Chukuani v. Wells Fargo Bank N.A

Filing 41

ORDER REGARDING MOTION TO DISMISS. Signed by Judge Jeffrey S. White on 12/6/13. (jjoS, COURT STAFF) (Filed on 12/6/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SYLVIA CHUKUANI,

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Plaintiff,

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For the Northern District of California

United States District Court

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No. C 13-00500 JSW

v.
WELLS FARGO BANK, N.A. and DOES 1
through 50,

ORDER REGARDING MOTION
TO DISMISS

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Defendants.
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Now before the Court is the motion to dismiss filed by defendant Wells Fargo Bank,

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N.A. (“Wells Fargo”) the first amended comlaint (“FAC”) filed by plaintiff Sylvia Chukuani

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(“Plaintiff”). The Court finds this motion is suitable for disposition without oral argument. See

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N.D. Civ. L.R. 7-1(b). Accordingly, the Court VACATES the hearing scheduled for December

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13, 2013.

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As the Court noted in the Order requiring further briefing, Wells Fargo is moving to

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dismiss all of the claims brought by Plaintiff, including her sole federal claim under the Equal

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Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691, et seq. The Court raised concerns

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whether, in light of Plaintiff’s factual allegations, Plaintiff could state a claim under ECOA.

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The allegations of Plaintiff’s FAC demonstrates that she was in default when she submitted an

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application for a loan modification. (FAC, ¶ 14 (alleging that “Plaintiff stopped submitting her

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payments and began applying for a loan modification.”).)

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Courts have held that ECOA notice requirements do not apply to applicants who are

Mich. June 18, 2013) (internal quotation marks and citation omitted) (“ECOA’s notice

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requirements do not apply where the consumer requesting credit is delinquent or in default on

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an existing relationship with the creditor.”); see also Rockridge Trust v. Wells Fargo, N.A., ---

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F. Supp. 2d ---, 2013 WL 5428722, *17 (N.D. Cal. Sept. 25, 2013) (holding that plaintiff failed

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to state a claim under ECOA’s notice requirements where plaintiff was delinquent on his

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mortgage loan payments when he sought the loan modification); Davis v. CityMortgage, Inc.,

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2011 WL 891209, *5 (E.D. Mich. March 11, 2011) (same). “The default status of a consumer

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is determined at the time the creditor takes action with respect to the consumer, rather than at

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For the Northern District of California

delinquent or otherwise. See Clark v. Bank of America, N.A., 2013 WL 3069305, *8 (E.D.

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United States District Court

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the time the creditor applies for credit.” CitiMortgage, 2011 WL 891209 at *2.

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Before dismissing Plaintiff’s ECOA claim on this basis, the Court provided Plaintiff

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with an opportunity to provide legal authority demonstrating that she states a viable claim for

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failure to provide notification under ECOA. In response, Plaintiff failed to provide any legal

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authority or even argue that she may state an ECOA claim despite her allegations that she

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stopped making payments. Instead, she argues that she did not allege that she was in default

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and that Wells Fargo made an accounting error. (Plaintiff’s Further Br. at 2.) However,

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Plaintiff ignores her allegation, noted by the Court, that she “stopped submitting her payments.”

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(FAC, ¶ 14 (emphasis added).) Therefore, the Court finds that Plaintiff’s ECOA claim fails as a

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matter of law. Accordingly, the Court grants Wells Fargo’s motion to dismiss as to Plaintiff’s

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ECOA claim.

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The Court’s jurisdiction over this action is based solely on the existence of a federal

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question, and the remaining claims arise solely under state law. In light of the Court’s dismissal

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of Plaintiff’s sole federal claim, the Court must determine whether it should exercise

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supplemental jurisdiction over Plaintiff’s remaining state-law claims. A district court may

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decline to exercise supplemental jurisdiction in a case arising from a common nucleus of

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operative fact where: (1) a novel or complex issue of state law is raised; (2) the claim

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substantially predominates over the federal claim; (3) the district court dismisses the federal
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claims; or (4) under exceptional circumstances. See 28 U.S.C. § 1367(c). In order to make this

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determination, courts should consider factors such as “economy, convenience, fairness, and

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comity.” Acri v. Varian Associates, Inc., 114 F.3d 999, 1001 (9th Cir. 1997) (internal

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quotations and citations omitted). When “federal-law claims are eliminated before trial, the

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balance of factors to be considered ... will point toward declining to exercise jurisdiction over

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the remaining state-law claims.” Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7

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(1988), superseded by statute, 28 U.S.C. § 1447(c); see also United Mine Workers of America v.

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Gibbs, 383 U.S. 715, 726 (1966) (suggesting in dicta that “if federal claims are dismissed before

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trial, ... the state claims should be dismissed as well”) (footnote omitted), superseded by statute,
28 U.S.C. § 1367.

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For the Northern District of California

United States District Court

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The United States Supreme Court has explained that “[n]eedless decisions of state law

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should be avoided as both a matter of comity and to promote justice between the parties, by

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procuring for them a surer-footed reading of applicable law.” United Mine Workers, 383 U.S.

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at 726 (footnote omitted). In this case, it would be equally convenient for the parties to try the

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remaining claims in state court. Further, the Court has expended few resources in supervising

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this case. See Trustees of the Construction Indus. & Laborers Health & Welfare Trust v. Desert

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Valley Landscape & Maintenance, Inc., 333 F.3d 923, 926 (9th Cir. 2003) (finding an abuse of

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discretion where the district court ordered a dismissal of state law claims just seven days before

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trial and after long delays). Therefore, the principles of comity, convenience, and judicial

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economy weigh against retaining supplemental jurisdiction in this case.

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Accordingly, the Court declines to exercise jurisdiction over Plaintiff’s state-law claims

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and denies the remainder of Wells Fargo’s motion to dismiss as moot. This Order is without

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prejudice to Plaintiff refiling her claims in state court and to Wells Fargo renewing its

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arguments raised in its motion to dismiss in state court. A separate judgment shall issue and the

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Clerk shall close the file.

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IT IS SO ORDERED.

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Dated: December 6, 2013
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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