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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 1 of 11 Page ID #:470



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CONSUMER LITIGATION LAW CENTER, APC
September J. Katje, Esq. (SBN 227896)
[email protected]
Sholi Goodman, Esq., (SBN 287465)
[email protected]
100 North Citrus Street, Suite 408
West Covina, CA 91791
Telephone: (800) 787-5616
Fax: (888) 909-7647

Attorney for Plaintiff, ALFREDO C. ARANDA

UNITED STATES DISTRICT COURT







CENTRAL DISTRICT OF CALIFORNIA



Plaintiff,


ALFREDO C. ARANDA, an individual;



v.

CITIMORTGAGE, INC., a New York
Corporation; U.S. BANK N.A., AKA,
U.S. BANK TRUST N.A., AS TRUSTEE
FOR VERICREST OPPORTUNITY
LOAN TRUST ASSET HOLDINGS
NPL3; VERICREST FINANCIAL, INC.,
a Delaware Corporation; SUMMIT
MANAGEMENT COMPANY, LLC, a
Delaware Limited Liability Company;
and all persons or entities unknown
claiming any legal or equitable right, title,
estate, lien or interest in the property
described in this complaint adverse to
Plaintiff’s title thereto, and DOES 1
through 25, inclusive,

Defendants.




Case No.: 8:13-cv-00273-JVS-
MLG

PLAINTIFF’S OPPOSITION
DEFENDANT
TO
INC.’S
CITIMORTGAGE,
MOTION
DISMISS
PLAINTIFF’S
SECOND
AMENDED
COMPLAINT;
MEMORANDUM OF POINTS
AND AUTHORITIES
IN
SUPPORT THEREOF

TO


Hearing Date:
Date: August 12, 2013
Time: 1:30 p.m.
Ctrm: 10C

Judge: Honorable James V. Selna

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PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 2 of 11 Page ID #:471





Plaintiff, ALFREDO C. ARANDA, herein submits his Opposition to

Defendant, CITIMORTGAGE, INC.’S, (“CITI”) Motion to Dismiss his Second

Amended Complaint (“SAC.”) Plaintiff opposes Defendant’s Motion to Dismiss

on the grounds that his SAC does state valid causes of action and that Defendant’s

Motion to Dismiss is without merit.

The Opposition shall be based on

this Opposition,

the attached

Memorandum of Points and Authorities, on the complete files and records of this

action, and on such other oral and/or documentary evidence as may be presented

at the hearing on the Motion.

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Dated: July 22, 2013 CONSUMER LITIGATION LAW

CENTER, APC



BY: ___/s/ Sholi Goodman____________
September J. Katje, Esq.
Sholi Goodman, Esq.
Attorney for Plaintiff,
ALFREDO C. ARANDA








































PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 3 of 11 Page ID #:472



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Memorandum of Points and Authorities

I.

INTRODUCTION

On June 3, 2013, Plaintiff filed a Second Amended Complaint (“SAC”)

containing factual allegations against Defendant CitiMortgage (“CITI”) sufficient

to support denying Defendants Motion to Dismiss in its entirety. Plaintiff carefully

considered every allegation in Defendant’s original motion and this court’s ruling

thereafter in filing their SAC, but Defendant CITI has again filed a Motion to

Dismiss in this matter.

II. STATEMENT OF FACTS

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Plaintiff is the owner of the real property located at 22421 Gravino, Laguna

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Hills, CA 92653 (“Subject Property”). (SAC ¶ 3.) On September 30, 2005,

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Plaintiff obtained a mortgage loan in the amount of $512,000.00, secured by a deed

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of trust.

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CITI is part of, and bound by, a National Class Action Settlement

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Agreement (“Settlement Agreement”) whereby it is required to follow specific

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steps to remedy the plethora of fraudulent or otherwise wrongful loans that were a

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substantial cause of the recent financial crisis. (The Terms of the Settlement

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Agreement, as summarized below, can be found in the Exhibit “A” to the

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Settlement Agreement entitled “Settlement Term Sheet”.) One of the Settlement

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Agreement’s requirements is that borrowers be reviewed for a HAMP loan

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modification if eligible. (SAC ¶ 49.) Although CITI was, nor is, required to give

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every borrower a permanent loan modification, according the Settlement

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Agreement, they must be reviewed for, among others, a HAMP loan modification.

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(SAC ¶ 50.)

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The HAMP guidelines require that if a borrower is given a trial loan

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modification and makes all three payments timely under the trial plan, as well as

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supplies all the requested documents, he must be offered a permanent loan

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modification. (SAC ¶ 51.) Thus, once a borrower is reviewed and found eligible

PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 4 of 11 Page ID #:473



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for a trial HAMP loan modification, if the borrower makes timely payments and

documentary responses – CITI has a duty to give the borrower a permanent loan

modification. (SAC ¶ 52.)

Plaintiff began contacting CITI, the holder and effective servicer of

Plaintiff’s loan note at that time, in late 2010, to inquire about loan workout

options, particularly a loan modification. (SAC ¶ 16.) CITI advised Plaintiff to

submit a loan modification application and all the required documents. Id. Plaintiff

submitted the documents and was approved for a trial modification plan. Id.

CITI’s agent that was handling Plaintiff’s approved loan modification

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request told Plaintiff that if he complied with the trial modification requirements he

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would get a permanent loan modification, as he had been requesting. Accordingly,

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Plaintiff made three payments under the terms of the trial modification in

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compliance with the modification offer. (SAC ¶ 54.)

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Plaintiff had been reviewed, found eligible, and given a trial loan

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modification, however CITI never provided Plaintiff with a permanent loan

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modification. (SAC ¶ 18.) Instead CITI claimed that the only reason why Plaintiff

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was being denied a permanent loan modification was because Plaintiff had

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allegedly never signed or returned the modification agreement. (SAC ¶ 17.) In fact,

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Plaintiff never received any such loan modification documents. (SAC ¶ 18.)

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Further, Plaintiff is informed and believes that all contact had occurred over the

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phone and he categorically never received any permanent loan modification

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documentation or attempts by Defendant to facilitate as much. (SAC ¶ 19.)

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Had Plaintiff received permanent loan modification documents from CITI,

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Plaintiff would have accepted the loan modification agreement and signed the

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required documents and returned them to CITI. (SAC ¶ 18.) CITI was negligent in

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proceeding to process Plaintiff’s loan modification application, in informing

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Plaintiff he would receive a permanent loan modification if he made all three trial

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payments, thereinafter failing to provide Plaintiff a permanent loan modification

PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 5 of 11 Page ID #:474



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after Plaintiff made all trial payments under the terms of the loan modification, and

erroneously and blindly denying Plaintiff for the promised permanent loan

modification based on a failure to fill out documentation that Defendant itself was

the sole cause of failing to supply. Id.

Plaintiff was not denied for any substantive reason other than for failing to

sign documents he was never supplied with. (SAC ¶ 18.) It can thus be inferred

that Plaintiff was otherwise eligible for, and would have received, the promised

permanent loan modification, the conditions of which he had dutifully and timely

fulfilled, absent Defendant CITI’s failure or otherwise mishandling of Plaintiffs

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loan modification documents.

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III.

LEGAL STANDARD

Rule 12(b)(6) motions are viewed with disfavor, and accordingly,

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dismissals for failure to state a claim are “rarely granted.” Gilligan v. Jamco

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Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted). The standard

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for dismissal under Rule 12(b)(6) is a stringent one. “[A] complaint should not

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be dismissed for failure to state a claim unless it appears beyond doubt that the

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plaintiff can prove no set of facts in support of her claim which would entitle her

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to relief.” See Hartford Fire Ins. Co. v. California, 509 U.S. 764, 811 (1993)

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(quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Cervantes v. City of San

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Diego, 5 F.3d 1273, 1274 (9th Cir. 1993) (emphasis added). The purpose of a

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Federal Rule 12(b)(6) motion is to test the formal sufficiency of the statement of

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the claim for relief in the complaint. See Rutman Wine Co. v. E. & J. Gallo

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Winery, 829 F.2d 729, 738 (9th Cir. 1987).

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The complaint must be construed in the light most favorable to the

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nonmoving party and its allegations taken as true. See Scheuer v. Rhodes, 416 U.S.

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232, 236 (1974). It is not a procedure for resolving a contest about the facts or the

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merits of the case. In reviewing the sufficiency of the complaint, the issue is not

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whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to

PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 6 of 11 Page ID #:475



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offer evidence to support the claims asserted. Furthermore, more recently, the

U.S. Supreme Court has held that to survive a motion to dismiss, a complaint must

contain sufficient factual matter that, accepted as true, would “state a claim to

relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 55 US 544, 547

(2007).

IV.

ARGUMENT

First, Defendant never claims, and the denial letter confirms, that Plaintiff

was not denied for any reason other than for failing to fill out and sign the

permanent loan modification documents. Plaintiff has alleged that he never

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received these documents and thus could never have signed them. (SAC ¶ 57.)

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Defendant has never alleged in any pleading or other document that it actually ever

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sent Plaintiff these precise documents. Defendant certainly has not referred to or

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presented any evidence of such. In fact, Plaintiff has alleged, and Defendants have

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not denied, that all communications regarding the loan modification process,

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temporary or permanent, were conducted telephonically. Thus, it can reasonably

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be concluded that Defendant never did in fact send any permanent loan

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modification documents to Plaintiff.

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Further, if Plaintiff was only denied, albeit erroneously, for failure to

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provide the necessary documentation, then it can be inferred that he otherwise

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qualified absent this procedural nuance. Had Plaintiff been ineligible for investor

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non-participation or financial insufficiency or excess, Defendant would have and

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could have said as much. In fact, if Plaintiff had not otherwise qualified

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substantively, then what permanent loan modification application would need to

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have been signed? The signing is the acceptance of the agreement. Thus,

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Defendant’s denial shows that Plaintiff was otherwise fully eligible and qualified

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for the permanent loan modification.

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PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 7 of 11 Page ID #:476



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A. PLAINTIFF HAS STATED A CLAIM FOR UNFAIR BUSINESS

PRACTICES IN VIOLATION OF BUSINESS AND PROFESSIONS

CODE SECTIONS 17200, ET SEQ.

Unfair Competition Law (“UCL”) defines “unfair competition” to include

“any unlawful, unfair, or fraudulent business act or practices” that “threatens an

incipient violation of an antitrust law, or violates the policy or spirit of one of

those laws because…(it) significantly threatens or harms competition.” Cel-

Tech Comm., Inc. v. Los Angeles Cellular Tel. Co. (1999) 20 Cal.4th 163, 180.

1. Plaintiff Has Sufficiently Pled That Defendants’ Actions Were

Unfair

“[A]n unfair business practice occurs when it offends an established public

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policy or when the practice is immoral, unethical, oppressive, unscrupulous or

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substantially injurious to the consumer.” People v. Casa Blanca Convalescent

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Homes Inc. (1984) Cal.App.3d 509, 530. Section 5 of the Federal Trade

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Commission Act prohibits “unfair methods of competition in commerce.” See 15

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U.S.C. § 43(a).

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As set out above, CITI and at least four (4) other major financial

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institutions were bound by the Settlement Agreement. (The Terms of the

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Settlement Agreement, as summarized below, can be found in the Exhibit “A” to

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the Settlement Agreement entitled “Settlement Term Sheet”.) Pursuant to the

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Settlement Agreement, all five (5) signatories – including CITI - are required to

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follow specific steps to remedy the plethora of fraudulent or otherwise wrongful

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loans that were a substantial cause of the recent financial crisis and to promote

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the public policy of avoiding foreclosures that has devastated the economy. (See

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e.g.; the recently enacted: Protecting Tenants at Foreclosure Act; California’s

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Homeowners Bill of Rights; and the Dodd-Frank Bill.)

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The Settlement Agreement expressly requires that borrowers be reviewed

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for a HAMP loan modification, if eligible. Although CITI was not, nor is,

PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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Case 8:13-cv-00273-JVS-MLG Document 33 Filed 07/22/13 Page 8 of 11 Page ID #:477



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required to give every borrower a permanent loan modification, according to the

Settlement Agreement, they must be reviewed for, among others, a HAMP loan

modification. Further, since 2010 HAMP guidelines require that if a borrower is

given a trial loan modification and makes all three payments timely under the

trial plan, as well as supplies all the requested documents, he must be offered a

permanent loan modification. Thus, once a borrower is reviewed and found

eligible for a trial HAMP loan modification, if the borrower makes timely

payments and documentary responses – CITI is required to give the borrower a

permanent loan modification.

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It is undisputed that Plaintiff was reviewed, found eligible, and given a

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trial loan modification, and that Plaintiff timely made all three trial payments as

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instructed, and required by HAMP guidelines, in order to receive a permanent

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loan modification. Plaintiff also timely supplied all requested documents.

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However, CITI unfairly failed to send Plaintiff a permanent loan modification

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agreement for Plaintiff to sign, as promised and required by the Settlement

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Agreement and HAMP guidelines.

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CITI never requested that Plaintiff return any, allegedly sent, permanent

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loan modification agreement. Had CITI sent the agreement to be signed, Plaintiff

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would have immediately signed and returned the agreement. Had CITI requested

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Plaintiff to sign and return a permanent loan modification agreement, Plaintiff

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would have immediately notified CITI that he had not received one and

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immediately request another one to be sent for him to sign.

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Further, Plaintiff believes and thereon alleges that CITI has and does

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engage in this unfair, and other deceptive conduct, not just against Plaintiff, but

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against the public at large. By violating the Settlement Agreement while the other

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four (4) major banking institutions that make up the substantial majority of

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mortgage sources in the United States, are abiding by the Settlement Agreement,

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PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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CITI has gained a substantial competitive advantage over the other banking

institutions.

Not giving permanent loan modifications is inherently profitable because it

allows for CITI to not only continue to wrongfully charge late fees, foreclosure

fees, and other costs associated with default, but it also allows CITI to foreclose

on properties, the securing notes of which were purchased at the nadir of the

financial crisis at pennies on the dollar, and then resell at monumental profits at

the height of the real estate market recovery. CITI is able to thus maximize at

every angle, to the detriment of the public at large, and with an incredible

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competitive edge over the rest of the major banks bound by the Settlement

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Agreement who cannot usuriously profiteer because they are abiding by the

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Settlement Agreement and giving borrowers, such as Plaintiff, their rightful

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permanent loan modifications instead of unfairly foreclosing to the detriment of

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the other signatories and fair competition as a whole.

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CITI’s acts are “unfair” because they clearly violate the Settlement

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Agreement and competition laws, “offends the published public policy of

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avoiding foreclosures in the wake of the current foreclosure crisis (See e.g.; the

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recently enacted: Protecting Tenants at Foreclosure Act; California’s

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Homeowners Bill of Rights; and the Dodd-Frank Bill.), and is without doubt

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“immoral, unethical, oppressive…and substantially injurious to consumers.”

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To support a claim for Unfair Competition, the FTC requires the

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consumer injury to be substantial, the complained-of-practice must not be

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outweighed by any countervailing benefits to consumers or competition, or the

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injury must be one that consumers themselves could not have reasonably

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avoided. See Am. Fin. Serv. Ass’n v. F.T.C. (D.C. Cir. 1985) 767 F.2d 957, 971.

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CITI’s conduct in loan modification practices gave Defendant an unfair

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competitive advantage over its competitors that did not engage in such practices.

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(FAC ¶ 67.) Further, there is no greater injury than the loss of ones home, and

PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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certainly the devastation that the foreclosure epidemic has had on the entire

economy. The legislative response to the epidemic is evidence enough of the

horrific impact. (See e.g.; the recently enacted: Protecting Tenants at Foreclosure

Act; California’s Homeowners Bill of Rights; and the Dodd-Frank Bill.)

Defendant intended that Plaintiff would be misled. Id. The harm to Plaintiff

outweighs any utility that Defendant’s acts might have, albeit Plaintiffs cannot

think of any legitimate benefits he, society or the economy could gain by directly

violating a promise, the Settlement Agreement, intended to do exactly the

opposite of CITI’s conduct. Id.

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Plaintiff has also been harmed by CITI’s unfair conduct, in the form of

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pecuniary damages to his credit, late fees, interest and other costs associated with

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the wrongful denial of his promised permanent loan modification, and the

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wrongful foreclosure proceedings that have begun against his property. (SAC ¶¶

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22, 23) In addition, substantial additional fees, penalties and interest have

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continued to accrue on his account since he should have obtained the permanent

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loan modification on his loan from CITI. (SAC ¶¶ 76, 77) But for CITI’s failure

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to provide Plaintiff a permanent loan modification after Plaintiff’s compliance

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with all of the terms of the temporary loan modification and CITI’s promise to do

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so after Plaintiff’s compliance, Plaintiff would not have accumulated the

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additional penalties, interest and fees since his permanent loan modification

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would have taken effect, in or around early 2011.

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Therefore, Plaintiff stated that Defendants’ actions were unlawful and

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unfair and thus a violation of California Business and Professions Code §§

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17200, et seq. and Defendant’s Motion to Dismiss should be denied.

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B. PLAINTIFF IS NOT REQUIRED TO TENDER



A mortgagor who seeks to set aside a voidable sale must make a valid

tender of payment of indebtedness. Karlsen v. American Savings & Loan Assn.,

PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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15 Cal. App. 3d 112, 117 (1971). Thereby, Defendant contends that Plaintiff is

required to provide tender, allege that Plaintiff is incapable of performing tender,

and thus the entire FAC is barred by the tender rule. However, there are

recognized exceptions to the tender requirement. As to CITI, Plaintiff does not

seek to rescind the loan documentation, but rather he seeks damages for the

harms perpetrated against him by CITI in the modification process as set forth

above. Thus, Plaintiff’s causes of action specifically do not require tender and

Plaintiff should not be required to allege tender.

C. CONCLUSION

For the reasons set forth above, Plaintiff respectfully requests that the

Court deny Defendant’s Motion to Dismiss, set a date in which Defendant must

answer the SAC, and further set this case for trial. In the alternative, Plaintiff

requests the Court allow him sufficient time to amend his complaint to allege

additional facts sufficient to plead inadequately pled causes of action against

Defendant.



Dated: July 22, 2013

CONSUMER LITIGATION LAW CENTER, APC









































BY ___/s/ Sholi Goodman_____________
September J. Katje, Esq.
Sholi Goodman, Esq.
Attorney for Plaintiff,
ALFREDO C. ARANDA



PLAINTIFF’S OPPOSITION TO DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S

SECOND AMENDED COMPLAINT

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