Leticia Munguia v. Wells Fargo Bank NA et al

Filing 37

MINUTES OF DEFENDANT WELLS FARGO BANK, N.A.S MOTION TO DISMISS (Dkt. 23, filed February 17, 2015); DEFENDANT APB PROPERTIES, LLCS MOTION TO DISMISS (Dkt. 25, filed February 18, 2015): Motion Hearing held before Judge Christina A. Snyder: The Court G RANTS in part and DENIES in part Wells Fargos motion to dismiss. Specifically, the Court GRANTS without prejudice Wells Fargos motion to dismiss plaintiffs claims for bid rigging and violation of the UCL. The Court DENIES Wells Fargos motion to dismi ss plaintiffs claims for violation of the HBOR and wrongful foreclosure. The Court also GRANTS in part and DENIES in part APBs motion to dismiss. Specifically, the Court DENIES APBs motion to dismiss plaintiffs claim for wrongful foreclosure, but oth erwise GRANTS APBs motion to dismiss without prejudice. Plaintiff shall have until Wednesday, April 29, 2015 to file a first amended complaint addressing the deficiencies identified herein. Failure to do so may result in dismissal with prejudice. Court Reporter: Laura Elias. (shb)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:15-cv-00582-CAS(JCx)

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Present: The Honorable

Date

‘O’

March 30, 2015

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Laura Elias
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Isabel Rodriguez

Sam Muriella
Stephen Britt

Proceedings:

DEFENDANT WELLS FARGO BANK, N.A.’S MOTION TO
DISMISS (Dkt. 23, filed February 17, 2015)
DEFENDANT APB PROPERTIES, LLC’S MOTION TO
DISMISS (Dkt. 25, filed February 18, 2015)

I.

INTRODUCTION

On January 26, 2015, pro se plaintiff Leticia Munguia filed a verified complaint
against defendants Wells Fargo Bank, N.A. (“Wells Fargo”), NBS Default Services, LLC
(“NBS”), APB Properties, LLC (“APB”), and Does 1 through 10. Dkt. 1. Plaintiff
alleges claims under the California Homeowner Bill of Rights (“HBOR”), Cal. Civil
Code §§ 2923, 2924, California’s Unfair Competition Law, Cal. Bus. & Prof. Code §
17200, et seq., the Sherman Antitrust Act, 15 U.S.C. §§ 1-7, the Clayton Antitrust Act, 15
U.S.C. §§ 12-27, 29 U.S.C. §§ 52-53, and the Cartwright Act, Cal. Bus. and Prof. Code
§§ 16700, et seq. Id. Plaintiff also alleges a claim for declaratory relief. Id.
On February 17, 2015, defendant Wells Fargo filed a motion to dismiss plaintiff’s
complaint pursuant to Rule 12(b)(6), as well as a request for judicial notice. Dkt. 23.1
1

Wells Fargo requests that the Court take notice of the following documents: Deed
of Trust for the property, dated July 13, 2004 and recorded on July 30, 2004 as
Instrument No. 04-1958377 in the Los Angeles County Recorder’s Office (“LACRO”)
(Ex. A); Assignment of Deed of Trust, dated November 5, 2013 and recorded on that
same date as Instrument No. 20131574292 in the LACRO (Ex. B); Substitution of
Trustee, dated March 5, 2014 and recorded on March 14, 2014 as Instrument No.
20140260558 in the LACRO (Ex. C); Notice of Default and Election to Sell Under Deed
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Defendant APB subsequently filed a motion to dismiss on February 18, 2015. Dkt. 25.
Plaintiff belatedly filed a joint opposition to defendants’ motion on March 19, 2015, dkt.
32, to which defendants replied on March 25, 2015, dkts. 35, 36.2 The Court held a
hearing on March 30, 2015. Having carefully considered the parties’ arguments, the
Court finds and concludes as follows.
II.

BACKGROUND

On July 13, 2004, plaintiff obtained a home mortgage loan in the amount of
$300,000 from Wells Fargo. Compl. ¶ 10, Ex. A. This loan was secured by a promissory
note and deed of trust against plaintiff’s residence, located at 1148 S. Fresno Street, Los
Angeles, California 90023 (“the property”). Id.
In January 2014, plaintiff contacted Wells Fargo to discuss the possibility of
obtaining a loan modification. Id. ¶ 11. Plaintiff was informed by a Wells Fargo
customer service representative that, in order to qualify for a Loan Modification, plaintiff
was required to be in default on her original loan for three months. Id. ¶ 12. Plaintiff
followed these instructions, allowing her payments to fall behind for three months. Id. ¶
13.
Between February 2014 and May 2014, plaintiff repeatedly requested a Loan
Modification Application from various Wells Fargo customer care representatives. Id. ¶
of Trust, dated March 12, 2012 and recorded on March 14, 2014 as Instrument No.
20140260559 in the LACRO (Ex. D); Notice of Trustee’s Sale, recorded on June 26,
2014 as instrument No. 20140660386 in the LACRO (Ex. E); Trustee’s Deed Upon Sale,
dated September 25, 2014 and recorded on October 8, 2014 as Instrument No.
20141065586 in the LACRO (Ex. F). The Court takes judicial notice of these documents
because they are matters of public record, but does not accept them for the truth of the
matters asserted therein. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir.
2001).
2

On March 13, 2015, defendant Wells Fargo filed a notice of non-opposition to the
motion to dismiss, correctly pointing out that plaintiff had failed to file a timely
opposition and requesting that the Court grant defendant’s motion pursuant to Local Rule
7-12. Dkt. 29. The Court declines to dismiss pro se plaintiff’s complaint based on
noncompliance with the local rules.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

14. In June 2014, plaintiff received a Loan Modification package from Wells Fargo, and
subsequently submitted a Loan Modification Application (“Application”) pursuant to
instructions provided by Wells Fargo. Id. ¶ 15. On July 8, 2014, plaintiff spoke with
Daniel Romero, the home representative specialist assigned by Wells Fargo to handle
plaintiff’s Application. Id. ¶ 16. Romero informed plaintiff that her Application had
been received and was being reviewed. Id.
Soon thereafter, plaintiff learned that the property was scheduled to be sold at a
trustee’s sale on August 25, 2014. Id. ¶ 17. Plaintiff contacted Romero on August 19,
2014 to notify him of the sale; Romero informed plaintiff that the sale had been
postponed until September 25, 2014. Id. ¶ 18. Romero also requested further financial
documentation from plaintiff, which plaintiff subsequently faxed to Romero at a number
he provided. Id. ¶ 19. Romero stated that he was still reviewing plaintiff’s Application
and would contact her if he needed further documentation. Id. ¶ 20.
On September 4, 2014, plaintiff called a number provided by Romero and spoke
with a customer care servicer, Ebrahina. Id. ¶ 21. Ebrahina informed plaintiff that
Romero needed further documentation from her, and directed plaintiff to go to a Wells
Fargo branch located at 3800 Whittier Blvd., Los Angeles, CA 90023 (“Whittier Blvd.
Branch”) to fax the requested information. Id. On September 23, 2014, plaintiff made 22
calls to Romero. Id. ¶ 22. Plaintiff alleges that Romero would not return her calls, but
that she was instead transferred to a “seven day specialist” named Luke, who informed
plaintiff that her Application was still being reviewed. Id.
The next day, plaintiff again contacted Luke to inquire about the September 25,
2014 trustee’s sale. Id. ¶ 23. Plaintiff alleges that Luke advised her not to worry, since
the sale would be postponed. Id. Plaintiff called back a short time later that same day,
and spoke to a woman named Angie, who advised plaintiff to review her notes and to
return to return to the Whittier Blvd. Branch to re-fax documentation related to plaintiff’s
Application. Id.
On September 25, 2014, plaintiff was “shocked” to receive a call from Romero,
who informed plaintiff that the seven day specialist was “actively reviewing” her
Application. Id. ¶ 24. Romero also told plaintiff that he would meet with his supervisor
regarding postponement of the trustee’s sale in light of the ongoing review of plaintiff’s
Application. Id. Romero told plaintiff that her home would not be sold. Id.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Later that day, plaintiff discovered that her home was still scheduled to be sold on
September 25, 2014. Id. ¶ 25. Plaintiff immediately contacted Romero, and informed
him that her brother was “on standby” at a Wells Fargo branch prepared to make the
payment required to bring plaintiff’s loan current. Id. ¶ 26. Romero informed plaintiff
that a payment of $30,782.00 would suffice to make the loan current. Id. ¶ 27. Romero
then transferred plaintiff to the “trustee attorney,” to whom plaintiff explained her
situation. Id. Plaintiff alleges that the attorney “had no idea” what plaintiff was talking
about and “basically hung up the phone.” Id.
While plaintiff was on the phone with Wells Fargo on September 25, 2014,
plaintiff alleges that a man identifying himself as Nelson Vega confronted plaintiff at her
residence, informing plaintiff that he was the new owner of the property. Id. ¶ 28.
Plaintiff threatened to call the police, and Vega left. Id. Plaintiff then tried to contact
Romero and the seven day specialist several more times, without success, to ascertain the
status of her pending Application. Id. ¶¶ 29, 30. Plaintiff alleges that her brother
continued to wait at a Wells Fargo branch to make the payment to bring the loan current.
Id. ¶ 30. It appears that the property was sold on September 25, 2014.
Plaintiff alleges that she provided Wells Fargo with all of the requested
information for her Application within the time frame specified by Wells Fargo, but
“never received any confirmation from the bank regarding the next step in the
negotiations.” Id. ¶ 31. Instead, plaintiff alleges that she was repeatedly told “that she
needed to resubmit the requested information, as it had gotten stale by the passage of
time.” Id. Ultimately, plaintiff alleges that she resubmitted the same information to
Wells Fargo “no fewer than seven times.” Id. ¶ 33.
III.

LEGAL STANDARD

A motion pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the claims asserted in a complaint. Under this Rule, a district court
properly dismisses a claim if “there is a ‘lack of a cognizable legal theory or the absence
of sufficient facts alleged under a cognizable legal theory.’ ” Conservation Force v.
Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balisteri v. Pacifica Polic Dep’t,
901 F.2d 696, 699 (9th Cir. 1988)). “While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[F]actual allegations must
be enough to raise a right to relief above the speculative level.” Id.
In considering a motion pursuant to Rule 12(b)(6), a court must accept as true all
material allegations in the complaint, as well as all reasonable inferences to be drawn
from them. Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be
read in the light most favorable to the nonmoving party. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, “a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth. While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.”
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); see Moss v. United States Secret Service,
572 F.3d 962, 969 (9th Cir. 2009) (“[F]or a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content,’ and reasonable inferences from that content, must be
plausibly suggestive of a claim entitling the plaintiff to relief.”). Ultimately,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial experience
and common sense.” Iqbal, 556 U.S. at 679.
Unless a court converts a Rule 12(b)(6) motion into a motion for summary
judgment, a court cannot consider material outside of the complaint (e.g., facts presented
in briefs, affidavits, or discovery materials). In re American Cont’l Corp./Lincoln Sav. &
Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other grounds sub nom
Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court
may, however, consider exhibits submitted with or alleged in the complaint and matters
that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon
Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee v. City of Los Angeles,
250 F.3d 668, 689 (9th Cir. 2001).
As a general rule, leave to amend a complaint which has been dismissed should be
freely granted. Fed. R. Civ. P. 15(a). However, leave to amend may be denied when “the
court determines that the allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture
Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th
Cir. 2000)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:15-cv-00582-CAS(JCx)

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

IV.

Date

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March 30, 2015

DISCUSSION
A.

Plaintiff’s Claims for Violation of the Homeowner Bill of Rights

Plaintiff alleges that defendants violated several provisions of the Homeowner Bill
of Rights (“HBOR”) in foreclosing on the property. Among other requirements, the
HBOR mandates that “individual borrowers and lenders ‘assess’ and ‘explore’
alternatives to foreclosure,” and that “[d]uring the foreclosure process, the debtor/trustor
[be] given several opportunities to cure the default and avoid the loss of the property.”
Mabry v. Superior Court, 185 Cal.App. 4th 208, 223 (2010). The gravamen of plaintiff’s
complaint is that defendants foreclosed on the property while plaintiff’s loan
modification application was pending, a practice known as “dual tracking” that is
expressly prohibited by section 2923.6(c) of the HBOR. Cal. Civ. Code § 2923.6(c).
Section 2924.12 of the HBOR provides a cause of action for material violations of
sections 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17, and permits a
borrower to seek injunctive and monetary relief under subsections (a) and (b),
respectively. See Cal. Civ. Code § 2924.12. Under subsection 2924.12(a), injunctive
relief is solely available to prevent a foreclosure sale before it occurs. Cal. Civ. Code §
2924.12(a)(2) (providing that “[a]ny injunction shall remain in place and any trustee's
sale shall be enjoined until the court determines that” the underlying violation has been
remedied). Pursuant to subsection 2924.12(b), damages are available “after a trustee’s
deed upon sale has been recorded.” Cal. Civ. Code § 2924.12(b).
The Court addresses each defendant’s motion to dismiss plaintiff’s HBOR claims
in turn.
1.

Defendant APB

The Court concludes that plaintiff has failed to state a claim against defendant APB
for violation of the HBOR. Only “a mortgage servicer, mortgagee, trustee, beneficiary,
or authorized agent” can be held liable to a borrower for damages resulting from a
material violation of the HBOR. Cal. Civ. Code § 2924.12(b). APB correctly points out
that plaintiff has not alleged that APB is “a mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent.” Indeed, plaintiff’s complaint makes no specific

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

allegations against APB in connection with her HBOR claims. It follows that plaintiff
has failed to state a claim against APB for violation of the HBOR.
Accordingly, the Court GRANTS without prejudice defendant APB’s motion to
dismiss plaintiff’s claim for violation of the HBOR.
2.

Defendant Wells Fargo
a.

Plaintiff’s Claim for Dual Tracking in Violation of Cal. Civ.
Code § 2923.6

As noted above, the gravamen of plaintiff’s complaint is that Wells Fargo engaged
in dual tracking in violation of § 2923.6(c). Compl. ¶ 40. Section 2923.6(c) provides:
If a borrower submits a complete application for a first lien loan
modification offered by, or through, the borrower's mortgage servicer, a
mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall
not record a notice of default or notice of sale, or conduct a trustee's sale,
while the complete first lien loan modification application is pending. A
mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall
not record a notice of default or notice of sale or conduct a trustee's sale until
any of the following occurs:
(1) The mortgage servicer makes a written determination that the borrower is
not eligible for a first lien loan modification, and any appeal period pursuant
to subdivision (d) has expired.
(2) The borrower does not accept an offered first lien loan modification
within 14 days of the offer.
(3) The borrower accepts a written first lien loan modification, but defaults
on, or otherwise breaches the borrower’s obligations under, the first lien loan
modification.
Cal. Civ. Code §§ 2923.6(c)(1)-(3).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Here, plaintiff alleges that Wells Fargo violated 2923.6(c) by failing to make a
written determination that she was ineligible for a loan modification before conducting a
trustee’s sale on the property. Compl. ¶ 40.3
Wells Fargo contends that this claim fails because plaintiff “admits that she did not
submit a ‘complete’ loan modification application . . . under the definition provided by
the statute.” WF Mot. Dismiss at 4. Wells Fargo directs the Court to Cal. Civ. Code §
2923.6(h), which states that “an application shall be deemed ‘complete’ when a borrower
has supplied the mortgage servicer with all documents required by the mortgage servicer
within the reasonable timeframes specified by the mortgage servicer.” According to
Wells Fargo, plaintiff “does not plead that all of the requested documents were submitted
to Wells Fargo by the deadlines it provided.” WF Mot. Dismiss at 5. Wells Fargo
reiterates this argument in its reply, asserting that plaintiff “fails to plead that a ‘complete
loan modification application’ was submitted prior to the September 25, 2014 trustee’s
sale.” WF Reply at 3.
Construing the complaint in the light most favorable to the nonmoving party, the
Court concludes that plaintiff has alleged submission of a “complete” application within

3

Plaintiff also cites to Cal. Civ. Code § 2924.15 in support of her dual tracking
claim. Compl. ¶ 44. In pertinent part, section 2924.15 provides:
Section[] . . . 2923.6 . . . shall apply only to first lien mortgages or deeds of
trust that are secured by owner-occupied residential real property containing
no more than four dwelling units. For these purposes, ‘owner-occupied’
means that the property is the principal residence of the borrower and is
security for a loan made for personal, family, or household purposes.
Cal. Civ. Code § 2924.15(a) (emphasis added). Wells Fargo argues that plaintiff’s claim
under section 2924.15 fails because this section is merely descriptive, and does not
prohibit dual tracking. WF Mot. Dismiss at 7. Wells Fargo misses the mark. Plaintiff
does not assert a claim under 2924.15; indeed, the HBOR does not provide a private
cause of action for material violations of this section. See Cal. Civ. Code § 2924.12(b).
Rather, plaintiff is simply alleging that her claim for dual tracking under section 2923.6 is
viable, since the property is “her principal residence,” Compl. ¶ 45—as required by
section 2924.15(a).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

the meaning of section 2923.6, prior to the September 25, 2014 trustee’s sale.
Specifically, plaintiff alleges that she “provided the requested information [to Wells
Fargo] within the specified time frame . . . [but] never received any confirmation . . .
regarding the next step in the negotiations.” Compl. ¶ 31. See also id. ¶ 33 (alleging that
plaintiff submitted the requested information “no fewer than seven times”). Plaintiff also
repeatedly alleges that Wells Fargo informed her that her Application was under review.
Id. ¶¶ 16, 29 22, 24. Moreover, plaintiff alleges that she submitted her Application and
information requested by Wells Fargo prior to September 25, 2014. See, e.g., Compl.,
Exs. C, D. Taken together, these allegations suggest that plaintiff submitted a timely and
complete loan modification application to Wells Fargo, which Wells Fargo did not deny
in writing prior to initiating the trustee’s sale on the property. These allegations suffice to
state a claim for violation of section 2923.6.
Accordingly, the Court DENIES Wells Fargo’s motion to dismiss plaintiff’s claim
for violation of Cal. Civ. Code § 2923.6.
b.

Failure to Provide Plaintiff with a Single Point of Contact
Violation of Cal. Civ. Code § 2923.7

Plaintiff alleges that Wells Fargo violated section 2923.7 of the HBOR by failing
to provide her with a single point of contact (“SPOC”). Specifically, plaintiff alleges that
she “cannot obtain a straight answer from any of the bank’s myriad number of purported
representatives,” and has been “shuttled from one ‘department’ . . . to the next.” Compl.
¶ 43.
Under section 2923.7, “[u]pon request from a borrower who requests a foreclosure
prevention alternative, the mortgage servicer shall promptly establish a single point of
contact and provide to the borrower one or more direct means of communication with the
single point of contact.” The SPOC is responsible for:
(1) Communicating the process by which a borrower may apply for an
available foreclosure prevention alternative and the deadline for any
required submissions to be considered for these options.

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UNITED STATES DISTRICT COURT
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CIVIL MINUTES - GENERAL
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Case No.

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March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.
(2) Coordinating receipt of all documents associated with available
foreclosure prevention alternatives and notifying the borrower of any
missing documents necessary to complete the application.
(3) Having access to current information and personnel sufficient to
timely, accurately, and adequately inform the borrower of the current
status of the foreclosure prevention alternative.
(4) Ensuring that a borrower is considered for all foreclosure
prevention alternatives offered by, or through, the mortgage servicer,
if any.
(5) Having access to individuals with the ability and authority to stop
foreclosure proceedings when necessary.

Id. § 2923.7(b). Section 2923.7(e) defines SPOC as “an individual or team of personnel,
each of whom has the ability and authority to perform the responsibilities” described in
sections 2923.7(b)–(d). This statute is intended “to prevent borrowers from being given
the run around, being told one thing by one bank employee while something entirely
different is being pursued by another.” Jolley v. Chase Home Fin., LLC, 213 Cal. App.
4th 872, 904–05 (2013).
First, Wells Fargo contends that plaintiff’s claim for violation of section 2923.7
fails as a matter of law because plaintiff does not allege that she requested a SPOC from
Wells Fargo. Although some courts have found that section 2923.7 requires the borrower
to specifically request a SPOC, see, e.g., Williams v. Wells Fargo Bank, 2014 WL
1568857, at *8 (C.D. Cal. Jan. 27, 2014), other courts have rejected this interpretation,
concluding that it is incumbent upon the lender to provide a SPOC when the borrower
requests a foreclosure prevention alternative, see, e.g., McFarland v. JP Morgan Chase
Bank, 2014 WL 4119399, at *11 (C.D. Cal. Aug. 21, 2014); Penermon v. Wells Fargo
Bank, N.A., 2014 WL 2754596, at *12 (N.D. Cal. June 11, 2014); Mungai v. Wells Fargo
Bank,2014 WL 250890, at *9 (N.D. Cal. June 3, 2010). The Court finds these latter cases
more persuasive and more consistent with the provision’s purpose of ensuring that
borrowers are not “given the run around.” Thus, plaintiff’s failure to allege that she
requested a SPOC does not render her claim for violation of section 2923.7 defective.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

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Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Wells Fargo next contends that plaintiff’s complaint may be construed as alleging
that she was assigned the requisite “team of personnel” within the meaning of section
2923.7. WF Mot. Dismiss at 6. Wells Fargo misconstrues the standard on a Rule
12(b)(6) motion. At this stage, the Court is required to construe the pleadings in the light
most favorable to the nonmoving party—not to Wells Fargo. Sprewell, 266 F.3d at 988.
Thus, that the pleadings might be construed to support Wells Fargo’s position is
irrelevant to the instant motion.
Here, plaintiff alleges that she made contact with at least five Wells Fargo
representatives—Romero, Ebrahina, a seven day specialist named Luke, Angie, and a
trustee’s attorney—in attempting to determine the status of her Application. See, e.g.,
Compl. ¶¶ 18, 21-23, 27. She further alleges that her calls were transferred “repeatedly to
different people in different ‘departments’ within the bank,” id. ¶ 31, and that she was
repeatedly told that her loan modification information “had been lost, misplaced, or was
being handled by someone else in a different department,” id. ¶ 34. These allegations are
consistent with a failure to assign plaintiff a SPOC with the “ability and authority to stop
foreclosure proceedings when necessary.”
Finally, Wells Fargo asserts that the alleged failure to respond to plaintiff’s calls
two days prior to the trustee’s sale “does not necessarily constitute a violation of the
statute.” WF Mot. Dismiss at 6. Wells Fargo points to section 2923.7(c), which states in
pertinent part that the SPOC “shall remain assigned to the borrower's account until the
mortgage servicer determines that all loss mitigation options offered by, or through, the
mortgage servicer have been exhausted.” Wells Fargo implies that such “loss mitigation
options” may have been exhausted two days prior to the trustee’s sale, thus excusing
Wells Fargo of its obligation to provide plaintiff with a SPOC. Wells Fargo again
misconstrues the applicable standard on a motion to dismiss. Although Wells Fargo’s
position is certainly possible, the Court must draw all inferences in favor of plaintiff at
this juncture. Doing so, the Court concludes that plaintiff has adequately alleged a
violation of section 2923.7 against Wells Fargo.
Accordingly, the Court DENIES Wells Fargo’s motion to dismiss plaintiff’s claim
for violation of Cal. Civ. Code § 2923.7.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

2:15-cv-00582-CAS(JCx)

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.
B.

Date

‘O’

March 30, 2015

Plaintiff’s Claims for Violation of the Sherman Antitrust Act, Clayton
Act, and Cartwright Act

Without specifying relevant statutory provisions, plaintiff asserts a claim for “bid
rigging” in violation of the Sherman Antitrust Act, Clayton Antitrust Act, and the
Cartwright Act. Specifically, plaintiff alleges that defendants NBS and APB “were
working in collusion through bid rigging to deprive plaintiff of her property.” Compl. ¶
47.
The Court concludes that plaintiff has failed to state a claim against either Wells
Fargo or APB for violation of the aforementioned statutes. First, plaintiff does not make
any allegations specifically against Wells Fargo in connection with the bid rigging claim.
Second, apart from alleging that NBS and APB colluded “through bid rigging to deprive
plaintiff of her property,” plaintiff has not provided any factual allegations concerning the
alleged collusion. See, e.g., In re Late Fee & Over-Limit Fee Litig., 528 F. Supp. 2d 953,
962 (N.D. Cal. 2007) aff'd, 741 F.3d 1022 (9th Cir. 2014) (to state claim under section 1
of the Sherman Act, plaintiff must set forth, inter alia, “concrete allegations about the
content and circumstances of any actual agreement.”). Instead, plaintiff appears to set
forth boilerplate explanations of bid rigging and antitrust violations that are not
connected to the alleged actions of defendants. See Compl. ¶¶ 50-53.
Finally, it is not clear to the Court that plaintiff has standing to bring antitrust
claims. As the Ninth Circuit has explained, “[t]he antitrust laws do not provide a remedy
to every party injured by unlawful economic conduct. It is well established that the
antitrust laws are only intended to preserve competition for the benefit of consumers.”
Am. Ad Mgmt., Inc. v. Gen. Tel. Co. of California, 190 F.3d 1051, 1055 (9th Cir. 1999).
Among other requirements, antitrust standing only exists “where the plaintiff is a
participant in the relevant market—e.g., a consumer or competitor in the relevant market
alleged.” In re Dynamic Random Access Memory (Dram) Antitrust Litig., 516 F. Supp.
2d 1072, 1090 (N.D. Cal. 2007). Further, to bring an antitrust claim, “a plaintiff must
allege injury not only to itself, but to competition within a field of commerce in which the
claimant is engaged (i.e., ‘antitrust injury’).” Int'l Norcent Tech. v. Koninklijke Philips
Electronics N.V., 2007 WL 4976364, at *14 (C.D. Cal. Oct. 29, 2007) aff'd, 323 F. App'x
571 (9th Cir. 2009) (internal quotations omitted). Moreover, “[t]o allege injury to
competition, a plaintiff may not merely recite the bare legal conclusion that competition
has been restrained unreasonably. [citation].” Id. (internal quotations and citations
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

omitted). Here, plaintiff has not alleged that she is a “consumer or competitor” in the
relevant market—i.e., the market for the sale of the property—nor has she explained how
the alleged conspiracy harmed competition. Rather, as noted above, plaintiff proffers
generic explanations of the process of bid rigging and the purpose of the antitrust laws.
Accordingly, the Court GRANTS without prejudice both Wells Fargo’s motion
and APB’s motion to dismiss plaintiff’s claim for bid rigging.
C.

Plaintiff’s Claim for Violation of the Unfair Competition Law, Cal. Bus.
& Prof. Code § 17200, et seq

Plaintiff alleges that defendants “violated . . . [the] Unfair Competition Law . . . in
connection with processing loan modifications and foreclosures.” Compl. ¶ 6. However,
plaintiff does not set forth a separate claim for relief for violation of the UCL. Plaintiff is
directed in her amended complaint to state a separate claim for violation of the UCL, Cal.
Bus. & Prof. § 17200, et seq. The plaintiff is reminded that damages are not available
under that statute.
Accordingly, the Court GRANTS without prejudice both Wells Fargo’s motion
and APB’s motion to dismiss plaintiff’s claim for violation of the UCL.
D.

Plaintiff’s Claim for Declaratory Relief

Plaintiff’s claim for declaratory relief seeks to enjoin defendants from “taking
possession of [the property],” following the “false, fraudulent and void foreclosure sale
on September 25, 2014.” Compl. ¶ 55. However, as discussed supra, the HBOR
contemplates injunctive relief only to prevent a foreclosure sale. See Cal. Civ. Code §
2924.12(a). Thus, to the extent that plaintiff seeks to set aside the completed sale of the
property, the Court construes plaintiff’s request for injunctive relief as an action in equity
for wrongful foreclosure. See Lona v. Citibank, N.A., 202 Cal.App. 4th 89, 103 (2011)
(“After a nonjudicial foreclosure sale has been completed, the traditional method by
which the sale is challenged is a suit in equity to set aside the trustee's sale.”). See also
Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010) (“[W]e continue to construe pro se
filings liberally when evaluating them under Iqbal.”).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Under California law, “[t]he elements of an equitable cause of action to set aside a
foreclosure sale are as follows: (1) the trustee or mortgagee caused an illegal, fraudulent,
or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or
deed of trust; (2) the party attacking the sale (usually but not always the trustor or
mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor
challenges the sale, the trustor or mortgagor tendered the amount of the secured
indebtedness or was excused from tendering.” Lona v. Citibank, N.A., 202 Cal. App. 4th
89, 104 (2011) (collecting cases). Accord In re Mortgage Elec. Registration Sys., Inc.,
754 F.3d 772, 784 (9th Cir. 2014). “Justifications for setting aside a trustee's sale . . .
which satisfy the first element, include the trustee's or the beneficiary's failure to comply
with the statutory procedural requirements for the notice or conduct of the sale.” Id. at
104. “Other grounds include proof that: (1) the trustee did not have the power to
foreclose [citations]; (2) the trustor was not in default, no breach had occurred, or the
lender had waived the breach [citations]; or (3) the deed of trust was void.” Id.
The Court concludes that plaintiff has stated a claim for wrongful foreclosure. As
to the first element, the gravamen of plaintiff’s complaint is that defendants conducted
the trustee’s sale while her loan modification application was still pending in violation of
Cal. Civ. Code section 2923.6—i.e., a “failure to comply with the statutory procedural
requirements for the notice or conduct of the sale.” Plaintiff has also satisfied the second
element of a wrongful foreclosure claim by alleging that she is “in danger of being
deprived of her home [because of the] false, fraudulent and void foreclosure sale on
September 25, 2014.” Compl. ¶ 55.
As to the final element, defendants assert that plaintiff has not alleged tender of the
full amount due on the loan. WF Mot. Dismiss at 11; APB Mot. Dismiss at 7.
Defendants’ contention, however, appears to ignore plaintiff’s allegations that Wells
Fargo informed her that a payment of $30,782.00 would “bring plaintiff’s loan current,”
Compl. ¶ 27, and that her brother was at Wells Fargo “on standby to make the payment to
bring the loan current,” id. ¶ 26. Although Wells Fargo directs the Court to a Notice of
Default, asserting it indicates that, “as of March 12, 2014, Plaintiff was approximately
$156,526.78 in arrears” on her loan, WF Mot. Dismiss at 2 (citing RJN, Ex. D, at p. 2.), the
Notice of Default actually states that the amount owed is “$15,526.78 as of 3/12/2014, and
will increase until your account becomes current.” Plaintiff’s allegation that her brother was
“on standby” to make a $30,782.00 payment to Wells Fargo in September 2014 is entirely
consistent with the tender requirement.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

‘O’

Case No.

2:15-cv-00582-CAS(JCx)

March 30, 2015

Title

LETICIA MUNGUIA v. WELLS FARGO BANK N.A., ET AL.

Accordingly, the Court DENIES defendants’ motions to dismiss plaintiff’s claim
for wrongful foreclosure.
V.

CONCLUSION

In accordance with the foregoing, the Court GRANTS in part and DENIES in part
Wells Fargo’s motion to dismiss. Specifically, the Court GRANTS without prejudice
Wells Fargo’s motion to dismiss plaintiff’s claims for bid rigging and violation of the
UCL. The Court DENIES Wells Fargo’s motion to dismiss plaintiff’s claims for
violation of the HBOR and wrongful foreclosure.
The Court also GRANTS in part and DENIES in part APB’s motion to dismiss.
Specifically, the Court DENIES APB’s motion to dismiss plaintiff’s claim for wrongful
foreclosure, but otherwise GRANTS APB’s motion to dismiss without prejudice.
Plaintiff shall have until Wednesday, April 29, 2015 to file a first amended
complaint addressing the deficiencies identified herein. Failure to do so may result in
dismissal with prejudice.
IT IS SO ORDERED
00
Initials of Preparer

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CMJ

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