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

Filing 33

ORDER by Judge Yvonne Gonzalez Rogers Denying 28 Motion to Dismiss First Amended Complaint. (fsS, ) (Filed on 6/4/2013)

1
2

UNITED STATES D ISTRICT CO
OURT

3

NORTHE DISTRIC OF CALIF
ERN
CT
FORNIA

4
5
6

MAR
RILYN POST
TLEWAITE an PAMELA
nd
POS
STLEWAITE,

7

Plaintiffs,

8
9

C
Case No.: 12
2-CV-04465 YGR
O RDER DENY
YING MOTIO OF DEFEN
ON
NDANT
T O DISMISS FIRST AMEN
NDED COMPL
LAINT

vs.
WEL FARGO BANK N.A. et al.,
LLS

10

Defe
endant(s).

United States District Court
Northern District of California

11

Plaintiff Pamela and Marilyn Postlewaite b ring this act
fs
d
tion to set aside a non-ju
udicial

12
13

fore
eclosure sale conducted after Defend Wells Fa
a
dant
argo Bank, N (“Wells Fargo”) represented
N.A.

14

that it would rei
instate a loan and continu the sale. Plaintiffs’ F
n
ue
First Amende Complain (Dkt. No.
ed
nt

15

27, “FAC”) alle
“
eges four cau of action seeking to : (1) Set As a Trustee’s Sale; (2) Cancel a
uses
n
side
)

16

Trus
stee’s Sale; (3) Quiet Tit and (4) get an Accou
(
tle;
g
unting.
Wells Fa
argo has filed a Motion to Dismiss o the ground that no ac
t
on
ds
ctionable cla has been
aim
n

17
18

alleg and that Plaintiffs do not have st
ged
t
o
tanding to se an accou
eek
unting. The Court held o argumen
oral
nt

19

on June 4, 2013.
J
Having carefully con
c
nsidered the papers subm
mitted, the FAC, and the oral argume of
e
ent

20
21

coun
nsel, for the reasons set forth below, the Court h
,
hereby DENIE the Motio to Dismis
ES
on
ss.

22

I.

BACKG
GROUND

23

A.

24

On Augu 1, 2006, Philomena F. Mitchell b
ust
F
borrowed $585,000 from Wells Farg
m
go’s

25

pred
decessor in in
nterest, Wor Savings Bank, FSB1 (“Loan”), se
rld
B
ecured by a D
Deed of Tru recorded
ust

26

1

27
28

TRANSFERS OF INTEREST IN THE PR
O
ROPERTY

World Savings Bank, FSB thereafter changed its n
s
B,
c
name to Wa
achovia Mort
tgage, FSB, but remaine
ed
char
rtered under the Home Owner’s Loa Act and ov
O
an
verseen by t Office of Thrift Supe
the
f
ervision.
Subsequently, Wachovia Mortgage, FSB was merg into Wel Fargo Ban N.A. (Se RJN, Exs.
W
B,
ged
lls
nk,
ee
C-F.)

1

on August 8, 20 against 7 Hillsdale Place, San M
A
006
Mateo, CA 94
4403 (the “Pr
roperty”). (F
FAC ¶¶ 2(a),

2

9.) On August 26, 2006, Ms. Mitchell conveyed he r interest in the Property to the Philo
2
c
y
omena F.

3

chell Living Trust. (Id. ¶ 10.) Ms. Mitchell died in 2007. (I ¶ 4.) Som
M
d
Id.
metime thereafter,
Mitc

4

Joan Holman Stine becam successor trustee of th Philomen F. Mitchel Living Tru because,
nne
me
r
he
na
ll
ust

5

acco
ording to the Complaint, on March 17, 2008, Ms Stine, succ
e
,
1
s.
cessor truste of the Phil
ee
lomena F.

6

Mitc
chell Living Trust filed and recorded a Trust Tra
a
d
ansfer Deed named Wes
stern Nationa Trust
al

7

Com
mpany as suc
ccessor trustee. (Id. ¶ 13
3.)

8

On June 29, 2010, Western National Trust C
W
Company, as the successor trustee of the
s
f
Phil
lomena F. Mitchell Livin Trust, qui
M
ng
itclaimed its interest in t Property to the daugh and
s
the
hter

10

gran
nddaughter of Ms. Mitch Plaintiff Marilyn an Pamela P
o
hell,
fs
and
Postlewaite. (Id. ¶¶ 7, 15 Each
5.)

11

United States District Court
Northern District of California

9

Plaintiff obtaine an undivid one-half interest, in the Property as tenants in common. (Id. ¶¶ 6,
ed
ded
f
y,

12

14.) Their inter remained subject to the senior lie in favor o Wells Farg that had b
rest
d
t
en
of
go
been created
d

13

by virtue of the Deed of Tru recorded on August 8 2006.
v
ust
8,

14

B.

15

On January 11, 2011 and again on March 30 2011, a No
1
o
0,
otice of Defa was reco
ault
orded

16

refle
ecting that th Loan had been in defa since Au
he
ault
ugust 15, 20
010. (Id. ¶ 16 On June 30, 2011, a
6.)
e

17

Noti of Truste Sale wa recorded, reciting that the debt wa now $681,
ice
ee’s
as
r
as
,314. (Id.) C
Copies of the

18

Noti
ices of Defa and copies of the No
ault
otice of Trust
tee’s Sale were sent to W
Western Nati
ional Trust

19

Com
mpany but no Plaintiffs. (Id.)
ot

20

FORECLOSUR PROCEED
RE
DINGS

On July 6, 2011, We
estern Nation Trust Co
nal
ompany infor
rmed Wells Fargo that P
Plaintiffs wer
re

21

the true owners of the Prope and that notice to W
t
erty
Western Natio Trust Company did not
onal
d

22

cons
stitute notice to the owners. (Id. ¶ 17.) Plaintiff allege that on or about July 14, 20
e
fs
t
t
011, they firs
st

23

beca aware of a Notice of Trustee’s Sale on July 21, 2011. ( ¶ 18.) Plaintiffs furt
ame
o
o
S
(Id.
ther allege

24

that they contacted Wells Fa
argo, explain they had no notice o the sale, an attempted to work ou
ned
d
of
nd
d
ut

25

a loa modificat
an
tion. (Id.)

26

C.

27

On Augu 17, 2011 Plaintiff Pa
ust
amela Postlew
waite, on be
ehalf of herse filed an a
elf,
action against

28

PRIOR LAWS
SUIT AND TRUSTEE’S SA
R
ALE

Wel Fargo and the then tru
lls
d
ustee under the Deed of Trust, NDEx West LLC in state cou alleging
t
x
C,
urt

2

1

six causes of act
c
tion: (1) bre
each of contr
ract; (2) frau (3) neglig
ud;
gence; (4) in
ntentional tor (5)
rt;

2

violation of the California Foreclosure Prevention A and (6) d
F
P
Act;
declaratory a injunctiv relief.
and
ve

3

y
o
ern
of
a.
04563-PJH.)2
The action was subsequently removed to the Northe District o California (11-CV-0

4

On or ab
bout Septemb 16, 2011 then-couns for Pame Postlewa and thenber
1,
sel
ela
aite
-counsel for

5

lls
ene
eed
tatement of t Loan for $44,813.49 and to conti
the
inue the
Wel Fargo, Ge Wu, agre to reinst

6

Trus
stee’s Sale from Septem
fr
mber 23, 2011 to October 21, 2011, su
1
r
ubject to Pam Postlew
mela
waite not

7

purs
suing litigati against Wells Fargo and not filin for bankru
ion
W
ng
uptcy. (FAC ¶¶ 21-23.) In the
C

8

orig
ginal Compla
aint, Plaintiff alleged th Mr. Wu a
ffs
hat,
agreed to an did send a “Reinstatem Quote,”
nd
ment

9

whic was attac
ch
ched to the Complaint as Exhibit H. (Complaint ¶¶ 16-17.) The quote st
C
t
tated about
the reinstatemen amount: “good throug 09-21-11 ” and “the am
r
nt
“
gh
amount quote above mu be
ed
ust

11

United States District Court
Northern District of California

10

rece
eived in our San Antonio office no la than 4:0 p.m., East
S
o
ater
00
tern Time, on 09-21-11. After this
n

12

date additional amounts ma become due.” (Comp
e,
ay
d
plaint, Ex. H
H.)
Even tho
ough the sale date was su
e
upposed to b continued to October 21, 2011, w
be
d
without

13
14

warn
ning, on Oct
tober 4, 2011, Wells Far sold the P
rgo
Property at a Trustee’s S
Sale, with W
Wells Fargo

15

takin title pursu to its cr
ng
uant
redit bid. (F
FAC ¶ 24.) P
Plaintiffs alle that they tried to ten
ege
y
nder the

16

rein
nstatement am
mount but th Defendan refused to accept the m
hat
nt
money. (Id. 26.)

17

D.

18

On Augu 1, 2012, Plaintiffs fil this actio in state co seeking to set aside the trustee’s
ust
led
on
ourt
s

PROCEDURA BACKGRO
AL
OUND

19

sale, cancel the trustee’s dee on sale, quiet title, an an accoun
ed
q
nd
nting. On Au
ugust 24, 2012 Wells

20

Farg removed the action ba
go
ased on dive
ersity jurisdic
ction. On February 13, 2013, the Co
ourt

21

dism
missed the or
riginal Comp
plaint. On March 6, 201 Plaintiffs filed their F
M
13,
s
FAC, which Wells Fargo
o

22

has moved to di
ismiss.

23

II.

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

24
25

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

26

2

27
28

On November 14, 2011, Ju
n
udge Hamilt granted W
ton
Wells Fargo’s motion to dismiss, dis
smissing all
claim with prej
ms
judice becau the claim were preem
use
ms
mpted (First through Fou Causes of Action);
t
urth
alleg violation of a statute that provid no privat right of ac
ged
n
e
ded
te
ction (Fifth C
Cause of Act
tion); or
alleg a remed not a cause of action (Sixth Cause of Action). (See RJN, E M.)
ged
dy
e
Ex.

3

1

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

2

conc
clusory state
ements, not supported by actual factu allegations, need not be accepted See
s
y
ual
t
d.

3

Ashc
croft v. Iqba 556 U.S. 662, 678 (20
al,
6
009). Plainti
iffs’ obligati to provid the ground of their
ion
de
ds

4

entit
tlement to re
elief “require more than labels and conclusions, and a form
es
n
mulaic recitation of the

5

elem
ments of a ca
ause of action will not do Bell Atl. Corp. v. Tw
n
o.”
wombly, 550 U.S. 544, 55 (2007)
55

6

(cita
ations and qu
uotations om
mitted). Rath the alleg
her,
gations in the complaint “must be en
e
nough to raise

7

a rig to relief above the sp
ght
a
peculative lev
vel.” Id.

8

III.

DISCUS
SSION
This law
wsuit arises out of the alle
o
eged breach of an oral p
promise to po
ostpone a no
on-judicial

9

fore
eclosure sale. Wells Farg moves to dismiss the First throug Third Cau of Actio (Set Aside
go
gh
uses
on

11

United States District Court
Northern District of California

10

a Tr
rustee’s Sale Cancel a Trustee’s Sale; and Quiet Title) on th sole basis that there w no
e;
T
t
he
was

12

agre
eement to po
ostpone the sale (Part A, infra). Wel Fargo mo
s
lls
oves to dismi the Fourt Cause of
iss
th

13

Acti (for an Accounting) on the sole basis that Pla
ion
A
b
aintiffs do n have stan
not
nding to seek an
k

14

acco
ounting unde the Note or Deed of Trust because neither Pla
er
o
T
e
aintiff is a pa to either agreement
arty
r

15

(Par B, infra).3
rt

16

A.

17

A non-ju
udicial foreclosure sale is presumed to have been conducted regularly an fairly.
n
nd

AGREEMENT TO POSTPO FORECL
T
ONE
LOSURE SAL
LE

18

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 th
he

19

pres
sumption of validity acco
orded the for
reclosure sal
le”). The pr
resumption m be rebut by
may
tted

20

evid
dence that, in alia, the trustor and beneficiary agreed to cu the defau and reinst the loan
nter
e
ure
ult
tate
n

21

befo the foreclosure sale. Bank of Am
ore
merica, N.A. v La Jolla G
v.
Group II, 129 Cal. App. 4th 706, 713
3

22

(Cal Ct. App. 2005). Whet
l.
2
ther there is sufficient pr
roof to overc
come the pre
esumption of a regular
f

23

fore
eclosure sale generally pr
resents a que
estion of fac 6 Angels, Inc. v. Stua
ct.
art-Wright M
Mortgage,

24

Inc., 85 Cal. Ap 4th 1279, 1284 (Cal. Ct. App. 200
pp.
,
01).
Plaintiff seek to set aside the no
fs
on-judicial fo
foreclosure sale on the ba that Wells Fargo
asis

25
26
27
28

brea
ached an ora promise to postpone th sale. Wel Fargo arg
al
he
lls
gues that the First throug Third
gh
3

Th Order onl addresses the grounds raised by W
his
ly
s
Wells Fargo. To the exte others ma have
ent
ay
exis
sted, the Cou takes no position.
urt
p

4

1

Cau of Actio (Set Aside a Trustee’s Sale; Cance a Trustee’ Sale; and Quiet Title) should be
uses
on
e
s
el
’s

2

dism
missed becau the FAC fails to alleg a binding agreement t postpone the non-judi
use
ge
g
to
icial

3

fore
eclosure sale. According to the FAC on Septem
g
C,
mber 16, 2011 Wells Far agreed to (1) reinstat
rgo
o
te
1,

4

the Loan on the Property an (2) continu the sale fr
L
nd
ue
from Septem
mber 23, 2011 to October 21, 2011,
1
r

5

and Plaintiffs ag
greed (3) not to pursue li
t
itigation or b
bankruptcy. (FAC ¶ 22.) Wells Farg disputes
)
go

6

that the parties agreed to any of these th terms.
a
y
hree

7
8
9

1.
1

Denia that there was an agre
al
eement to re
einstate the l
loan.

Wells Fa
argo disputes that there was an agree
w
ement to rein
nstate the Lo
oan. The FA alleges
AC
that the parties’ agreement required rein
r
nstatement by October 21, 2011. Co
y
ontrary to the allegations
e
in th FAC, how
he
wever, Wells Fargo argues that there was an “off to reinst the Loan that
s
e
fer”
tate
n

11

United States District Court
Northern District of California

10

Plaintiffs never accepted and thus, no co
ontract was f
formed. We Fargo be
ells
elieves that t
the

12

Rein
nstatement Quote attached to the original compl aint admits t
Q
this.

13

Accordin to Wells Fargo, the Reinstatemen Quote “is clear as to w is required to accep
ng
R
nt
what
pt

14

and reinstate the loan includ
e
ding the paym of $44,
ment
,813.49 by S
September 21, 2011, not October

15

21st (Motion at 5.) The Reinstatemen Quote is m
t.”
R
nt
more ambigu
uous than W
Wells Fargo re
epresents.

16

Spec
cifically, the Reinstatem Quote provides that “the amoun quoted ab
e
ment
p
t:
nt
bove [$44,81
13.49] must

17

be received in our San Anto
onio office no later than 4
o
4:00 p.m., E
Eastern Time on 09-21-1 After thi
e,
11.
is

18

date additional amounts ma become due.” (Comp
e,
ay
d
plaint, Ex. H This lang
H.)
guage quoted from the
d

19

Rein
nstatement Quote is cons
Q
sistent with, and not con
ntradictory to the factual allegations in the FAC.
o,
s

20

Tak
king as true all allegation of fact and drawing all reasonable inferences i favor of th Plaintiffs
a
ns
d
l
e
in
he

21

(as a court must on a motion to dismiss) the Reinsta
t
n
),
atement Quo discloses the parties did negotiate
ote
s

22

a rei
instatement. Whether th Reinstatem Quote is a quote of the amount necessary t reinstate
he
ment
f
t
to

23

the loan “good through 09-2
l
t
21-11” and “[a]fter this d
“
date, additional amounts may becom due,” or an
s
me
a

24

offe to contract that is “goo through 09-21-11” is an issue of f which cannot be res
er
t
od
0
fact
solved in this
s

25

mot
tion.

26

tion on this ground is DENIED.
g
E
The mot

27
28

5

1
2

2.
2

Denia that there was an agre
al
eement to co
ontinue the s
sale.

Wells Fa
argo argues in its Reply that “[a]n al
i
lleged oral ag
greement to postpone th sale is
he

3

barr under the statute of frauds because it is a mo dification of an agreeme to pay an
red
e
fr
f
ent
n

4

inde
ebtedness sec
cured by a deed of trust.” The FAC alleges post
d
tponement o the sale, not a
of

5

mod
dification of the Loan. Nor is it obvi
N
ious how the (alleged) a
e
agreement be
etween Plain
ntiffs and

6

Wel Fargo cou modify th Loan.
lls
uld
he

7
8
9
10

United States District Court
Northern District of California

11

Drawing all reasonab inference in favor o the Plainti
g
ble
es
of
iffs, the alleg agreeme is not an
ged
ent
oral contract to modify a Lo secured by a Deed of Trust that i barred by the statute o frauds.
m
oan
b
f
is
of
The mot
tion on this ground is DENIED.
g
E
3.
3

Denia that there was an agre
al
eement not t pursue liti
to
igation or ba
ankruptcy.

Accordin to Wells Fargo, “the facts belie th formation of any agre
ng
he
n
eement invol
lving

12

ntiff’s not pu
ursuing the litigation bec
l
cause the fac are that th action wa never volu
cts
he
as
untarily
plain

13

dism
missed.” Alt
though raised as a defect in contract formation, i appears that Wells Far is denyin
t
it
rgo
ng

14

form
mation based on failure by Plaintiff to perform un
d
b
t
under the term of the all
ms
leged agreem
ment. Wells

15

Farg believes that because Ms. Postlew
go
t
waite did not dismiss her lawsuit bet
t
r
tween Septem
mber 16,

16

2011 (when the alleged oral agreement was made) a October 4, 2011 (wh the Prop
l
w
and
hen
perty was

17

d),
t
laintiff agree not to pur
ed
rsue litigatio or bankrup was nev formed.
on
ptcy
ver
sold a contract in which Pl

18

Add
ditionally, Wells Fargo argues that Ms. Postlewa never rai
W
a
M
aite
ised the fact of the allege agreemen
ed
nt

19

in th earlier pro
he
oceeding, wh “almost certainly in
hich
t
ndicates that there never was an agre
t
eement.”

20

Agreeing not to purs litigation or bankrup
g
sue
n
ptcy is the all
leged consid
deration for a four-week

21

post
tponement of a foreclosu sale. Fai
ure
ilure to perfo all term of the alleg agreeme (by not
orm
ms
ged
ent

22

dism
missing the lawsuit prior to the non-judicial forec
closure sale of the Prope
erty) does no disprove
ot

23

the existence of an agreement. Drawing all reasona
e
f
g
able inferenc in favor o the Plainti
ces
of
iffs, as the

24

nonm
moving part the facts alleged do not “belie the formation o any agreement” in wh Plaintiff
ty,
a
e
of
hich
fs

25

agre not to pu
eed
ursue litigatio or bankru
on
uptcy. The M
Motion on th ground is DENIED.
his
s

26
27

Based on the foregoi analysis, the Motion to Dismiss is DENIED a to the Firs through
n
ing
,
n
as
st
Thir Causes of Action.
rd
f

28

6

1

B.

2

“A caus of action for an accounting require a showing that a relat
se
f
es
g
tionship exis between
sts

STANDING TO SEEK AN ACCOUNTIN
O
NG

3

the plaintiff and defendant that requires an accounti
p
d
t
ing, and that some balance is due the plaintiff tha
e
at

4

can only be asce
ertained by an accountin
a
ng.” Teselle v. McLough
e
hlin, 173 Ca App. 4th 1
al.
156, 179

5

l.
2
f
ationship is r
required. Le
ester v. JPM
Morgan Chase Bank, ―F.
(Cal Ct. App. 2009)). No fiduciary rela

6

Supp. 2d―, 201 WL 633333, at *13 (N Cal. Fe 20, 2013) (citing Teselle, supra, 173 Cal.
13
N.D.
eb.
)

7

p.
ikov v. JPMo
organ Chase Bank, Case No. 12-039 JCS, 201 WL
e
e
996
12
App 4th at 180 and Shkolni

8

6553988, at *23 (N.D. Cal. Dec. 14, 2012)).
3
Wells Fa
argo argues that Plaintiff do not hav standing t seek an ac
t
fs
ve
to
ccounting be
ecause

10

ot
wers
L
y
Wells Fargo. According
.
Plaintiffs are no the borrow on the Loan and do not owe any money to W

11

United States District Court
Northern District of California

9

W
n
ationship ex ists between the parties that would r
n
require an
to Wells Fargo no fiduciary or other rela

12

acco
ounting. Wh Plaintiff may not be the parties to the Loan they purpo to have an interest in a
hile
fs
e
n,
ort
n

13

Prop
perty in whic Wells Far has a lien, and Plaint
ch
rgo
tiffs seek an accounting to determin the amoun
n
ne
nt

14

of th lien. The Court disag
hat
e
grees that Pl
laintiffs fail to allege tha a relations
at
ship exists th requires
hat

15

an accounting.
a
Based on the foregoi analysis, the Motion to Dismiss is DENIED a to the Fou Cause of
n
ing
,
n
as
urth
f

16
17

Acti
ion.

18

IV.

CONCL
LUSION

19

For the reasons set forth above, the Motion t Dismiss is DENIED.
r
fo
t
to
s

20

Defenda shall ans
ants
swer the Firs Amended Complaint w
st
within 21 da of the dat of this
ays
te

21

Ord
der.

22

minates Dkt. No. 28.
.
This term

23

IT IS SO ORDERED.

24
25
26

Date: June 4, 2013
2

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

27
28

7