Bergman’s Firm Wins Appellate Writ Petition of HOLA Preemption Ruling Against OneWest
Posted On: September 9th 2015
On March 20, 2015, Judge Mark Mooney, a LA Superior Court judge, dismissed our client’s tort claims against OneWest in a case involving OneWest’s negligent conduct and wrongful foreclosure. The trial court sided with OneWest’s argument that the Home Owners Loan Act “HOLA” (12 USC Section 1461 et seq.) preempted all state-law tort claims like negligence, fraud, and wrongful foreclosure, thereby leaving the plaintiff with no legal recourse against OneWest for its wrongful conduct in the servicing of her mortgage loan and the wrongful foreclosure of her home.
Bergman’s team objected to the ruling as it would in essence give OneWest, and any other mortgage loan servicer, carte blance to act negligenty, deceptively, and fraudulently when dealing with its customers. Bergman’s team argued that HOLA was enacted in 1933 for the purpose of giving banks leeway to engage in banking activities without significant state regulation, but it was not intended to permit the banks to side step basic state law claims preventing companies from acting negligently, deceptively, and fraudulently with their customers.
On May 20, 2015, Bergman’s team filed a Petition for Writ of Mandate with the California Court of Appeal, Second District, asking the appeals court to overturn Judge Mooney’s decision. On August 21, 2015, the court issued a Notice of Intent to Grant Preemptory Write of Mandate, overturning the lower court’s dismissal of the plaintiff’s tort claims. Specifically, the appeals court stated that it had “concluded that the demurrer was erroneously sustained” and “the demurrer should have been overruled.” Bergman’s Petition and the appeals court ruling can be found below.
This is a big win for the plaintiff in this lawsuit, and for all California homeowners, since many judges in state and federal courts have increasingly found that HOLA preempts all state tort law claims if they in any way involve the servicing of a mortgage loan. The appeals court ruling should make clear that servicers must abide by the same basic state tort laws that other companies are required to follow prohibiting them from acting negligently, deceptively, and fraudulently when dealing with consumers.