Aylsworth v. Wells Fargo Bank, N.A. et al

Filing 54

ORDER by Judge Laurel Beeler granting 36 Motion to Dismiss; granting 40 Motion to Dismiss (lblc1S, COURT STAFF) (Filed on 1/17/2014)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 Northern District of California 10 San Francisco Division ANGELIQUE M AYLSWORTH, 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 No. C 13-02286 LB Plaintiff, ORDER GRANTING DEFENDANTS’ MOTIONS TO DISMISS v. 13 WELLS FARGO BANK, et al., [ECF Nos. 36 & 40] 14 15 Defendants. _____________________________________/ 16 17 INTRODUCTION Plaintiff Angelique M. Aylsworth sued Wells Fargo Bank, N.A., Citibank, N.A., Private 18 Mortgage Advisors, LLC, and First American Trustee Servicing Solutions, LLC (collectively, 19 “Defendants”) for alleged misconduct related to the origination and servicing of her adjustable-rate 20 mortgage loan and the foreclosure proceedings on her property. See First Amended Complaint 21 (“FAC”), ECF No. 17.1 Defendants move to dismiss.2 See ECF Nos. 36, 40. Upon consideration of 22 the papers submitted and applicable legal authorities, the court GRANTS the motions to dismiss.3 23 24 1 Citations are to the Electronic Case File (“ECF”) with pin cites to the electronicallygenerated page number at the top of the document. 25 2 26 27 28 The court collectively refers to Wells Fargo, Citibank, and Private Mortgage Advisors as “Lenders.” 3 Pursuant to Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument and vacates the May 24, 2012 hearing. C 13-02286 LB ORDER 1 STATEMENT4 2 Ms. Aylsworth owns a residence at 664 Myrtle Avenue, South San Francisco, California (the 3 “Property”). First Amended Complaint (“FAC”), ECF No. 17. 4 I. LOAN ORIGINATION 5 In or about February 2007, Ms. Aylsworth contacted an “Agent” to apply for a mortgage loan.5 6 See Id. ¶¶ 22-23. She told the Agent that she wanted the “best possible loan and rate.” Id. ¶ 22. 7 The Agent, rather than Ms. Aylsworth, filled out the loan application over the phone. Ms. 8 Aylsworth was not given the opportunity to read the loan documents before signing. Id. 9 10 During signing, Ms. Aylsworth reviewed the loan documents and noticed that the terms of the loan had changed “in that it was an interest only loan.” Id. No details were provided to Ms. 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 4 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The facts below are taken from the FAC, its exhibits, and the documents subject to judicial notice. The Lenders ask the court to take judicial notice of the following documents: (1) a Deed of Trust, dated February 16, 2007, recorded in the Official Records of the San Mateo County Recorder’s Office as document number 2007-030075 on February 27, 2007; (2) a Substitution of Trustee dated September 11, 2009 and recorded in the Official Records of the San Mateo County Recorder’s Office as document number 2009-128306 on September 25, 2009; (3) a Notice of Default and Election to Sell Under Deed of Trust, dated November 11, 2010 and recorded in the Official Records of the San Mateo County Recorder’s Office as document number 2010136737 on November 15, 2010; (4) a Notice of Trustee’s Sale, dated March 3, 2011 and recorded in the Official Records of the San Mateo County Recorder’s Office as document number 2011-027529 on March 8, 2011; and (5) a Notice of Trustee’s Sale dated March 5, 2012, and recorded in the Official Records of the San Mateo County Recorder’s Office as document number 2012-031819 on March 8, 2012. See Lender’s Request for Judicial Notice (“RJN”), ECF No. 41. The court may take judicial notice of matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Because the documents listed above are public records, the court may take judicial notice of the undisputed facts contained in them. See Hotel Employees & Rest. Employees Local 2 v. Vista Inn Mgmt. Co., 393 F. Supp. 2d 972, 978 (N.D. Cal. 2005); Fed. R. Evid. 201(b); see also Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 264-67 (2011). Ms. Aylsworth has not objected to the court’s consideration of these documents and has not challenged any of the facts in them. Accordingly, the court takes judicial notice of Exhibits B through E (numbered 2-5 above). Because the Deed of Trust is attached to Ms. Aylsworth’s Complaint, the court does not need declines to take judicial notice of the copy attached as Exhibt A to the RJN. 5 The FAC does not name the Agent or otherwise identify whether the Agent was affiliated with any Defendant. C 13-02286 LB ORDER 2 1 Aylsworth. Id. The Agent told Ms. Aylsworth that she could always refinance the loan later and 2 directed her to sign the loan documents in a short period of time. The FAC also alleges that “Agent 3 did not disclose and Plaintiff was not aware that, among other things, the first ten(10) years of the 4 loan was interest only and the loan contained a late charge of 5% of the principal and interest due. 5 Id. ¶ 23. 6 Ms. Aylsworth felt pressured and that she had no choice but to sign the loan documents. Id. ¶ 7 22. She signed them in a public place in the presence of a notary. Id. Copies of the loan documents 8 were not provided to Ms. Aylsworth until after the loan was signed and recorded. Id. ¶ 26, Ex. D. The loan is secured by a Deed of Trust on the Property that was executed on or about 11 February 16, 2007.6 See FAC Ex. D., ECF No. 17 at 44. The Deed names Private Mortgage 12 For the Northern District of California Ms. Aylsworth’s loan is an adjustable-rate montage loan in the amount of $568,000. See FAC 10 UNITED STATES DISTRICT COURT 9 Advisors, LLC (“PMA”) as the Lender and Fidelity National Title Ins Co as the Trustee. See id. at 13 44-45. On February 16, 2007, PMA assigned the Deed to Wells Fargo. See FAC Ex. A, ECF No. 14 17 at 35. On February 27, 2008, at PMA’s request, the Deed and the Assignment to Wells Fargo 15 were recorded in the official records of San Mateo County. Id. at 35, 44. 16 II. LOAN MODIFICATION 17 In mid-2009, Ms. Aylsworth began contacting “Lender” (an entity that the complaint does not 18 specifically identify) to ask about obtaining a loan modification. Id. ¶ 24. She submitted a loan 19 modification application and all the required documentation. Id. ¶ 47. 20 On August 24, 2009, Wells Fargo, through First American, “its alleged trustee,” recorded a 21 Notice of Default on the Property (the “2009 NOD”). Id. ¶¶ 26, 62, 73. The 2009 NOD was signed 22 by Wendy Randall. Id. ¶ 63. “Wendy Randall” is a “notorious robo-signature[]” that has “been seen 23 all over the Country.” Id. ¶¶ 63, 81, 87. Wendy Randall and the other robo-signatures below are the 24 names of “persons paid to sign documents for pecuniary gain, not based on actual knowledge of the 25 26 27 28 6 The record does not indicate the date Ms. Aylsworth signed the Deed of Trust. The document states that it is dated February 16, 2007. See FAC Ex. D, ECF No. 17 at 44. The signature pages, however, are undated. See id. at 58, 64. The Deed was notarized on February 20, 2007. It was recorded on February 27, 2007. C 13-02286 LB ORDER 3 1 contents of the facts contained in the documents they are attesting to. Id. ¶ 87. 2 On September 11, 2009, “Herman John Kennerty, Vice President of Loan Documentation” for 3 “Wells Fargo Bank, NA as it [sic] attorney in fact for EMC MORTGAGE CORPORATION” signed 4 a Substitution of Trustee naming First American as Trustee under the Deed of Trust in place of the 5 former Trustee, Fidelity National Title Ins Co. See FAC ¶ 64; RJN Ex. B. Herman John Kennerty 6 also is a robo-signature. FAC ¶¶ 64, 81, 87. The Substitution of Trustee was recorded in the 7 Official Records of San Mateo County on September 25, 2009. Id.; RJN Ex. B. 8 On October 2, 2009, Wells Fargo signed an assignment transferring its interest in the Deed of 9 Trust to EMC Mortgage Corporation. Complaint Ex. B, ECF No. 17 at 39. A stamp on the front of the assignment has the words “Effective Date” with “9/8/09” handwritten below. Id. The 11 assignment was recorded on October 13, 2009. Id. 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 In “late 2009,” a Wells Fargo representative spoke with Ms. Aylsworth on the telephone and told 13 her that she had been approved for a temporary loan modification. Id. ¶ 48. The Wells Fargo 14 representative also said that if Ms. Aylsworth made three consecutive and timely payments in the 15 amount of $1,950.17, she would be given a permanent loan modification and that Ms. Aylsworth 16 would receive paperwork in the mail to reflect the trial loan modification payment plan. Id. ¶¶ 48, 17 115. Ms. Aylsworth was also asked to provide banking information so that the monthly payments 18 could automatically be withdrawn from her checking account and she provided the necessary 19 banking information. Id. 20 In October, November, and December 2009, Ms. Aylsworth made the timely payments required 21 under the trial modification. Id. ¶ 48, Ex. E. During that three month period, however, Wells Fargo 22 failed to send Ms. Aylsworth anything in writing to reflect the verbal agreement even though it 23 withdrew the three monthly payments from Ms. Aylsworth’s checking account. Id. ¶¶ 48, 115. 24 At the end of the three-month trial modification, Ms. Aylsworth contacted Wells Fargo to ask 25 about her permanent loan modification. Id. ¶¶ 49, 116. A Well Fargo representative told her that 26 they were going to mail her a permanent loan modification package. Id. Ms. Aylsworth repeatedly 27 contacted Wells Fargo and was told to keep checking the mail and that the application package had 28 been sent. Id. Ms. Aylsworth never received a permanent loan modification package. Id. C 13-02286 LB ORDER 4 1 Ms. Aylsworth applied for a loan modification approximately five more times, but was always 2 denied. Id. ¶¶ 24, 50, 117. Each time she applied, Wells Fargo sent her numerous letters stating she 3 had not provided necessary documentation. Id. ¶¶ 24, 50, 117. Ms. Aylsworth would resubmit the 4 document she previously sent and go through a lengthy application process. Id. ¶¶ 50, 117. Each 5 time, Wells Fargo eventually denied her request because of the allegedly missing documentation. 6 Id. 7 Ms. Aylsworth complied with every request from Defendants in her unsuccessful attempts to 8 obtain a loan modification or assistance. Id. ¶¶ 51, 119. 9 III. DEFENDANTS’ NOTICE OF DEFAULT AND ATTEMPTED FORECLOSURE 10 On October 28, 2010, Wells Fargo rescinded the 2009 NOD. FAC ¶¶ 62, 73. It recorded another Notice of Default (the “2010 NOD”) on November 15, 2010. Id. ¶¶ 63, 73; RJN Ex. C. The 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 2010 NOD states that as of November 11, 2010, the past due amount on Ms. Aylsworth’s mortgage 13 was $79,884.75. FAC ¶ 104; RJN Ex. C. Ms. Aylsworth alleges that this amount is incorrect. FAC 14 ¶ 104. 15 The 2010 NOD was signed by Olga Volpe and the attached Notice of Default Declaration was 16 signed by Nicole Miles-Todd. FAC ¶ 63; see RJN Ex. C. Olga Volpe and Nicole Miles-Todd also 17 are robo-signatures “that have been seen all over the Country.” Id. ¶¶ 63, 81, 87. The Notice of 18 Default Declaration states that Wells Fargo Home Mortgage met the requirements of California 19 Civil Code § 2923.5, by meeting one of the following five requirements: 20 • The Beneficiary has made contact with the borrower pursuant to CA Civil Code 2923(a)(2). Contact with the borrower was made in person or by telephone to assess the borrower’s financial situation and explore options for the borrower to avoid disclosure. • Due Diligence to contact the borrower was exercised pursuant to CA Civil Code 2923.5(g)(2) by the Beneficiary. • The borrower has surrendered the property as evidenced by either a letter confirming the surrender or delivery of the keys to the property to the mortgage. Trustee, beneficiary, or authorized agent pursuant to CA Civil Code 2923.5(h)(1). • The borrower has contracted with an organization, person, or entity whose primary business is advising people who have decided to leave their homes on how to extend the foreclosure process and avoid their contractual obligations to mortgagees or beneficiaries pursuant to CA Civil Code 2923.5(h)(2). • The borrower has filed for bankruptcy and the proceedings have not been finalized 21 22 23 24 25 26 27 28 C 13-02286 LB ORDER 5 1 2 3 pursuant to CA Civil Code 2923.5(h)(3). See RJN Ex. C. Before recording the 2010 NOD, Defendants did not do any of the following: (1) contact Ms. 4 Aylsworth; (2) send her a first class letter that included a toll-free number for HUD; (3) send her a 5 certified letter with return receipt requested after she did not respond to Defendants after two weeks; 6 (4) enter into good faith discussions with her; or (5) attempt to contact her by telephone at least three 7 times, at three hours, and on different days. Id. ¶¶ 66, 74-77. Ms. Aylsworth’s mailing address and 8 primary telephone number have not changed since the date of her loan to the present. Id. ¶ 74. Her 9 primary telephone number allows for voice messages, and she does not recall ever receiving 10 On March 3, 2011, First American signed a Notice of Trustee’s Sale, which it recorded on 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 telephone messages from Wells Fargo prior to the 2010 NOD being recorded. Id. ¶ 76. March 8, 2011. See FAC ¶¶ 25, 62; RJN Ex. D. The 2011 Notice of Trustee’s sale was robo-signed 13 by Wendy Randall. See FAC ¶¶ 63, 81, 87; RJN Ex. D. On March 5, 2012 Wendy Randall signed 14 another Notice of Trustee’s Sale, which First American recorded on March 8, 2012. FAC ¶¶ 25, 62; 15 see RJN Ex. E. 16 On January 16, 2013, Ms. Aylsworth sent Wells Fargo a qualified written request (“QWR”) and 17 sent Wells Fargo and First American a validation of debt (“VOD”). Id. ¶ 97. The QWR stated that 18 Ms. Aylsworth believed there had been RESPA or TILA violations in the way certain fees 19 associated with her loan and loan documentation were processed. Id. It also requested a specific 20 breakdown of the fees and an explanation for the charges. Id. Neither Wells Fargo nor First 21 American have responded. Id. ¶ 98. Ms. Aylsworth alleges on information and belief that 22 Defendants reported her debt to a consumer reporting agency within 60 days after receiving her 23 QWR and VOD. Id. ¶ 101. 24 On or about January 17, 2013, Ms. Aylsworth appealed the denial of her loan modification 25 application. FAC ¶ 92. The appeal was denied on February 15, 2013. Id. The denial letter stated, 26 “[p]lease note that within 15 days of the date of this letter, your home will not be sold in a 27 foreclosure sales.” Id. ¶ 92. Despite those assurances, a foreclosure sale had been scheduled for 28 February 27, 2013 – just 12 days later. Id. This was brought to Wells Fargo’s attention, but it failed C 13-02286 LB ORDER 6 1 2 to take any action to postpone the trustee sale. Id. Just prior to the sale, on February 27, 2013, Ms. Aylsworth filed for bankruptcy with a 3 certification setting forth exigent circumstances. Id. ¶ 93. The trustee was notified immediately and 4 did not move forward with the trustee sale. Id. 5 IV. PROCEDURAL HISTORY 6 Ms. Aylsworth filed the instant civil action on April 10, 2013 in San Mateo County Superior 7 Court. Notice of Removal Ex. A, ECF No. 1. Wells Fargo was served with the Summons on April 8 18, 2013. See id., ECF No. 1 at 8. The record does not indicate when the other Defendants were 9 served, though none of them dispute that service was proper. None of the Defendants answered the question grounds. Id. at 2. First American joined the Notice of Removal the same day. See Joinder 12 For the Northern District of California Complaint. Instead, on May 20, 2013, the Lenders removed the action to this court on federal 11 UNITED STATES DISTRICT COURT 10 in Notice of Removal, ECF No. 4. 13 On May 22, 2013, First American moved to dismiss Ms. Aylsworth’s Complaint. ECF No. 8. 14 The Lenders moved to dismiss on May 28, 2013. ECF No. 12. In response, Ms. Aylsworth filed the 15 operative FAC on June 11, 2013, in accordance with Federal Rule of Civil Procedure 15(a)(1)(B). 16 FAC, ECF No. 17. The court thus denied the motions to dismiss as moot. See 6/21/2013 Order. 17 The FAC contains claims for the following: (1) violation of California Business and Professions 18 Code section 17200 (the “UCL”) in loan origination by PMA, Wells Fargo, and Citibank; (2) unfair 19 and deceptive business practices in loan servicing by Wells Fargo; (3) unfair and deceptive business 20 practices in the foreclosure process by Wells Fargo and First American; (4) set aside pending trustee 21 sale based on wrongful foreclosure proceedings in violation of California Civil Code section 2923.5 22 as to Wells Fargo and First American; (5) - (6) violations of the Homeowners Bill of Rights under 23 California Civil code sections 2924.17 and 2923.6 by Well Fargo, Citibank, and First American; (7) 24 violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605 by Wells 25 Fargo and First American; (8) breach of the covenant of good faith and fair dealing by Wells Fargo; 26 (9) reformation of a fraudulent contract and restitution as to PMA, Wells Fargo, and Citibank; (10) 27 quiet title as to all Defendants and “all persons unknown” who claim an interest in the Property; and 28 (11) declaratory relief as to all Defendants. See generally FAC, ECF No. 17. C 13-02286 LB ORDER 7 1 On June 26, 2013, the court granted the parties’ stipulated request to stay the litigation until 2 August 27, 2013 so that the parties could attempt to informally resolve the case. ECF No. 20. The 3 court granted the parties’ stipulated extensions to the stay on September 4 and October 1, 2013. See 4 ECF No. 24, 26. The parties filed a case management conference statement on October 31, 2013 5 that indicated the matter had not settled and that Defendants intended to file motions to dismiss. 6 See ECF No. 33. Accordingly, the court lifted the stay on November 1, 2013. See Order, ECF No. 7 39. 8 First American and the Lenders have now moved to dismiss Ms. Aylsworth’s First Amended 9 Complaint. See First American Motion, ECF No. 36; Lenders’ Motion to Dismiss, ECF No. 40. Lenders’ Motion, ECF No. 43. Defendants filed replies on November 22, 2013. See ECF Nos. 44- 12 For the Northern District of California Ms. Aylsworth opposes both motions. See Opp’n to First American Motion, ECF No. 42; Opp’n to 11 UNITED STATES DISTRICT COURT 10 45. 13 14 15 ANALYSIS I. MOTIONS TO DISMISS A. Federal Rule of Civil Procedure 12(b)(6) 16 A court may dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) when it does not 17 contain enough facts to state a claim to relief that is plausible on its face. See Bell Atlantic Corp. v. 18 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads 19 factual content that allows the court to draw the reasonable inference that the defendant is liable for 20 the misconduct alleged.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). “The plausibility standard 21 is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a 22 defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 557.). “While a complaint 23 attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s 24 obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and 25 conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual 26 allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. 27 at 555 (internal citations and parentheticals omitted). 28 In considering a motion to dismiss, a court must accept all of the plaintiff’s allegations as true C 13-02286 LB ORDER 8 1 and construe them in the light most favorable to the plaintiff. See id. at 550; Erickson v. Pardus, 551 2 U.S. 89, 93-94 (2007); Vasquez v. Los Angeles County, 487 F.3d 1246, 1249 (9th Cir. 2007). 3 If the court dismisses the complaint, it should grant leave to amend even if no request to amend 4 is made “unless it determines that the pleading could not possibly be cured by the allegation of other 5 facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quoting Cook, Perkiss and Liehe, Inc. 6 v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990)). But when a party 7 repeatedly fails to cure deficiencies, the court may order dismissal without leave to amend. See 8 Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992) (affirming dismissal with prejudice where 9 district court had instructed pro se plaintiff regarding deficiencies in prior order dismissing claim 10 with leave to amend). B. Federal Rule of Civil Procedure 9(b) 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 Federal Rule of Civil Procedure 9(b)’s particularity requirement applies to state-law claims 13 grounded in fraud and requires a plaintiff to plead with particularity the circumstances constituting 14 the fraud. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged 15 generally. “Averments of fraud must be accompanied by the ‘who, what, when, where, and how’ of 16 the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003). 17 Rule 9(b) serves to give defendants notice of the specific fraudulent conduct against which they 18 must defend. Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). 19 II. MS. AYLSWORTH’S SOLE FEDERAL CLAIM: RESPA 20 Ms. Aylsworth’s first claim alleges that Wells Fargo and First American violated the Real Estate 21 Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-17. RESPA protects home buyers “from 22 unnecessarily high settlement charges by certain abusive practices.” 12 U.S.C. § 2601(a). It 23 provides plaintiffs with a private right of action for three types of wrongful acts: “(1) payment of a 24 kickback and unearned fees for real estate settlement services, 12 U.S.C. § 2607(a), (b); (2) 25 requiring a buyer to use a title insurer selected by a seller, 12 U.S.C. § 2608(b); and (3) the failure 26 by a loan servicer to give proper notice of a transfer of servicing rights or to respond to a qualified 27 written request [“QWR”] for information about a loan, 12 U.S.C. § 2605(f).” Choudhuri v. Wells 28 Fargo Bank, N.A., No. C 11-00518 SBA, 2011 WL 5079480, at *8 (N.D. Cal. Oct. 25, 2011) (citing C 13-02286 LB ORDER 9 1 Patague v. Wells Fargo Bank, N.A., No. C 10-03460 SBA, 2010 WL 4695480, at *3 (N.D. Cal. Nov. 2 8, 2010)). Ms. Aylsworth’s sole federal claim, and thus the claim upon which this court’s 3 jurisdiction is based, alleges the third type. FAC, ECF No. 17, ¶¶ 95-109. 4 A. The RESPA Claim as to Wells Fargo 5 Ms. Aylsworth alleges that she sent Wells Fargo a QWR and a Validation of Debt and that it 6 never responded. FAC ¶ 97. The Lenders argue that the FAC does not sufficiently allege that any 7 correspondence Ms. Aylsworth sent constituted a QWR and fails to allege actual damages caused by 8 the alleged violation. medium supplied by the servicer, that – (i) includes, or otherwise enables the servicer to identify, the 11 name and account of the borrower; and (ii) includes a statement of the reasons for the belief of the 12 For the Northern District of California A QWR is a “a written correspondence, other than notice on a payment coupon or other payment 10 UNITED STATES DISTRICT COURT 9 borrower, to the extent applicable, that the account is in error or provides sufficient detail to the 13 servicer regarding other information sought by the borrower.” 12 U.S.C. § 2605(e)(1)(B). If a 14 servicer of a federally-related mortgage loan receives a QWR from the borrower (or an agent of the 15 borrower) for information relating to the servicing of such loan, RESPA requires the servicer: (1) 16 within 5 days (excluding legal public holidays, Saturdays, and Sundays), to provide the borrower 17 with a written response acknowledging receipt of the correspondence (unless the action requested is 18 taken within such period); and (2) within 30 days (excluding legal public holidays, Saturdays, and 19 Sundays), and, if applicable, before taking any action with respect to the inquiry of the borrower, to: 20 21 (A) make appropriate corrections in the account of the borrower, including the crediting of any late charges or penalties, and transmit to the borrower a written notification of such correction (which shall include the name and telephone number of a representative of the servicer who can provide assistance to the borrower); 22 23 24 25 26 27 28 (B) after conducting an investigation, provide the borrower with a written explanation or clarification that includes--(i) to the extent applicable, a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer; and (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower; or (C) after conducting an investigation, provide the borrower with a written explanation or clarification that includes--(i) information requested by the borrower or an explanation of why the information requested is unavailable or cannot be obtained by the servicer; and (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the C 13-02286 LB ORDER 10 1 2 borrower. 12 U.S.C. §§ 2605(e)(1)(A), (e)(2).7 correspondence constituted a QWR. Lenders’ Motion at 17-18. “Plaintiff’s alleged letter simply 5 makes a blanket statement that her account is in error, without providing a reason, and requests a 6 payment breakdown. This does not qualify as a QWR.” Id. at 18. The court disagrees. According 7 to the FAC “[t]he QWR stated that Plaintiff believed there were violations of RESPA or TILA in the 8 processing of certain fees associated with Plaintiff’s loan and loan documentation i.e., the servicing 9 of her loan, and requested among other things, a specific breakdown of the fees and an explanation 10 of why such charges were incurred.” FAC ¶ 97. The FAC’s references to “certain fees” and “such 11 charges” are sufficient to allege a QWR at the motion to dismiss stage. See 12 U.S.C. 12 For the Northern District of California The Lenders first argue that the FAC does not allege facts showing that Ms. Aylsworth’s 4 UNITED STATES DISTRICT COURT 3 § 2605(e)(1)(B). 13 Moreover, a QWR is valid if it explains why the borrower’s “account is in error or provides 14 sufficient detail to the servicer regarding other information sought by the borrower.” 12 U.S.C. 15 § 2605(e)(1)(B)(ii) (emphasis added). Here, the FAC sufficiently alleges that the QWR identified 16 the information that Ms. Aylsworth sought from Wells Fargo. At this stage, that is enough. 17 In opposition, the Lenders cite cases in which court dismissed similar allegations at the pleading 18 stage. See Phillips v. Bank of America Corp., No. C 10-0400 JF (HRL), 2010 WL 1460824, at *3 19 (N.D. Cal. Apr. 9, 2010); Pettie v. Saxon Mortgage Servs., No. C08-5089RBL, 2009 WL 1325947, 20 at *2 (W.D. Wash. May 12, 2009); Walker v. Equity 1 Lenders Grp., 09CV325 WQHAJB, 2009 WL 21 1364430, at *4-5 (S.D. Cal. May 14, 2009). These cases do not change the outcome. In Phillips and 22 Pettie, the plaintiffs pleaded themselves out of court by attaching their obviously-deficient purported 23 QWRs to the complaint. In Walker, the plaintiff alleged that the operative complaint itself was the 24 QWR. See 2009 WL 1364430, at *4-5. In contrast, Ms. Aylsworth’s FAC alleges facts about the 25 content of her alleged QWR that permit the court to reasonably draw the conclusion that it met the 26 27 28 7 The parties rely on an earlier version of 12 U.S.C. § 2605(e)(1)(A) that allows a servicer more time to respond to a QWR. The court quotes the current statute, which became effective July 20, 2011 and applies here. C 13-02286 LB ORDER 11 1 statutory definition. Cf. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) 2 (cited in Lenders’ Reply, ECF No. 45 at 7). 3 The Lenders’ second argument is that Ms. Aylsworth fails to allege actual damages caused by the borrower as a result of the failure” to respond to the QWR, as well as “any additional damages, 6 as the court may allow, in the case of a pattern or practice of noncompliance with the requirements 7 of this section, in an amount not to exceed $2,000.” 12 U.S.C. § 2605(f)(1). In order to state a claim 8 for actual damages under RESPA, a plaintiff has the obligation to “point to some colorable 9 relationship between his injury and the actions or omissions that allegedly violated RESPA.” Allen 10 v. United Fin. Mortg. Corp., No. 09-2507 SC, 2010 WL 1135787, at *5 (N.D. Cal. Mar. 22, 2010); 11 see Lawther v. Onewest Bank, No. C 10-0054 RS, 2010 WL 4936797, at *6 (N.D. Cal. Nov. 30, 12 For the Northern District of California the alleged violation. Lenders’ Motion at 18. RESPA permits recovery of “any actual damages to 5 UNITED STATES DISTRICT COURT 4 2010). The plaintiff must allege a “concrete harm caused by the RESPA violation itself, not harm 13 generally resulting from a plaintiff’s default and foreclosure process.” Tamburri v. Suntrust 14 Mortgage, Inc., 875 F. Supp. 2d 1009, 1014 (N.D. Cal. 2012) (collecting cases). 15 Ms. Aylsworth does not allege any connection between her alleged damages and Wells Fargo’s 16 failure to respond to the QWR. Her damages allegations are that “[d]ue to [Wells Fargo’s] failure to 17 provide a breakdown of such fees resulting in Plaintiff’s inability to properly dispute such fees, 18 Plaintiff continues to be charged additional interest, penalties and fees for which she would not 19 otherwise be charged.” FAC ¶ 103. She states that the $79,884.75 past due amount recorded in the 20 2011 NOD is incorrect and that since Defendants have not responded to the QWR she sent on 21 January 16, 2013, she has been “unable to verify this alleged amount due to Defendants.” Id. ¶ 104. 22 Furthermore, she “has been damaged in the amount of ongoing penalties, fees, and interest charged 23 by Defendants, including but not limited to a charge of 5% of any payment of principal and interest 24 not received in full by the end of fifteen calendar days after the date it was due.” Id. ¶ 105. Finally, 25 she alleges that Wells Fargo’s failure to comply with the prohibition on reporting overdue payments 26 to a credit agency cause “significant injury” to Ms. Aylsworth’s credit score and prevented her from 27 obtaining additional credit.” Id. ¶ 106. 28 To the extent Ms. Aylsworth incurred these damages before Wells Fargo had any obligation to C 13-02286 LB ORDER 12 1 respond to the QWR, the allegations do not support a RESPA claim. See, e.g., Obot v. Wells Fargo 2 Bank, N.A., No. C11-00566 HRL, 2011 WL 5243773, at *3 (N.D. Cal. Nov. 2, 2011) (where 3 plaintiff sent QWR after she had already defaulted on her loan, she failed to allege facts plausibly 4 showing damages for fees, interest, and penalties incurred because of default were caused by any 5 RESPA violation). 6 Ms. Aylsworth’s best argument is that her inability to dispute the amount of her alleged default 7 and the resulting penalties, fees, and interest caused her to pay more money in the interim between 8 the date that Wells Fargo should have responded to her QWR (approximately March 1, 2013)8 and 9 the date she filed suit (April 10, 2013). But she does not allege that she incurred any damages during that period given that she filed for bankruptcy on February 27, 2013. FAC ¶ 93. Regardless, 12 For the Northern District of California during that period. Nor can the court reasonably conclude that Ms. Aylsworth suffered damages 11 UNITED STATES DISTRICT COURT 10 she provides no facts to support her contention that if Wells Fargo had responded to her QWR, its 13 response would have enabled her to avoid any damages or adverse credit consequences. Such 14 conclusory allegations fail to state a claim. See Guidi v. Paul Fin., LLC, No. 13-CV-01919-LHK, 15 2014 WL 60253 (N.D. Cal. Jan. 7, 2014) (dismissing as conclusory nearly identical RESPA 16 allegations in complaint filed by Ms. Aylsworth’s counsel). Accordingly, the court grants the 17 Lenders’ motion to dismiss Ms. Aylsworth’s RESPA claim against Wells Fargo without prejudice. 18 B. The RESPA Claim as to First American 19 First American moves to dismiss Ms. Aylsworth’s RESPA claim on the ground that it is not a 20 “servicer” subject to RESPA and because Ms. Aylsworth does not allege she sent First American a 21 QWR. First American Motion at 18-19. The court agrees. 22 RESPA provides that a “servicer” must respond to a borrower’s QWR. See 12 U.S.C. 23 § 2605(e)(2). A “servicer” is “the person responsible for servicing of a loan (including the person 24 who makes or holds a loan if such person also services the loan),” and “‘servicing’ means receiving 25 any scheduled periodic payments from a borrower pursuant to the terms of any loan.” 12 U.S.C. 26 27 28 8 This is 30 days after January 16, 2013, excluding Saturdays, Sundays, Martin Luther King Day (1/21/2013), and President Washington’s birthday (2/18/2013). C 13-02286 LB ORDER 13 1 § 2605(i)(2) & (3). 2 First American argues that it is not a servicer within the definition of RESPA. First American 3 Motion at 18-19. Ms. Aylsworth does not argue otherwise. See Opp’n to First American Motion, 4 ECF No. 43. Accordingly, the court dismisses Ms. Aylsworth’s RESPA claim against First 5 American. 6 In her opposition, Ms. Aylsworth argues that the facts in her RESPA claim against First 7 American regarding the Validation of Debt are sufficient to put First American on notice that she 8 has a claim under the Fair Debt Collection Practices Act (“FDCPA”) so that the court should require 9 First American to answer the FAC. See First American Opp’n at 17; First American Reply at 6-7. claim, that does not mean she has sufficiently pleaded that claim. For example, to be held liable for 12 For the Northern District of California The court disagrees. Just because First American is on notice that Ms. Aylsworth intends to bring a 11 UNITED STATES DISTRICT COURT 10 violation of the FDCPA, a defendant must fall within the FDCPA’s definition of “debt collector.” 13 See Heintz v. Jenkins, 514 U.S. 291, 294 (1995); see also Romine v. Diversified Collection Servs., 14 155 F.3d 1142, 1146 (9th Cir. 1998). The FAC contains no allegations showing that First American 15 falls within that definition. Accordingly, if Ms. Aylsworth seeks to bring an FDCPA claim against 16 First American, she should do it in an amended complaint. 17 III. SUPPLEMENTAL JURISDICTION 18 Having dismissed Ms. Aylsworth’s sole federal claim, the court must decide whether to retain 19 jurisdiction over her state law claims. In any civil action of which the district court has original 20 jurisdiction, the district court shall have supplemental jurisdiction over related state law claims that 21 are part of the same case or controversy. 28 U.S.C. § 1367(a). “The district courts may decline to 22 exercise supplemental jurisdiction over a claim” if, among other reasons, “the district court has 23 dismissed all claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3). The court may 24 also decline to exercise supplemental jurisdiction if the retention of the state claims “requires the 25 expenditure of substantial additional judicial time and effort.” Executive Software North America, 26 Inc. v. U.S. Dist. Court for Cent. Dist. of California, 24 F.3d 1545, 1548 (9th Cir. 1994); Carnegie- 27 Mellon Univ. v. Cohill, 484 U.S. 343 (1988); see also Government Employees Ins. Co. v. Dizol 133 28 F.3d 1220, 1224 (9th Cir. 1998). C 13-02286 LB ORDER 14 1 Here, Ms. Aylsworth’s state law claims form the body of this action. They involve a number of 2 disputes arising out of the parties’ loan modification discussions, the foreclosure process, and 3 compliance with California statutes pertaining to both. Accordingly, having dismissed all claims 4 over which it has original jurisdiction, the court declines to exercise supplemental jurisdiction over 5 the remaining state law claims. These remaining state law claims are dismissed without prejudice 6 for lack of subject matter jurisdiction. 7 8 9 10 CONCLUSION The court GRANTS Defendants’ motions to dismiss. Ms. Aylsworth may file a Second Amended Complaint within 21 days of this order. If no amended complaint is filed, the Clerk shall close the file. This disposes of ECF Nos. 36 & 40. 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 IT IS SO ORDERED. 13 Dated: January 17, 2014 14 _______________________________ LAUREL BEELER United States Magistrate Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C 13-02286 LB ORDER 15

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