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

Filing 29

ORDER by Judge Yvonne Gonzalez Rogers dismissing with Leave to Amend 7 Motion to Dismiss (fs, COURT STAFF) (Filed on 11/26/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SUSAN AGUIAR and ROBERTO AGUIAR,

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United States District Court
Northern District of California

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Plaintiffs,
vs.

Case No.: 12-CV-03653 YGR
ORDER GRANTING MOTION OF DEFENDANTS
WELLS FARGO BANK, N.A. AND REGIONAL
SERVICE CORPORATION TO DISMISS WITH
LEAVE TO AMEND

WELLS FARGO BANK, N.A. and REGIONAL
SERVICE CORPORATION,
Defendants.
Plaintiffs Susan and Roberto Aguiar filed a Verified Complaint for Equitable Relief to Set

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Aside Trustee Sale and Damages against Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and

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Regional Service Corporation (“Regional Service”) (collectively “Defendants”). Plaintiffs allege

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three claims: (1) Wrongful Trustee Sale against both Defendants; (2) Quiet Title against Wells

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Fargo; and (3) violation of the Federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C.

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§§ 1692 et seq. against both Defendants. Fundamentally, they allege that Wells Fargo violated the

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National Housing Act (“NHA”), 12 U.S.C. §§ 1701 et seq. because it did not meet with Plaintiffs

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in-person to discuss alternatives to foreclosure or secure the approval of the Secretary of the

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Department of Housing and Urban Development prior to initiating foreclosure proceedings.

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Plaintiffs claim further that both Defendants violated the FDCPA because Regional Service failed

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to provide Plaintiffs with a Debt Validation Notice.

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Wells Fargo has filed a Motion to Dismiss all three claims alleged in the Complaint on the

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grounds that judicially noticeable documents demonstrate that Wells Fargo had the right to conduct

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a non-judicial foreclosure and complied with the statutory requirements for non-judicial

1

fore
eclosures; the NHA does not apply to Plaintiffs’ mortgage or create a pri
e
s
o
r
ivate right of action; and
f
d

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Wel Fargo is exempt from the FDCPA (See Dkt. No. 7.) Defendant Reg
lls
e
m
A.
gional Servic
ces

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Corp
poration file a joinder of Wells Far
ed
o
rgo’s motion (See Dkt. No. 16.)
n.
Having carefully con
c
nsidered the papers subm
mitted and th pleadings in this actio for the
he
on,

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reas
sons set forth below, the Court hereb GRANTS t Motion to Dismiss WITH LEAVE TO
h
by
the
o
E

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AME .1
END

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I.

In Decem
mber 2010, Plaintiff Rob
P
berto Aguiar who is Pla
r,
aintiffs’ sole source of in
ncome, was

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9

BACKG
GROUND

serio
ously injured at work. (Complaint ¶ 9.) He had back surger in Septem
d
d
ry
mber 2011 bu was
ut
unab to return to work unt March 2012. (Id.) Hi claim for worker’s compensation insurance
ble
n
til
is

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United States District Court
Northern District of California

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was approved, but has not yet received money for th claim. (Id While M Aguiar w unable to
b
y
m
he
d.)
Mr.
was
o

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wor a notice of default and a notice of trustee’s sa were filed and three weeks befor Mr.
rk,
o
d
f
ale
d,
re

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Agu returned to work, De
uiar
d
efendants sold Plaintiffs ’ home in a t
trustee’s sale. (Id.)

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A.

NONJUDICIA FORECLO
AL
OSURE PROC
CEEDINGS

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On Marc 30, 2006, Plaintiffs ex
ch
xecuted an A
Adjustable R Note (“N
Rate
Note”) in the amount of
e

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$840
0,000, secur by a Deed of Trust ag
red
gainst real p roperty loca at 50 Ra
ated
anch Drive, N
Novato,

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Cali
ifornia (the “Property”), in favor of Wells Fargo predecess in interes World Sa
“
W
o’s
sor
st,
avings Bank,

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FSB (Id. ¶¶ 1, 3, 5.)
B.

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fs
o
n
n
arch 7, 2011,
Plaintiff defaulted on their loan payment in November 2010. (Id. ¶ 8.) On Ma

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Reg
gional Servic filed a no
ces
otice of defau which w recorded with the Ma County Recorder’s
ult,
was
arin

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Offi
ice. (RJN, Ex. F). A no
E
otice of truste sale was subsequent recorded on June 8, 2
ee’s
s
tly
d
2011. (RJN,

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Ex. G).
2
er
heir
laintiffs filed a Chapter 13 Bankrupt Petition,
d
tcy
In June 2011, in orde to save th home, Pl

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Case No. 11-124
e
441-AJ. (Pls.’ Opp’n 7.) As part of a settlemen in the bank
f
nt
kruptcy case Plaintiffs
e,

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agre to pay an prepetitio amounts owing2 over a period of s
eed
ny
on
o
several years and pay $5 each
s,
500

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Pur
rsuant to Fede Rule of Civil Procedu 78(b) and Civil Local R 7-1(b), th Court finds this motion
eral
C
ure
Rule
he
appr
ropriate for de
ecision withou oral argum
ut
ment.
2

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Ac
ccording to the March 2011 Notice of Default, the am
e
1
D
mount owing w $20,629. as of March 4, 2011.
was
.36
(See RJN, Ex. F.)
e
)

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mon
nth. (Id.) Pl
laintiffs were able to mak the July 2
e
ke
2011 paymen in an amo
nt
ount of $390
04.00 but

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coul not make further paym
ld
ments.
In Novem
mber 2011, Wells Fargo successfully moved to have the aut
W
o
y
tomatic stay lifted,

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whic was lifted in January 2012. (Pls’ RJN, Ex. B On Febru
ch
d
B.)
uary 21, 2012, a Trustee’s Sale was

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held at which Wells Fargo purchased th Property a the highes bidder. (R
d
W
p
he
as
st
RJN, Ex. H a 2.) “Wells
at
s

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Farg filed an unlawful deta
go
u
ainer compla against p
aint
plaintiffs and took a defa
d
fault, default judgment,

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and obtained a writ of posse
w
ession pursua to the Ju
ant
udgment.” (C
Complaint ¶ 9.) Plaintif moved to
ffs

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vaca the defau on the bas that they were never served but th motion was denied. (Id.) A
ate
ult
sis
heir

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stay of eviction was schedul to end on June 18, 20
y
led
n
012. (Id.)
B.

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United States District Court
Northern District of California

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PROCEDURA BACKGRO
AL
OUND

On June 18, 2012, Plaintiffs filed this action in the Supe
d
n
erior Court fo the Count of Marin.
or
ty

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Plaintiffs moved for a tempo
d
orary restraining order to enjoin Def
o
fendants from evicting P
m
Plaintiffs

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from the Proper
m
rty. (See Not of Remo
tice
oval, Ex. B.) A tempora restrainin order was issued
)
ary
ng
s

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enjo
oining Defen
ndants from evicting Plai
e
intiffs. (Id.) A hearing on a prelimi
)
inary injunct
tion was

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sche
eduled in Su
uperior Court for July 18, 2012. (Id.) On July 12 2012, Def
t
)
2,
fendants rem
moved the

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actio to this Co
on
ourt. It appe that subs
ears
sequent to re
emoval, Def
fendants evic Plaintiff from the
cted
fs

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Prop
perty.

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II.

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LEGAL STANDAR
L
RD
A motion to dismiss under Rule 12(b)(6) tes the legal s
n
sts
sufficiency o the claims alleged in
of
s

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the complaint. Ileto v. Gloc Inc., 349 F.3d 1191, 1
c
I
ck,
1199-1200 (
(9th Cir. 200
03). All alleg
gations of

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mate
erial fact are taken as tru Erickson v. Pardus, 551 U.S. 89 94 (2007). However, l
e
ue.
n
9,
legally

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pted. See As
conc
clusory state
ements, not supported by facts, need not be accep
s
y
d
shcroft v. Iqbal, 556

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U.S. 662, 678 (2
2009). Plain
ntiffs’ obliga
ation to prov ide the grou
unds of their entitlement to relief

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“req
quires more than labels and conclusio and a fo
t
a
ons,
ormulaic rec
citation of the elements o a cause of
of
f

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actio will not do.” Bell Atl
on
d
lantic Corp. v. Twombly 550 U.S. 5
y,
544, 555 (200 (citation and
07)
ns

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quot
tations omitt
ted). Rather the allegations in the c
r,
complaint “m be enou to raise a right to
must
ugh

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relie above the speculative level.” Id.
ef

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3

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Review is generally limited to th contents o the compl
he
of
laint and doc
cuments atta
ached

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ther
reto. Allarco Pay Telev
om
vision. Ltd. v. Gen. Instr
v
rument Corp 69 F.3d 381, 385 (9th Cir. 1995).
p.,
h

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Add
ditionally, th Court may consider matter that is properly the subject of judicial notic such as
he
y
m
e
ce,

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cour filings and other publi records, without conve
rt
d
ic
w
erting a mot
tion to dismi into one f summary
iss
for
y

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judg
gment. Lee v. Los Angel 250 F.3d 668, 688-8 (9th Cir. 2
v
les,
d
89
2001). The C
Court finds t the
that

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docu
uments subm
mitted by We Fargo an Plaintiffs are properly the subject of judicial n
ells
nd
y
t
notice. Fed.
.

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R. Evid. 201(b)(
E
(2). All of th documen are docum
he
nts
ments issued by a legisla
d
ative or execu
utive

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depa
artment of th United St
he
tates, public records pert
taining to the Property, o court filin
e
or
ngs. The

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Cou will take judicial notice of the dat parties, a legally o
urt
j
tes,
and
operative lan
nguage of the
ese
docu
uments, but not the truth of various factual repre
h
f
esentations m
made in the d
documents.3 See Lee,

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United States District Court
Northern District of California

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supr 250 F.3d at 690.
ra,
d

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III.

DISCUS
SSION
Plaintiff first cause of action al
fs’
e
lleges Wron
ngful Trustee Sale on th grounds t the
e’s
he
that

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trust
tee’s sale wa improperl held becau Defenda failed to comply wit the (a) Na
as
ly
use
ants
o
th
ational

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Hou
using Act and (b) Fair De Collectio Practices Act before i
d
ebt
on
initiating for
reclosure pro
oceedings.

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Base on these same allegat
ed
s
tions, the sec
cond cause o action see to quiet title in the Pr
of
eks
roperty

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agai Wells Fa
inst
argo. The th cause of action reall
hird
f
leges a viola
ation of the F
FDCPA. Because the

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alleg violation of the FD
ged
ns
DCPA is also used to sup
pport the clai for Wron
im
ngful Trustee Sale, the
e’s

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Cou will addre the FDCP claim as an element of the Wron
urt
ess
PA
ngful Trustee Sale claim
e’s
m.

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A.

FIRST CAUSE OF ACTION: WRONGF TRUSTE ’S SALE
E
N
FUL
EE

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A nonjud
dicial foreclosure sale is presumed t have been conducted r
s
to
n
regularly and fairly.
d

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Ngu
uyen v. Calho 105 Cal App. 4th 428, 444 (Ca Ct. App. 2
oun,
l.
4
al.
2003) (“Our analysis pro
r
oceeds on

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the presumption of validity accorded the foreclosure sale”). To state a caus of action f a
p
n
e
e
se
for

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wrongful trustee sale, the Plaintiffs mu plead “(1 the trustee or mortgag caused an illegal,
e’s
ust
1)
e
gee
n

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3

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For example, a Declaration filed with the Notice of Def
r
D
fi
N
fault (RJN, E F, at 3) dec
Ex.
clares under p
penalty of
perju that “Wel Fargo Bank, N.A., has tried with due diligence … to contact th borrower.” The Court
ury
lls
t
e
he
”
can take judicial notice of the fact that this statement wa made and th legally ope
t
n
f
s
as
he
erative effect of a
declaration under penalty of pe
r
erjury, but no the truth of the matter as
ot
f
sserted in the hearsay decla
aration. The
Cour uses this ex
rt
xample becau Wells Farg argues that the Court ca take judicial notice of th truth of the
use
go
at
an
he
e
state
ements contained in the dec
claration beca
ause the decla
aration was m
made under pe
enalty of perju
ury.
4

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frau
udulent, or willfully oppr
w
ressive sale of real prope pursuant to a power of sale in a mortgage or
o
erty
t
r

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deed of trust; (2) the party attacking the sale (usuall but not alw
d
a
ly
ways the trus or mortg
stor
gagor) was

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prejudiced or ha
armed; and (3) in cases where the tru
w
ustor or mort
tgagor challe
enges the sa the
ale,

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trust or mortgagor tendere the amoun of the secu
tor
ed
nt
ured indebte
edness or wa excused fr
as
rom

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tend
dering.” Lon v. Citiban N.A., 202 Cal. App. 4 89, 104 (
na
nk,
2
4th
(Cal. Ct. App 2011).
p.

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First Element: Il
llegal, fraudu
dulent, or wil
llfully oppres
ssive sale of real
f
prope
erty.

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Plaintiffs alle that Defe
P
ege
fendants faile to comply with the (a NHA; and (b) FDCPA
ed
y
a)
d
A

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befo beginning foreclosur proceeding and theref
ore
re
gs
fore, contend the Trustee’s Sale was improperly
s
y

10

1.
1

held
d.

United States District Court
Northern District of California

11

a)

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ndants allege
edly violated the NHA b
d
because, prio to initiatin
or
ng
Defen

National Housing Act
H
t.

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fore
eclosure proc
ceedings, a bank represen
b
ntative faile d to “meet w plaintiff on a face t face basis
with
fs
to

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to discuss altern
natives to for
reclosure and [a] modific
d
cation of the subject loan (Compla ¶ 7.)
e
n.”
aint

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Add
ditionally, Pl
laintiffs alleg that “Wel Fargo wa required to secure the approval of the
ge
lls
as
o

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Secr
retary of Housing and Urban Develo
U
opment prior to commen
r
ncing any for
reclosure pro
oceedings.”

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(Id.)
)

18

Wells Fa
argo argues that the NHA does not a
t
A
apply to Plain
ntiffs’ mortg
gage and eve if it did,
en

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the NHA does not provide for a private right of action. The Cou agrees. S Karigud
N
n
f
urt
See
ddaiah v.

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Wel Fargo Bank, N.A., C-0
lls
09-5716 MH 2010 WL 2650492, at *5 (N.D. Cal. July 1, 2010) (“the
HP,
L

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Nati
ional Housin Act does not create a private right of action”) To suppor this claim, Plaintiffs
ng
).
rt
,
t

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cite to the short title to the NHA, 12 U.S § 1701, and a subpa of its imp
N
S.C.
art
plementing regulations,

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C
wever, as the plain langua of the NH shows it does not im
age
HA
t
mpose the
24 C.F.R. § 203.500.4 How

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4

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26
27
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The referenced subpart provi
ides:
This subp identifies servicing pra
part
s
actices of len
nding institutio that HUD considers
ons
D
acceptabl for mortgag insured by HUD. Failu to comply with this sub
le
ges
y
ure
y
bpart shall no be a
ot
basis for denial of insu
urance benefits, but failure to comply w be cause f imposition of a
e
will
for
n
civil mon penalty, in
ney
ncluding a pe
enalty under § 30.35(c)(2), or withdrawa of HUD’s
al
approval of a mortgag
gee. It is the intent of the D
Department th no mortga
hat
agee shall
commenc foreclosure or acquire ti to a prope until the r
ce
e
itle
erty
requirements of this subpa
art
have been followed.
n
5

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duties allegedly breached vis-à-vis a mortagee and mortgagor, rather it “‘govern[s] relations

2

between the mortgagee and the government.’” Jara v. Aurora Loan Services LLC, C-11-00419 LB,

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2011 WL 4536898, at *4 (N.D. Cal. Sep. 30, 2011) (holding that plaintiff’s “attempt to amend his

4

complaint to allege that Defendants failed to comply with the terms of the National Housing Act,

5

then, is futile”) (quoting Mitchell v. Chase Home Finance LLC, Case No. 06-CV-2099-K, 2008 WL

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623395, at *3 (N.D. Tex. Mar. 4, 2008)). Plaintiffs do not address this issue at all in their

7

Opposition brief, which the Court takes as a concession that this claim lacks merit.

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Based on the foregoing, the Court GRANTS WITH PREJUDICE the Motion to Dismiss
Plaintiffs’ claim for wrongful trustee’s sale on this particular basis.
b)

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United States District Court
Northern District of California

10

Fair Debt Collection Practices Act.

The FDCPA prohibits “debt collectors” from engaging in unfair, abusive, or

12

deceptive practices “in connection with the collection of a debt.” 15 U.S.C. § 1692. Under the

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FDCPA, debt collectors are required to provide debtors with a Debt Validation Notice to notify

14

debtors of their dispute rights shortly after communicating with them “in connection with the

15

collection of a debt.” Id. § 1692g.

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Plaintiffs allege that the Defendants failed to provide a Debt Validation Notice in

17

connection with the collection of a debt in violation of the FDCPA. Specifically, Plaintiffs allege

18

that Defendant Regional Service “was employed by Wells Fargo as a debt collector after plaintiffs

19

defaulted on their loan payment. Regional Service failed to provide plaintiffs the Debt Validation

20

Notice required by the FDCPA. Regional Service also engaged in unfair debt collection practices

21

by proceeding to sell the subject property with actual knowledge that plaintiffs were being denied

22

the protections of the law.” (Complaint ¶ 8.)

FDCPA Analysis: Regional Service Corporation.

23

i.

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Regional Service argues that it is exempt from the FDCPA because it

25

is not a “debt collector” and that it was not engaging in debt collection services. Under the

26

FDCPA, a “debt collector” is defined as “any person … in any business the principal purpose of

27

which is the collection of any debts, or who regularly collects or attempts to collect, directly or

28

24 C.F.R. § 203.500.
6

1

indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a. Here, the

2

Complaint alleges as follows:

3

Regional Service Corporation is a debt collector as that term is defined in the FDCPA. In
particular, the principal business of Regional Services is the collection of delinquent debts
from borrowers such as plaintiffs. Regional Service began its debt collection activities after
plaintiffs were in default. Also Regional Service used the US Mail to solicit money from
plaintiffs after the default of plaintiffs.

4
5
6
7

(Complaint ¶ 9.) Regional Service disputes the truth of these allegations but does not otherwise

8

challenge the legal sufficiency of these particular allegations. Given the procedural posture of this

9

case, the Court must accept the allegations as true.
Regional Service next argues that it was not engaging in debt collection services because,

10

United States District Court
Northern District of California

11

under the FDCPA, the non-judicial foreclosure of real property secured by a deed of trust is not

12

“debt collection activity.” Ample authority supports this position. See, e.g., Odinma v. Aurora

13

Loan Services, C-09-4674 EDL, 2010 WL 2232169, at *11 (N.D. Cal. June 3, 2010) (collecting

14

cases that hold “foreclosure is not debt collection under the federal Fair Debt Collection Practices

15

Act”). In opposition, Plaintiffs refer to a brief filed by the Consumer Financial Protection Bureau5

16

in Birster v. Am. Home Mortg. Servicing, Inc., 11-13574, 2012 WL 2913786 (11th Cir. July 18,

17

2012), in which it argued that district courts have construed the statute too narrowly so as to

18

eliminate categorically all debt collection services which may be related to a foreclosure. However,

19

that case did involve more traditional attempts to collect on a debt. There, the defendant allegedly

20

“engaged in a relentless assault of harassing phone calls and home inspections in an attempt to

21

collect the mortgage debt.” Id. at *1. Additionally, the defendant mailed a letter that stated “THIS

22
23
24
25
26
27
28

5

Plaintiffs argue that the Court must defer to the agency’s interpretation of a statute as reflected in the
amicus brief. The cases to which they cite in support are not on point as the cases refer to a type of
deference described as Auer deference, which requires courts defer to an agency’s interpretation of its own
ambiguous regulations even if the interpretation is advanced in an amicus brief. See Auer v. Robbins, 519
U.S. 452, 461-62 (1997). The amicus brief filed by the Consumer Financial Protection Bureau is
interpreting the FDCPA, not the agency’s own regulations. An agency interpretation not embodied in any
formal issuance from the agency, such as a regulation, guideline, policy statement, or administrative
adjudication is entitled to little if any deference. Bowen v Georgetown Univ. Hospital, 488 U.S. 204, 212-13
(1988); see Bresgal v. Brock, 843 F.2d 1163, 1168 (9th Cir. 1987) (“[The agency] did not construe [the
statutory provision at issue] until the onset of this litigation. The Secretary’s construction is entitled to no
more deference than is the interpretation of any party to the suit”).
7

1

IS AN ATTEMPT TO COLLECT A DEBT,” advising the homeowners that it would proceed with

2

the foreclosure unless they cured the default. (Id.) In an unpublished decision, the Eleventh Circuit

3

found this evidence insufficient to determine whether the defendant was a debt collector or was

4

engaging in debt collection activity and reversed the summary judgment entered against the

5

homeowners. Id. at *4 (“an entity can both enforce a security interest and collect on a debt”)

6

(citing Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1217 (11th Cir. 2012))

7

(“The fact that the letter and documents relate to the enforcement of a security interest does not

8

prevent them from also relating to the collection of a debt within the meaning of § 1692e.”). By

9

contrast, here, Plaintiffs allege that “Regional Service used the US Mail to solicit money from

10

plaintiffs after the default of plaintiffs.” (Complaint ¶ 9.)
Plaintiff has not pled sufficient facts for the Court to determine whether Regional Service’s

United States District Court
Northern District of California

11
12

conduct constituted debt collection services. The mere mailing of a Notice of Default will not

13

suffice. See Santoro v. CTC Foreclosure Serv., 12 Fed.App. 476, 480 (9th Cir. 2001). The Motion

14

to Dismiss is GRANTED WITH LEAVE TO AMEND.

FDCPA Analysis: Wells Fargo.

15

ii.

16

Wells Fargo also argues that it is exempt from the provisions of the

17

FDCPA.6 Plaintiffs do not contest that when Wells Fargo acts as a lender, it is exempt from the

18

FDCPA, but argue that Wells Fargo is not exempt when it acts as a loan servicer. According to

19

Plaintiffs, they are entitled to pursue their claims against America’s Servicing Company, the

20

servicing division of Wells Fargo. America’s Servicing Company is not a defendant to this lawsuit

21

and there are no allegations about it in the Complaint.

22

Based on the foregoing, the Court GRANTS the Motion to Dismiss the FDCPA cause of

23

action against Wells Fargo to the extent it is based on its banking capacity. The Court does not

24

give an advisory opinion regarding America’s Servicing Company. However, the Court GRANTS

25

LEAVE TO AMEND to permit Plaintiffs to bring this claim against America’s Servicing Company.

26
27
28

6

Wells Fargo argues that even if the FDCPA did apply to it, Plaintiffs fail to allege that they provided a
timely written dispute of the debt, as required by 15 U.S.C. § 1692g(b). There is no such pleading
requirement.

8

1

2.
2

Secon Element: Prejudice.
nd

2

Irregularities in a nonjud
s
dicial foreclo
osure sale ma be ground for setting aside the
ay
ds
g

3

sale if the irregu
ularities are prejudicial to the party c
p
o
challenging t sale. Lon supra, 20 Cal. App.
the
na,
02

4

4th at 104. Thu the party attacking the sale must a
us,
a
e
allege that th were pre
hey
ejudiced or h
harmed by

5

the violation.
v

6

Wells Fa
argo argues that even if Plaintiffs co uld allege a flaw in the f
t
P
foreclosure m
mechanics,
“hyp
per-technica defects ar not a basis to challeng a trustee’s sale. Altho
al”
re
s
ge
s
ough Plaintif have
ffs

8

alleg technica noncompli
ged
al
iance with fe
ederal law, t
they have no explained how they we
ot
ere

9

prejudiced by su noncomp
uch
pliance. Pla
aintiffs allege that they d
e
defaulted on the Note, wh under
hich

10

the Deed of Tru allowed the Trustee (or Beneficia to initia foreclosur proceedin
D
ust,
t
(
ary)
ate
re
ngs. If the

11

United States District Court
Northern District of California

7

Trus (or Bene
stee
eficiary) has the right to initiate fore
s
eclosure proc
ceedings, the Plaintiffs must allege
en

12

facts that show the violation of the statu itself, and not the fore
t
n
ute
d
eclosure pro
oceedings, ca
aused their

13

inju
ury. Here, Pl
laintiffs alleg that their injuries wer caused by the foreclos
ge
re
y
sure proceed
dings, and

14

not by any statu
b
utory violatio Therefor Plaintiffs fail to alleg the prejud necessar to state a
on.
re,
ge
dice
ry

15

claim for wrong foreclosu
m
gful
ure.

16
17

Based on the foregoi analysis, the Court G RANTS the Motion to D
n
ing
,
Dismiss the c
claim for
Wro
ongful Truste Sale on the grounds that Plainti fail to all
ee’s
s
iffs
lege prejudic
ce.

18

3.
3

d
T
Third Element: Tender.

19

Finally, in or
F
rder to set as a foreclo
side
osure, Plaint
tiffs must all
lege that they offered to
y

20

tend the full amount of the secured ind
der
e
debtedness o that they s
or
should be ex
xcused from tendering

21

the full amount. See Abdall v. United Savs. Bank 43 Cal. Ap 4th 1101, 1109 (Cal. Ct. App.
f
lah
d
k,
pp.

22

1996); see also Guerrero v. Greenpoint Mortg. Fun
nding, Inc., C
Case No. 10-15333, 2010 WL
0

23

4117
7102, at *1 (9th Cir. Oct 20, 2010) (stating the p
(
t.
plaintiffs “la
acked standi to bring a claim for
ing

24

‘wro
ongful foreclosure,’ beca
ause they fai to allege actual, full and unambiguous tende of the
iled
e
l
er

25

debt owed on th mortgage” “This req
t
he
”).
quirement is based on th theory tha one who is relying
he
at
s

26

upon equity in overcoming a voidable sale must sho that he is able to perf
n
o
ow
s
form his obli
igations

27

unde the contra so that eq
er
act
quity will no have been employed fo an idle pu
ot
or
urpose.” Dim
mock v.

28

Eme
erald Proper
rties LLC, 81 Cal. App. 4th 868, 878 (Cal. Ct. A
1
4
8
App. 2000) (c
citing Karlse v. Am.
en

9

1

Sav. & Loan Ass 15 Cal. App. 3d 112 118 (Cal. C App. 197
.
sn.,
A
2,
Ct.
71)). Here, t Complai lacks
the
int

2

alleg
gations of fu tender or that tender should be ex
ull
s
xcused.7 Inst
tead, the alle
egations are ambiguous

3

as to what Plain
o
ntiffs are will
ling to tende Thus: “P
er.
Plaintiffs are ready, willi and able to make the
e
ing
e

4

paym
ments requir of them pursuant to the Deed of Trust” but re
red
p
t
equest “an a
accounting to determine
o

5

the amount due under the Deed of Trust as wells [s as the ap
a
D
t,
sic]
ppropriate pa
ayment sched
dule.”

6

(Com
mplaint ¶¶ 12, 15.) Sim
1
milarly, in the opposition Plaintiffs argue that “
eir
n,
“Plaintiffs ar ready,
re

7

willing and able to tender th post petiti amounts due on the l
e
he
ion
loan.” (Opp 14.) The also argue
p’n
ey
e

8

that it would be inequitable to require fu tender be cause Mr. A
ull
Aguiar was o of work w
out
when

9

fendants initi
iated the fore
eclosure proceedings. T
These allegat
tions and arg
guments crea
ate
Defe
amb
biguity as to whether the Plaintiffs ca tender the full amoun and wheth the amou they
an
e
nt
her
unt

11

United States District Court
Northern District of California

10

inten to tender is pre- or po petition.
nd
ost.
Based on this analys the Court GRANTS th Motion to Dismiss Pla
n
sis,
t
he
o
aintiffs’ clai for
im

12
13

Wro
ongful Truste Sale bec
ee’s
cause the co
omplaint fails to allege “f
s
full” tender.

14

B.

SECOND CAUSE OF ACT : QUIET TITLE
TION
T

15

The claim for Quiet Title against Wells Farg is predica on the sa acts und
m
go
ated
ame
derlying the

16

claim for a Wrongful Truste Sale. Accordingly, the Court GRANTS the M
m
ee’s
A
Motion to Di
ismiss for

17

the reasons set forth above.
r
f

18

IV.

CONCL
LUSION

19

Based on the foregoi analysis, the Court G RANTS the Motion to D
n
ing
,
Dismiss.

20

Plaintiff Complain is DISMISS WITH L EAVE TO AM
fs’
nt
SED
MEND consis
stent with th Order.
his

21

By no la than 21 days after the date this O
ater
d
Order is filed Plaintiffs sh file an a
d
hall
amended

22

com
mplaint.

23

der
tes
N
This Ord Terminat Docket Number 7.

24

IT IS SO ORDERED.

25
26

Date:November 26, 2012

27

__
__________
___________
__________
__________
YVON GONZAL ROGERS
NNE
LEZ
UNITED ST
TATES DISTR
RICT COURT JUDGE
T

28
7

Pla
aintiffs’ claim for Quiet Tit seeks an accounting to set up a paym plan for late payment
m
tle
a
ment
ts.
10