On July 3, 2018, Judge Birotte Jr. of the Central District of California denied a motion to dismiss filed by Ditech that argued our client was not removed from the home mortgage loan even though the lawsuit alleges that Ditech undertook the specific actions of removing her name as a customer and signatory to a modification agreement entered into by the ex-husband. Ditech argued that the modification agreement contains a clause that shows the underlying loan still applies in full force as against our client. However, California law specifically holds that any inconsistent terms between the modification agreement and the underlying agreement are replaced by the modification agreement. Our position was that the modification agreement only applies between Ditech and the ex-husband, because it is a basic principal of contract law that someone cannot be held liable to something they did not agree to, and therefore any term in the modification agreement that shows the original note still applies in full force only applies to Ditech and the ex-husband subject to the inconsistent terms in the modification agreement.
The Court agreed with our allegations, ruling that Ditech’s actions in removing our client’s name as a customer creates at least an inference worthy of discovery and litigation that Ditech intended to remove our client from the loan altogether, and that when Ditech continued reporting to the credit reporting agencies that our client remains obligated upon the loan in the full amount then Ditech furnished false/inaccurate/misleading information as against our client. Furthermore, Judge Birotte also agreed that when Ditech continued to call our client directly seeking payment after the ex-husband went into default, Ditech engaged in unlawful debt collection in violation of the Rosenthal Act.
Read the opinion by clicking HERE.