Spence v. Wells Fargo Bank., N.A.

Filing 22

ORDER GRANTING defendant's Motion to Dismiss, document 10 , and DISMISSING each of plaintiff's claims, without prejudice, and DIRECTING plaintiff to file an amended complaint, with defendant filing a response to same, to be filed in accordance with this order; order signed by Judge Oliver W. Wanger on 5/2/2011. (Rooney, M)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA– FRESNO DIVISION

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ORDER GRANTING MOTION TO
DISMISS

Plaintiff,
vs.

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Case No. 1:10-cv-02057-OWW-GSA

MICHELE A. SPENCE,

WELLS FARGO BANK, N.A.
Defendant.

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I. INTRODUCTION.

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Plaintiff Michele A. Spence (“Plaintiff ) brings this action against Wells Fargo Bank, N.A.
”

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(“Defendant”). Plaintiff proceeds pro se. Currently before the court is Defendant’s motion to

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dismiss. (Doc. 10). Plaintiff filed opposition to Defendant’s motion and a request for judicial

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notice on March 17, 2011. (Docs. 16, 17). Defendant filed a reply to Plaintiffs’ opposition and

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request for judicial notice on April 9, 2011. (Doc. 19).
II. FACTUAL BACKGROUND.

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Although the allegations of the complaint are unclear, it appears that Plaintiff’s claims

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arise out of Defendant’s attempt to enforce a promissory note concerning real property. (See

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Comp. at 2). Plaintiff complains that Defendant has not presented a valid proof of claim because

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Defendant’s are only in possession of a photocopy of the promissory note, not the original.
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1:10-CV-2057-OWW-GSA
ORDER GRANTING MOTION
TO DISMISS COMPLAINT

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According to the complaint, on July 23, 2010, Plaintiff sent a letter to Defendant

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requesting the original wet ink signature as well as the Deed of Trust, document assignments,

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and required public recordings as evidence that [Defendant is] in fact a damaged party and the

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true creditor to establish proof of claim within 30 days. (Comp. at 5). Defendant did not respond.
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On September 24, 2010, Plaintiff sent a second letter to Defendant requesting proof of
claim. Defendant again ignored Plaintiff’s request for verification of the debt.

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Plaintiff requests a declaration as to whether or not Defendants have standing to enforce

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the promissory note. Plaintiff contends that Defendant has no right to enforce the promissory

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note because Defendant is not a “note holder in due course.
”

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III. LEGAL STANDARD.

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Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks sufficient facts to

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support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th

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Cir.1990). To sufficiently state a claim to relief and survive a 12(b) (6) motion, the pleading “does

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not need detailed factual allegations but the “[f]actual allegations must be enough to raise a right
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to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct.

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1955, 167 L.Ed.2d 929 (2007). Mere “labels and conclusions or a“formulaic recitation of the
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elements of a cause of action will not do. Id. Rather, there must be “enough facts to state a claim
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to relief that is plausible on its face.” Id. at 570. In other words, the “complaint must contain

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sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”

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Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (internal

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quotation marks omitted).
The Ninth Circuit has summarized the governing standard, in light of Twombly and Iqbal,

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as follows: “In sum, for a complaint to survive a motion to dismiss, the nonconclusory factual

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content, and reasonable inferences from that content, must be plausibly suggestive of a claim

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entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir.2009)

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(internal quotation marks omitted). Apart from factual insufficiency, a complaint is also subject

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to dismissal under Rule 12(b)(6) where it lacks a cognizable legal theory, Balistreri, 901 F.2d at

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699, or where the allegations on their face “show that relief is barred for some legal reason, Jones
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1:10-CV-2057-OWW-GSA
ORDER GRANTING MOTION
TO DISMISS COMPLAINT

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v. Bock, 549 U.S. 199, 215, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007).

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In deciding whether to grant a motion to dismiss, the court must accept as true all “well-

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pleaded factual allegations in the pleading under attack. Iqbal, 129 S.Ct. at 1950. A court is not,
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however, “required to accept as true allegations that are merely conclusory, unwarranted

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deductions of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979,
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988 (9th Cir.2001). “When ruling on a Rule 12(b)(6) motion to dismiss, if a district court

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considers evidence outside the pleadings, it must normally convert the 12(b)(6) motion into a

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Rule 56 motion for summary judgment, and it must give the nonmoving party an opportunity to

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respond. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir.2003). “A court may, however,
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consider certain materials-documents attached to the complaint, documents incorporated by

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reference in the complaint, or matters of judicial notice-without converting the motion to dismiss

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into a motion for summary judgment. Id. at 908.
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IV. DISCUSSION.

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Plaintiff’s first cause of action seeks a declaration regarding whether or not Defendant has

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standing to enforce the promissory note. Plaintiff’s second cause of action asserts “theft of public

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funds.” Plaintiff’s third cause of action is for breach of contract. Plaintiff’s complaint fails to

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comply with federal pleading standards. The complaint does not contain sufficient nonconclusory

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factual allegations to give rise to any cognizable cause of action.

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Plaintiff’s first cause of action fails because it appears to be based on the discredited legal

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theory that only a “note holder in due course has standing to enforce a promissory note.1 See, e.g.,
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Wood v. Aegis Wholesale Corp., 2009 U.S. Dist. LEXIS 57151, *14 (E.D. Cal. July 2, 2009)

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(citing In re Golden Plan of Cal., Inc., 829 F.2d 705, 708-11 (9th Cir.1986) (when a mortgage is

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sold, physical transfer of the note is not required). Plaintiff’s invocation of the California

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Commercial Code is of no avail, as it has no application in the instant context of real property

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financing. See, e.g., Blanco v. American Home Mortgage Servicing, Inc., 2010 U.S. Dist. LEXIS

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17415, 2010 WL 716311 at *2 (E.D. Cal., Feb. 26, 2010) (rejecting application of California

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Plaintiff also references “qualified written requests” throughout the complaint, but it is unclear whether Plaintiff
seeks to assert any statutory claims.

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ORDER GRANTING MOTION
TO DISMISS COMPLAINT

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Commercial Code section 3301 mortgage context).

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Plaintiff’s second cause of action is unintelligible. Inter alia, Plaintiff fails to identify what

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public funds Defendant obtained. From the face of the complaint it appears the dispute is over a

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private loan transaction. Plaintiff has alleged no facts that would give rise to standing to

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complain about the source of the loan funds.

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Plaintiff’s third cause of action for breach of contract does not set forth the requisite

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elements under California law. The standard elements of a breach of contract claim are: (1) the

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existence of a contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's

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breach, and (4) damage to plaintiff therefrom. E.g., Abdelhamid v. Fire Ins. Exch., 182

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Cal.App.4th 990, 999 (2010).

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Plaintiff’s allegations are unclear. Plaintiff alleges that “[the] note like most others has been

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sold and monetized [and thus] the Lender has ‘received payment of all sums secured. (Complaint
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at 7). Even if this is true, there is no fact alleged that makes securitization a matter of legal

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consequence. It appears that Plaintiff’s claim is that Defendant’s attempt to foreclose on her

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property despite the fact that the note was sold to a third party somehow breaches her loan

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contract. However, inter alia, Plaintiff does not allege performance or excuse for

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nonperformance by her of her obligations under the contract.

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Plaintiff’s claims are each DISMISSED, without prejudice. One opportunity will be

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provided for amendment of the complaint.

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ORDER
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1:10-CV-2057-OWW-GSA
ORDER GRANTING MOTION
TO DISMISS COMPLAINT

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For reasons stated, IT IS ORDERED:

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1) Each of Plaintiff’s claims is DISMISSED, without prejudice;

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2) Plaintiff shall file and amended complaint within thirty days of electronic service of

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this decision. Defendant shall file responsive pleading within twenty days of service of the

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amended complaint; and

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3) Defendant shall file a form of order consistent with this memorandum decision within
five days of electronic service of this decision.

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IT IS SO ORDERED.

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Dated: May 2, 2011

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/s/ OLIVER W. WANGER
United States District Judge

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1:10-CV-2057-OWW-GSA
ORDER GRANTING MOTION
TO DISMISS COMPLAINT