Anderson et al v. Wells Fargo Home Mortgage et al

Filing 16

ORDER granting in part and denying in part 4 Motion to Dismiss signed by District Judge Leslie E. Kobayashi on 9/20/17. (Kaminski, H)

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IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
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Plaintiffs,
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vs.
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WELLS FARGO HOME MORTGAGE;
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and BARRETT DAFFIN, FRAPPIER, )
TREDER & WEISS, LLP,
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Defendants.
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_____________________________ )
CLIFFORD M. ANDERSON,
MARLENE J. ANDERSON,

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2:16-CV-01783 LEK

ORDER GRANTING IN PART AND DENYING
IN PART DEFENDANT’S MOTION TO DISMISS
Before the Court is Defendant Wells Fargo Home

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Mortgage’s, doing business as America’s Servicing Company (“Wells

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Fargo” or “Defendant”), Motion to Dismiss (“Motion”), filed on

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August 3, 2016.1

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and Marlene J. Anderson (“Plaintiffs”) filed a memorandum in

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opposition on August 18, 2016, and Defendant filed its reply on

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September 1, 2016.

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matter suitable for disposition without a hearing pursuant to

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Rule LR230(g) of the Local Rules of Practice of the United States

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District Court for the Eastern District of California (“Local

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[Dkt. no. 4.]

Plaintiffs Clifford M. Anderson

[Dkt. nos. 6, 8.]

The Court finds this

The Motion states that Defendant is actually Wells Fargo
Bank, N.A., and was “erroneously sued as Wells Fargo Home
Mortgage d/b/a America’s Servicing Company.” [Motion at 1.]
Defendant has not moved to alter or correct its name in the
docket, and the Court will therefore refer to Defendant as its
name appears in this district court’s electronic case filing
system.

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Rules”).

Defendant’s Motion is granted in part and denied in

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part for the reasons set forth below.

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BACKGROUND

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Plaintiffs filed their Complaint for Damages and

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Equitable Relief (“Complaint”) in the Superior Court of

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California in and for the County of Nevada on June 15, 2016, and

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Defendant removed the Complaint on July 29, 2016.

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Removal, filed 7/29/16 (dkt. no. 1), Exh. A (Complaint).]

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Plaintiffs are residents of and owners of a property in Nevada

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City, California (“the Property”).

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[Notice of

[Complaint at ¶¶ 1-3.]

Plaintiffs allege that Defendant is involved in a

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scheme that fraudulently conceals mortgage-default-related fee

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income.

[Id. at ¶ 23.]

According to Plaintiffs:

Defendants[2] order default-related services from
their subsidiaries and affiliated companies, who,
in turn, obtain the services from third-party
vendors. The third-party vendors charge
Defendants for their services. Defendants, in
turn, charge borrowers a fee that is significantly
marked-up from the third-party vendors’ actual
fees for the services. As a result, even though
the mortgage market has collapsed, and more and
more borrowers are following into delinquency,
Defendants continue to earn substantial profits by
assessing undisclosed, marked-up fees for defaultrelated services on borrowers’ accounts.

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[Id. at ¶ 24.]

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allow a mortgage servicer to mark up the costs of default-related

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Plaintiffs argue that mortgage contracts do not

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Barrett, Daffin, Frappier, Treder, & Weiss, LLP (“Barrett
Daffin”) is also named as a defendant, but Plaintiffs apparently
have not completed service on Barrett Daffin.
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services in order to make a profit.

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Plaintiffs submit that these default-related fees are not

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disclosed to the borrowers.

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these marked-up fees can make it impossible for borrowers to

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become current on their loan.”

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[Id. at ¶ 27.]

[Id. at ¶ 29.]

Moreover,

“[T]he assessment of

[Id. at ¶ 33.]

In the instant matter, Plaintiffs state that they

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obtained a $1,072,000 loan to purchase the Property, secured by

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the Deed of Trust to the Property.

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changes in their financial situation, Plaintiffs fell behind on

[Id. at ¶ 38.]

Due to

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their loan payments, and, on July 18, 2012, Defendant recorded a

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Notice of Default.

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to their financial hardship, they applied for a loan modification

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on May 5, 2015.

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August 27, 2015, they submitted six requests for information

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(“8/27/15 Requests”), pursuant to 12 C.F.R. § 1024.36

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(“Regulation X”) of the Real Estate Settlement Procedures Act

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(“RESPA”) and 12 C.F.R. § 1026.36 (“Regulation Z”) of the Truth

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in Lending Act (“TILA”).3

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that Defendant’s response to the 8/27/15 Requests was untimely,

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[Id. at ¶ 39.]

[Id. at ¶ 45.]

According to Plaintiffs, due

Plaintiffs state that, on

[Id. at ¶ 46.]

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Plaintiffs also allege

The Complaint states that the requests were sent on
August 27, 2016, although it subsequently states that the
requests were sent in 2015. Compare Complaint at ¶ 46, with
id. at ¶ 56. Defendant also states that the 8/27/15 Requests
were sent in 2016. See Mem. in Supp. of Motion at 2 (“Plaintiffs
allegedly mailed six letters to Wells Fargo, all dated August 27,
2016.” (citation omitted)). Given the filing date of the
Complaint, any reference to 2016 with respect to the 8/27/15
Requests is clearly an oversight.
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pursuant to § 1024.36(c).

[Id. at ¶ 47.]

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Plaintiffs sent Defendant six Notices of Error (“12/7/15

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Notices”), pursuant to 12 C.F.R. § 1024.35.

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that Defendant has not adequately responded to the 12/7/15

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Notices.

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Trustee’s Sale on May 18, 2016.

[Id. at ¶¶ 47-48.]

On December 7, 2015,

Plaintiffs assert

Defendant recorded a Notice of
[Id. at ¶ 49.]

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Plaintiffs allege that Defendant’s failure to respond

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to the 8/27/15 Requests in a timely fashion, and its failure to

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sufficiently respond to the 12/7/15 Notices, are violations of

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Regulation X and Regulation Z (“Count I”).

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Plaintiffs also allege that Defendant’s actions violated Cal.

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Bus. & Prof. Code § 17200, et seq. (“Count II”).

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96.]

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an order vacating and setting aside the foreclosure sale, and an

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order rescinding that sale; damages that resulted from

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Defendant’s actions; “disgorgement of all monies acquired by

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Defendants by means of any act or practice declared by this Court

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to be wrongful”; interest; punitive damages; relief under Cal.

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Civil Code § 2924.12(b); attorneys’ fees and costs and any other

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relief under Cal. Civil Code § 2923.12(i); injunctive relief; and

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any other relief the Court believes to be appropriate.

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Prayer for Relief ¶¶ 1-10.]

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//

Plaintiffs seek:

[Id. at ¶¶ 50-81.]

[Id. at ¶¶ 82-

an order rescinding the Trustee’s Sale;

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[Id. at

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DISCUSSION
I.

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Request for Judicial Notice
On August 3, 2016, Defendant filed a Request for

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Judicial Notice in Support of Motion to Dismiss (“Request”), and

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Plaintiffs filed an objection on August 18, 2016.

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7.]

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Postal Service (“Postal Service”) tracking information for the

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12/7/15 Notices.

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Request “because it is unfairly prejudicial to Plaintiffs,

[Dkt. nos. 5,

The Request seeks judicial notice of the United States

[Request at 1-2.]

Plaintiffs oppose the

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contains hearsay statements, and is improper documentary evidence

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which lacks foundation.”

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court in the Ninth Circuit has considered whether or not a court

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may take judicial notice of the Postal Service’s tracking

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information:

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[Objection at 2.]

Another district

The Court generally cannot consider materials
other than the complaint when ruling on a motion
to dismiss under [Fed. R. Civ. P.] 12(b)(6), but a
court may take judicial notice of facts that are
“(1) generally known within the territorial
jurisdiction of the court; or (2) capable of
accurate and ready determination by resort to
sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201(b); see also
Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006)
(providing that courts may also take judicial
notice of materials that are included as part of
the complaint or relied upon by the complaint).
Where a party submission satisfies any of these
requirements, the court “must take judicial notice
if a party requests it and supplies the court with
the necessary information.” Fed. R. Evid.
201(c)(2) (emphasis added).

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These submissions are appropriate for
judicial notice as matters in the public record or
sources whose accuracy cannot reasonably be
questioned. See Marder, 450 F.3d at 448.
Whiting v. United States, Case No.: CV 15-01472-AB (DTBx), 2016

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WL 3946920, at *2-3 (C.D. Cal. June 21, 2016).

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that, here, Plaintiffs include the tracking numbers for each of

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the 12/7/15 Notices.

The Court notes

See Complaint at ¶¶ 68-73 (describing each

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of the 12/7/15 Notices, including the Postal Service tracking

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numbers).

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the 12/7/15 Notices provide facts that are “capable of accurate

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and ready determination by resort to sources whose accuracy

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cannot reasonably be questioned,” see Whiting, 2016 WL 3946920,

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at *3 (citation omitted), and Defendant’s Request is therefore

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granted.

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II.

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The Court concludes that the tracking information for

Count I – Violation of Regulation X and Regulation Z
A.

Timeliness of Defendant’s Responses to the
8/27/15 Requests and the 12/7/15 Notices
Regulation X requires that “[w]ithin five days

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(excluding legal public holidays, Saturdays, and Sundays) of a

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servicer receiving an information request from a borrower, the

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servicer shall provide to the borrower a written response

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acknowledging receipt of the information request.”

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If a request for information concerns the “identity of, and

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address or other relevant contact information for, the owner and

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assignee of a mortgage loan,” the loan servicer must respond to
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§ 1024.36(c).

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the request within ten days.

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other requests for information,” a servicer must respond within

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thirty days.

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of Regulation X are not applicable to “information request[s that

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are] overbroad or unduly burdensome.”

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§ 1024.36(d)(2)(i)(A).

§ 1024.36(d)(2)(i)(B).

“For all

Finally, the requirements

§ 1024.36(f)(1)(iv).

While Plaintiffs appear to argue that Defendant’s

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acknowledgment of the 8/27/15 Requests was untimely, their

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argument defies common sense.

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Court must accept well-pled factual allegations as true and draw

On a motion to dismiss, “[t]he

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all reasonable inferences in favor of the non-moving party.”

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Herrera v. Cal. Dep’t of Corr. & Rehabs., 1:16-cv-01053-DAD-SKO

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(PC), 2017 WL 117861, at *1 (E.D. Cal. Jan. 12, 2017) (some

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citations omitted) (citing Daniels-Hall v. National Educ. Ass’n,

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629 F.3d 992, 998 (9th Cir. 2010)).4

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motion to dismiss, a complaint must contain sufficient factual

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allegations, accepted as true, to state a claim that is plausible

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on its face.”

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Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009)).

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Defendant states that it received the 8/27/15 Requests on

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August 31, 2015, and acknowledged receipt the same day (“8/31/15

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Acknowledgment”).

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allege that they did not receive the 8/31/15 Acknowledgment until

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However, “[t]o survive a

Id. (some citations omitted) (citing Ashcroft v.

[Mem. in Supp. of Motion at 4.]

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First,

Plaintiffs

2017 WL 117861 is the magistrate judge’s findings and
recommendation, which was adopted on April 20, 2017. [Herrera,
dkt. no. 21.]
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September 5, 2015, although it was backdated to August 31, 2015.5

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See Complaint at ¶ 47; id. at pg. 85 (Exh. F (8/31/15

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Acknowledgment)).6

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California to Des Moines, Iowa.

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challenge Defendant’s contention that it took the 8/27/15

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Requests a day or two to arrive in Iowa, and that it took a day

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or two for the 8/31/15 Acknowledgment to reach California.

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addition, over the course of the nine days in question, there was

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Plaintiffs sent the 8/27/15 Requests from
[Id. at ¶ 57.]

Thus, Plaintiffs

In

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Fed. R. Civ. P. 12(d) states, in relevant part, that
“[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside
the pleadings are presented to and not excluded by the court, the
motion must be treated as one for summary judgment under [Fed. R.
Civ. P.] 56.” However, there are two exceptions:
First, a court may consider “material which is
properly submitted as part of the compliant” on a
motion to dismiss without converting the motion to
dismiss into a motion for summary judgment.
Branch [v. Tunnell], 14 F.3d [449,] 453 [(9th Cir.
1994)] (citation omitted). If the documents are
not physically attached to the complaint, they may
be considered if the documents’ “authenticity
. . . is not contested” and “the plaintiff’s
complaint necessarily relies” on them. Parrino v.
FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998).
Second, under Fed. R. Evid. 201, a court may take
judicial notice of “matters of public record.”
Mack v. South Bay Beer Distrib., 798 F.2d 1279,
1282 (9th Cir. 1986).
Malifrando v. Real Time Resolutions, Inc., No. 2:16-cv-0223 TLN
GGH PS, 2016 WL 6955050, at *3 (E.D. Cal. Nov. 29, 2016) (some
alterations in Malifrando) (quoting Lee v. City of Los Angeles,
250 F.3d 668, 688-89 (9th Cir. 2001)).
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There are over a hundred pages of exhibits attached to the
Complaint, most of which are not consecutively paginated. The
Court will therefore refer to the page numbers assigned by this
district court’s electronic filing system.
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at least one weekend.

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days from “receiving an information request from a borrower,” and

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not five days from the day that a request is sent.

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argument that Defendant’s response to the 8/27/15 Requests was

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untimely is simply implausible.

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Count I is based upon this argument, it must be dismissed.

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Finally, § 1024.35(c) gives Defendant five

Plaintiffs’

Accordingly, to the extent that

It is unclear whether or not Plaintiffs argue that the

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responses to the 12/7/15 Notices were untimely, but this claim

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also fails.

In response to the 12/7/15 Notices, Defendant sent

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an acknowledgment, dated December 11, 2015 (“12/11/15

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Acknowledgment”).

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12/11/15 Acknowledgment includes a stamp stating that it was

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received on December 19, 2015, the tracking numbers provided by

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Plaintiffs in the Complaint show otherwise.

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(showing that all of the 12/7/15 Notices were delivered on

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December 11, 2015).

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to timely acknowledge the 12/7/15 Notices must also be dismissed.

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B.

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While the

See Request, Exh. A

Any claim regarding the failure of Defendant

The Sufficiency of Defendant’s Response
1.

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[Complaint at pg. 112 (Exh. I).]

Regulation X

Plaintiffs state the following regarding the 8/27/15

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Requests:

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- the first request (“First Request”) sought “a payoff statement
as well as an itemized payoff statement for the mortgage
loan”; [Complaint at ¶ 58;]
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- the second request (“Second Request”) sought “the promissory
note for the Loan or other evidence of indebtedness, the
deed of trust, any assignment of information demonstrating
the right to foreclose, and payment history since the
borrower was less than 60 days past due”; [id. at ¶ 59;]
- the third request (“Third Request”) sought “information
regarding its participation in and the type and availability
of loans under . . . loan modification programs”; [id. at
¶ 60;]
- the fourth request (“Fourth Request”) sought “a complete lifeof-loan loan history and a complete statement of the amount
the borrower must pay to cure any default”; [id. at ¶ 61;]
- the fifth request (“Fifth Request”) sought “the full names and
addresses of the owner, investor, master servicer, current
servicer, special information if Fannie Mae or Freddy Mac is
the investor, and property valuation information”; [id. at
¶ 62;] and
- the sixth request (“Sixth Request”) sought “the servicing file
as well as sections of the [Pooling and Service Agreement
(“PSA”)] [id. at ¶ 63].
In a letter dated October 13, 2015 (“10/13/15 Letter”),

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Defendant responded to the 8/27/15 Requests by sending

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Plaintiffs’ attorney a copy of the note (“Note”), security

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instrument (“Security Instrument”), and payment history (“Payment

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History”).

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118-45 (Note and Security Instrument), 146-53 (Payment History).

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Defendant also informed Plaintiffs:

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account; the status of their account; and that it was “unable to

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provide any further information because your remaining requests

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are too broad.”

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informed Defendant that Plaintiffs believed it erred in its

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response to the 8/27/15 Requests.

See id., Exh. J at pgs. 116-17 (10/13/15 Letter),

about the origin of their

[10/13/15 Letter at 1-2.]

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The 12/7/15 Notices

[Complaint at ¶¶ 68-73.]

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Defendant responded to the 12/7/15 Notices in a letter dated

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December 21, 2015 (“12/21/15 Letter”), wherein it:

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copy of the 10/13/15 Letter and attachments; and informed

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Plaintiffs again that it was “unable to provide any further

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information because your remaining requests are too broad.

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you’d like to provide us with more specific details about what

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you’re seeking, we’ll review your request again.”

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at pgs. 114-15.]

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re-sent a

If

[Id., Exh. J

Defendant argues that its response to both the 8/27/15

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Requests and the 12/7/15 Notices was sufficient pursuant to

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§ 1024.35.

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that, “[e]ven if the explanation were adequate, the issue here is

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that no such explanation was provided in Wells Fargo’s response

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to the” 12/7/15 Notices.

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states, in relevant part that, in response to a notice of error,

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a servicer must correct the errors and provide notice of the

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corrections, or

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[Mem. in Supp. of Motion at 4-5.]

[Mem. in Opp. at 7.]

Plaintiffs counter

Section 1024.35

[c]onduct[] a reasonable investigation and
provid[e] the borrower with a written notification
that includes a statement that the servicer has
determined that no error occurred, a statement of
the reason or reasons for this determination, a
statement of the borrower’s right to request
documents relied upon by the servicer in reaching
its determination, information regarding how the
borrower can request such documents, and contact
information, including a telephone number for
further assistance.
§ 1024.35(e)(1)(i)(A)-(B).

The regulation also states, “[a]

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notice is overbroad if the servicer cannot reasonably determine

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from the notice of error the specific error that the borrower

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asserts has occurred on a borrower’s account.”

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§ 1024.35(g)(1)(ii).

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Other district courts in the Ninth Circuit have
reasoned:
While RESPA “provides plaintiffs with a
private right of action for . . . the failure by a
loan servicer . . . to respond to a [Qualified
Written Request (“QWR”)] for information about a
loan,” Gomes v. Wells Fargo Home Mortg., No. C 1101725 LB, 2011 WL 5834949, at *3 (N.D. Cal.
Nov. 21, 2011) (internal quotation marks omitted),
it does not require loan servicers to respond when
they “reasonably determine” that a request is
overbroad or unduly burdensome, see 12 C.F.R.
§ 1024.36(f). “An information request is
overbroad if a borrower requests that the servicer
provide an unreasonable volume of documents or
information to a borrower.” Id.
§ 1024.36(f)(1)(iv).
Plaintiffs attached the relevant QWR to their
complaint. It consists of 18 single-spaced pages
of legal arguments and requests for documents and
responses, including several questions amounting
to requests for a “complete life of loan
transactional history,” which courts in this
circuit have found overbroad. See also Derusseau
v. Bank of Am., N.A., 2011 WL 5975821, at *4 (S.D.
Cal. Nov. 29, 2011) (finding a QWR overly broad
where it “request[ed] a ‘complete life of loan
transactional history,’ the ‘Transaction Codes for
the software platform of the Servicer,’ and the
‘Key Loan Transaction history, bankruptcy work
sheet (if any), or any summary of all the accounts
in an XL spreadsheet format.’”); Junger v. Bank of
America, N.A., No. CV 11-10419 CAS (VBKx), 2012 WL
603262, at *5 (C.D. Cal. Jan. 24, 2012). . . .
However, “[t]o the extent a servicer can
reasonably identify a valid information request in
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a submission that is otherwise overbroad or unduly
burdensome, the servicer shall comply with the
requirements of paragraphs (c) and (d) of [that]
section with respect to that requested
information.” 12 C.F.R. § 1024.36(f)(1)(iv). In
this regard, while Plaintiffs allege that Wells
Fargo could have attempted to answer some of their
questions rather than relying on “[t]he flat
assertion . . . that every single one of [their]
detailed questions [was] somehow too broad,” they
nevertheless fail to identify any specific
questions they reasonably could have expected
Wells Fargo to answer, or additional documents
that Wells Fargo should have produced, in response
to an appropriately scoped and specific QWR. See
also 12 C.F.R. § 1024.36(f)(1)(iv), Supplement I
to Part 1024 – Official Bureau Interpretations,
comment 36(f)(1)(iv), “Examples of Overbroad or
Unduly Burdensome Requests for Information,” as
published in 78 FR 10695 (Feb. 14, 2013) (stating
that requests for information (1) “that seek
documents relating to substantially all aspects of
mortgage origination, mortgage servicing, mortgage
sale or securitization, and foreclosure”; (2) “are
not reasonably understandable or are included with
voluminous tangential discussion”; (3) [“]purport
to require servicers to provide information in
specific formats . . . when such information is
not ordinarily stored in such formats”; and
(4) [“]are not reasonably likely to assist a
borrower with the borrower’s account, including,
for example, a request for copies of the front and
back of all physical payment instruments,” are
overbroad or unduly burdensome). Because
(1) Plaintiffs’ facially overbroad requests sought
a broad range of documents that went well beyond
the limited subject matter of a valid QWR,
(2) Wells Fargo provided Plaintiffs with a copy of
their promissory note in response to the QWRs, and
(3) the complaint lacks any specificity as to what
in particular was insufficient about Wells Fargo’s
response, the Court grants Defendants’ motion to
dismiss Plaintiffs’ RESPA and Regulation X claims.
See Menashe v. Bank of New York, 850 Fed. Supp. 2d
1120, 1132 (D. Haw. 2012). . . .
Brewer v. Wells Fargo Bank, N.A., Case No. 16-cv-02664-HSG, 2017

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WL 1315579, at *4-5 (N.D. Cal. Apr. 6., 2017) (some alterations

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in Brewer) (emphasis and some citations omitted).

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In addition:

Servicing, as defined under RESPA, “does not
include the transactions and circumstances
surrounding a loan’s origination – facts that
would be relevant to a challenge to the validity
of an underlying debt or the terms of a loan
agreement. Such events precede the servicer’s
role in receiving the borrower’s payments and
making payments to the borrower’s creditors.”
Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 66667 (9th Cir. 2012). In Medrano, the Ninth Circuit
upheld the dismissal of the RESPA claim for
failing to properly request servicing information
where the letters from the borrowers to servicer
challenged terms of the loan and mortgage
documents, and the failure of loan documents to
“accurately reflect the proper payment schedule
represented by the loan broker”. Id. at 667.
Under these facts, the court found no duty to
respond to the request. Id. Therefore, requests
for documents and information “relating to the
original loan transaction and its subsequent
history” do not qualify as QWRs. Junod v. Dream
House Mortg. Co., No. CV 11-7035-ODW(VBKx), 2012
WL 94355, at *4 (C.D. Cal. Jan. 5, 2012); see also
Consumer Solutions REO, LLC v. Hillery, 658 F.
Supp. 2d 1002, 1014 (N.D. Cal. 2009) (dismissing
plaintiff’s RESPA claim with prejudice after
observing that the requirement “[t]hat a QWR must
address the servicing of the loan, and not its
validity, is borne out by the fact that [12
U.S.C.] § 2605(e) expressly imposes a duty upon
the loan servicer, and not the owner of the
loan.”). In addition, requests relating to loan
modification are not related to “servicing” of the
loan. Smallwood v. Bank of America, N.A., Case
No. 15cv336, 2015 WL 7736876, at *6 (S.D. Ohio,
Dec. 1, 2015) (citing “Mbakpuo v. Civil Wells
Fargo Bank, N.A., No. 13-2213, 2015 WL 4485504, at
*8 (D. Md. July 21, 2015) (request for a loan
modification did not relate to servicing of a
loan); Mayer v. EMC Morg. Corp., No. 2:11-cv-147,
2014 WL 1607443, at *5-6 (N.D. Ind. Apr. 22, 2014)
(same); Van Egmond v. Wells Fargo Home Mortg., No.
12-0112, 2012 WL 1033281, at *4 (C.D. Cal Mar. 21,
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2012) (RESPA only obligates loan services to
respond to borrowers’ requests for information
relating to servicing of their loans, which does
not include loan modification information)”);
Mobine v. OneWest Bank, FSB, 11cv2550-IEG(BGS),
2012 WL 1520116, at *2 (S.D. Cal. Apr. 27, 2012)
(same).
Watson v. Bank of Am., N.A., CASE NO. 16cv513-GPC(MDD), 2016 WL

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6581846, at *6 (S.D. Cal. Nov. 7, 2016) (some alterations in

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Watson).

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Here:

Plaintiffs’ own descriptions of the 8/27/15

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Requests reveal that they are facially overbroad and go well

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beyond the proper subject matter for QWRs; the 10/13/15 Letter

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provided Plaintiffs with the Note, Security Instrument, and

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Payment History; and “the complaint lacks any specificity as to

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what in particular was insufficient about Wells Fargo’s

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response,” see Brewer, 2017 WL 1315579, at *5 (citation omitted).

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The Motion, insofar as it seeks dismissal of the Regulation X

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claims, is granted.

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without prejudice.

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KJM, 2008 WL 3373821, at *3 (E.D. Cal. Aug. 8, 2008) (“A court

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may determine that amendment of a complaint is futile, and

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dismiss a claim with prejudice, if the pleadings could not

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possibly be cured by the allegation of other facts.” (some

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citations omitted) (citing Cook, Perkiss and Liehe, Inc. v.

However, the dismissal of this claim is
See McCliss v. Ward, No. 2:07-cv-01154-MCE-

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N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th Cir.

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1990))).7

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2.

Violation of Regulation Z

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The Complaint states that it also seeks to enforce

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“amended Regulation Z, Section 1026.36.”

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[Complaint at ¶ 51.]

This district court has stated:

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Weston v. Kelso, No. 2:17-cv-0384 CKD P, 2017 WL 1354574, at *2

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(E.D. Cal. Apr. 13, 2007) (alterations in Weston).

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//

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Plaintiff is required to establish standing
for each claim he asserts. DaimlerChrysler Corp.
v. Cuno, 547 U.S. 332, 352 (2006). If a plaintiff
has no standing, the court has no subject matter
jurisdiction. Nat’l Widlife Fed’n v. Adams, 629
F.2d 587, 593 n.11 (9th Cir. 1980) (“[B]efore
reaching a decision on the merits we [are required
to] address the standing issue to determine if we
have jurisdiction.”). There are three
requirements that must be met for a plaintiff to
have standing: (1) the plaintiff must have
suffered an “injury in fact” – an invasion of a
legally protected interest which is both concrete
and particularized and actual or imminent;
(2) there must be a causal connection between the
injury and the conduct complained of; and (3) it
must be likely that the injury will be redressed
by a favorable decision. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992); Wash. Legal
Found. v. Legal Found. of Wash., 271 F.3d 835, 847
(9th Cir. 2001) (en banc).

7

While not necessary in ruling on the instant Motion, the
Court notes that, if Plaintiffs file an amended complaint, it
“should explicitly plead facts that could support a finding that
Plaintiffs suffered causal damages arising from Defendants’
failure to respond to their QWRs within the allotted time frame,
as required by RESPA.” See Brewer, 2017 WL 1315579, at *5 n.5
(citing Lawthner v. Onewest Bank, 2010 WL 4936797, at *7 (N.D.
Cal. Nov. 30, 2010)).
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With specific regard to Regulation Z, this district
court has explained:

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TILA was enacted “to assure a meaningful
disclosure of credit terms” so the consumer can
“compare . . . the various credit terms available
to him and avoid the uniformed use of credit,” and
to “protect the consumer against inaccurate and
unfair credit billing and credit card practices.”
15 U.S.C. § 1601(a). To effectuate this remedial
purpose, courts “construe the Act’s provisions
liberally in favor of the consumer.” Haulk v. JP
Morgan Chase Bank USA, 552 F.3d 1114, 1118 (9th
Cir. 2009) (internal quotation marks and citations
omitted).

Jamison v. Bank of Am., N.A., No. 2:16-cv-00422-KJM-AC, 2017 WL

36

3394120, at *3 (E.D. Cal. Aug. 8, 2017) (alterations in Jamison).

To the extent relevant here, TILA provides
“[a] creditor or servicer of a home loan shall
send an accurate payoff balance within a
reasonable time, but in no case more than 7
business days, after the receipt of a written
request for such balance from or on behalf of the
borrower.” 15 U.S.C. § 1639g. Regulation Z,
which implements TILA, provides in relevant part,
“a creditor, assignee or servicer, as applicable,
must provide an accurate statement of the total
outstanding balance that would be required to pay
the consumer’s obligation in full as of a
specified date.” 12 C.F.R. § 1026.36(c)(3). The
Federal Consumer Financial Protection Bureau is
responsible for enforcing Regulation Z, and has
explained “payoff statements should be issued
according to the best information available at the
time.” 78 Fed. Reg. 10902 (Feb. 14, 2013).

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Moreover,

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a procedural violation of the TILA requirements
for payoff statements does not inherently
establish concrete harm. . . . [T]he TILA
provision at issue here regulates only the
provision of certain information on the payoff
statement. See 15 U.S.C. § 1639g; 12 C.F.R.
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Jamison v. Bank of Am., N.A., 194 F. Supp. 3d 1022, 1029 (E.D.

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Cal. 2016) (some alterations in Jamison) (some citations

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omitted).

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§ 1026.36(c)(3). A procedural violation of the
TILA provision may result in no concrete harm if
the lender provides the omitted information
through other means. Cf. Spokeo[, Inc.] v.
Robbins, 136 S. Ct. [1540,] 1550 [(2016)]
(“. . . [N]ot all inaccuracies cause harm or
present a material risk to harm.”). Here, the
complaint does not allege [the defendant] failed
or refused to ever disclose information to
plaintiff about her proceeds, but only that it
failed to disclose such information on the payoff
statements.

Finally,
neither the text of TILA, nor the implementing
regulation provide instruction regarding what
constitutes an “accurate payoff balance,” though
the section-by-section analysis in the Federal
Register provides some additional context:
The Bureau does not believe further
regulation on procedures around payoff
balances is necessary. A payoff balance
request is any request from a consumer, or
appropriate party acting on behalf of the
consumer, which inquires into the total
amount outstanding on the loan, or the amount
needed to pay off the loan. While such
requests are most often made when a consumer
is refinancing their loan, payoff balance
requests are not limited to this
context. . . . The Bureau is not making any
changes to the requirements of the accuracy
of the statement. The Bureau believes payoff
statements should be issued according to the
best information available at the time. . . .
Mortgage Servicing Rules Under the Truth in
Lending Act (Regulation Z) V. Section-by-Section
Analysis, 78 Fed. Reg. 10902-01, 10957-10958
(Feb. 14, 2013).

Davidson v. PNC Bank, N.A., CAUSE NO. 1:16-cv-569-WTL-MPB, 2016
18

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WL 7179371, at *3 (S.D. Ind. Dec. 9, 2016) (alterations in

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Davidson).

3

It is undisputed that Defendant sent Plaintiffs a copy

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of the Note, Security Instrument, and Payment History.

Moreover,

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Defendant informed Plaintiffs that, “[t]he account is due for

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May 01, 2011, through October 01, 2015, monthly payments totaling

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$385,815.94.

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insurance.”

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includes all of the information necessary for Plaintiffs to

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easily determine the total amount they would need to pay to

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satisfy their obligations.

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the Payment History is inaccurate.

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“[t]he Reg. Z requirement provides a borrower with an up-to-date

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and itemized payoff statement in order to allow the borrower to

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determine its validity and the feasibility of bringing the loan

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current,” and that “[a] borrower cannot and is not required to

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discern this from a payment history provided by the loan servicer

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that may not include all fees charged to the account.”

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Opp. at 8.]

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their position.

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were not informed about certain fees or that some fees were not

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included on the Payment History, and that information about these

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fees was needed to determine “the feasibility of bringing the

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loan current.”

We’ve paid $38,243.66, toward property taxes and
[10/13/15 Letter at 1.]

The Payment History

Further, Plaintiffs do not state that
Instead, they allege that

[Mem. in

Plaintiffs do not provide any citation to support
Nor do Plaintiffs specifically allege that they

See Mem. in Opp. at 8.

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In sum, Plaintiffs have

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not established a concrete harm, and have therefore failed to

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show that they have standing to bring their Regulation Z claim.

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Accordingly, to the extent that Count I alleges a claim for

4

violation of Regulation Z, it must be dismissed without

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prejudice.8

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III. Count II

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Count II states, in part, that “Defendants’ acts and

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practices, as hereinabove alleged, constitute ‘unfair’ business

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acts under Bus. and Prof. Code § 17200, et seq., in that said

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acts and practices offend public policy and are substantially

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injurious to Plaintiffs and all consumers.”

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Accordingly, Count II is derivative of Count I.

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claim must be brought ‘by a person who has suffered injury in

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fact and has lost money or property as a result of the unfair

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competition.’”

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EMC, 2009 WL 3458300, at *4 (N.D. Cal. Oct. 23, 2009) (emphasis

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in Sullivan) (some citations omitted) (quoting Cal. Bus. & Prof.

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[Complaint at ¶ 89.]
“[A] § 17200

Sullivan v. Wash. Mut. Bank, FA, No. C-09-2161

8

Insofar as Plaintiffs allege that Defendant failed to
respond to their Regulation Z request by the statutory deadline,
their argument is unavailing. A payoff statement must “be sent
within a reasonable time, but in no case more than seven business
days, after receiving written request from the consumer or any
person acting on behalf of the consumer.” § 1026.36(c)(3).
However, “[w]hen a creditor, assignee, or servicer, as
applicable, is not able to provide the statement within seven
business days of such a request because a loan is in bankruptcy
or foreclosure . . . the payoff statement must be provided within
a reasonable time.” Id. Plaintiffs do not allege that the time
in which the Payment History and other information was provided
was unreasonable.
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Code § 17204).

Because Count I was dismissed, Count II must also

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be dismissed.

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dismissal of Count II is without prejudice.

However, for the same reasons as Count I, the

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CONCLUSION

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On the basis of the foregoing, Defendant Wells Fargo

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Home Mortgage’s, doing business as America’s Servicing Company,

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Motion to Dismiss, filed on August 3, 2016, is HEREBY GRANTED IN

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PART AND DENIED IN PART.

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Clifford M. Anderson and Marlene J. Anderson’s Complaint for

It is granted insofar as Plaintiffs

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Damages and Equitable Relief is HEREBY DISMISSED.

It is denied

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insofar as the dismissal is WITHOUT PREJUDICE.

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intend to file an amended complaint, they must do so by

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October 30, 2017, and the amended complaint must cure the defects

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identified in this Order and must also comply with Local Rule

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220.

If Plaintiffs

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IT IS SO ORDERED.

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DATED AT HONOLULU, HAWAII, September 20, 2017.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

CLIFFORD M. ANDERSON, ET AL. VS. WELLS FARGO HOME MORTGAGE, ET
AL., 2:16-CV-01783 LEK

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