Masis-Barrett v. PHH Mortgage Corporation et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
TONYA MASIS-BARRETT,
Plaintiff,
v.
PHH MORTGAGE CORPORATION,
OCWEN FINANCIAL CORPORATION,
and DOES 1-50, Inclusive,
Defendants.
Case No.: 3:25-cv-3178-CAB-MSB
ORDER GRANTING MOTION TO
DISMISS
[Doc. No. 4]
Before the Court is a motion to dismiss Plaintiff’s complaint filed by Defendants
PHH 	Mortgage 	Corporation, 	LLC 	(“PHH”) 	and 	Onity 	Group, 	Inc. 1 (collectively,
“Defendants”). [Doc. No. 4.] The Court finds the motion suitable for submission on the
papers and without oral argument in accordance with CivLR 7.1(d)(1). 	The Court
GRANTS Defendants’ motion to dismiss as detailed below.
I. 	BACKGROUND
On October 13, 2025, Plaintiff Tonya Masis-Barrett (“Plaintiff” or “Masis-Barrett”)
filed a complaint in the Superior Court of California, San Diego County alleging claims of
breach of contract, fraud and document forgery, and negligence claims against Defendants
1 According to Defendants, the original state court complaint “erroneously” sued Ocwen Financial
Corporation instead of Onity Group, Inc. [Doc. No. 1 at 1.]
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related to a mortgage on her property located in Solana Beach. [Doc. No. 1-4 (“Compl.”
or “Complaint”).] 	Defendant PHH is the loan servicer for the mortgage and Defendant
Onity Group, Inc. is the parent company of PHH. [Doc. No. 4-1 at 3.] Defendants removed
the action to this Court on the basis of diversity jurisdiction. [Doc. No. 1 (“NOR”) at ¶ 8.]
Plaintiff’s complaint stems from a mortgage she obtained from Defendants for a
property in Solana Beach, California. 	[Compl. at ¶ 8.] 	Following a job loss, Plaintiff
defaulted on the loan in July 2024 and subsequently obtained a forbearance and started a
loan modification trial plan in November 2024. 	[Id. at ¶ 9; see also Doc. No. 4-1 at 3.]
Plaintiff alleges she made timely trial payments and Defendants offered her a final loan
modification agreement. [Compl. at ¶¶ 10–11.] After Plaintiff questioned a charge in the
loan modification agreement, Defendants extended the deadline for her to return the
completed document. [Id. at ¶ 12.] Plaintiff alleges she notarized and mailed the signed
loan modification document on March 14, 2025, with confirmed delivery on March 19,
2025. 	[Id. at ¶ 13.] 	Defendants denied the loan modification on April 9, 2025 because
they claimed it was received late and contained a notary error. 	[Compl. ¶ 14.] 	Plaintiff
alleges that Defendant PHH “forged and altered the notarized modification documents,
including 	removing 	the 	notary’s 	handwritten 	ID 	notation 	and 	changing 	Plaintiff’s
handwritten date” to justify the denial. [Id. at ¶ 14.] Defendants then moved forward with
the process to foreclose on and sell Plaintiff’s property.
II. 	LEGAL STANDARD
Under Rule 12(b)(6), a party may bring a motion to dismiss based on the failure to
state a claim upon which relief may be granted. 	A Rule 12(b)(6) motion challenges the
sufficiency of a complaint as failing to allege “enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Ordinarily,
for purposes of ruling on a Rule 12(b)(6) motion, the court “accept[s] factual allegations in
the complaint as true and construe[s] the pleadings in the light most favorable to the
nonmoving party.” 	Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031
(9th Cir. 2008). 	But a “pleading that offers ‘labels and conclusions’ or ‘a formulaic
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recitation of the elements of a cause of action will not do.’” 	Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 555). “Determining whether a complaint
states a plausible claim for relief . . . [is] a context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.” Id. at 679.
Generally, leave to amend a pleading “shall be freely given when justice so requires.
Fed. R. Civ. P. 15 (a)(2). 	See, e.g., Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048,
1051 (9th Cir. 2003) (“This policy ‘is to be applied with extreme liberality.’”) Dismissal
without leave to amend is only appropriate when the court is satisfied that the deficiencies
in the complaint could not possibly be cured by amendment. 	Jackson v. Carey, 353 F.3d
750, 758 (9th Cir. 2003); Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (holding that
dismissal with leave to amend should be granted even if no request to amend was made).
III. 	JURISDICTION
While the instant motion was pending, the Court issued an order to show cause
regarding jurisdiction because Defendants’ motion referred to PHH as both an LLC and a
corporation. [Doc. No. 15.] Defendants responded that they “mistakenly referred to PHH
Mortgage Corporation as an ‘LLC’ in the pending Motion to Dismiss papers” and requested
that the Court recognize PHH as PHH Mortgage Corporation, as it is listed in the caption
and discussed in the removal papers. 	[Doc. No. 16 at 1–2.] 	Based on Defendants’
response, the Court is satisfied of its subject matter jurisdiction under diversity jurisdiction.
28 U.S.C. § 1332.
IV. 	DISCUSSION
Plaintiff brings causes of action for fraud and document forgery, negligence,
wrongful foreclosure, unfair business practices, and injunctive and declaratory relief.
[Compl. at 5–6.] Defendants move to dismiss all of Plaintiff’s causes of action for failure
to state a claim under Fed. R. Civ. P. 12(b)(6). The Court analyzes each cause of action in
turn but notes generally that Plaintiff’s complaint is largely threadbare, with most causes
of action supported by only one or two conclusory sentences.
///
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A. 	Claim for Fraud and Document Forgery
The heart of Plaintiff’s complaint appears to be Plaintiff’s allegations that PHH
“knowingly altered notarized documents and presented falsified copies to justify denial”
of her loan modification and that “[s]uch conduct constitutes fraud and forgery under
California Penal Codes §§ 115 and 470.” 	[Compl. at ¶¶ 23–24.] 	Defendants move to
dismiss these claims because criminal statutes are not enforceable by private actors. [Doc.
No. 4-1 at 6.] 	Plaintiff counters that her allegations of fraud and document forgery
represent “civil misconduct” and that they “may not be dismissed merely because criminal
statutes are referenced in the background allegations.” [Doc. No. 12 at 4–5.]
The Court does not view Plaintiff’s claims as mere “background allegations.” 	To
the contrary, Plaintiff’s cited California criminal statutes are the only asserted statutory
basis for her fraud and document forgery claim, even though there are civil causes of action
under California law for fraud. 	E.g. Cal. Civ. Code §§ 1709–10. 	The Court therefore
GRANTS the motion to dismiss these claims with leave to amend.
B. 	Claim for Negligence
Plaintiff alleges that “PHH owed Plaintiff a duty to process modification documents
accurately and in good faith” and that PHH breached this duty through “reckless handling
and document tampering[.]” [Compl. ¶¶ 25–26.] Defendants move to dismiss this claim
because Plaintiff does not and cannot plead a duty of care owed by Defendants, which is a
required element for a California negligence claim. [Doc. No. 4-1 at 6 (citing Nymark v.
Heart Fed. Sav. & Loan Assn., 231 Cal. App. 3d 1089, 1096 (1991)).] Plaintiff makes no
arguments in response.
While normally the Court freely gives pro se litigants leave to amend, the California
Supreme Court has held that “when a borrower requests a loan modification, a lender owes
no tort duty sounding in general negligence principles to process, review and respond
carefully and completely to the borrower’s application.” Sheen v. Wells Fargo Bank, N.A.,
12 Cal. 5th 905, 948 (2022) (internal quotation marks omitted). Amendment on this claim
would therefore be futile. Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2004) (“Futility
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alone can justify the denial of a motion for leave to amend.”). 	The Court DISMISSES
Plaintiff’s negligence claim without leave to amend.
C. 	Claim for Wrongful Foreclosure
Plaintiff 	alleges 	that 	Defendants 	violated 	the 	statutory 	framework 	governing
nonjudicial foreclosures under Cal. Civ. Code. § 2924 et. seq. by failing to comply with
notice and modification statutes, denying review, and proceeding toward foreclosure
despite Plaintiff’s compliance. [Compl. ¶ 27.] Defendants counter that Plaintiff has failed
to state a claim under § 2924 because Defendants complied with the statutory requirements.
[Doc. No. 4-1 at 8–9.]
The only factual allegation the Court can discern in relation to the § 2924 claim is
that PHH “issued a Notice of Default and Election to Sell despite Plaintiff’s full
compliance.” [Compl. at ¶ 15.] This allegation confirms that Defendants complied with
the notice requirement of § 2924(a)(1). 	The Complaint contains no other factual
allegations relevant to the requirements of § 2924. 	The Court GRANTS the motion to
dismiss the claim for wrongful foreclosure with leave to amend.
D. 	Claim for Unfair Business Practices
Plaintiff brings claims for unfair business practices under California’s Business and
Professions Code § 17200 based on Defendants’ alleged unfair business practice of
“document tampering, deceptive communication, and dual tracking.” 	[Compl. at ¶ 28.]
Defendants argue that Plaintiff does not have standing to bring a UCL claim and that even
if she did, since a UCL claim derives from her other failed claims, the UCL claim must
likewise fail. [Doc. No. 4-1 at 10–11.]
The Court agrees that Plaintiff lacks standing to bring a UCL claim. 	To have
standing, a private plaintiff must “(1) establish a loss or deprivation of money or property
sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic
injury was the result of, i.e., caused by the unfair business practice or false advertising that
is the gravamen of the claim.” 	Lueras v. BAC Home Loans Serv., LP, 221 Cal. App. 4th
49, 81 (2013) (citing Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 322 (2011)).
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Plaintiff’s allegation of the loss of her home via foreclosure satisfies the first prong.
Lueras, 221 Cal. App. 4th at 82. The second causation prong is not satisfied, however, if
the plaintiff would have suffered the same harm regardless of whether defendant complied
with the law. 	Daro v. Superior Ct., 151 Cal. App. 4th 1079, 1099 (2007). Here, Plaintiff
cannot show that the foreclosure of her property was caused by Defendants’ alleged
document tampering or deceptive communications because Plaintiff has cited no California
or other law obliging Defendants to provide a loan modification at all. See Mueller v. Bank
of Am., N.A., No. 12-CV-0074-WQH–BLM, 2012 WL 3134243, at *3 (S.D. Cal. Aug. 1,
2012) (dismissing claims alleging a lender “mishandled and misinformed [plaintiff] about
loan modification opportunities”); Gonzalez v. Wells Fargo Bank, N.A., No. 12-CV-5977-
ABC-JEMx, 2012 WL 12893376, at *3 (C.D. Cal. Dec. 5, 2012) (“Under California law,
a lender has no duty to offer a loan modification.”); Bertelsen v. CitiMortgage, Inc., No.
16-CV-2-BU-JCL, 2017 WL 1368289, at *5 (D. Mont. Apr. 7, 2017), aff’d, 743 F. App’x
128 (9th Cir. 2018) (“[I]t is beyond dispute that a borrower has no right to modify or
renegotiate a defaulted loan, and a lender has no obligation to provide a modification or
loan assistance.”). Plaintiff thus has not plausibly alleged facts that establish the causation
element.
The Court also finds that Plaintiff fails to state a § 17200 claim because she has not
specified which of the three varieties of unfair competition she alleges, or the facts that
support allegation. Cel-Tech Comm’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180
(1999) (explaining that § 17200 establishes three varieties of unfair competition - acts or
practices which are (1) unlawful, (2) unfair, or (3) fraudulent). 	Accordingly, the Court
DISMISSES Plaintiff’s § 17200 claim with leave to amend.
E. 	Claim for Breach of Contract
Plaintiff alleges that “PHH breached the modification agreement by denying it after
acceptance, despite Plaintiff’s performance under trial terms and timely signed return.”
[Compl. at ¶ 22.] 	Defendants argue that no valid contract ever existed and so no breach
occurred. [Doc. No. 4-1 at 5–6.] The Court agrees with Defendants.
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In California, the elements for breach of contact are: (1) existence of the contract;
(2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and
(4) damages to plaintiff as a result of the breach. CDF Firefighters v. Maldonado, 158 Cal.
App. 	4th 	1226, 	1239 	(2008). 	Plaintiff 	expressly 	pleaded 	that 	“PHH 	denied 	the
modification[.]” 	[Compl. at ¶ 14.] 	Moreover, the modification agreement contains a
precondition to modification that “[t]he Loan Documents will not be modified by this
Agreement unless and until both (i) the Lender has accepted this agreement as solely
evidenced by Lender’s signature on this Agreement or on a copy of this Agreement
containing Lender’s signature[.]” 	[Doc. No. 1-5 at 58.] 	Plaintiff has not produced any
evidence of a modification agreement signed by PHH. And though Plaintiff contends that
under California law, a trial period plan and subsequent conduct may give rise to
enforceable contractual obligations, or at least a covenant of good faith and fair dealing,
she does not actually cite any such law. 2 [Doc. No. 12 at 4.]
Plaintiff’s claim for breach of contract is therefore DISMISSED without leave to
amend.
F. 	Claim for Declaratory Relief
Finally, Plaintiff “seeks a declaration that the March 14, 2025 modification
agreement is valid and enforceable, and that PHH must honor these terms.” 	[Compl. at
¶ 21.] 	“[A] claim for declaratory relief is duplicative and unnecessary when it is
commensurate with the relief sought through other causes of action.” Khankin v. JLR San
Jose, LLC, 720 F. Supp. 3d 816, 827 (N.D. Cal. 2024). 	Because Plaintiff’s claim for
declaratory relief is the same relief requested through her breach of contract claim, it too is
DISMISSED without leave to amend. 	However, this ruling does not preclude Plaintiff
2 The Court additionally notes that though “[e]very contract imposes on each party a duty of good faith
and fair dealing in each performance and in its enforcement,” “if the allegations do not go beyond the
statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages
or other relief already claimed in a companion contract cause of action, they may be disregarded as
superfluous as no additional claim is actually stated.” Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222
Cal. App. 3d 1371, 1393–95 (Cal. Ct. App. 1990).
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from amending her Complaint to plead declaratory relief as a remedy for other viable
claims.
G. 	Claim for Injunctive Relief
Plaintiff requests a stay of foreclosure proceedings under California Code of Civil
Procedure §§ 526–27 because she says she faces imminent foreclosure and irreparable
harm without judicial intervention. [Compl. at ¶ 19.] Defendants counter that she has not
shown a likelihood of success on her claims. [Doc. No. 4-1 at 4.] The Court agrees with
Defendants. 	Given the Court’s dismissal of her underlying claims for failure to state a
claim, Plaintiff’s Complaint lacks necessary facts to show clearly the need for injunctive
relief. The Court DISMISSES Plaintiff’s claim for injunctive relief with leave to amend.
V. 	CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss [Doc.
No. 4] as follows:
1. 	The injunctive relief claim is DISMISSED WITH LEAVE TO AMEND;
2. 	The declaratory relief claim is DISMISSED WITHOUT LEAVE TO
AMEND to the extent it seeks relief related to Plaintiff’s breach of contract
claim;
3. 	The breach of contract claim is DISMISSED WITHOUT LEAVE TO
AMEND;
4. 	The fraud and document forgery claim is DISMISSED WITH LEAVE TO
AMEND;
5. 	The negligence claim is DISMISSED WITH LEAVE TO AMEND;
6. 	The wrongful foreclosure claim is DISMISSED WITH LEAVE TO
AMEND; and
7. 	The unfair business practices claim is DISMISSED WITH LEAVE TO
AMEND
///
///
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If Plaintiff chooses to file a first amended complaint, she must do so no later than
April 6, 2026. Plaintiff must identify all claims she asserts against Defendants and clearly
set forth the necessary factual allegations to support the elements of each claim against
each Defendant. The amended complaint must be complete in itself without reference to
the original complaint. Any claim not re-alleged will be considered waived. 	See CivLR
15.1(a).
It is SO ORDERED.
Dated: March 6, 2026
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