STAY REQUESTED

Trial date: September 21, 2015

IN THE COURT OF APPEAL
OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
From the California Superior Court,
County of Los Angeles, Case No.
BC550713

BRENDA WHITMAN,

)
)
Petitioner,
)
vs.
)
)
THE SUPERIOR COURT OF
)
CALIFORNIA FOR THE COUNTY )
OF LOS ANGELES
)
)
Respondent
)

Judge of the Superior Court, Hon.

Mark V. Mooney; Dept. 68;
Telephone: (213) 633-1068

ONEWEST BANK, FSB

Real Party in Interest
PETITION FOR WRIT OF MANDATE OR OTHER APPROPRIATE
RELIEF AND REQUEST FOR IMMEDIATE STAY; MEMORANDUM
OF POINTS AND AUTHORITIES
[SUPPORTING EXHIBITS FILED UNDER SEPARATE COVER]
*Deborah P. Gutierrez, Esq., SBN 240383
Penelope P. Bergman, Esq., SBN 220452
Amanda L. Gray, Esq., SBN 244644
BERGMAN & GUTIERREZ LLP
880 Apollo Street, Suite 334
El Segundo, CA 90245
(310) 893-6200 Telephone
(310) 988-2930 Facsimile
Attorneys for Petitioner Brenda Whitman

TABLE OF CONTENTS
INTRODUCTION .....................................................................................................5
A. Why Writ Relief Should Be Granted ...............................................................5
B. Why an Immediate Stay Should Issue..............................................................6
PETITION FOR WRIT OF MANDATE OR OTHER APPROPRIATE RELIEF ...7
Statement of Facts ...................................................................................................8
Basis for Relief .....................................................................................................11
Absence of Other Remedies .................................................................................11
PRAYER ..................................................................................................................12
VERIFICATION ......................................................................................................14
MEMORANDUM OF POINTS AND AUTHORITIES .........................................15
I.

Petitioners Claims are Not Preempted by HOLA ........................................15

A. HOLA .............................................................................................................15
B. HOLA Preemption Analysis...........................................................................16
C. Petitioners State Tort Law Claims Do Not Regulate Federal Savings
Servicing Operations As Contemplated Under HOLA ........................................17
D. Applicable California Authority Supports The Finding That Petitioners Tort
and UCL Claims Are Not Preempted By HOLA .................................................18

II.
Whitmans Claims are Not Preempted under the Conflict Preemption Rules
of the National Bank Act .........................................................................................21
III.

CONCLUSION..............................................................................................23

CERTIFICATE OF WORD COUNT ......................................................................24

TABLE OF AUTHORITIES
Cases
Aguayo v. U.S. Bank,
653 F.3d 912 (9th Cir. 2011) ......................................................................... 18, 19
Alvarez v. BAC Home Loans Servicing, L.P.,
228 Cal. App. 4th 941 (2014) ...............................................................................14
Angie M. v. Super.Ct. (Hiemstra),
37 Cal. App. 4th 1217 (1995) .............................................................................2, 8
Barnett Bank v. Nelson,
517 U.S. 25 (1996). ...............................................................................................19
Cheung v. Wells Fargo Bank, N.A.,
987 F. Supp. 2d 972 (N.D. Cal. 2013) ..................................................................16
Cockrell Estate of Cockrell v. Wells Fargo Bank, N.A.,
No. CV 13-2072 SC, 2013 WL 3830048 (N.D. Cal. July 23, 2013) ............ 15, 16
Gerbery v. Wells Fargo Bank, N.A.,
No. 13-CV-614-MMA DHB, 2013 WL 3946065 (S.D. Cal. July 31, 2013) .......16
Gibson v. World Sav. & Loan Assn., 103 Cal. App. 4th 1291 (2002) ............. passim
Harris v. Wells Fargo Bank, N.A.,
No. 12-cv-05629-JST, 2013 WL 1820003 ...........................................................16
Jolley v. Chase Home Finance, LLC,
213 Cal. App. 4th 827 (2013) ...............................................................................14
North American Chem. Co. v. Super.Ct. (Trans Harbor, Inc.),
59 Cal. App. 4th 764 (1997) ...................................................................................8
3

Sarkar v. World Savings FSB,

No. C 13-4375, 2014 WL 457901 (N.D. Cal. Jan. 31, 2014)...............................16
Smith v. Wells Fargo Bank, N.A.,
135 Cal. App. 4th 1463 (2005) .............................................................................12
Watters v. Wachovia Bank, N.A.,
127 S. Ct. 1559 (2007) ..........................................................................................18
Wickman v. Aurora Loan Servs., LLC,
No. 12CV1702 JAH DHB, 2013 WL 4517247 (S.D. Cal. Aug. 23, 2013) .........16
Wigod v. Wells Fargo Bank, N.A.,
No. 11-1423, 673 F. 3d 547 (7th Cir. 2012) .........................................................17
Wyeth v. Levine,
555 U.S. 555 (2009) ..............................................................................................12
Statutes
12 C.F.R. 34.4 .......................................................................................................19
12 C.F.R. 560.2 .................................................................................. 11, 12, 13, 17
12 U.S.C. 1465 ......................................................................................................18
12 U.S.C. 21 et seq................................................................................................18
Cal. Bus. & Prof. Code 17200 ............................................................................1, 5
Cal. Civ. Proc. 1084 et seq. .....................................................................................9
Other Authorities
California Rules of Court, Rule 8.493 .......................................................................8

INTRODUCTION
A.

Why Writ Relief Should Be Granted

The issue presented herein is whether the Home Owners Loan Act (12
U.S.C. 1461 et seq., referred to as HOLA), which was enacted in1933,
preempts all state tort law, giving a mortgage loan servicer blanket immunity to act
negligently, fraudulently, and deceptively and thereby take advantage of vulnerable
homeowners facing foreclosure. OneWest Bank, and other mortgage loan
servicers, would have this Court believe that simply because HOLA enumerates
servicing as an area regulated by the federal law, that any and all conduct which
is even tangentially related to the servicing of a mortgage loanno matter how
tortious, fraudulent, or deceptiveis preempted by the federal law. Such an
interpretation would give loan servicers, like OneWest, carte blanche to carry out
deceptive practices, while leaving homeowners, like Ms. Whitman, with no legal
recourse to seek compensation for the companys tortious conduct. A plain
reading of the statute belies this nonsensical outcome and makes clear that such an
expansive interpretation of HOLA is wrong. Binding California decisional
authority is in accord with the plain meaning of the statute, finding that state tort
law is not preempted by HOLA merely because the conduct at issue may involve
the servicing of a mortgage loan or fall within the lending context.1
The Respondent court erred in sustaining OneWests demurrers to Ms.
Whitmans complaint on the basis that her state law claims for negligence,
negligent misrepresentation and violation of Business & Professions Code, section
17200, et seq. (UCL) were preempted under HOLA. Petitioner seeks a writ of
mandate overturning the courts ruling in order to address this important question,
as this issue has been wrongly decided by many trial courts. In Petitioners case,

See Gibson v. World Sav. & Loan Assn., 103 Cal. App. 4th 1291, 1301-1304
(2002).
5

the lower courts decision to dismiss her tort claims precludes her from obtaining
legal recourse for severe emotional distress, harm to her health, and financial
devastation caused by OneWests tortious conduct.
By sustaining OneWests demurrers, the lower court has confined her action
to breach of contract. The lower courts order severely hampers Ms. Whitmans
ability to assert critical facts surrounding OneWests tortious conduct and resulting
damages. For instance, Whitman will be precluded from asserting evidence of the
years of mistreatment and resulting emotional distress. By permitting OneWest to
hide behind HOLA a law which was never intended to shield bad actors from
their misconductthe lower court has deprived Ms. Whitman of an opportunity to
plead a substantial portion of her case. Whereas here, the sustaining of a demurrer
as to some but not all causes of action has deprived a party of an opportunity to
plead a substantial portion of the case, extraordinary [writ] relief may prevent a
needless trial and reversal. Angie M. v. Super.Ct. (Hiemstra), 37 Cal. App. 4th
1217, 1223 (1995) (brackets added).
Petitioner respectfully requests that this Court put an end to the
misapplication of HOLA preemption so that unscrupulous mortgage loan servicers
are prevented from using HOLA as a shield to side-step the very laws that are
necessary to protect vulnerable consumers and ensure that the relationship between
a mortgage loan servicer and its borrowers is held to the same standard as any
other company and its customers.
B.

Why an Immediate Stay Should Issue

Trial on Ms. Whitmans breach of contract claim is currently scheduled for

September 21, 2015. Petitioner requests an immediate stay of this action while
writ review is pending. As a practical matter, if Ms. Whitman is forced to continue
litigating her breach of contract claim, she could end up in the position of having to
conduct two trialsone for her breach of contract claim and another for her tort
6

law claims. Presenting two trials involving overlapping facts and issues, identical
evidence, law and motion practice, and witness participation will be a waste of
significant judicial resources, including empaneling two separate juries. Moreover,
the parties are actively engaged in extensive discovery, which is currently limited
to Ms. Whitmans breach of contract claim. If a writ is issued, discovery would
need to be repeated to allow the parties an opportunity to conduct discovery on Ms.
Whitmans tort claims. A stay would prevent this unnecessary duplication of
resources. Without a stay, Ms. Whitman will face tens of thousands of dollars in
added attorneys fees and litigation costs in order to litigate two separate actions.
While OneWest may have unlimited resources, Ms. Whitman does not. Forcing
consumers, like Ms. Whitman, to mount two separate lawsuits in order to enforce
basic state law claims is inequitable and wrongly puts the onus on the aggrieved
consumer to assert basic consumer rights.
A stay of this action would also prevent OneWest from obtaining an unfair
advantage in future litigation related to her tort claims (should she succeed on
appeal). If Ms. Whitman is forced to litigate her breach of contract claim first,
OneWest will gain an unfair advantage and have two bites at its defense strategy.
The potential harm to Ms. Whitman justifies an immediate stay of this action
pending this Courts writ review.
PETITION FOR WRIT OF MANDATE OR OTHER APPROPRIATE
RELIEF
1.

Petitioner Brenda Whitman (Whitman) is a plaintiff in an action

pending in respondent court titled, Whitman v. OneWest Bank, FSB, Los Angeles
County Superior Court, case no. BC550713. The Real Party in Interest is
Defendant OneWest Bank, FSB (OneWest). As the plaintiff, Whitman has a
beneficial interest in the pending action.

2.

On March 20, 2015, respondent court, Judge Mark V. Mooney

presiding, sustained OneWests demurrer to Whitmans second, third and fourth

causes of action for negligence, negligent misrepresentation and violation of the
UCL. [Ex. 7, p. 085].
3.

A transcript of the demurrer hearing is not available, as there was no

court reporter present. The parties presented oral argument concerning the issue of
federal preemption under HOLA as it applies to Ms. Whitmans tort claims.
Specifically, Ms. Whitmans counsel made clear that the statute does not preempt
state common-law tort claims and argued the position stated in Petitioners
opposition to the demurrer. Respondent court concluded that Ms. Whitmans tort
and UCL claims were related to servicing, and therefore were preempted under
HOLA. Formal notice of the ruling was waived. [Ex. 7, p. 085].
4.

This petition is timely as Whitman has not caused any unreasonable

delay and this petition was filed within 60 days of the lower courts ruling. [Ex. 7,
p. 085].
5.

This petition is being filed in the lowest court capable of granting

relief, as the pending action is venued in the Superior Court of California in the
unlimited civil division.
Statement of Facts
6.

On November 24, 2014, Whitman filed the operative first amended

complaint (complaint), asserting causes of action for breach of contract,

negligence, negligent misrepresentation, and violation of California Business &
Professions Code, section 17200. [Ex. 1, pp. 001-030]. Whitmans causes of
action were based on the following pertinent allegations:
A.

On or about June 14, 2007, Whitman obtained a mortgage loan

in connection with the Property (hereinafter referred to as the Loan),

which was serviced by OneWest or a division of OneWest. [Ex. 1, p.

002:19-21].
B.

In mid-2009, OneWest solicited Whitman to apply for the

Home Affordable Modification Program (HAMP) offered through the

U.S. Department of the Treasury. [Ex. 1, p. 002:25-26]. OneWest then
offered Whitman a trial modification plan (TPP) that instructed her to
submit reduced monthly mortgage payments, which would cause her to fall
behind on her regular payments. [Ex. 1, pp. 003:7-13; 004:22-25; 023-026].
Believing that she would be able to complete the TPP and receive permanent
modification assistance, Whitman accepted the plan and began making the
modified monthly mortgage payments. [Ex. 1, pp. 003:14-16; 004:1-2].
After collecting Ms. Whitmans money, OneWest refused to give her a
permanent modification and simply instructed her to reapply. [Ex. 1, p.
004:3-21; 26-28].
C.

Ms. Whitman followed OneWests instruction and reapplied for

a modification. [Ex. 1, p. 005:3-8]. Despite collecting Ms. Whitmans

personal and financial information and telling her she would eventually be
modified, OneWest made repeated misrepresentations concerning the status
of the application. [Ex. 1, pp. 005:13-006:6]. Such misrepresentations and
misinformation kept Ms. Whitman engaged in this process while the
arrearages, interest, and fees continued to be added to the back of her loan
balance. Her repeated efforts to obtain a loan modification were made under
the repeated threats of foreclosure by OneWest. [Ex. 1, p. 007:26-13].
D.

Desperate to obtain loss mitigation assistance, Ms. Whitman

attended a NACA conference, designed to assist home loan borrowers

who were in need of loss mitigation assistance. [Ex. 1, p. 006:7-11]. After
waiting in long lines for days on end, Ms. Whitman eventually met with a
9

OneWest representative, who reviewed her financial documentation,

obtained approval for and offered her another trial modification. [Ex. 1, pp.
006:10-24; 028]. Inexplicably, after Whitman made the first payment,
OneWest reneged on its promise to modify and pushed her back into the
loan modification application process. [Ex. 1, pp. 006:25-007:8].
E.

After years of engaging in an endless loan modification review

process, Ms. Whitman realized that OneWest had no intention of providing

her with a loan modification or any loss mitigation alternatives. [Ex. 1, p.
007:9-13]. Accordingly, Ms. Whitman filed a legal action against OneWest
and obtained a temporary restraining order (TRO) enjoining the sale of her
home. [Ex. 1, p. 007:14-17]. Despite the fact that a judge had issued legal
order preventing OneWest from selling her home, OneWest ignored the
court order and sold Ms. Whitmans home at a foreclosure sale. [Ex. 1, p.
007:14-17].
F.

OneWests negligent and deceptive scheme was carried out to

keep Ms. Whitman in a perpetual cycle of modification review so that

OneWest could add arrearages, penalties and fees, which it collected through
the foreclosure sale. [Ex. 1, pp. 015:21-018:13]. OneWests dealings with
its customer make clear that it elevates its ability to improve its financial
bottom line over treating consumers fairlyeven if it means breaching its
contractual duties and violating state tort laws and court orders. [Ex. 1, p.
019:6-15].
G.

Due to OneWests misconduct and misrepresentations, Ms.

Whitman suffered damages including loss of her trial modification

payments; inability to sell or refinance the Property; inability to obtain loss
mitigation assistance; financial, emotional and physical distress; damage to

10

her credit; loss of investment; and loss of her home. [Ex. 1, pp. 008:18-21;
013:10-16].
7.

OneWest demurred to the second, third and fourth causes of action for

negligence, negligent misrepresentation, and violation of California Business &

Professions Code, section 17200 on the sole basis that the state law claims were
barred by preemption of federal law, namely, The Home Owners Loan Act, 12
U.S.C. 1461 et seq. (HOLA). [Ex. 2, pp. 031-044].
Basis for Relief
8.

The lower court sustained OneWests demurrer on the ground that

Ms. Whitmans tort and statutory claims are preempted under HOLA. [Ex. 7, p.
085]. Such a finding is in direct contradiction of the plain language of the statute,
applicable California case law, and clear public policy objectives to protect
vulnerable California consumers. By sustaining the demurrer on this ground and
dismissing Ms. Whitmans claims, the trial court abused its discretion.
9.

OneWest did not demurrer to Ms. Whitmans first cause of action for

breach of contract, which remains at issue in the lower court and set for trial on
September 21, 2015.
Absence of Other Remedies
10.

The courts order sustaining OneWests demurrer has deprived Ms.

Whitman of an opportunity to present a substantial portion of her case. At issue in

this case is OneWests wrongful conduct throughout the loan modification process,
including breach of its duty to Ms. Whitman not to make misrepresentations or
engage in unlawful and deceptive business practices. By dismissing Ms.
Whitmans tort and UCL claims, the lower court has wrongly gutted her case and
precluded her from obtaining tort damages and seeking appropriate relief.
Granting writ relief may prevent a needless trial and reversal, making Ms.
Whitmans petition appropriate under these circumstances. See Angie M., 37 Cal.
11

App. 4th at 1223; North American Chem. Co. v. Super.Ct. (Trans Harbor, Inc.), 59
Cal. App. 4th 764, 773 (1997).
11.

Ms. Whitman will suffer substantial and irreparable harm if she is

forced to conduct one trial on her breach of contract claim and then re-litigate the
same issues and same set of facts, should she later prevail on an appeal. Ms.
Whitman would be forced to experience twice the stress and emotional distress of
reliving an extremely difficult time in her life; would incur substantially more in
attorneys fees and litigation costs, including reporter fees, witness fees, and expert
fees; and would be required to take multiple weeks off work to attend two trials.
Moreover, potentially conducting two separate trials on the same issues is
judicially-inefficient and a waste of judicial resources as both will involve similar,
if not identical, issues, evidence, and witness testimony. Waiting to appeal the
lower courts decision will indisputably prejudice Ms. Whitman and waste
significant judicial resources.
PRAYER
1.

Issue an immediate stay of the trial proceedings. Trial is currently

scheduled to commence on September 21, 2015, in Los Angeles County Superior

Court, case no. BC550713, to remain in effect pending final disposition of this
petition.
2.

Issue an order instructing the respondent court to vacate the

September 21, 2015 trial date.

3.

Grant the petition and issue a of writ of mandate directing respondent

court to vacate its order sustaining OneWests demurrer to the second, third and
fourth causes of action for negligence, negligent misrepresentation and violation of
California Business and Professions Code 17200, and to enter an order
overruling the demurrer in its entirety. (Cal. Civ. Proc. 1084 et seq.).
///
12

4.

An award of Petitioners costs pursuant to California Rules of Court,

Rule 8.493.
5.

Whatever further relief may be just and proper.

Respectfully submitted,

DATED:

May 18, 2015

BERGMAN & GUTIERREZ LLP

By:

13

______________________________
PENELOPE P. BERGMAN
DEBORAH P. GUTIERREZ
AMANDA L. GRAY
Attorneys for Plaintiff/Petitioner,
Brenda Whitman

VERIFICATION
I, Amanda L. Gray, declare as follows:
I am one of the attorneys for Petitioner Brenda Whitman herein. I have read
the foregoing Petition for Writ of Mandate and Request for Immediate Stay and
know of its contents. The facts alleged in the petition are within my own
knowledge, and I know these facts to be true. Because of my familiarity with the
relevant facts pertaining to the trial court proceedings, I, rather than Petitioner,
verify this petition.
I declare under penalty of perjury that the foregoing is true and correct and
that this verification was executed on May 18, 2015, at El Segundo, California.

DATED:

May 18, 2015

By:

14

______________________________
AMANDA L. GRAY

MEMORANDUM OF POINTS AND AUTHORITIES

I.

Petitioners Claims are Not Preempted by HOLA

A.

HOLA

Congress enacted HOLA in 1933 to establish federal regulation over savings

and loan associations in response to the collapse of the economy. The purpose of
the statute was to enable federal savings associations to extend credit without
regard to state laws purporting to regulate or otherwise affect their credit
activities, except those laws which were expressly excluded by the statute.
Gibson v. World Sav. & Loan Assn., 103 Cal. App. 4th 1291, 1297 (2002).
HOLA created and authorized the Office of Thrift Supervision (OTS) to
issue regulations governing federal savings associations. Pursuant to 12 C.F.R.
560.2(b), the OTS provided illustrative examples of types of state laws that it
intended to be preempted in order to accomplish its statutory objective. Among
those examples are state laws purporting to impose requirements regarding:
(1) Licensing, registration, filings, or reports by creditors
(4) The terms of credit, including amortization of loans and the deferral and
capitalization of interest and adjustments to the interest rate, balance, payments
due, or term to maturity of the loan, including the circumstances under which a
loan may be called due and payable upon the passage of time or a specified event
external to the loan;
(5) Loan-related fees, including without limitation, initial charges, late
charges, prepayment penalties, servicing fees, and overlimit fees;
(6) Escrow accounts, impound accounts, and similar accounts
(10) Processing, origination, servicing, sale or purchase of, or investment or
participation in, mortgages; [and]
(11) Disbursements and repayments

15

Section 12 C.F.R. 560.2(c) illustrates state laws that are not preempted.
This section provides that the following state tort laws, which only incidentally
affect [] lending operations, as well as state laws that further a vital state interest
are not preempted:
(1) Contract and commercial law;
(2) Real property law;
(3) Homestead laws specified in 12 U.S.C. 1462a(f);
(4) Tort law;
(5) Criminal law; and
(6) Any other law that OTS, upon review, finds:
(i) Furthers a vital state interest; and
(ii) Either has only an incidental effect on lending operations or is not
otherwise contrary to the purposes expressed in paragraph (a) of this
section.
Thus, the plain language of the statute expressly states that state tort law
claims which only incidentally affect lending operations are not preempted by
HOLA.
B.

HOLA Preemption Analysis

Analysis of federal preemption begins with the assumption that the historic
police powers of the state will not be superseded absent a clear intent by Congress.
See Wyeth v. Levine, 555 U.S. 555, 565 (2009); Smith v. Wells Fargo Bank, N.A.,
135 Cal. App. 4th 1463, 1475 (2005); Gibson v. World Sav. & Loan Assn., 103
Cal. App. 4th 1291, 1296-97 (2002). The states historic police powers include
the regulation of consumer protection in general and of the banking and insurance
industries in particular. Gibson, 103 Cal. App. 4th at 1300. Considering that
federal preemption in this area is disfavored, HOLA must be narrowly construed to

16

determine whether state law claims, such as those advanced by Ms. Whitman, are
preempted. Id.
To determine whether a state law is preempted under HOLA, the principle
inquiry is whether application of the state law to a federal savings association
would impose requirements on activities regulated by the OTS. 12 C.F.R.
560.2; Gibson, 103 Cal. App. 4th at 1301. As to each state law claim, the central
inquiry is whether the legal duty that is the predicate of the [claim] constitutes a
requirement or prohibition of the sort that federal law expressly preempts.
Gibson, 103 Cal. App. 4th at 1301. While a state law cannot dictate how a federal
savings bank can or cannot operate, it can insist that, however [the bank] chooses
to operate, it do so free from fraud and other deceptive business practices. Id. at
1305. Laws which are based on legal principles that a defendant bank has a
requirement to refrain from deceptive conduct are not expressly preempted merely
because laws were violated in the context of a lending relationship. Id. at 1303.
C.

Petitioners State Tort Law Claims Do Not Regulate Federal

Savings Servicing Operations As Contemplated Under HOLA

The types of laws that Ms. Whitman seeks to enforce do not impose any
requirements on or regulate conventional servicing of a mortgage loan as
identified under 12 CFR 560.2. Although the wrongful conduct at issue was by a
loan servicer, the laws prohibiting the alleged conduct do not involve servicing
restraints. Whitmans tort and UCL causes of action serve to enforce OneWests
duty not to misrepresent matters or engage in negligent conduct not to impose
additional limits related to servicing. The tort and UCL claims advanced by
Whitman do not seek to regulate OneWests servicing operationsrather,
Whitman seeks redress for OneWests unlawful and deceptive conduct, whatever
their servicing policies are. The legal duties that arise under Whitmans claims for
negligence, negligent misrepresentation, and violation of the UCL do not seek to
17

regulate the specific business model, operations, and how-to of mortgage loan
servicing.
Whitman alleged that once OneWest invited her into and engaged her in the
loan modification review process, it had a legal obligation to exercise reasonable
care and skill with regard to handling her loan modification application; to not
make misrepresentations concerning her loan modification application; and to
refrain from unfair and fraudulent business practices. [Ex. 1, pp. 010-019].
California case law makes clear that a duty of care may arise when a lender or
servicer exceeds its conventional role as a lender by mishandling a loan
modification application. See Alvarez v. BAC Home Loans Servicing, L.P., 228
Cal. App. 4th 941, 948-949 (2014); Jolley v. Chase Home Finance, LLC, 213 Cal.
App. 4th 827 (2013). Whitmans pleading sufficiently alleges facts to support her
claims that OneWest exceeded its conventional servicing role and breached its
legal obligations to use reasonable care and to not make misrepresentations. Ms.
Whitmans claims serve to enforce OneWests obligations to exercise reasonable
care when it exceeds its traditional servicing role, and to refrain from making
misrepresentations and engaging in deceptive and unfair business practices.
Consistent with these principles, California decisional authority has
unanimously found that state tort law claims are not preempted by HOLA.
D.

Applicable California Authority Supports The Finding That

Petitioners Tort and UCL Claims Are Not Preempted By HOLA

In Gibson v. World Sav. & Loan Assn., 103 Cal. App. 4th 1291 a California
appeals court held that HOLA did not preempt state tort law and ULC causes of
action. The court found that the duties to refrain from misrepresentation are not
preempted under HOLA, as they do not have any substantial effect on lending:
The duties to comply with contracts and the laws
governing them and to refrain from misrepresentation,
together with the more general provisions of the UCL,
18

are principles of general application. They are not

designed to regulate lending and do not have a
disproportionate or otherwise substantial effect on
lending. To the contrary, they are part of the legal
infrastructure that undergird all contractual and
commercial transactions. Therefore, their effect is
incidental and they are not preempted.
Gibson, 103 Cal. App. 4th at 1303-04. Importantly, the court also concluded that
laws which are based on legal principles that a defendant bank has a requirement to
refrain from deceptive conduct are not preempted merely because the laws were
violated in the context of a lending relationship. Id.
Similarly, in Cockrell Estate of Cockrell v. Wells Fargo Bank, N.A., No. CV
13-2072 SC, 2013 WL 3830048, at *2-3 (N.D. Cal. July 23, 2013), the plaintiff
asserted various claims pertaining to false and negligent misrepresentations made
in the context of a loan modification. The court rejected the defendants argument
that the claims were preempted under HOLA, finding that while the case may
relate to loan servicing, the claims are tort causes of action whose effects on
loan servicing are incidental, and functionally, the causes of action that Plaintiff
asserts serve only to make Defendant tell the truth and abide by its promisesnot
to impose additional requirements specifically related to loan servicing. Id. at *3.
The court further stated that to hold otherwise could essentially permit federal
savings associations to lie to their customers with impunity. Id.
Other California courts have consistently found that state law tort claims are
not preempted by HOLA. See Wickman v. Aurora Loan Servs., LLC, No.
12CV1702 JAH DHB, 2013 WL 4517247 (S.D. Cal. Aug. 23, 2013) (negligent
misrepresentation and promissory estoppel claims, which stemmed from
allegations of false statements by the bank regarding loan modification are not
preempted); Gerbery v. Wells Fargo Bank, N.A., No. 13-CV-614-MMA DHB,
2013 WL 3946065 (S.D. Cal. July 31, 2013) (claims based on allegations which
rely on a general duty not to misrepresent material facts regarding loan
19

modification are not preempted under HOLA); Cheung v. Wells Fargo Bank, N.A.,
987 F. Supp. 2d 972 (N.D. Cal. 2013); Sarkar v. World Savings FSB, No. C 134375, 2014 WL 457901 (N.D. Cal. Jan. 31, 2014) (state property law claims,
including quiet title and declaratory relief only have incidental impact on lending
and are not preempted; Harris v. Wells Fargo Bank, N.A., No. 12-cv-05629-JST,
2013 WL 1820003, *6-7 (N.D. Cal. Apr. 30, 2013) (adopting the position that
claims which fall on the regulatory side of the lender will be preempted, whereas
claims that fall on the common law side of the lender are not; allegations of
misrepresentation in the loan modification process fall on the common law side of
the lender and are not preempted).
Other federal jurisdictions have reached the same conclusion. In Wigod v.
Wells Fargo Bank, N.A., No. 11-1423, 673 F. 3d 547 (7th Cir. 2012), the U.S.
Court of Appeals, Seventh Circuit held that claims such as fraud and violation of
consumer protection statutes were not preempted under HOLA. In its ruling, the
court rejected defendant banks argument that HOLA preempted state commonlaw suits that imposed standards for the servicing of mortgage loans, whether they
conflict with federal policy or not. The court found that the banks argument was
directly at odds with the savings clause of 12 C.F.R. 560.2. Id. at 577. The
court also noted that while the OTS had the power to regulate licensing
requirements, imposition of fees and penalties, disclosure requirements, and the
like, it did not have the power to adjudicate disputes between savings and loan
customers and their customers. Id. Accordingly, the court held that HOLA did not
preempt suits by persons harmed by the wrongful acts of savings and loan
associations seeking basic state common-law type remedies. Id.

20

II.

Whitmans Claims are Not Preempted under the Conflict Preemption

Rules of the National Bank Act
On July 21, 2010, Congress enacted the Dodd-Frank Act, effectively ending

HOLA field preemption. See 12 U.S.C. 1465, which provides, in pertinent

part:
(a) In general
Any determination by a court regarding the relation of
State law to a provision of this chapter or any regulation
or order prescribed under this chapter shall be made in
accordance with the laws and legal standards applicable
to national banks regarding the preemption of State law.
(b) Principles of conflict preemption applicable
Notwithstanding the authorities granted under sections
1463 and 1464 of this title, this chapter does not occupy
the field in any area of State law.
Accordingly, under the National Bank Act (NBA) 2, which sets forth the
applicable standard for national banks, the principles of conflict preemption
(rather than field preemption) apply. Conflict preemption means that national
banks (and now federal savings banks) are subject to state laws of general
application that do not conflict with the letter or the general purposes of the
NBA [or HOLA]. Watters v. Wachovia Bank, N.A., 127 S. Ct. 1559, 1567 (2007).
In fact, the NBA specifically excludes state law tort claims from preemption (state
tort laws are expressly excluded from preemption so long as they do not prevent or
significantly interfere with the banks exercise of its power. See 12 C.F.R.
34.4(b)(2); see also Barnett Bank, 517 U.S. at 33 (1996)). Thus, post-2010, state

12 U.S.C. 21 et seq. and regulations promulgated thereunder by the Office of

the Comptroller of Currency (OCC). Watters v. Wachovia Bank, N.A., 127 S. Ct.
1559, 1564 (2007). The OCC implemented regulations specifically directed
toward identifying which state laws affecting national banks are preempted.
Aguayo v. U.S. Bank, 653 F.3d 912, 919 (9th Cir. 2011).
21

regulation is permissible when it does not prevent or significantly interfere with

the [banks] exercise of its powers. Barnett Bank v. Nelson, 517 U.S. 25, 33
(1996). Under a conflict preemption analysis, a law must actually conflict with
federal law before a preemption analysis is even necessary. Such a conflict arises
when compliance with both federal and state regulations is a physical
impossibility, or when state law stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress. Aguayo v. U.S. Bank,
653 F.3d 912, 918 (9th Cir. 2011).
Here, a conflict analysis demonstrates that state tort law claims are not
preempted since OneWests ability to service mortgages can be carried out in a
manner that does not violate state law tort claims.
While OneWests wrongful conduct began in 2009, it continued beyond
2011, well after the Dodd-Frank Act changed the preemption standard applicable
to federal savings associations. [Ex. 1, pp. 005:13-007:16]. Accordingly,
Whitmans allegations that give rise to OneWests liability and occurred after
Dodd-Frank was enacted, must be analyzed under the conflict preemption rules,
not field preemption originally contemplated under HOLA. Given there is no
conflict between state tort laws and HOLA, Whitmans claims are not preempted,
and the trial court's ruling must be reversed.
///
///
///
///
///
///

22

III.

CONCLUSION
For the foregoing reasons, Whitman respectfully requests this court to grant

extraordinary relief as prayed - including an immediate stay of this action - and

issue an order directing the superior court to vacate its order sustaining OneWest's
demurrer as to Whitman's second, third and fourth causes of action for negligence,
negligent misrepresentation and violation of California Business and Professions
Code section 17200, and enter a new order overruling the demurrer in its entirety.

Respectfully submitted,

DATED:

BERGMAN & GUTIERREZ LLP

May 18, 2015

By:

Attorneys for Pla

Brenda Whitman

23

CERTIFICATE OF WORD COUNT

(Cal. Rules of Court, Rule 8.204(c)(l))
The text of this brief consists of 4 745 words as counted by the Microsoft
Word 2010 word-processing program used to generate the brief.

DATED:

BERGMAN & GUTIERREZ LLP

May 18, 2015

Attorneys for
ntiff/Petitioner,
Brenda Whitman

24

TO BE FILED IN THE COURT OF APPEAL

Second

COURT OF APPEAL,

APP-008
Court of Appeal Case Number:

APPELLATE DISTRICT, DIVISION

AHORNEY OR PARTY WITHOUT AHORNEY (Name, State Bar number, and address):

Superior Court Case Number.

Amanda L. Gray, SBN: 244644

-BERGMAN & GUTIERREZ LLP
880 Apollo Street, Ste. 334
El Segundo, CA 90245

BC550713
FOR COURT USE ONLY

(310) 893-6200 FAX NO. (Optional): (310) 988-2930

amanda@b-g-law.com
ATTORNEY FOR !Name): Appellant/Petitioner: Brenda Whitman
TELEPHONE NO.:

E-MAIL ADDRESS 1optiona1;:

APPELLANT/PETITIONER:

Brenda Whitman

RESPONDENT/REAL PARTY IN INTEREST:

Onewest Bank, FSB

CERTIFICATE OF INTERESTED ENTITIES OR PERSONS

(Check one):

[l]

INITIAL CERTIFICATE

SUPPLEMENTAL CERTIFICATE

Notice: Please read rules 8.208 and 8.488 before completing this form. You may use this form for the initial
certificate in an appeal when you file your brief or a prebriefing motion, application, or opposition to such a
motion or application in the Court of Appeal, and when you file a petition for an extraordinary writ. You may
also use this form as a supplemental certificate when you learn of changed or additional information that must
be disclosed.
1. This form is being submitted on behalf of the following party (name):
2. a.
b.

D
0

Appellant/Petitioner: Brenda Whitman

There are no interested entities or persons that must be listed in this certificate under rule 8.208.
Interested entities or persons required to be listed under rule 8.208 are as follows:

Full name of interested

entity or person

Nature of interest
(Explain):

(1)

Brenda Whitman

Appellant/Petitioner

(2)

Onewest Bank, FSB

Respondent/Investor

(3)
(4)
(5)

Continued on attachment 2.

The undersigned certifies that the above-listed persons or entities (corporations, partnerships, firms, or any other
association, but not including government entities or their agencies) have either (1) an ownership interest of 10 percent or
more in the party if it is an entity; or (2) a financial or other interest in the outcome of the proceeding that the justices
should consider in determining whether to disqualify themselves, as defined in rule 8.208(e)(2).

Date:

05/18/2015

Amanda L. Gray, Esq.

(TYPE OR PRINT NAME)

(SIG~TJRE OF

{~~/
Form Approved for Optional Use
Judicial Council of Cal~ornia
APP-008 [Rev. January 1, 2009]

CERTIFICATE OF INTERESTED ENTITIES OR PERSONS

Page 1of1
les of Court, rules 8.208, 8.488

www.courtinfo.ca.gov

PROOF OF SERVICE
Whitman v. Onewest Bank, FSB
Superior Court of California County of Los Angeles; Case No. BC550713
I am a resident of the State of California, over the age of eighteen years, and not a
party to the within action. My business address is 880 Apollo Street, Suite 334, El
Segundo, CA 90245. On, May 19, 2015, I served the following document(s) by
the method indicated below:

PETITION FOR WRIT OF MANDATE OR OTHER APPROPRIATE

RELIEF AND REQUEST FOR IMMEDIATE STAY; MEMORANDUM
OF POINTS AND AUTHORITIES
[X] BY OVERNIGHT DELIVERY: I placed the document(s) listed above in a
sealed envelope(s) and consigning it to an express mail service for guaranteed
delivery on the next business day following the date of consignment to the parties
set forth below:
Attorney General's Office
300 S. Spring St., #1700,
Los Angeles, CA 90013

District Attorney Office

320 West Temple Street #540
Los Angeles, CA

[X] BY PERSONAL DELIVERY: I placed the documents(s) listed above in

sealed envelope(s) and by caused personal delivery of the envelope(s) to the
person(s) at the address(es) set forth below:
Attorney for Real Party in Interest
Onewest Bank, FSB
DYKEMA GOSSETT LLP
J. Kevin Snyder, Esq.
Lukas Sosnicki, Esq.
333 South Grand Avenue, Suite 2100
Los Angeles, CA 90071
(213) 457-1800

Clerk of the Court

Los Angeles County Superior Court
111 N. Hill Street
Los Angeles, CA 90012

I declare under penalty of perjury under the laws of the United States that the
above is true and correct. Executed on May 19, 2015, at El Segundo, California.

~
Monica Caseres