pretenses, identifying the fees on mortgage invoices, loan statements, or proofs of claims only as “Miscellaneous Fees” or “Corporate Advances” to obtain full payments from borrowers, Defendants disguised the true nature of these fees and omitted the fact that the fees include undisclosed mark-ups or were unnecessary. By omitting and fraudulently concealing the true nature of amounts purportedly owed in communications to borrowers, Defendants made false statements using the Internet, telephone, facsimile, United States mail, and other interstate commercial carriers.

115. Furthermore, to lull borrowers into a sense of trust, conceal Defendants’ unlawful fees, and dissuade borrowers from challenging Defendants’ unlawful fee assessments, Defendants further conceal their scheme from borrowers by telling them, in statements and other documents, that such fees are “allowed by [borrowers’] Note and Security Instrument.”

116. Defendants’ omissions were material to Plaintiffs and the members of the Class. Had Defendants disclosed the true marked-up or unnecessary nature of the fees for default-related services, Plaintiffs would have been aware and would have challenged Defendants’ unlawful fee assessments or they would not have paid them.

117. Each of these acts constituted an act of mail fraud for puiposes of Title 18 United States Code section 1341.

118. Additionally, using the Internet, telephone, and facsimile transmissions to fraudulently communicate false information about these fees to borrowers, to pursue and achieve their fraudulent scheme, Defendants engaged in repeated acts of wire fraud in violation of Title 18 United States Code section 1343.

119. In an effort to pursue their fraudulent scheme, Defendants knowingly fraudulently concealed or omitted material information from Plaintiffs and members of the Class. Defendants’ knowledge that their activities were fraudulent and unlawful is evidenced by, among other things, the fact that they did not disclose the mark-ups or unnecessary nature of the fees in their communications to borrowers.

120. The predicate acts specified above constitute a “pattern of racketeering activity” within the meaning of Title 18 United States Code section 1961(5) in which Defendants have engaged under Title 18 United States Code section 1962(c).

121. All of the predicate acts of racketeering activity described herein are part of the nexus of the affairs and functions of the Chase Enterprise racketeering enterprise. The racketeering acts committed by the Chase Enterprise employed a similar method, were related, with a similar purpose, and they involved similar participants, with a similar impact on the members of the Class. Because this case is brought on behalf of a class of similarly situated borrowers and there are numerous acts of mail and wire fraud that were used to carry out the scheme, it would be impracticable for Plaintiffs to plead all of the details of the scheme with particularity. Plaintiffs cannot plead the precise dates of all of Defendants’ uses of the mail and wire because this information cannot be alleged without access to Defendants’ records.

122. The pattern of racketeering activity is currently ongoing and open-ended, and threatens to continue indefinitely unless this Court enjoins the racketeering activity.

123. Numerous schemes have been completed involving repeated unlawful conduct that by its nature, projects into the future with a threat of repetition.

124. As a direct and proximate result of these violations of Title 18 United States Code sections 1962(c) and (d), Plaintiffs and members of the class have suffered substantial damages. Defendants are liable to Plaintiffs and members of the Class for treble damages, together with all costs of this action, plus reasonable attorney’s fees, as provided under Title 18 United States Code section 1964(c).

THIRD CAUSE OF ACTION

Violation of the Racketeer Influenced and Corrupt Organizations Act, Conspiracy to Violate Title 18 United States Code section 1962(c) (18 U.S.C.§ 1962(d))

125. Plaintiffs incorporate by reference in this cause of action each and every allegation of the preceding paragraphs, with the same force and effect as though fully set forth herein.

126. Plaintiffs bring this cause of action on behalf of themselves and the members of the Nationwide Class.

127. As set forth above, in violation of Title 18 United States Code section 1962(d), defendants J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC conspired to violate the provisions of Title 18 United States Code section 1962(c).

128. As set forth above, J.P. Morgan Chase & Co. and J.P. Morgan Chase Bank, N.A., having directed and controlled the affairs of the Citi Enterprise, were aware of the nature and scope of the enterprise’s unlawful scheme, and they agreed to participate in it.

129. As a direct and proximate result, Plaintiffs and the members of the Nationwide Subclasses have been injured in their business or property by the predicate acts which make up Defendants’ patterns of racketeering activity in that unlawfully marked-up and/or unnecessary fees for default-related services were assessed on their mortgage accounts.

FOURTH CAUSE OF ACTION

Unjust Enrichment

130. Plaintiffs incorporate by reference in this cause of action each and every allegation of the preceding paragraphs, with the same force and effect as though fully set forth herein.

131. Plaintiffs bring this cause of action on behalf of themselves and the members of the Nationwide Subclass.

132. By their wrongful acts and omissions of material facts, Defendants were unjustly enriched at the expense of Plaintiffs and members of the Class.

133. The mortgage contract with borrowers like Plaintiffs and the members of the Class discloses that Defendants will pay for default-related services when necessary, and they will be reimbursed by the borrower. Nowhere in the mortgage contract is it disclosed that Defendants may mark-up the actual cost of those services to make a profit, or that Defendants may incur unnecessary third party fees.

134. Nevertheless, Defendants mark-up the prices charged by vendors, often by 100% or more, and then, without disclosing the mark-up, assess borrowers’ accounts for the higher, marked-up fee so that Defendants can earn a profit. Additionally, Defendants assess such fees on borrowers’ accounts without adequate concern for whether they are necessary.

135. Thus, Plaintiffs and members of the Class were unjustly deprived.

136. Defendants are aware that it is improper to mark-up or assess unnecessary third party fees on borrowers’ accounts for default-related services. Therefore, Defendants fraudulently conceal these fees on borrowers’ accounts, omitting any information about Defendants’ additional profits, by identifying them on mortgage statements only as “Miscellaneous Fees” or “Corporate Advances.”

137. Furthermore, to lull borrowers into a sense of trust, conceal Defendants’ unlawful fees, and dissuade borrowers from challenging Defendants’ unlawful fee assessments, Defendants further conceal their scheme from borrowers by telling them, in statements and other documents, that such fees are “allowed by [borrowers’] Note and Security Instrument.”

138. It would be inequitable and unconscionable for Defendants to retain the profit, benefit and other compensation they obtained from their fraudulent, deceptive, and misleading conduct alleged herein.

139. Plaintiffs and members of the Class seek restitution from Defendants, and seek an order of this Court disgorging all profits, benefits, and other compensation obtained by Defendants from their wrongful conduct.

FIFTH CAUSE OF ACTION

Fraud

140. Plaintiffs incorporate by reference in this cause of action each and every allegation of the preceding paragraphs, with the same force and effect as though fully set forth herein.

141. Plaintiffs bring this cause of action on behalf of themselves and the members of the Nationwide Class.

142. Defendants concealed and suppressed material facts, namely, the fact that Defendants mark-up the prices charged by vendors, often by 100% or more, and then, without disclosing the mark-up, assess borrowers’ accounts for the higher, marked-up fee so that Defendants can earn a profit. In truth and in fact, borrowers are not obligated to pay the amounts that have been specified in Defendants’ communications for default-related services, such as BPOs. Contrary to Defendants’ communications, Defendants are not legally authorized to assess and collect these fees.

143. Defendants omit a true itemization that identifies the nature of each fee, and they fail to disclose the nature of the charges and fees assessed. Defendants conceal the fact the category identified as “Corporate Advances” or “Miscellaneous Fees” reflects marked-up and/or unnecessary fees that were never incurred by Defendants.

144. Plaintiffs relied their reasonable expectation that Defendants comply with the disclosures set forth in the mortgage agreement, Notes, Security Instruments, and as a result, Plaintiffs relied on Defendants’ disclosures about the fees on their statements, reasonably believing the “Corporate Advances” or “Miscellaneous Fees” to be valid charges that were not unlawfully marked-up or unnecessary

145. Indeed, to lull borrowers into a sense of trust and dissuade them from challenging Defendants’ unlawful fee assessments, Defendants further conceal their scheme by telling borrowers, in statements and other documents, that such fees are “allowed by [borrowers’] Note and Security Instrument.”

146. Had the true nature of the fees been disclosed to Plaintiffs and members of the Class, they would have been aware of the mark-ups, or unnecessary nature of the fees, and Plaintiffs would have disputed the charges and not paid them.

147. Defendants knew their concealment and suppression of materials facts was false, misleading, and in violation of the disclosures made to borrowers because the fees exceed the actual cost of the services.

148. As a result of Defendants’ fraudulent omissions and failures to disclose, Plaintiffs and members of the Class have been injured in fact and suffered a loss of money or property. Plaintiffs and members of the Nationwide Class would not have paid Defendants’ fraudulently marked-up fees or they would have challenged the assessment of such fees on their accounts had it not been for Defendants’ concealment of material facts.

149. Defendants omitted and concealed material facts, as discussed above ,with knowledge of the effect of concealing of these material facts. Defendants knew that by misleading consumers, they would generate higher profits.

150. Plaintiffs and members of the Nationwide Class justifiably relied upon Defendants’ knowing, affirmative, and active concealment. By concealing material information about their scheme to assess undisclosed marked-up fees on borrowers’ accounts, Defendants intended to induce Plaintiffs and members of the Nationwide Class into believing that they owed Defendants money that Defendants were not actually entitled.

151. Defendants acted with malice, oppression, or fraud.

152. As a direct and proximate result of Defendants’ omissions and active concealment of material facts, Plaintiffs and each member of the Nationwide Class has been damaged in an amount according to proof at trial.

PRAYER FOR RELIEF

Plaintiffs, and on behalf of themselves and all others similarly situated, request the Court to enter judgment against Defendants, as follows:

1. Certifying the Class, as requested herein, certifying Plaintiffs as the representatives of the Class, and appointing Plaintiffs’ counsel as counsel for the Class;

2. Ordering that Defendants are financially responsible for notifying all members of the Class of the alleged omissions discussed herein;

3. Awarding Plaintiffs and the members of the Class compensatory damages in an amount according to proof at trial;

4. Awarding restitution and disgorgement of Defendants’ revenues or profits to Plaintiffs and members of the Class;

5. Awarding Plaintiffs and the members of the Class treble damages in an amount according to proof at trial;

6. Awarding declaratory and injunctive relief as permitted by law or equity, including: enjoining Defendants from continuing the unlawful practices as set forth herein, and directing Defendants to identify, with Court supervision, victims of its conduct and pay them restitution and disgorgement of all monies acquired by Defendants by means of any act or practice declared by this Court to be wrongful;

7. Ordering Defendants to engage in corrective advertising;

8. Awarding interest on the monies wrongfully obtained from the date of collection through the date of entry of judgment in this action;

9. Awarding attorneys’ fees, expenses, and recoverable costs reasonably incurred in connection with the commencement and prosecution of this action; and

10. For such other and further relief as the Court deems just and proper.

Dated: July 24, 2012

BARON & BUDD, P.C.

By: <<signature>>

Mark Pifko

Daniel Alberstone (SBN 105275)

Roland Tellis (SBN 186269)

Mark Pifko (SBN 228412)

Baron & Budd, P.C.

15910 Ventura Boulevard, Suite 1600

Encino, California 91436

Telephone: (818)839-2333

Facsimile: (818)986-9698

Attorneys for Plaintiffs

DIANA ELLIS, JAMES SCHILLINGER, and RONALD LAZAR individually, and on behalf of other members of the public similarly situated

DEMAND FOR JURY TRIAL

Plaintiffs hereby demand a trial of their claims by jury to the extent authorized by law.

Dated: July 24, 2012

BARON & BUDD, P.C.

By: <<signature>>

Mark Pifko

Daniel Alberstone (SBN 105275)

Roland Tellis (SBN 186269)

Mark Pifko (SBN 228412)

Baron & Budd, P.C.

15910 Ventura Boulevard, Suite 1600

Encino, California 91436

Telephone: (818)839-2333

Facsimile: (818)986-9698

Attorneys for Plaintiffs

DIANA ELLIS, JAMES SCHILLINGER, and RONALD LAZAR, individually, and on behalf of other members of the public similarly situated

Footnotes

1

See Bias et al. v. Wells Fargo & Company et al, N.D. Cal., case no. 4:12-cv-00664-YGR, Order Granting in Part and Denying in Part Motion of Defendants Wells Fargo & Company and Wells Fargo Bank, N.A. to Sever and Transfer, and Severing Claims as to Other Defendants on the Court’s Own Motion, July 13, 2012 (Dkt. No. 59).

2

See Sarah Bloom Raskin, Member Board of Governors of the Federal Reserve System, Remarks at the National Consumer Law Center’s Consumer Rights Litigation Conference, Boston Massachusetts, Nov. 12, 2010, available at http://www.federalreseve.gov/newsevents/speech/raskin20101112a.htm (last visited Jan. 23,2012).

3

In re: Prevo, 394 B.R. 847, 848 (Bankr. S.D. Tex. 2008).

4

Id. at 851 (emphasis added).

5

See Mark Pearce, Director, Division of Depositor and Consumer Protection, Federal Deposit Insurance Corporation, Mortgage Servicing: An Examination of the Role of Federal Regulators in Settlement Negotiations and the Future of Mortgage Servicing Standards, before the Subcommittees on Financial Institutions and Consumer Credit, and Oversight and Investigations Committee on Financial Services, U.S. House of Representatives, July 7, 2011, available at http://financialseivices.house.gov/UploadedFiles/070711pearce.pdf (last visited, Feb. 1, 2012).

6

See Sarah Bloom Raskin, Member Board of Governors of the Federal Reserve System, Remarks at the National Consumer Law Center’s Consumer Rights Litigation Conference, Boston Massachusetts, Nov. 12, 2010, available at http://www.federalreserve.gov/newsevents/speech/raskin20101112a.htm (last visited Jan. 23,2012).

7

See Adam J. Levitin, Robo-Singing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing, before the House Financial Services Committee, Subcommittee on Housing and Community Opportunity, Nov. 18, 2010, available at http:// financialservices.house.gov/Media/file/hearings/111/Levitin111810.pdf (last visited Feb. 1, 2012).

8

See http://www.isgn.com/Products/Fortracs.htm (last visited Feb. 8, 2012).

9

See Fannie Mae, Broker Price Opinion Providers and Pricing Structure, available at https:// efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/ntce121710a.pdf (last visited Feb. 1, 2012).

10

See National Association of BPO Professionals (NABPOP), Broker Price Opinion — BPO Brief, available at http://www.nabpop.org/Advocacy-BPOBrief-2.php (last visited Feb. 2, 2012).

11

See J.P. Morgan Chase & Co. 2010 Annual Report at p. 39, available at http://files.shareholder.com/downloads/ONE/1653115906x0x458380/ab2612d5-3629-46c6-ad94-5fd3ac68d23b/2010_JPMC_AnnualReport_.pdf (last visited Jan. 24, 2012).

12

See J.P. Morgan Chase & Co. 2010 Annual Report, available at http:// files.shaeholder.com/downloads/ONE/1653115906x0x458380/ab2612d5-3629-46c6-ad94-5fd3ac68d23b/2010_JPMC_AnnualReport_.pdf (last visited Jan. 24, 2012).

13

See Katherine Porter, Misbehavior and Mistake in Bankruptcy Mortgage Claims, 87 Tex. L. Rev. 121, 155(2008).

14

See In re: Jones, 418 B.R. 687, 699 (E.D. La. 2009).

2013 WL 2921799

Only the Westlaw citation is currently available.

United States District Court,

N.D. California.

Diana ELLIS, James Schillinger, and Ronald Lazar, individually and on behalf of other members of the general public similarly situated, Plaintiffs,

v.

J.P. MORGAN CHASE & CO., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC, Defendants.

No. 12–cv–03897–YGR.

June 13, 2013.

Synopsis

Background: Borrowers filed putative class action against lender and mortgage loan servicer alleging fraud, unjust enrichment, and violation of California Business and Professions Code and Racketeer Influenced and Corrupt Organizations Act (RICO) based on defendants’ alleged uniform practice of marking up default-related fees charged by third party vendors, assessing them against borrowers’ accounts, failing to notify borrowers of the mark-ups, and assessing fees for unnecessary services. Defendants moved to dismiss.

Holdings: The District Court, Yvonne Gonzalez Rogers, J., held that:

1 Financial Institutions Supervisory Act (FISA) did not divest court of subject matter jurisdiction over borrowers’ claims;

2 neither judicially-created equitable abstention doctrine nor primary jurisdiction doctrine applied;

3 state law claims were not preempted by National Bank Act (NBA) or its related regulations;

4 borrowers sufficiently alleged injury-in-fact as required for standing;

5 complaint failed to state claim for RICO violation;

6 complaint stated claim for unjust enrichment, notwithstanding written contract; and

7 complaint stated claim for fraud, with sufficient particularity required under federal rule.

Motion granted in part and denied in part.

West Headnotes (32)Collapse West Headnotes

Change View

1Federal Civil Procedure

 

Although there is no mandatory sequencing of jurisdictional issues, jurisdictional questions ordinarily must precede merits determinations in dispositional orders.

0 Case that cites this headnote

 

170AFederal Civil Procedure

2Federal Civil Procedure

 

When subject matter jurisdiction is challenged, the burden of proof is placed on the party asserting that jurisdiction exists. Fed.Rules Civ.Proc.Rule 12(b)(1), 28 U.S.C.A.

0 Case that cites this headnote

 

170AFederal Civil Procedure

3Federal Civil Procedure

 

On a motion to dismiss for lack of subject matter jurisdiction, court presumes lack of jurisdiction until plaintiff proves otherwise in response to the motion. Fed.Rules Civ.Proc.Rule 12(b)(1), 28 U.S.C.A.

0 Case that cites this headnote

 

170AFederal Civil Procedure

4Federal Civil Procedure

 

A motion to dismiss for lack of subject matter jurisdiction may be either facial or factual; in a “facial attack,” the movant argues that the allegations of a complaint are insufficient to establish federal jurisdiction, while in a “factual attack” or a “speaking motion,” the movant disputes the allegations that would otherwise invoke federal jurisdiction. Fed.Rules Civ.Proc.Rule 12(b)(1), 28 U.S.C.A.

0 Case that cites this headnote

 

170AFederal Civil Procedure

5Federal Civil Procedure

 

In resolving a factual attack on subject matter jurisdiction, district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Fed.Rules Civ.Proc.Rule 12(b)(1), 28 U.S.C.A.

0 Case that cites this headnote

 

170AFederal Civil Procedure

6Federal Civil Procedure

 

Court need not presume the truthfulness of a plaintiff’s allegations when resolving a factual attack on subject matter jurisdiction. Fed.Rules Civ.Proc.Rule 12(b)(1), 28 U.S.C.A.

0 Case that cites this headnote

 

170AFederal Civil Procedure

7Federal Civil Procedure

 

The existence of disputed material facts in a factual attack on subject matter jurisdiction will not preclude a trial court from evaluating for itself the merits of jurisdictional claims, except where the jurisdictional and substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution of factual issues going to the merits. Fed.Rules Civ.Proc.Rule 12(b)(1), 28 U.S.C.A.

0 Case that cites this headnote

 

170AFederal Civil Procedure

8Evidence

 

Facts that may be judicially noticed must be generally known within the trial court’s territorial jurisdiction or can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned. Fed.Rules Evid.Rule 201(b), 28 U.S.C.A.

0 Case that cites this headnote

 

157Evidence

9Banks and Banking

 

Section of the Financial Institutions Supervisory Act (FISA) divesting federal courts of jurisdiction to “affect by injunction or otherwise” or “modify” cease-and-desist orders issued by certain federal banking agencies did not divest court of subject matter jurisdiction over borrowers’ putative class action claims against lender and mortgage loan servicer alleging unlawful and unnecessary fees for default-related services, even though defendants had entered into consent order with regulators concerning their foreclosure practices; Act did not seek to prohibit third parties from asserting claims, nor did consent order itself purport to do so, and consent order addressed only defendants’ foreclosure proceedings, not the fraudulent scheme alleged by borrowers. 12 U.S.C.A. § 1818(i).

0 Case that cites this headnote

 

52Banks and Banking

10Administrative Law and Procedure

 

The “doctrine of primary jurisdiction” allows a court to stay a proceeding or dismiss a complaint pending the resolution of an issue within the special competence of an administrative agency.

0 Case that cites this headnote

 

15AAdministrative Law and Procedure

11Administrative Law and Procedure

 

Primary jurisdiction doctrine, which allows court to stay proceeding or dismiss complaint pending resolution of an issue within the special competence of an administrative agency, applies only if a claim requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency, and if protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme.

0 Case that cites this headnote

 

15AAdministrative Law and Procedure

12Administrative Law and Procedure

 

Although no fixed formula exists for applying the doctrine of primary jurisdiction, which allows court to stay proceeding or dismiss complaint pending resolution of an issue within the special competence of an administrative agency, court generally considers whether: (1) the issue is within the conventional experiences of judges or involves technical or policy considerations within the agency’s particular field of expertise; (2) the issue is particularly within the agency’s discretion; and (3) there exists a substantial danger of inconsistent rulings.

0 Case that cites this headnote

 

15AAdministrative Law and Procedure

13Administrative Law and Procedure

 

In applying the doctrine of primary jurisdiction, which allows court to stay proceeding or dismiss complaint pending resolution of an issue within the special competence of an administrative agency, court must balance the parties’ need to resolve the action expeditiously against the benefits of obtaining a federal agency’s expertise on the issue.

0 Case that cites this headnote

 

15AAdministrative Law and Procedure

14Federal Courts

 

The judicially-created equitable abstention doctrine gives federal courts discretion to abstain from deciding a claim under California’s Unfair Competition Law (UCL). West’s Ann.Cal.Bus. & Prof.Code § 17200.

0 Case that cites this headnote

 

170BFederal Courts

15Federal Courts

 

Underlying the judicially-created equitable abstention doctrine which gives federal courts discretion to abstain from deciding a claim under California’s Unfair Competition Law (UCL) is the rationale that because the remedies available under the UCL, namely injunctions and restitution, are equitable in nature, courts have discretion to abstain from employing them. West’s Ann.Cal.Bus. & Prof.Code § 17200.

0 Case that cites this headnote

 

170BFederal Courts

16Federal Courts

 

Abstention under the judicially-created equitable abstention doctrine which gives federal courts discretion to abstain from deciding a claim under California’s Unfair Competition Law (UCL) may be appropriate if: (1) resolving the claim requires determining complex economic policy, which is best handled by the legislature or an administrative agency; (2) granting injunctive relief would be unnecessarily burdensome for the trial court to monitor and enforce given the availability of more effective means of redress; or (3) federal enforcement of the subject law would be more orderly, more effectual, less burdensome to the affected interests. West’s Ann.Cal.Bus. & Prof.Code § 17200.

0 Case that cites this headnote

 

170BFederal Courts

17Federal Courts

 

The judicially-created equitable abstention doctrine which gives federal courts discretion to abstain from deciding a claim under California’s Unfair Competition Law (UCL) applies only in rare instances. West’s Ann.Cal.Bus. & Prof.Code § 17200.

0 Case that cites this headnote

 

170BFederal Courts

18Federal Courts

 

Neither judicially-created equitable abstention doctrine, which allowed federal court discretion to abstain from deciding a claim under California’s Unfair Competition Law (UCL), nor primary jurisdiction doctrine, which allowed court to stay proceeding pending resolution of issue within special competence of administrative agency, applied to borrowers’ putative class action claims against lender and mortgage loan servicer alleging violation of Racketeer Influenced and Corrupt Organizations Act (RICO), violation of UCL, fraud, and unjust enrichment; the claims involved areas within the conventional experience of the court and, despite defendants’ characterizations that court would be resolving issues under regulatory scheme of the Office of the Comptroller of Currency (OCC), uniformity or consistency would not be threatened by court’s adjudication of the claims. West’s Ann.Cal.Bus. & Prof.Code § 17200.

0 Case that cites this headnote

 

170BFederal Courts

19Banks and Banking

 

In analyzing preemption under National Bank Act (NBA), court asks whether state law prevents or significantly interferes with a national bank’s exercise of its powers. 12 U.S.C.A. § 24.

0 Case that cites this headnote

 

52Banks and Banking

20Banks and Banking

 

Borrowers’ putative class action claims against lender and mortgage loan servicer for unjust enrichment and unfair business practices under California law, based on defendants’ imposition of allegedly unlawful and unnecessary fees for default-related services, were not preempted by the National Banking Act (NBA) or its related Office of the Comptroller of Currency (OCC) regulations; claims did not invade the exclusive province of the OCC by interfering with bank’s ability to calculate fees, but instead, fell under generally applicable state laws prohibiting activity likely to mislead the public. 12 U.S.C.A. § 24; 12 C.F.R. §§ 7.4002(a), 7.4002(b)(2)(i)–(iv); 12 C.F.R. section 34.4(a); West’s Ann.Cal.Bus. & Prof.Code § 17200.

0 Case that cites this headnote

 

52Banks and Banking

21Federal Courts

 

Borrowers, as plaintiffs in putative class action against lender and mortgage loan servicer, sufficiently alleged injury-in-fact, as required to have standing to pursue claims for unjust enrichment and unfair business practices under California law, as well as Racketeer Influenced and Corrupt Organizations Act (RICO) claims, based on defendants’ alleged scheme to impose unlawful and unnecessary fees upon borrowers for default-related services; borrowers claimed they suffered injury-in-fact when they paid some or all of the allegedly unlawful fees assessed on their accounts. U.S.C.A. Const. Art. 3, § 2, cl. 1; West’s Ann.Cal.Bus. & Prof.Code § 17200; 18 U.S.C.A. §§ 1962, 1964(c).

0 Case that cites this headnote

 

170BFederal Courts

22Racketeer Influenced and Corrupt Organizations

 

A consumer who has been overcharged can claim “injury to property,” for purposes of establishing standing under Racketeer Influenced and Corrupt Organizations Act (RICO), based on a wrongful deprivation of money, which is a form of property. 18 U.S.C.A. § 1962.

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

23Racketeer Influenced and Corrupt Organizations

 

To state a claim for relief under Racketeer Influenced and Corrupt Organizations Act (RICO), a plaintiff must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. 18 U.S.C.A. § 1962(c).

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

24Racketeer Influenced and Corrupt Organizations

 

When a plaintiff alleges a unified course of fraudulent conduct under Racketeer Influenced and Corrupt Organizations Act (RICO) and relies entirely on that course of conduct as the basis of a claim, the claim is said to be grounded in fraud or to sound in fraud, and the pleading of that claim as a whole must satisfy the particularity requirement of federal rule for pleading fraud. 18 U.S.C.A. § 1962(c); Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

25Racketeer Influenced and Corrupt Organizations

 

Under Racketeer Influenced and Corrupt Organizations Act (RICO), to sufficiently allege conduct by “any person employed by or associated with any enterprise,” plaintiff must allege two distinct entities: a “person” and an “enterprise” that is not simply the same “person” referred to by a different name. 18 U.S.C.A. § 1962(c).

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

26Racketeer Influenced and Corrupt Organizations

 

An “associated-in-fact enterprise,” for purposes of Racketeer Influenced and Corrupt Organizations Act (RICO), is a group of persons associated together for a common purpose of engaging in a course of conduct. 18 U.S.C.A. § 1962(c).

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

27Racketeer Influenced and Corrupt Organizations

 

To constitute an “association-in-fact enterprise” under Racketeer Influenced and Corrupt Organizations Act (RICO), there must be: (1) a common purpose of engaging in a course of conduct; (2) evidence of an ongoing organization, formal or informal; and (3) evidence that the various associates function as a continuing unit. 18 U.S.C.A. § 1962(c).

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

28Racketeer Influenced and Corrupt Organizations

 

Borrowers failed to state Racketeer Influenced and Corrupt Organizations Act (RICO) claim against lender and mortgage loan servicer, since complaint failed to sufficiently allege an association-in-fact enterprise consisting of any entity other than lender’s subsidiaries or affiliates, or that defendants engaged in enterprise conduct for a common purpose distinct from their own affairs. 18 U.S.C.A. § 1962(c).

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

29Racketeer Influenced and Corrupt Organizations

 

The failure to adequately plead a substantive violation of Racketeer Influenced and Corrupt Organizations Act (RICO) precludes a claim for RICO conspiracy. 18 U.S.C.A. § 1962(d).

0 Case that cites this headnote

 

319HRacketeer Influenced and Corrupt Organizations

30Implied and Constructive Contracts

 

Under California law, the required elements of a claim for unjust enrichment are the receipt of a benefit and unjust retention of the benefit at the expense of another.

0 Case that cites this headnote

 

205HImplied and Constructive Contracts

31Implied and Constructive Contracts

 

Borrowers stated claim in putative class action against lender and mortgage loan servicer for unjust enrichment, under California law, by alleging that defendants had collected and retained excessive and unnecessary fees from borrowers related to loan default services; even though written mortgage agreements with borrowers allegedly addressed the imposition of the fees, it was premature, on motion to dismiss, for court to determine whether the contracts precluded borrowers’ claims.

0 Case that cites this headnote

 

205HImplied and Constructive Contracts

32Fraud

 

Borrowers stated claim for fraud, with sufficient particularity required under federal rule, in putative nationwide class action against lender and mortgage loan servicer, by alleging numerous instances where defendants charged borrowers marked-up fees for default-related services, including the specific dates of statements borrowers had received, and that defendants had failed to disclose material information that the amounts demanded on mortgage statements were false, because amounts did not correspond to actual figures outlined in mortgage agreements. Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.

0 Case that cites this headnote

 

184Fraud

Attorneys and Law Firms

Mark Philip Pifko, Daniel Alberstone, Roland K. Tellis, Baron Budd, P.C., Encino, CA, for Plaintiffs.

Peter Obstler, John Anthony Polito, Zachary J. Alinder, Bingham McCutchen, LLP, San Francisco, CA, for Defendants.

Opinion

 

Order Granting in Part and Denying in Part Defendants’ Motion to Dismiss

YVONNE GONZALEZ ROGERS, District Judge.

*1 Named Plaintiffs Diana Ellis, James Schillinger, and Ronald Lazar filed a Class Action Complaint against Defendants J.P. Morgan Chase & Co., J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC (collectively, “Chase” or “Defendants”). (Dkt. No. 1.) Plaintiffs allege Chase engaged in fraudulent practices by charging marked-up or unnecessary fees in connection with Defendants’ home mortgage loan servicing businesses. This action was filed separately as to these Defendants pursuant to a previous order of the Court. (See Bias, et al. v. Wells Fargo & Co., et al., Case No. 12–cv–00664–YGR [Dkt. No. 59].)

Defendants filed a Motion to Dismiss Plaintiffs’ Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) on August 21, 2012, seeking dismissal of the Complaint with prejudice. (Dkt. No. 6.) On September 4, 2012, Plaintiffs filed their Opposition to the Chase Defendants’ Motion to Dismiss Plaintiffs’ Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). (Dkt. No. 11.) Chase filed their Reply in Support of Motion to Dismiss Complaint on September 11, 2012. (Dkt. No. 14.) The Court held oral argument on November 6, 2012. (Dkt. No. 21.)

Having carefully considered the papers submitted and the pleadings in this action, oral argument at the hearing held on November 6, 2012, and for the reasons set forth below, Defendants’ Motion to Dismiss:

• Is Denied based on a lack of subject matter jurisdiction pursuant to 12 U.S.C. section 1818(i) of the National Bank Act;

• Is Denied based on the doctrines of primary jurisdiction and equitable abstention;

• Is Denied based on preemption by the National Bank Act;

• Is Denied based on a lack of standing under Article III, the California Business and Professions Code section 17200, et seq., and the Racketeer Influenced and Corrupt Organizations Act (“RICO”);

• Is Granted as to the second and third claims for violations of RICO and conspiracy to violate RICO With Leave to Amend; and

• Is Denied as to the fourth and fifth claims for unjust enrichment and fraud, respectively.

I. Factual and Procedural Background

Plaintiffs allege that Defendants have engaged and continue to engage in fraudulent practices in connection with their home mortgage loan servicing business.1 (Compl.¶ 2.) Defendants allegedly adopted a uniform practice designed to maximize fees assessed on delinquent borrowers’ accounts. (Id. ¶ ¶ 2–4.) As part of the scheme, Defendants “formed an enterprise with their respective subsidiaries, affiliates, and ‘property preservation’ vendors, … unlawfully mark[ed] up default-related fees charged by third parties[,] and assess[ed] them against borrowers’ accounts” for an undisclosed profit. (Id. ¶ 9.) Specifically, “Defendants order[ed] default-related services from their subsidiaries and affiliated companies, who, in turn, obtain[ed] the services from third-party vendors.” (Id. ¶ 40 .) The third-party vendors charged Defendants for their services, but Defendants “assess[ed] borrowers a fee that [wa]s significantly marked-up from the third-party vendors’ actual fees for the services .” (Id.) Through the unlawful enterprise, Defendants marked-up fees charged by vendors, “often by 100% or more,” and failed to disclose the mark-ups and hidden profits to borrowers. (Id. ¶ 4.)

*2 In addition to marked-up fees, Defendants had a “practice of routinely assessing fees … even when they [we]re unnecessary.” (Compl.¶ 4.) Plaintiffs allege that: “even if the property inspections were properly performed and actually reviewed by someone at the bank, Chase’s continuous assessment of fees for these inspections on borrowers accounts [sic ] [wa]s still improper because of the frequency with which they [we]re performed. If the first inspection report show[ed] that the property [wa]s occupied and in good condition, it [would be] unnecessary and inappropriate for Chase’s system to automatically continue to order monthly inspections. Nothing in the reports justifie[d] continued monitoring.” (Id. ¶ 52.)

Plaintiffs allege that their mortgage contracts disclosed that Defendants will pay for default-related services when necessary, which would be reimbursed by borrowers, but “[n]owhere [wa]s it disclosed to borrowers that the servicer may mark-up the actual cost of those services to make a profit, nor d[id] it permit such fees to be assessed on borrowers’ accounts when they [we]re unnecessary.” (Compl.¶ 42.) Defendants identified the marked-up fees as “Miscellaneous Fees,” “Corporate Advances,” “Other Fees,” or “Advances” on mortgage statements. (Id. ¶¶ 10, 49 & 50.) Plaintiffs allege that the marked-up fees included Broker’s Price Opinion fees (“BPOs”), appraisal fees, and inspection fees. (Id. ¶¶ 30, 43–45, 49–50 & 52.) A “significant number” of BPOs were “ordered by Chase’s Bankruptcy Processing team and Collection Department in San Diego, California.” (Id. ¶ 49.)

Plaintiffs also allege that Defendants used a sophisticated home loan management program provided by Fidelity National Information System, Inc. called Mortgage Servicing Package (the “Program”). (Compl.¶¶ 36.) The Program “automatically implement[ed] decisions about how to manage borrowers’ accounts based on internal software logic” and imposed the default-related fees when a loan was past due. (Id. ¶ 37.) The parameters and guidelines for the Program were inputted by Defendants and “designed by the executives” at J.P. Morgan Chase & Company and J.P. Morgan Chase Bank, N.A. (Id. ¶¶ 35–37.) “Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. assess[ed] fees for default-related services on borrowers accounts through these systems.” (Id. ¶ 37.) In addition, Plaintiffs allege that Defendants use a “Bankruptcy Work Station” platform “infused with computer logic to manage a loans [sic ] during pending bankruptcy” and a program called “FORTRACS” which “automate[d] default management processing, decisionmaking and documentation of a loan.” (Id. ¶ 38.)

The Complaint alleges “Chase” serviced the mortgages. (Compl. ¶¶ 61, 64 & 67.) As to Plaintiff Diana Ellis, Chase assessed $154.24 for “Miscellaneous Fees” on a July 1, 2011 Mortgage Loan Statement. (Id. ¶ 62.) Plaintiff Ellis alleges this fee was marked-up and unnecessary, and that “over the history of her loan, her account was assessed numerous other unlawful and unnecessary fees for default-related services.” (Id.) Plaintiff Ellis alleges on information and belief that she “paid some or all of the unlawful fees assessed on her account.” (Id.) As to Plaintiff James Schillinger, Chase continually assessed fees for default-related services, including property inspections, on his account. (Id. ¶ 65.) He alleges such fees were charged on dates including October 18, 2011, October 28, 2011, and February 18, 2012. Plaintiff Schillinger alleges that he “paid some or all of the unlawful fees assessed on his account.” (Id.) As to Plaintiff Ronald Lazar, Chase continually assessed fees, including fees for property inspections, on his account in 2010 and 2011. (Id. ¶ 68.) The fees were identified as “Miscellaneous Fees.” (Id.) In addition, Chase sent Plaintiff Lazar an “Acceleration Warning” dated June 2, 2011, in which it demanded he pay $86.80 in “Other Fees” and $28.00 in “Advances.” The Acceleration Warning letter stated that “Other Fees and Advances include those amounts allowed by your Note and Security Instrument.” (Id.) Plaintiff Lazar alleges that he “paid some or all of the unlawful fees assessed on his account. (Id. ¶ 69.) As to each Plaintiff, they allege they cannot provide details of each and every fee assessed because Defendants maintain the complete accounting. (Id. ¶¶ 62, 65 & 69.)

*3 Plaintiffs allege that “Defendants are under a continuous duty to disclose to [them and class members] the true character, quality, and nature of the fees they assess on borrowers’ accounts.” (Compl .¶ 71.) Chase “actively concealed the true character … of the[ ] assessment of marked-up fees against borrowers’ accounts” and borrowers “reasonably relied upon Defendants’ knowing, affirmative, and active concealment.” (Id.) In addition, Chase “falsely represent[ed] on statements provided to borrowers that ‘Other Fees’ and ‘Advances,’ which are charges for BPOs and property inspections, include ‘amounts allowed by [borrowers’] Note and Security Instrument.’ “ (Id. ¶ 53 (first alteration supplied).)

With respect to damages, borrowers allege harm resulting from: (i) charges for default-related services accumulated over time such that borrowers were driven further into default and/or ensured to stay in default; (ii) damage to credit scores; (iii) the inability to obtain favorable interest rates on future loans because of their default; and (iv) in some cases, foreclosure. (Compl.¶¶ 55–59.)

On the basis of the allegations summarized above, Plaintiffs bring this action on behalf of two sub-classes. The first sub-class is a nationwide class consisting of:

All residents of the United States of America who had a loan serviced by Chase Home Finance LLC at any time, or a loan serviced by J.P. Morgan Chase Bank, N.A. from May 1, 2011 continuing through the date of final disposition of this action, and whose accounts were assessed fees for default-related services, including Broker’s Price Opinions, and inspection fees, at any time, continuing through the date of final disposition of this action.

(Compl. ¶ 76 [the “Nationwide Sub–Class”].) The second sub-class consists of:

All residents of the State of California who had a loan serviced by Chase Home Finance LLC at any time, or a loan serviced by J.P. Morgan Chase Bank, N.A. from May 1, 2011 continuing through the date of final disposition of this action, and whose accounts were assessed fees for default-related services, including Broker’s Price Opinions, and inspection fees, at any time, continuing through the date of final disposition of this action.

(Id. ¶ 76 [the “California Sub–Class”].)

The Complaint alleges five claims: first, a violation of California Business and Professions Code section 17200, et seq. (“UCL” or “Section 17200”) based on the allegedly unlawful, unfair, and fraudulent business practices summarized above.2 (Compl.¶¶ 90–102.) Specifically, Defendants omitted a true itemization that identified the nature of each fee and “conceal[ed] the fact the category identified as ‘Miscellaneous Fees’ reflect[ed] marked-up and/or unnecessary fees that were never incurred by Defendants.” (Id. ¶ 93.) Plaintiff Ellis and California borrowers reasonably relied on Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A. and believed the charges were valid and that they were obligated to pay the amounts specified in communications with those Defendants. (Id. ¶¶ 93 & 99.) The failure to disclose the fact that the purportedly owed amounts had been marked-up or that they were unnecessary violated the disclosures in the mortgage agreements. (Id. ¶ 94.) In addition, Defendants lulled borrowers into a sense of trust and dissuaded them from challenging the unlawful fees by telling them “in statements and other documents from Chase Home Finance LLC and J.P. Morgan Chase Bank, N.A., that such fees are ‘allowed by [borrowers’] Note and Security Instrument.’ “ (Id. ¶ 99 (alteration in original).) Plaintiff Ellis alleges that had she known the true nature of the mark-ups or unnecessary fees, she would have disputed them and not paid them. (Id. ¶ 99.)

*4 Plaintiffs’ second claim alleges a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. section 1962(c). (Compl.¶¶ 103–124.) The alleged “enterprise” consisted of: (i) J.P. Morgan Chase & Company, J.P. Morgan Chase Bank, N.A., and Chase Home Finance LLC, including their directors, employees, and agents; (ii) their subsidiaries, affiliated companies, and intercompany divisions; and (iii) their “property preservation” vendors3 and their real estate brokers who provide BPOs. (Id. ¶¶ 2, 4, 9, 33, 46 & 106.) This “association-in-fact” enterprise is an “ongoing, continuing group … of persons and entities associated together for the common purpose of limiting costs and maximizing profits by fraudulently concealing assessments for unlawfully marked-up and/or unnecessary fees for default-related services on borrowers’ accounts.” (Id. ¶ 107; see id. ¶ 46.) The enterprise members—while “systematic[ally] link[ed]” through contractual and financial ties—act according to policies established by Chase executives but also “have an existence separate and distinct from the enterprise.” (Compl.¶¶ 108–109.) Plaintiffs allege that Defendants’ scheme constituted “racketeering activity” based on acts of mail and wire fraud (18 U.S.C. sections 1341 and 1343), through which the enterprise “provided mortgage invoices, loan statements, payoff demands, or proofs of claims to borrowers, demanding that borrowers pay fraudulently concealed marked-up or unnecessary fees for default-related services, such as BPOs or property inspections.” (Id. ¶¶ 110–112.) Defendants made “false statements” using the mail and wires, including telling borrowers in statement and other documents that the fees were “allowed by [their] Note[s] and Security Instrument[s].” (Id. ¶¶ 114–115.) Defendants also accepted payments through the mail and wires. (Id. ¶ 112.) Plaintiffs seek treble damages under RICO.

Plaintiffs’ third claim alleges a conspiracy to violate RICO. (Compl.¶¶ 125–129.) Defendants allegedly conspired to violate RICO as summarized above, were aware of the nature and scope of the enterprise’s unlawful scheme, and agreed to participate in said scheme. Plaintiffs’ fourth claim alleges that Defendants have been unjustly enriched by their wrongful acts and omissions of material fact. (Id. ¶¶ 130–139.) Plaintiffs seek restitution and an order disgorging all profits obtained by Defendants. (Id. ¶ 139.) Plaintiffs’ fifth claim alleges fraud as summarized above. (Id. ¶¶ 140–152.)

In the pending Motion, Defendants make five primary arguments. (Mot. at 1.) First, this Court lacks subject matter jurisdiction of this action pursuant to 12 U.S.C. section 1818(i) of the National Bank Act based on a consent order entered between J.P. Morgan Chase Bank, N.A. and the United States Department of Treasury’s Office of the Comptroller of Currency (“OCC”) on April 13, 2011 (“Consent Order”). Second, the Court should abstain from taking jurisdiction under the doctrines of primary jurisdiction and/or equitable abstention. Third, Plaintiffs’ claims are preempted by the National Bank Act. Fourth, Plaintiffs lack standing because they have not suffered injury-in-fact. Fifth, Plaintiffs fail to state a claim upon which relief can be granted. Defendant J.P. Morgan Chase & Co. also seeks dismissal because it is a non-operating holding corporation that “could not conceivably have taken any action ascribed to ‘Chase’ or the ‘Chase Enterprise.’ “ (Mot. at 25.)

*5 Plaintiffs oppose all of these arguments and request leave to amend if the Court dismisses any claim. The Court addresses each claim in turn.

II. Jurisdictional Arguments Under Fed.R.Civ.P. 12(b)(1)

1 Both Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) are raised in this Motion. Although there is no mandatory “sequencing of jurisdictional issues,” jurisdictional questions ordinarily must precede merits determinations in dispositional order. Sinochem Int’l. Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 431, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) (citing Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999)). The Court therefore proceeds first with its jurisdictional analysis of the pending Motion under Rule 12(b)(1). Those issues include the first three of Defendants’ five arguments referenced above, namely whether: (1) 12 U.S.C. section 1818(i) divests this Court of subject matter jurisdiction; (2) the Court should abstain from taking jurisdiction under the doctrines of primary jurisdiction and/or equitable abstention; and (3) Plaintiffs’ claims are preempted by the National Bank Act. Although Defendants argue Plaintiffs’ lack of standing under both Rules 12(b)(1) and 12(b)(6), the Court will address standing in the Rule 12(b)(6) portion of this Order.

A. Legal Standard Under Fed.R.Civ.P. 12(b)(1)

23 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) tests the subject matter jurisdiction of the Court. See, e.g., Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039–40 (9th Cir.2003), cert. denied, 541 U.S. 1009, 124 S.Ct. 2067, 158 L.Ed.2d 618 (2004). When subject matter jurisdiction is challenged, the burden of proof is placed on the party asserting that jurisdiction exists. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir.1986) (holding that “the party seeking to invoke the court’s jurisdiction bears the burden of establishing that jurisdiction exists”). Accordingly, the court will presume lack of subject matter jurisdiction until the plaintiff proves otherwise in response to the motion to dismiss. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 376–78, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).

4567 Motions under Rule 12(b)(1) may be either “facial” or “factual .” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004) (citing White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000)). In a facial attack, the movant argues that the allegations of a complaint are insufficient to establish federal jurisdiction. Id. By contrast, a factual attack or “speaking motion” disputes the allegations that would otherwise invoke federal jurisdiction. Id. In resolving a factual attack, district courts may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Id. (citing Savage, 343 F.3d at 1039 n. 2). Courts consequently need not presume the truthfulness of a plaintiff’s allegations in such instances. Id. (citing White, 227 F.3d at 1242). Indeed, “[o]nce the moving party has converted a motion to dismiss into a factual motion by presenting affidavits or other evidence properly before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Id. (quoting Savage, 343 F.3d at 1039 n. 2). Further, the existence of disputed material facts will not preclude a trial court from evaluating for itself the merits of jurisdictional claims, except where the jurisdictional and substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution of factual issues going to the merits. Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir.1983) (citing Thornhill Publ’g Co. v. Gen. Tel. Corp., 594 F.2d 730, 733–35 (9th Cir.1979)).

*6 The Court treats Defendants’ Motion as a factual attack on subject matter jurisdiction and therefore considers all admissible evidence in the record.

B. Request for Judicial Notice

8 Fed.R.Evid. 201 allows a court to take judicial notice of “matters of public record,” but not facts that may be subject to a reasonable dispute. Lee v. City of Los Angeles, 250 F.3d 668, 689–90 (9th Cir.2001). Facts that may be judicially noticed must be “generally known within the trial court’s territorial jurisdiction” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b).

The parties have filed numerous requests for judicial notice (“RJN”) in connection with this Motion. Defendants seek judicial notice of eight documents in support of their Motion based on Fed.R.Evid. 201(b). (Defendants’ Request for Judicial Notice in Support of Motion to Dismiss Complaint [Dkt. No. 7] [“Motion RJN”].)4

Defendants seek judicial notice of four additional documents with their Reply based on Fed.R.Evid. 201. (Defendants’ Request for Judicial Notice in Support of Reply in Support of Motion to Dismiss Complaint [Dkt. No. 15] [“Reply RJN”].) Defendants contend these documents consist of administrative publications available on government websites and/or are opinions or pleadings capable of accurate and ready determination by resort to official court files.5

Plaintiffs seek judicial notice of three exhibits in conjunction with their Opposition based on Fed.R.Evid. 201. (Declaration of Roland Tellis in Support of Plaintiffs’ Opposition to Chase Defendants’ Motion to Dismiss Plaintiffs’ Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) [Dkt. No. 11–1] [“Opposition RJN”].)6 Each document is publicly-available.

No objections to the above RJNs were filed with the Court, nor did the parties raise any objection at oral argument when asked by the Court. Finally, pursuant to an Order of this Court, the parties have filed a Joint Stipulation for Submission and Judicial Notice of Supplemental Exhibit. (Dkt. No. 30.) Exhibit A is the Amendment to April 13, 2011 Consent Order, dated February 28, 2013.

It does not appear to the Court that, with regard to certain exhibits, the parties have meaningfully attempted to explain what facts are subject to judicial notice. Fed.R.Evid. 201(b). Moreover, the Court does not believe that all of the documents filed by the parties are necessary to the Court’s determination on this Motion. However, based on the lack of objection by the parties, the Court Grants judicial notice of the requested documents for determination of this Motion to the extent that the documents consist of court documents, OCC orders or stipulations, or formal publications of the OCC. The Court takes judicial notice of the fact that other documents are publicly-available in the form presented to the Court, but not of any “facts” therein unless otherwise specified by this Order.

C. First Jurisdictional Argument: Applicability of 12 U.S.C. Section 1818(i) (“Section 1818(i)”)

*7 Defendants argue that Section 1818(i) divests this Court of subject matter jurisdiction because the conduct alleged and relief sought is “subsumed, regulated, and governed entirely by the Consent Order.” (Mot. at 2.)

i. Scope of the Consent Order

On April 13, 2011, J.P. Morgan Chase Bank, N.A. consented to the issuance of a Consent Cease and Desist Order by the OCC. (Motion RJN, Ex. A (Consent Order).) The Consent Order issued after an “interagency horizontal review of major residential mortgage servicers” and “examination of the residential real estate mortgage foreclosure processes of JPMorgan Chase Bank, N.A., … (‘Bank’).” Consent Order at 1.7 The OCC “identified certain deficiencies and unsafe or unsound practices in residential mortgage servicing and in the Bank’s initiation and handling or foreclosure proceedings.” Id. The “unsafe and unsound banking practices” identified by the OCC were found to have been “[i]n connection with certain foreclosures of loans in [the Bank’s] residential mortgage servicing portfolio.” Id., Art. I §§ 2–3. Without admitting or denying the OCC’s findings, the Bank “committed to taking all necessary and appropriate steps to remedy the deficiencies and unsafe or unsound practices identified by the OCC, and to enhance the Bank’s residential mortgage servicing and foreclosure processes.” Id. at 1–2. The Consent Order stated that it was intended to and shall be construed as a “final order issued pursuant to 12 U.S.C. [section] 1818(b).” Id., Art. XIII § 8.

The Bank agreed to submit to the OCC a comprehensive action plan describing actions necessary to achieve compliance with the Consent Order. Consent Order, Art. III § 1. Once accepted by the OCC, the Bank was prohibited from “tak [ing] any action that would constitute a significant deviation from, or material change to, the requirements of the Action Plan or [the Consent Order], unless and until the Bank [receives] a prior written determination of no supervisory objection from the Deputy Comptroller.” Id. The Action Plan sought to “achieve[ ] and maintain[ ] effective mortgage servicing, foreclosure, and loss mitigation activities …, as well as associated risk management, compliance, quality control, audit, training, staffing, and related functions.” Id., Art. III § 2 (defining “loss mitigation” to include “activities related to special forbearances, modifications, short refinances, short sales, cash-for-keys, and deeds-in-lieu of foreclosure”).

Among other things, the Bank agreed to implement a Compliance Program to ensure that mortgage servicing and foreclosure operations, including loss mitigation (as defined above) and loan modification, complied with all legal requirements, OCC supervisory guidance, and requirements of the Consent Order. Id., Art. IV § 1. The Consent Order explicitly required that the Compliance Program include, among other things: (i) policies and procedures to conduct, oversee, and monitor mortgage servicing, loss mitigation, and foreclosure operations; (ii) processes to ensure that the Bank has properly documented ownership of the promissory note and mortgage or deed of trust at all stages of foreclosure and bankruptcy litigation, and that all affidavits filed in foreclosure proceedings are properly executed and notarized; (iii) “processes to ensure that all fees, expenses, and other charges imposed on the borrower are assessed in accordance with the terms of the underlying mortgage note, mortgage, or other customer authorization with respect to the imposition of fees, charges, and expenses, and in compliance with all applicable Legal Requirements and OCC supervisory guidance”; and (iv) ongoing testing for compliance with applicable legal requirements and OCC supervisory guidance. Id., Art. IV § 1(a)-(q). Additional policies were to be adopted by the Bank regarding “outsourcing foreclosure or related functions, including Loss Mitigation and loan modification, and property management functions for residential real estate acquired through or in lieu of foreclosure” to third-party agents, contractors, or consulting or law firms. Id., Art. V § 1.

*8 Article VII of the Consent Order (entitled Foreclosure Review) further required the Bank to retain an independent consultant to conduct an independent review of certain residential foreclosure actions or proceedings. Recently, the OCC and Bank agreed to modifications to the Consent Order, resulting in the Amendment to April 13, 2011 Consent Order. (Dkt. No. 30–1 [“Amendment”] at 1.) Specifically, the Amendment superseded Article VII of the previous Consent Order relating to the Foreclosure Review.8 The Amendment recognized that the prior order “required the Bank … to retain an independent consultant (the ‘IC’) to conduct an independent review of certain residential mortgage loan foreclosure actions or proceedings for borrowers who had a pending or completed foreclosure on their primary residence any time from January 1, 2009 to December 21, 2010 (the ‘In–Scope Borrower Population’), the purposes of which were set forth in paragraph 3 of Article VII of the 2011 Consent Order (the ‘Independent Foreclosure Review’).”9 Amendment at 1–2. The Amendment acknowledged that the Bank had taken steps to comply with their obligations under Article VII of the Consent Order. Id. at 2.10

Under the Amendment, the Bank agreed to: (i) make a cash payment to a qualified settlement fund for distribution to the In–Scope Borrower Population in accordance with a distribution plan developed by the OCC and the Board of Governors of the Federal Reserve System in their discretion11; and (ii) take other loss mitigation and other foreclosure prevention actions.12 Amendment at 2. “[T]he amount of any payments to borrowers made pursuant to th[e] Amendment to the Consent Order do[es] not in any manner reflect specific financial injury or harm that may have been suffered by borrowers receiving payments, except as expressly provided for in th[e] Amendment to the Consent Order, nor do the payments constitute either an admission or a denial by the Bank of any wrongdoing or a civil money penalty under 12 U.S.C. [section] 1818(i).” Amendment at 2–3; see id., Art. V § 1 (OCC agreed not to initiate further enforcement actions against Bank and subsidiaries with respect to findings in Article I of Consent Order, the matters addressed in Article VII of the Consent Order (Foreclosure Review), and “any other past mortgage servicing or foreclosure-related practices that are addressed by the 2011 Consent Order through the execution date of this Amendment to the Consent Order”).

As to the above-referenced payments by the Bank, the Amendment explicitly states that:

In no event shall the Bank request or require any borrower to execute a waiver of any claims against the Bank (including any agent of the Bank) in connection with any payment or Foreclosure Prevention assistance pursuant to this Amendment to the Consent Order. However, nothing herein shall operate to bar the Bank from asserting in the future in any separate litigation, or as part of a settlement related to the Bank’s foreclosure and servicing practices, any right that may exist under applicable law to offset the amounts received by a borrower through the distribution process set forth above. Nothing herein shall operate to amend or modify in any respect any preexisting settlement between the Bank or an affiliate thereof and a borrower in the In–Scope Borrower Population.

*9 Amendment, Art. V § 3.

ii. Jurisdictional Framework Under Section 1818(i)

Section 1818(i)(1) of Title 12 of the United States Code provides in full:

The appropriate Federal banking agency may in its discretion apply to the United States district court, or the United States court of any territory, within the jurisdiction of which the home office of the depository institution is located, for the enforcement of any effective and outstanding notice or order issued under this section or under section 1831 o or 1831p–1 of this title, and such courts shall have jurisdiction and power to order and require compliance herewith; but except as otherwise provided in this section or under section 1831 o or 1831p–1 of this title no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under any such section, or to review, modify, suspend, terminate, or set aside any such notice or order.

(Emphasis supplied.)

As recently explained by a Central District of California court in an action against Chase Home Finance LLC and related entities, Section 1818(i)(1) contains two parts: both a jurisdiction-granting clause and jurisdiction-divesting clause. Rex v. Chase Home Finance LLC, 905 F.Supp.2d 1111, 1124–26(C.D.Cal.2012) (examining whether Section 1818(i) divested court of jurisdiction based on same Consent Order as here, where Chase defendants allegedly failed to release plaintiffs from obligation to pay short sale deficiencies despite promises to do so).

In its analysis, the Rex court found it necessary to consider other provisions of Section 1818 such that the jurisdictional bar in sub-section (i) could be read in the context of the entire statute. Id. at 1125–26 (citing In re JPMorgan Chase Mortg. Modification Litig., 880 F.Supp.2d 220, 231 (D.Mass.2012) [“In re JP Morgan Chase ”] ). Specifically, it looked to Section 1818(c)(2), which provides that a recipient of a cease-and-desist order “may seek an injunction in district court restraining enforcement of the order,” and Section 1818(h)(2), which “authorizes court of appeals review of final [federal banking agency] orders.” Rex, 905 F.Supp.2d at 1126 (alteration in original). The court ultimately concluded that because the judicial mechanisms of Section 1818 focused on the ability of either the federal banking agency or recipient of a cease-and-desist order to obtain review of the order, it was “clear that the Jurisdiction–Divesting Clause was ‘not intend[ed] to … prohibit non-parties from exercising their separate remedies at law.” Id. at 1126 (quoting In re JPMorgan Chase, 880 F.Supp.2d at 231) (alterations in original). Instead, “the primary purpose of [Section 1818] is to prevent federal courts from usurping the OCC’s power to enforce its own consent orders against parties to the orders.” Rex, 905 F.Supp.2d at 1126 (quoting In re JPMorgan Chase, 880 F.Supp.2d at 231) (emphasis and alteration in original). Also significant to both the In re JP Morgan Chase and Rex courts was the fact that Section 1818 does not otherwise provide for a non-party to a consent order to challenge findings made therein. In re JPMorgan Chase, 880 F.Supp.2d at 232 (jurisdictional bar not meant to displace non-party’s right to present claims to federal court); Rex, 905 F.Supp.2d at 1126.

iii. Analysis

*10 Defendants argue Plaintiffs’ claims would “necessarily affect the Consent Order” and, therefore, the Court is expressly precluded under Section 1818(i) from exercising jurisdiction. (Mot. at 2–3 & 10.) Where judicial adjudication and award of relief would affect the OCC’s administration, compliance, enforcement of a Consent Order, Section 1818(i) prohibits jurisdiction. (Id. at 3.) For this proposition, Defendants rely primarily on two district court cases, Bakenie v. JPMorgan Chase Bank, N.A., No. SACV 12–60 JVS (MLGx), 2012 WL 4125890 (C.D.Cal. Aug. 6, 2012) and American Fair Credit Ass’n v. United Credit Nat’l Bank, 132 F.Supp.2d 1304 (D.Colo.2001).

In Bakenie, the court analyzed the same April 13, 2011 Consent Order. There, plaintiffs alleged damage arising from improper notarial practices, specifically that “various foreclosure documents were acknowledged by non-notaries, outside of the presence of the signers, without verification of the signer’s identification, and without proper recordation in a sequential journal.” 2012 WL 4125890, at *1 (quoting First Am. Compl.). The court agreed that these particular foreclosure-related claims affected the enforcement of the Consent Order. Id. at * 3; see American Fair Credit Ass’n, 132 F.Supp.2d at 1306–07, 1312 (Section 1818(i) divested court’s jurisdiction over claims brought by non-party to consent orders because state law claims sought money damages from party to consent order in direct contravention of the order).

Under Bakenie and American Fair Credit Ass’n, Defendants contend that the OCC has raised and redressed the same default-related fees that Plaintiffs here challenge. (Mot. at 12.) Defendants claim they are investigating and remediating those claims, including determining whether: (i) fees charged were permissible, customary, and reasonable under terms of the loan documents and applicable state and federal law; (ii) the frequency of fees charged on delinquent borrowers’ accounts (including BPOs) was excessive under the loan documents and applicable law; and (iii) errors, misrepresentations, or other deficiencies resulted in financial injury to borrowers. (Id. (citing Consent Order, Art. VII §§ 3(e)-(f), (h)).) Defendants argue that this action will require the Court to determine what the “actual cost” of default-related services is, whether what was charged was necessary or reasonable, and whether the failure to disclose the actual cost versus the charged cost was a material omission constituting fraud. (Mot. at 13.) Thus, if the Court finds that the fees were unreasonable but the independent review finds the opposite, this would “affect” Defendants’ ability to comply “with the OCC or the Court.” (Id.)13 Finally, Defendants emphasize that the appropriate course for Plaintiffs to seek remedy is under the Consent Order, which makes millions of dollars of relief available to borrowers. (Mot. at 14.)

*11 Plaintiffs counter with four primary arguments. First, the Consent Order targeted JP Morgan Chase Bank’s foreclosure practices only and required creation of a foreclosure compliance program and improvements the administration of foreclosure activities. An independent review under the Consent Order separately required an examination of pending foreclosures between January 1, 2009 and December 31, 2010. (Opp. at 1.) Plaintiffs argue that independent consultant’s findings regarding whether fees previously charged (including BPOs) were permissible, reasonable, and/or assessed too frequently were strictly limited to the foreclosure context. (Id. (citing Consent Order, Art. VII).) Importantly, Plaintiffs assert this review did not contemplate or address the fraud alleged here. (Opp. at 2.)

Second, Plaintiffs argue that the OCC explicitly intended that borrowers receiving compensation under the Consent Order retain the right to pursue other legal remedies regarding their mortgages. (Opp. at 2; see Opposition RJN, Ex. 2 (“question and answer” portion of OCC website regarding Consent Order); Amendment, Art. V § 3 (preservation of borrowers’ rights in the Amendment).)

Third, Section 1818(i) does not divest the Court from exercising “parallel or co-extensive subject matter jurisdiction.” (Opp. at 4.)14 It only narrowly prohibits a court from “modifying or countermanding” OCC orders. Plaintiffs argue that Defendants provide no authority in which a court declined jurisdiction over a class action, as here, where the parties did not expressly seek to set aside or modify a federal banking order or to enjoin regulatory proceedings. (Id.) In addition, Plaintiffs distinguish Bakenie because the challenges to Chase’s foreclosure and notarial practices there were “squarely covered” by the Consent Order. (Opp. at 5.) Plaintiffs instead rely on In re JP Morgan Chase and the district court’s holding that Congress did not intend to prohibit nonparties from exercising separate remedies even where the OCC and a defendant have entered into a consent order. (Id. at 6.)

Fourth, Plaintiffs argue this action would not “affect” the Consent Order under Section 1818(i) because they “do not seek any remedies that are inconsistent with the Consent Order” nor do they seek to set aside the order. (Opp. at 7.) Plaintiffs point out that Defendants, despite reiterating that they are prohibited from significantly deviating or materially changing their actions under the Consent Order, have failed to articulate how this would occur if this action were to proceed. (Id.) By analogy, Plaintiffs refer to the National Mortgage Settlement Consent Judgment between the federal government and state attorneys general and five major financial institutions, including J.P. Morgan Chase Bank, N.A. United States of America v. Bank of America Corp., et al., No. 1:12–cv–361 (D.D.C. Apr. 4, 2012) (“NMS Consent Judgment”); see Opposition RJN, Ex. 3 and Reply RJN, Ex. B. With respect to that action, Chase did not assert a lack of subject matter jurisdiction even though it agreed to comply with certain standards for mortgage servicing, including as to third-party servicing fees.15 Plaintiffs reason that if the NMS Consent Judgment Section was entered, Section 1818(i) must not really divest federal courts of jurisdiction. (Opp. at 8.)16

*12 9 The Court finds that Section 1818(i) does not divest this Court of jurisdiction for four reasons. First, the deficiencies and unsafe or unsound practices identified by the OCC were primarily, if not entirely, devoted to foreclosures. Importantly, Defendant’s independent consultant, Deloitte & Touche LLP, was only charged with making determinations regarding fees and their frequency (including BPOs) with respect to a defined group of borrowers—those active in foreclosure between January 1, 2009 and December 31, 2010. (Consent Order, Art. VII §§ 1 & 3(e)-(f); Motion RJN, Ex. C (Interim Status Report: Foreclosure–Related Consent Orders dated November 2011) at 5 (sought to provide relief to borrowers who “suffered financial injury as a result of [the Bank’s] errors, misrepresentations, or other deficiencies in foreclosure actions …”); Motion RJN, Ex. E (Interim Status Report: Foreclosure–Related Consent Orders dated June 2012) at 7; Motion RJN, Ex. G (Interagency Review of Foreclosure Policies and Practices dated April 2011) at 1–2 (review “did not include a complete analysis of the payment history of each loan prior to foreclosure or the potential mortgage-servicing issues outside of the foreclosure process”).) The Consent Order did not require remediation to borrowers for financial injuries outside of the scope of the review. (See November 2011 Interim Status Report at 5.) Moreover, Deloitte assumed that fraud of the nature alleged here did not occur. (Reply RJN, Ex. A (Engagement Letter) at 15 (assuming that fees permissible under state laws or Fannie Mae guidelines were reasonable and not excessive, services were “actually rendered” if there was an invoice, and “all fees and penalties were assessed in accordance with the applicable loan documents”).)17 As such, the steps taken to remedy the deficiencies were not intended to address a fraudulent scheme, as alleged here.

Second, the Complaint on its face does not seek to “review, modify, suspend, terminate, or set aside” the Consent Order. See Section 1818(i).

Third, the recent Amendment to the Consent Order indicates that the OCC did not intend for third-parties to waive their rights by requesting a review of their mortgages.18 From this express reservation, the Court must conclude that third-party actions were not intended to be barred by the Consent Order. This finding is consistent with recent cases addressing the same jurisdictional arguments under Section 1818(i) asserted by the same Defendants over the same Consent Order.

Fourth, even if the Court assumes that Section 1818(i) or the Consent Order somehow intended to divest federal courts’ jurisdiction over third-party actions, Defendants have not sufficiently articulated how the outcome of this action “necessarily affects” the OCC’s enforcement of the Consent Order. Defendants repeatedly assert that Plaintiffs should not be permitted to “double down on the Consent Order” but fail to explain how adjudication of this action would actually “review, modify, suspend, terminate, or set aside” the Consent Order itself, nor how it would “affect” the OCC’s enforcement in the first place. The “double down” argument contrasts the explicit provisions in the Amendment that: (i) borrowers shall not be required to execute a waiver of their claims against the Bank “in connection with any payment or Foreclosure Prevention assistance pursuant to th[e] Amendment”; and (ii) the Bank shall not be barred from asserting in separate litigation “any right that may exist under applicable law to offset the amounts received by a borrower through the distribution process set forth [in the Amendment].” (Amendment, Art. V § 3 (emphasis supplied); see June 2012 Interim Status Report at 6 (“OCC will not permit servicers to require borrowers to sign a waiver of their ability to pursue claims against the servicer in order to receive compensation under the Independent Foreclosure Review”).). It is unclear how Plaintiffs’ action “necessarily affect[s] or “obstruct[s] the OCC’s efforts to provide relief” where an offset would prohibit a double recovery by borrowers in the class. (Mot. at 2:2–5; see id. at 2:22–23, 3:8–11, 13:4–6 & 13:18–20.) Defendants have not provided any authority or evidence that an overlap of borrowers who may require offset is sufficient to divest this Court of jurisdiction.

*13 The primary cases relied upon by Defendants are inapposite and do not support a lack of jurisdiction. Bakenie is distinguishable from the case at hand because the alleged improper practices related to “improper notarial practices” by plaintiffs whose properties were subjected to foreclosure. 2012 WL 4125890, at *1. Unlike this case, the OCC made specific findings relating to notarial practices as to foreclosed borrowers. Consent Order, Art. I § 2(a)-(b). American Fair Credit does not control either. There, the consent orders expressly prohibited a payment of money to the plaintiff; here, a “direct contravention” of the Consent Order or Amendment has not been identified, particularly in light of the offset provision in the Amendment. See American Fair Credit, 132 F.Supp.2d at 1312.

In sum, the Court agrees with the well-reasoned analysis of Section 1818(i) by the district courts in Rex and In re JPMorgan Chase. This section itself seeks to ensure that federal courts do not interject themselves into the relationship between the OCC and parties when it comes to enforcement or review of a consent order. Rex, 905 F.Supp.2d at 1126; In re JPMorgan Chase, 880 F.Supp.2d at 231–32. The statute at large does not seek to prohibit third-parties from asserting claims, nor did the Consent Order itself purport to do so.

For the foregoing reasons, the Court Denies Defendant’s Motion to Dismiss based on the argument that Section 1818(i) divests the Court of subject matter jurisdiction.

D. Second Jurisdictional Argument: Doctrine of Primary Jurisdiction and Equitable Abstention

Defendants advance both the doctrines of primary jurisdiction and equitable abstention as additional reasons that this Court should not adjudicate Plaintiffs’ claims.

10111213 The doctrine of primary jurisdiction allows a court to stay a proceeding or dismiss a complaint pending the resolution “of an issue within the special competence of an administrative agency.” Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir.2008). Primary jurisdiction applies in a limited set of circumstances, “only if a claim requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency, and if protection of the integrity of a regulatory scheme dictates preliminary resort to the agency which administers the scheme.” Id. (internal citations and quotations omitted). Although no fixed formula exists for applying the doctrine of primary jurisdiction (Davel Comm’ns, Inc. v. Qwest Corp., 460 F.3d 1075, 1086 (9th Cir.2006)), the Ninth Circuit has considered whether (1) the issue is within the “conventional experiences of judges” or “involves technical or policy considerations within the agency’s particular field of expertise,” (2) the issue “is particularly within the agency’s discretion,” and (3) “there exists a substantial danger of inconsistent rulings.” Maronyan v. Toyota Motor Sales, U.S.A., Inc., 658 F.3d 1038, 1048–49 (9th Cir.2011) (internal citations omitted).19 The court must also balance the parties’ need to resolve the action expeditiously against the benefits of obtaining the federal agency’s expertise on the issues. Nat’l Comm’ns Ass’n, Inc. v. American Telephone & Telegraph Co. Co., 46 F.3d 220, 223 (2d Cir.1995) (cited in Maronyan, 658 F.3d at 1049).

*14 14151617 “The judicially-created equitable abstention doctrine gives courts discretion to abstain from deciding a UCL claim.” Wehlage v. EmpRes Healthcare, Inc., 791 F.Supp.2d 774, 784 (N.D.Cal.2011) (citing Desert Healthcare Dist. v. PacifiCare FHP, Inc., 94 Cal.App.4th 781, 795, 114 Cal.Rptr.2d 623 (Cal.Ct.App.2001) and Alvarado v. Selma Convalescent Hosp., 153 Cal.App.4th 1292, 1297–98, 64 Cal.Rptr.3d 250 (Cal.Ct.App.2007)). Underlying the doctrine is the rationale that “because the remedies available under the UCL, namely injunctions and restitution, are equitable in nature,” courts have discretion to abstain from employing them. Desert Healthcare, 94 Cal.App.4th at 795, 114 Cal.Rptr.2d 623. “Abstention under the doctrine may be appropriate if: (1) resolving the claim requires ‘determining complex economic policy, which is best handled by the legislature or an administrative agency;’ (2) ‘granting injunctive relief would be unnecessarily burdensome for the trial court to monitor and enforce given the availability of more effective means of redress;’ or (3) ‘federal enforcement of the subject law would be more orderly, more effectual, less burdensome to the affected interests.’ “ Wehlage, 791 F.Supp.2d at 784–85 (quoting Alvarado, 153 Cal.App.4th at 1298, 64 Cal.Rptr.3d 250); see Shamsian v. Dep’t of Conservation, 136 Cal.App.4th 621, 642, 39 Cal.Rptr.3d 62 (Cal.Ct.App.2006) (court has discretion to abstain where: (1) the requested relief would “interfere with the department’s administration of the act and regulation of beverage container recycling and potentially risk throwing the entire complex economic arrangement out of balance” and (2) the “public’s need for” the relief “is not so great as to warrant judicial interference in the administrative scheme designed to address those needs”). The equitable abstention doctrine applies in rare instances. Rex, 905 F.Supp.2d at 1134.

18 Defendants argue that primary jurisdiction applies because the OCC has special expertise to: (i) enforce claims requiring the resolution of issues under their regulatory scheme; and (ii) apply uniform and consistent treatment of the complex and comprehensive issues involving home loan servicing practices, especially in a context where the OCC has already determined that Defendants have engaged in unsound practices. (Mot. at 14–15.)

Plaintiffs disagree and note this is a fraud case. Primary jurisdiction applies “only if a claim requires resolution of an issue of first impression” or is “a particularly complicated issue that Congress has committed to a regulatory agency.” (Opp. at 8 (citing Clark, 523 F.3d at 1114).) Plaintiffs argue neither is implicated here. (Opp. at 9; Dkt. No. 25.)

This case asserts claims for violations of RICO and the UCL, fraud, and unjust enrichment. These are areas within the conventional experience of this Court and, despite Defendants’ characterizations that this Court will be resolving issues under the OCC’s regulatory scheme, the Court is not persuaded that uniformity or consistency will be threatened by adjudicating these claims. While Defendants have rightfully pointed out that there may be administrative difficulties in determining the offsets for class members, these inconveniences alone are not a reason to abstain from this action. Such determinations are frequently made in class actions or can be addressed at the class certification stage. Indeed, the purpose of the Amendment itself is to provide the “greatest benefit to borrowers … in a more timely manner than would have occurred under the Independent Foreclosure Review.” Amendment at 2. Abstention does not serve this purpose.

*15 For the foregoing reasons, the Court Denies Defendants’ Motion to Dismiss based on the doctrines of primary jurisdiction and equitable abstention.

E. Third Jurisdictional Argument: Preemption Under National Bank Act

Defendants next argue that Plaintiffs’ claims are preempted under the National Bank Act and related OCC regulations.

The National Bank Act (“NBA”) vests national banks such with authority to exercise “all such incidental powers as shall be necessary to carry on the business of banking.” 12 U.S.C. § 24 (Seventh). Real estate lending is expressly designated as part of the business of banking. 12 U.S.C. § 371(a). As the agency charged with administering the NBA, the OCC “has the primary responsibility for the surveillance of the ‘business of banking’ authorized by the [NBA].” Martinez v. Wells Fargo Home Mortg., 598 F.3d 549, 554–55 (9th Cir.2010) (citations omitted). “To carry out this responsibility, the OCC has the power to promulgate regulations and to use its rulemaking authority to define the “incidental powers” of national banks beyond those specifically enumerated in the statute.” Id. at 555 (citing 12 U.S.C. § 93a).) The regulations possess the same preemptive effect of the NBA itself. Martinez, 598 F.3d at 555.

19 “In analyzing preemption, [courts must] ask whether the state law ‘prevent[s] or significantly interfere[s] with the national bank’s exercise of its powers.’ “ Gutierrez v. Wells Fargo Bank, N.A., 704 F.3d 712, 722 (9th Cir.2012) (“Gutierrez II ”) (quoting Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25, 33, 116 S.Ct. 1103, 134 L.Ed.2d 237 (1996)) (first alteration supplied). “[S]tate laws of general application continue to apply to national banks when ‘doing so does not prevent or significantly interfere with the national bank’s exercise of its powers.’ “ Gutierrez II, 704 F.3d at 722 (quoting Barnett Bank, 517 U.S. at 33).

As to the UCL claim, Defendants argue that Plaintiff Ellis’ claim for excessive, unnecessary, or undisclosed default-related service fees are preempted for four reasons: “(1) by regulation, fee-setting is a business decision; (2) by regulation, state-law claims may not be used to impose disclosure requirements; (3) by regulation, claims concerning both origination and processing are preempted; and, (4) UCL claims are preempted when the predicate conduct is preempted.” (Mot. at 16 (citing Martinez, 598 F.3d at 556).)20

Under these regulations, Defendants assert that any determination regarding the establishment of fees, the failure to disclose information about actual costs incurred for services, and claims regarding servicing of mortgages are preempted. (Mot. at 17; see Martinez, 598 F.3d at 557.) Because these “predicate acts” are preempted, Defendants argue any resulting UCL claim is preempted.

As to the unjust enrichment and fraud claims, Defendants similarly assert these are preempted because the claims are based on “assumptions about the reasonableness of default-related fees and services, which is the exclusive province of the OCC.” (Mot. at 18.) The RICO claims are preempted because they are based on an alleged breach of contract between Plaintiffs and Chase, and not fraudulent communications. (Id.)

*16 Plaintiffs respond by emphasizing that Northern District of California courts have held that “consumer protection laws of general application are not preempted by federal banking laws.” Jefferson v. Chase Home Finance, No. C. 06–6510 TEH, 2008 WL 1883484, at * 10 (N.D.Cal. Apr.29, 2008). Plaintiffs argue that they do not ask this Court to determine what an appropriate BPO or inspection fee should be, and they do not challenge the Chase’s ability to charge fees. Rather, their claims target Defendants’ fraudulent practices of utilizing software that automatically inflates fees, charges the inflated fees to borrowers, and demands payment by borrowers by stating the fees must be paid pursuant to the mortgage agreements. At most, Plaintiffs contend that adjudication of these claims would have no more than an “incidental effect” on Chase’s lending activities. (Opp. at 14.)

20 The Court finds that under the Ninth Circuit’s opinion in Gutierrez II, the UCL claim may proceed at least as to the fraudulent prong. In Gutierrez II, the Ninth Circuit examined Wells Fargo’s practices with regard to posting account debits and overdraft fees following a bench trial before the district court. The district court found that, among other things, Wells Fargo’s practices violated the unfair and fraudulent prongs of Section 17200 .21 The Ninth Circuit held that “federal law preempts state regulation of the posting order as well as any obligation to make specific, affirmative disclosures to bank customers” but that “[f]ederal law does not … preempt California consumer law with respect to fraudulent or misleading representations concerning posting.” 704 F.3d at 716. As to the preempted state regulation, the court held that the posting process was integrally related to the receipt of deposits, which normally falls within the federal banking regulatory power. Id. at 723. In addition, the OCC specifically delegated to banks the method of calculating fees. Id. at 724 (citing 12 C.F.R. § 7.4002(b)). With respect to the overdraft fees at issue in Gutierrez, “[t] he OCC has interpreted these incidental powers to include the power to set account terms and the power to charge customers non-interest charges and fees.” 704 F.3d at 724. In other words, “federal law authorizes national banks to establish a posting order as part and parcel of setting fees, which is a pricing decision” specifically within the power of national banks. Id.

On remand, the district court re-visited certain injunctive relief and restitution issues in light of the Ninth Circuit’s holding that:

[T]he National Bank Act preempts the application of the “unfair” prong of Section 17200 to a national bank’s order of posting. Both the posting order itself, and any requirement to make particular disclosures are within the exclusive purview of the National Bank Act. Liability based on failure to disclose was likewise preempted on the ground that it was tantamount to mandating specific disclosures.

*17 Liability based on the “fraudulent” prong of Section 17200 for false and misleading statements, however, was held not preempted. [The Ninth Circuit] held that for these purposes Section 17200 is a non-discriminatory state law of general applicability that did not impose disclosure requirements in conflict with federal law. Rather, it prohibited statements that are likely to mislead the public.

Gutierrez v. Wells Fargo Bank, N.A., No. C 07–05923 WHA, –––F.Supp.2d ––––, 2013 WL 2048030, at * 1–2 (N.D.Cal. May 14, 2013) (“Gutierrez III ”); see Gutierrez II, 704 F.3d at 727 (“we hold that Gutierrez’s claim for violation of the fraudulent prong of the [UCL] by making misleading misrepresentations with regard to its posting method is not preempted, and we affirm the district court’s finding to this extent”); Gutierrez I, 730 F.Supp.2d at 1129 (“Wells Fargo affirmatively reinforced the expectation that transactions were covered in the sequence made while obfuscating its contrary practice of posting transactions in high-to-low order to maximize the number of overdrafts assessed on customers.”).

Based on Gutierrez, Defendants’ blanket argument that the UCL claim is preempted in its entirety fails. As will be discussed in more detail infra, Plaintiffs have sufficiently stated a claim for fraud which, as pled, also states a claim for a UCL violation under the fraudulent prong. Plaintiffs have alleged both that Defendants failed to advise them of actual costs of services and inflated fees, and also that false statements were made to borrowers when Defendants told them the fees were in accordance with their mortgage agreements. Failure to adequately disclose this practice can shape reasonable expectations of consumers and be misleading. See Gutierrez III, 2013 WL 2048030, at * 2. As such, Defendant’s Motion to Dismiss the entire first claim for violation of the UCL is Denied. Defendant’s Motion that unjust enrichment and fraud are preempted is likewise Denied because those claims do not invade the exclusive province of the OCC. Rather, they—as generally applicable state laws—“do not significantly interfere with the bank’s ability to … calculate fees.” Gutierrez II, 704 F.3d at 727.22

For the foregoing reasons, the Court Denies Defendants’ Motion to Dismiss based on preemption.

III. Failure to State a Claim Under Fed.R.Civ.P. 12(b)(6)

In this section, the Court addresses Defendants’ fourth and fifth primary arguments: that Plaintiffs lack standing because they have not suffered injury-in-fact and, even if they do have standing, they fail to state a claim upon which relief can be granted.

A. Legal Standard Under Fed.R.Civ.P. 12(b)(6)

Pursuant to Fed.R.Civ.P. 12(b)(6), a complaint may be dismissed against a defendant for failure to state a claim upon which relief may be granted against that defendant. Dismissal may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.1990); Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533–34 (9th Cir.1984). For purposes of evaluating a motion to dismiss, the court “must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party.” Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir.1987). Any existing ambiguities must be resolved in favor of the pleading. Walling v. Beverly Enters., 476 F.2d 393, 396 (9th Cir.1973).

B. Standing under Article III, UCL, and RICO

*18 Defendants assert Plaintiffs lack standing in three ways. First, Plaintiffs have failed to allege an “injury in fact” to establish Article III standing. (Mot. at 19 (“No Plaintiff alleges that he or she made any actual payments to any Defendant related to any allegedly improper fees.”).) Second, Plaintiff Ellis has not alleged that she “lost money or property” and thus cannot pursue her UCL claim without economic injury. (Mot. at 19–20.) Third, Plaintiffs have failed to allege harm to a specific business or property interest—or a “concrete financial loss”—as required under RICO. (Id. at 19 (citing Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th Cir.2008).)

Plaintiffs respond that they “unambiguously allege that they ‘paid some or all of the unlawful fees assessed on [their] account[s].’ “ (Opp. at 14 (citing Compl. ¶¶ 62, 65 & 68) (emphasis and alteration in original).) They argue these allegations alone are sufficient to allege standing under Article III, the UCL, and RICO.

21 The Court is satisfied with the allegations as pled and finds there is standing to pursue these claims. Plaintiffs allege on information and belief that they have paid some or all of the unlawful fees assessed on their accounts. (Compl. ¶¶ 62, 65 & 68.) The Court must take these allegations as true and in the light most favorable to Plaintiffs, even if made on information and belief. Such allegations state an economic injury that qualifies as injury-in-fact under the UCL. See Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 323, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011) (economic injury may be shown where plaintiff “surrender[s] in a transaction more, or acquire[s] in a transaction less, than he or she otherwise would have”); see Cal. Bus. & Prof.Code § 17204 (UCL claim may be brought “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.”). “[A] party who has lost money or property generally has suffered injury in fact .” Kwikset, 51 Cal.4th at 322, 120 Cal.Rptr.3d 741, 246 P.3d 877 (emphasis in original). For these same reasons, Article III standing is also satisfied.

As to RICO standing, the “[c]ivil remedies” provision of RICO permits “[a]ny person injured in his business or property by reason of a violation of [18 U.S.C.] section 1962 … [to] sue” and recover treble damages and the cost of the suit, including a reasonable attorney’s fee. 18 U.S.C. § 1964(c). “To have standing under [Section] 1964(c), a civil RICO plaintiff must show: (1) that his alleged harm qualifies as injury to his business or property; and (2) that his harm was ‘by reason of’ the RICO violation, which requires the plaintiff to establish proximate causation.” Canyon County v. Syngenta Seeds, Inc., 519 F.3d 969, 972 (9th Cir.2008) (internal citation omitted). With regard to the requirement of injury to business or property, “[i]n the ordinary context of a commercial transaction, a consumer who has been overcharged can claim an injury to her property, based on a wrongful deprivation of her money…. Money, of course, is a form of property.” Id. at 976 (internal citation omitted).23

*19 22 Plaintiffs allege they have paid marked-up fees and thus satisfy RICO standing. A consumer who has been overcharged can claim injury to property under RICO based on a wrongful deprivation of money, which is a form of property. Canyon County, 519 F.3d at 976; see Dufour v. BE LLC, No. C 09–03770 CRB, 2010 WL 2560409, at * 11 (N.D.Cal. June 22, 2010) (“Plaintiffs here allege that they were deprived of their money based upon Defendants’ conduct, which is sufficient.”).

For these reasons, the Court Denies Defendants’ Motion to Dismiss based on lack of standing.

C. RICO Claims

1. Second Claim: Substantive RICO Violation: 18 U.S.C. Section 1962(c) ( “Section 1962(c)”)

23 Under Section 1962(c), “[i]t shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.” To a state a claim, a plaintiff must allege: “(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.” Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir.2007) (en banc ). Racketeering activity is also referred to as the “predicate acts.” Living Designs, Inc. v. E.I. Dupont de Numours and Co., 431 F.3d 353, 361 (9th Cir.2005).

24 Where a plaintiff alleges “a unified course of fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of a claim[,] … the claim is said to be ‘grounded in fraud’ or to ‘sound in fraud,’ and the pleading of that claim as a whole must satisfy the particularity requirement of [Federal Rule of Civil Procedure] 9(b).” Yess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1103–04 (9th Cir.2003). To be alleged with particularity, a plaintiff must allege “the who, what, when, where, and how” of the alleged fraudulent conduct (Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997)) and “set forth an explanation as to why [a] statement or omission complained of was false and misleading” (In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.1994) (en banc )). In other words, “the circumstances constituting the alleged fraud [must] be specific enough to give defendants notice of the particular misconduct … so that they can defend against the charge and not just deny that they have done anything wrong.” Yess, 317 F.3d at 1106 (first alteration supplied; internal quotation and citations omitted). “Rule 9(b)‘s requirement that ‘[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity’ applies to civil RICO fraud claims.” Edwards v. Marin Park, Inc., 356 F.3d 1058, 1065–66 (9th Cir.2004) (internal citation omitted); Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 541 (9th Cir.1989).

*20 Defendants challenge Plaintiffs’ RICO claim for failure to sufficiently allege each required element, and a failure to meet the heightened pleading requirements for mail and wire fraud. (Mot. at 20.) The Court will first address conduct of an enterprise.

25 Section 1962(c) targets conduct by “any person employed by or associated with any enterprise….” The Supreme Court has recognized the basic principle that Section 1962(c) imposes a distinctiveness requirement—that is, one must allege two distinct entities: a “person” and an “enterprise”24 that is not simply the same “person” referred to by a different name. Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 & 166, 121 S.Ct. 2087, 150 L.Ed.2d 198 (2001) (holding that under Section 1962(c), distinctiveness is satisfied and RICO applies “when a corporate employee unlawfully conducts the affairs of the corporation of which he is the sole owner-whether he conducts those affairs within the scope, or beyond the scope, of corporate authority”). The Court noted that the distinctiveness requirement was consistent with a prior holding that liability “depends on showing that the defendants conducted or participated in the conduct of the ‘enterprise’s affairs,’ not just their own affairs.” Id. at 163 (quoting Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993)).

2627 An enterprise that is not a legal entity is commonly known as an “association-in-fact” enterprise. Mitsui O.S.K. Lines, Ltd. v. Seamaster Logistics, Inc., 871 F.Supp.2d 933, 939 n. 6 (N.D.Cal.2012). In Odom v. Microsoft Corp., the Ninth Circuit held that “an associated-in-fact enterprise under RICO does not require any particular organizational structure, separate or otherwise.” 486 F.3d 541, 551 (9th Cir.2007) (no requirement of an “ascertainable structure”). “[A]n associated-in-fact enterprise is ‘a group of persons associated together for a common purpose of engaging in a course of conduct.’ “ Id. at 552 (quoting United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981)); Boyle v. United States, 556 U.S. 938, 944, 129 S.Ct. 2237, 173 L.Ed.2d 1265 (2009). Ninth Circuit precedent requires proof of three elements: (i) a common purpose of engaging in a course of conduct; (ii) evidence of an “ongoing organization, formal or informal”; and (iii) evidence that the various associates function as a continuing unit. Odom, 486 U.S. at 552 (citing Turkette ).25

28 Defendants primarily assert that Plaintiffs fail to allege the existence of an enterprise that is distinct from Defendants themselves because subsidiaries and affiliates of a corporation generally do not constitute an association-in-fact enterprise. (Mot. at 20.) In addition, Plaintiffs direct their claims to Chase’s conduct in marking-up fees, charging them to borrowers, and establishing policies that impose the marked-up fees, but they “do not allege that any non-Chase entity has taken any specific action at all in support of the purported enterprise.” (Id. at 21.) In other words, the “Chase Enterprise” is only Chase and no one else’s conduct makes up the enterprise. (Id.)

*21 Plaintiff responds that they have, in fact, alleged there were non-Chase members of the enterprise, namely the “property preservation vendors” and real estate brokers who performed BPOs who helped carry out the scheme. (Opp. at 19 (citing Compl. ¶ 106).) Plaintiffs note that an associated-in-fact enterprise does not require any particular organizational structure, separate or otherwise, under the Ninth Circuit’s holding in Odom. 486 F.3d at 551. Plaintiffs also argue that the enterprise conduct consisted of Chase’s use of the mail and wires to engage in its scheme to defraud. (Opp. at 21.)

The Court agrees that Plaintiffs have not sufficiently identified the structure of the enterprise, nor that Defendants have engaged in enterprise conduct distinct from their own affairs. Throughout the Complaint, Plaintiffs allege that the enterprise includes “subsidiaries,” “affiliated companies,” “intercompany divisions,” and third-party property preservation vendors and real estate brokers. (Compl.¶¶ 2, 4, 9, 33, 46, 106.) Defendants “order[ed] default-related services from their subsidiaries and affiliated companies, who, in turn, obtain[ed] the services from third-party vendors.” (Id. ¶ 40.) These vendors charged Defendants for services, but Defendants marked-up the fees in excess of any amounts actually paid. (Id.) Defendants “provided mortgage invoices, loan statements, payoff demands, or proofs of claims to borrowers” to “demand” payment of fees, but these documents “fraudulently concealed” the true nature of the fees, some of which were “never incurred” at all by Defendants. (Id. ¶¶ 93, 112, 114 & 143.) Defendants also falsely represented to borrowers in statements and other documents that the fees were “allowed by [their] Note and Security Instrument .” (Id. ¶¶ 53 & 115.) Plaintiffs allege that the enterprise’s common purpose was to “limit[ ] costs and maximiz[e] profits by fraudulently concealing assessments for unlawfully marked-up and/or unnecessary third party fees for default-related services on borrowers’ accounts.” (Id. ¶ 107.)

These allegations stand in contrast to those alleged in a related action, Bias, et al. v. Wells Fargo & Co., et al., Case No. 12–cv–00664–YGR. Here, Plaintiffs repeatedly state that subsidiaries, affiliated companies, and intercompany divisions are members of the enterprise. However, Plaintiffs fail to specifically identify these members or to provide any factual allegations to detail their involvement or make their involvement in the enterprise plausible. Plaintiffs vaguely allege that unidentified subsidiaries, affiliated companies, and/or intercompany divisions order default-related services from third-party vendors and brokers. No specific factual allegations explain how this occurs, and without this information, the Court cannot ascertain the structure of the alleged enterprise. Nor can the Court determine whether Defendants have engaged in conduct of the enterprise, as opposed to their own affairs.

*22 In addition, the Court notes that the “common purpose” here is the same as that alleged against Wells Fargo in Bias—to limit costs and maximize profits by fraudulently concealing marked-up and/or unnecessary third party fees. However, an associated-in-fact enterprise must consist of “a group of persons associated together for a common purpose of engaging in a course of conduct.” Odom, 486 F.3d at 552 (quoting Turkette ). Plaintiffs’ Complaint lacks factual allegations that show that the unidentified enterprise members associated together with Defendants for that alleged common purpose. This is unlike in Bias, where plaintiffs alleged that Wells Fargo had associated with third party Premiere Asset Services for a common purpose.

For these reasons, the Court Dismisses Plaintiffs’ RICO claim under Section 1262(c) With Leave to Amend for failure to sufficiently allege an enterprise. Plaintiffs’ amended complaint must address the deficiencies stated herein, or Plaintiffs may file a motion for leave to amend if future discovery in this action reveals a factual basis for a RICO claim.26

2. Third Claim: Conspiracy to Violate RICO: 18 U.S.C. Section 1962(d) ( “Section 1962(d)”)

Under Section 1962(d), “[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.” “To establish a violation of section 1962(d), Plaintiffs must allege either an agreement that is a substantive violation of RICO or that the defendants agreed to commit, or participated in, a violation of two predicate offenses.” Howard v. America Online Inc., 208 F.3d 741, 751 (9th Cir.2000). The conspiracy defendant “must intend to further an endeavor which, if completed, would satisfy all of the elements of a substantive criminal offense, but it suffices that he adopt the goal of furthering or facilitating the criminal endeavor.” Id. (quoting Salinas v. United States, 522 U.S. 52, 65, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997)). Moreover, the defendant must also have been “aware of the essential nature and scope of the enterprise and intended to participate in it.” Id. (quoting Baumer v. Pachl, 8 F.3d 1341, 1346 (9th Cir.1993)).

29 In Howard, the Ninth Circuit affirmed the “district court[‘s holding] that the failure to adequately plead a substantive violation of RICO precludes a claim for conspiracy.” Id.; see Turner v. Cook, 362 F.3d 1219, 1231 n. 17 (9th Cir.2004) (affirming dismissal of RICO claims, including conspiracy, where plaintiffs failed to allege, among other things, acts of mail fraud, wire fraud, and pattern of racketeering activity).

Here, Plaintiffs have failed to allege the requisite substantive elements of RICO under Section 1962(c), and thus their claim for conspiracy under Section 1962(d) also fails.

For these reasons, Plaintiffs’ claim for conspiracy under Section 1962(d) is Dismissed With Leave to Amend.

D. Fourth Claim: Unjust Enrichment

*23 Defendants argue the unjust enrichment claim fails because the only cognizable claim in California is a quasi-contractual claim for restitution, which cannot exist where there is a binding, enforceable agreement defining the right of the parties. (Mot. at 24 (citing Paracor Fin., Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151, 1167 (9th Cir.1996)).) According to Defendants, the mortgage contracts “permit” the charges at issue here, and the unjust enrichment is “based upon the contract.” (Reply at 15.)

30 Plaintiffs argue they have pled the required elements of a claim for unjust enrichment: the receipt of a benefit and unjust retention of the benefit at the expense of another. (Opp. at 24.) Further, the viability of the claim is unaffected by the existence of the agreements. (Id. (citing In re Countrywide Fin. Corp. Mortg. Mktg. & Sales Practices Litig., 601 F.Supp.2d 1201, 1220–21 (S.D.Cal.2009)).) In In re Countrywide, the district court rejected both of defendants’ arguments for dismissal of an unjust enrichment claim, holding that “[a]lthough there are contracts at issue in this case, none appears to provide for the specific recovery sought by Plaintiffs’ unjust enrichment claim.” Id. at 1220–21 (noting conflicting case law regarding whether California recognizes unjust enrichment as a claim and declining to conclude the claim was not legally cognizable).

31 Despite Defendants’ arguments that the mortgage agreements preclude the claim here, the Court finds it is premature for the Court to take a position on whether this action derives from the subject matter of the agreements such that a claim for unjust enrichment is unavailable. In re Countrywide, 601 F.Supp.2d at 1220–21. Under California law, Plaintiffs have pled sufficient facts to support a claim for unjust enrichment. Lectrodryer v. SeoulBank, 77 Cal.App.4th 723, 726, 91 Cal.Rptr.2d 881 (Cal.Ct.App.2000); see also Hirsch v. Bank of America, N.A., 107 Cal.App.4th 708, 721–22, 132 Cal.Rptr.2d 220 (Cal.Ct.App.2003) (valid claim for unjust enrichment stated where banks collected and retained excessive fees passed through to them by title companies at the expense of plaintiffs). Whether Plaintiffs will succeed with their burden of establishing this claim should be certified as a nationwide class is not appropriate to determine at this time.

For these reasons, the Court Denies Defendants’ Motion to Dismiss the fourth claim for unjust enrichment.

E. Fifth Claim: Fraud

Defendants argue that the fraud claim fails to meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b). (Mot. at 24.) In particular, Plaintiffs have not alleged injury or reliance based “on any specific communication from any Defendant” and have failed to specifically plead the “time, date, and amount of allegedly improper fees charged to the named Plaintiffs” or payment of the same. (Id.; Reply at 15.) In addition, Defendant argues that where the fraud claim is based on the omission of material facts, a “duty to disclose” must exist to state a claim. (Mot. at 24.)

*24 Plaintiffs disagree, emphasizing that it has provided specific detail regarding the nature of the scheme and that Defendants can adequately prepare an answer to the Complaint. (Opp. at 25.) Plaintiffs identify the mortgage contracts as the source of Defendants’ duty to disclose. (Id.)

32 Defendants’ arguments fail to persuade. As to the claimed lack of specificity, Plaintiffs have provided more detail than Defendants acknowledge. Plaintiffs have alleged numerous instances where deficient information was provided and could have been revealed—namely, in the mortgage agreements themselves, in the mortgage statements reflecting the marked-up fees, or during communications with Chase where it told Plaintiffs that the fees were in accordance with their mortgage agreements. Plaintiffs provide specific dates for statements in which they believe they were charged the marked-up fees, and allege they paid the fees without knowing their true nature. Plaintiffs describe the content of the omission as the failure to inform them that the fees were marked-up and that the majority of the fees ultimately went to Chase, and not third-party vendors performing the services. As discussed above, Plaintiffs have also sufficiently alleged that they did pay the marked-up fees.

As to the argument regarding a “duty to disclose,” the alleged omissions by Defendants here are interwoven with misrepresentations. Defendants’ failure to advise Plaintiffs of the actual costs for services is linked to the inflated costs that Chase expressly demanded as due in monthly mortgage statements and other documents. Using the mortgage agreements as justification, Defendants allegedly demanded payment for fees that, in some cases, were never actually incurred. (See Compl. ¶ 112.) Moreover, Plaintiffs allege that false representations were made to borrowers when Chase told them that the fees were in accordance with their mortgage contracts—this is distinguishable from an omission. (Compl. ¶¶ 53 & 115.) As alleged, the fraud is equally about the failure to disclose material information as it is that the amounts demanded on mortgage statements were false because they did not correspond to the actual amounts owed pursuant to the mortgage agreements relied upon by Defendants. Based on the alleged nature of the fraudulent scheme, the lack of an explicit “duty to disclose” is not dispositive in light of affirmative fraud that is also alleged.

The Court notes that, unlike the unjust enrichment claim, Defendants provide authorities from California, Oregon, and Tennessee in support of dismissing the fraud claim. Plaintiffs will ultimately bear the burden of establishing whether their fraud claim can be certified as a nationwide class and the Court declines to engage in a choice of law analysis at this juncture. However, regardless of which state’s law applies here, Defendants’ argument fails because Plaintiffs have alleged more than a fraud claim of omission here.

*25 For the foregoing reasons, the Court Denies Defendants’ Motion to Dismiss the fifth claim for fraud.

F. Request to Dismiss JPMorgan Chase & Co. Under Rule 8

Defendants argue that JPMorgan Chase & Co. must be dismissed as a Defendant for two reasons: first, it is a non-operating holding company that “could not conceivably have taken any action” attributed to the Chase Enterprise. (Mot. at 25.) Second, the allegations do not provide fair notice under Federal Rule of Civil Procedure 8 because they are conclusory. (Id. (citing Compl. ¶ 26).)

Plaintiffs concede that JPMorgan Chase & Co. is not itself a national bank or an operating subsidiary thereof (Opp. at 10), but does not specifically address Defendant’s argument for dismissal. Defendants emphasize this lack of opposition, and re-assert that JPMorgan Chase & Co. is merely a holding company that “could not have been involved in any purported conduct here.” (Reply at 9 n. 1 .)

While Plaintiffs did not explicitly state that they oppose this portion of the Motion to Dismiss, they do highlight in their Opposition that there are allegations that each of the Defendants (including J.P. Morgan Chase & Co.) was an active participant in the scheme to defraud. (See Opp. at 23 (citing Compl. ¶ 109).) The Court further notes that there are additional allegations regarding J.P. Morgan Chase & Co. in the Complaint. (See id. ¶ 26 (J.P. Morgan Chase & Co. exercises specific and financial control over other Defendants’ operations, dictates their policies and practices, exercises power and control over them with regard to the conduct alleged in the Complaint, and is the ultimate recipient of the ill-gotten gains).) Plaintiffs also allege that executives at the highest levels of J.P. Morgan Chase & Co. organized the fraudulent scheme. (Id. ¶¶ 26 & 109, 132 Cal.Rptr.2d 220.) At the pleading stage, this states a plausible claim against J.P. Morgan Chase & Co. and Defendants have not provided any concrete reason that it could not have “conceivably” engaged in any part of the conduct alleged in the Complaint.

For these reasons, the Court Denies Defendants’ Motion to Dismiss J.P. Morgan Chase & Co. as a Defendant for the claims that have survived this Motion to Dismiss—i.e., the UCL claim, unjust enrichment, and fraud.

IV. Conclusion

For the foregoing reasons, the Court Grants in Part and Denies in Part Defendants’ Motion to Dismiss. The Motion to Dismiss under Rule 12(b)(1) and Defendants’ arguments as to standing are hereby Denied. The second and third claims for violation of RICO and conspiracy to violate RICO, respectively, are Dismissed With Leave to Amend. Defendants’ Motion to Dismiss the first claim for violation of the UCL, fourth claim for unjust enrichment, and fifth claim for fraud is Denied.

Plaintiffs must file an amended complaint within twenty-one (21) days from the date of this Order. If Plaintiffs do not wish to file an amended complaint at this time, Plaintiffs are granted leave to file a motion for leave to amend if future discovery reveals a factual basis to support the dismissed RICO claims. In that case, Plaintiffs shall file a notice stating that they intend to stand on the first, fourth, and fifth claims as pled in the Complaint (Dkt. No. 1), and the Court will deem the Complaint to be operative as of the date of that notice. Defendants shall have fourteen (14) days to respond to the amended complaint or the filing of the notice described above.

*26 This Order terminates Dkt. No. 6.

It Is So Ordered.

Footnotes

1

Plaintiffs are citizens of California, Tennessee, and Oregon. (Compl.¶¶ 18–20, 60–69.) Plaintiffs allege that J.P. Morgan Chase & Co. is a corporation organized under the laws of Delaware with its principal place of business in New York. (Id. ¶ 21.) Defendant J.P. Morgan Chase Bank, N.A. is a subsidiary of J.P. Morgan Chase & Co. and is a national bank organized and existing as a national association under the National Bank Act, 12 U.S.C. section 21, et seq., with its principal place of business in Columbus, Ohio. (Id. ¶ 22.) Plaintiffs further allege that Defendant Chase Home Finance LLC is a subsidiary of the other Defendants and a Delaware limited liability company with its principal place of business in New Jersey. (Id. ¶ 23.) Plaintiffs assert that J.P. Morgan Chase & Co. exercises specific and financial control over other Defendants’ operations, dictates their policies and practices, and exercises power and control over them with regard to the conduct alleged in the Complaint. (Id. ¶ 26.) J.P. Morgan Chase & Co. is further alleged to be the ultimate recipient of the “ill-gotten gains” alleged in the Complaint. (Id.) Plaintiffs allege that executives at the highest levels of J.P. Morgan Chase & Co. and J.P. Morgan Chase Bank, N.A. organized the fraudulent scheme, which was then carried out by executives and employees of all Defendants. (Id.)

2

The UCL claim is brought on behalf of Plaintiff Ellis and members of the California Sub–Class. (Compl.¶ 91.) All other claims in this action are brought on behalf of all Plaintiffs and the members of the Nationwide Sub–Class. (Id. ¶¶ 104, 126, 131 & 141.)

3

The property preservation vendors include: Safeguard Real Estate Properties, LLC, d/b/a Safeguard Properties, LLC; Mortgage Contracting Services, LLC; and LPS Field Services, Inc. (Compl.¶ 106.)

4

Exhibits A and C–G to the Motion RJN consist of the Consent Order and status reports, stipulations, or publications relating to the Consent Order executed by and/or issued by the OCC. Exhibit B is a printout from the Federal Deposit Insurance Corporation (“FDIC”) website reflecting that JPMorgan Chase Bank, National Association is FDIC insured. Exhibit H is a copy of civil minutes dated August 6, 2012 in Bakenie v. JPMorgan Chase Bank, N.A., No. SACV 16–60 JVS (MLGx) (C.D.Cal.) (Selna, J.).

5

Exhibit A is an engagement letter between Deloitte & Touche LLP and J.P. Morgan Chase Bank, N.A. regarding a foreclosure review pursuant to the Consent Order with the OCC. Exhibit B is an excerpt of the Consent Judgment between Chase, the United States, and 49 State Attorneys General in United States v. Bank of America Corporation, et al., No. 1:12–cv–361 (D.D.C. Apr. 4, 2012). Exhibit C is an exhibit to Consent Judgment attached as Exhibit B. Exhibit D consists of Remarks by John Walsh, Acting Comptroller of the Currency before the 2012 National Interagency Community Reinvestment Conference on March 26, 2012.

6

Exhibit 1 is a Statement of Mark Pearce, Director of the Division of Depositor and Consumer Protection of the FDIC, made before the Subcommittees on Financial Institutions and Consumer Credit, and Oversight and Investigations Committee on Financial Services of the U.S. House of Representatives on July 7, 2011. Exhibit 2 is a “Borrowers’ Quick Reference Guide to the Financial Remediation Framework” available on the OCC website. Exhibit 3 is a copy of the complete Consent Judgment and exhibits in United States v. Bank of America Corporation, et al., No. 1:12–cv–361 (D.D.C. Apr. 4, 2012).

7

The Court notes that the “Bank” referenced in the Consent Order was J.P. Morgan Chase Bank, N.A., but the Consent Order also applied to subsidiaries of the Bank, even though those subsidiaries were not named as parties to the Order. Consent Order, Art. XIII § 7. This Order may refer to the “Bank” in the Consent Order as Chase, or vice versa.

8

While the Amendment superseded Article VII of the prior Consent Order, it “d[id] not replace the other remaining Articles of the 2011 Consent Order or the agreement by and between the Bank and the [OCC] dated February 27, 2012, both of which shall remain in effect without modification.” Amendment at 1.

9

Among the many purposes of the Foreclosure Review, the independent consultant was to determine “whether a delinquent borrower’s account was only charged fees and/or penalties that were permissible under the terms of the borrower’s loan documents, applicable state and federal law, and were reasonable and customary” and “whether the frequency that fees were assessed to any delinquent borrower’s account (including broker price opinions) was excessive under the terms of the borrower’s loan documents, and applicable state and federal law.” Consent Order, Art. VII §§ 3(e)-(f).

10

The OCC issued a Financial Remediation Framework for Use in Independent Foreclosure Review on June 21, 2012. (Motion RJN, Ex. F .) The framework provided “examples of situations where compensation or other remediation is required for financial injury due to servicer errors, misrepresentations, or other deficiencies. The independent consultants will use the Framework to recommend remediation for financial injury identified during the Independent Foreclosure Review.”

11

The Bank agreed to make a cash payment of $753,250,131.00 into the qualified settlement fund for borrowers who had a pending or completed foreclosure on their primary residence any time from January 1, 2009 to December 31, 2010. Amendment, Art. I § 1.

12

By no later than January 7, 2015, the Bank will provide loss mitigation or other foreclosure prevention actions in the amount of $1,205,200,210.00. Amendment, Art. IV § 1.

13

Defendants also seem to argue that even if the Court and the independent review both conclude the fees were reasonable, jurisdiction is still lacking because Defendants would not know whose orders control. (Mot. at 13.)

14

The Court notes that despite Plaintiffs’ frequent references to “parallel or coextensive subject matter jurisdiction,” the Court sees no such terminology in either Section 1818(i) or American Fair Credit Ass’n—which Plaintiffs appear to cite as authority.

15

Specifically, Chase agreed it “shall not impose unnecessary or duplicative property inspection, property preservation or valuation fees on the borrower” including a prohibition on “impos[ing] its own mark-ups on Servicer initiated third-party default or foreclosure related services.” NMS Consent Judgment at A–36–A–37. Moreover, “[c]laims and defenses asserted by third parties, including individual mortgage loan borrowers on an individual and class basis” were not released and were specifically reserved by the NMS Consent Judgment. Id. at G–6 & G–10.

16

Defendants respond that the NMS was “expressly negotiated” between Chase and the OCC such that it would not “affect” the OCC Consent Order. (Reply at 5; see NMS Consent Judgment at F–36 (reserving and not releasing claims pursuant to Section 1818 or “any action by the [federal banking agency] to enforce the Consent Order”).)

17

The Court takes judicial notice of these statements in the Engagement Letter because such letter was provided to the OCC pursuant to the Consent Order under Article VII, section 2. The document is publicly-available on the OCC’s website and Plaintiffs have not objected to this Court taking judicial notice.

18

“In no event shall the Bank request or require any borrower to execute a waiver of any claims against the Bank (including any agent of the Bank) in connection with any payment or Foreclosure Prevention assistance pursuant to this Amendment to the Consent Order. However, nothing herein shall operate to bar the Bank from asserting in the future in any separate litigation … any right that may exist under applicable law to offset the amounts received by a borrower through the distribution process set forth above.” Amendment, Art. V § 3.

19

In determining whether the doctrine of primary jurisdiction applies, the Ninth Circuit also has considered: “(1) [the] need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration.” Clark, 523 F.3d at 1115 (citing Syntek Semiconductor Co., Ltd., v. Microchip Tech. Corp., 307 F.3d 775, 781 (9th Cir.2002)).

20

Specifically, Defendants identify the applicable regulations as 12 C.F.R. section 7.4002(a), which provides that “[a] national bank may charge its customers non-interest charges and fees, including deposit and account service charges.” A bank engages in “safe and sound banking principles” in establishing such charges and fees “if [it] employs a decision-making process through which is considers the following factors, among others: (i) The cost incurred by the bank in providing the service; (ii) The deterrence of misuse by customers of banking services; (iii) The enhancement of the competitive position of the bank in accordance with the bank’s business plan and marketing strategy; and (iv) The maintenance of the safety and soundness of the institution.” 12 C.F.R. § 7.4002(b)(2)(i)-(iv).

In addition, 12 C.F.R. section 34.4(a) provides that a national bank may make real estate loans without regard to state law limitations concerning: “(9) Disclosure and advertising, including laws requiring specific statements, information, or other content to be included in credit application forms, credit solicitations, billing statements, credit contracts, or other credit-related documents; (10) Processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages.” 12 C.F.R. § 34.4(a)(9)-(10).

21

The “fraudulent” conduct violating Section 17200 included failure to disclose (or to adequately disclose) the challenged practices and making misleading statements to consumers regarding the practice. Gutierrez v. Wells Fargo Bank, N.A., 730 F.Supp.2d 1080, 1126–28 (N.D.Cal.2010) (“Gutierrez I ”).

22

Defendants argue that the RICO claims are preempted because they are based on state law breach of contract claims. (Mot. at 18.) The Court finds that this argument, although couched as preemption, attacks the substance of the RICO claims and is unrelated to preemption by the NBA. The Court will address RICO, infra.

23

However, where a plaintiff is a governmental entity not acting as a “consumer” but “to enforce the laws or promote the general welfare” the analysis is slightly different. Canyon County, 519 F.3d at 976–80. Canyon County sought to recover damages under RICO for monies it spent on public health care and law enforcement services for undocumented immigrants. Id. at 971. Financial loss in that specific context was insufficient to allege injury to one’s “business or property.” Id. at 975–76. Accordingly, the Ninth Circuit held that the county lacked RICO standing. Id. at 976–80.

24

A “ ‘person’ includes any individual or entity capable of holding a legal or beneficial interest in property.” 18 U.S.C. § 1961(3). An “ ‘enterprise’ includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1961(4).

25

The Ninth Circuit in Odom noted that the definition of an enterprise is, based on its text, “not very demanding.” 486 F.3d at 548; Boyle, 556 U.S. at 944 (“the very concept of an association in fact is expansive”). In fact, the Supreme Court has recognized that “RICO is to be read broadly” and is to “be liberally construed to effectuate its remedial purposes.” Sedima, S.P.R.I v. Imrex Co., Inc., 473 U.S. 479, 497–98, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985) (quoting Pub.L. 91–452 § 904(a), 84 Stat. 947 (1970)); see Boyle, 556 U.S. at 946 (association-in-fact enterprise must have three structural features: a purpose; relationships among those associated with the enterprise; and longevity sufficient to permit these associations to pursue the enterprise’s purpose).

26

In light of the Court’s dismissal on these grounds, the Court declines to address additional arguments raised by Defendants. To the extent that Plaintiffs choose to amend their complaint, Defendants may not re-argue on a future motion to dismiss any argument that has been rejected in this Order. In addition, Defendants may not raise for the first time on a future motion to dismiss any argument that was previously available but not raised on this Motion.

 

Court numbers

17 Jul

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6  California Court Directory

JUDGE                                                       TITLE               DW/DEPT               MATTER                                                             DATS      ROOM/R.                            TELEPHONE

San Diego, California

U.S. Courthouse, 940 Front St., San Diego, CA 92101

Wallace, J. Clifford……………….. SCJ…………………………………………………………… M-F…. 4192/…. (619) 557-6114

U.S. Court of Appeals, 401 West A. Street, Ste. 2000, San Diego, CA 92101

McKeown, M.Margaret………….. CircJ………………………………………………………… M-F…. /2000…. (619) 557-5300

San Francisco, California

US. Court of Appeals Building, 95 Seventh St, SF, CA 94103, P.O. Box 193939, San Francisco, CA 94119

Appellate Commissioner……………………………………………………………………………………………….. (415)355-8110

Attorney Admissions…………………………………………………………………………………………………… (415)355-7800

Calendar Unit………………………………………………………………………………………………….. (415) 355*190

Case Files…………………………………………………………………………………………………………….. (415)355-7810

Circuit Mediators………………………………………………………………………………………………………. (415)355-7908

Computer Operations………………………………………………………………………………………………….. (415)355-7890

Death Penalty….…………………………………………………………………………………………………. (415)3558197

Docketing-Civil……………………………………………………………………………………………………. (415)355-7830

Docketing-Criminal………………………………………………………………………………………………. (415)355-7840

Extension of Time/Briefs Written Request……………………………………………………………………………….. (415)355-7853

Judicial Misconduct……………………………………………………………………………………………………. (415)355«099

Motions Attorneys………………………………………………………………………………………………… (415)3558020

Operations Assistants…………………………………………………………………………………………………. (415)355-7920

Personnel…………………………………………………………………………………………………………… (415)355-7869

Procedural Motions……………………………………………………………………………………………………. (415)355-7860

Procurement………………………………………………………………………………………………………….. (415)3558050

Pro Se Unit……………………………………………………………………………………………………………. (415)3558040

Records Unit………………………………………………………………………………………………………….. (415)3557820

Staff Attorneys………………………………………………………………………………………………………… (415)3558020

Tours…………………………………………………………………………………………………………………. (415)3557930

Office of the Circuit Executive…………………………………………………………………………………………… (415)3558800

Circuit Library……………………………………………………………………………………………………… (415)3558650

Bea, Carlos T.……………………. CircJ………………………………………………………… M-F…. 205/…… (415) 3558180

Berzon, Marsha………………….. CircJ………………………………………………………… M-F…. 243/…… (415) 3558160

Retcher, William A.………………. CircJ…………………………………………………………. M-F…. 216/….. (415) 3558140

TBD…………………………….. SCJ……………………………………………………………. M-F…. 316…… (415)3558100

Noonan, John T. JR……………… SCJ…………………………………………………………… M-F…. 331/….. (415) 3558130

Santa Ana California

US. Courthouse, 411W. Fourth St, Santa Ana, CA 927014500
Librarian, Nedra Grubel…………………………………………………………………………………………………. (714)338-2806

Seattle, Washington

US. Court of Appeals, 1010 Fifth Avenue, Seattle, WA 98104…………………………………………………………… (208) 2244200

Seattle Clerk, Ste 430……………………………………………………………………………………………. (206) 224-2200

Circuit Mediation Office, Ste 730………………………………………………………………………………. (206) 224-2320

Librarian, Timothy Sheehy.……………………………………………………………………………………………… (206)224-2310

Retcher, Betty B…………………. SCJ…………………………………………………………… M-F…. 1000…. (206) 224-2240

Farris, Joseph Jerome……………. SCJ…………………………………………………………… Mf….. 1030…. (206)224-2260

Beezer, Robert R…………….. …..SCJ…………………………………………………………… M-F…. 802…… (206) 224-2270

Gould, Ronald M…………………. CircJ………………………………………………………… M-F…. 940…… (206) 224-2280

Tatlman, Richard C………………. CircJ………………………………………………………… M-F…. 902…… (206) 224-2250

Sacramento California

Federal Courthouse, 5011 Street #12-700, Sacramento, CA 95814………………………………………………….. -…(916) 9304040

Librarian, Bobbi Murray…………………………………………………………………………………………………. (916)9304155

Callahan, Consuelo M……………. CJ………. ,.………………………………………………….. M-F…. 12-700/. (916) 9304160

Fresno

2500 Tulare Street, Ste. 2401, Fresno, CA 93721

Librarian, Martin Schwartz.……………………………………………………………………………………………… (559)4995615

San Francisco

450 Golden Gate Ave., 18th R, San Francisco, CA 941023489

Librarian. Susan Wong Caulder…………………………………………………………………………………………. (415)4366130

San Jose

280 S. First Street, Rm. 5152, San Jose, CA 951134002

Librarian, Lee Van Duzer……………………………………………………………………………………………….. (408)5355323

Tucson

405 W. Congress St, Ste. 6200, Tucson, AZ 857015064

Librarian, Michelle Martin………………………………………………………………………………………… (520)2054660

Spokane

920 W. Rlverskto Ave., Rm. 650, Spokane, WA 992011008

Librarian, James Murray……………………………………………………………………………………………….. (509)3533293

UNITED STATES BANKRUPTCY APPEUATE PANEL OF THE NINTH CIRCUIT

U.S. Court of Appeals Building, 125 S. Qrand Ave, Pasadena, CA 911051652…………………………………………. (626) 229-7225

www.ca9.uscourts.gov/web/bap.nsf/baphorne7openpage

Clerk of Court, Susan Spraul……………………………………………………………………………………………. (626) 229-7225

Staff Attorney, Sarah Stevenson………………………………………………………………………………………… (626)229-7233

Staff Attorney, MeleWood….…………………………………………………………………………………… (626)229-7231

Jury, Meredith A.…………………. Judge…………………………………………………………. Mf…………….. (951)744-1043

Hollowed, Eileen…………………. Judge…………………………………………………………. M-F……………. (520)202-7964

Kirscher, Ralph B………………… Judge…………………………………………………………. M-F……………. (406)497-1286

Markell, Bruce A…………………. Judge…………………………………………………………. M-F……………. (702)3886505

Pappas.JimD…………………. Judge…………………………………………………………. Mf…………….. (208)3340369

Dunn, Randall L………………….. Judge…………………………………………………………. M-F……………. (503)326-1538

See Legend on page 78


California Court Directory   S


JUDGE                                          TITLE                                         DIV/DEPT                        MATTER           OATS                RO0M/R-                            TELEPHONE

SUPREME COURT OF THE UNITED STATES

U.S. Supreme Court Building, 1 First Northeast, Washington, DC 20543—————– ____________________ (202) 47*3000

www.supreiTwcourtu8.gDv/Index.html

Clerk, William K. Suter………………………………………………………………………………………………….. (202) 479-3000

Curator, Catherine Rtts………………………………………………………………………………………………….. (202)4795000

Director of Information Technology. Robert J. Hawkins………………………………………………………………… ~…. (202) 4793000

Librarian, Linda Maslow.………………………………………………………………………………………………… (202)4793000

Marshal, Pamela TatWn………………………………………………………………………………………………….. (202)4793000

Public Information Officer, Kathy Arberg…………………………………………………………………………………… (208) 4793000

Reporter of Decisions, Christine L Fallon………………………………………………………………………………….. (202) 4793000

Staff Counsel. Jeffrey P. Mlnear.………………………………………………………………………………………….. (202) 4793000

Alto, Samuel A.………………….. Justice………………………………………………………….. Mf……………… (202)4793000

Breyer, Stephen G………………… Justice………………………………………………………….. M-F…………….. (202) 4793000

Ginsburg, Ruth Bader…………….. Justice……………………………………………………. :….. MF…………….. (202)4793000

Kagan, Hena……………………… Justice…………………………………………………………. M-F…………….. (202)4793000

Kennedy, Anthony M………………….. Justice………………………………………………………….. MF…………….. (202) 4793000

Roberts, John 6. JR.………………. CJ……………………………………………………………… IwVF……………. (202) 4793000

ScaiIa,Antonin..„…………………. Justice………………………………………………………….. M-F…………….. (202)4793000

Sotomayor, Sonla………………….. Justice…………………………………………………………. M-F…………….. (202) 4793000

Thomas, Clarence………………….. Justice…………………………………………………………. MF…………….. (202) 4793000

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

BHItogs, Montana

US. Court of Appeals, 301N. 27th St, (59101), P.0 Box 31478, BOHngs, MT 69107 www.ca9.uscourts.gov

Thomas, Sidney R………………… CircJ…………………………………………………………… MF….. /200…… (406) 3733200

Boise, Idaho

US. Courthouse, 550 W. Fort St, Boise, ID 837240040————————————————————– (208) 3341812

Pocatello Idaho

801 East Sherman Street, Pocatello, ID 83201

Smith, N. Randy………………….. CJ…………………………………………………………….. M-F……201/…….. (208) 4784140

Fairbanks, Alaska

Courthouse Square, 250 Cushman St, Fairbanks, AK 99701

KteWeld. Andrew J…………………….. SCJ…………………………. ..………………………………. MF….. 3A/……. (907) 4560564

Honolulu, Hawaii

999 Bishop Street, Honolulu, HI 96813

Clifton, Richard R………………………. CircJ………………………………………………………….. M-F….. 2010/…. (808) 522-7474

Las Vegas, Nevada

Uoyd D. George Btdg, 333 Las Vegas Btvd South, Las Vegas, NV 89101

Rawfinson, Johnnie B…………….. CircJ…………………………………………………………… M-F….. 7072/…. (702) 4645670

Bybee, Jay S…………………….. CircJ…………………………………………………………… Mf…… 7080/…. (702) 4645650

Los Angeles, California

312 N. Spring St, Los Angeles, CA 90012

Alarcon, Arthur L…………………. SCJ…………………………………………………………….. MF….. 1607/…. (213) 894-2693

Retahardt Stephen R………………. CircJ…………………………………………………………… MF___ 1747/…. (213) 8943639

Pasadena, CatHbrnla

U.S. Court of Appeals Building, 125 S. Grand Ave., P.O. Box 91510, Pasadena, CA 91109____________________ ….. (626) 229-7250

KozlnsW. Alex……………………….. CJ……………………………………………………………… MF.…. 200/…… (626) 229-7150

Ikuta, Sandra S……………………. CircJ…………………………………………………………… MF….. 204/…… (626) 229-7339

Paez. Richard A.………………….. CircJ…………… .’.……………………………………………. M-F……300/……. (626) 229-7180

Nelson, Dorothy W.……………………. SCJ…………………………………………………………….. M-F ……303/……. (626) 2297400

Nguyen, Jacqueline H…………….. CircJ——— ……………………………………………….. M-F ……305.……. (626) 229-7248

Rsher, Raymond C.……………….. CircJ__________________________________ MF….. 400/…… (626) 229-7110

Tashima, A. Wallace.…………………….. SCJ…………………………………………………………….. M-F ……406/……. (626) 229-7373

Wardlaw.WmM………………………. CircJ…………………………………………………………… MF….. 500/…… (626)229-7130

Goodwin, Alfred T.…………………….. SCJ…………………………………………………………….. M-F___ 506/…… (626) 229-7100

Fernandez, Ferdinand F.…………… SCJ…………………………………………………………….. M-F….. 602/…… (626) 229-7121

D Segundo, California

222 N. Sepulveda Blvd., El Segundo, CA 90245
Smith, Milan D JR
……………………… CircJ…………………………………………………………………… 2325/…. (310) 607-4020

Woodland KIDS, California

21800 Oxnard St, Woodland Hills, CA 91367

Pregerson, Harry………………….. CircJ…………………………………………… ……. :……………. 1140/…. (818) 710-7791

Phoenix, Arizona

Sandra Day O’Connor US. Courthouse, 401W. Washington St, SPC 54, Phoenix, AZ 85003———————————- (602) 322-7200

Librarian. Timothy Blake………………………………………………………………………………………………… (602)322-7295

Canby, William C. JR…………………… SCJ……… 55…………………………………………………. M-F ……612/……. (602) 322-7300

Hawkins, Michael Dary………………….. SCJ……… 47…………………………………………………. MF___ 510/___ (602) 322-7310

Murgula, Mary H______________ CJ——————- .———————————- M-F……525/____ (602) 332-7580

Schroeder, Mary M…………… ___ OrcJ …….54……………………………………………….. ;__ MF___ 610/…… (602) 322-7320

Silverman, Barry G.……………….. CircJ……. 78…………………………………………………. MF.…. 512/…… (602) 322-7330

Portland, Oregon

Mailing Address: US Courthouse, 1000 SW Third Ave., Portland, OR 97204

Skopll, Otto R………………………… SCJ…………………………………………………………….. M-F….. 807……. (503) 3268390

Pioneer US. Courthouse, 700 SW 6th Ave., Portland, OR 97204

Graber, Susan P.………………….. CircJ………………………………………………………….. MF___ 211……. (503) 8335360

Leavy, Edward……………………….. SCJ………………….. ……………………………………… MF….. 226/…… (503)8335350

O’Scarmlain, Dlarmuld F.…………… CircJ………………………………………………………….. MF….. 313/…… (503) 8335380

Reno, Nevada

Bruce Thompson US. Courthouse, 400 S. Virginia St, Reno, NV 895012193

See Legend on page 78

Hug, Procter JR…………………… SCJ…..………………………………………………………… MF……708/……… (775) 6865949


8  California Court Directory

JUDGE                                                       TITLE               HV/DEPT                MATTER                                                                DWS      ROOM/H.                             TELEPHONE

Eastern District of Caufobnia

Fresno

2500 Tulare Street, #1501, Fresno, CA 9372]___________________________________________________________ (569) 4996600

www.caed.uscourts.gov

Chief Deputy, Marianne Matheriy…………………………………………………………………….. .’………………. (559) 4995600

Jury Administrator, Heather Mabe……………………………………………………………………………………….. (559)4995613

Court Librarian, Martin Schwartz…………………………………………………………………………………………. (559) 4995615

Court Interpreter, Rebecca Rubenstein………………………………………………………………………………….. (559) 4995611

U.S. Marshals Service, Enforcement Asst, Colleen L Neimoyer…………………………………………………………… (559) 487-5600

U.S. Marshals Service, Legal Technician, Susan M. Perry………………………… ——————————————- (559) 487-5600

U.S. Marshals Service, Assistant Chief Deputy, Russell Vbrke…………………………………………………………… (559) 487-5600*

Austin, Gary S……………………. MagJ………………………………………………………….. MF….. 10/6…… (559) 4995960

Beck, Dennis L………………. MagJ…………………………………………………….. ___ MF__ 9/6____ (559) 4996670

Ishii, Anthony W.…………………. CDL.………………………………………………………… Mf ……2/8___ (559) 4996660

McAuliffee, Barbara A.……………. MagJ………………………………………………………… M-F…. 8/6……. (559) 4996789

Oberto, Sheila K………………….. MagJ…………………………………………………………. M-F…. 7/6____ (559) 4996790

O’Neill, Lawrence J………………. DJ…………………………………………………………….. MF……4/7___ (559) 4996680

Snyder, Sandra M……………….. MagJ…………………………………………………………. MF…. 9/1…… (559) 4996690

2386 BecheQ In., Redding, CA 96002—————————————————————– ~__________________ ..__ (530) 2466418

U.S. Deputy Clerk. Christy Pine……………………………………………………………………………………… ….(530) 2466416

Keillson, Craig M………………… MagJ………………………………………………………….. MF…………….. (530)2466416

Sacramento

6011 St, #4-200, Sacramento, CA 95814_______________________________________ ___ ————————— (918) 9304000

Clerk, Victoria Minor…………………………………………………………………………………………………… (916)9304000

Human Resources Department…………………………………………………………………………………………. (916)9304032

Information Technology………………. ‘.………………………………………………………………………………. (916)9304335

Financial Department………………………………………………………………………………………………… …(916)9304027

Court Interpreter, Yblanda RlleyPortal…………………………………………………………………………………… (916) 9304221

Jury Administrator, Maria Luna………………………………………………………………………………………….. (916) 9304240

Court Librarian, Jana Maglnness……………………………………………………………………………………….. (916) 9304155

Admin. Officer, Vlkkl Humphrey………………………………………………………………………………………… (916) 930-2030

Warrant Supervising, Carolyn Griffin…………………………………………………………………………………….. (916)930-2030

U.S. Marshal, Chief Deputy, Albert Najera……………………………………………………………………………….. (916) 930-2030

Operations Supervisor, Bruce Clark…………………………………………………………………………………….. (916) 930-2030

Bommer, Timothy J………………. MagJ………………………………………………………….. M-F………………………………

Brennan, Edmund F.……………… MagJ………………………………………………………….. MF…………….. (916) 9304170

Burrell. Garland E. JR…………….. DJ……………………………………………………………… MF__________ (916) 9304115

Conn, Gerald B………………….. MagJ………………………………………………………….. M^………………………………

Damrell, Frank C. Jr.…………….. SDJ…………………………………………………………… Mf…………….. (916) 9304120

Drozd, Dale A.……………………. MagJ…….. …………………………………………………. MF…………….. (916) 9304210

England. Morrison C. Jr.………….. DJ…………………………………………………………….. MF—————– (916) 9304205

Garcia, Edward J………………… SDJ…………………………………………………………… MF……………. (916)9304225

Hollows, Gregory G………………. MagJ………………………………………………………….. MF…………….. (916)9304195

Kartton, Lawrence K.……………… SDJ……………………………………………………………. MF…………….. (916) 9304130

Mendez,JohnA…………………… DJ……………………………………………………………… MF„………… (916)9304250

Moulds, John F.………………….. MagJ………………………………………………………….. M-F……………. (916)9304180

Mueller, Wmberly J………………. DJ……………………………………………………………… M-F……………. (916)9304260

Newman. Kendall J………………. MagJ………………………………………………………….. MF__________ (916) 9304710

Shubb. William B………………… SDJ……………………………………………………………. MF….………….. (916) 9304230

Sorrentino, Chartene H……………. MagJ………………………………… .’.……………………… MF……………………………….

Delaney. Carolyn………………… MagJ………………………………………………………….. M-F……………. (916)9304060

Bakersfleld

1200 Truxtun, Suite 120BakersfleM, CA 93301

Thurston, Jennifer L………………. MagJ………………………………………………………….. WF…………….. (661) 3266620

Ybsontfto

P.O Box 576, Yosemlte National Park, CA 95389……………………………. _________ …….____ ……………._____ …………(209) 3720320

Seng, Michael J…………………. iMagJ…………… ‘.……………………………………………. MF…………….. (209)3720320

Nohtwerw District of Cautorma

Eureka

814 H Street, Eureka, CA 95501/1038————————————————————————————- .___________ (707) 44*3612

www.cand.uscourts.gov

Vadas, Nandor J…………………. USMJ…………………………………………………………. MAW…………… (707) 4453612

Oakland

1301 Clay St, Ste. 400S, Oakland, CA 946126212___________________________ ___________ …..____ (810) 637-3530

Armstrong, Saundra B……………. SDJ…… 1…………………………………………………… MF…………… (510) 637-3541

Witken, Claudia………………….. CJ……… 2…………………………………………………… MF…. 2/4____ (510) 637-3542

Hamilton. Phyllis J……………….. Judge….. 3…………………………………………………… MF__ 3……… (510) 637-1296

Gonzalez Rogers, Yvonne………… DJ……… 5…………………………………………………… MF…………… -(510)637-3540

Ryu. Donna M……………………. MagJ….. 4…………………………………………………… M-F……………. (510)637-3639

Westmore,KandisA………………. MagJ…… 4…………………………………………………… MF…………….. (510)637-3525

San Francisco

U.S. Courthouse, 480 Golden Gate Ave., San Francisco, CA 941023483________________ ….—————————————– (418) 8222000

Clerk’s Office, Richard W. Wieking……………………………………………………………………………………… (415) 522-2000

U.S. Marshals Serv., US Marshal, Fredertco L Rocha……………………….. ………………………………………… (415) 438-7677

Schwarzer, William……………….. SDJ…………………………………………………………… MF…. /18.…… (415)5224660

Contl, Samuel……………………. SDJ…… 1…………………………………………………… MF…. /17……. (415) 522-2077

White, Jeffreys…:.………….. DJ……… 2…………………………………………………… MF—/17——– (415)5224173

Seeborg. Richard………………… DJ……… 3…………………………………………………… M-F__ /17____ (415)5222123

TBD………………………………………… 5…………………………………………………… MF—/17…….. (415)5223018

Walker, Vaughn R……………….. CJ……… 6…………………………………………………… MF „…./17…… (415) 522-2039

Chesney. Madne M……………… DJ……… 7…………………………………………………… MF—/19——– (415) 522-2041

Breyer. Charles R………………… DJ……… 8…………………………………………………… M-F__ /19—— (415) 522-2062

Alsup, William H…………………. DJ……… 9…………………………………………………… MF…. /19…… (415) 522-2020

lllston, Susan Y.………………….. DJ……… 10…………………………………………………. MF……/19….. (415) 522-2028

TBD……………………………………………………………… 11……………………………………………………………………………. MF……/19——– (415)522-2123

See Legend on page 78


California Court Directory   7

JUDGE                                          TITLE                                         OV/DEFT                          MATTER              DATS                ROOM/R.                            TELEPHONE

UNITED STATES DISTRICT COURT OF CAUPORNIA

CeNTR^PfiTWCTOfCMffWfBa

Los Angeles

312 N. Spring St, #&8Los Angeles, CA 900124783

www.cacd.uscourts.gov

Chief Judge, AudreyB. Collins………………………………………………………………………………………….. (213) 894-1565

Clerk of Court, Terry Naflsl……………………………………………………………………………………………… (213) 894-1565

Chief Deputy Cleric Administration. Ren Young………………………………………………………………………….. (213) 894-1565

Chief Deputy Clerk: Judicial Services, RandallSchnack………………………………………………………………….. (213) 894-1565

Chief Deputy: Case Processing, Bob Bolton…………………………………………………………………………….. (213) 894-1565

Civil Section…………………………………………………………………………………………………………… (213)8943535

Criminal Section……………………………………………………………………………………………………….. (213)8946288

Information……………………………………………………………………………………………………………. (213)894-1565

Judgments and Defaults………………………………………………………………………………………………. (213)894-3535

Records Section………………………………………………………………………………………………………. (213)894-3863

or recordsjracctfteacdaiscourts.gov

U.S. Marshals Service………………………………………………………………………………………………… (213)894-2485

Abrams, Paul L………………….. USMJ__________ ………………………………………… Mf ……934G/9. (213) 894-7103

Anderson, Percy…………………. DJ……………………………………………………………. Mf….. 15/…… (213) 894-1795

ChooOlan, Jacqueline……………. USMJ………………………………………………………… Mf ……20/….. (213) 894-2921

FJck, Charles F. Jr.……………… USMJ————————- …………………….. ………… Mf___ 20/____ (213) 8946234

Falrbank. Valerie Baker.-………….. SDJ_________________________________________ M-F__ 9/…….. (213) 8940066

Federman, Rita C……………….. USMJ……………….. Santa Barbara (Part-Time)…………….. MF……………. (213) 8943787

Fitzgerald, Michael W.……………. DJ…………………………………………………………….. Mf….. 1600/1653(213)894

1527

Gandhi, Jay C…………………… USMJ………………………………………………………… Mf….. 827A/8.. (213) 8946369

Gee, Doily M……………………. DJ…………………………………………………………….. Mf….. 7/…….. (213) 8945452

Hatter, Terry J. JR……………….. SDJ___________________________________ J……. Mf ……17/—– (213) 8946276

Keller, William D…………………. SDJ________________ ………………………………….. Mf___ 1600/…. (213) 8940539

Letts, J. Spencer………………… SDJ………………………………………………………….. Mf ……4/……. (213) 8940925

Lew, Ronald…………………….. SJ……………………………………………………………. Mf—21/..……. (213)894-2682

Marshall, Consuelo B………. ….. SDJ_________________________________________ Mf ……2/——- (213) 8945288

McDermott, John E.…………….. USMJ___________________ ————– ……………… Mf—836 C/8. (213) 8940216

Mete, A. Howard………………… SJ……………………………………………………………. Mf….. 14/—— (213) 8946283

Mumm, Frederick F.…………….. USMJ………………………………………………………… Mf……927-E/9.. (213) 8943046

Otguin. Fernando M……………………. USMJ____________________________ ………… Mf___ 927-f/9.. (213) 8940215

Otero, S. James…………………. DJ…………………………………………………………….. Mf….. 1/…….. (213) 8941796

Pfeelzer, Mariana R………………. SDJ………………………………………………………….. Mf ……12/….. (213) 8945286

Pregerson, Dean D………………. DJ__________________________________________ Mf ……3/……. (213) 8943913

RedT Manuel L………………….. DJ……………………………………………………………. Mf ……8/……. (213) 8946696

Rosenberg, Alicia G……………… USMJ………………………………………………………… Mf….. 83SD/8. (213) 8946419

Segal, Suzanne H……………….. CUSMJ_________ ,……………………………….. ……. Mf….. 324…… (213) 8940958

‘ Snyder, Christina H……………….. DJ……………………………………………………………. Mf….. 5/…….. (213) 8943433

Timlin, Robert J………………….. SDJ…………………………………………………………… Mf….. 233/….. (213) 8940539

Walsh, Patrick J…………………. USMJ………………………………………………………… Mf….. 23/3___ (213) 8948958

Walter, John F.………………….. DJ…………………………………………………………….. Mf—16/——— (213) 8945396

Wilson, Stephen V.………………. DJ…………………………………………………………….. Mf….. 6/…….. (213) 8942881

Wright II, Otis D.…………………. DJ…………………………………………………………….. Mf….. 11……. (213) 8948266

Wu, George H…………………… DJ……………………………………………………………. Mf……10……. (213)8940191

WHner, Michael R………………. USMJ………………………………………………………… Mf….. 930-H/9. (213) 8945496

Edward R. Roybal Federal BuMng and Courthouse 3

268 E. Temple StLos Angeles, CA 90012

Conins, Audrey B……………………… CJ……………………………………………………………… Mf…… 680/…… (213) 8946500

Feess, Gary A.………………….. DJ…………………………………………………………….. Mf….. 740/….. (213) 8943480

Fischer, Dale S………………….. DJ…………………………………………………………….. Mf___ 840/___ (213) 8940435

Gutierrez, Philip S………………… DJ…………………………………………………………….. Mf….. 880/….. (213) 8948899

Hillman, Stephen J………………. USMJ………………………………………………………… Mf….. 550/….. (213) 8946487

Kenton, Victor B…………………. USMJ………………………………………………………… M-F…..590/…. (213) 8941831

King, George H………………….. DJ__________________________________________ ..Mf—650/____ (213) 8946907

Kteusner, R. Gary……………….. DJ…………………………………………………………….. Mf….. 850/…… (213) 8942649

Kronstadt, John A.………………. DJ…………………………………………………………….. Mf….. 760…… (213) 8942156

Morrow, Margaret M…………….. DJ…………………………………………………………….. Mf…. .780/ — (213) 8947857

Nagte, Margaret A.………………. USMJ………………………………………………………… Mf….. 580/….. (213) 8948285

Wlstrfch, Andrew J………………. USMJ………………………………………………………… Mf….. 690/….. (213 8946509

Woehrle, Carta M……………….. USMJ……………………………. .………………………… Mf….. 640/….. (213) 8946825

Zarefsky, Ralph…………………. USMJ………………………………………………………… Mf….. 540/….. (213)8948256

Riverside

3470 Twelfth St, Riverside, CA 928013000…………_ ……………._ ………………………….._ ………._ (961) 3294480

Deputy In Charge, KIry Gray…………………………………………………………………………………………………….. (951) 3284451

Brlstow, David T.………………… USMJ………………………………………………………… Mf….. 4/…….. (951) 3284466

Parada, Oswald…………………. USMJ………………………………………………………… Mf….. 3/…….. (951) 3284463

Pym,Sherl………………………. USMJ..……………………………………………………….. Mf……3/——– (951)3284467

Phillips. Virginia A.………………… DJ….………………………………………………………….. Mf….. 2/…….. (951) 3284461

Santa Ana

411W. Fourth St, MOSS, Santa Ana, CA 827014816-~.^.„..~………………………————– .———- (714) 3384760

DeputyftKharge. Mini Borgarding……………………………………………………………………………………….. (714)3384764

Block, Robert N………………….. USMJ………………………………………………………… Mf ……60/….. (714) 3384754

Carney, Cormac J……………….. DJ———————————————————————– Mf—9B/——— (714) 338-2849

Carter, David 0__________ …… DJ…„………………………………………………………… Mf ……90/….. (714) 3384543

Goldman, Marc L………………… USMJ………………………………………………………… Mf….. &A/…… (714)3384755

Guilford, Andrew J……………….. DJ…………………………………………………………….. Mf….. 100/….. (714) 3384757

Nakazato, Arthur……………. —- USMJ.—………………………………………………. —– Mf….. SB/…… (714)3384756

RosenWuth, Jean P……………… MagJ………………………………………………………… Mf….. /9…….. (714) 3384776

Selna, James V.…………………. DJ………. ;.………………………………………………….. Mf….. IOC/.(714) 338-2848

Stotfer, Allcemarte H…………….. SDJ………………………………………… „.…………….. Mf…. .TBD…… (714) 3384758

Tucker, Josephine Staton________ DJ………………………………………….. ……………… Mf….. 10A.….. (714)3384738

See Legend on page 78


California Court Directory   9

JUDGE                                            TITLE                                        DIV/DEPT                           MATTER                 WYS                  ROOM/R.                               TELEPHONE

Henderson, Thelton E.……………… SDJ……… 12……….. ..………………………………………. Mf….. /19……. (415) 522-2047

Patel, Marilyn H.………………… DJ…..….. 15…………………………………………………. Mf….. /18……. (415) 522*600

Spero, Joseph C……………………….. USMJ……. A…………………………………………………… Mf….. /15…… (415) 522-2035

James. MariaBena „……………. USMJ……. B…………………………………………………… Mf ……/15….. (415) 5224708

Chen, Edward M……………….. MagJ….. C………………………………………… …….... Mf ……/15—– (415) 522-2034

Laoorte. Elizabeth D.…………… USMJ……. E…………………………………………………… Mf….. /15……. (415) 522-3694

Larson, James.…………………….. CUSMJ…… F…………………………………………………… Mf….. /15.—— (415)522-2112

Zimmerman, Bernard………………… USMJ……. G………………………………………………….. Mf….. /IS……. (415)522-2015

San Joso

280 8. First St, #2112, San Jose, CA 9311*3008……………………………………………….. ..———- (408) 638*383

Fbgel, Jeremy D._____ .………….. DJ……… 3…………………………………………………… Mf…………….. (408)5356426

Lloyd. Howard R………………………. USMJ……. 2…………………………………………………… Mf…………….. (408) 53&5411

Trumbull, Patricia V.……………………… USMJ……. 5…………………………………………. ———– Mf…………….. (408)5356438

Whyte, Ronald M………………….. DJ………. 6…………………………………………………… Mf…………….. (408)5356331

Ware, James……………………. DJ………. 8…………………………………………………… Mf…………….. (408)5356454

gWTW^PmmCTQFCMJFORtflA

San Diego

880 Front St, Rm. 4290, San Diego, CA 92101*900..…..———– …..—.————— ……————– (619) 887-6600

www.c8sd.uscourt&gov

Clerk of Court, W. Samuel Hamrick Jr.……………………………………………………………………………… (619) 557-5600

Moskowitz, Barry T.………………… CDJ………………………………………… ………………… Mf___ 15/…… (619) 5576583

Huff, Marilyn L…………………. DJ……………………………………………………………. …Mf……13/…… (619)557-6016

Gonzalez. Irma E.………………….. DJ……………………………..     ……. :…………………. ;.Mf……1/……. (619) 557-7107

Bums, Larry A.…………………….. DJ……………………………………………………………… Mf—9/……….. (619) 557-5874

Sabraw. Dana M…………………… DJ……………………………………………………………… Mf….. 10/…… (619) 557-6262

Hayes, Wffliam Q.………………. DJ…………………………………………………………….. Mf ..„..4/……. (619) 557*420

Houston, John A.……………… DJ…………………………………………………………….. Mf „….ll/…….. (619) 5576716

Benltez, Roger T.………………. DJ………………………………………………………….. ….Mf…. 3/——- .. (619) 4463589

SammartJno, Jartls L……………….. DJ……………………………………………………………… Mf ……6/……. (619) 557-5542

Anello, Michael M………………….. DJ.………………………………………… ………………… Mf ……5/……. (619) 557-5960

BattagUa, Anthony J————————– DJ————————————————————— ^____ Mf ……12/___ (619) 557-3446

Benclvengo, Catty Arm……………… DJ……………………………………………………………… Mf….. 2/…….. (619) 557-7688

Thompson, Gordon Jr———————— SDJ———————————————————————– Mf___ 8/…….. (619) 557*480

Enrtght, William B………………………. SDJ…………………………………………………………….. Mf…………….. (619)557*537

Brewster, Rudi M…………………… SDJ…………………………………………………………….. Mf____ …….. (619)557-6190

Miller, Jeffrey T.…………………… SDJ…………….. J……………………………………………. Mf…. .16/…… (619) 557-6627

Whelan, Thomas J……………………… SDJ……………………………………………………. ——— Mf >….7/_______ (619) 557-6625

Lorenz, M. James………………….. SDJ…..…………………………………………………………. Mf ……14/….. (619) 557-7669

Stormes, Nlta L…………………. PMJ…………………………………………………………… Mf……G/……. (619) 557-5391

Brooks, Ruben B……………… MagJ……………………… ————————————— Mf___ B/….. „. (619) 557*404

Adler.JanM…………………….. MagJ…………………………………………………………. Mf….. A/.……. (619)557-5585

Major, Barbara L……………….. MagJ…………………………………………………. ~____ Mf—H/———- (619) 557-7372

McCurfne, William Jr.………………. MagJ…………………………………………………………… Mf.__ C/……. (619) 557-6624

GaUo, William V.……………………….. MagJ…………………………………………………………… Mf….. FA____ (619)557-6384

Stomal, Bernard G…………………. MagJ…………………………………………………………… Mf…………….. (619) 557-2993

Dembln, Mitchell D…………………. MagJ…………………………………………………………… Mf…………….. (619)4463972

Crawford, Karen S………………….. MagJ…………………………………………………… _____ Mf…………….. (619) 446*964

Bartfck, David H……………………. MagJ…………………………………………………………… Mf….. /5…….. (619) 557*383

Imperial

2003 W. Adams Aw., Ste 220O Centre, CA 92243

Lewis, Peter C…….. ………… MagJ………………………….. .’.…………………………. „Mf.—._______ (760) 3394250

UNITED STATES BANKRUPTCY COURTS

Cpttral District of Caupqrnia Los Angeles

Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara and Ventura Counties.

Edward R. Roybal Federal Bktg, 288 E. Temple St, Los Angeles, CA 90012-3300____________________   ________ ..______ (213) 894*118

www.cacb.uscourt8.gov

Executive Officer/Clerk of Court, Kathleen Campbell…………………………………………………………………………… (213) 894*244

Chief Deputy of Administration, Steve Stonlker………………………………………………………………………………. (213) 894-1175

Chief Deputy of Operations, Michael Rotberg………………………………………………………………………………… (213) 894*257

DeputyJnCharge, Dennis Tibayan………………………………………………………………………………………….. (213)894-1156

Administrative Manager, John Kohler……………………………………………………………………………………….. (213) 894-1296

General Information……………………………………………………… ____ ……………………………………… (213)894*118

Late Riing information…………………………………………………………………………………………………… (213)894*401

Altenberger, William…………………….. Judge………………………………………………………….. Mf….. 1634…. (213)8944081

BueoondVSherlA.…………………. Judge…………………………………………………………… Mf….. 1482…. (213)894*980

Bason, Neil W…„……………… Judge………………………………………………………… .Mf___ 1552___ (213)894*098

Brand, Julia W.…………………… Judge………………………………………………………….. Mf….. 1382___ (213) 894*080

Carroll, Peter H…………………….. CJ……………………………………………………………. …Mf___ 1460…… (213) 894*343

Donovan, Thomas B.____________ fudge——————————– ………………. _________ Mf___ 1352__ (213) 894*728

Klein, Sandra R…………………… Judge………………………………………………………… …Mf…. 1582…. (213) 894-7741

Nefter, Richard M.…………………. .Judge———————- ……….. —————— …………… Mf___ 1652__ (213) 8944080

Rendten, Charles E. Ill……………… Judge…………………………………………………………… Mf__ .1634.__ (213) 894-2552

Robtes, Ernest M………………….. Judge…………………………………………………. …….. Mf….. 1560.__ (213)894-1522

Russell, Barry.…………………….. Judge……………………………………………………. ……. Mf….. 1660…. (213)894*091

Zhre, Gregg W.……………………….. Judge………………………………………………………….. Mf….. 1334…. (213) 894*745

Zurzoto, Vincent P.………………… Judge………………………………………………………….. Mf….. 1360…… (213) 894*755

Kwan. Robert……………………… Judge…………………………………………………………… Mf….. 1682…. (213)894-2775

Riverside

3420 Twelfth St, Riverside, CA 92801*819…………….. ._______ ,._______________ ………….. ……(981) 7741000

Operations Manager, Lsurle Gaffney……………………………………………………………………… ………….———– (951) 774-1003

Clarkson, Scott C…………………. Judge…………………………………………………………… Mf……5130/5C (714) 3386460

Houle,MarkD—————————– tudge—————————————- ………….. ————- Mf___ 365/303(951)774-1021

Johnson, Wayne………………………. Judge…………………………………………………………… Mf….. 345/302(951)774-1031

Jury. Meredith A.………………….. Judge…………………………………………………………… Mf ……325/301 (951) 774-1043

Saltzman, Deborah J.………………. Judge……………………………………………………………. Mf….. 385/304(951)774-1026

‘ See Legend on page 78


10  California Court Dlraotory

judge                                      me       nv/DEPr      matter                                                  dws    room/r.                   telephone

San Fernando Valley

21041 Burba* Blvd., Woodland Mn, CA 91367-6803……………………………………………………………………………… (&L8) 887-2900

Senior Deputy^nCharge, Paula Roe……………………………………………………………………………………….. (818) 587-2811

Operations Superior, Michael Hfll____________________________ ………………………………………… .’.…. .(818)587-2860

Ahart, Alan M…………………….. Judge_________________________ …………………… Mf ……342/303 (818) 587-2836

Kaufman, Victoria S_____________ ludge________________________________________ Mf….. 354/301 (818) 587-2823

Mund, Geratdlne………………….. Judge………………………………………………………….. Mf….. 342/303(818)587-2840

Trtfw, Maureen A.____________ ludgQ____________ .____________________________ Mf ……325/302 (818) 587-2806

Santa Ana

411W. Fourth St, Ste. 2080, Santa Ana, CA 927014883…………………………………. „„„.„.„———————————— (714) 338*300

Operations Manager, Ben Varela…………………………………………………………………………………………… (714)3386341

Albert, Theodor C______________ ludge________________________________________ Mf….. 5085/58 (714) 3386430

Bauer, Catherine E.………………… Judge………………………………………………………….. Mf….. 5153/5D (714) 3386450

Smith, Eitthe A,_____________ ludge________________________________________ Mf—5041/5A (714) 3386440

Wallace, Mark S…………………… Judge………………………………………………………….. Mf….. 6135/6C (714) 3386470

Santa Barbara

1418 State St, Santa Barbara, CA 93101rOT11……….■…■….■■^.■..■………■.■…….■…..■……■■…■■■……………… ………. (808) 8844800

Senior Deputy-m-Charge, Paula Roe………………….. _____________ ………………………………………….. „…(805) 884-4876

Operations Supervisor. Cheri Davis………………………………………………………………………………………… (805)884-4885

Ribtet, Robin I_______________ ludge——————————————————————- Mf….. /201….. (805) 8844860

Eastern DtSTRicT of Cmjpoowa

Fresno

U.S. Courthouse, 2500 Tutaro Street, Sutta 2501, Rime, CA 937211818——————————————————– (659) 499*800

wwwxaeb.uscourts,gov

Calendar Management Section……………………………………………………………………………………………. (559)498-7220

Case Management Section__________________________________________________________________ (559)498-7596

Division Manager, Bob Hemdon…………………………………………………………………………………………… (559)4996800

Deputy^nCharge. Michaels Cheryl…………………………………………………………………………………………. (559)498-7286

Operations Coordinator, Mary Wellington………………………………………………………………………………….. (559) 4996800

Rimel, Whitney_______________ Judge—A————————————————————— Mf—11/5……. (599) 4996800

Lee, Richard………………………. Judge____ B…………………………………………………… Mf….. 12/5….. (559)4996800

TBD_____________________ M.TBA._____ D____________________________________ Mf___ 13/5…… (559) 4996800

Ford, Richard T.………………….. Judge—F__________________________ ………………… Mf….. 14/5….. (559) 4996800

Modesto DMslon

12001 St, Ste. 4, Modesto, CA 95854————————————- .——————————————— (209) 5216160

Division Manager, Shelly Frfteh——————————————- ……………………………………………… (916) 9304455

Operations Coordinator, Deborah Martin………………………………………………………………………….. (209) 521-5160

BardwB. Robert S.______________ ludge________________________________________ .Mf……………. (209) 521-6160

Sags. Ronald H_____________ fudge——————————————————————— Mf……………. (209) 521-5160

SocfSfnottto Division

5011 St, #9200, Sacramento, CA 9681*2*22————————————————————————— (918) 9304400

Clerk of Court. Richard CL Hetttel________________________ ……………………………………………… (916) 9304400

Division Manager, Shelly Frfteh…………………………………………………………………………………………… (916) 9304400

Operations Coordinator, Beverly Door………………………………………………. ~………………………………….. (916)9304400

Brandt. Phillip H______________ ludge——————————- …………………………….. Mf……………. (916)9304400

Holman. Thomas C_____________ ludge——————————————————————- Mf……………. (916) 9304400

Wein, Christopher M____________ CJ———————————– ……………………………… Mf……………. (916)9304400

McManus, Michaels—————- ludge——————————————————————- Mf……………. TOPJ&f^X

Russell, Davkt E._______________ ludge——————————————————- ……….. Mf……………. (916) 9304400

WMIIHHMDtSTHirfrOPCMIBWWM

Oakland DMslon

Alameda and Contra Costa Counties.                                                                                                        ,^M_____ ^^

1300 Clay St, #300, Oakland, CA 94612……………………………… ~~————– •«———————— (510) 879-3600

www.canb.uscourt8.gov

Division Manager, Trade Williams———————————————————————————– ………………. 510 8793600

Help Desk.—…………………………………………………………………………………………………………… (510)8793554

Efremsky. Roger I______________ ludge———————————————– ………………. Mf….. 201…… (510) 8793600

JellenTEdwardD.………………….. Judge_____________________________ ………………. Mf….. 215…… (510)8793600

Urfferty, William J______________ ludge——————————————————————- Mf….. 220/—(510)8793600

San Jose DMslon

Monterey, San Benito, Santa Clara, and Santa Cruz Counties.

280 8. First #3035, San Jose, CA 951133099____ ..———- .—————————————————– (408) 278-7500

Division Manager, Roger WWte_______________________________________________________________ (408) 278-7500

Johnson. Stephen I_____________ ludge—————————————————– …………. Mf……………. (408)278-7500

Novack, Charles____________ Judge________________________________________ Mf……………. (408)278-7500

Wetesbrodt, Arthur S………………. Judge………………………………………………………….. Mf……………. (408) 278-7500

San Francesco DMslon

San Francisco and San Mateo Counties.                                                                                           , __ „, ^^ „„^

235 Ptne St, IStn Ft; Sao FtaoolMW, CA 94104———————————————————————- (415) 2684300

Bankruptcy Clerk, Gloria Franklin…………………………………………………………………………….. 415 268-23°<)

Chief Deputy, Edward J. Emmons——————————————————————————————————– 415) 268-2300

Ovlston Manager, Elizabeth Lucero………………………………………………………………………………………… (415)268-2300

HelpDesk.—._________________________________________________________ ……………………… (415)268-2368

Carlson, Thomas E._____________ fudge——————————————————————— Mf….. 23/…… (415) 268-2300

Montafl. Dennis J_____________ JudgB___________________________________ .____ Mf ……22/….. (415) 268-2300

Santa Rosa DMslon

Del Norte, Humbokn, Lake. Marin, Mendocino, Napa and Sonoma Counties

99 South E Street Santa Ron, CA 954046524…………….. ~~—………………...———————– (707) 547-6900

Courtroom Deputy – TarajUTuaa©canb.uscourt&gov, Tara Arruda……………………………………………….. (707) 5473920

DMslon Manager – DennlaJ?necMi9canb.uscourt&gov, Dennis BQecM….. _…………………………………… (707) 5473925

Law Clerk, Cara Mm—————————————————- ……………………. ,…………………………. <I29 ^ZfJSS

Judicial Assistant. Dawn Passalacqua—————————————————— …………………………….. (707) 5473900

Jaroslovsky, Alan__________________ ludge—————————————— …………………… Mf……………. (707)5473900

See legend on page 78


California Court Directory   11

JUDGE                              TITLE                           BV/DEPT                  MATTER          CWrS            ROOM/H-                   TELEPHONE

SQtmgHwDtSTOTTOFCAilFOBWA

San Diego

San Diego and Imperial Counties                                                                                              tm^M mnmmtM

Jacob WMnbaiger US. Courthouse 325 W. F St, San Diego, CA 92LOL6989……————— ~—————————– (619) 887-8620

For case Information, dial *0″

wwwx8sb.uscourts£ov                                                                                                          „,..,««,««.„„

Clerk of Court. Barry K. Lander.………………………………………………. ~………………………….. ~………. 613 f57-6582

Court Fax…………………………………………………………………………………………………………….. (619)557-5536

Mam, Margaret M.___________ HJ_____ 1……………………………. ———————— Mf—218/ — (619) 557-7407

AdJer, Uxitse Decarl___________ Judge—– 2………………………………………………….. Mf—118/ — (619)557-6594

Taylor, Laura S_______________ ludge___ 3………………………………………………….. Mf ……129/…. (619) 557-6018

Bowie, Peter W______________ CJ_.4_______________________________________ Mf—328/—(619) 557-5157

Meyers, James W……………… Judge—- 5…………………………………………………. .Mf—318/ — (619) 557-6019

SUPREME COURT OF CALIFORNIA

ofln Rfottottoo uvnco

350 MeMMnr St, San Francisco, CA 94102-7303——- .,———————- ……………………————- (418) 866-7000

wwwxourtsxagov/supremecourts/

Court Administrator, Frank A. McGuire………………………………………………………………………………. …..(415) 865-7000

Reporter of Decisions, Edward W. Jessen……………………………………………………………………………… (415) 865-7168

Assistant Clerk Administrator, Jorge Navarrete…………………………………………………………………………… (415) 865-7002

■ Cant&Sakauye, Tanl G……. _____ CJ…………………………………………………………….. Mf „…………… (415) 865-7062

Kermard, Joyce I____________ .AssocJ…………………………………………………… —- Mf……….. —- (415)865-7102

Baxter, Marvin R………………… .AssccJ……………………………………………………… Mf……………. (415) 865-7082

Werdegar, Kathryn M__________ .AssocJ……………………………………………………….. Mf__________ (415) 865-7032

CMn,MingW._____________ AssocJ……………………………………………………….. Mf__________ (4*5) 865-7052

Ox»ton,CarolA.………………. AssocJ……………………………………………………….. Mf……………. (415)885-7074

Liu, Goodwin_______________ .ASSOCJ………………………………………………………….. Mf__________ (415) 865-7092

STATE BAR COURT OF CALIFORNIA

U49 S. HD St, FL 5, Lot Angeles, CA 900152299————— ..——— .———- .-.._______________ (213) 765-1400

CAO(Mf), Colin Wong.…………………………………………………………………………………………………. (213)765-1472

CCC (Mf), George Scott……………………………………………………………………………………………….. (213) 765-1450

Honn, Richard A._________ ….. SHJ………………….. Trial………………………………….. Mf…………….. (213) 765-1400

Miles, Donald F._____________ HJ……………………. Trial………………………….. ^..___ Mf__________ (213) 765-1400

Plate), Richard A.………………… HJ……………………. Trial………………………………….. Mf…………….. (213) 765-1400

180 Howard St, FL 6, San Francisco, CA 94108-1639___________________ .,_______________ …..(415) 8382080

CAD (Mf), Colin Wong.………………………………………………………………………………………………… (415)538-2233

.CCC (Mf), George Scott………………………………………………………………………………………… (415)538-2036

Stovftz, Ronald W.……………….. Pro Tern………………. Appellate (2 days/Wk)……………………………………. (415)538-2050

Epstein, Judtth A.………………… RevJ…………………. Appellate…..……………………… T-Th_________ (415) 538-2050

McHroy, Patrice E.——————- HJ……………………. Trial……………….. ——————– Mf__________ (415)5382050

Remke, Joam M………………… PJ…………………….. Appellate……………………….. —– Mf…………….. (415) 5382050

Arrnendartz, Lucy………………… HJ……………………. Trial………………………………….. Mf…………….. (415)5382050

Puroen. Catherine D___________ RevJ…………………. Appellate_____________________ MW.……. ___ (415)538-2050

CALIFORNIA APPELLATE COURTS

ftflT AfPBiATE PffTWCT San Francisco

Alameda, Contra Costa, Del Norte, Humboldt, Lake, Marin, Mendocino, Napa, San Francisco, San Mateo, Solano & Sonoma

350 MeAOster StSan Frandseo, CA 941023600 http://wwwxourtirtfbxa^ov/coum/courtsofappeal/lst01strict/

Clerk/Administrator, Diana Herbert……………………………………………………………………. -.…………….. (415)865-7300

Assistant Clerk/Administrator, Susan Graham…………………………………………………………………………… (415)865-7263

Division 1- Deputy Clerk, Fred Abad…………………………………………….. ——- .———————————– (415) 865-7290

Division 1- Deputy Clerk, Laura Phonseya………………………………………………………………………………. (415) 865-7291

Division 2 – Deputy Clerk, Stacy Wheeler……………………………………………………………………………….. (415) 865-7292

Division 2 • Deputy Clerk, Imelda Santos………………………………………………………………………………… (415) 865-7293

DMsion 3- Deputy Clerk, Beth Robbins…………………………………………………………………………………. (415) 865-7295

DMsion 3 – Deputy Clerk, Mery Chang…………………………………………………………………………………. (415) 865-7294

DMston 4 – Deputy Clerk, Ann Reasoner……………………………………………………………………………….. (415) 865-7297

Division 4 ■> Deputy Clerk, Charming Hoo……………………………………………………………………………… (415) 865-7296

DMsion 5 – Deputy Clerk, Felix Castuera……………………………………………………………………………….. (415) 865-7298

DMsion 5 – Deputy Clerk, VIra Pons……………………………………………………………………………………. (415) 885-7299

MarcKano, James J……………… PJ……… 01…………………………………………………. Mf…………….. (415) 865-7270

MarguOes, Sandra I__________ .AssocJ….01………………………………………….. ……..Mf………… „.. (415) 865-7287

Dondero, Robert I—————- .AssocJ….01……………………………………………….. Mf…………….. (415)865-7260

Banke, Kathleen M……………… .AssocJ ….01………………………………………………. Mf…………….. (415) 865-7250

Kline, J. Anthony JR……………… PJ_____ 02.………………………………………………… Mf…………….. (415)865-7370

Haerte, Paul R.———————– AssocJ….02………………………………………………… Mf………….. ….(415)865-7350

Lambden, James R.…………….. AssocJ ….02………………………………………………. Mf…………….. (415)885-7380

Riehman,JamesA.——— …….. .AssocJ…. 02………………………………………………. Mf__________ (415)865-7230

McGumess, WBDam R.………………… JWmlnJ»J..03.~…………………………………………………….. Mf__________ (415)865-7210

Jenkins, Martin J…………………. AssocJ….03……………………………………………….. Mf……………. (415)865-7377

PoIIak, Stuart R———————– AssocJ ….03™………………………………………………… Mf__________ (415)865-7390

S|ggns,PetBrJ____________ -AS8OCJ….03………………………………………………….. Mf__________ (415)865-7365

Ruvolo, t&azio J…………………. PJ…….. 04.…… …………………………………………. Mf…………….. (415) 865-7360

Reardon, Timothy A.—————– .AssocJ …104———– .’.______ .——- ……___________ Mf__________ (415) 865-7220

Rivera. Maria P.———————- .AssocJ….04……………………………………………….. Mf…………….. (415)865-7240

Jones, Barbara J.R.……………… PJ……… 05………………… ;…:.;……………………. Mf__________ (415) 8657320

Simons, Mark B———————- .AssocJ ….05……………………………. ________ .___ Mf__________ (415) 865-7330

Needham, Henry E. JR.————- .AssocJ ….05………………………………………………. Mf……………. (415) 865-7340

Brulnlere, Terence L………. ……. AssocJ….05……………………………………………… ;;Mf…. ____ …..(415) 885-7342

See Legend on page 78


12  California Court Directory

JUDGE                                   TITIE         DW/DETT        MffrtH                                         d»S     RO0M/H-                  TELEPHONE

Second Appbiate Dbiwct Los Angeles

San Luis Oblspos, Santa Barbara and Ventura

300 8. Spring St, R. 2, N. Tama, Los Angeles, CA 900134213…………………………………_________ ,__________ ..(213) 830-7000

http://www.coum.ca.gov/2dca

CterK/Executive Officer of the Court, Joseph A. Lane………………………………………………………………………………………… (213) 830-7000

Asst Cterk/ExecuuVe Officer of the Court, Dan Potter……………………………………………………………………………………….. (213) 830-7000

Division 1 – Deputy Clerks…………………………………………………………………………………… ;…………………………………………….. (213) 830-7000

Division 2 • Deputy Clerks….___________ ……………………………. ________ „.……………………………………………………. (213) 830-7000

Division 3 – Deputy Clerks………………………………………………….. …………………………………………………………………………….. .(213) 830-7000

Division 4 – Deputy Clerks…………………………………………………………………………………………………………………………………….. (213) 830-7000

Division 5 – Deputy Clerks..