Shaterian v. Wells Fargo Bank National Association et al

Filing 84

ORDER by Judge Samuel Conti granting in part and denying in part 79 Motion to Dismiss, continuing status conference to May 4, 2012. (sclc1, COURT STAFF) (Filed on 2/6/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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NADER SHATERIAN,
Plaintiff,

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v.

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WELLS FARGO BANK, N.A.;
CAL-WESTERN RECONVEYANCE
CORPORATION

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Defendants.

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Case No. 11-0920 SC
ORDER GRANTING IN PART AND
DENYING IN PART
CAL-WESTERN'S MOTION TO
DISMISS

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I.

INTRODUCTION

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Plaintiff Nader Shaterian ("Shaterian") brings this action

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against Defendants Wells Fargo Bank, N.A. ("Wells Fargo"), and Cal-

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Western Reconveyance Corporation ("Cal-Western"), challenging the

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terms of his mortgage and the foreclosure of his home.

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previously granted in part and denied in part Wells Fargo's motion

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to dismiss Shaterian's Second Amended Complaint ("SAC").

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76 ("Nov. 7, 2011 Order").

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only two claims asserted against it in the SAC, claims which

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remained undisturbed after the Court ruled on Wells Fargo's motion

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The Court

ECF No.

Cal-Western now moves to dismiss the

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to dismiss.

ECF No. 79 ("MTD").

Cal-Western also moves to dismiss

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each of the other claims asserted in the SAC.

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is fully briefed.

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to Civil Local Rule 7-1(b), the Court finds this motion suitable

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for determination without oral argument.

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reasons, the Court GRANTS in part and DENIES in part Cal-Western's

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motion to dismiss.

Cal-Western's motion

ECF Nos. 81 ("Opp'n"); 82 ("Reply").

Pursuant

For the following

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United States District Court

For the Northern District of California

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II.

BACKGROUND
The Court detailed the background of this dispute in its prior

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order granting in part and denying in part Wells Fargo's first

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motion to dismiss and does not repeat that background in full here.

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Nov. 7, 2011 Order at 1-6.

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in 2007 through Wells Fargo's predecessor-in-interest, World

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Savings Bank.

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27, 2007, Shaterian received a $985,000 loan secured by his

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property.

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Shaterian's deed of trust.

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Id.

In short, Shaterian refinanced his home

According to his Deed of Trust, dated August

Cal-Western eventually became the substituted trustee on

At one point, Shaterian could no longer afford his mortgage

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payments.

In June 2010, he spoke with John H. Kearny ("Kearny"), a

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Wells Fargo loan adjustment specialist, about the possibility of a

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loan adjustment.

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loan modification application, but it was denied a few weeks later.

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In August 2010, Kearny informed Shaterian that he could qualify for

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a loan modification by showing an income of $9,500 per month.

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Shaterian allegedly increased his income to $15,000 per month by

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expanding his business and reapplied for the loan modification in

Later that month Shaterian submitted a completed

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both October and November 2010, but he was rejected for a second

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and third time.

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On October 7, 2010, Cal-Western recorded a Notice of Default

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which indicated that Shaterian was $60,175.64 in arrears on his

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mortgage payments.

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Notice of Default, Wells Fargo vice-president Sandra Garza

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("Garza") declares that Wells Fargo contacted Shaterian on March

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13, 2011, as required by California Civil Code § 2923.5.

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alleges that this declaration was false and that he had not been

In the declaration filed with the October 2010

Shaterian

United States District Court

For the Northern District of California

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contacted by anyone from Wells Fargo to assess his financial

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situation and discuss options, or to arrange a subsequent meeting.

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On January 12, 2011, Cal-Western recorded a Notice of

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Trustee's Sale, setting a sale date of February 1, 2011 for

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Shaterian's property.

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in bankruptcy court, staying the scheduled foreclosure sale until

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July 18, 2011.

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taken place.

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Shaterian later filed a Chapter 13 petition

It is unclear whether the foreclosure sale has yet

Shaterian commenced this action on January 28, 2011 and filed

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his SAC on August 5, 2011.

The SAC is comprised of ten claims, but

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only two are asserted against Cal-Western.

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alleges that Cal-Western and Wells Fargo violated California Civil

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Code § 2923.5 by attaching the false Garza declaration to the

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Notice of Default.

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and Wells Fargo cannot foreclose on his residence until a valid

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Notice of Default has been recorded.

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Shaterian seeks declaratory relief concerning a number of

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allegations in the SAC, including a declaration that Cal-Western

SAC ¶ 137.

In Claim 7, Shaterian

Shaterian asserts that Cal-Western

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Id. ¶ 140.

In Claim 10,

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and Wells Fargo have violated California foreclosure laws and

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cannot proceed with the foreclosure of Plaintiff's home.

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166, 169.

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declaratory relief only applies to Cal-Western insofar as it

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implicates a violation of California Civil Code § 2923.5.

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Id. ¶¶

As the Court construes the SAC, Shaterian's claim for

On September 14, 2011, Wells Fargo moved to dismiss each of

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Shaterian's ten claims.

On November 7, 2011, the Court granted in

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part and denied in part Wells Fargo's motion to dismiss.

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2011 Order.

Nov. 7,

The Court dismissed several of Shaterian's claims, but

United States District Court

For the Northern District of California

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not the two claims asserted against Cal-Western.

Now Cal-Western

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moves to dismiss these two claims along with the rest of the SAC.

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III. LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure

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12(b)(6) "tests the legal sufficiency of a claim."

Navarro v.

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Block, 250 F.3d 729, 732 (9th Cir. 2001).

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on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory."

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Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.

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1988).

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should assume their veracity and then determine whether they

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plausibly give rise to an entitlement to relief."

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Iqbal, 129 S. Ct. 1937, 1950 (2009).

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court must accept as true all of the allegations contained in a

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complaint is inapplicable to legal conclusions.

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recitals of the elements of a cause of action, supported by mere

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conclusory statements, do not suffice."

"Dismissal can be based

"When there are well-pleaded factual allegations, a court

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Ashcroft v.

However, "the tenet that a

Threadbare

Id. (citing Bell Atl.

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Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

The allegations made

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in a complaint must be both "sufficiently detailed to give fair

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notice to the opposing party of the nature of the claim so that the

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party may effectively defend against it" and "sufficiently

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plausible" such that "it is not unfair to require the opposing

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party to be subjected to the expense of discovery."

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633 F.3d 1191, 1204 (9th Cir. 2011).

Starr v. Baca,

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United States District Court

For the Northern District of California

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IV.

DISCUSSION
The Court DENIES Cal-Western's motion to the extent it seeks

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to dismiss Claims 1 through 6, 8, and 9.

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to Wells Fargo and, as such, Cal-Western lacks standing to move to

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dismiss them.

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been dismissed.

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extent it seeks to dismiss claims 7 and 10, the only claims

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asserted against it.

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These claims apply only

Additionally, Claims 2, 4, 8, and 9 have already
The Court GRANTS Cal-Western's motion to the

Claim 7 asserts that Cal-Western violated California Civil

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Code § 2923.5 by filing a false declaration with the Notice of

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Trustee's Sale.

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mortgagee, beneficiary, or authorized agent [to] assess the

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borrower's financial situation and explore options for the borrower

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to avoid foreclosure."

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has no responsibilities under the statute since it is the trustee,

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not "the mortgagee, beneficiary, or authorized agent."

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the allegedly false declaration stating that Wells Fargo contacted

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Shaterian in compliance with the California Civil Code § 2923.5 was

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submitted by Wells Fargo and made by a Wells Fargo employee.

The statute requires, among other things, "[a]

Cal. Civ. Code § 2923.5(a)(2).

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Cal-Western

Further,

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Shaterian does not allege Cal-Western knew the declaration was

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false when it was attached to the Notice of Default or that Cal-

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Western otherwise committed any wrongdoing.1

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DISMISSES Claim 7 as it applies to Cal-Western.

Therefore the Court

The only aspect of Claim 10 which pertains to Cal-Western

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Western and Wells Fargo have violated California foreclosure laws

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and cannot proceed with the foreclosure of Shaterian's home.

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Shaterian cannot state a claim against Cal-Western for violations

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United States District Court

concerns Shaterian's request for a declaratory judgment that Cal-

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For the Northern District of California

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of California foreclosure laws, his claim for declaratory relief

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against Cal-Western necessarily must fail.

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Cal-Western must remain in the case because any order postponing

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the foreclosure sale would be meaningless if it were not directed

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to Cal-Western, the party conducting the sale.

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disagrees.

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sale and any order binding on it would affect the foreclosure sale

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in its entirety.2

As

Shaterian argues that

The Court

The beneficiary dictates when the property is clear for

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V.

CONCLUSION
For the foregoing reasons, the Court GRANTS in part and DENIES

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in part Defendant Cal-Western Reconveyance Corporation's motion to

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dismiss.

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Shaterian's seventh and tenth claims, but only as they apply to

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The Court DISMISSES WITH LEAVE TO AMEND Plaintiff Nader

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Addtionally, California Civil Code § 2924(b) provides that "the
trustee shall incur no liability for any good faith error resulting
from reliance on information provided in good faith by the
beneficiary regarding the nature and the amount of the default."
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The Notice of Trustee's Sale and Notice of Default indicate that
Wells Fargo, as the beneficiary, dictates when the property is to
be sold. See ECF No. 79-1 ("RJN") Exs. 3 ("Not. of Default"), 4
("Not. of Tr.'s Sale").

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Cal-Western.

Shaterian's SAC remains undisturbed in all other

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respects.

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this Order to include additional factual allegations against Cal-

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Western, otherwise this case will be dismissed with prejudice as to

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Cal-Western.

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scheduled for February 10, 2012 is hereby VACATED.

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conference scheduled for February 10, 2012 is hereby continued to

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May 4, 2012.

Shaterian shall amend his SAC within thirty (30) days of

The hearing on Cal-Western's motion to dismiss
The status

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United States District Court

For the Northern District of California

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IT IS SO ORDERED.

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Dated: February 6, 2012
UNITED STATES DISTRICT JUDGE

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