Chang v. Wachovia Mortgage, FSB et al

Filing 37

ORDER by Judge Samuel Conti granting 28 Motion to Dismiss; denying 29 Motion to Strike (sclc1, COURT STAFF) (Filed on 11/15/2011)

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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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CYNTHIA M. CHANG,

)
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Plaintiff,
)
)
v.
)
)
WACHOVIA MORTGAGE, FSB, a national )
association; WELLS FARGO BANK,
)
N.A., a national association; and )
DOES 1 through 50, inclusive,
)
)
Defendants.
)

Case No. C-11-1951 SC
ORDER GRANTING MOTION TO
DISMISS AND DENYING MOTION
TO STRIKE

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I.

INTRODUCTION
Plaintiff Cynthia M. Chang ("Plaintiff") brings this action

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against Wachovia Mortgage, FSB ("Wachovia") and Wells Fargo Bank,

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N.A. ("Wells Fargo") (collectively, "Defendants"), pleading five

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causes of action arising from loan modification discussions between

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Plaintiff and Defendants and the May 2010 foreclosure sale of

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Plaintiff's San Francisco, California residence.

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("FAC").

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Motion to Dismiss and Motion to Strike Plaintiff's First Amended

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Complaint ("FAC").

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35 ("MTD Reply"), 36 ("MTS Reply").

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Court GRANTS Wells Fargo's Motion to Dismiss Plaintiff's second

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through fifth causes of action and DENIES Wells Fargo's Motion to

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Strike as moot.

ECF No. 22

Now before the Court is Wells Fargo's fully briefed

ECF Nos. 28 ("MTD"), 29 ("MTS"), 31 ("Opp'n"),
For the following reasons, the

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II.

BACKGROUND

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A.

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As it must on a motion brought under Federal Rule of Civil

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Procedure 12(b)(6), the Court assumes the truth of the well-pleaded

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facts in Plaintiff's Complaint.

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Francisco, and from 1996 until around May 12, 2010, she was the

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owner of a residence located at 80 Collingwood Street, Number 302,

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San Francisco, California, Block 2648, Lot 056 ("the residence").

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FAC ¶¶ 1, 7.

Factual Background

Plaintiff is a resident of San

Around May 18, 2006, Plaintiff refinanced the

United States District Court

For the Northern District of California

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residence with World Savings Bank ("WSB").1

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refinance consisted of two loans: the first in the principal amount

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of $380,000 ("the first loan") and the second, an equity line of

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credit, in the amount of $50,000 ("the second loan").

Id. ¶ 8.

The

Id.

Plaintiff alleges that she made all payments on her loans

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until sometime in 2008, when she lost her job.

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this time, Plaintiff contacted Defendants to inquire into loan

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modification.

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continued through May 2010, and that Defendants "made statements,

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promises and assurances to plaintiff that her requests for a loan

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modification or a new loan would be reasonably considered in good

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faith."

Id. ¶ 9.

Id. ¶ 7.

Around

Plaintiff claims that these discussions

Id.

On July 24, 2009, and again on September 1, 2009, Defendants

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recorded a Notice of Default and Election to Sell Under Deed of

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Trust ("NOD") with respect to the second loan on Plaintiff's home.

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Id. ¶ 10.

Plaintiff claims that upon receiving the NOD, she

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Plaintiff alleges, and Wells Fargo concedes, that Wachovia is
WSB's successor in interest, and that Wells Fargo is Wachovia's
successor in interest. Id. ¶¶ 2-6.

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"immediately contacted defendants and was assured that her requests

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and applications for a loan modification and new loan were being

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considered and that she would not be hurt by the NOD so long as

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such negotiations continued."

Id. ¶ 11.

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On or about January 11, 2010, Wachovia recorded a Notice of

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Trustee's Sale setting for February 1, 2010 a private sale under

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the Deed of Trust securing the second loan.

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continued to discuss modification of both loans with Defendants.

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Id.

Id. ¶ 12.

Plaintiff

The sale date was postponed on more than one occasion, but

United States District Court

For the Northern District of California

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Plaintiff allegedly did not receive notice of this postponed sale

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date.

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her that "so long as plaintiff and defendants were working on a

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loan modification or new loan, any foreclosure or trustee's sale

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would be postponed."

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Id.

Plaintiff claims that Defendants promised and assured

Id.

Plaintiff specifically describes many of her communications

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with Defendants concerning a loan modification in early 2010.

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January 21, 2010 she had a telephone conversation with a Wachovia

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representative in which there was a discussion of the "Home

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Affordable Modification Plan" ("HAMP").

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and 5, 2010, Plaintiff faxed to "Melissa" at Wells Fargo a

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"hardship letter," financial statement, tax return and other

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information.

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letter from Wachovia thanking her for her response to the Mortgage

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Assistance Plan and requesting "current sources of income

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immediately" "[i]n order to move forward with modification

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process."

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she "was assured" by someone at phone number 800-282-3458 "that the

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foreclosure had been or was being postponed."

Id. ¶ 13b.

Id. ¶ 13c.

Id. ¶ 13a.

On

On March 4 and

On March 5, 2010 Plaintiff received a

Plaintiff also alleges that around this time

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Id. ¶ 13b.

The FAC

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is not clear on when this assurance was made or how long the

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foreclosure was to be postponed.
Plaintiff claims that, in April 2010, Defendants informed her

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that they were "unable to proceed" with the modification.

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14.

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foreclosure process would resume.

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residence was sold by a Trustee at public auction.

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("Trs. Deed Upon Sale").2

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her of substantial equity in the Residence, estimated to be between

United States District Court

For the Northern District of California

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Id. ¶

By two letters dated April 12, 2010, Wachovia stated that the

$250,000 and $300,000.

Id.

On May 12, 2010, the
Id.; RJN Ex. J

Plaintiff alleges that the sale deprived

FAC ¶ 14.

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Plaintiff alleges that, even after Defendants resumed the

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foreclosure process, Defendants continued to lead Plaintiff to

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believe that she could obtain a loan modification.

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an April 9, 2010 letter, Wachovia stated that, even though

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Plaintiff was ineligible for assistance under the Mortgage

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Assistance Plan Modification, she could still be eligible for other

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loss mitigation options.

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telephone conversation with an unidentified Wachovia

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representative, "it was discussed that plaintiff could receive

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temporary payment assistance and, if not possible, she could

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Id. ¶ 15a.

Id. ¶ 15.

In

In an April 15, 2010

Wells Fargo asks the Court to take judicial notice of a number of
documents. ECF No. 30 ("RJN"). Under Rule 201 of the Federal
Rules of Evidence, a court may take judicial notice of facts
generally known within the territorial jurisdiction of the trial
court or capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned. A court
may also take judicial notice of a document if the plaintiff's
claim depends on the contents of the document, and the parties do
not dispute the authenticity of the document. Knievel v. ESPN, 393
F.3d 1068, 1076 (9th Cir. 2005). However, the Court may not take
judicial notice of the truth of the facts recited within a
judicially noticed document. Lee v. City of Los Angeles, 250 F.3d
668, 688–90 (9th Cir. 2001). The Court GRANTS Wells Fargo's RJN,
but limits its review of the exhibits accordingly.

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reinstate the loan."

Id. ¶ 15c.

Plaintiff complains that in April

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16 and 20, 2010 telephone conversations, Defendants failed to

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inform her that the foreclosure was proceeding.

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Plaintiff alleges that Wachovia again failed to mention the

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impending foreclosure in a May 5, 2010 letter notifying her that it

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was unable to offer her credit on the terms requested.

Id. ¶¶ 15c, 15d.

Id. ¶ 16.

Plaintiff also alleges that Defendants acted "inconsistently

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and recklessly" after the May 12, 2010 foreclosure sale.

Id. ¶ 18.

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For example, in a May 12, 2010 conversation, Wachovia's Bernice

United States District Court

For the Northern District of California

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Hernandez ("Hernandez") told Plaintiff that her loans could not be

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reinstated and that the trustee was selling and foreclosing on the

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second loan.

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the loan could be reinstated.3

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a June 23, 2010 letter from Wachovia stating that failure to cure

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default on one of her loans could result in foreclosure and that

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Plaintiff may be eligible for Home Ownership counseling.

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Finally, Plaintiff refers to two August 3, 2010 letters from

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Wachovia, one requesting documents for the Mortgage Assistance Plan

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and another stating that Wachovia was unable to offer her a

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modification.

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thirty days to contact Wachovia about its decision and that "no

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foreclosure sale will be conducted and you will not lose your home"

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during that thirty day period.

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///

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///

Id. ¶ 17.

Id.

Defendants later informed plaintiff that
Id. ¶ 18.

Plaintiff also points to

Id. ¶ 18.

This letter also stated that Plaintiff had

Id.

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Plaintiff specifically refers to telephone conversations with
"Rachel," "Richard" and "Ron." Id. ¶ 18. However, it is not clear
what these individuals told Plaintiff, when these conversations
took place, or what positions these individuals held.
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B.

Procedural History

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Plaintiff brought this action in California state court on

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March 21, 2011, alleging nine causes of action.

ECF No. 1 ("Not.

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of Removal") Ex. A. ("Compl.").

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promissory estoppel based on Defendants' statements that they would

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not proceed with a foreclosure sale so long as Plaintiff's

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modification negotiations continued.

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alleged fraud, misrepresentation, and reckless disregard, asserting

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that Defendants' conduct "constituted material misrepresentations,

First, she alleged a claim for

Id. ¶ 18-24.

Second, she

United States District Court

For the Northern District of California

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omissions . . . and actions in reckless disregard of plaintiff's

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rights and remedies to retain and preserve her Residence."

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26.

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misrepresentation.

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negligence.

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breached the implied covenant of good faith and fair dealing by

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secretly continuing the foreclosure sale while continuing

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modification negotiations with Plaintiff.

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Plaintiff alleged a claim for unconscionability.

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Seventh, Plaintiff alleged Defendants waived their right to

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foreclosure by continuing loan modification negotiations.

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41.

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California's Unfair Competition Law, Cal. Bus. & Profs. Code §

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17200 ("UCL"), claiming Defendants engaged in deceptive business

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practices by "failing to provide plaintiff with accurate and proper

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information as to loan status and steps of foreclosure in

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accordance with the requirements of the California Civil Code,"

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concealing from Plaintiff information about the ongoing

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foreclosure, and "[i]nducing plaintiff to not resume her payments

Id. ¶

Third, Plaintiff alleged Defendants committed negligent
Id. ¶ 30.

Id. ¶¶ 31-33.

Fourth, Plaintiff alleged

Fifth, Plaintiff alleged Defendants

Id. ¶ 26.

Sixth,

Id. ¶ 40.

Id. ¶

Eighth, Plaintiff alleged a claim for violation of

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or otherwise cure alleged defaults by falsely promising and stating

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that a modification . . . would reasonably be considered in good

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faith based on plaintiff's circumstances."

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Plaintiff alleged intentional infliction of emotional distress

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("IIED"), asserting: "Defendants' conduct was outrageous and beyond

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the bounds of decency and in reckless disregard of causing

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plaintiff mental and emotional distress."

Ninth,

Id. ¶ 51.

Wells Fargo moved to dismiss the Complaint on April 28, 2011.

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Id. ¶ 46.

ECF No. 6.

On July 21, 2011, the Court granted in part and denied

United States District Court

For the Northern District of California

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in part the motion.

ECF No. 21 ("July 21, 2011 Order").

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Plaintiff's original nine causes, the Court dismissed four with

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prejudice, and left one, Plaintiff's claim for promissory estoppel,

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undisturbed.

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causes of action with leave to amend.

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was granted leave to amend her causes of action for: fraud,

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misrepresentation, and reckless disregard; breach of the implied

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covenant of good faith and fair dealing; a UCL violation; and IIED.

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Id.

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more detail was required as to what false and misleading statements

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were made, when they were made, and who said them.

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Plaintiff's claim for breach of the implied covenant of good faith

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and fair dealing failed because Plaintiff failed to identify the

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contract at issue and the benefits deprived by Defendants.

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12.

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with the required specificity.

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Plaintiff's IIED claim, Plaintiff failed to state what about

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Defendants' conduct rendered it so extreme as to "exceed all bounds

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of that usually tolerated in a civilized community."

Id. at 15-16.

Of

The Court dismissed the remaining four
Id.

Specifically, Plaintiff

With respect to Plaintiff's fraud claim, the Court found that

Id. at 11.

Id. at

The Court found that Plaintiff's UCL claim was not pleaded
Id. at 13.

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Finally, as to

Id. at 15.

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Plaintiff filed her FAC on August 16, 2011, asserting five

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causes of action for (1) promissory estoppel; (2) fraud,

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misrepresentation, and reckless disregard; (3) breach of the

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implied covenant of good faith and fair dealing; (4) violation of

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the UCL; and (5) IIED.

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appears to be that Plaintiff would have sold her residence or

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obtained alternative financing had she not been misled by

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Defendants' statements and actions concerning a loan modification

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or had adequate notice of the trustee's sale.

FAC ¶¶ 22-50.

The gravamen of the FAC

See id. ¶¶ 12, 14.

United States District Court

For the Northern District of California

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The FAC includes additional facts not alleged in the Complaint.

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Defendants contend these new facts are insufficient to cure the

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defects identified in the Court's July 21, 2011 Order.

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now move to dismiss the second, third, fourth, and fifth causes of

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action in the FAC.

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paragraphs from the FAC.

Defendants

Defendants have also moved to strike various

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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

"Dismissal can be based

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

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Ashcroft v.

However, "the tenet that 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."

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

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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."

United States District Court

For the Northern District of California

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Threadbare

Id. (citing Bell Atl.
The allegations made

Starr v. Baca,

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

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IV.

DISCUSSION

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A.

Fraud

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Wells Fargo argues that Plaintiff has not properly pleaded her

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second claim for "fraud, misrepresentation, reckless disregard" in

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light of Federal Rule of Civil Procedure 9(b)'s heightened pleading

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standard for claims sounding in fraud.4

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agrees.

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what, when, where, and how of the misconduct charged, as well as

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what is false or misleading about [the purportedly fraudulent]

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statement, and why it is false."

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Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011)

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(internal quotation marks omitted).

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the Court found that Plaintiff's fraud claim failed because more

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detail was required than what was supplied.

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11.

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4

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MTD at 2-3.

The Court

"To satisfy Rule 9(b), a pleading must identify the who,

Cafasso, U.S. ex rel. v. Gen.

In its July 21, 2011 Order,

July 11, 2011 Order at

Despite alleging new facts, Plaintiff's fraud claim still

Plaintiff does not dispute that her second cause of action sounds
in fraud.

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fails to meet the pleading requirements of Rule 9(b).

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Plaintiff's claim does not point to any specific conduct,

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statements, or misrepresentations, leaving Defendants and the Court

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to guess at which of her general allegations constitute the basis

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for her claim.

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the crux of the claim appears to be that Defendants falsely

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represented that they would postpone the trustee's sale so long as

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Plaintiff and Defendants were working on a loan modification or a

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new loan.5

See FAC ¶¶ 29-32.

See id. ¶ 12.

Construing the FAC liberally,

The FAC offers new details concerning

United States District Court

For the Northern District of California

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Plaintiff's communications with Defendants in the months preceding

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and following the trustee's sale.

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taken together and construed in the light most favorable to

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Plaintiff, these allegations are still insufficient to state

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plausible claim for fraud, misrepresentation, and reckless

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disregard.

See id. ¶¶ 13-18.

However,

While Plaintiff alleges the "who," "what," and "when"

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concerning many of her communications with Defendants in March and

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April 2010, those communications simply do not support her theory

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of fraud.

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Defendants' representatives about loan modification alternatives in

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March 2010.

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facts showing that, during this time, Defendants promised or

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otherwise represented that they would postpone the trustee's sale

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while these discussions were ongoing.

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she was "assured" by someone at phone number 800-282-3458 "that the

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Plaintiff alleges that she spoke with several of

See id. ¶ 13.

However, she does not allege particular

Plaintiff does allege that

Plaintiff confirms this theory in her opposition brief. See
Opp'n at 5 ("plaintiff is alleging that in the course of loan
modification dialogue and process, defendants made new independent
promises, relied on by plaintiff to her detriment in not seeking a
sale of her property").
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foreclosure had been or was being postponed."

Id. ¶ 13b.

However,

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Plaintiff does not identify the date on which this statement was

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made or, critically, how long the sale was to be postponed.

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Plaintiff's allegations concerning her April 2010

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communications with Defendants are also unhelpful.

Plaintiff

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alleges that, during April 2010, Defendants informed her that they

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would be unable to proceed with her modification request; the

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foreclosure process would resume; Plaintiff was ineligible for the

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Mortgage Assistance Plan Modification; Plaintiff was ineligible for

United States District Court

For the Northern District of California

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the Home Affordable Modification Program; and Plaintiff did not

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have enough income to qualify for short-term assistance.6

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14-15.

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representation by Defendants that the trustee's sale would be

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postponed while loan modification discussions were ongoing.

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Further, the allegation that Defendants informed Plaintiff that the

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foreclosure process would resume tend to undercut rather than

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bolster Plaintiff's theory that Defendants led her to believe that

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the trustee's sale was being postponed.7

Id. ¶

Once again, none of these allegations evidence a promise or

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The FAC also suggests that Defendants are liable for

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fraudulent concealment because they failed to inform Plaintiff

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Defendants also allegedly informed Plaintiff that she "may still
be eligible for other loss mitigation options." FAC ¶ 15a.
However, Plaintiff does not allege that Defendants promised or
represented that the sale would be postponed while Plaintiff
applied for these programs.
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Plaintiff also alleges that Defendants falsely represented that
the loan could be reinstated after the date of the trustee's sale.
See FAC ¶ 18. Defendants argue that these post-sale statements are
not actionable with respect to the fraud claim because Plaintiff
did not rely on such statements. MTD at 5. The Court agrees.
Once the trustee's sale occurred, Plaintiff no longer owned the
property and could not have plausibly relied on Defendants' loan
modification offers.
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about the status of the foreclosure sale.

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Defendants argue that Plaintiff has not alleged facts establishing

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that Wells Fargo had a duty to disclose the postponed date of the

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foreclosure sale.

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LLC, 187 Cal. App. 4th 429, 436 (Cal. Ct. App. 2010), Wells Fargo

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points out that loan transactions generally do not give rise to a

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fiduciary or confidential relationship.

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also argues that, under California Civil Code section 2924g, notice

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of postponement is to be given "by public declaration by the

MTD at 7-8.

See id. ¶ 15-16.

Citing Perlas v. GMAC Mortgage,

Id. at 7.

Wells Fargo

United States District Court

For the Northern District of California

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trustee" and "[n]o other notice of postponement need be given."

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Id. at 7-8 (quoting Cal. Civ. Code § 2924g(d)).

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by citing to language from the Court's July 21, 2011 Order stating

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that "defendants are responsible for statements they make to

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borrowers."

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was referring to whether the Home Owner's Loan Act ("HOLA")

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preempts claims for fraud premised on affirmative statements made

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by lenders.

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not create a new duty requiring lenders to disclose a postponed

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sale date.

Opp'n at 4.

Plaintiff responds

This language is inapposite as the Court

July 21, 2011 Order at 9.

The July 21, 2011 Order did

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The Court finds that, despite the new allegations in the FAC,

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Plaintiff has not pled sufficient facts to state a plausible claim

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for fraud.

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cause of action for "fraud; misrepresentation; reckless disregard"

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WITH LEAVE TO AMEND.

Accordingly, the Court DISMISSES Plaintiff's second

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B.

Implied Covenant of Good Faith and Fair Dealing

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The Court initially dismissed Plaintiff's claim for breach of

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the implied covenant of good faith and fair dealing because the

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Complaint did not specify what contract was at issue.

12

Id. at 11-

1

12.

Plaintiff now identifies the contract as the Line of Credit

2

Agreement, Note, and Deeds of Trust.

3

Plaintiff alleges that Defendants "did not act in good faith under

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the terms of the Deeds of Trust when they secretly continued the

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foreclosure sale from the February 1, 2010 date and continued to

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negotiate with plaintiff for a modification of the First Loan and

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Second Loan without informing plaintiff of the new secretly

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determined date."

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fails as a matter of law since the implied covenant of good faith

Id. ¶ 36.

FAC ¶ 35.

Specifically,

Wells Fargo argues that the claim

United States District Court

For the Northern District of California

10

and fair dealing cannot prohibit Defendants from foreclosing on the

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property, an act which the Deed of Trust expressly permits.

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12-14.

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MTD at

The Court agrees.

"It is universally recognized [that] the scope of conduct

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prohibited by the covenant of good faith is circumscribed by the

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purposes and express terms of the contract."

16

Inc. v. Marathon Dev. California, Inc., 2 Cal. 4th 342, 373 (1992).

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"[T]he implied covenant of good faith is read into contracts in

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order to protect the express covenants or promises of the contract,

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not to protect some general public policy interest not directly

20

tied to the contract's purpose."

21

citation omitted).

22

stretched to prohibit a party from doing that which the agreement

23

expressly permits."

24

2011 U.S. Dist. LEXIS 69257, at *15 (E.D. Cal. June 28, 2011); see

25

also Dooms v. Fed. Home Loan Mortg. Corp., No. CV F 11-0352 LJO

26

DLB, 2011 U.S. Dist. LEXIS 38550, at *22-23 (E.D. Cal. Mar. 30,

27

2011).

28

Carma Developers,

Id. (internal quotation marks and

Accordingly, "[t]he implied covenant cannot be

Schuck v. Fannie Mae, No. 11-cv-691 OWW JLT,

In the instant action, the Deed of Trust provides that, if

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Plaintiff failed to make payment on her loans, "[l]ender may

2

exercise the power of sale, take action to have the Property sold

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under applicable law, and invoke such other remedies as may be

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permitted under any applicable law."

5

Plaintiff does not deny that she was in default in repaying the

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loans.

7

impose a duty on Defendants that would prevent them from exercising

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their right to sell the property.

See FAC ¶ 7.

RJN Ex. B ("DOT") at 13.

Accordingly, the implied covenant does not

In her opposition brief, Plaintiff argues that her action is

9

United States District Court

For the Northern District of California

10

different from others in which district courts rejected claims for

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breach of the implied covenant because "defendants acted on

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plaintiff's requests for a loan modification and undertook acts and

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communications to plaintiff in regard thereto, such that then it

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was a breach of the implied covenant to proceed to the trustee's

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sale without further notice to plaintiff and opportunity for her to

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protect herself."

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altogether clear to the Court.

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arguing that her claim for breach of the implied covenant is

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premised on new, independent duties created by the acts and

20

communications of Defendants, this theory is inconsistent with the

21

cause of action pleaded in the FAC.

22

not point to any express terms of the Deed of Trust, Line of Credit

23

Agreement, or Note which would have been frustrated by the sale of

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the residence.

Opp'n at 7.

Plaintiff's argument here is not
To the extent that Plaintiff is

In any event, Plaintiff does

For the foregoing reasons, the Court DISMISSES Plaintiff's

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third claim for breach of the implied covenant of good faith and

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fair dealing WITHOUT LEAVE TO AMEND.

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///

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1

C.

UCL

2

Plaintiff's UCL claim is based on four categories of deceptive

3

business practices.

First, Plaintiff cites Defendants' "[f]ailure

4

to provide Plaintiff with accurate and proper information as to

5

loan status and steps of foreclosure in accordance with the

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requirements of [] Sections 2924, 2924b, 2924f, and 2924g of the

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California Civil Code."

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Plaintiff has failed to properly allege an unlawful act or practice

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because she has not identified specific defects in the notice of

FAC ¶ 42.

Wells Fargo argues that

United States District Court

For the Northern District of California

10

default, notice of sale, or how the sale was conducted.

11

Further, Wells Fargo complains that the Civil Code sections cited

12

by Plaintiff encompass dozens of requirements, and Plaintiff has

13

not specified which particular requirements were not met.

14

Plaintiff does not provide a coherent response.

15

with Wells Fargo and finds that Plaintiff has not pled sufficient

16

facts to put Defendants on notice as to what requirements they

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allegedly violated.

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MTD at 16.

Id.

The Court agrees

The last three categories of deceptive business practices

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sound in fraud and, consequently, are subject to the heightened

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pleading standards of Rule 9(b).

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violated the UCL by: making statements to Plaintiff and concealing

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information relating to the ongoing foreclosure sale; "[e]ngaging

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in misleading statements and omissions as to the foreclosure sale,

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depriving plaintiff of the opportunity to object and stop the

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foreclosure sale"; and "[i]nducing plaintiff to not resume her

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payments or otherwise cure alleged defaults by falsely promising

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and stating that a modification of the First Loan and Second Loan

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would be reasonably considered in good faith based on plaintiff's

Plaintiff alleges that Defendants

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1

circumstances."

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allegations fail to meet the heightened pleading standards of Rule

3

9(b).

4

allegations are substantially similar to, if not exactly the same

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as, those underlying Plaintiff's claim for "fraud,

6

misrepresentation, reckless disregard."

7

allegations, Plaintiff's UCL allegations fail to specify "the who,

8

what, when, where, and how of the misconduct charged."

9

IV.A., supra.

United States District Court

For the Northern District of California

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11

FAC ¶ 42.

MTD at 15-16.

Wells Fargo argues that these

The Court agrees.

Plaintiff's underlying UCL

Like the other fraud

See section

Accordingly, the Court DISMISSES Plaintiff's claim for
violation of the UCL WITH LEAVE TO AMEND.

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D.

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Plaintiff's fifth cause of action for IIED alleges that

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"Defendants' conduct was outrageous and beyond the bounds of

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decency and in reckless disregard of causing plaintiff mental and

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emotional distress."

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included "misleading telephone conferences promising and

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representing defendants' willingness to consider a modification of

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plaintiff's loans when, in fact, another department or division of

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defendants was proceeding with a private trustee's sale of

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foreclosure of plaintiff's Second Loan."

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allegedly outrageous conduct also included representations that

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they would consider and grant Plaintiff a home equity loan or

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reinstate Plaintiff's first loan, even after Plaintiff's residence

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had been sold through a trustee's sale.

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Intentional Infliction of Emotional Distress

FAC ¶ 47.

Plaintiff alleges this conduct

Id.

Defendants'

Id.

To plead a claim for IIED, Plaintiff must allege: "(1) extreme

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and outrageous conduct by the defendant with the intention of

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causing, or reckless disregard of the probability of causing,

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1

emotional distress; (2) the plaintiff's suffering severe or extreme

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emotional distress; and (3) actual and proximate causation of the

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emotional distress by the defendant's outrageous conduct."

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Christensen v. Super. Ct., 54 Cal. 3d 868, 903 (1991) (quotations

5

and citations omitted).

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when it was "so extreme as to exceed all bounds of that usually

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tolerated in a civilized community."

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Westminster, 32 Cal. 3d 197, 185 (1982).

Conduct is only "extreme and outrageous"

Davidson v. City of

United States District Court

As pointed out by Wells Fargo, several district courts in this

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For the Northern District of California

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circuit have held that conduct similar to that alleged by Plaintiff

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was insufficient to support a claim for IIED.

12

of Am., No. C-11-0477 EMC, 2011 U.S. Dist. LEXIS 92900, at *32-35

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(N.D. Cal. Aug. 19, 2011); Mehta v. Wells Fargo Bank, N.A., 737 F.

14

Supp. 2d 1185, 1204 (S.D. Cal. 2010).

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reasoning of those decisions and finds that Plaintiff has not

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alleged conduct "so extreme as to exceed all bounds of that usually

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tolerated in a civilized society."

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on multiple occasions, Defendants communicated the possibility of a

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loan modification or other loss mitigation options.

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Defendants ultimately found Plaintiff ineligible for a modification

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and exercised their legal right to sell the property does not

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render this conduct outrageous.

23
24

See Ottolini v. Bank

The Court agrees with the

Plaintiff has merely pled that,

The fact that

Accordingly, Plaintiff's fifth claim for IIED is DISMISSED
WITHOUT LEAVE TO AMEND.

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E.

Motion to Strike

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Wells Fargo moves to strike allegations in Plaintiff's second

27

and fifth causes of action relating to punitive damages and certain

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portions of Plaintiff's prayer for relief as they relate to

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1

Plaintiff's fourth cause of action.

MTS at 2.

As this Order

2

dismisses Plaintiff's last four causes of action, Wells Fargo's

3

Motion to Strike is DENIED as moot.8

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5

V.

CONCLUSION
Plaintiff Cynthia M. Chang's first cause of action for

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7

promissory estoppel remains undisturbed.

The Court GRANTS

8

Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss Plaintiff's

9

second, third, fourth, and fifth causes of action.

Specifically:

United States District Court

For the Northern District of California

10

• The Court DISMISSES WITHOUT LEAVE TO AMEND Plaintiff's third

11

cause of action for breach of the implied covenant of good

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faith and fair dealing and fifth cause of action for

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intentional infliction of emotional distress.
• The Court DISMISSES WITH LEAVE TO AMEND Plaintiff's second

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15

cause of action for fraud, misrepresentation, reckless

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disregard and fourth cause of action for violation of

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California Business and Professions Code Section 17200, et

18

seq.

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Plaintiff is granted thirty (30) days leave to file an amended

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complaint.

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this time frame, her second and fourth causes of action will be

22

dismissed WITHOUT LEAVE TO AMEND.

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8

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27
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If Plaintiff fails to file an amended complaint within

The Court also DENIES Wells

Wells Fargo also moves to strike paragraph 6 of Plaintiff's
prayer for relief. MTS at 2. Wells Fargo describes this paragraph
as a prayer for "exemplary and punitive damages," id., but the
paragraph actually relates to attorney's fees, FAC at 16. The
Court assumes Wells Fargo intended to move to strike paragraph 5 of
Plaintiff's prayer, which refers to exemplary or punitive damages.
Id. Regardless of which paragraph Wells Fargo intended to move to
strike, the Court DENIES the motion. Wells Fargo has offered no
explanation as to why Plaintiff's prayer for attorney's fees is
inappropriate and Plaintiff's prayer for punitive damages is now
moot.
18

1

Fargo Bank, N.A.'s Motion to Strike as moot.

2

The hearing scheduled

for November 18, 2011 is hereby VACATED.

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4

IT IS SO ORDERED.

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Dated: November 15, 2011
UNITED STATES DISTRICT JUDGE

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United States District Court

For the Northern District of California

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