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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SEGUNDO ALMOGELA,

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Plaintiff,
v.

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For the Northern District of California

United States District Court

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No. C-12-3644 EMC

WORLD SAVINGS BANK, et al.,

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ORDER DISMISSING CASE

Defendants.
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(Docket Nos. 36, 38)

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Previously, the Court issued an order instructing Plaintiff to show cause as to why his

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complaint should not be dismissed with prejudice based on his failure to allege any facts (which

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would include attaching any document to his complaint) to support his claim that his loan was sold

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to a REMIC Trust. The Court also ordered Plaintiff’s counsel to show cause as to why he filed the

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complaint on Plaintiff’s behalf under the circumstances. See Docket No. 36 (order). In response,

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counsel for Plaintiff submitted a declaration. See Docket No. 38 (Peabody declaration). Having

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reviewed the contents of the declaration, the Court hereby dismisses the case with prejudice and

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further sanctions Plaintiff’s counsel.

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Dismissal with prejudice is warranted because, contrary to what counsel suggests in his

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declaration, see Peabody Decl. ¶ 16, it is clear from the face of the complaint that the complaint was

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based on the audit. See, e.g., FAC ¶ 29 (alleging that, “[a]ccording to the audit of the loan . . . the

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following facts were determined” – e.g., that the loan was securitized). As noted in the Court’s prior

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order, there is no evidence in the audit report to support the allegations of securitization.

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Even if counsel’s declaration were given some credit – i.e., that he filed the complaint not

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only on the basis of the audit but also on the basis of his experience – counsel has failed to provide

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an adequate showing that his experience justified the complaint. For example, counsel asserts that

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the loan at issue must have been securitized because, based on prior “securitization analyses

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performed on World Savings Bank loans, it has been my determination that World Savings Bank as

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a practice and policy sold each and every loan that it originated prior to the sale of its assets to

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Wachovia Bank.”1 Peabody Decl. ¶ 5. However, counsel fails to provide any details about these

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prior “securitization analyses,” including how many of these analyses there were. In other words,

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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

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For the Northern District of California

United States District Court

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supporting his claim other than his own assertion. The Court is not persuaded that his conclusion

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was justified, particularly when counsel’s own “expert witness in the area of lender legal standing as

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well as securitization of audits,” FAC ¶ 28, was unable to find evidence of securitization. To the

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extent counsel suggests his expert was stymied because “information is not readily available on

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either Bloomberg or other data screens available through the US Government or otherwise,”

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Peabody Decl. ¶ 7, counsel has failed to show that the expert found this to be a limitation or that

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these are the only sources available. Under Federal Rule of Civil Procedure 11, counsel had a duty

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to conduct a reasonable inquiry to ensure that the “factual contentions have evidentiary support or, if

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specifically so identified, will likely have evidentiary support after a reasonable opportunity for

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further investigation or discovery.” Fed. R. Civ. P. 11(b)(3).

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In the attempt to overcome these problems, counsel now claims that the complaint that was

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filed “is not primarily based upon a securitization analysis . . . . A more important and cogent

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argument can be made that Plaintiff’s property was foreclosed illegally and wrongfully by Wells

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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).)

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Fargo Bank due to the fact that Wells Fargo Bank did not have the legal authority to do so.”

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Peabody Decl. ¶ 11. Counsel maintains that there was “a failure by World Savings Bank or its

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agents to actually execute any proper assignments of Deed of Trust or assignments of Trustee

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powers which would have allowed Wells Fargo Bank to actually foreclose on the subject property.”

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Peabody Decl. ¶ 9. But for counsel to try to disavow that the complaint is based on the audit strains

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credulity.

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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

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Bank. The deed of trust expressly states that the lender includes not only World Savings Bank but

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For the Northern District of California

Wells Fargo before it could have the authority to foreclose makes little sense. As noted above, see

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United States District Court

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also its successors. Thus, the undisputed evidence substantiates that Wells Fargo had the authority

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to foreclose as the lender.

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Finally, to the extent counsel asserts that the actions he took were supported by an

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unpublished decision, Wells Fargo Bank, N.A. v. Detelder-Collins, No. APP10000325, 2012 WL

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4482587 (App. Div., Cal. Sup. Ct. Mar. 28, 2012), the Court does not agree. In fact, the court in the

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case rejected the appellants’ contention that Wells Fargo had to prove it obtained an interest in the

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deed of trust via recorded assignment. See id. at *8.

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Accordingly, the Court concludes that dismissal with prejudice is warranted. The only issue

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remaining is whether counsel for Plaintiff should be sanctioned. For the same reasons as articulated

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above, the Court concludes that sanctions pursuant to Rule 11 are proper. While a monetary

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sanction would be justified, the Court shall, in its discretion, limit its sanction to a written reprimand

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to counsel that such conduct shall not tolerated and a warning that, should a Rule 11 issue arise in

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another case in which counsel represents a party or is a party, more severe sanctions may be

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imposed.

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The Clerk of the Court is instructed to enter judgment in accordance with this opinion and
close the file in this case.

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IT IS SO ORDERED.

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Dated: December 19, 2012

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_________________________
EDWARD M. CHEN
United States District Judge

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For the Northern District of California

United States District Court

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