Vogan et al v. Wells Fargo Bank NA et al

Filing 30

ORDER signed by Judge John A. Mendez on 11/16/11 ORDERING that defendant's 10 Motion to Dismiss is GRANTED IN PART and DENIED IN PART as follows: Plaintiffs' claim for negligence against Defendants is DISMISSED with prejudice; Plaintiffs& #039; claims for declaratory relief and an accounting against Defendants are DISMISSED with prejudice; and the Court's previous Order dismissing with prejudice all remaining claims against First American is REAFFIRMED; Defendants' motion to dismiss Plaintiffs' remaining claims is DENIED. Defendants shall file their answers to Plaintiffs' Complaint within twenty (20) days of this Order. (Benson, A.)

Download PDF
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 17 18 19 20 BILLI VOGAN and HAROLD TRAUPEL, individuals, ) ) ) Plaintiffs, ) ) v. ) ) ) WELLS FARGO BANK, N.A.; US BANK ) NATIONAL ASSOCIATION, AS TRUSTEE ) FOR WFMBS 2005-AR12; WELLS FARGO ) HOME MORTGAGE; and FIRST ) AMERICAN TRUSTEE SERVICING ) SOLUTIONS FORMERLY KNOWN AS ) FIRST AMERICAN LOANSTAR TRUSTEE ) SERVICES, LLC; and Does 1-100, ) inclusive, ) Defendants. ) ) Case No. 2:11-CV-02098-JAM-KJN ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS PLAINTIFFS’ COMPLAINT PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6). 21 This matter is before the Court on Wells Fargo Bank, N.A. 22 (―Wells Fargo‖) and U.S. Bank, N.A. as Trustee for WFMBS 2005- 23 AR12’s (―U.S. Bank‖) Motion to Dismiss Plaintiffs’ Complaint 24 pursuant to Federal Rule of Civil Procedure 12(B)(6) (―MTD‖) (Doc. 25 #10). 26 Servicing Solutions (―First American‖) (Doc. #12) (Wells Fargo and 27 U.S. Bank are collectively referred to as ―Defendants‖). 28 Defendants also submitted a Request for Judicial Notice (Doc.#11). The motion is joined by Defendant First American Trustee 1 1 Plaintiffs Billi Vogan and Harold Traupel (collectively 2 ―Plaintiffs‖) oppose the motion (―Opposition‖) (Doc. #16). 3 4 5 I. PROCEDURAL BACKGROUND AND FACTUAL ALLEGATIONS This action is predicated on the non-judicial foreclosure of 6 Plaintiffs’ home, located at 20066 Wildwood West Drive, Penn 7 Valley, California (―the Property‖), by Defendants. 8 the successor to Wells Fargo Home Mortgage was the original lender 9 and was servicer for the loan at all relevant times. MTD, at 1. Wells Fargo as The loan 10 originated on June 29, 2004. Plaintiffs were current 11 on their payments up until at least August 2010. 12 stopped paying their mortgage sometime after that, and First 13 American, acting on Wells Fargo’s behalf, recorded a notice of 14 default on the property on December 14, 2010. 15 Fargo did not substitute First American as trustee until January 4, 16 2011, which was after First American filed the Notice of Default 17 against the property. Plaintiffs MTD, at 1. Wells MTD, at 1. 18 Prior to defaulting on their loan, Plaintiffs allege that they 19 attempted to contact Wells Fargo to obtain a modification in August 20 2010. 21 that they qualified for a modification, so long as they were in 22 default for at least three months. 23 defaulted in order to qualify that Wells Fargo allegedly informed 24 them that their loan was owned by an investor that did not engage 25 in mortgage modification. 26 to verify the note associated with their mortgage, and the 27 documentation produced by Wells Fargo indicated that Wells Fargo 28 still owned the loan. Compl., at 16. First, Wells Fargo allegedly told Plaintiffs Id. Id. It was only after they Plaintiffs then asked Wells Fargo Compl., Ex. B. 2 1 The parties dispute what occurred as far as ownership of the 2 loan. Plaintiffs claim that the loan was sold to someone who is 3 not yet identified at an unknown time. 4 claim that the loan was sold to U.S. Bank as trustee of a mortgage 5 backed security (―MBS‖) named WFMBS 2005-AR12 on January 11, 2011. 6 MTD, at 1-2. 7 2005-AR12 has a closing date of June 16, 2005, which according to 8 the Pooled Security Agreement (―PSA‖) governing administration of 9 the security is the cut-off date for adding additional property to Opp., at 2-3. Defendants Plaintiffs respond with the allegation that WFMBS 10 the WFMBS 2005-AR12 trust. 11 that the officer who executed the assignment to U.S. Bank on behalf 12 of Wells Fargo was actually a First American employee. 13 11. 14 MBS, that the loan was never actually sold to U.S. Bank as trustee 15 for WFMBS 2005-AR12, and that the assignment of interest recorded 16 on January 11, 2011 was recorded to deceive Plaintiffs as to who 17 owned their loan and who was authorized to foreclose. 18 Opp., at 2-3. Plaintiffs also allege Compl., at Plaintiffs further allege, relying on the closing date for the Opp., at 3. Plaintiffs filed this federal complaint after their state 19 court complaint was twice dismissed pursuant to Defendants’ 20 demurrers. 21 Defendants violated federal law just prior to filing their federal 22 complaint, which is why they dismissed the state court complaint 23 and re-filed in the Eastern District. 24 Plaintiffs claim that they only discovered that Opp., at 1. Plaintiffs’ Complaint brings ten causes of action against 25 various defendants: (1) Declaratory relief as to the rights and 26 obligations of Plaintiffs and all defendants with regard to the 27 Property and Plaintiffs’ mortgage; (2) Negligence against all 28 defendants; (3) Quasi-Contract against Wells Fargo and U.S. Bank; 3 1 (4) Unfair Competition under California Business & Professions Code 2 § 17200 against all defendants; (5) violation of the Truth in 3 Lending Act (―TILA‖), 15 U.S.C. § 1641(g) against U.S. Bank; 4 (6) Accounting against Wells Fargo and U.S. Bank; (7) Constructive 5 trust against Wells Fargo and U.S. Bank; (8) Wrongful foreclosure 6 seeking to set aside Trustee’s Sale against all defendants; (9) To 7 void or cancel trustee’s deed upon sale against U.S. Bank and First 8 American; and (10) Quiet Title against U.S. Bank and Wells Fargo. 9 The Court has jurisdiction over the TILA claim against U.S. 10 Bank pursuant to 28 U.S.C. § 1331. The Court has jurisdiction in 11 its discretion over the remaining state law claims if they are 12 pendent from the federal TILA claim pursuant to 28 U.S.C. § 1367. 13 The Court held a hearing on this motion on November 2, 2011. 14 At that hearing, the Court granted First American’s motion to 15 dismiss with prejudice. 16 17 II. OPINION 18 A. Legal Standard 19 A party may move to dismiss an action for failure to state a 20 claim upon which relief can be granted pursuant to Federal Rule of 21 Civil Procedure 12(b)(6). 22 court must accept the allegations in the complaint as true and draw 23 all reasonable inferences in favor of the plaintiff. 24 Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by 25 Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 26 322 (1972). 27 are not entitled to the assumption of truth. 28 129 S. Ct. 1937, 1950 (2009) (citing Bell Atl. Corp. v. Twombly, In considering a motion to dismiss, the Scheuer v. Assertions that are mere ―legal conclusions,‖ however, 4 Ashcroft v. Iqbal, 1 550 U.S. 544, 555 (2007)). 2 plaintiff needs to plead ―enough facts to state a claim to relief 3 that is plausible on its face.‖ 4 Dismissal is appropriate where the plaintiff fails to state a claim 5 supportable by a cognizable legal theory. 6 Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 7 To survive a motion to dismiss, a Twombly, 550 U.S. at 570. Balistreri v. Pacifica Upon granting a motion to dismiss for failure to state a 8 claim, the court has discretion to allow leave to amend the 9 complaint pursuant to Federal Rule of Civil Procedure 15(a). 10 ―Dismissal with prejudice and without leave to amend is not 11 appropriate unless it is clear . . . that the complaint could not 12 be saved by amendment.‖ 13 316 F.3d 1048, 1052 (9th Cir. 2003). Eminence Capital, L.L.C. v. Aspeon, Inc., 14 B. Request for Judicial Notice 15 Defendants filed a Request for Judicial Notice. They ask the 16 Court to take judicial notice of 12 publicly recorded or filed 17 documents related to the non-judicial foreclosure process on 18 Plaintiff’s property and the resulting state court lawsuit. 19 at 2-3. 20 asks the Court to accept the contents of the documents as true. 21 Opp., at 4. RJN, Plaintiffs oppose the motion only to the extent that it 22 Generally, a court may not consider material beyond the 23 pleadings in ruling on a motion to dismiss for failure to state a 24 claim. 25 the complaint so long as authenticity is not disputed, or matters 26 of public record, provided that they are not subject to reasonable 27 dispute. The exceptions are material attached to, or relied on by, E.g., Sherman v. Stryker Corp., 2009 WL 2241664 at *2 28 5 1 (C.D. Cal. Mar. 30, 2009) (citing Lee v. City of Los Angeles, 250 2 F.3d 668, 688 (9th Cir. 2001) and Fed. R. Evid. 201). 3 In this case, the items provided by Defendants are the proper 4 subject of judicial notice so long as they are not reasonably 5 subject to dispute. 6 two of the exhibits are in dispute: (1) Substitution of Trustee 7 dated January 4, 2011 (RJN Ex. C), and (2) Assignment of Deed of 8 Trust dated January 6, 2011 (RJN Ex. D). 9 Judicial Notice of the other exhibits, and Defendants’ request is Based on the above discussion, the contents of It is appropriate to take 10 GRANTED with respect to those exhibits. 11 dispute as to the contents of Exhibits C and D, Defendants’ request 12 for judicial notice of those two exhibits is DENIED. 13 14 15 C. Due to the reasonable Motion to Dismiss 1. The TILA Claim Against U.S. Bank Plaintiffs’ sole federal claim is against U.S. Bank for 16 allegedly violating a provision of TILA, 15 U.S.C. § 1641(g). 17 Bank seeks dismissal of this claim on the grounds that as a trustee 18 for a mortgage backed security, TILA does not apply to it. 19 Defendants also seek dismissal by arguing that Plaintiffs failed to 20 plead damages arising from a violation of 15 U.S.C. § 1641(g). 21 the following reasons, the Court finds that U.S. Bank as trustee 22 for WFMBS 2005-AR12 may be subject to liability arising from a 23 violation of 15 U.S.C. § 1641(g) and therefore Defendants’ motion 24 to dismiss this claim must be denied. 25 U.S. For 15 U.S.C. § 1641(g), titled ―Liability of Assignees,‖ requires 26 that when an entity purchases or is assigned the beneficial 27 interest in a loan on a property, it must notify the borrower in 28 writing within 30 days of when the loan is transferred. 6 15 U.S.C. 1 § 1641(g). 2 the assignee’s notice must contain. 3 to the ―new owner or assignee of the debt. 4 15 U.S.C. § 1640 authorizes a civil action for violations of § 1641 5 for (1) actual damages, or (2) statutory damages that may included 6 (a) damages equal to twice the amount of any finance charge or 7 (b) for a credit transaction secured by real property an amount not 8 less than $400 and not greater than $4000. 9 10 Subsection (g) lists the particular information that a) This subsection only applies 15 U.S.C. § 1641(g). 15 U.S.C. § 1640(a). Application of 15 U.S.C. § 1641(g) to Trustees U.S. Bank argues that as a general rule, trustees are not 11 subject to TILA in California because trustees have limited 12 liability in California’s non-judicial foreclosure process. 13 Plaintiffs respond that U.S. Bank cannot both foreclose on their 14 home, thereby claiming a beneficial interest in the note securing 15 Plaintiffs’ loan, and simultaneously claim that it is not a 16 creditor subject to TILA’s provisions. 17 Under California law, the trustee of a deed of trust has no 18 beneficial interest in the mortgage associated with the deed of 19 trust. 20 Rptr. 3d 510, 514 (Ct. App. 2007). 21 has only two duties: (1) to foreclose the deed of trust upon 22 default, or (2) when the secured debt is satisfied to convey the 23 deed of trust to the borrower. 24 lack of beneficial interest assigned to the trustee of a deed of 25 trust, federal courts in California hold that TILA does not apply 26 to the trustee of a deed of trust. 27 Lending, Inc., No. CV F 08-1878 LJO GSA, 2009 WL 926973, at *4 28 (E.D. Cal. Apr. 3, 2009) (holding that TILA does not apply to the Heritage Oaks Partners v. First Am. Title Ins. Co., 66 Cal. Id. 7 The trustee for a deed of trust Due to the limited duties and Guerrero v. Citi Residential 1 trustee of a deed of trust and explaining that the limited role of 2 such a trustee under California law precludes TILA liability). 3 U.S. Bank’s argument conflates the trustee of a deed of trust 4 with other types of trustees. To support their position, U.S. Bank 5 cites Wilson v. Wells Fargo Bank, No. C 11–03394 CRB, 2011 WL 6 3443635, at *2 (N.D. Cal. Aug. 5, 2011). 7 Bank’s position but is without citation to any Ninth Circuit 8 authority. 9 CRB, 2011 WL 724390 (N.D. Cal. Feb. 22, 2011)). Wilson does support U.S. Id. (citing Hargis v. Wash. Mut. Bank, No. C 10-02341 The Hargis case 10 cited by the Wilson court involves the trustee of a deed of trust, 11 not a traditional trustee or as in this case the trustee of a 12 mortgage backed security. 13 appears that the Wilson court failed to note the distinction 14 between a trustee of a deed of trust and the trustee of a mortgage 15 backed security, as well as the basis for the rule exempting the 16 trustee of a deed of trust from TILA. 17 trust is exempt from TILA because of its limited role under 18 California law, but there is no analogous reason to exempt other 19 types of trustees from TILA’s provisions. 20 Hargis, 2011 WL 724390, at *2. It The trustee of a deed of The potential breadth of U.S. Bank’s position is easily 21 illustrated by hypothetically granting limited liability to a 22 common law trustee. 23 subject to personal liability to third persons on obligations 24 incurred in the administration of the trust to the same extent that 25 he would be liable if he held the property free of trust.‖ 26 Restatement (2d) of Trusts § 261. 27 stark contrast between the duties of the trustee of a deed of 28 trust, as limited by California law, and those of a common law Under the common law of trusts, a ―trustee is 8 This common law rule shows a 1 trustee. 2 is responsible for omissions related to the administration of that 3 property. 4 acting as lenders to completely evade TILA’s provisions. 5 A traditional trustee holds title to trust property and Exempting all trustees from TILA would permit trusts Further, as Plaintiffs point out, U.S. Bank was assigned the 6 ownership interest in the loan by the January 11, 2011 assignment, 7 meaning that U.S. Bank is Wells Fargo’s purported assignee. 8 at 2. 9 1641(g), which creates liability for the assignees of the loan’s 10 original creditor if the assignee fails to notify the borrower of 11 the acquisition. 12 MTD, As an assignee, U.S. Bank falls squarely within 15 U.S.C. § 15 U.S.C. § 1641(g). The Court declines to follow the Wilson court’s decision with 13 respect to TILA liability of trustees. 14 trust enjoys limited liability because it only has two duties in 15 the California statutory foreclosure process, but there is no legal 16 basis to support a holding that limits the liability of all 17 trustees in this manner. 18 Plaintiffs have properly alleged that U.S. Bank as trustee for 19 WFMBS 2005-AR12, a mortgage-backed-security, is liable for 20 violations of TILA. 21 22 b) The trustee of a deed of Accordingly, the Court finds that Damages Pleaded by Plaintiffs U.S. Bank argues that Plaintiffs must plead actual damages to 23 state a claim, and that the actual damages pleaded in the complaint 24 do not meet the appropriate pleading standard. 25 Plaintiffs respond that a 1641(g) claimant may recover actual 26 damages, statutory damages, and attorneys’ fees and that they 27 appropriately pleaded all three types of damages. 28 MTD, at 2-3. Opp., at 8. 15 U.S.C. § 1640(a) authorizes claims for actual damages, 9 1 statutory damages, and attorneys fees for violations of 15 U.S.C. 2 § 1641(g). 3 1092-PK, 2010 WL 3945117, at *6-*7 (D. Or. Apr. 6, 2010) 4 (acknowledging all three types of damages are authorized by § 1640 5 against original creditor’s assignee). 6 Russell v. Mortgage Solutions Mgmt., —Inc., No. CV 08- In this case, Plaintiffs pleaded that U.S. Bank’s violation of 7 § 1641(g) caused their home to be foreclosed, presumably because 8 they were unable to contact their actual creditor to negotiate a 9 modification of their loan as they explained in another part of 10 their complaint. 11 to hire an attorney in order to determine who held their loan. 12 Finally, Plaintiffs pleaded that U.S. Bank is subject to statutory 13 damages and fees. 14 of these damages, Plaintiffs have not pleaded a causal connection 15 between the alleged § 1641(g) violation and their actual damages 16 because the event precipitating the foreclosure was their default, 17 not a lack of notice as to who owned the loan. 18 that they were unable to make the required payments on the loan 19 without receiving a modification, and they do not plead that a 20 modification is legally required. 21 plaintiffs are not entitled to actual damages based on the 22 allegations in their Complaint, they did adequately plead that they 23 are entitled to attorneys’ fees and statutory damages. 24 Compl., at 28. Id. They also pleaded that they had Id. The Court notes that despite pleading all Plaintiffs admit Compl., at 16. Even if Plaintiffs pleaded a claim arising out of U.S. Bank’s alleged 25 violation of 15 U.S.C. § 1641(g) and damages associated with that 26 claim, making dismissal at this stage improper. 27 Bank’s motion to dismiss this claim is DENIED. 28 10 As a result, U.S. 1 2. 2 Plaintiffs’ State Law Claims a) 3 Jurisdiction Defendants argue that the Court does not have federal question 4 jurisdiction pursuant to 28 U.S.C. § 1331 because Plaintiffs’ 5 federal TILA claim is not a valid claim. 6 the Court does have jurisdiction pursuant to 28 U.S.C. 1331 over 7 the federal TILA claim and jurisdiction pursuant to 28 U.S.C. 8 § 1367 over the pendant state law claims. Plaintiffs respond that 9 As discussed above, Plaintiffs did plead a valid federal claim 10 giving the Court jurisdiction over that claim pursuant to 28 U.S.C. 11 § 1331. 12 over pendant state law claims pursuant to 28 U.S.C. 1367. 13 The Court may, in its discretion, exercise jurisdiction The Court finds that the remaining state law claims are all 14 pendant from the federal TILA claim. 15 out of the origination, sale, default, and foreclosure of the note 16 securing the loan used to purchase the Property. 17 Court asserts jurisdiction over the state law claims and decides 18 Defendants’ motion to dismiss those claims as follows. 19 b) 20 The state law claims arise Accordingly, the Negligence Against All Defendants Defendants argue that Plaintiffs failed to adequately plead a 21 negligence cause of action. 22 that no defendant owes Plaintiffs a legal duty, which is the second 23 element in a prima facie negligence case. 24 Defendants argue that California does not permit recovery in 25 negligence absent a physical injury to person or property. 26 8. 27 28 MTD, at 7-8. Specifically, they claim Id. Additionally, Id. at Plaintiffs do not respond to Defendants’ arguments in their Opposition. The Court interprets Plaintiffs’ failure to respond as 11 1 a concession to Defendants’ arguments concerning this claim. 2 Accordingly, the Court GRANTS Defendants’ motion to dismiss 3 Plaintiffs’ negligence claim with prejudice. 4 c) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Violation of Business and Professions Code § 17200, et seq. Against All Defendants Defendants argue that Plaintiffs failed to plead that any conduct is ―unlawful, unfair, or fraudulent‖ as required for violations of the § 17200 unfair competition law (―UCL‖). 8-9. MTD, at Plaintiffs respond that they adequately pleaded violations sufficient to satisfy each of the three varieties of UCL claims with respect to Wells Fargo and U.S. Bank. ―The purpose of the UCL is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.‖ Drum v. San Fernando Valley Bar Ass'n, 106 Cal. Rptr. 3d 46, 49 (Ct. App. 2010) (internal citations omitted). ―The California Supreme Court held that the UCL establishes three varieties of unfair competition—acts or practices which are [1] unlawful, or [2] unfair, or [3] fraudulent.‖ Id. at 50. Since the UCL is written in the disjunctive, a business act or practice may be alleged to be all or any of the three varieties. Berryman v. Merit Prop. Mgmt., Inc., 62 Cal. Rptr. 3d 177, 185 (Ct. App. 2007). In order to state a claim under the unlawful prong, a plaintiff must allege facts that show that anything that can reasonably be characterized as a business practice is also a violation of law. California v. McKale, 25 Cal.3d 626, 632 (1979). To show a violation under the fraudulent prong, a plaintiff must show that members of the public are likely to be deceived by the practice. Weinstat v. Dentsply Int'l, Inc., 103 Cal. Rptr. 3d 614, 12 1 622 n. 8 (Ct. App. 2010). 2 demonstrate that the representations or nondisclosures in question 3 would likely be misleading to a reasonable consumer.‖ 4 Finally, under the unfair prong, three different tests are 5 currently used by California courts to determine if a practice is 6 unfair. 7 ―A plaintiff's burden thus is to Id. Drum, 106 Cal. Rptr. 3d at 53. In this case, Plaintiffs pleaded that U.S. Bank failed to 8 comply with TILA § 1641(g), as discussed above. 9 Bank violated TILA is sufficient to maintain a UCL claim against 10 Pleading that U.S. U.S. Bank under the unlawful aspect of the UCL. 11 Plaintiffs also pleaded that Wells Fargo recorded a fabricated 12 assignment of deed of trust assigning interest in Plaintiffs’ loan 13 to U.S. Bank. Compl., at 14-16. 14 alleged that the recorded assignment was executed well after the 15 closing date of the MBS to which it was allegedly sold, giving rise 16 to a plausible inference that at least some part of the recorded 17 assignment was fabricated. 18 proven, constitutes a violation of Cal. Penal Code § 532f(a)(4). 19 Compl., at 24. 20 document related to a mortgage loan transaction with the county 21 recorder’s office that is known to be false, with the intent to 22 defraud. 23 As discussed above, Plaintiffs Plaintiffs allege that such conduct, if That section prohibits any person from filing a Cal. Penal Code § 532f(a)(4). Accordingly, the Court DENIES Wells Fargo and U.S. Bank’s 24 motion to dismiss this claim. 25 /// 26 /// 27 /// 28 /// 13 1 d) 2 3 4 5 The Requirement to Plead Tender with Respect to the Following Claims: Claim 3) Quasi-Contract, Claim 7) Constructive Trust, Claim 8) Wrongful Foreclosure and to Set Aside Trustee’s Sale, Claim 9) Voiding the Trustee’s Deed, Claim 10) Quiet Title Defendants argue that any claim related to a foreclosure that 6 arises in equity must be accompanied by Plaintiffs’ credible 7 allegation of tender. 8 must only allege tender, which they claim to have done, and that 9 tender is not required when the validity of the underlying debt is 10 11 attacked. MTD, at 10. Plaintiffs respond that they Opp., at 11. A plaintiff is required to allege tender of the full 12 outstanding loan amount in order to maintain any cause of action 13 for irregularity in the non-judicial foreclosure sale procedure. 14 Abdallah v. United Sav. Bank, 43 Cal.App.4th 1101, 1109 (1996). 15 ―[T]he tender rule is not absolute, and a tender may not be 16 required where it is inequitable to do so.‖ 17 Elec. Registration Sys., Inc., No. CV 11–1658 AHM (CWx), 2011 WL 18 2533029, at *10 (C.D. Cal. June 24, 2011) (citing Onofrio v. Rice, 19 55 Cal.App.4th 413, 424, 64 Cal.Rptr.2d 74 (1997)). 20 action attacks the validity of the underlying debt, a tender is not 21 required since it would constitute an affirmative of the debt.‖ 22 Onofrio, 64 Cal. Rptr. 2d 74. 23 Sacchi v. Mortgage ―Also, if the Plaintiffs do not adequately plead full tender as required to 24 attack an irregularity in the foreclosure process. 25 that they were willing to make modified payments on their loan. 26 Compl., at 16. 27 28 They only plead On the other hand, Plaintiffs allege that Wells Fargo represented itself as the owner of Plaintiffs’ mortgage, but then 14 1 represented that it had already sold the loan to a third party. 2 Compl., at 16. 3 assignment of their loan to an MBS that was prohibited from 4 accepting it because its closing date was over 5 years prior to the 5 assignment. 6 allege that Wells Fargo as the servicer reported to Plaintiffs that 7 it still owned the loan, even though U.S. Bank was foreclosing and 8 Wells Fargo previously recorded an assignment to U.S. Bank. 9 Compl., Ex. B. Then, Plaintiffs allege, Wells Fargo recorded an Compl., at 17. Further, on May 26, 2011, Plaintiffs Based on these alleged facts, Plaintiffs claim that 10 U.S. Bank does not own their loan, despite the fact that U.S. Bank 11 acted as the foreclosing beneficiary under the deed of trust. 12 Plaintiffs are not saying that U.S. Bank failed to follow the 13 letter of California’s statutory foreclosure law; they are claiming 14 that U.S. Bank did not have standing to foreclose in the first 15 place. 16 the full amount of the indebtedness to an entity, U.S. Bank, that 17 is allegedly not the beneficiary to the deed of trust in order to 18 protect Plaintiffs’ interest in the Property would be inequitable. 19 Thus, relying on Onofrio, requiring Plaintiffs to tender Defendants U.S. Bank and Wells Fargo’s only ground for seeking 20 dismissal on these causes of action is the tender requirement. The 21 Court holds that the tender requirement does not apply to this case 22 because Plaintiffs are challenging the beneficial interest held by 23 U.S. Bank in the deed of trust, not the procedural sufficiency of 24 the foreclosure itself. 25 Fargo’s motion to dismiss these claims because Plaintiffs failed to 26 plead tender is DENIED. 27 /// 28 /// For this reason, U.S. Bank and Wells 15 1 e) 2 3 Defendants’ Motion to Dismiss The Remaining Causes of Action: Claim 1) Declaratory Relief Against All Defendants and Claim 6) Accounting Against U.S. Bank and Wells Fargo 4 Defendants argue that both remaining causes of action are 5 duplicative of the other causes of action because they are remedial 6 in nature, and are not sufficient to be standalone causes of 7 action. 8 cause of action, but generally argue that the declaratory relief 9 claim is sufficient because deciding it will clarify and settle the 10 MTD, at 12. dispute and relieve uncertainty. (1) 11 12 Plaintiffs do not address the accounting Opp., at 13. Declaratory Relief A claim for declaratory relief is duplicative and unnecessary 13 when it is commensurate with the relief sought through other causes 14 of action. 15 708 (N.D. Cal. 2009). 16 Mangindin v. Wash. Mut. Bank, 637 F. Supp. 2d 700, 707– In this case, Plaintiffs put forward other claims, that if 17 decided, will resolve the remaining controversies between the 18 parties and relieve any uncertainty related to the Property. 19 Plaintiffs only argument in support of the claim for declaratory 20 relief is that Defendants claim an interest in the property and 21 will sell the home to another party. 22 Foreclosure and Quiet Title claims are decided, however, 23 Defendants’ interest in the property will be resolved. 24 Opp., at 13. If the Wrongful For this reason, the claim for declaratory relief is 25 duplicative of the other claims asserted, and Defendants’ motion to 26 dismiss it is GRANTED with prejudice. 27 28 (2) Accounting Defendants seek dismissal of this cause of action on the 16 1 grounds that the claim is merely remedial as pleaded and therefore 2 duplicative of Plaintiffs’ other claims. 3 to this argument in their Opposition. 4 motion to dismiss this claim is GRANTED with prejudice. Plaintiffs do not respond Accordingly, Defendants’ 5 6 III. ORDER 7 After carefully considering the papers submitted in this 8 matter and the argument of counsel at the hearing on this motion, 9 it is hereby ordered that Defendant’s Motion to Dismiss is GRANTED 10 11 12 13 14 15 16 17 in part, as follows: 1. Plaintiffs’ claim for negligence against Defendants is dismissed with prejudice; 2. Plaintiffs’ claims for declaratory relief and accounting against Defendants are dismissed with prejudice; and 3. The Court’s previous Order dismissing with prejudice all remaining claims against First American is reaffirmed. Defendants’ motion to dismiss Plaintiffs’ remaining claims is 18 DENIED. 19 Complaint within twenty (20) days of this Order. 20 21 an Defendants shall file their answers to Plaintiffs’ IT IS SO ORDERED. Dated: November 16, 2011 ____________________________ JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 17

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?