Almogela v. World Savings Bank et al

Filing 39

ORDER dismissing case. Signed by Judge Edward M. Chen on 12/19/2012. (emclc1, COURT STAFF) (Filed on 12/19/2012)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 8 SEGUNDO ALMOGELA, 9 Plaintiff, v. 11 For the Northern District of California United States District Court 10 No. C-12-3644 EMC WORLD SAVINGS BANK, et al., 12 ORDER DISMISSING CASE Defendants. ___________________________________/ (Docket Nos. 36, 38) 13 14 15 Previously, the Court issued an order instructing Plaintiff to show cause as to why his 16 complaint should not be dismissed with prejudice based on his failure to allege any facts (which 17 would include attaching any document to his complaint) to support his claim that his loan was sold 18 to a REMIC Trust. The Court also ordered Plaintiff’s counsel to show cause as to why he filed the 19 complaint on Plaintiff’s behalf under the circumstances. See Docket No. 36 (order). In response, 20 counsel for Plaintiff submitted a declaration. See Docket No. 38 (Peabody declaration). Having 21 reviewed the contents of the declaration, the Court hereby dismisses the case with prejudice and 22 further sanctions Plaintiff’s counsel. 23 Dismissal with prejudice is warranted because, contrary to what counsel suggests in his 24 declaration, see Peabody Decl. ¶ 16, it is clear from the face of the complaint that the complaint was 25 based on the audit. See, e.g., FAC ¶ 29 (alleging that, “[a]ccording to the audit of the loan . . . the 26 following facts were determined” – e.g., that the loan was securitized). As noted in the Court’s prior 27 order, there is no evidence in the audit report to support the allegations of securitization. 28 1 Even if counsel’s declaration were given some credit – i.e., that he filed the complaint not 2 only on the basis of the audit but also on the basis of his experience – counsel has failed to provide 3 an adequate showing that his experience justified the complaint. For example, counsel asserts that 4 the loan at issue must have been securitized because, based on prior “securitization analyses 5 performed on World Savings Bank loans, it has been my determination that World Savings Bank as 6 a practice and policy sold each and every loan that it originated prior to the sale of its assets to 7 Wachovia Bank.”1 Peabody Decl. ¶ 5. However, counsel fails to provide any details about these 8 prior “securitization analyses,” including how many of these analyses there were. In other words, 9 did counsel arrive at this conclusion based on five prior cases? Ten? One hundred? Even if counsel reached this conclusion based on a substantial number of prior cases, he cites no evidence 11 For the Northern District of California United States District Court 10 supporting his claim other than his own assertion. The Court is not persuaded that his conclusion 12 was justified, particularly when counsel’s own “expert witness in the area of lender legal standing as 13 well as securitization of audits,” FAC ¶ 28, was unable to find evidence of securitization. To the 14 extent counsel suggests his expert was stymied because “information is not readily available on 15 either Bloomberg or other data screens available through the US Government or otherwise,” 16 Peabody Decl. ¶ 7, counsel has failed to show that the expert found this to be a limitation or that 17 these are the only sources available. Under Federal Rule of Civil Procedure 11, counsel had a duty 18 to conduct a reasonable inquiry to ensure that the “factual contentions have evidentiary support or, if 19 specifically so identified, will likely have evidentiary support after a reasonable opportunity for 20 further investigation or discovery.” Fed. R. Civ. P. 11(b)(3). 21 In the attempt to overcome these problems, counsel now claims that the complaint that was 22 filed “is not primarily based upon a securitization analysis . . . . A more important and cogent 23 argument can be made that Plaintiff’s property was foreclosed illegally and wrongfully by Wells 24 25 26 27 28 1 Plaintiff has not challenged Wells Fargo’s contention that it is the successor to World Savings Bank. See Peabody Decl. ¶ 4 (implicitly admitting that World Savings Bank became Wachovia and that Wachovia became part of Wells Fargo). Such facts have also been judicially noticed by a number of federal courts. See, e.g., Hale v. World Sav. Bank, No. CIV 2:12-cv-1462GEB-JFM (PS), 2012 U.S. Dist. LEXIS 141917, at *11-13 (E.D. Cal. Oct. 1, 2012); Shaterian v. Wells Fargo Bank, No. C-11-920 SC, 2011 U.S. Dist. LEXIS 62165, at *3-4 (N.D. Cal. June 10, 2011).) 2 1 Fargo Bank due to the fact that Wells Fargo Bank did not have the legal authority to do so.” 2 Peabody Decl. ¶ 11. Counsel maintains that there was “a failure by World Savings Bank or its 3 agents to actually execute any proper assignments of Deed of Trust or assignments of Trustee 4 powers which would have allowed Wells Fargo Bank to actually foreclose on the subject property.” 5 Peabody Decl. ¶ 9. But for counsel to try to disavow that the complaint is based on the audit strains 6 credulity. 7 Moreover, counsel’s suggestion that World Savings Bank had to make an assignment to note 1, supra, Plaintiff has conceded that Wells Fargo is the successor in interest to World Savings 10 Bank. The deed of trust expressly states that the lender includes not only World Savings Bank but 11 For the Northern District of California Wells Fargo before it could have the authority to foreclose makes little sense. As noted above, see 9 United States District Court 8 also its successors. Thus, the undisputed evidence substantiates that Wells Fargo had the authority 12 to foreclose as the lender. 13 Finally, to the extent counsel asserts that the actions he took were supported by an 14 unpublished decision, Wells Fargo Bank, N.A. v. Detelder-Collins, No. APP10000325, 2012 WL 15 4482587 (App. Div., Cal. Sup. Ct. Mar. 28, 2012), the Court does not agree. In fact, the court in the 16 case rejected the appellants’ contention that Wells Fargo had to prove it obtained an interest in the 17 deed of trust via recorded assignment. See id. at *8. 18 Accordingly, the Court concludes that dismissal with prejudice is warranted. The only issue 19 remaining is whether counsel for Plaintiff should be sanctioned. For the same reasons as articulated 20 above, the Court concludes that sanctions pursuant to Rule 11 are proper. While a monetary 21 sanction would be justified, the Court shall, in its discretion, limit its sanction to a written reprimand 22 to counsel that such conduct shall not tolerated and a warning that, should a Rule 11 issue arise in 23 /// 24 /// 25 /// 26 /// 27 /// 28 3 1 another case in which counsel represents a party or is a party, more severe sanctions may be 2 imposed. 3 4 The Clerk of the Court is instructed to enter judgment in accordance with this opinion and close the file in this case. 5 6 IT IS SO ORDERED. 7 8 Dated: December 19, 2012 9 _________________________ EDWARD M. CHEN United States District Judge 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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