On November 12, the U.S. District Court for the Northern District of California granted in part and denied in part a motion to dismiss in a class action case involving mortgage contracts claims. The court allowed the plaintiff’s unjust enrichment and unfair competition law claims to proceed against the subsidiary of the parent company, a bank, finding that no contract covered the alleged conduct, and that the complaint met the requirements under all three prongs of California’s Unfair Competition Law. The court found the allegations in the complaint “leave open the possibility” that the mortgage origination process was so confusing that a reasonable person would not have suspected overcharging until receiving a letter. The court also found that the plaintiff’s allegations of overcharging, delayed notification, and partial refunds sufficed to state a claim under the “unfair” prong.

The court dismissed the plaintiff’s claim for civil theft under California Penal Code Section 496(a), finding the cause of action inapplicable and treble damages under Penal Code Section 496(c) time barred. The court also dismissed the conversion claim, finding that overcharge fees are not actionable under a conversion theory.