Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

O'Banion v. Select Portfolio Services

September 23, 2010


The opinion of the court was delivered by: Honorable Edward J. Lodge U. S. District Judge



On August 13, 2010, Chief United States Magistrate Judge Candy W. Dale issued a Report and Recommendation in this matter. (Dkt. No. 50.) Pursuant to 28 U.S.C. § 636(b)(1), the parties had opportunity to file written objections. Plaintiffs Michael P. O'Banion and Patricia R. Bradley ("Plaintiffs") filed objection, (Dkt. No. 54.), as did Defendants Litton Loan Servicing LP ("LLS") and Mortgage Electronic Registration Systems, Inc. ("MERS")*fn1 , (Dkt. No. 53.) Additionally, LLS, MERS, and Defendant Select Portfolio Servicing, Inc. ("SPS")*fn2 filed responses to Plaintiffs' objection. (Dkt. Nos. 55, 57.)

The Court "may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1). However, the Court "shall make a de novo determination of those portions of the report . . . to which objection is made." Id. In United States v. Reyna-Tapia, the Ninth Circuit interpreted the requirements of 28 U.S.C. § 636(b)(1):

The statute [28 U.S.C. § 636(b)(1)] makes it clear that the district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise. . . . [T]o the extent de novo review is required to satisfy Article III concerns, it need not be exercised unless requested by the parties. Neither the Constitution nor the statute requires a district judge to review, de novo, findings and recommendations that the parties themselves accept as correct United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (citations, internal quotation marks, and emphasis omitted); see also Wang v. Masaitis, 416 F.3d 992, 1000 (9th Cir. 2005) (discussing a magistrate's authority to issue recommended findings and conclusions and the constitutional implications of a district judge reviewing and adopting those recommendations).

Based on Judge Dale's report and the Court's de novo review of the objections and responses, the Court will adopt Judge Dale's recommendation.


The Court adopts the factual background set forth in the Report and Recommendation:

Plaintiffs Michael O'Banion and Patricia Bradley ("Plaintiffs") filed this lawsuit against Defendants Select Portfolio Services, Inc. ("SPS"), Litton Loan Servicing, LP ("LLS"), Just Law, Inc. ("JL"), Mortgage Electronic Registration Systems, Inc. ("MERS"), Discover Lending Group ("DLG"), and Ownit Mortgage Solutions, Inc. ("OM") on May 22, 2009. The Complaint includes several causes of action, all based upon a contract for a 'refinance mortgage loan on their residential real property' that the Plaintiffs entered into on July 7, 2006.

Prior to consummation of the loan transaction, Plaintiffs allegedly met in person with a broker, Defendant [DLG], to discuss the terms of their desired loan. Allegedly, Plaintiffs expressly advised DLG that they wanted a conventional loan program with payments in accordance with their financial abilities. DLG later advised Plaintiffs that it had located a loan program, allegedly leading Plaintiffs to believe that they were being placed into a 'conventional, fixed rate loan which they could afford to repay, based on their income, assets, and other information provided to Defendant DLG.' Instead, Plaintiffs claim they were tricked into signing a contract for a 'high cost' or 'Adjustable Rate Balloon Loan' -- what Plaintiffs refer to as a 'bait and switch' scheme.

Plaintiffs also contend that, during the application and loan consummation process, Defendants DLG, OM, and LLS violated the Truth in Lending Act ("TILA") by intentionally failing to provide early disclosures regarding the loan terms as well as providing inaccurate or incomplete disclosures regarding the loan terms at the time of closing to induce Plaintiffs to enter into the 'high cost' loan transaction. With respect to all other Defendants, Plaintiffs allege that they are liable for these TILA violations and the alleged fraud because they played some role or otherwise took part in Plaintiffs' loan and had knowledge of the defective disclosures because they are 'evident on the face of the documents.'

As a result of the alleged 'bait and switch' scheme, Plaintiffs claim they were forced into a 'second loan program' and were subjected to 'a calculated and predetermined, manufactured default by defendants resulting in foreclosure proceedings instituted by Defendants SPS, MERS, JL on behalf of OM.' Defendants SPS, MERS, and LLS filed motions to dismiss regarding the majority of the claims included in the Complaint. . . . (Report and Recommendations at 2-3 (citations omitted).)


Judge Dale recommended that Defendants' motions to dismiss be granted with respect to Plaintiffs' Counts I, II, III, IV, and VI and denied with respect to Count V. (Report and Recommendation at 20.) Judge Dale also recommended the Court grant Plaintiffs leave to amend ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.