Amany Simmonds v. Wells Fargo Bank, N.A. et al

Filing 17

MINUTES (IN CHAMBERS) by Judge David O. Carter: granting 7 MOTION to Dismiss ; denying 12 MOTION to Remand Case. Plaintiff may file an amended complaint on or before May 1, 2017. (twdb)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

Date: April 7, 2017

Title: AMANY SIMMONDS V. WELLS FARGO BANK, N.A. ET AL.

PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Dwayne Roberts
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR
PLAINTIFF:
None Present

ATTORNEYS PRESENT FOR
DEFENDANT:
None Present

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING
DEFENDANT’S MOTION TO
DISMISS [7]; DENYING
PLAINTIFF’S MOTION TO
REMAND [12]
Before the Court are Defendant’s Motion to Dismiss (“MTD”) (Dkt. 7), and
Plaintiff’s Motion to Remand (“MTR”) (Dkt. 12). The Court finds these matters
appropriate for resolution without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. After
reviewing the moving papers and considering the parties arguments, the Court GRANTS
Defendant’s Motion to Dismiss TD and DENIES Plaintiff’s Motion to Remand.
I.

Background
A.

Facts

The Court adopts the facts as set out in Plaintiff’s Complaint (“Complaint”) (Dkt.
1-1) and the documents attached to Defendant’s Request for Judicial Notice (“RJN”)
(Dkt. 8).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

Date: April 7, 2017
Page 2

On March 16, 2007, Plaintiff Amany Simmonds (“Plaintiff”) took out a
$626,400.00 loan (the “Loan”) from an investor through World Savings Bank, FSB
(“WSB”) for her residence located at 11 Style Drive, Aliso Viejo, California (the
“Property”). Compl. ¶¶ 1, 3. A promissory note (“Note”) and Deed of Trust were
executed the same day. Id. ¶ 3.
On December 31, 2007, WSB was acquired by Wachovia Mortgage, FSB
(“Wachovia”). Id. ¶ 8. In August 2009, Plaintiff attempted to obtain a modification or
forbearance on her Loan. Id. ¶ 9.
On November 1, 2009, Wachovia was acquired by Defendant Wells Fargo Bank,
N.A. (“Wells Fargo” or “Defendant”). Id.
On April 29, 2010, Plaintiff fell behind on her payments, and Wells Fargo
recorded a Notice of Default on Plaintiff’s Property. Id. ¶ 10. On September 14, 2010 and
December 30, 2011, Wells Fargo recorded Notices of Trustee Sale, but both sales was
subsequently cancelled. Id. From August 2009 to December 2011, Plaintiff allegedly
asked Wells Fargo to show her the original Note on her Loan several times, but Wells
Fargo failed to produce it. Id. ¶ 11.
At the time Plaintiff borrowed the loan, Plaintiff was on disability and earned
approximately $700 per week, but on the loan application WSB stated that Plaintiff
earned about $150,000 per year. Id. ¶ 4. Plaintiff’s Loan was a “pick-a-payment” loan,
which meant she would be able to pick which payment she wanted to make each month.
Id. However, Plaintiff allegedly was not told that as a result of the payment plan she
selected, her balance was negatively amortized—meaning the total amount due on the
loan increased. Id. ¶ 5.
Plaintiff filed an action against Wells Fargo on August 22, 2012 in the Superior
Court of California for the County of Orange. See RJN Ex. E. It was subsequently
removed to the Central District of California, see Amany Simmonds v. Wells Fargo Bank,
NA, No. 13-00294-JVS (RNBx) (C.D. Cal. Apr. 2, 2013), and the court dismissed the
case on April 2, 2013. See id. Ex. F.
In December 2016, Plaintiff became aware of a Settlement Agreement between
Wells Fargo and the State of California that required Wells Fargo to grant loan
modifications to home owners who received a “pick-a-payment” loan from WSB. Compl.
¶ 5. Wells Fargo never offered this loan modification to Plaintiff. Id.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

B.

Date: April 7, 2017
Page 3

Procedural History

Plaintiff filed this suit in the California Superior Court for the County of Orange
on January 30, 2017 (“Notice of Removal”) (Dkt. 1). Wells Fargo removed the action to
the Central District of California on February 27, 2017. Plaintiff brings the following
claims: (1) fraud, (2) breach of settlement agreement, (3) cancellation of foreclosure
instruments, (4) wrongful foreclosure, and (5) declaratory relief. See Compl.
On March 3, 2017, Wells Fargo filed the instant Motion to Dismiss and a Request
for Judicial Notice (“RJN”) (Dkt. 8). Plaintiff opposed on March 16, 2017 (“MTD
Opposition”) (Dkt. 11). No reply brief was filed.
On March 16, 2017, Plaintiff filed the instant Motion to Remand. Wells Fargo
opposed on March 24, 2017 (“MTR Opposition”) (Dkt. 14). No reply brief was filed.
II.

Legal Standard
A.

Motion to Remand

“If at any time before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Removal of a case
from state court to federal court is governed by 28 U.S.C. § 1441, which provides in
pertinent part that “any civil action brought in a State court of which the district courts of
the United States have original jurisdiction, may be removed . . . to the district court of
the United States for the district and division embracing the place where such action is
pending.” The removing defendant must file a notice of removal in the appropriate
United States District Court, together with all process, pleadings, and orders served upon
the defendant. 28 U.S.C. § 1446(a). Notice of removal must be filed within thirty days of
receiving a copy of the original complaint, or “within 30 days after the service of
summons upon the defendant, if such initial pleading has then been filed in court and is
not required to be served on the defendant, whichever period is shorter.” 28 U.S.C. §
1446(b). Remand may be ordered for lack of subject matter jurisdiction or any defect in
the removal procedure. 28 U.S.C. § 1447(c).
To protect the jurisdiction of state courts, removal jurisdiction should be strictly
construed in favor of remand. Harris v. Bankers Life and Cas. Co., 425 F.3d 689, 698
(9th Cir. 2005) (citing Shamrock Oil & Gas Corp. v. Sheet, 313 U.S. 100, 108–09
(1941)). If there is any doubt as to the right of removal in the first instance, remand must
be ordered. See Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

B.

Date: April 7, 2017
Page 4

Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed
when a plaintiff’s allegations fail to set forth a set of facts which, if true, would entitle the
complainant to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order
to survive a motion to dismiss). The pleadings must raise the right to relief beyond the
speculative level; a plaintiff must provide “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S.
at 555 (citing Papasan v. Allain, 478 U.S. 265, 268 (1986)). On a motion to dismiss, a
court accepts as true a plaintiff’s well-pleaded factual allegations and construes all factual
inferences in the light most favorable to the plaintiff. See Manzarek v. St. Paul Fire &
Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept
as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.
Dismissal with leave to amend should be freely given “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). This policy is applied with “extreme liberality.” Morongo Band
of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990); Lopez v. Smith, 203
F.3d 1122, 1127 (9th Cir. 2000) (holding that dismissal with leave to amend should be
granted even if no request to amend was made). Courts consider four factors in
determining whether to grant leave to amend: (1) undue delay; (2) bad faith; (3) futility of
amendment; and (4) prejudice to the opposing party. Webb, 655 F.2d at 980 (citing
Foman v. Davis, 371 U.S. 178, 182 (1962)).
III.

Request for Judicial Notice

Courts may “properly consider exhibits attached to the complaint and documents
whose contents are alleged in the complaint but not attached, if their authenticity is not
questioned.” Okla. Firefighters Pension & Ret. Sys. v. IXIA, 50 F. Supp. 3d 1328, 1348
(C.D. Cal. 2014) (citing Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001)). Under
Federal Rule of Evidence 201, a court may also take judicial notice of matters of public
record. Lee, 250 F.3d at 689. In addition, judicial notice is appropriate for information
obtained from government websites, see Paralyzed Victims of Am. v. McPherson, No. C
06-4670, 2008 WL 4183981, at *5 (N.D. Cal. Sept. 8, 2008), as well as copies of official
acts or records of departments of the United States. See Hite v. Wachovia Mortg., No.
2:09-cv-02884-GEB-GGH, 2010 U.S. Dist. LEXIS 57732, at *6 (E.D. Cal. June 10,
2010) (collecting cases).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

Date: April 7, 2017
Page 5

Because all of the documents attached to Wells Fargo’s RJN fall into the above
categories, the Court GRANTS Wells Fargo’s Request for Judicial Notice.
IV.

Analysis
A.

Motion to Remand

Plaintiff moves to remand back this case state court, arguing that it was improperly
removed. MTR at 2.
Wells Fargo removed this action from the California Superior Court based on
diversity jurisdiction because “the citizenship of the parties is entirely diverse and the
amount in controversy exceeds $75,000.” Removal at 2. Plaintiff is a citizen of
California. Id. at 3. “[A] national bank, for § 1348 purposes, is a citizen of the State in
which its main office, as set forth in its articles of incorporation, is located.” Wachovia
Bank v. Schmidt, 546 U.S. 303, 306–07 (2006). Thus, Wells Fargo is a citizen of South
Dakota because that is where its main office is located. Id. at 4.
Plaintiff moves to remand this case on the basis that none of her claims contain a
federal question. MTR at 5. However, as noted above, Wells Fargo removed this action
based on diversity, not on the basis of federal question jurisdiction. Because diversity
jurisdiction is proper, the Court DENIES Plaintiff’s Motion to Remand.
B.

Motion to Dismiss

Wells Fargo moves to dismiss all of Plaintiff’s causes of action.
1.

Res Judicata

Wells Fargo first moves to dismiss Plaintiff’s claims on the basis of res judicata.
MTD at 3. “Res judicata applies when the earlier suit: (1) reached a final judgment on the
merits; (2) involved the same cause of action or claim; and (3) involved identical parties
or privies.” Leon v. IDX Sys. Corp., 464 F.3d 951, 962 (9th Cir. 2006) (quoting Sidhu v.
Flecto Co., Inc., 279 F.3d 896, 900 (9th Cir. 2002)).
a.

Final Judgment on the Merits

Plaintiff filed a lawsuit against Wells Fargo in August 2013. RJN Ex. E. After the
lawsuit was removed to the Central District of California, the court dismissed it with
prejudice. RJN Ex. F. “A dismissal with prejudice has res judicata effect” and “bars any
further action between the parties on the issues subtended by the case.” In re Marino, 181

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

Date: April 7, 2017
Page 6

F.3d 1142, 1144 (9th Cir. 1999). Therefore, Plaintiff’s prior action against Wells Fargo
ended with a final judgment on the merits.
b.

Same Cause of Action

For res judicata to apply, the issues in the prior adjudication must be identical to
the issues raised in the present action. Whether there is an identity of claims depends on
four factors, the last of which is the most important:
(1) whether rights or interests established in the prior judgment
would be destroyed or impaired by prosecution of the second action;
(2) whether substantially the same evidence is present in the two
actions; (3) whether the two suits involve infringement of the same
right; and (4) whether the two suits arise out of the same
transactional nucleus of facts.
Costantini v. Trans World Airlines, 681 F.2d 1199, 1201–02 (9th Cir. 1982), cert. denied,
459 U.S. 1087 (1982).
“Whether two suits arise out of the same transactional nucleus depends on whether
they are related to the same set of facts and whether they could conveniently be tried
together.” ProShipLine Inc. v. Aspen Infrastructures Ltd., 609 F.3d 960, 968 (9th Cir.
2010). In most cases, “the inquiry into the ‘same transactional nucleus of facts’ is
essentially the same as whether the claim could have been brought in the first action.”
United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1138, 1151 (9th
Cir. 2011). A plaintiff need not bring every possible claim. Turtle Island Restoration
Network v. U.S. Dept. of State, 673 F.3d 914, 918 (9th Cir. 2012). But where claims arise
from the same factual circumstances, a plaintiff must bring all related claims together or
forfeit the opportunity to bring any omitted claim in a subsequent proceeding. Id.
Wells Fargo argues that the claims in Plaintiff’s Complaint could have been raised
in the prior action because they are based on the same facts. Mot. at 3. A claim arises
from a different transactional nucleus of facts where the later claim alleges “new injuries
caused by new acts” of the defendant. Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Regional Planning Agency, 322 F.3d 1064, 1076 (9th Cir. 2003). Plaintiff alleges she was
not aware until December 2016 that Wells Fargo entered into a settlement agreement
with the State of California or that WSB had overstated her income to qualify her for the
Loan. Compl. ¶ 5. The prior case was dismissed on April 1, 2013, which is more than
three years before Plaintiff allegedly became aware of these facts. See RJN Ex. F. Thus,
Plaintiff has alleged new facts.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

Date: April 7, 2017
Page 7

Further, Plaintiff alleges new injuries. In Plaintiff’s prior action, she requested
injunctive relief, a temporary restraining order against a foreclose sale, and damages of
$626,400 plus interest. RJN Ex. E at 22. Here, based on the new facts, Plaintiff requests
the Court to quiet title and to cancel all Notices of Default and Notices of Trustees Sales.
Compl. at 12. Therefore, the Court finds that Plaintiff’s claims arise from a different
transactional nucleus of facts.
Accordingly, the Court finds that res judicata does not bar the instant action.
2.

Judicial Estoppel

Next, Wells Fargo argues that Plaintiff is judicially estopped from asserting her
claims because she failed to disclose them in her bankruptcy proceeding. Mot. at 4.
Judicial estoppel works to bar the assertion of inconsistent positions. See Hamilton
State Farm Fire & Cas. Co., 270 F.3d 778, 783 (9th Cir. 2001). “In the bankruptcy
context, a party is judicially estopped from asserting a cause of action not raised in a
reorganization plan or otherwise mentioned in the debtor’s schedules or disclosure
statements.” Id. (citing Hay v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557
(9th Cir. 1992) (failure to give notice of a potential cause of action in bankruptcy
schedules and disclosure statements estops the debtor from prosecuting that cause of
action)). Judicial estoppel will be imposed when the debtor “has knowledge of enough
facts to know that a potential cause of action exists during the pendency of the
bankruptcy, but fails to amend his schedules or disclose statements to identify the cause
of action as a contingent asset.” Hamilton State Farm Fire, 270 F.3d at 784.
Here, Plaintiff most recently filed for bankruptcy on January 7, 2015. RJN Ex. G.
Plaintiff did not list any of these claims in her bankruptcy schedule. See id. Ex. G. “[A]
debtor has no duty to schedule a cause of action that did not accrue prior to bankruptcy.”
Cusano v. Klein, 264 F.3d 936, 947 (9th Cir. 2001). However, the claims Plaintiff brings
in this action accrued before January 7, 2015, which is when Plaintiff filed for
bankruptcy. Further, in regards to the information she discovered in 2016, Plaintiff could
have amended her bankruptcy schedule to disclose her newly discovered cause of action
when she filed this case because her bankruptcy is still pending. See In re Amany
Simmonds, No. 8:15-bk-10083 (C.D. Cal. Mar. 16, 2017); see also Hamilton State Farm
Fire, 270 F.3d at 784. Therefore, the Court finds that Plaintiff’s claims are barred by
judicial estoppel.
Accordingly, the Court GRANTS Wells Fargo’s Motion to Dismiss and
DISMISSES WITHOUT PREJUDICE the entirety of Plaintiff’s claims.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-0337-DOC (JEM)

V.

Date: April 7, 2017
Page 8

Disposition

For the foregoing reasons, the Court DENIES Plaintiff’s Motion to Remand and
GRANTS Defendant’s Motion to Dismiss.
Plaintiff may file an amended complaint on or before May 1, 2017.
The Clerk shall serve this minute order on the parties.
MINUTES FORM 11
CIVIL-GEN

Initials of Deputy Clerk