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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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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RICHARD SOWINSKI,
Plaintiff,

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For the Northern District of California

United States District Court

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v.

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WELLS FARGO BANK, N.A., and DOES
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Defendants.

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I.

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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

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Wells Fargo Bank, N.A.'s ("Defendant") foreclosure of his

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residential mortgage and the subsequent trustee sale of his

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residence.

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No. 50 ("3AC"), which Defendant now moves to dismiss pursuant to

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Federal Rule of Civil Procedure 12(b)(6), ECF No. 51 ("MTD").

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is the fourth motion to dismiss filed in this case.

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motion to dismiss was granted in part and denied in part.

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49 ("Feb. 26 Order").1

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Court, Defendant argues that the 3AC fails to cure the deficiencies

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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

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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).

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dismiss claims that were previously left undisturbed.

The motion

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is fully briefed, ECF Nos. 54 ("Opp'n"), 56 ("Reply"), and suitable

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for determination without oral argument pursuant to Civil Local

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Rule 7-1(b).

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GRANTED in part and DENIED in part.

For the reasons set forth below, the motion is

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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

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2006 Plaintiff and his wife, Mary B. Sowinski, borrowed $672,000

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from World Savings Bank, FSB ("WSB").

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loan was secured by a deed of trust recorded against Plaintiff's

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residence in Walnut Creek, California.

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judicially noticeable correspondence from federal banking

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regulators, WSB later changed its name to Wachovia Mortgage, FSB,

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which was subsequently converted to Wells Fargo Bank Southwest,

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N.A., and then merged into Defendant.

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Feb. 26 Order at 2.

Id.

The

According to

Id.

At the time of the loan transaction, Plaintiff was sixty-eight

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years old and allegedly suffered from "pre-Alzheimers."

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Plaintiff alleges that he was intentionally misled as to the terms

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of the loan transaction.

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that: (1) WSB falsely represented that the interest rate on the

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loan was fixed rather than adjustable; (2) WSB falsely stated

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Plaintiff's income and the value of the property on the loan

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application; (3) Plaintiff was not permitted to read the loan

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documents and, "because of his weakened mental state," he could not

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have understood them if he had been.

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these alleged misrepresentations, Plaintiff took out a loan he

Id.

Id.

Specifically, Plaintiff alleges

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3AC ¶ 9.

As a result of

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could not afford.

See id. ¶ 15.

In January 2008, Plaintiff contacted Defendant about increases
Id. ¶ 25.

One of Wells Fargo's

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to his monthly loan payments.

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agents offered to assist Plaintiff with a loan modification, and

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for the next twenty-eight months, Plaintiff submitted and re-

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submitted loan modification application materials.

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Plaintiff alleges that Wells Fargo never reached a decision on his

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application.

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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

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Contra Costa County Recorder's Office, indicating that Plaintiff

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was over $46,000 in arrears on his loan.

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December 2, 2011, Plaintiff filed the instant action in California

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Superior Court, and Defendant timely removed to this Court.

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On December 12, 2011, a few days after the action was filed, a

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trustee's sale was conducted, through which Wells Fargo allegedly

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sold the property to itself at a below-market price.

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According to the trustee's deed upon sale, the total debt at the

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time of sale was $763,042.60.

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Feb. 26 Order at 3.

On

Id.

Id.

Id.

On or about December 13, 2011, Monique Martin met with

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Plaintiff and his wife at their Walnut Creek residence.

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Martin identified herself as the local agent for Defendant and

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represented that she was in charge of the foreclosure process.

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Plaintiff later called a supervisor in Defendant's organization and

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confirmed Martin's status.

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wife $10,000 "cash for keys" if they vacated the property by

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January 2, 2012.

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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

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move [out]."

Id. ¶ 30.

Martin agreed that the $10,000 cash-for-

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keys offer would remain open through January 20, 2012 and that

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Defendant would only pay Plaintiff and his wife if they vacated the

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home by that date in "clean broom" condition.

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accepted the offer and thoroughly cleaned and vacated the property

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on January 15, 2012.

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she informed him that Defendant had revoked the offer because there

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was a lawsuit pending.

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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

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Plaintiff agreed to dismiss this action with prejudice.

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Plaintiff refused this offer.

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an unlawful detainer judgment against Plaintiff, destroying

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Plaintiff's credit rating.

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Id.

Id.

Defendant subsequently obtained

Id. ¶ 32.

There have been several rounds of motion practice in

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connection with Plaintiff's pleading.

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dismiss was granted in part and denied in part.

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to dismiss Plaintiff's claim for quiet title to the extent that it

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was not premised on deficiencies in the foreclosure process.

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26 Order at 9.

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which was brought in connection with the parties cash-for-keys

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agreement, was dismissed with leave to amend so that Plaintiff

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could plead the exact terms of the oral contract and Defendant's

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agent's authority to enter into it.

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dismissed with leave to amend Plaintiff's claim for elder abuse,

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finding that Plaintiff's allegations were implausible as pled.

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at 12-13.

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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.

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Defendant now moves to

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dismiss all three claims pursuant to Federal Rule of Civil

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Procedure 12(b)(6) for failure to state a claim.

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III. LEGAL STANDARD
A Rule 12(b)(6) motion to dismiss "tests the legal sufficiency

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

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of a claim."

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"Dismissal can be based on the lack of a cognizable legal theory or

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the absence of sufficient facts alleged under a cognizable legal

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theory."

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699

United States District Court

For the Northern District of California

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(9th Cir. 1988).

"When there are well-pleaded factual allegations,

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a court should assume their veracity and then determine whether

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they plausibly give rise to an entitlement to relief."

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Iqbal, 556 U.S. 662, 664 (2009).

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

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is inapplicable to legal conclusions.

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elements of a cause of action, supported by mere conclusory

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statements, do not suffice."

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

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complaint must be both "sufficiently detailed to give fair notice

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

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may effectively defend against it" and "sufficiently plausible"

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such that "it is not unfair to require the opposing party to be

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subjected to the expense of discovery."

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1191, 1204 (9th Cir.2011).

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Ashcroft v.

However, "the tenet that a court

Threadbare recitals of the

Id. at 663 (citing Bell Atl. Corp. v.

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The allegations made in a

Starr v. Baca, 633 F.3d

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IV.

DISCUSSION

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A.

Quiet Title

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Despite the fact that the Court left Plaintiff's quiet title

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claim largely undisturbed in its February 26 Order on Defendant's

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previous motion to dismiss, Defendant moves to dismiss that claim

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again.

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validity of the underlying debt because he previously affirmed its

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validity by agreeing to the alleged cash-for-keys agreement; (2)

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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

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quiet title; and (3) pursuant to Rule 12(b)(7), Plaintiff

failed

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to join a necessary party, his wife, who is also a title-holder.2

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Mot. at 1, 3-5.
These arguments were not raised in any of Defendant's three

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previous motions to dismiss.

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Accordingly, Federal Rule of Civil Procedure 12(g)(2) bars

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Defendant from raising them now.

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as provided in Rule 12(h)(2) . . . , a party that makes a motion

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under this rule must not make another motion under this rule

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raising a defense or objection that was available to the party but

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omitted from its earlier motion."

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to state a claim upon which relief can be granted to join a person

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required by Rule 19(b), or to state a legal defense to a claim may

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be raised" in any Rule 7(a) pleading, by a Rule 12(c) motion, or at

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trial.

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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.

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In sum, under Rule 12(g), Defendant was required to

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consolidate all Rule 12 defenses in a single pre-answer motion to

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dismiss.

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arguments concerning Plaintiff's quiet title claim.

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its motion to dismiss that claim is denied.

Defendant failed to do so with respect to its new
Accordingly,

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B.

Breach of Oral Contract

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Defendant contends that Plaintiff's breach of oral contract

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claim remains flawed.

First, Defendant asserts that Plaintiff has

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not articulated Martin's authority to bind Defendant to the cash-

United States District Court

For the Northern District of California

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for-keys agreement.

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specifically alleged that Martin represented that she was in charge

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of the foreclosure process and that Plaintiff confirmed this fact

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with one of Defendant's supervisors.

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that Plaintiff could not have reasonably believed that Martin had

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authority because the foreclosure process was complete by the time

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she made the cash-for-keys offer.

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to be clutching at straws.

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foreclosure of Plaintiff's home, as Defendant's own agents

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allegedly confirmed, it was reasonable for Plaintiff to believe

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that she would also have the authority to make arrangements for

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Defendant to take possession of the property.

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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

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curiously high pleading standard.

Despite the fact that Plaintiff

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alleges that he and his wife accepted the cash-for-keys offer

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sometime around January 15, 2012, see 3AC ¶¶ 29-30, Defendant

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argues that Plaintiff cannot state a claim because he failed to

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allege when or how he accepted the offer.

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also argues that Plaintiff failed to plead that he left the

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Mot. at 6.

Defendant

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property in "clean broom condition" or relinquished possession of

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the property, id., in spite of Plaintiff's allegations that he

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thoroughly cleaned and vacated the property on or around January

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15, 2012, 3AC ¶ 30.

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related to the alleged cash-for-keys agreement.

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a plausible claim for relief.

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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

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Plaintiff need not plead every single detail

for breach of an oral contract.

United States District Court

For the Northern District of California

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C.

Elder Abuse

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As pled, Plaintiff's claim for elder abuse is predicated on:

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(1) the 2006 loan transaction, which Plaintiff claims was

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unconscionable; (2) the foreclosure process, which allegedly

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amounted to illegal "double-tracking"; and (3) the cash-for-keys

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agreement, which was allegedly intended to trick Plaintiff to

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vacate the property without a fight.

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that Plaintiff's conclusory double-tracking allegations are

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insufficient.

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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-

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barred to the extent that it is predicated on the 2006 loan

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transaction.

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limitations is not relevant because his elder abuse claim relates

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to ongoing conduct over a series of years.

Mot. at 6.

Plaintiff responds that the statute of

Opp'n at 5.

Defendant

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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.").

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argues that the court should apply the "separate accrual rule,"

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whereby the statute of limitations applies separately to causes of

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action arising out of distinct injuries or occurrences.

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(citing Grimmett v. Brown, 75 F.3d 506, 511 (9th Cir. 1996)

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(applying the separate accrual rule in the RICO context)).

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However, Defendant has not cited any California authority applying

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the separate accrual rule in this context, and thus has failed to

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meet its burden as the moving party.

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Reply at 7

Plaintiff also alleges that Defendant violated the elder abuse

United States District Court

For the Northern District of California

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statute, Cal. Welf. & Inst. Code § 15600 et al., by tricking him

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into giving up possession of his property by offering the cash-for-

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keys agreement.

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of the property through the cash-for-keys agreement, but through an

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unlawful detainer action, proceedings that Defendant claims are

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privileged under California law.

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pleading, Plaintiff responds that Defendant took possession of the

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property before the unlawful detainer judgment was rendered.

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at 6-7.

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the property is a factual issue, not amenable for determination on

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a motion to dismiss.

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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

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the abusive conduct alleged was authorized or ratified by an

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officer, director, or managing agent of Defendant, as required by

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the elder abuse statute.

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§ 15657(c)).

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director, or managing agent of Defendant authorized the acts

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alleged in the complaint.

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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

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appropriate for resolution here.
Accordingly, Plaintiff's claim for elder abuse is DISMISSED

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WITH PREJUDICE to the extent that it is predicated on the double-

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tracking allegations in the Complaint.

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all other respects.

It remains undisturbed in

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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

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Plaintiff's elder abuse claim is DISMISSED WITH PREJUDICE to the

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extent discussed in Section IV.C supra.

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remain undisturbed.

Plaintiff's other claims

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IT IS SO ORDERED.

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Dated:

June 4, 2013
UNITED STATES DISTRICT JUDGE

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