homeowner helen galope overjoyed at decision by ninth circuit court of appeal -march 27 2014--this...

U.S.C.A. CASE NO. 12-56892

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

_________________________

HELEN GALOPE, on behalf of herself and all others similarly situated

Plaintiffs-Appellants

vs.

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER POOLING AND SERVICING AGREEMENT DATED AS OF MAY 1, 2007 SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2007-BR4; WESTERN PROGRESSIVE, LLC; BARCLAYS BANK PLC, BARCLAYS CAPITAL REAL ESTATE INC. d/b/a HOMEQ SERVICING; OCWEN LOAN

SERVICING, LLC, and DOES 4 through 10, Inclusive

Defendants-Appellees ________________________

Appeal from Judgment/Order of the

U.S. District Court, Central District of California The Honorable Cormac J. Carney

Case No. 8:12-cv-00323-CJC (RNBx)

BRIEF OF APPELLEES DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, WESTERN PROGRESSIVE, LLC, AND OCWEN LOAN SERVICING, LLC

Robert W. Norman, Jr. (Cal. Bar. No. 232470) Brent A. Kramer, Esq. (Cal. Bar No. 256243)

HOUSER & ALLISON 3780 Kilroy Airport Way, Suite 130

Long Beach, CA 90806 Telephone: (562) 256-1675 Facsimile: (562) 256-1685

Attorney for Defendants-Appellees

Case: 12-56892 07/05/2013 ID: 8692641 DktEntry: 28 Page: 1 of 57

CORPORATE DISCLOSURE STATEMENT

Pursuant to Federal Rule of Appellate Procedure 26.1 and 28(a)(1), the

following entities have an interest, financial or otherwise, in the outcome of the

litigation:

Defendant-Appellee Ocwen Loan Servicing, LLC is a limited liability company, the sole member of which is Ocwen Financial Corporation, a publicly traded company. Defendant-Appellee Western Progressive, LLC, is a limited liability company, the sole member of which is Altisource Portfolio Solutions S.A., a publicly traded company.

There are no other known publicly held companies for purposes of disclosure

pursuant to Federal Rule of Appellate Procedure 26.1.

DATED: July 5, 2013 HOUSER & ALLISON A Professional Corporation By: /s/ Brent A. Kramer Brent A. Kramer

Attorneys for Defendants-Appellees Deutsche Bank National Trust Company, as Trustee under Pooling and Servicing Agreement Dated as of May 1, 2007 Securitized Asset Backed Receivables LLC Trust 2007-BR4, Western Progressive, LLC, and Ocwen Loan Servicing, LLC


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TABLE OF CONTENTS

I. JURISDICTIONAL STATEMENT .................................................................... 1

II. STATEMENT OF THE ISSUES ........................................................................ 2

III. STATEMENT OF THE CASE ........................................................................ 2

IV. STATEMENT OF FACTS ............................................................................... 3

A. HomEq Offered Galope A Loan Modification After She

Defaulted On Her Mortgage Loan. ........................................................................ 3

B. After Galope Defaulted On Her Reduced Payments, She

Filed For Bankruptcy And An Adversary Action When Non-Judicial

Foreclosure Was Initiated. ...................................................................................... 4

C. Galope Again Filed For Bankruptcy After Foreclosure Was

Reinitiated But Her Bankruptcy Case Was Dismissed. ........................................ 5

D. Galope Moved To Vacate The Dismissal Of Her Chapter 13

Bankruptcy Case Just Before The Trustee's Sale. ................................................. 5

E. Galope Filed Her Third Bankruptcy Petition In Two Years

But This Case Was Likewise Dismissed And The September 1, 2011

Trustee's Sale Was Rescinded. .............................................................................. 6

V. SUMMARY OF THE ARGUMENT .................................................................. 6

VI. STANDARD OF REVIEW .............................................................................. 7

VII. ARGUMENT .................................................................................................... 9

A. The Trial Court Correctly Granted Summary Judgment on

Galope’s First Claim For Violation of the Sherman Antitrust Act. ...................... 9

1. Galope Lacks Article III Standing to Bring An Antitrust

Claim Because She Has Not Sustained Any Injury-in-Fact ............................. 10

a. Galope Lacks Standing under the Lujan Decision. .................................. 10

b. Galope Lacks Antitrust Standing. ............................................................. 12


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c. The Consumer Expectations Test is Inapplicable. .................................... 13

d. The Rational Expectations Test is Inapplicable. ...................................... 16

2. Galope Has No Evidence That Establishes a Conspiracy ........................... 17

B. The Trial Court Correctly Granted Summary Judgment on

Galope’s Second, Third, and Fourth Claims For Violation

of the UCL 17200. ................................................................................................ 19

1. Galope’s UCL Claims Are Contractually and Equitably

Barred Against DBNTC. ................................................................................... 19

2. DBNTC Cannot Be Vicariously Liable For Galope’s

UCL Claims Concerning the Modification and the LIBOR ............................. 22

3. All Of The Alleged Oral Promises Concerning the

Modification Are Barred Because The Written Modification

Agreement Is A Fully Integrated Document. .................................................... 25

4. Galope is Not Entitled to Any Relief Against Defendant

DBNTC Under the UCL and Her “Damages” are Purely

Conjectural and Hypothetical ............................................................................ 27

5. Galope is Not Entitled to Restitution Under the UCL. ............................... 29

6. Galope Has No Damages For Any UCL Claim Premised

on Fraud............................................................................................................. 30

7. Galope is Precluded From Restitution For Her UCL Claim

Premised on the Trustee’s Sale. ........................................................................ 31

C. The Trial Court Correctly Granted Summary Judgment on

Galope’s Fifth Claim For Violation of the FAL 17500. ..................................... 32

D. The Trial Court was Correct to Grant Summary Judgment

as to Galope’s Seventh Claim for Wrongful Foreclosure. ................................... 34

1. Galope’s Wrongful Foreclosure Claim is Moot and Galope

Has No Damages Because There Was No Equity in the Property. .................. 34


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2. Galope Did Not Give Any Notice to Western Progressive,

the Foreclosure Trustee, of Her Bankruptcy Reinstatement Prior

to the Trustee’s Sale. ......................................................................................... 36

E. The Trial Court was Correct to Grant Summary Judgment

as to Galope’s Eighth Claim for Breach of Good Faith and Fair Dealing. .......... 37

VIII. CONCLUSION .............................................................................................. 40


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TABLE OF AUTHORITIES

Cases

Alaska v. United States, 201 F.3d 1154 ................................................................... 14

Allen v. Wright, 468 U.S. 737 .................................................................................. 10

Amarel v. Connell, 102 F.3d 1494 .................................................................... 10, 12

American Tobacco Co. v. U.S., 328 U.S. 781 .......................................................... 17

Anderson v. Liberty Lobby, Inc., 477 U.S. 242.......................................................... 9

Arizonans for Official English v. Arizona, 520 U.S. 43 .......................................... 34

Assn. v. Schwarzenegger, 556 F.3d 950 .................................................................... 7

Associated Gen. Contractors of California, Inc. v. California State

Council of Carpenters, 459 U.S. 519, 536 n. 33, 103 S.Ct. 897 .......................... 16

Barker v. Lull Engineering Co. 20 Cal.3d 413 ........................................................ 15

Bradstreet v. Wong, 161 Cal.App.4th 1440 ............................................................. 29

C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474 ........................ 8

Celotex Corp. v. Catrett, 477 U.S. 317 ...................................................................... 8

Cel-Tech Communications, Inc. v. Los Angeles Cellular Tel. Co.,

20 Cal.4th 163 ....................................................................................................... 22

Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042 ......................................... 23

City of Erie v. Pap’s A.M., 529 U.S. 277 ................................................................. 34

City of Hope Nat. Medical Center v. Genentech Inc., 43 Cal.4th 375 .................... 19

Doleman v. Meiji Mut. Life Ins. Co., 727 F.2d 1480 ............................................... 18

Emery v. Visa Int’l Serv. Ass’n, 95 Cal.App.4th 952 ............................................... 23

F.T.C. v. Neovi, Inc., 604 F.3d 1150 ........................................................................ 18

Foley v. Interactive Data Corp., 47 Cal.3d 654 ...................................................... 37

FPI Development, Inc. v. Nakashima, 231 Cal.App.3d 367 .................................... 26

Freeman v. San Diego Association of Realtors, 322 F.3d 1133 .............................. 13


v

Gerlinger v. Amazon.com Inc., 526 F.3d 1253 ................................................. 10, 12

Guz v. Bechtel Nat. Inc., 24 Cal.4th 317 .................................................................. 37

Harmsen v. Smith, 693 F.2d 932 .............................................................................. 18

Harper v. 24 Hour Fitness, Inc., 167 Cal.App.4th 966 ........................................... 27

In re Ramirez, 183 BR 573 ...................................................................................... 32

Kim v. Regents of the University of California, 80 Cal.App.4th 160 ...................... 37

Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 ............................... 29

Kraus v. Trinity Mgmt. Servs., 23 Cal.4th 116 ........................................................ 29

Kwikset Corp. v. Superior Court, 51 Cal.4th 310 .................................................... 28

Lovell v. Chandler, 303 F.3d 1039 ............................................................................ 7

Lujan v. Defenders of Wildlife, 504 U.S. 555 .......................................................... 10

Masterson v. Sine, 68 Cal.2d 222 ............................................................................ 26

Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574 ................................... 9

McDonald v. Coldwell Banker, 543 F.3d 498 ......................................................... 23

Metoyer v. Chassman, 504 F.3d 919 ....................................................................... 26

Munger v. Moore, 11 Cal.App.3d 1, 7-8, n. 6 .......................................................... 34

Neubronner v. Milken, 6 F.3d 666 ........................................................................... 30

Orloff v. Metro Trust Co., 17 Cal.2d 484 ................................................................ 18

Padgett v. Wright, 587 F.3d 983 .............................................................................. 14

People v. Toomey, 157 Cal.App.3d 1 ..................................................................... 23

People v. Casa Blanca Convalescent Homes, Inc., 159 Cal.App.3d 509 ................ 23

Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d 788 ................................... 23

Pollyana Homes, Inc. v. Berney, 56 Cal.2d 676 ...................................................... 25

POM Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 ........................................ 28

Puentes v. Wells Fargo Home Mortg., Inc., 160 Cal.App.4th 638 .......................... 22

R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 890 F.2d 139 ........................ 16

Recinto v. U.S. Dep’t of Veterans Affairs, 706 F.3d 1171 ....................................... 39


vi

Salehi v. Surfside III Condominium Owners’ Assn., 200 Cal.App.4th 1146 ........... 20

See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 ........................... 10

Sipe v. Countrywide Bank, 690 F.Supp.2d 1141 ..................................................... 23

Small v. Fritz Companies, Inc., 30 Cal.4th 167 ....................................................... 30

Smith v. Marsh, 194 F.3d 1045 ................................................................................ 14

Soule v. General Motors Corp., 8 Cal.4th 548 ........................................................ 16

Susilo v. Wells Fargo Bank, 796 F.Supp.2d 1177 ................................................... 39

Symbersound Records, Inc. v. UAV Corp., 517 F.3d 1137 ...................................... 23

Tozzi v. Lincoln Nat. Life Ins. Co., 103 F.2d 46 ...................................................... 20

Valdez v. Rosenbaum, 302 F3d 1039 ......................................................................... 7

Walker v. Truck Ins. Exchange, Inc., 11 Cal.4th 1 .................................................. 37

West v. Secretary of Dept. of Transp., 206 F.3d 920 ............................................... 34

Statutes

28 U.S.C. § 1291 ........................................................................................................ 1

28 U.S.C. § 1331 ........................................................................................................ 1

28 U.S.C. § 1332 ........................................................................................................ 1

Cal. Bus. & Prof. Code § 17200 .............................................................................. 22

Cal. Bus. & Prof. Code § 17204 .............................................................................. 27

Cal. Bus. & Prof. Code § 17500 ......................................................................... 2, 33

Cal. Bus. Prof. Code §§ 17203 ................................................................................ 27

Fed. R. Civ. P. 56(a) ................................................................................................... 8

Fed. R. Civ. P. 56(c)(1) .............................................................................................. 8

Fed. R. Civ. P. 9(b) .................................................................................................. 30

UCL § 17200 .............................................................................................................. 2

Other Authorities

Sherman Antitrust Act § 1 .....................................................................................2, 9


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I. JURISDICTIONAL STATEMENT

Pursuant to Ninth Circuit Rule 28-2.2, Defendants-Appellees Deutsche Bank

National Trust Company, as Trustee under Pooling and Servicing Agreement

Dated as of May 1, 2007 Securitized Asset Backed Receivables LLC Trust 2007-

BR4 (“DBNTC”), Western Progressive, LLC (“Western Progressive”), and Ocwen

Loan Servicing, LLC (“Ocwen”), submit the following statement of jurisdiction:

a. The United States District Court, Central District of California (the

“Trial Court”), had subject matter jurisdiction over this case pursuant to 28 U.S.C.

§ 1331 (federal question jurisdiction) and 28 U.S.C. § 1332 (diversity jurisdiction).

b. The Court of Appeals for the Ninth Circuit has jurisdiction over this

appeal because the summary judgment order appealed was a final decision

pursuant to 28 U.S.C. § 1291 (jurisdiction over appeals of final decisions of district

court).

c. The United States District Court, Central District of California,

entered an Order granting summary judgment in this case on September 26, 2012.

Galope filed her Notice of Appeal of the Order on October 16, 2012. Galope’s

appeal was timely filed within 30 days from the date of entry of the judgment or

order appealed from.


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II. STATEMENT OF THE ISSUES

Whether the Trial Court erred in granting Defendants-Appellees DBNTC,

Western Progressive, and Ocwen’s Motion for Summary Judgment, and entering

its Order thereon.

III. STATEMENT OF THE CASE

On July 20, 2012, Galope filed a Third Amended Complaint (“TAC”)

against Defendants-Appellees DBNTC, Western Progressive, and Ocwen, and

others. Galope alleged claims against DBNTC, Western Progressive, and Ocwen

for: (1) Violation of the Sherman Antitrust Act § 1 (Price Fixing); (2) UCL §

17200 Violation; (3) UCL § 17200 Violation; (4) UCL § 17200 Violation; (5) FAL

Violation of § 17500; (6) Wrongful Foreclosure; (7) Breach of Good Faith and Fair

Dealing. See EOR 1599-1643.

On August 6, 2012, DBNTC, Western Progressive, and Ocwen filed a

Motion for Summary Judgment. Plaintiff filed an Opposition to the Motion for

Summary Judgment on August 13, 2012. See EOR 1291-1325. The Court granted

the Motion for Summary Judgment in its entirety on September 26, 2012. See

EOR 1-11.

///

///


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IV. STATEMENT OF FACTS

A. HomEq Offered Galope A Loan Modification After She Defaulted On

Her Mortgage Loan.

On December 16, 2006, Galope borrowed $522,000.00 from lender New

Century Mortgage Corporation. See EOR 1331; 1374; 1382-1387. Under the

terms of the loan, Galope’s monthly mortgage payment was $3,817.13 and her

interest rate of 8.775% could change beginning in January 2009 based on a

calculation involving the LIBOR. See EOR 1331; 1374; 1382-1387. The loan was

secured by a Deed of Trust recorded against the subject real property on December

28, 2006. See EOR 1331; 1374-75; 1388-1408. In April 2007, HomEq began to

service the loan. See EOR 1331; 1375. By April 2008, Galope was $15,951.62 in

arrears on the loan. See EOR 1331-32; 1375. In April 2008, HomEq offered

Galope a loan modification, which she accepted, and this agreement was

memorialized in writing (“Modification Agreement”). See EOR 1332; 1375; 1409-

12. Under the terms of the Modification Agreement, the total monthly mortgage

payment was reduced by roughly $800.00 to $3,027.02 per month for a period of

five years, including escrow, and the interest rate was fixed at 5.5% to maturity.

See EOR 1332; 1375; 1409-12. The Modification Agreement provides that the

monthly payment will increase beginning May 1, 2013 to ensure the entire debt is


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paid at maturity. See EOR 1332; 1375; 1409-12. The Modification Agreement

included a release and integration clause. See EOR 1332; 1375; 1409-12.

B. After Galope Defaulted On Her Reduced Payments, She Filed For

Bankruptcy And An Adversary Action When Non-Judicial Foreclosure

Was Initiated.

On April 8, 2009, Galope made her last modified payment. See EOR 1332;

1375; 1413-1414. This only brought the loan contractually current through March

1, 2009 because Galope had only made three out of the four required payments

from January 1, 2009 through April 8, 2009. See EOR 1332; 1375; 1413-1414.

Given the continued default, non-judicial foreclosure was initiated on July 31,

2009. See EOR 1375; 1415-1420. From April 2008 through July 2009, Galope did

not contact HomEq to specifically complain that she was only given an incomplete

copy of the Modification Agreement. See EOR 1375.

On January 5, 2010, Galope filed for Chapter 7 bankruptcy. See EOR 1332;

1379; 1424-1477. On February 25, 2010, Galope also filed a bankruptcy adversary

action against Deutsche Bank and HomEq. See EOR 1379; 1478-1507. This

adversary action was dismissed on April 14, 2010. See EOR 1379; 1508-13. On

April 28, 2010, Galope received her discharge in the Chapter 7 bankruptcy. See

EOR 1379-80; 1514-16. The foreclosure initiated on July 31, 2009 was rescinded

on May 11, 2010. See EOR 1376; 1422-23.


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C. Galope Again Filed For Bankruptcy After Foreclosure Was Reinitiated

But Her Bankruptcy Case Was Dismissed.

Given that Galope had not made a modified payment since April 2009, non-

judicial foreclosure was reinitiated on March 8, 2011. See EOR 1375; 1377; 1413-

14; 1517-21. In response, Galope filed for Chapter 13 bankruptcy on July 11,

2011. See EOR 1380; 1531-40. However, this Chapter 13 bankruptcy was

dismissed and the automatic stay vacated on August 17, 2011 because Galope

failed to file the required documents. See EOR 1380; 1541-42.

D. Galope Moved To Vacate The Dismissal Of Her Chapter 13 Bankruptcy

Case Just Before The Trustee's Sale.

On September 1, 2011, the property sold at trustee's sale to DBNTC. See

EOR 1377-78; 1522-26. However, on August 30, 2011, just before the trustee's

sale, the bankruptcy court reinstated Galope’s Chapter 13 case after she moved to

vacate the dismissal. See EOR 1380; 1543-45. Galope did not give any notice to

WPT, the foreclosure trustee, that her bankruptcy case had been reinstated. See

EOR 1378. The Chapter 13 bankruptcy was ultimately again dismissed on

December 16, 2011. See EOR 1380; 1546-47.

///

///

///


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E. Galope Filed Her Third Bankruptcy Petition In Two Years But This

Case Was Likewise Dismissed And The September 1, 2011 Trustee's

Sale Was Rescinded.

Galope again filed for Chapter 7 on January 17, 2012, her third bankruptcy

petition in a span of two years. See EOR 1380-81; 1548-93. However, Galope’s

attempt to convert this Chapter 7 to a Chapter 13 was denied and this bankruptcy

case was dismissed on March 13, 2012. See EOR 1381; 1594-98. On March 27,

2012, the rescission of the September 1, 2011 trustee's sale was recorded. See EOR

1378; 1527-30.

V. SUMMARY OF THE ARGUMENT

The Trial Court correctly granted the Motion for Summary Judgment, which

was filed by DBNTC, Western Progressive, and Ocwen. The undisputed evidence

shows that Galope did not suffer an injury-in-fact sufficient to confer Article III

standing. Galope alleges that DBNTC, Western Progressive, and Ocwen were

involved in manipulating the LIBOR rate, which in turn caused Galope to pay a

higher interest rate on her Loan. However, Galope’s Loan was never subject to the

LIBOR rate. Galope’s Loan originated in December, 2006. Galope stopped

making payments on her Loan before her Loan became an adjustable rate Loan in

January 2009. Galope received a fixed 5.5% interest rate loan modification in


7

April 2008 from HomEq. Therefore, the LIBOR rate was never used to calculate

payments due from Galope.

Galope’s other main theory is that DBNTC, Western Progressive, and

Ocwen sent her a Loan Modification Agreement by facsimile, but purportedly

“sandwiched” legal paper between regular size paper, and that terms were cut off

from the transmission. Galope has no evidence that any of the above defendants

were involved in the loan modification agreement transmission. Even if they were,

the Loan Modification Agreement terms meant that her Loan would not be subject

to the LIBOR rate until May, 2013 at the earliest. Galope did not suffer any

injury-in-fact from the purported fax transmission scheme. For these reasons, and

all of the reasons set forth below, the Trial Court was correct to grant the Motion

for Summary Judgment filed by DBNTC, Western Progressive, and Ocwen.

VI. STANDARD OF REVIEW

An order granting or denying summary judgment generally is reviewed de

novo. Lovell v. Chandler, 303 F.3d 1039, 1052 (9th Cir. 2002). The reviewing

court must determine whether there are any genuine issues of material fact and

whether the district court correctly applied the relevant substantive law. Valdez v.

Rosenbaum, 302 F3d 1039, 1043 (9th Cir. 2002). Summary judgment may be

affirmed on any ground supported by the record. See Video Software Dealers

Assn. v. Schwarzenegger, 556 F.3d 950, 956 (9th Cir. 2009).


8

Federal Rule of Civil Procedure 56(a) mandates that “[t]he court shall grant

summary judgment if the movant shows that there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). The moving party bears the initial burden of establishing the

absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986). “When the party moving for summary judgment would bear the

burden of proof at trial, it must come forward with evidence which would entitle it

to a directed verdict if the evidence went uncontroverted at trial.” C.A.R. Transp.

Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (internal

quotation marks and citations omitted). “In such a case, the moving party has the

initial burden of establishing the absence of a genuine issue of fact on each issue

material to its case.” Id. In contrast, when the nonmoving party bears the burden

of proving the claim or defense, the moving party need not produce any evidence

or prove the absence of a genuine issue of material fact. See Celotex, 477 U.S. at

325. Rather, the moving party's initial burden “may be discharged by ‘showing’ -

that is, pointing out to the district court - that there is an absence of evidence to

support the nonmoving party's case.” Id.

Once the moving party meets its initial burden, the “party asserting that a

fact cannot be or is genuinely disputed must support the assertion.” Fed. R. Civ. P.

56(c)(1). “The mere existence of a scintilla of evidence in support of the


9

[nonmoving party]'s position will be insufficient; there must be evidence on which

the jury could reasonably find for the [nonmoving party].” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 252 (1986) (“Anderson”); accord Matsushita Elec.

Indus. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (“[O]pponent must do

more than simply show that there is some metaphysical doubt as to the material

facts.”). Further, “[o]nly disputes over facts that might affect the outcome of the

suit . . . will properly preclude the entry of summary judgment [and] [f]actual

disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477

U.S. at 248. At the summary judgment stage, a court does not make credibility

determinations or weigh conflicting evidence. See id. at 249. A court is required

to draw all inferences in the light most favorable to the nonmoving party.

Matsushita, 475 U.S. at 587.

VII. ARGUMENT

A. The Trial Court Correctly Granted Summary Judgment on Galope’s

First Claim For Violation of the Sherman Antitrust Act.

Galope’s first claim is for violation of the Sherman Antitrust Act § 1 (Price

Fixing) against Barclays Bank PLC, Barclays Capital Real Estate, Inc. d/b/a

HomEq Servicing, and DBNTC. See EOR 1616-18. Galope’s antitrust claim

fails because she lacks standing to bring the claim, as she has no evidence of any


10

injury-in-fact. Furthermore, Galope’s claim fails because she has no evidence of

any conspiracy.

1. Galope Lacks Article III Standing to Bring An Antitrust

Claim Because She Has Not Sustained Any Injury-in-Fact

Galope has no evidence to establish she sustained any injury-in-fact.

Article III standing requires proof of injury-in-fact and causation. Allen v.

Wright, 468 U.S. 737, 750 (1984). For Article III purposes, an antitrust plaintiff

establishes injury-in-fact when she “has suffered an injury which bears a causal

connection to the alleged antitrust violation.” Amarel v. Connell, 102 F.3d 1494,

1507 (9th Cir. 1996). Where an injury-in-fact cannot be established, summary

judgment of the plaintiff’s antitrust claim based on Article III grounds is proper.

Gerlinger v. Amazon.com Inc., 526 F.3d 1253, 1255-56 (9th Cir. 2008).

Furthermore, Galope must adequate demonstrate Article III standing of an injury-

in-fact before even reaching the issue of antitrust standing. See Brunswick Corp.

v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). For the reasons set forth

below, Galope has not offered sufficient evidence that she has standing.

a. Galope Lacks Standing under the Lujan Decision.

In her Opening Brief, Galope argues that, under Lujan v. Defenders of

Wildlife, 504 U.S. 555 (1992) (“Lujan”), she has adequately alleged standing

based on an injury-in-fact. See Opening Brief, p.30. Galope argues that she


11

meets the standing requirement under Lujan because “general factual allegations

of injury resulting from the defendant’s conduct may suffice, for on a motion to

dismiss we ‘presum[e] that general allegations embrace those specific facts that

are necessary to support the claim.’” Galope ignores the fact that the Court

granted summary judgment, not a motion to dismiss, based on a lack of evidence

of any injury-in-fact.

Furthermore, Galope’s quotation from Lujan was taken out of context. The

Lujan court wrote, as follows:

At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we “presum[e] that general allegations embrace those specific facts that are necessary to support the claim.” [citation omitted]. In response to a summary judgment motion, however, the plaintiff can no longer rest on such “mere allegations,” but must “set forth” by affidavit or other evidence “specific facts,” Fed.Rule Civ.Proc. 56(e), which for purposes of the summary judgment motion will be taken to be true. And at the final stage, those facts (if controverted) must be “supported adequately by the evidence adduced at trial.” [citation omitted].

Without any actual evidence of any injury-in-fact caused by the conduct of

Defendants-Appellees DBNTC, Western Progressive, and Ocwen, Galope cannot

prevail on summary judgment on her antitrust claim.

In the Opening Brief, Galope contends that she need not establish Article

III standing because “agreements to fix prices in interstate commerce are


12

unlawful per se.” See Opening Brief, p.24. This is not so. The injury-in-fact

requirement is mandatory, not optional, for a private plaintiff to bring an antitrust

claim. Amarel v. Connell, 102 F.3d 1494, 1507 (9th Cir. 1996); see also

Gerlinger v. Amazon.com Inc., 526 F.3d 1253, 1255-56 (9th Cir. 2008).

Galope has no evidence that establishes she sustained an injury-in-fact as a

result of Barclays’s alleged manipulation of the LIBOR because the interest rate

on her mortgage loan was not affected by the LIBOR. Under the terms of the

original loan obtained in December 2006, Galope’s interest rate of 8.775% could

change beginning in January 2009 based on a calculation involving the LIBOR.

See EOR 1374, 1383-84. However, before the interest rate could change based

on a calculation involving the LIBOR, Galope received a fixed 5.5% interest rate

loan modification in April 2008 from HomEq. See EOR 1374, 1409-12. As such,

Galope has not sustained any injury-in-fact as a result of the alleged LIBOR

manipulation because the interest rate on her specific mortgage loan was fixed

before it could ever be adjusted based on a calculation involving the LIBOR.

Galope lacks Article III standing because she has no measurable damages related

to the conduct of which she complained.

b. Galope Lacks Antitrust Standing.

In her appeal, Galope argues that she has standing to sue under the antitrust

laws. She argues that she “lost the opportunity to obtain financing of her home


13

based on an independent market rate.” See Opening Brief, p. 25. Galope, offered

no evidence, either in Opposition to the Motion for Summary Judgment, or

elsewhere in her Appeal, that her 8.775% interest rate was higher than it should

have been had the alleged LIBOR-rate manipulation not occurred. Additionally,

Galope offered no evidence that there were non-LIBOR based loans she could

have obtained at a lower initial interest-rate. The only evidence presented by

Galope is that the purported LIBOR manipulation impacted the adjustable-rate

interest that she would have paid after the initial two years of fixed-interest

payments. See EOR 125-28.

c. The Consumer Expectations Test is Inapplicable.

Galope argues that her “consumer expectations were not taken into

account” and therefore, she suffered injury as a result of the conduct of

Defendants-Appellees DBNTC, Ocwen, and Western Progressive. See Opening

Brief, pp. 26-27. Galope asserts she has standing according to the case of

Freeman v. San Diego Association of Realtors, 322 F.3d 1133 (9th Cir. 2011)

(“Freeman”). This case, which does not appear anywhere in her Opposition to

the Motion for Summary Judgment, see EOR 1291-1325, never discusses or even

mentions the so-called “consumer expectations test.” Nor was the consumer

expectations test ever discussed in Galope’s Opposition to the Motion for

Summary Judgment. See EOR 1291-1325. This Court should decline to consider


14

issues raised for the first time on appeal. See Padgett v. Wright, 587 F.3d 983,

985 n. 2 (9th Cir. 2009) (“Padgett”); Alaska v. United States, 201 F.3d 1154,

1163–64 (9th Cir. 2000); Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999)

(“Smith”).

Furthermore, in Freeman, unlike here, the Plaintiffs-Appellants suffered a

concrete and direct injury. The Plaintiffs in Freeman were real estate agents who

subscribed to the Multiple Listing Service (“MLS”) operated by a corporation

called Sandicor, which let the agents share information about real estate

properties on the market with the help of a computerized database. See Freeman,

322 F.3d at 1140-1141. Each real estate agent, in order to use the MLS database,

was required to pay a subscription fee. See id. at 1141. Real estate associations

were responsible for signing up new the agents who subscribed, and collecting

these fees, but Sandicor determined the fees agents must pay to subscribe. Id.

The local real estate associations also provided support services to the

subscribers, and received a fee from Sandicor in return for the services. Id.

The Freeman court held, first, that the support service payments made

from Sandicor to the real estate associations was being fixed at a higher rate than

the market would have otherwise permitted for some of the associations. See id.

at 1145. In turn, the Plaintiffs were harmed because those inflated service fees

were then passed onto the actual agent subscribers, including the named


15

Plaintiffs. See id. at 1147 (“Sandicor passed on some portion of that inflated

support fee to agents, who paid higher prices for the MLS as a result. This is

precisely the type of injury the antitrust laws are designed to prevent.”) In

summary, there was an actual, concrete, direct harm to the Plaintiffs in Freeman

(in the form of artificially inflated fees) that is absent in the current case before

the Court. There is no evidence that the purported antitrust violation caused

Galope to pay a higher interest rate than she otherwise would have paid.

While Galope urges this Court to adopt the consumer expectations test to

conclude that she suffered an injury-in-fact, she offers no reason why the Court

should do so here. See Opening Brief, pp.26-27. The consumer-expectations test

is exclusively a product liability doctrine relating to product safety. The

consumer expectations test is satisfied when the evidence shows that “the product

failed to perform as safely as an ordinary consumer would expect when used in an

intended or reasonably foreseeable manner.” Barker v. Lull Engineering Co. 20

Cal.3d 413, 429, 143 (Cal. 1978). Not one Court in the United States has ever

applied the consumer expectations test in the context of an antitrust claim.

The Court should also reject Galope’s argument that the consumer

expectations test should apply here due to the “esoteric scientific” nature of the

loan at issue. See Opening Brief, p.27. Galope’s attempted analogy is

unpersuasive. The consumer expectations test is reserved for cases in which the


16

everyday experience of the products’ users permits a conclusion that the product's

design violated minimum safety assumptions, and is “defective regardless of

expert opinion about the merits of the design.” Soule v. General Motors Corp., 8

Cal.4th 548 (Cal. 1994). This test would not fit in the context of a mortgage loan

case like the case at bar.

d. The Rational Expectations Test is Inapplicable.

Galope also urges the Court to adopt the “rational expectations test” to

conclude she has shown evidence of an injury-in-fact caused by Defendants-

Appellees DBNTC, Western Progressive, and Ocwen. See Opening Brief, pp.27-

30. Again, Galope raises this argument for the first time on appeal, which is

improper. Galope also fails to point to a single California case employing the

rational expectations test to a damages claim under the antitrust laws.

Galope argues for the first time on appeal that she has standing based on

the “target area” test. Even assuming consideration of this argument were proper,

Galope’s claims lack merit. The so-called “target area” test has been discredited,

both by the U.S. Supreme Court, and the Ninth Circuit Court of Appeals. See

Associated Gen. Contractors of California, Inc. v. California State Council of

Carpenters, 459 U.S. 519, 536 n. 33, 103 S.Ct. 897 (1983) (stating that the

Court's antitrust injury analysis is intended to replace “target area” test); see R.C.

Dick Geothermal Corp. v. Thermogenics, Inc., 890 F.2d 139, 146 (9th Cir. 1989)


17

(holding that the target area test is no longer good law in the Ninth Circuit

following Associated General Contractors).

Galope also argues that she was purportedly harmed by being locked in a

30 year loan that was not due to expire until January 2036. See Opening Brief,

pp.31-32. But Galope never made this argument at the summary judgment stage,

and did not cite any of the case law she now presents for the first time on appeal.

Notwithstanding the fact that she should not be permitted to make these

arguments for the first time on appeal, the argument itself is fatally flawed.

Galope was not locked into her loan. She modified the loan in April 2008. See

EOR 1375; 1409-12. Under the terms of the Modification Agreement, the total

monthly mortgage payment was reduced by roughly $800.00 to $3,027.02 per

month for a period of five years, including escrow, and the interest rate was fixed

at 5.5% to maturity. See EOR 1375; 1409-12.

2. Galope Has No Evidence That Establishes a Conspiracy

Galope has no evidence to support her conspiracy theory against DBNTC

regarding the alleged LIBOR manipulation. For a civil conspiracy claim, the

plaintiff must establish that the alleged conspirators “had a unity of purpose or a

common design and understanding, or a meeting of minds in an unlawful

arrangement.” American Tobacco Co. v. U.S., 328 U.S. 781, 810 (1946). A civil

conspiracy is “a combination of two or more persons who, by some concerted


18

action, intend to accomplish some unlawful objective for the purpose of harming

another which results in damage.” Doleman v. Meiji Mut. Life Ins. Co., 727 F.2d

1480, 1482, n. 3 (9th Cir. 1984). The plaintiff must establish the formation and

operation of the alleged conspiracy and the damage resulting from the acts or acts

done in furtherance of the plan. Orloff v. Metro Trust Co., 17 Cal.2d 484, 488

(Cal. 1941). In order to find liability for aiding and abetting, there must be (1) the

existence of an independent primary wrong, (2) actual knowledge by the alleged

aider and abettor of the wrong and his or her role in furthering it, and (3)

substantial assistance in the wrong. Harmsen v. Smith, 693 F.2d 932, 943 (9th

Cir. 1982). The district court need not find a genuine issue of fact if a declaration

is uncorroborated and self-serving. F.T.C. v. Neovi, Inc., 604 F.3d 1150, 1159

(9th Cir. 2010).

Here, Galope has no evidence that establishes defendant DBNTC had a

meeting of the minds with Barclays regarding the alleged manipulation of the

LIBOR. Galope has no evidence that establishes any formation or operation of a

conspiracy between these parties. Further, Galope has no evidence that DBNTC

had actual knowledge of the alleged wrong and substantially assisted in the

alleged wrong. Galope’s purported “evidence” merely consists of uncorroborated

and self-serving conclusions. Just because DBNTC in its corporate capacity is

one of sixteen institutions that participate in submission of index rates does not


19

mean this defendant “manipulated” the LIBOR with Barclays. See EOR 1603;

1616. Galope’s conspirator liability theory against defendant DBNTC is

completely unsupported by evidence and cannot be the foundation for finding

liability.

B. The Trial Court Correctly Granted Summary Judgment on Galope’s

Second, Third, and Fourth Claims For Violation of the UCL 17200.

1. Galope’s UCL Claims Are Contractually and Equitably

Barred Against DBNTC.

In her TAC, Galope alleges several claims for violation of California

Business & Professions Code sections 17200 et seq., the Unfair Competition Law

(“UCL”). See EOR 1618-28. For the following reasons, the Trial Court was

correct to grant summary judgment in favor of DBNTC, Western Progressive, and

Ocwen.

First, Galope’s UCL claim fails because Galope released this claim as part

of the loan modification agreement. In return for receiving the loan modification

in April 2008, Galope released all of her UCL claims related to the origination

and the servicing of the loan. The interpretation of the preclusive effect of a

release in a contract is a legal question for the court if there is no conflicting

competent extrinsic evidence as to the parties’ intent. City of Hope Nat. Medical

Center v. Genentech Inc., 43 Cal.4th 375, 395 (Cal. 2008); see also Salehi v.


20

Surfside III Condominium Owners’ Assn., 200 Cal.App.4th 1146, 1159-60 (Cal.

Ct. App. 2011). Under California’s law of quasi-estoppel, a person may not act in

a manner inconsistent with her prior position to the injury of another if that

person gained some advantage for herself to the disadvantage of the other. Tozzi

v. Lincoln Nat. Life Ins. Co., 103 F.2d 46, 52 (9th Cir. 1939).

In this case, Galope is contractually barred from suing DBNTC concerning

the origination and servicing of the loan because the release provision in the

Modification Agreement provides as follows:

Borrower releases HomEq, its subsidiaries, affiliates, agents, officers and employees, from any and all claims, damages or liabilities of any kind existing on the date of this Agreement, which are in any way connected with the origination and/or servicing of the Loan, and/or events which resulted in Borrower entering into this Agreement. Borrower waives any rights which Borrower may have under federal or state statute or common law principle which may provide that a general release does not extend to claims which are not know to exist at the time of execution, including without limitation (if applicable), California Civil Code Sec. 1542. (Decl. of Stacy, Para. 7, Exh. 3, No. 3).

HomEq serviced the subject mortgage loan for DBNTC. See EOR 1374.

As such, the release provision in the Modification Agreement precludes Galope’s

UCL claims against DBNTC concerning the origination or the servicing of the

loan. The release language covers any and all claims, damages, or liabilities of

any kind, whether known at the time of execution of or not, related to the


21

origination and the servicing of the loan. The meaning of the release language is

plain and unambiguous. Galope received the fixed interest rate loan modification

and in return signed the release, thus is contractually barred from suing DBNTC

in the instant action.

Further, estoppel by contract, i.e. quasi-estoppel, bars all of Galope’s UCL

claims concerning the origination or servicing of the loan. When Galope was

given the loan modification in April 2008, she was $15,951.62 in the arrears. See

EOR 1375. The modification effectively cured the default on the loan and

allowed Galope to make reduced mortgage payments, thereby preventing

foreclosure. In return for the modification, Galope released all of her claims

concerning the origination and servicing of the loan. See EOR 1375; 1409-1412.

Galope is barred from now asserting her UCL claims because she benefitted from

the modification and because foreclosure was not initiated in April 2008 as a

result of the modification.

In Appellant’s Opening Brief, she completely ignores the arguments

relating to release based on the April 2008 Modification Agreement. Even if the

Court considers Galope’s argument in Opposition to the Motion for Summary

Judgment, Galope’s UCL claim is barred based on the release she signed. In her

Opposition to the Motion for Summary Judgment, Galope argues that the release

is invalid because a release cannot include future torts like fraud. See EOR 1291-


22

1325. However, the conduct that Galope complains about (i.e., purported LIBOR

manipulation) did not occur only after she executed the loan modification

agreement in 2008, but rather, purportedly occurred at the time of loan origination

back in 2006.

2. DBNTC Cannot Be Vicariously Liable For Galope’s UCL

Claims Concerning the Modification and the LIBOR

Second, Galope’s UCL claim fails because Galope has no evidence that

defendant DBNTC personally committed any unlawful, unfair, or fraudulent acts

under the UCL concerning the modification and the alleged LIBOR manipulation,

and said DBNTC cannot be vicariously liable under the statute, as a matter of

law. The UCL prohibits unfair competition including “any unlawful, unfair or

fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. Given the

statute is written in the disjunctive, each of the three prongs is a separate and

distinct theory of liability. Cel-Tech Communications, Inc. v. Los Angeles

Cellular Tel. Co., 20 Cal.4th 163, 180 (Cal. 1999). The UCL does not proscribe

specific activities, but broadly prohibits any (1) unlawful, (2) unfair, or (3)

fraudulent business act or practice. Puentes v. Wells Fargo Home Mortg., Inc.,

160 Cal.App.4th 638, 643-644 (Cal. Ct. App. 2008).

“As to the unlawful prong, the UCL incorporates other laws and treats

violations of those laws as unlawful business practices independently actionable


23

under state law.” Sipe v. Countrywide Bank, 690 F.Supp.2d 1141, 1158 (E.D.

Cal. 2010) (citing Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042, 1048

(9th Cir. 2000). “An unfair business practice is one that either ‘offends an

established public policy’ or is ‘immoral, unethical, oppressive, unscrupulous or

substantially injurious to consumers.’” McDonald v. Coldwell Banker, 543 F.3d

498, 506 (9th Cir. 2008) (quoting People v. Casa Blanca Convalescent Homes,

Inc., 159 Cal.App.3d 509, 530 (Cal. Ct. App. 1984). “Finally, fraudulent acts are

ones where members of the public are likely to be deceived.” Symbersound

Records, Inc. v. UAV Corp., 517 F.3d 1137, 1152 (9th Cir. 2008).

“The concept of vicarious liability has no application to actions brought

under the unfair business practices act.” People v. Toomey, 157 Cal.App.3d 1,

14 (Cal. Ct. App. 1984). Rather, “[a] defendant’s liability must be based on his

personal participation in the unlawful practices and unbridled control over the

practices that are found to violate sections 17200 or 17500.” Emery v. Visa Int’l

Serv. Ass’n, 95 Cal.App.4th 952, 960-1 (Cal. Ct. App. 2002) (“Emery”). A

defendant cannot be “secondarily liable” liable under the UCL. Perfect 10, Inc. v.

Visa Intern. Service Ass’n, 494 F.3d 788, 808-809 (9th Cir. 2007).

Here, Galope has no evidence that DBNTC individually committed any

unlawful, unfair, or fraudulent acts. The conduct complained of concerning the

circumstances surrounding the April 2008 modification only concerned HomEq,


24

who serviced the loan for DBNTC. See EOR 1374. Galope has no evidence that

defendant DBNTC personally and directly serviced Galope’s loan, and vicarious

or secondary liability is expressly prohibited under the UCL. Galope likewise has

no evidence that DBNTC manipulated the LIBOR. Galope cannot hold defendant

DBNTC vicariously or secondarily liable for the alleged manipulation of the

LIBOR by Barclays. The two are distinct and separate entities and the UCL does

not allow for any relief against defendant DBNTC vicariously. Galope’s

uncorroborated and self-serving conclusions are insufficient to survive summary

judgment. Neovi, supra, at 1159.

Further, Galope’s position that she only received an “incomplete” copy of

the Modification Agreement from HomEq has no merit. The evidence shows that

Galope did not contact HomEq from April 2008 through July 2009 to specifically

complain that her fax-received copy of the Modification Agreement was

incomplete. See EOR 1375. Further, logic dictates that a complete version of the

Modification Agreement, with all signatures, could not exist if Galope was only

provided an incomplete copy to sign. If Galope was only provided an incomplete

copy to sign and return to HomEq, only an incomplete copy with the signatures

would be available. However, DBNTC has presented into evidence a copy of the

complete Modification Agreement, with all signatures, that contains the full text

of Paragraphs 1(d) and 2. See EOR 1375. Galope has insufficient evidence to


25

support her uncorroborated and self-serving allegations in this regard. Neovi,

supra, at 1159.

Galope has no evidence that defendant DBNTC directly and personally

participated in the purported “missing fax page scheme.” See EOR 129-132; 161-

1262. Further, Galope could not present any evidence in this regard because her

arguments concerning the alleged scheme only involve Barclays and/or HomEq,

notwithstanding her counsel’s assertion of the “facts” are inadmissible, having no

evidentiary support. See EOR 191-1325. Vicarious liability is expressly barred

under the UCL, and so the Trial Court was correct in granting summary judgment

in favor of DBNTC.

3. All Of The Alleged Oral Promises Concerning the

Modification Are Barred Because The Written

Modification Agreement Is A Fully Integrated Document.

The Modification Agreement is a fully integrated document that precludes

all of the alleged oral promises made by HomEq concerning the subject loan

modification. When the parties to a written contract have agreed to it as an

“integration” – a complete and final embodiment of the terms of an agreement –

parol evidence cannot be used to add or to vary its terms. Pollyana Homes, Inc.

v. Berney, 56 Cal.2d 676, 679-80 (Cal. 1961). “The crucial issue in determining

whether there has been an integration is whether the parties intended their writing


26

to serve as the exclusive embodiment of their agreement.” Masterson v. Sine, 68

Cal.2d 222, 225 (Cal. 1968). Although the court may consider evidence of

surrounding circumstances, a collateral oral agreement must be one that would

have been made as a separate contract because it cannot embrace the same subject

in the written contract but require different results. Metoyer v. Chassman, 504

F.3d 919, 935-37 (9th Cir. 2007). This rule is “grounded on the notion that a

writing constitutes a jural act, conduct which alters the voluntary legal relations

of the parties.” FPI Development, Inc. v. Nakashima, 231 Cal.App.3d 367, 388

(Cal. Ct. App. 1991).

Here, the April 2008 Modification Agreement in pertinent part provides

verbatim as follows:

This Agreement constitutes the entire Agreement between the parties regarding the subject matter hereof. Except as otherwise provided herein, this Agreement supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether written or oral, of the parties hereto, relating to the Note and Security Instrument. (Decl. of Stacy, Para. 7, Exh. 3, No. 5).

The foregoing integration clause in the Modification Agreement precludes

all of the alleged oral promises by HomEq concerning the subject loan

modification. The plain and clear language of the integration clause provides that

the writing is intended by the parties as the final expression of their agreement

regarding the terms of the loan modification, thus Galope cannot introduce parol


27

evidence to contradict the express terms therein. The integration clause

supersedes all prior and contemporaneous discussions regarding the loan

modification, whether written or oral, relating to Galope’s obligation to pay back

her mortgage loan. HomEq’s alleged oral promises would not have been reduced

into a separate contract separate from the Modification Agreement because the

subject matter is the same. It is proper for the Court to wholly disregard Galope’s

allegations regarding HomEq’s alleged oral promises.

4. Galope is Not Entitled to Any Relief Against Defendant

DBNTC Under the UCL and Her “Damages” are Purely

Conjectural and Hypothetical

Galope has insufficient evidence to establish that DBNTC conspired to fix

the LIBOR. Further, Galope is not entitled to any relief under the UCL for her

LIBOR claim regardless because the evidence shows she has not sustained any

concrete damages. The standing requirements under the UCL were amended by

Proposition 64 in 2004, which limits standing to those who have actually been

injured by an alleged violation. Cal. Bus. Prof. Code §§ 17203, 17204; see also

Harper v. 24 Hour Fitness, Inc., 167 Cal.App.4th 966, 975-77 (Cal. Ct. App.

2008). To bring a claim, a private plaintiff must prove that she (1) sustained an

injury-in-fact and (2) lost money or property (3) as a result of the unfair

competition. Cal. Bus. & Prof. Code § 17204; see also POM Wonderful LLC v.


28

Coca-Cola Co., 679 F.3d 1170, 1178 (9th Cir. 2012). To satisfy the injury-in-fact

requirement, the injury must be concrete and particularized, and actual or

imminent, not conjectural or hypothetical. Kwikset Corp. v. Superior Court, 51

Cal.4th 310, 322 (Cal. 2011). The lost-money-or-property element requires the

Galope have suffered some form of economic injury. Id. at 323.

In this case, Galope claimed that she would not have refinanced her

mortgage loan in December 2006 had she known her interest rate was not based

on “independent market factors.” See EOR 1302; 1304. However, this “damage”

is purely conjectural and hypothetical. Galope has not established a concrete and

particularized economic injury-in-fact to sustain her UCL claim premised on the

LIBOR. Galope’s theory of what she might have done is too disconnected from

the conduct complained of and cannot be the basis for any relief under the UCL.

As stated throughout this Brief, Galope never paid interest based on the

LIBOR rate because she ceased making payments on her loan long before the first

Interest Rate Change Date was to occur. Furthermore, Galope’s assertion that the

purported missing page in the loan modification agreement caused her harm is not

supported by any evidence. The undisputed facts show that the Modification

Agreement actually saved Galope money by reducing her interest rate from

8.775% to 5.500% and reduced her monthly mortgage payment from $3,817.13 to

$3,027.02. Galope conceded that Modification Agreement cured her default


29

under her Original Note. See Galope’s EOR 660. In addition, Galope defaulted

on her modified mortgage and declared Bankruptcy in January 2010 – more than

three years before her interest rate was to become linked to LIBOR under the

Loan Modification Agreement.

5. Galope is Not Entitled to Restitution Under the UCL.

Galope is not entitled to restitution under the UCL for moneys paid. In

California, an order for restitution under the UCL is one “compelling a UCL

defendant to return money obtained through an unfair business practice to those

persons in interest from whom the property was taken.” Kraus v. Trinity Mgmt.

Servs., 23 Cal.4th 116, 126-27 (Cal. 2000). However, restitution to an alleged

victim under the UCL requires “that the offending party must have obtained

something to which it was not entitled and the victim must have given up

something which [she] was entitled to keep.” Bradstreet v. Wong, 161

Cal.App.4th 1440, 1460-61 (Cal. Ct. App. 2008). An unfair competition claim is

equitable in nature, and the remedies are generally limited to injunctive relief and

restitution, and damages cannot be recovered. Korea Supply Co. v. Lockheed

Martin Corp., 29 Cal.4th 1134, 1144 (Cal. 2003).

In this case, Galope is not entitled to restitution of the modified payments

made to HomEq because she was obligated to make her mortgage payments in

order to keep the property. See EOR 1374-75; 1382-1412. If the mortgage loan


30

was not modified in April 2008, the outstanding arrearages would be even higher

at the present time because the modification reduced the amount of the monthly

mortgage payments by roughly $800.00. See EOR 1374-75; 1382-87; 1409-12.

The evidence conclusively shows that Galope is not entitled to restitution as a

matter of law. Galope is not entitled to take out a mortgage loan, not make her

payments, and continue to keep the property.

6. Galope Has No Damages For Any UCL Claim Premised on

Fraud.

To the extent Galope’s multiple UCL claims against defendant DBNTC are

premised on fraud, these claims fail because Galope has no evidence to support

any of the required elements. The elements of a fraud claim in California are (1)

a misrepresentation, (2) knowledge of falsity, (3) intent to defraud, (4) justifiable

reliance, and (5) damages. Small v. Fritz Companies, Inc., 30 Cal.4th 167, 173

(Cal. 2003). The plaintiff must state with particularity the circumstances

surrounding the fraud. Fed. R. Civ. P. 9(b). “The particularity requirement of

Rule 9(b) is designed to give defendants notice of the particular misconduct

which is alleged to constitute the fraud charged.” Neubronner v. Milken, 6 F.3d

666, 671 (9th Cir. 1993).

As discussed above, Galope has no evidence that DBNTC personally

participated in the circumstances surrounding the modification or that this


31

defendant manipulated the LIBOR. Further, Galope has no evidence of damages.

The September 1, 2011 trustee’s sale has been rescinded and there was no equity

in the property at the time of the sale as briefed below. See EOR 1378; 1527-30.

The loan modification benefitted Galope because it effectively cured the

$15,951.62 in arrearages on the subject loan, and reduced the interest rate to a

fixed 5.5% in contrast to the adjustable rate between 8.775% and 15.775% under

the original terms of the loan. See EOR 1374-75; 1385; 1409-12. To the extent

Galope’s UCL claims against DBNTC are premised on fraud, the Trial Court was

correct to grant summary judgment because Galope has no evidence of damages.

7. Galope is Precluded From Restitution For Her UCL Claim

Premised on the Trustee’s Sale.

Galope’s third claim against defendants Ocwen, DBNTC, and Western

Progressive is for an alleged violation of the UCL premised on the circumstances

surrounding the September 1, 2011 trustee’s sale. See EOR 1622-25. However,

as discussed above, Galope is not entitled to restitution under the UCL for

moneys paid because she was not entitled to keep the property without making

her payments. Kraus, supra, at 126-27. “[T]he offending party must have

obtained something to which it was not entitled and the victim must have given

up something which [she] was entitled to keep.” Bradstreet, supra, at 1460-61.

Here, Galope is not entitled to restitution because she is obligated to make


32

her mortgage payments to keep the property. See EOR 1374-75; 1382-1412. It is

undisputed that Galope is in default on the modified loan, as her last payment was

made in April 2009. See EOR 1375; 1413-14. DBNTC, Western Progressive,

and Ocwen are entitled to foreclose pursuant to the power of sale as authorized by

the December 2006 Deed of Trust. See EOR 1374-75. Galope is not entitled to

keep the property without making her mortgage payments, and Galope is not

entitled to restitution for her UCL claim premised on the trustee’s sale as a matter

of law.

In her Opening Brief, Galope argues that the case of In re Ramirez stands

for the proposition that actual damages—including attorneys fees, costs, and

emotional distress – are mandatory for a violation of the UCL based on a

violation of the automatic stay. See Opening Brief, p.52. The case, however, did

not involve any UCL claim, and it does not hold that Galope can recover any

purported damages under the UCL. See In re Ramirez, 183 BR 573 (9th Cir.

BAP 1995).

C. The Trial Court Correctly Granted Summary Judgment on Galope’s

Fifth Claim For Violation of the FAL 17500.

Galope’s fifth claim is for violation of California’s Business and Professions

Code section 17500, the False Advertising Law (“FAL”). See EOR 1628-31. The

FAL prohibits “untrue or misleading” statements in connection with the sale of


33

property, when those statements are known or should be known to be untrue or

misleading. Cal. Bus. & Prof. Code § 17500. Galope asserts that DBNTC

“committed acts of untrue and misleading advertising” when HomEq faxed to her a

loan modification agreement with certain terms missing. See EOR 1629.

Vicarious liability is inapplicable to the FAL, in addition to the UCL. See

Emery, 95 Cal.App.4th at 960-1. But Galope fails to present any evidence to

indicate that DBNTC was involved in any way with the allegedly improper

transmission of her loan modification agreement. Without more, Ms. Galope has

failed to meet her burden to “set forth specific facts showing that there is a genuine

issue for trial.” Anderson, 477 U.S. at 256.

In her Opening Brief, Galope does not address or rebut the holding of the

Trial Court in the Order on Summary Judgment as to the FAL claim. See Opening

Brief, pp.45-46. Accordingly, there is no reason to disturb the Trial Court’s correct

decision to grant summary judgment as to Galope’s fifth claim.

///

///

///

///

///

///


34

D. The Trial Court was Correct to Grant Summary Judgment as to

Galope’s Seventh Claim for Wrongful Foreclosure.

1. Galope’s Wrongful Foreclosure Claim is Moot and Galope

Has No Damages Because There Was No Equity in the

Property.

Galope’s seventh claim is for wrongful foreclosure. See EOR 1632-33.

Galope’s wrongful foreclosure claim is moot because the September 1, 2011

trustee’s sale has been rescinded. Further, Galope has no damages because there

was no equity in the property at the time of the sale. “[A]n actual controversy

must be extant at all stages of review, not merely at the time the complaint is

filed.” Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997). “[T]he

question is not whether the precise relief sought at the time the application for an

injunction was filed is still available. The question is whether there can be any

effective relief.” West v. Secretary of Dept. of Transp., 206 F.3d 920, 925 (9th

Cir. 2000). Unless the prevailing party can obtain effective relief, any opinion as

to the legality of the challenged action would be merely advisory. City of Erie v.

Pap’s A.M., 529 U.S. 277, 287 (2000). The measure of damages when the power

of sale is invoked under a deed of trust is the “fair market value at the time of sale

less outstanding encumbrances and/or taxes due at such time.” Munger v. Moore,

11 Cal.App.3d 1, 7-8, n. 6 (Cal. Ct. App. 1970).


35

Here, Galope’s wrongful foreclosure claim is moot because the September

1, 2011 trustee’s sale has been rescinded. See EOR 1378; 1527-30. As such, the

foreclosure commenced on March 8, 2011 is no longer at issue and any opinion

on the same would be merely advisory. The Trial Court was correct to grant

Defendants summary judgment on Galope’s wrongful foreclosure claim because

Galope cannot obtain any relief on this claim as a matter of law.

Further, Galope has no damages because there was no equity in the

property at the time of the sale. In the January 5, 2010 bankruptcy filing, Galope

declared under the penalty of perjury that the fair market value of the property is

$373,000.00 and the outstanding debt is $537,951.00. See EOR 1379; 1435;

1451. In the January 17, 2012 bankruptcy filing, Galope declared under the

penalty of perjury that the fair market value of the property is $350,000.00 and

the outstanding debt is $522,000.00. See EOR 1380-81; 1560; 1567; 1572. In

sum, at the time of the trustee’s sale, the fair market value of the property was

between $350,000.00 and $373,000.00 whereas the outstanding debt was between

$522,000.00 and $537,951.00. Accordingly, the property was under water by

$150,000.00 or more and Galope has no damages for her wrongful foreclosure

claim because there was no equity in the property at the time of the sale.

///

///


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2. Galope Did Not Give Any Notice to Western Progressive,

the Foreclosure Trustee, of Her Bankruptcy Reinstatement

Prior to the Trustee’s Sale.

The record shows that the September 1, 2011 trustee’s sale went forward as

Galope’s bankruptcy had been dismissed and the automatic stay vacated on

August 17, 2011. See EOR 1380; 1541-41. While Galope reinstated the Chapter

13 bankruptcy case on August 30, 2011, just before the trustee’s sale, the

bankruptcy court ultimately dismissed this case once more. See EOR 1380-81;

1543-47. Galope did not give Western Progressive, the foreclosure trustee, any

notice that the bankruptcy case was reinstated prior to the subject sale. See EOR

1378. Western Progressive was in charge of conducting the foreclosure of the

property. See EOR 1377-78. Galope’s attempt to make the trustee’s sale some

sort of nefarious situation is contradicted by the record. The only “evidence”

Galope presents for her position that she gave Western Progressive notice of the

reinstatement are uncorroborated self-serving statements, and disregard of such

statements is proper. Neovi, supra, at 1159. Vicarious liability under the UCL is

expressly barred, thus Galope cannot obtain any relief under the UCL for the

circumstances surrounding the subject trustee’s sale because defendant WPT was

not given notice of the bankruptcy reinstatement. Toomey, supra, at 14.


37

Galope asserts, in her Opening Brief, that no tender was required, that “the

maker of the note did not transfer the note to any defendant,” and that “the

documents had indicia of robo-signing.” See Opening Brief, pp.4-51. None of

these arguments were ever made to the Trial Court, and are not proper to be

considered on this appeal.

E. The Trial Court was Correct to Grant Summary Judgment as to

Galope’s Eighth Claim for Breach of Good Faith and Fair Dealing.

Galope’s eighth claim is for breach of good faith and fair dealing. See

EOR 1633-34. However, Galope has no evidence to support this claim against

DBNTC, Western Progressive, and Ocwen. “The covenant of good faith and fair

dealing, implied by law in every contract, exists merely to prevent one

contracting party from unfairly frustrating the other party’s right to receive the

benefits of the agreement actually made.” Guz v. Bechtel Nat. Inc., 24 Cal.4th

317, 349 (Cal. 2000). The covenant thus “should not be endowed with an

existence independent of its contractual underpinnings.” Walker v. Truck Ins.

Exchange, Inc., 11 Cal.4th 1, 36 (Cal. 1995). As such, any relief to be obtained

must be incorporated in the specific terms of the agreement. Kim v. Regents of

the University of California, 80 Cal.App.4th 160, 164 (Cal. Ct. App. 2000). The

implied covenant rests upon the existence of some specific contractual obligation.

Foley v. Interactive Data Corp., 47 Cal.3d 654, 683-84 (Cal. 1998). The implied


38

covenant is read into contracts to protect the express covenants or promises of the

contract, not to protect some general public policy interest that is not directly tied

to the contract’s purpose. Id. at 690.

Here, the only contracts of relevance are the December 2006 Note and

Deed of Trust, and the April 2008 Modification Agreement. See EOR 1374-75;

1382-1412. Galope has no evidence that moving defendants “unfairly frustrated”

her right to receive the benefits under the Deed of Trust or the Modification

Agreement. Galope’s last payment on the modified loan was made in April 2009,

and DBNTC, Western Progressive, and Ocwen were authorized under the power

of sale provision in the Deed of Trust to initiate foreclosure based on the default.

Galope has no evidence that establishes that DBNTC, Western Progressive, or

Ocwen specifically interfered with her performance under the contracts or that

they failed to cooperate with her concerning the specific contractual terms in the

Note, Deed of Trust, and Modification Agreement. Galope cannot rely on

theories independent and outside the scope of the terms of the subject contracts in

order to place blame on DBNTC, Western Progressive, or Ocwen. Moreover,

Galope has no damages as briefed above thus Galope cannot obtain any relief

regardless.

In her Appeal, Galope asserts two arguments for the first time. First, Galope

argues that DBNTC, Western Progressive and Ocwen violated the Power of Sale


39

covenant in the Deed of Trust. See Opening Brief, pp. 53-54. This allegation was

never presented in the Third Amended Complaint, or in the Opposition to the

Motion for Summary Judgment. See EOR 1291-1325; 1633-34. See Recinto v.

U.S. Dep’t of Veterans Affairs, 706 F.3d 1171, 1176 n.3 (9th Cir. 2013) (declining

to consider allegations advanced for the first time on appeal). In fact, Galope did

not offer any argument in support of the good faith and fair dealing claim in her

Opposition to the Motion for Summary Judgment. As stated throughout this brief,

new arguments presented for the first time on Appeal should be disregarded.

Furthermore, Galope presents no case law or other support for her interpretation of

the Power of Sale clause and its effects. See Opening Brief, p. 54.

Second, Galope argues that DBNTC, Ocwen, and Western Progressive

violated an implied covenant to disclose all “material terms.” This is another

argument made for the first time on appeal. See EOR 1291-1325. Even if the

Court considers Galope’s argument, the Court should reject it. Galope cites Susilo

v. Wells Fargo Bank, 796 F.Supp.2d 1177 (C.D.Cal. 2011) (“Susilo”), for the

proposition that the purported failure to provide the entire loan modification

document to Galope by facsimile constitutes a breach of the covenant of good faith

and fair dealing. The Susilo decision does not apply here. In that case, Plaintiff

alleged an oral agreement wherein Wachovia promised the borrower to delay a

pending foreclosure sale if the borrower provided a letter disputing the sale and


40

providing proof that the borrower had mailed in a check for $52,000.00. See id. at

1183-84. The $52,000.00 check was purportedly in excess of the amount stated in

the default notice to cure the default. See id. The Plaintiff alleged that she

performed under the terms of the oral agreement, but that Defendants went ahead

with the foreclosure sale anyway. See id. at 1184. The Susilo court denied the

Motion to Dismiss as to the breach of the covenant of good faith and fair dealing

filed by Wells Fargo (the successor to Wachovia), but granted the Motion to

Dismiss filed by the foreclosure trustee ETS.

The Susilo case does not support Galope. In Susilo, there was an allegation of

breach of an express term, namely, that Wachovia would delay the foreclosure

sale, provided that the borrower offered proof of payment of the $52,000.00.

Contrary to Galope’s argument, the holding in the Susilo case was not based on the

failure by Wachovia to provide the payoff amount to the borrower. In her appeal,

or in her Opposition to the Motion for Summary Judgment, Galope does not point

to a breach of any express term of the loan modification agreement. The Court

was correct to grant summary judgment on the good faith and fair dealing claim.

VIII. CONCLUSION

For the foregoing reasons, Defendants-Appellees Deutsche Bank National

Trust Company, as Trustee under Pooling and Servicing Agreement Dated as of

May 1, 2007 Securitized Asset Backed Receivables LLC Trust 2007-BR4,Western


41

Progressive, LLC, and Ocwen Loan Servicing, LLC request this honorable Court

to affirm the Trial Court’s Summary Judgment Order.




42

STATEMENT OF RELATED CASES

1. Helen Galope v. Deutsche Bank National Trust Company, as Trustee Under

Pooling and Servicing Agreement Dated as of May 1, 2007 Securitized Asset

Back Receivables, LLC., Trust 2007-BR4, et al., Case No. 8:12-cv-00323-

CJC-RNB (C.D.Cal. 2012).

2. In re Helen Galope, Case No. 1:10-bk-10107-BK (C.D.Cal. – Bankruptcy

2010)

3. Galope v. Deutsche Bank National Trust Company, et al., Case No. 1:10-ap-

01082-MT (C.D.Cal. – Bankruptcy 2010)

4. In re Helen Galope, Case No. 1:11-bk-18339-MT (C.D.Cal. – Bankruptcy

2011)

5. In re Helen Galope, Case No. 1:12-bk-10462-MT (C.D.Cal. – Bankruptcy

2012)




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CERTIFICATE OF FILING COMPLIANCE

Certificate of Compliance with Type-Volume Limitation,

Typeface Requirements and Type Style Requirements

1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because: [X] this brief contains 9,175, words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because:

[X] this brief has been prepared in a proportionally spaced typeface using Microsoft Word in 14 point font Times New Roman. DATED: July 5, 2013 HOUSER & ALLISON A Professional Corporation By: /s/ Brent A. Kramer Brent A. Kramer



44

CERTIFICATE OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES: I, the undersigned say: I am a person over the age of eighteen years and not a party to this action. My business address is 3780 Kilroy Airport Way, Suite 130, Long Beach, CA 90806. I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system on July 5, 2013:

BRIEF OF APPELLEES DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, WESTERN PROGRESSIVE, LLC, AND OCWEN LOAN SERVICING, LLC

I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. /s/ Brent A. Kramer


ADDENDUM TO BRIEF

The Addendum to the brief required by FRAP 28(f) and Circuit Rule 28-2.7

is bound along with the brief, and filed and served concurrently herewith.


i

TABLE OF CONTENTS

Cal. Bus. & Prof. Code §17200……………………………………………….…..1

Cal. Bus. & Prof. Code §17203…………………………………………………..1

Cal. Bus. & Prof. Code §17204…………………………………………………..1

Cal. Bus. & Prof. Code §17500…………………………………………………..1


Cal. Bus. & Prof. Code § 17200. Unfair competition; prohibited activities

As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.

Cal. Bus. & Prof. Code § 17203. Injunctive Relief--Court Orders

Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction. The court may make such orders or judgments, including the appointment of a receiver, as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition. Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 and complies with Section 382 of the Code of Civil Procedure, but these limitations do not apply to claims brought under this chapter by the Attorney General, or any district attorney, county counsel, city attorney, or city prosecutor in this state.

Cal. Bus. & Prof. Code § 17204. Actions for Injunctions by Attorney General, District Attorney, County Counsel, and City Attorneys

Actions for relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the Attorney General or a district attorney or by a county counsel authorized by agreement with the district attorney in actions involving violation of a county ordinance, or by a city attorney of a city having a population in excess of 750,000, or by a city attorney in a city and county or, with the consent of the district attorney, by a city prosecutor in a city having a full-time city prosecutor in the name of the people of the State of California upon their own complaint or upon the complaint of a board, officer, person, corporation, or association, or by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.

Cal. Bus. & Prof. Code § 17500. False or misleading statements; penalty

It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or


those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.


CERTIFICATE OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES: I, the undersigned say: I am a person over the age of eighteen years and not a party to this action. My business address is 3780 Kilroy Airport Way, Suite 130, Long Beach, CA 90806. I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system on July 5, 2013:

ADDENDUM TO BRIEF OF APPELLEES DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE, WESTERN PROGRESSIVE, LLC, AND OCWEN LOAN SERVICING, LLC

I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. /s/ Brent A. Kramer


homeowner helen galope overjoyed at decision by ninth circuit court of appeal -march 27 2014--this...

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