Sowinski v. Wells Fargo Bank, N.A.

Filing 58

Order by Hon. Samuel Conti granting in part and denying in part 51 Motion to Dismiss.(sclc1, COURT STAFF) (Filed on 6/4/2013)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 RICHARD SOWINSKI, Plaintiff, 10 For the Northern District of California United States District Court 9 v. 11 12 WELLS FARGO BANK, N.A., and DOES 1-10, 13 Defendants. 14 15 I. 16 ) ) ) ) ) ) ) ) ) ) ) Case No. 11-6431-SC ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS THIRD AMENDED COMPLAINT INTRODUCTION Plaintiff Richard Sowinski ("Plaintiff") challenges Defendant 17 Wells Fargo Bank, N.A.'s ("Defendant") foreclosure of his 18 residential mortgage and the subsequent trustee sale of his 19 residence. 20 No. 50 ("3AC"), which Defendant now moves to dismiss pursuant to 21 Federal Rule of Civil Procedure 12(b)(6), ECF No. 51 ("MTD"). 22 is the fourth motion to dismiss filed in this case. 23 motion to dismiss was granted in part and denied in part. 24 49 ("Feb. 26 Order").1 25 Court, Defendant argues that the 3AC fails to cure the deficiencies 26 previously identified by the Court and also raises new grounds to Plaintiff recently filed a third amended complaint, ECF It The last ECF No. In the motion to dismiss now before the 27 28 1 Sowinski v. Wells Fargo Bank, N.A., 11-6431-SC, 2013 WL 706825, 2013 U.S. Dist. LEXIS 26330 (N.D. Cal. Feb. 26, 2013). 1 dismiss claims that were previously left undisturbed. The motion 2 is fully briefed, ECF Nos. 54 ("Opp'n"), 56 ("Reply"), and suitable 3 for determination without oral argument pursuant to Civil Local 4 Rule 7-1(b). 5 GRANTED in part and DENIED in part. For the reasons set forth below, the motion is 6 7 8 9 II. BACKGROUND As it must on a Rule 12(b)(6) motion to dismiss, the Court takes all well-pleaded factual allegations as true. On February 3, United States District Court For the Northern District of California 10 2006 Plaintiff and his wife, Mary B. Sowinski, borrowed $672,000 11 from World Savings Bank, FSB ("WSB"). 12 loan was secured by a deed of trust recorded against Plaintiff's 13 residence in Walnut Creek, California. 14 judicially noticeable correspondence from federal banking 15 regulators, WSB later changed its name to Wachovia Mortgage, FSB, 16 which was subsequently converted to Wells Fargo Bank Southwest, 17 N.A., and then merged into Defendant. 18 Feb. 26 Order at 2. Id. The According to Id. At the time of the loan transaction, Plaintiff was sixty-eight 19 years old and allegedly suffered from "pre-Alzheimers." 20 Plaintiff alleges that he was intentionally misled as to the terms 21 of the loan transaction. 22 that: (1) WSB falsely represented that the interest rate on the 23 loan was fixed rather than adjustable; (2) WSB falsely stated 24 Plaintiff's income and the value of the property on the loan 25 application; (3) Plaintiff was not permitted to read the loan 26 documents and, "because of his weakened mental state," he could not 27 have understood them if he had been. 28 these alleged misrepresentations, Plaintiff took out a loan he Id. Id. Specifically, Plaintiff alleges 2 3AC ¶ 9. As a result of 1 2 could not afford. See id. ¶ 15. In January 2008, Plaintiff contacted Defendant about increases Id. ¶ 25. One of Wells Fargo's 3 to his monthly loan payments. 4 agents offered to assist Plaintiff with a loan modification, and 5 for the next twenty-eight months, Plaintiff submitted and re- 6 submitted loan modification application materials. 7 Plaintiff alleges that Wells Fargo never reached a decision on his 8 application. 9 Id. ¶¶ 25-26. Id. ¶ 26. On August 18, 2011, a notice of default was recorded with the United States District Court For the Northern District of California 10 Contra Costa County Recorder's Office, indicating that Plaintiff 11 was over $46,000 in arrears on his loan. 12 December 2, 2011, Plaintiff filed the instant action in California 13 Superior Court, and Defendant timely removed to this Court. 14 On December 12, 2011, a few days after the action was filed, a 15 trustee's sale was conducted, through which Wells Fargo allegedly 16 sold the property to itself at a below-market price. 17 According to the trustee's deed upon sale, the total debt at the 18 time of sale was $763,042.60. 19 Feb. 26 Order at 3. On Id. Id. Id. On or about December 13, 2011, Monique Martin met with 20 Plaintiff and his wife at their Walnut Creek residence. 21 Martin identified herself as the local agent for Defendant and 22 represented that she was in charge of the foreclosure process. 23 Plaintiff later called a supervisor in Defendant's organization and 24 confirmed Martin's status. 25 wife $10,000 "cash for keys" if they vacated the property by 26 January 2, 2012. 27 28 Id. 3AC ¶ 29. Id. Martin offered Plaintiff and his Id. Plaintiff and his wife later informed Martin that "they had no choice but to accept the offer but would need additional time to 3 1 move [out]." Id. ¶ 30. Martin agreed that the $10,000 cash-for- 2 keys offer would remain open through January 20, 2012 and that 3 Defendant would only pay Plaintiff and his wife if they vacated the 4 home by that date in "clean broom" condition. 5 accepted the offer and thoroughly cleaned and vacated the property 6 on January 15, 2012. 7 she informed him that Defendant had revoked the offer because there 8 was a lawsuit pending. 9 Plaintiff's counsel that Defendant would only pay the $10,000 if Id. Id. Plaintiff When Plaintiff gave the keys to Martin, Id. ¶ 31. Defendant's counsel informed United States District Court For the Northern District of California 10 Plaintiff agreed to dismiss this action with prejudice. 11 Plaintiff refused this offer. 12 an unlawful detainer judgment against Plaintiff, destroying 13 Plaintiff's credit rating. 14 Id. Id. Defendant subsequently obtained Id. ¶ 32. There have been several rounds of motion practice in 15 connection with Plaintiff's pleading. 16 dismiss was granted in part and denied in part. 17 to dismiss Plaintiff's claim for quiet title to the extent that it 18 was not premised on deficiencies in the foreclosure process. 19 26 Order at 9. 20 which was brought in connection with the parties cash-for-keys 21 agreement, was dismissed with leave to amend so that Plaintiff 22 could plead the exact terms of the oral contract and Defendant's 23 agent's authority to enter into it. 24 dismissed with leave to amend Plaintiff's claim for elder abuse, 25 finding that Plaintiff's allegations were implausible as pled. 26 at 12-13. 27 28 Defendant's last motion to The Court declined Feb. Plaintiff's claim for breach of oral contract, Id. at 11. The Court also Id. All other claims were dismissed with prejudice. Plaintiff's 3AC asserts claims for (1) quiet title, (2) breach of oral contract, and (3) elder abuse. 4 Defendant now moves to 1 dismiss all three claims pursuant to Federal Rule of Civil 2 Procedure 12(b)(6) for failure to state a claim. 3 4 III. LEGAL STANDARD A Rule 12(b)(6) motion to dismiss "tests the legal sufficiency 5 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 6 of a claim." 7 "Dismissal can be based on the lack of a cognizable legal theory or 8 the absence of sufficient facts alleged under a cognizable legal 9 theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 United States District Court For the Northern District of California 10 (9th Cir. 1988). "When there are well-pleaded factual allegations, 11 a court should assume their veracity and then determine whether 12 they plausibly give rise to an entitlement to relief." 13 Iqbal, 556 U.S. 662, 664 (2009). 14 must accept as true all of the allegations contained in a complaint 15 is inapplicable to legal conclusions. 16 elements of a cause of action, supported by mere conclusory 17 statements, do not suffice." 18 Twombly, 550 U.S. 544, 555 (2007)). 19 complaint must be both "sufficiently detailed to give fair notice 20 to the opposing party of the nature of the claim so that the party 21 may effectively defend against it" and "sufficiently plausible" 22 such that "it is not unfair to require the opposing party to be 23 subjected to the expense of discovery." 24 1191, 1204 (9th Cir.2011). 25 /// 26 /// 27 /// 28 /// Ashcroft v. However, "the tenet that a court Threadbare recitals of the Id. at 663 (citing Bell Atl. Corp. v. 5 The allegations made in a Starr v. Baca, 633 F.3d 1 IV. DISCUSSION 2 A. Quiet Title 3 Despite the fact that the Court left Plaintiff's quiet title 4 claim largely undisturbed in its February 26 Order on Defendant's 5 previous motion to dismiss, Defendant moves to dismiss that claim 6 again. 7 validity of the underlying debt because he previously affirmed its 8 validity by agreeing to the alleged cash-for-keys agreement; (2) 9 Plaintiff failed to allege the necessary elements of a claim for Defendant argues (1) that Plaintiff cannot now attack the United States District Court For the Northern District of California 10 quiet title; and (3) pursuant to Rule 12(b)(7), Plaintiff failed 11 to join a necessary party, his wife, who is also a title-holder.2 12 Mot. at 1, 3-5. These arguments were not raised in any of Defendant's three 13 14 previous motions to dismiss. 15 Accordingly, Federal Rule of Civil Procedure 12(g)(2) bars 16 Defendant from raising them now. 17 as provided in Rule 12(h)(2) . . . , a party that makes a motion 18 under this rule must not make another motion under this rule 19 raising a defense or objection that was available to the party but 20 omitted from its earlier motion." 21 to state a claim upon which relief can be granted to join a person 22 required by Rule 19(b), or to state a legal defense to a claim may 23 be raised" in any Rule 7(a) pleading, by a Rule 12(c) motion, or at 24 trial. 25 2 26 27 28 See ECF Nos. 11, 18, 39. Rule 12(g)(2) provides: "Except Rule 12(h)(2) provides: "Failure The Court notes that Defendant's arguments regarding Rule 12(b)(7) and the joinder of Plaintiff's wife are cursory at best. The entirety of Defendant's argument is contained in two short sentences in the introduction to its motion. Defendant does not cite to any law concerning joinder or cite to any judicially noticeable documents showing that Plaintiff's wife was also a title holder. 6 1 In sum, under Rule 12(g), Defendant was required to 2 consolidate all Rule 12 defenses in a single pre-answer motion to 3 dismiss. 4 arguments concerning Plaintiff's quiet title claim. 5 its motion to dismiss that claim is denied. Defendant failed to do so with respect to its new Accordingly, 6 B. Breach of Oral Contract 7 Defendant contends that Plaintiff's breach of oral contract 8 claim remains flawed. First, Defendant asserts that Plaintiff has 9 not articulated Martin's authority to bind Defendant to the cash- United States District Court For the Northern District of California 10 for-keys agreement. 11 specifically alleged that Martin represented that she was in charge 12 of the foreclosure process and that Plaintiff confirmed this fact 13 with one of Defendant's supervisors. 14 that Plaintiff could not have reasonably believed that Martin had 15 authority because the foreclosure process was complete by the time 16 she made the cash-for-keys offer. 17 to be clutching at straws. 18 foreclosure of Plaintiff's home, as Defendant's own agents 19 allegedly confirmed, it was reasonable for Plaintiff to believe 20 that she would also have the authority to make arrangements for 21 Defendant to take possession of the property. 22 Mot. at 5. However, Plaintiff has 3AC ¶ 29. Mot at 5-6. Defendant suggests Defendant appears If Martin was in charge of the Defendant's remaining arguments seek to hold Plaintiff to a 23 curiously high pleading standard. Despite the fact that Plaintiff 24 alleges that he and his wife accepted the cash-for-keys offer 25 sometime around January 15, 2012, see 3AC ¶¶ 29-30, Defendant 26 argues that Plaintiff cannot state a claim because he failed to 27 allege when or how he accepted the offer. 28 also argues that Plaintiff failed to plead that he left the 7 Mot. at 6. Defendant 1 property in "clean broom condition" or relinquished possession of 2 the property, id., in spite of Plaintiff's allegations that he 3 thoroughly cleaned and vacated the property on or around January 4 15, 2012, 3AC ¶ 30. 5 related to the alleged cash-for-keys agreement. 6 a plausible claim for relief. 7 Court finds that Plaintiff has met that burden.3 He need only plead See Iqbal, 556 U.S. at 664. The Accordingly, the Court declines to dismiss Plaintiff's claim 8 9 Plaintiff need not plead every single detail for breach of an oral contract. United States District Court For the Northern District of California 10 C. Elder Abuse 11 As pled, Plaintiff's claim for elder abuse is predicated on: 12 (1) the 2006 loan transaction, which Plaintiff claims was 13 unconscionable; (2) the foreclosure process, which allegedly 14 amounted to illegal "double-tracking"; and (3) the cash-for-keys 15 agreement, which was allegedly intended to trick Plaintiff to 16 vacate the property without a fight. 17 that Plaintiff's conclusory double-tracking allegations are 18 insufficient. 19 Plaintiff's claim for elder abuse is DISMISSED WITH PREJUDICE. Feb. 26 Order at 12. The Court has already held Accordingly, that aspect of Defendant argues that Plaintiff's elder abuse claim is time- 20 21 barred to the extent that it is predicated on the 2006 loan 22 transaction. 23 limitations is not relevant because his elder abuse claim relates 24 to ongoing conduct over a series of years. Mot. at 6. Plaintiff responds that the statute of Opp'n at 5. Defendant 25 26 27 28 3 Defendant raises a number of other arguments for the first time in its reply brief. Reply at 4-6. As Plaintiff was not provided an opportunity to respond to these arguments, the Court does not consider them. See Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) ("[A]n argument raised for the first time in a reply brief, . . . is not an argument that we may consider here."). 8 1 argues that the court should apply the "separate accrual rule," 2 whereby the statute of limitations applies separately to causes of 3 action arising out of distinct injuries or occurrences. 4 (citing Grimmett v. Brown, 75 F.3d 506, 511 (9th Cir. 1996) 5 (applying the separate accrual rule in the RICO context)). 6 However, Defendant has not cited any California authority applying 7 the separate accrual rule in this context, and thus has failed to 8 meet its burden as the moving party. 9 Reply at 7 Plaintiff also alleges that Defendant violated the elder abuse United States District Court For the Northern District of California 10 statute, Cal. Welf. & Inst. Code § 15600 et al., by tricking him 11 into giving up possession of his property by offering the cash-for- 12 keys agreement. 13 of the property through the cash-for-keys agreement, but through an 14 unlawful detainer action, proceedings that Defendant claims are 15 privileged under California law. 16 pleading, Plaintiff responds that Defendant took possession of the 17 property before the unlawful detainer judgment was rendered. 18 at 6-7. 19 the property is a factual issue, not amenable for determination on 20 a motion to dismiss. 21 Defendant argues that it did not obtain possession Mot. at 7. Consistent with his Opp'n The dispute over when and how Defendant took possession of Defendant also argues that Plaintiff has failed to plead that 22 the abusive conduct alleged was authorized or ratified by an 23 officer, director, or managing agent of Defendant, as required by 24 the elder abuse statute. 25 § 15657(c)). 26 director, or managing agent of Defendant authorized the acts 27 alleged in the complaint. 28 actually ratified may be determined through discovery and is not Mot. at 7 (citing Cal. Welf. & Inst. Code The Court finds that it is plausible that an officer, Whether or not the conduct at issue was 9 1 appropriate for resolution here. Accordingly, Plaintiff's claim for elder abuse is DISMISSED 2 3 WITH PREJUDICE to the extent that it is predicated on the double- 4 tracking allegations in the Complaint. 5 all other respects. It remains undisturbed in 6 7 8 9 V. CONCLUSION For the foregoing reasons, Defendant Wells Fargo Bank, N.A.'s motion to dismiss is GRANTED in part and DENIED in part. United States District Court For the Northern District of California 10 Plaintiff's elder abuse claim is DISMISSED WITH PREJUDICE to the 11 extent discussed in Section IV.C supra. 12 remain undisturbed. Plaintiff's other claims 13 14 IT IS SO ORDERED. 15 16 17 Dated: June 4, 2013 UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28 10

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