Wilkinson et al v. Wells Fargo Bank NA et al

Filing 39

ORDER granting 26 Motion to Dismiss Party; Defendant Wells Fargo Bank NA terminated. Signed by Judge David G Campbell on 3/14/12.(LSP)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Christopher C. and Laura L.Wilkinson,
husband and wife,

No. CV11-02467-PHX-DGC
ORDER

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Plaintiffs,

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v.

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Wells Fargo Bank, N.A., et. al.,

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Defendants.

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Plaintiffs filed suit against Defendants alleging six claims. Doc. 1-1. Defendant

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Wells Fargo Bank filed a motion to dismiss all claims pursuant to Federal Rule of Civil

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Procedure 12(b)(6). Doc. 26. Plaintiff responded (Doc. 33) and Wells Fargo replied

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(Doc. 35). The motion is fully briefed and no party has requested oral argument. For the

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reasons that follow, the Court will grant the motion to dismiss.

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I.

Background.

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The following facts are taken from the complaint and will be assumed true for

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purposes of this motion. Plaintiffs refinanced their mortgage through a loan arrangement

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with Wells Fargo under a first and second mortgage, and pledged 6129 East Shangri La

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Road (the “Property”) as collateral for the deed of trust (“DOT”). Doc. 1-1 at 10. The

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first mortgage was dated May 8, 2007, and the second mortgaged was dated June 7, 2007.

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Id. Wells Fargo was the named beneficiary in both mortgages. Id. On or about April 2,

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2010, Plaintiffs contacted Wells Fargo to discuss options for refinancing or modifying the

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loan agreement. Id. Representatives of Wells Fargo told Plaintiffs that it was highly

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unlikely that any assistance was available and that Wells Fargo would not consider

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providing assistance until Plaintiffs were delinquent in their mortgage payments. Id.

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Plaintiffs continued making payments and submitted all requested information to be

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considered for a loan modification. Id. Between April 2 and June 29, 2010, Plaintiffs

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made multiple calls to Wells Fargo and were told that it was highly unlikely that they

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would be considered for any assistance unless the mortgage was delinquent. Id. During

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this time, Plaintiffs were told that their requests for modifications were in process.

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Doc. 1-1 at 11.

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On about June 29, 2010, Plaintiffs called Wells Fargo to follow up on the file and

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were told that it was in short sale status and a new file was required to be considered for

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loan modification.

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documents to Wells Fargo. Id. On about August 3, 2010, Plaintiffs provided further

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requested documentation to Wells Fargo.

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requested Plaintiffs to provide additional documentation including medical records to

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justify a medical hardship. Id. Plaintiffs told Wells Fargo that the medical records may

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take up to 30 days. Id. On about August 24, 2010, Plaintiffs called Wells Fargo and

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were told that their file had been terminated for failure to provide documentation. Id.

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Plaintiffs told Wells Fargo that they had the required documentation and would fax it

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over. Id. Wells Fargo verified its receipt of the documentation and told Plaintiffs that the

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file would be changed to “in process.” Doc. 1-1 at 12.

Id.

On July 20, 2010, Plaintiffs supplied additional requested

Id.

On August 10, 2010, Wells Fargo

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On about September 22, 2010, Plaintiffs were told that they needed to provide

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additional documentation. Id. On about September 28, 2010, Plaintiffs provided the

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additional requested documents. Id. On about October 5, 2010, Plaintiffs were told that

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more documentation was required and shortly thereafter provided it. Id. On about

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October 19, 2010, Plaintiffs were told that the file had been withdrawn due to missing

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documents. Id. Wells Fargo did not identify which documents were missing, but told

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Plaintiffs that they could resubmit a loan modification packet for consideration. Id. On

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about October 22, 2010, Plaintiffs resubmitted the entire packet, including the prior
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correspondence, and was told that file was again “in process.” Id.
Between April and December 2010, Plaintiffs spoke to at least 15 different Wells

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Fargo representatives.

Id.

During the last few months of these communications,

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Plaintiffs missed payments because of financial hardship and because Wells Fargo

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indicated that it was unlikely to provide assistance if the loans were current. Id. On

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about November 18, 2010, Plaintiffs were informed that servicing on the first mortgage

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had been transferred to Marix Servicing and that the loan modification requests would be

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handled by Marix. Doc. 1-1 at 13. On February 7, 2011, Wells Fargo recorded an

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assignment of the DOT to TruCap in Maricopa County, Arizona. Id. Plaintiffs believe

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that Wells Fargo assigned rights to the first and second mortgage prior to the assignment

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with TruCap. Id.

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Plaintiffs allege six counts in their complaint: (1) violations of the Arizona

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Consumer Fraud Act; (2) quiet title to the real property; (3) damages; (4) breach of

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contract; (5) fraud; and (6) demand for an accounting.

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II.

Standard.

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When analyzing a complaint for failure to state a claim under Rule 12(b)(6), the

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well-pled factual allegations “‘are taken as true and construed in the light most favorable

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to the nonmoving party.’” Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009)

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(citation omitted). Legal conclusions couched as factual allegations “are not entitled to

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the assumption of truth,” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009), and therefore

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“‘are insufficient to defeat a motion to dismiss for failure to state a claim,’” In re Cutera

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Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010) (citation omitted).

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Rule 12(b)(6) dismissal, the complaint must plead “enough facts to state a claim to relief

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that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This

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plausibility standard “is not akin to a ‘probability requirement,’ but it asks for more than

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a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S. Ct. at 1949

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(quoting Twombly, 550 U.S. at 556). “[W]here the well-pleaded facts do not permit the

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court to infer more than the mere possibility of misconduct, the complaint has alleged –
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To avoid a

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but it has not ‘show[n]’ – ‘that the pleader is entitled to relief.’” Id. at 1950 (quoting Fed.

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R. Civ. P. 8(a)(2)).

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When addressing a Rule 12(b)(6) motion, a court “may consider documents

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attached to the complaint, documents relied upon but not attached to the complaint when

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the authenticity of those documents is not questioned, and other matters of which the

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Court can take judicial notice.” Humboldt Baykeeper v. Union Pacific Railroad Co., No.

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C 06-02560 JSW, 2006 WL 3411877, at *1 (N.D. Cal. Nov. 27, 2006) (citing, inter alia,

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Branch v. Tunnell, 14 F.3d 449, 453-54 (9th Cir. 1994), overruled on other grounds,

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Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002)). In addition, a court

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may consider documents of which it takes judicial notice, including those that are matters

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of public record. Gallo v. Board of Regents of Univ. of Cal., 916 F. Supp. 1005, 1007

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(S.D. Cal. 1995).

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III.

Analysis.

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A.

Count 1: Arizona Consumer Fraud Act.

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The elements of consumer fraud under A.R.S. § 44-1522 are “a false promise or

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misrepresentation made in connection with the sale or advertisement of merchandise and

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the hearer’s consequent and proximate injury.” Nahom v. Blue Cross & Sheild, 885 P.2d

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1113, 1124 (Ariz. 1994) (quoting Parks v. Macro-Dynamics, Inc., 591 P.2d 1005, 1008

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(Ariz. 1979)). A claim for consumer fraud is subject to Rule 9(b). See, e.g., Grismore v.

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Capital One F.S.B., No. CV 05–2460–PHX–SMM, 2007 WL 841513 at *6 (D. Ariz.

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Mar.16, 2007). To satisfy Rule 9(b)’s heightened pleading standard for fraud, “a plaintiff

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‘must state the time, place, and specific content of the false representations as well as the

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identities of the parties to the misrepresentations.’” Stejic v. Aurora Loan Servs., LLC,

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No. 09-CV-819-PHX-GMS, 2009 WL 4730734, at *4 (D. Ariz. Dec.1, 2009) (quoting

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Schreiber Distrib. Co. v. ServWell Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)).

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The plaintiff also “‘must set forth what is false or misleading about the statement, and

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why it is false.’” Id. (quoting Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th

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Cir. 2003)).
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Plaintiffs allege that “Wells Fargo misled Plaintiffs regarding their alternatives to

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foreclosure, including loan modifications, forbearance of payments, etc.” Doc. 1-1, at 17.

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Plaintiffs also allege that Wells Fargo falsely told Plaintiffs “that they must be delinquent

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on their mortgage payments in order to be considered for a loan modification.” Id.

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Plaintiffs also allege generally that Wells Fargo “made false promises and used

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deception, deceptive practices, and/or misrepresentations.” Id. at 11.

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These allegations do not meet the pleading requirements for Rule 9(b). With the

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exception of the delinquency statement, Plaintiffs do not identify the substance of the

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alleged false statements. Nor do they identify when specific alleged misrepresentations

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were made or by whom. The Consumer Fraud Claim must therefore be dismissed.

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B.

Count 2: Quiet Title.

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An action for quiet title may be brought by anyone having or claiming interest in

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real property against any person adverse to the party, A.R.S. § 12-1101, but must “[s]tate

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that Plaintiff is credibly informed and believes defendant makes some claim adverse to

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plaintiff,” A.R.S. § 12-1102(4). This claim fails for a number of reasons. First, the

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complaint does not allege that Wells Fargo claims any title in the property. Doc. 1-1 at

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13 (stating Wells Fargo assigned its rights to TruCap with an assignment of deed of trust

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on February 7, 2011). Second, Plaintiffs cannot assert quiet title against their lender until

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they have paid off their loan or tendered the balance due. Eason v. IndyMac Bank, FSB,

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No. CV 09-1423-PHX-JAT, 2010 WL 4573270 at *3 (D. Ariz. Nov. 5, 2010). Finally,

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Plaintiffs’ failed to address these arguments in the response brief, which is an

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independent basis to dismiss. See L. R. Civ. 7.2(i).

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C.

Count 3: Damages.

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There is no cause of action called “damages” in Arizona. Plaintiffs appear to

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bring this claim under A.R.S. § 33-420(a). This statute applies to documents purporting

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to create an interest, lien, or encumbrance such as a lis pendens, mechanics lien, or the

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deed of trust itself, rather than an assignments of mortgages. Schayes v. Orion Fin.

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Group, Inc., No. CV–10–0265, 2011 WL 3156303, at *6 (D. Ariz. July 27, 2011).
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On June 7, 2007, the DOT for the Property was filed naming Wells Fargo as

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trustee and beneficiary. Doc. 1-1 at 30. Wells Fargo assigned the DOT to TruCap

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Grantor Trust 2010 on January 26, 2010. Doc. 1-1 at 35-36. On June 7, 2007, the DOT

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for the Property was filed naming Wells Fargo as trustee and beneficiary. Doc. 1-1 at 30.

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Wells Fargo assigned the DOT to TruCap Grantor Trust 2010 on January 26, 2010.

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Doc. 1-1 at 35-36.

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Count 3 alleges that Defendants “have recorded multiple documents against

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Plaintiffs’ property in an attempt by Defendants to improperly remove Plaintiffs’ right to

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the Property and have refused to remove these improper and invalid recordations.”

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Doc. 1-1 at 19. But Plaintiffs do not identify the documents that support this claim, nor

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do they explain how the documents are forged, groundless, contain a material

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misstatement or false claim, or are otherwise invalid, as required by the statute. The facts

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alleged in the complaint therefore do not support a claim under A.R.S. § 33-420(a).

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D.

Count 4: Breach of Contract.

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In an action for breach of contract, the plaintiff must show the existence of a

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contract, breach of the contract, and resulting damages. Chartone, Inc. v. Bernini, 83

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P.3d 1103, 1111 (Ariz. Ct. App. 2004). Count 4 addresses the Substitution of Trustee

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and Notice of Trustee’s Sale and alleges that they are defective in various respects, but

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does not identify a contract between Plaintiffs and Wells Fargo or allege how the contract

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was breached. The count therefore fails to state a claim for breach of contract. In

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addition, Plaintiffs failed to address this count in the response brief. See L. R. Civ. 7.2(i).

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E.

Count 5: Fraud.

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Count 5 alleges that Defendants committed residential mortgage fraud under

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A.R.S. § 13-2320 through deliberate misstatements, misrepresentations or material

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omissions, including causing an inaccurate substitution of trustee and notice of trustee

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sale to be recorded. Doc. 1-1 at 21. The count also alleges that Wells Fargo made

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“repeated misstatements and misrepresentations about the borrower’s loan modification.”

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Id. As already noted, Rule 9(b) requires a party alleging fraud to “state with particularity
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the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).

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Wells Fargo identifies several alleged defects in this claim, including its failure to

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plead fraud with particularity. Wells Fargo asserts that Plaintiffs have failed to identify

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what alleged misrepresentations support fraud. Doc. 26 at 11. In response, Plaintiffs

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argue that they sought information for months and were told only that “the file is in

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process” and “missing documents.” Doc. 33 at 6. Plaintiffs assert that they “were never

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provided proof of the Defendant’s review or consideration,” and that Wells Fargo

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imposed delays in excess of the times promised Plaintiffs. Id. This response does little to

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clarify Plaintiffs’ fraud claim. As in the complaint, Plaintiffs fail to identify the specific

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fraud perpetrated by Wells Fargo, much less with particularity. Plaintiffs do not identify

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what false statements were made, when, or by whom. The fraud claim clearly does not

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comport with Rule 9(b).

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F.

Count 6: Accounting.

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Count 6 requests copies of the entire loan servicing file from Defendants and the

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true note holder. Doc. 1-1 at 21. There is no such claim for accounting in Arizona.

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Kelly v, NationsBanc Mortg. Corp., 17 P.3d 790, 792-93 (Ariz. App. 2001) (concluding

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that there is no authority to support a trustor’s request for a complete accounting). In

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addition, Plaintiffs fail to address this claim in its response brief. See L. R. Civ. 7.2(i).

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IV.

Conclusion.

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Each of Plaintiffs’ claims must be dismissed for the reasons identified above. In

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addition, Plaintiffs’ complaint contains numerous allegations regarding federal loan

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modification programs. Borrowers cannot, however, enforce federal programs designed

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to encourage modifications. Robinson v. Wells Fargo Bank, N.A., No. CV 09-2066-

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PHX-JAT, 2010 WL 2534192, at *7-8 (D. Ariz. June 18, 2010) (holding that “TARP

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does not create, either explicitly or implicitly, a private right of action against TARP fund

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recipients”); Cettolin v. GMAC, No. CV 10-8036-PCT-JAT, 2010 WL 3834628, at *4 (D.

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Ariz. September 24, 2010) (“neither TARP nor HAMP provides a private right of action

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against financial institutions for refusal to modify a loan”).
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IT IS ORDERED that Defendant Wells Fargo’s motion to dismiss is granted.

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Dated this 14th day of March, 2012.

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