Martinez v. Wells Fargo Bank N.A. et al

Filing 27

ORDER by Judge Samuel Conti granting 7 Motion to Dismiss; denying 8 Motion to Strike as moot. (sclc1, COURT STAFF) (Filed on 2/21/2012)

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1 2 IN THE UNITED STATES DISTRICT COURT 3 FOR THE NORTHERN DISTRICT OF CALIFORNIA 4 5 ) Case No. 11-4624 SC ) ) ORDER GRANTING MOTION TO ) DISMISS ) ) ) ) ) ) ) ) RAFAEL A. MARTINEZ, 6 Plaintiff, 7 United States District Court v. 9 For the Northern District of California 8 WELLS FARGO BANK, N.A., et al. 10 Defendants. 11 12 I. INTRODUCTION Plaintiff Rafael A. Martinez ("Plaintiff") brings this action 13 14 to enjoin the foreclosure sale of his home by Defendants Wells 15 Fargo Bank, N.A. ("Wells Fargo"), Cal-Western Reconveyance 16 Corporation ("Cal-Western"), and Does 1 through 50 (collectively, 17 "Defendants"). 18 Defendants improperly recorded a Notice of Default and election to 19 sell and, therefore, the foreclosure sale may not proceed. 20 before the Court are Wells Fargo's Motions to Dismiss and Strike. 21 ECF Nos. 7 ("MTD"), 8 ("MTS"). 22 Nos. 24 ("Opp'n"), 26 ("Reply"). 23 the Court GRANTS Wells Fargo's Motion to Dismiss and DENIES Wells 24 Fargo's Motion to Strike as moot. The gravamen of Plaintiff's complaint is that Now The Motions are fully briefed. ECF For the reasons set forth below, 25 26 27 28 II. BACKGROUND As it must on a motion to dismiss, the Court takes all well- pleaded allegations in Plaintiff's Complaint as true. The Court 1 also takes judicial notice of all documents attached to Plaintiff's 2 Complaint. 3 World Savings Bank, FSB ("WSB"), Wells Fargo's predecessor in 4 interest, to secure a loan against his property that was recorded 5 on August 22, 2006. 6 ¶ 10. 7 On August 14, 2006, Plaintiff borrowed $429,000 from ECF No. 1 ("Not. of Removal) Ex. A. ("Compl.") Though it is not alleged in the Complaint, it appears that 8 Plaintiff fell behind on his loan payments. 9 Western recorded a Notice of Default and election to sell. On July 6, 2009, CalId. ¶ United States District Court For the Northern District of California 10 11. 11 make payments on the loan; and (2) Wells Fargo, the beneficiary on 12 the loan, elected to sell the property to satisfy Plaintiff's 13 obligations. 14 Defendants published a Notice of Trustee Sale, stating their intent 15 to sell the property at public auction on August 22, 2011. 16 ¶ 13, Ex. D ("Not. of Tr.'s Sale"). 17 sale has yet occurred. 18 The Notice of Default stated that: (1) Plaintiff failed to Compl. Ex. B ("Not. of Default"). On July 27, 2011, Compl. It does not appear that the The Notice of Default identifies Cal-Western as "either the 19 original trustee, the duly appointed substituted trustee, or acting 20 [] agent for the trustee or beneficiary under [the] deed of trust." 21 Not. of Default at 2. 22 Western as the "duly appointed trustee." 23 August 13, 2009, Cal-Western recorded a Substitution of Trustee. 24 Compl. Ex. C. ("Substitution of Tr."). 25 2, 2009 and was notarized on July 14, 2009. 26 Substitution of Trustee is an affidavit, dated August 11, 2009, 27 stating that a copy of the Substitution of Trustee had been mailed 28 to Plaintiff, "prior to or concurrently with the recording" of the The Notice of Trustee's Sale identifies Cal- 2 Not. of Tr.'s Sale. On This document is dated July Id. Attached to the 1 Substitution of Trustee and "in the manner provided in Section 2 2934a of the Civil Code of California[.]" 3 Id. Plaintiff filed the instant action in California Superior 4 Court in and for the County of Alameda on August 17, 2011. 5 Wells Fargo subsequently removed the action to federal court on 6 diversity grounds. 7 five causes of action: (1) wrongful foreclosure; (2) violation of 8 the Unfair Competition Law ("UCL"), Cal. Bus. and Prof. Code § 9 17200; (3) unfair business practices; (4) misrepresentation; and Not. of Removal at 2. Compl. The Complaint asserts United States District Court For the Northern District of California 10 (5) quiet title. 11 are predicated on the allegation that the trustee sale is improper 12 under California Civil Code § 2924 because Cal-Western had not been 13 substituted as the trustee on the Deed of Trust at the time it 14 recorded the Notice of Default and the Notice of Trustee's Sale. 15 See id. ¶¶ 18, 20, 29. 16 for quiet title, Plaintiff alleges that Defendants have no legal or 17 equitable right to Plaintiff's property because they have yet to 18 produce "the original note." Compl. ¶¶ 16-37. The first four causes of action With respect to the last cause of action Id. ¶ 35. 19 20 21 III. LEGAL STANDARD A motion to dismiss under Federal Rule of Civil Procedure 22 12(b)(6) "tests the legal sufficiency of a claim." 23 Block, 250 F.3d 729, 732 (9th Cir. 2001). 24 on the lack of a cognizable legal theory or the absence of 25 sufficient facts alleged under a cognizable legal theory." 26 Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 27 1988). 28 should assume their veracity and then determine whether they Navarro v. "Dismissal can be based "When there are well-pleaded factual allegations, a court 3 1 plausibly give rise to an entitlement to relief." 2 Iqbal, 129 S. Ct. 1937, 1950 (2009). 3 court must accept as true all of the allegations contained in a 4 complaint is inapplicable to legal conclusions. 5 recitals of the elements of a cause of action, supported by mere 6 conclusory statements, do not suffice." 7 Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 8 in a complaint must be both "sufficiently detailed to give fair 9 notice to the opposing party of the nature of the claim so that the Ashcroft v. However, "the tenet that a Threadbare Id. (citing Bell Atl. The allegations made United States District Court For the Northern District of California 10 party may effectively defend against it" and "sufficiently 11 plausible" such that "it is not unfair to require the opposing 12 party to be subjected to the expense of discovery." 13 633 F.3d 1191, 1204 (9th Cir. 2011). Starr v. Baca, 14 15 IV. DISCUSSION 16 A. 17 Plaintiff's first four claims are predicated on the allegation Substitution of Trustee 18 that Defendants somehow violated California Civil Code § 2924 19 because Cal-Western recorded the Notice of Default and Notice of 20 Trustee's Sale before it had been substituted as the trustee on 21 Plaintiff's Deed of Trust. 22 provisions or language in Civil Code § 2924 on which Plaintiff's 23 claims rely. 24 there was nothing improper about the manner or timing of Cal- 25 Western's substitution as trustee on Plaintiff's Deed of Trust or 26 the recording of the Notice of Default. 27 28 The Complaint does not identify the In any event, Plaintiff's claims must fail because Construing the Complaint liberally, it appears that Plaintiff is attempting to allege a violation of Civil Code § 2924(a)(1), 4 1 which states that, before a foreclosure sale may commence, "[t]he 2 trustee, mortgagee, or beneficiary, or any of their authorized 3 agents shall first file . . . a notice of default." 4 complied with this provision. 5 Default on July 6, 2009 and there is no indication that a 6 foreclosure sale has yet occurred. 7 Defendants Cal-Western recorded the Notice of To the extent that Plaintiff is asserting that Cal-Western 8 could not have properly recorded the Notice of Default on July 6, 9 2009 because Cal-Western was not yet the substituted trustee at United States District Court For the Northern District of California 10 that time, his claim fails. 11 indicates that Cal-Western was substituted as Trustee on July 2, 12 2009, four days before Cal-Western recorded the Notice of Default. 13 Second, even if Cal-Western was not the substituted trustee by July 14 6, 2009, either because its substitution was not notarized until 15 July 14, 2009 or because its substitution was not recorded until 16 August 13, 2009, Cal-Western still properly recorded the Notice of 17 Default as Wells Fargo's agent. 18 Default, Cal-Western was either acting as the trustee or as Wells 19 Fargo's acting agent. 20 allows for the substitution of a trustee after a notice of default 21 has been recorded.1 22 First, the Substitution of Trustee Indeed, according to the Notice of Third, Civil Code § 2934a(c) anticipates and As Plaintiff has not alleged a violation of Civil Code § 2924, 23 his first four causes of action fail as a matter of law. 24 Accordingly, these claims are DISMISSED WITHOUT LEAVE TO AMEND. 25 /// 26 1 27 28 In his opposition brief, Plaintiff also asserts that Defendants "violated and ignored Section 2923.5(b) of the California Civil Code." Opp'n at 3. No such violation is alleged in the Complaint. Nor does Plaintiff plead any facts, either in his Complaint or in his opposition brief, which would support such an allegation. 5 1 B. 2 Plaintiff's fifth cause of action for quiet title is based on Quiet Title 3 the allegation that Wells Fargo "has yet to produce the original 4 note," and, therefore, "is without any right whatsoever and . . . 5 has no legal or equitable right, claim, or interest in said 6 property." 7 number of courts have rejected the notion that California law 8 requires production of the original note to initiate nonjudicial 9 foreclosure proceedings. Compl. ¶ 35. As Wells Fargo correctly points out, a MTD at 13 (citing Serrano v. World Sav. United States District Court For the Northern District of California 10 Bank, No. 11-CV-00105-LHK, 2011 U.S. Dist. LEXIS 47766, at *9 (N.D. 11 Cal. May 3, 2011); Waqavesi v. Indymac Fed. Bank, FSB, No. 09-01601 12 WBS GGH, 2009 U.S. Dist. LEXIS 105555, at *20-21 (E.D. Cal. Nov. 13 11, 2009)). 14 Plaintiff's claim for quiet title fails as a matter of law and 15 DISMISSES the claim WITHOUT LEAVE TO AMEND. Plaintiff offers no response. The Court finds that 16 17 18 V. CONCLUSION For the foregoing reasons, the Court GRANTS Defendant Wells 19 Fargo, N.A.'s Motion to Dismiss and DENIES Wells Fargo's Motion to 20 Strike as moot. 21 DISMISSED WITHOUT LEAVE TO AMEND. Plaintiff Rafael A. Martinez's entire complaint is 22 23 IT IS SO ORDERED. 24 25 26 Dated: February 21, 2012 UNITED STATES DISTRICT JUDGE 27 28 6

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