Abels v. Bank of America et al

Filing 129

ORDER by Judge Yvonne Gonzalez RogersDENYING PLAINTIFFS MOTIONS TO ADD DEFENDANTS, TO SUPPLEMENT COMPLAINT, TO SET ASIDE ORDER ON MOTION TO DISMISS, AND FOR ENTRY OF DEFAULT JUDGMENTS; ORDER DENYING WELLS FARGOS MOTIONS TO INTERVENE AND TO DISMISS ; ORDER GRANTING MOTION TO REMAND.(ndr, COURT STAFF) (Filed on 1/4/2013)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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ALISON M. ABELS,

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Plaintiff,

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Northern District of California

United States District Court

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vs.
BANK OF AMERICA, N.A., et al.,
Defendants.

Case No.: 11-cv-208 YGR
ORDER DENYING PLAINTIFF’S MOTIONS TO
ADD DEFENDANTS, TO SUPPLEMENT
COMPLAINT, TO SET ASIDE ORDER ON
MOTION TO DISMISS, AND FOR ENTRY OF
DEFAULT JUDGMENTS; ORDER DENYING
WELLS FARGO’S MOTIONS TO INTERVENE
AND TO DISMISS ; ORDER GRANTING
MOTION TO REMAND

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Plaintiff Alison Abels (“Abels”) brought the instant action against Defendants Bank of

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America, N.A. (“BANA”), Recontrust, Realtime Resolutions (“Realtime”), Triton Realty Group, Inc.

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(“Triton”) and Marissa Moran.

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Currently pending before the Court are the following motions:
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(1) Plaintiff’s Motion to Add Defendants Wells Fargo Bank, N.A.and Last Mile Properties,
LLC (Dkt. No. 109);
(2) Plaintiff’s Motion for Leave to File Supplemental Pleading (Dkt No. 110);
(3) Plaintiff’s Corrected Motion to Set Aside Order Granting Defendants Bank of America,

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N.A., and Real Time Resolutions Motion to Dismiss (Dkt No. 111);
(4) Plaintiff’s Application for Entry of Default Judgment Against Defendant Triton Lending
Group (Dkt No. 114);

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(5) Plaintiff’s Application for Entry of Default Judgment Against Defendant Marissa Moran
(Dkt No. 115);
(6) Motion by Third Party Last Mile Properties, LLC to Remand (Dkt No. 120) the unlawful
detainer action removed by Plaintiff pursuant to her Notice of Removal and Corrected Notice of

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Removal filed in the instant action (Dkt Nos. 112, and 114);
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(7) Motion by Third Party Wells Fargo Bank, N.A. as Trustee on behalf of the holders of the

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HarborView Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2006-12

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(“Wells Fargo”) to Intervene (Dkt No. 122); and

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(8) Motion by Third Party Wells Fargo Bank to Dismiss Second Amended Complaint (Dkt

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Northern District of California

United States District Court

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No. 125).
Having carefully considered the papers submitted and the pleadings in this action, and for the
reasons set forth below, the Court rules as follows:
Plaintiff’s motions (Dkt. Nos. 109, 110, 111, 114, and 115) are DENIED, Wells Fargo’s
motions (Dkt Nos. 122 and 125) are DENIED, and Last Mile’s motion to remand (Dkt No. 120) is

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GRANTED. 1

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PROCEDURAL HISTORY

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Plaintiff filed her original complaint January 13, 2011, alleging claims based upon the

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origination of her home mortgage, including that the loan was improperly securitized, that her

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income was overstated on her loan application without her knowledge or consent, and that the loan
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she was actually sold had different terms than what she was led to believe it would have. She alleged
that the original loan was sold to her by Triton and Marissa Moran.

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Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the Court finds that
all pending motions are appropriate for decision without oral argument. Accordingly, the Court VACATES the
hearings set for January 8 and January 15, 2013.

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The Court granted a motion to dismiss by defendants BANA and Recontrust on April 11,

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2011, granting Plaintiff leave to amend. Plaintiff filed her First Amended Complaint on May 11,

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2011. BANA and Recontrust filed a new motion to dismiss on June 1, 2011. Before the motion was

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heard, Plaintiff filed a bankruptcy petition, and the action was stayed pending those proceedings.

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After the conclusion of a bankruptcy stay, the motion to dismiss was granted on March 2, 2012, with
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leave to amend.
Plaintiff filed her Second Amended Complaint on March 16, 2012. In addition to the
previously pleaded allegations, Plaintiff also alleged that she had applied a loan modification with
Countrywide, and then with BANA, and was led to believe modification of her mortgage loan was an

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Northern District of California

United States District Court

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option but only later learned that representations by BANA were false. (Second Amended
Complaint, Dkt. No. 62, ¶¶ 88-93.)
On March 28, 2012, Plaintiff filed an application for an order shortening time on a motion for
preliminary injunction, which the Court granted and set for hearing and further briefing. (Dkt. No.
64.) A hearing was held on April 5, 2012, and the Court issued its order denying the preliminary

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injunction on April 6, 2012, finding that Plaintiff had failed to offer evidence to support any
injunctive relief. (Dkt No. 77.)
On April 5, 2012, BANA and Recontrust filed their motion to dismiss (Dkt. No. 75) and
Realtime filed its motion to dismiss (Dkt. No. 71). Those motions were granted without leave to

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amend on May 31, 2012. (Dkt. Nos. 91, 92.)
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Upon entry of that order, the only remaining defendants in the action were Triton and Marissa

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Moran, as to which defaults had been entered previously, but default judgments had not. (See

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Docket Nos. 43, 44, 45, 46, 48, and 50.) In response to an Order to Show Cause re: Dismissal for

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failure to prosecute, Plaintiff filed motions for default judgment against Triton and Moran. (Dkt.

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Nos. 114 and 115.)
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In the meantime, on July 5, 2012, Wells Fargo filed a Motion to Intervene and Motion to

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Expunge Plaintiff’s Notice of Pendency of Action. (Dkt. Nos. 93, 95.) On August 9, 2012, the

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Court issued an Order to Show Cause (Dkt. No. 100) directing Wells Fargo to explain why those

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motions should not be denied for its failure to demonstrate a current interest in the property. In

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response, Wells Fargo withdrew the motions. (Dkt. No. 101.)
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I.

DISCUSSION
Plaintiff’s Motion to Add Defendants Wells Fargo Bank, N.A. and Last Mile Properties,
LLC (Dkt. No. 109), for Leave to File Supplemental Pleading (Dkt No. 110), and to Set
Aside Order Granting Defendants Bank of America, N.A., and Real Time Resolutions
Motion to Dismiss (Dkt No. 111)
Plaintiff seeks to add Wells Fargo and Last Mile as defendants to the action, arguing that they

Northern District of California

United States District Court

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are each liable to her based upon the same transactions and occurrences currently before the Court.

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Similarly, she seeks to supplement her complaint to add new events concerning these two entities in

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relation to the subject property. Specifically, Plaintiff argues that now-dismissed defendant BANA

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assigned the deed of trust on the property to Wells Fargo, a fact that was recorded in the chain of

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title, but not “disclosed” to Plaintiff. Wells Fargo subsequently conducted a foreclosure sale on the

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property, selling it to Last Mile, and recording a trustee’s deed upon sale in the name of Last Mile.

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Plaintiff also complains that Wells Fargo misrepresented its interest in the property when it filed its

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first motion to intervene, professing to have a current interest when it did not. Plaintiff argues that
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Last Mile is liable to her because the trustee’s deed upon sale slandered her title and Last Mile was

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not a bona fide purchaser. She argues that BANA had no standing to move to dismiss her complaint

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and that she was unable to enjoin the correct party, Wells Fargo, before it was able to conduct the

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foreclosure sale.

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Lastly, in her motion to set aside the Court’s Order dismissing her Second Amended
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Complaint without leave to amend, Plaintiff argues that the motion should not have been granted

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because BANA “had no standing” in the case and became a “non-party” when it transferred its

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interest in the property to Wells Fargo, which occurred before BANA filed its final motion to

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dismiss.

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The Court may add or drop parties on such terms as are just. Fed. R. Civ. P. 21. Moreover,

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parties whose joinder will not deprive the court of subject matter jurisdiction are required to be
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joined if: (1) in that party’s absence, the court cannot afford complete relief among the existing

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parties; or (2) the party claims an interest relating to the subject of the action and is so situated that

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disposing of the action in the person's absence may impede its ability to protect the interest or leave

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an existing party subject to a risk of multiple or inconsistent obligations. Fed. R. Civ. P. 19.

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Northern District of California

United States District Court

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Here, however, Plaintiff does not articulate any reason that Wells Fargo and Last Mile should

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be made parties to the instant action, particularly in light of the Court’s ruling that Plaintiff could not

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establish an entitlement to preliminary injunctive relief and the Court’s subsequent dismissal of all

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claims against BANA, Recontrust and Realtime. The transactions and circumstances that formed the

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basis for the litigation were related to the origination of underlying mortgage and BANA’s alleged

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misrepresentations about a loan modification. The Court determined that those allegations did not

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state a viable claim. Plaintiff offers no basis for Wells Fargo’s liability other than that BANA

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assigned its interest to Wells Fargo.2 Likewise, the only basis for liability as against Last Mile is that

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it bought the property at the foreclosure sale initiated by Wells Fargo. While Plaintiff argues that the

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foreclosure sale was improper under California Civil Code section 2924, she does not offer any basis
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for this conclusion, much less one that has not already been rejected by the Court in granting the
motions to dismiss. In short, there are no common transactions and occurrences before the Court

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Plaintiff argues Wells Fargo failed to disclose that the Deed of Trust on the subject property was
assigned to it by BANA, in violation of the Truth In Lending Act regulations at 12 C.F.R. § 226.39. Leaving
aside the question of whether this is a viable basis for liability, it is not part of the same transactions and
occurrences that were alleged against BANA, nor is it intertwined with the allegations against BANA or any
other defendant.

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since the claims from which Plaintiff attempts to derive Wells Fargo’s and Last Mile’s liability have
already been dismissed.

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Finally, Plaintiff moves under Rule 60 of the Federal Rules of Civil Procedure to set aside the

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Court’s Order granting the Motion to Dismiss of BANA and Recontrust. Plaintiff argues that BANA

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lacked “standing” to move to dismiss, and failed to notify her and the Court of the assignment.

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Plaintiff misunderstands the meaning of standing. Plaintiff named BANA and Recontrust and

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alleged wrongdoing by them in an attempt to establish a legal basis for halting a foreclosure sale,

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among other things. As named defendants in Plaintiff’s complaint, BANA and Reconstrust were

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parties with a right to raise whatever defenses were available to them, including failure to state a

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Northern District of California

United States District Court

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claim as argued in their motions to dismiss. While BANA’s failure to inform Plaintiff and the Court

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of the assignment of the Deed of Trust to Wells Fargo may have been less than candid, it does not

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provide a basis for vacating the Court’s ruling on its motion to dismiss under Rule 60 since the issue

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of the current assignment of the deed of trust ultimately has no bearing on whether Plaintiff’s

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allegations against BANA state a legal basis for relief.3

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II.

Plaintiff’s Application for Entry of Default Judgment Against Defendant Triton
Lending Group (Dkt No. 114) and Defendant Marissa Moran (Dkt No. 115)
Plaintiff’s Applications for Entry of Default Judgment both indicate that a declaration in

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support of the entry of judgment was to be submitted with the applications, but the Court’s review of

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the docket herein indicates that no such declarations were filed. In the absence of any evidence to

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support entry of judgment against Triton or Marissa Moran, the Applications must be DENIED.

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Moreover, the Court has previously ruled that these claims would be time-barred under the

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applicable statutes of limitations in the context of the motions to dismiss by BANA and Recontrust.
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Moreover, as BANA and Recontrust point out in their opposition, had the Court had granted
injunctive relief prior to the dismissal of the claims here, Recontrust would have been obligated to cease
action on the foreclosure sale as it continued to be the trustee under Deed of Trust.

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(See Order, Dkt. 90 at 4:3-6:18.) If anything, the allegations as to Triton and Moran are even more

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clearly time-barred than those against BANA, as there are no factual allegations of any conduct by

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Triton or Moran whatsoever within the four years preceding the filing of the complaint. Thus, the

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denial of the default judgment applications is with prejudice, and Defendants Triton and Marissa

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Moran are DISMISSED.
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III.

Motion to Remand Unlawful Detainer Action Removed Within This Case Number (Dkt
No. 120)
This case was removed from the Superior Court of the State of California, County of

Alameda, where it was pending as an unlawful detainer action against Plaintiff Alison M. Abels.

Filing of Notice of Removal on October 30, 2012 (Dkt. No. 116). Abels removed the unlawful

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Northern District of California

Defendant filed her Notice of Removal October 18, 2012 (Dkt No. 112), and her Corrected Notice of

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United States District Court

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detainer case pursuant to 28 U.S.C. § 1441 and 1446, invoking this Court’s federal question

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jurisdiction under 28 U.S.C. §1331 because Wells Fargo had an obligation to disclose the transfer

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from Bank of America to it pursuant to 15 U.S.C. § 1641(g), as well as diversity jurisdiction under

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28 U.S.C. § 1332(a) on the basis that there is complete diversity of citizenship and “more than

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$75,000 (the value of the Subject Property)” is at stake. (Dkt No. 112 at 2.) Plaintiff also asserts that

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her rights under the Constitution have been violated by (unspecified) persons acting under color of

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law, making federal jurisdiction appropriate. (Id. at 3-4.)

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Last Mile moves to remand the unlawful detainer action. (Dkt. No. 120.) Plaintiff has not
filed an opposition to the motion.

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The Court GRANTS the motion for remand. First, Abels’ removal of the unlawful detainer

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complaint is untimely. A notice of removal must be filed within 30 days after receipt of a copy of

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the initial pleading. 28 U.S.C. § 1446(b). The summons and complaint were served by posting order

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per Cal. Code of Civil Procedure section 415.45 on August 6, 2012. “Service of summons in this

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manner is deemed complete on the 10th day after posting and mailing.” Cal. Civ. Proc. Code §

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415.45(c). Thus, a notice of removal should have been filed no later than September 15, 2012. The

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Notice of Removal on the docket herein was filed October 18, 2012. (Dkt No. 112.)4
Second, no federal question is presented -- the removed state court complaint asserts only one

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state law claim for unlawful detainer. A defense under federal law does not create federal question

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jurisdiction. Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (under the “well-pleaded complaint”

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rule, a case may not be removed on the basis of a federal defense); see also Wayne v. DHL

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Worldwide Express, 294 F.3d. 1179, 1183 (9th Cir. 2002) (existence of a defense based on federal

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law is insufficient to support jurisdiction). A defendant's counterclaims and defenses asserting a

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federal question cannot give rise to jurisdiction under section 1331. Vaden v. Discovery Bank, 556

notice as required under federal law is not sufficient to create federal questions jurisdiction over this

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Northern District of California

U.S. 49, 60 (2009). Thus Plaintiff’s argument that the assignment to Wells Fargo was not done with

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United States District Court

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unlawful detainer complaint.

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Third, the amount in controversy in the unlawful detainer action does not meet the

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jurisdictional threshold of $75,000.00 for diversity jurisdiction, nor has Abels offered evidence to

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meet her burden to show complete diversity of citizenship between the parties.

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IV.

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Motions by Third Party Wells Fargo to Intervene (Dkt No. 122) and to Dismiss Second
Amended Complaint (Dkt No. 125)

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Wells Fargo seeks to intervene in the instant action under the permissive joinder provisions of

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Federal Rule of Civil Procedure 24(b). Wells Fargo filed a similar motion previously in this case,

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which it withdrew after the Court ordered that it demonstrate a current interest in the property. Wells

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Fargo now argues, in a conclusory fashion, that it has claims or defenses that share common

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questions of fact or law with the main action. First, the claims of the “main action” have been

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dismissed. Second, whatever claims or defenses Wells Fargo might have would be distinct from

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those giving rise to the dismissed claims, since those allegations concerned the origination of the

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loan and the misrepresentations about a loan modification, neither of which involved Wells Fargo.

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The Court notes that both this Notice of Removal and Abels’ Corrected Notice of Filing of
Notice of Removal indicate that they were signed by Abels on September 24, 2012, considerably
earlier than their filing dates. However, even if they had been filed on September 24, 2012, they still
would have been untimely.
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Intervention under Rule 24(b) is a matter within the discretion of the Court, and should not be

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granted when the intervention is untimely or would unduly delay or prejudice the complete

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adjudication of the original parties’ rights. See Donnelly v. Glickman, 159 F.3d 405, 412 (9th

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Cir.1998); Orange v. Air Cal., 799 F.2d 535, 539 (9th Cir.1986). Here, the request to intervene

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comes well after the claims against BANA and Recontrust were dismissed by the Court. Thus the

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Motion of Wells Fargo to Intervene is DENIED. Wells Fargo’s desire to join the litigation at this late

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date in hopes of heading off any future claims by Plaintiff is not sufficient reason to permit joinder

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after the main action has been dismissed.

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As a further result, Wells Fargo’s Motion to Dismiss Plaintiff’s Second Amended Complaint
is DENIED as moot since it is not a party to that complaint.

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CONCLUSION

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United States District Court

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Based upon the foregoing:

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(1) Plaintiff’s Motion to Add Defendants Wells Fargo Bank, N.A., and Last Mile Properties,

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LLC (Dkt. No. 109) is DENIED;

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(2) Plaintiff’s Motion for Leave to File Supplemental Pleading (Dkt No. 110) is DENIED;
(3) Plaintiff’s Corrected Motion to Set Aside Order Granting Defendants Bank of America,
N.A., and Real Time Resolutions Motion to Dismiss (Dkt No. 111) is DENIED;
(4) Plaintiff’s Application for Entry of Default Judgment Against Defendant Triton Lending

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Group (Dkt No. 114) is DENIED and Defendant Triton Lending Group is DISMISSED;
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(5) Plaintiff’s Application for Entry of Default Judgment Against Defendant Marissa Moran
(Dkt No. 115) is DENIED and Defendant Marissa Moran is DISMISSED;
(6) the Motion by Third Party Last Mile Properties, LLC to Remand (Dkt No. 120) the
unlawful detainer action removed by Plaintiff pursuant to her Notice of Removal and Corrected

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Notice of Removal filed in the instant action (Dkt Nos. 112, and 114) is GRANTED. However, Last
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Mile’s request for an award of attorneys’ fees is DENIED.

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The Clerk of the Court is directed to REMAND the state court unlawful detainer action

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referenced in Plaintiff’s Notice of Removal (Dkt. No. 112) to the Superior Court of the State of

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California, County of Alameda.

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(7) Motion by Third Party Wells Fargo Bank, N.A. as Trustee on behalf of the holders of the

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HarborView Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2006-12
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(“Wells Fargo”) to Intervene (Dkt No. 122) is DENIED; and
(8) Motion by Third Party Wells Fargo Bank to Dismiss Second Amended Complaint (Dkt
No. 125) is DENIED.

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Northern District of California

United States District Court

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IT IS SO ORDERED.
January 4, 2013
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YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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