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

Filing 14

ORDER signed by Judge Garland E. Burrell, Jr on 10/17/13 ORDERING For the stated reasons, judgment shall be entered in favor of Defendant Wells Fargo Bank, N.A. on Plaintiffs' claims alleged under the Federal Debt Collection Practices Act. Plaintiffs' state claims are dismissed under 28 U.S.C. § 1367(c)(3). CASE CLOSED.(Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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NORMA J. and JESSE N. PUGH,

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2:13-cv-01617-GEB-DAD

Plaintiff,

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No.

v.

ORDER

WELLS FARGO BANK, N.A.; THE
BANK OF NEW YORK MELLON F/K/A
THE BANK OF NEW YORK AS
TRUSTEE FOR WORLD SAVINGS
REMIC 24, MORTGAGE PASSTHROUGH CERTIFICATES, SERIES
2006-24 TRUST,

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Defendants.

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Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) moves

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20

under

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dismissal

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Verified Complaint. Plaintiffs allege claims against Wells Fargo

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under California law and under the federal Fair Debt Collection

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Practice Act (“FDCPA”).

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Federal
of

Rule
all

of

Civil

claims

Procedure

alleged

(“Rule”)

against

it

in

12(b)(6)

for

Plaintiffs’

I. JURISDICTION

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Subject matter jurisdiction is examined since a federal

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court has a “duty” to ensure it has subject matter jurisdiction

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over an action. United Investors Life Ins. Co. v. Waddell & Reed
1

1

Inc.,

2

district

3

jurisdiction . . . sua sponte, whether the parties raised the

4

issue or not”). Plaintiffs assert subject matter jurisdiction is

5

premised

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(“Compl.”), ECF No. 2, ¶ 4.) Specifically, Plaintiffs aver they

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“reside, and are domiciled, in California” (Id. ¶ 1); Defendant

8

Bank

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Delaware” and “its main offices” are “located” in New York (Id.

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¶ 3); and Defendant Wells Fargo’s “main office [is] located in

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Sioux

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Association.” (Id. ¶ 2.)

360

of

F.3d

960,

967

(9th

Cir.

court

had

a

duty

to

on

New

Falls,

13

diversity

York

Mellon

South

However,

of

Dakota

complete

2004)

(stating

establish

citizenship.

“is

designated

diversity

subject

(Verified

incorporated

as

that

in

in

does

the

its

not

“the

matter

Compl.

State

Articles

exist

of

of

between

14

Plaintiffs and all Defendants because this Court has previously

15

determined

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California as well as a citizen of South Dakota.” Gosal v. Wells

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Fargo Bank, N.A., No. 2:12-cv-02024-GEB-CKD, 2012 WL 4961696, at

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*2 (E.D. Cal. Oct. 15, 2012) (quoting Taheny v. Wells Fargo Bank,

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N.A., 878 F. Supp. 2d 1093, 1109 (E.D. Cal. 2012) (relying on Am.

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Sur. Co. v. Bank of Cal., 133 F.2d 160, 162 (9th Cir. 1943)).

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Therefore,

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diversity jurisdiction.

23

that

Wells

subject

However,

Fargo

matter

“in

jurisdiction,

Bank,

jurisdiction

determining
federal

the

court

is

“a

not

existence

premised

of

on

subject

jurisdictional statutes identified in the complaint. If facts

26

giving the court jurisdiction are set forth in the complaint, the

27

provision

28

pleaded.” K2 Am. Corp. v. Roland Oil & Gas, LLC, 653 F.3d 1024,
2

not

limited

of

25

need

not

citizen

matter

jurisdiction

is

is

24

conferring

a

N.A.

be

to

the

specifically

1

1027 (9th Cir. 2011) (citation omitted) (internal quotation marks

2

omitted).

3

question subject matter jurisdiction, and therefore 28 U.S.C.

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§ 1367 provides supplemental jurisdiction over Plaintiffs state

5

claims. The portion of the motion challenging Plaintiffs’ FDCPA

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claims will thus be decided first.

Plaintiffs’

claims

7

the

FDCPA

confer

federal-

II. LEGAL STANDARD

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9

under

Decision on Defendant’s Rule 12(b)(6) dismissal motion
requires

determination

of

“whether

the

complaint’s

factual

10

allegations, together with all reasonable inferences, state a

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plausible claim for relief.” United States ex rel. Cafasso v.

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Gen.

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(citing Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). “A claim

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has facial plausibility when the plaintiff pleads factual content

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that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.” Iqbal, 556 U.S.

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at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556

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(2007)).

Dynamics

19

When

C4

Sys.,

637

determining

F.3d

the

1047,

1054

sufficiency

(9th

of

a

Cir.

claim,

2011)

“[w]e

20

accept factual allegations in the complaint as true and construe

21

the

22

party[;

23

conclusions . . . cast in the form of factual allegations.” Fayer

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v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (citation omitted)

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(internal

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allegations of law and unwarranted inferences are insufficient to

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defeat a motion to dismiss.” Id. (citation omitted) (internal

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quotation

pleadings

in

however,

the

light

most

favorable

this

tenet

does

not

quotation

marks

marks

omitted);

omitted).

see

also
3

apply

to

the

to]

.

“Therefore,

Iqbal,

556

non-moving
.

.

legal

conclusory

U.S.

at

678

1

(stating “[a] pleading that offers ‘labels and conclusions’ or ‘a

2

formulaic recitation of the elements of a cause of action will

3

not do’” (quoting Twombly, 550 U.S. at 555)).

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III. FACTUAL AVERMENTS

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Plaintiffs’ averments in the Complaint germane to their

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FDCPA claims are the following. “On July 13, 2006, Plaintiffs

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executed a Deed of Trust and Adjustable Rate Note ‘Pick-A-Payment

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Loan.’” (Compl. ¶ 5.) “The original lender and loan servicer was

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World Savings Bank FSB and the trustee was Golden West Savings

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Association Service Company.” (Id.)

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“Golden

West

Financial

Corporation

was

the

parent

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company of World Savings Bank, FSB,” the original lender and

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servicer. (Id. ¶ 6.) “On or about May 6, 2007, Wachovia Bank

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acquired Golden West Financial.” (Id.) “After Wells Fargo Bank,

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N.A. acquired Wachovia in 2008, Wells Fargo Home Mortgage, a

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division

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Plaintiffs’ loan.” (Id. ¶ 7.)

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of

Wells

Fargo,

assumed

the

role

of

servicer

of

Plaintiffs assert that Wells Fargo violated 28 U.S.C.

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§ 1692e

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representations, and § 1692f of the FDCPA, which prohibits unfair

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practices,

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“identif[ing]

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representations

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foreclosure activity against Plaintiffs and to collect mortgage

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payments and associated fees and costs from them.” (Id. ¶ 37.)

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of

the

FDCPA,

because
Wells
of

which

letters
Fargo
[Well’s

prohibits

“sent
Home

by

false

Wells

Mortgage”

Fargo’s]

or

misleading

Fargo”

“contain

standing

to

and
false

pursue

IV. DISCUSSION
A. Fair Debt Collection Practices Act
Wells Fargo argues, inter alia, that Plaintiffs’ FDCPA
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1

claims should be dismissed with prejudice “because Wells Fargo is

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not a ‘debt collector’ within the meaning of the FDCPA.” (Wells

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Fargo’s Notice Mot. & Mot. Dismiss Compl., 15:17-18, ECF No. 7.)

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Section 1692e prescribes: “A debt collector may not use

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any false, deceptive, or misleading representation or means in

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connection

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prescribes:

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unconscionable means to collect or attempt to collect any debt.”

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“Because these prohibitions apply only to ‘debt collector[s]’ as

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defined by the FDCPA, the [C]omplaint must ‘plead factual content

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that allows the court to draw the reasonable inference’ that

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Wells Fargo is a debt collector.” Schlegel v. Wells Fargo Bank,

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N.A., 720 F.3d 1204, 1208 (9th Cir. 2013) (quoting Iqbal, 556

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U.S. at 678).

with
“A

the
debt

collection
collector

of

any

may

debt.”
not

use

Section 1692f
unfair

or

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The statutory term “debt collector” “does not include

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. . . (F) any person collecting or attempting to collect any debt

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owed or due or asserted to be owed or due another to the extent

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such activity . . . concerns a debt which was not in default at

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the time it was obtained by such person.” 15 U.S.C. § 1692a(6)

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(emphasis added).

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Plaintiffs’ averments in their Complaint evince that

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Wells Fargo obtained Plaintiffs’ debt through its acquisition of

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Plaintiffs’ previous debt creditor. Specifically, Plaintiffs aver

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their “original lender . . . was World Savings Bank FSB.” (Compl.

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¶ 5.) Plaintiffs further aver:

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Golden West Financial Corporation was the
parent
company
of
World
Savings
Bank,
FSB . . . . On or about May 6, 2007, Wachovia
Bank acquired Golden West Financial. The
integration process, which included World
5

1

Savings Bank, was completed in mid-2008.
Wells Fargo Bank acquired Wachovia in the
same year.

2
3

(Id.

¶ 6.)

Plaintiffs’

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acquisition of Wachovia establish that Wells Fargo “is not only

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much like the original creditor, it is the original creditor.”

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Dues v. Capital One, N.A., No. 11-cv-11808, 2011 WL 3799762, at

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*4 (E.D. Mich. Aug. 8, 2011) (internal quotation marks omitted).

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Therefore,

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Savings Bank, “its predecessor in interest,” “obtained the debt.”

10

Esquivel v. Bank of Am., N.A., No 12-cv-02502-GEB-KJN, 2013 WL

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682925,

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Citimortgage,

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(“[Defendant] is the successor by merger to . . . the originating

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lender and mortgagee, and therefore it is impossible for the loan

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to have been in default at the time [defendant] received its

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interest.”)); see also Brown v. Morris, 243 Fed. App’x 31, 34-35

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(5th Cir. 2007) (holding that since defendant mortgage company

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acquired plaintiff’s loan “through its merger with [plaintiff’s]

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previous

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[plaintiff’s] mortgage while it was in default”).

Wells

at

*2

(E.D.
Inc.,

mortgage

The

21

Fargo

Fargo

No.

Feb.

Plaintiffs’

21,

11-13432,

company,”

a

concerning

in

2013)
2012

defendant

Plaintiffs’

debt

not

Complaint

at

v.
*7

‘obtain’

evince

Therefore, Plaintiffs’ claims averred under the FDCPA will be

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dismissed. However, since Wells Fargo seeks dismissal of these

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claims

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should be provided leave to amend any dismissed FDCPA claim.

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averments

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Plaintiffs’

in

Plaintiffs’

opposition

issue

remains

Complaint

brief

reveal
6

and
that

Plaintiffs

that

23

the

as

World

Meyer

511995,

“did

collector”

when

(citing

WL

Fargo’s

Wells

prejudice,

“debt

Wells

22

with

not

obtained

Cal.

averments
is

averments

whether

the

assert.

Plaintiffs

arguments

providing

The
in

Plaintiffs

1

with leave to amend their claims alleged against Wells Fargo

2

under the FDCPA would be futile. Therefore, Plaintiffs’ claims

3

alleged against Wells Fargo under the FDCPA are dismissed with

4

prejudice. See Bonin v. Calederon, 59 F.3d 815, 845 (9th Cir.

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1995) (“Futility of amendment can, by itself, justify the denial

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of . . . leave to amend.”).

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B. Supplemental Jurisdiction Over State Claims

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9

Since Plaintiffs’ federal claims have been dismissed
with

prejudice,

the

exercising

Court

may

sponte

decide

11

state claims. 28 U.S.C. § 1367(c). Under 28 U.S.C. § 1367(c)(3),

12

a

13

jurisdiction over [state] claim[s]” when “the district court has

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dismissed all claims over which it has original jurisdiction.”

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“While discretion to decline . . . supplemental jurisdiction over

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state law claims is triggered by the presence of one of the

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conditions in § 1367(c), it is informed by the . . . values ‘of

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economy, convenience, fairness, and comity’” as delineated by the

19

Supreme Court in United Mine Workers of Am. v. Gibbs, 383 U.S.

20

715, 726 (1966). Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001

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(9th Cir. 1997).

22

“may

decline

to

over

to

continue

court

jurisdiction

whether

10

district

supplemental

sua

exercise

Plaintiffs'

supplemental

Judicial economy does not favor continuing to exercise

23

supplemental

jurisdiction,

24

energy does not justify retention of jurisdiction over the state

25

claims. See Otto v. Heckler, 802 F.2d 337, 338 (9th Cir. 1986)

26

(“[T]he

27

determine whether its investment of judicial energy justifies

28

retention of jurisdiction or if it should more properly dismiss

district

court,

since

of

the

course,

7

investment

has

the

of

judicial

discretion

to

1

the claims without prejudice.” (citation omitted)). Nor do the

2

comity

3

supplemental jurisdiction since “[n]eedless decisions of state

4

law should be avoided both as a matter of comity and to promote

5

justice between the parties, by procuring for them a surer-footed

6

reading

7

Nishimoto v. Federman–Bachrach & Assocs., 903 F.2d 709, 715 (9th

8

Cir.

9

eliminated

and

of

1990)

fairness

factors

applicable

(“In

a

before

law.”

case

in

trial,

weigh

Gibbs,

which

the

in

383

all

balance

favor

U.S.

federal
of

of

at

726;

law

these

exercising

accord

claims

factors

are
will

10

generally point toward declining to exercise jurisdiction over

11

the remaining state law claims.”). Therefore, Plaintiffs' state

12

claims are dismissed under 28 U.S.C. § 1367(c)(3) on the date on

13

which this order is filed.

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V. CONCLUSION

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For the stated reasons, judgment shall be entered in

16

favor of Defendant Wells Fargo Bank, N.A. on Plaintiffs’ claims

17

alleged

18

Plaintiffs’

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§ 1367(c)(3).

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Dated:

under

the

state

Federal
claims

Debt
are

October 17, 2013

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25
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27
28
8

Collection
dismissed

Practices

under

28

Act.
U.S.C.