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Seema Khan v. World Savings Bank

January 11, 2010

SEEMA KHAN
PLAINTIFF,
v.
WORLD SAVINGS BANK, FSB,
DEFENDANT.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

United States District Court For the Northern District of California

ORDER DISMISSING COMPLAINT WITH LEAVE TO AMEND AND ORDERING PLAINTIFF'S COUNSEL TO SHOW CAUSE WHY SANCTIONS SHOULD NOT BE IMPOSED

This action was originally filed in the Superior Court for the County of Santa Clara on August 2, 2010. See Notice of Removal (Dkt. No. 1) at Ex. A (Complaint). In the Complaint, Plaintiff alleges that Defendant World Savings Bank, FSB violated federal and California law in connection with a residential mortgage transaction. On September 9, 2010, Defendant Wells Fargo Bank, N.A.*fn1 removed the action to this Court. Id. Wells Fargo then filed Motions to Dismiss and Strike the Complaint on September 16, 2010. See Dkt. Nos. 6 and 7. These Motions were originally set for hearing on November 2, 2010. This date was vacated when the case was reassigned. Id. As a result, the oppositions to these motions were due on October 12, 2010, pursuant to Civil Local Rule 7-3. Plaintiff's counsel did not timely file an opposition or a statement of non-opposition, as required by Local Rule 7-3(b), in response to either Motion. On October 28, 2010, this matter was reassigned to the undersigned per the Defendant's declination to proceed before a Magistrate Judge. Pursuant to Civil Local Rule 7-1(b), the Court finds that this matter may be decided without oral argument. Accordingly, the hearing and case management conference currently scheduled for January 27, 2011 is hereby VACATED.

Because this request did not comply with various rules governing withdrawal of counsel, the Court denied this request and ordered that if Plaintiff's counsel wished to withdraw, he move to do so pursuant to Civil Local Rule 11-5(b). See Dkt. No. 16.

On November 2, 2010, Plaintiff's counsel filed a proposed "Consent Order Granting Substitution of Attorney," attempting to substitute his client as pro se counsel. See Dkt. No. 12.

On November 3, 2010, the Defendant filed an Amended Motion to Dismiss and Motion to Strike. See Dkt. Nos. 13 and 14. On November 18, the Court ordered that the Plaintiff file an opposition, or statement of non-opposition, to the Amended Motion to Dismiss by December 13, 2010. See Dkt. No. 18. Counsel was warned that repeated failure to follow the Civil Local Rules, including filing statements of non-opposition as required by Civil Local Rule 7-3(b), could lead to the imposition of sanctions. Id. at 1, n.1. As of today, January 11, 2011, the Plaintiff has filed no opposition or statement of non-opposition to either the Motion to Dismiss or the Motion to Strike.

Based on the papers filed herein, the Court GRANTS the Motion to Dismiss. The Motion to Strike 17 is therefore moot, and the Court does not consider it. Because it appears that Plaintiff's counsel 18 has abandoned this case without having formally withdrawn, the Court considers that Plaintiff is 19 proceeding pro se. Accordingly, the Court grants Plaintiff leave to amend the complaint to state a 20 claim. Any amended complaint must be filed within 30 days of the date of this order. Any 21 failure to file an amended complaint within 30 days will result in a dismissal with prejudice.

In addition, the Court finds that Plaintiff's counsel's repeated failure to follow the local 23 rules and this Court's Orders are likely sanctionable conduct. The Court hereby orders Plaintiff's 24 counsel to show cause why he should not be sanctioned for the following: 1) failure to comply 25 with Civil Local Rules and the California Rules of Professional Conduct, as outlined in the Court's Order of November 3, 2010 (Dkt. No. 16); 2) failure to follow Civil Local Rule 7-3(b) and file an 27 opposition or statement of non-opposition to the first Motions to Dismiss and Strike (Dkt. Nos. 6 28 and 7) by the deadline of October 12, 2010, set by the original hearing date of November 2, 2010; 3) failure to follow this Court's Order of November 18, 2010 and to file an opposition, or statement 2 of non-opposition, to the Amended Motion to Dismiss (Dkt. No. 13); 4) failure to follow Civil Strike by January 6, 2011; 5) additional failure to follow Civil Local Rule 7-3(b) in other matters 5 brought before this Court. See Jones v. PNC Bank, N.A., Case No. 10-cv-01077-LHK, 2010 U.S. No. 10-cv-04305 (N.D. Cal. filed September 23, 2010) (opposition or statement of non-opposition to Motions to Dismiss and Strike due on December 30, 2010 based on hearing date of January 20, LEXIS 59750 at *3 (N.D. Cal. June 16, 2010) (noting Plaintiff's counsel's failure to file an opposition to a Motion to Dismiss). Plaintiff's counsel's response to the Order to Show Cause is due February 17, 2011. The Court hereby sets a hearing date of March 17, 2011 at 1:30 p.m. for a hearing on the Order to Show Cause.

This action arises out of a mortgage transaction. However, the Complaint provides such scarce detail about the transaction at issue that the Court must rely primarily on documents submitted by Defendant to determine even basic information including the date the transaction occurred, the parties to the transaction, and the amount of the loan. See Defendant's Request for United States government officials working in their official capacities, the Court finds that they are "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned" and therefore takes judicial notice of them. See Corrie v. Caterpillar, Local Rule 7-3(b) and file an opposition or statement of non-opposition to the Amended Motion to Dist. LEXIS 92866 at *7-*8 (N.D. Cal. Aug. 20, 2010); Khan v. World Savings Bank, FSB, Case 2010; none filed); Huerta v. Ocwen Loan Servicing, LLC, No. 09-cv-05822, 2010 U.S. Dist.

I.BACKGROUND

Judicial Notice ("RJN"), Ex. A ("Note"), Ex. B ("Deed of Trust").*fn2 According to the Note and the 20 Deed of Trust, on November 8, 2007, Plaintiff Seema Khan*fn3 entered a loan to purchase real 2 property located at 3072 Silverland Drive, San Jose, California, 95135-2005 ("the Property"). See 3 Note at 1. The Deed of Trust identifies Plaintiff and Ahmed D. Afroz, her husband, as the 4 borrowers, and World Savings Bank, FSB as the lender. Id. Ahmed Afroz is not a named party in 5 the instant action. The note provided $660,000 to Plaintiff, and the Deed of Trust granted Complaint states in several places that Defendants "knew or should have known" that entering the Defendant a security interest in the Property. See Note at 1; Deed of Trust at 2. Although the Note would put Plaintiff at risk of foreclosure, neither party has submitted information indicating that the Property has been foreclosed upon.

chartered savings association or Federal savings bank. See RJN Ex. C (Letter from OTS dated April 21, 2006). World Savings Bank changed its name to Wachovia Mortgage, FSB in December, 13 Bank, N.A. Id. 15

California Business & Professions Code § 17200 et seq. (Unfair Competition Law or UCL); (2) 17 violation of the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. § 2601 et seq.; 18 (3) violation of the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its implementing 19 regulation, 12 C.F.R. § 226; (4) fraud; (5) fraud in the inducement; and (6) unfair business practices. Defendant has moved to dismiss on various grounds, including that all of Plaintiff's California law claims are preempted by the Home Owner's Loan Act (HOLA), and that Plaintiff has failed to plead sufficient facts to state claims under any of the asserted causes of action.

it fails to state a claim upon which relief can be granted. To survive a motion to dismiss, the World Savings Bank FSB, the entity that originated Plaintiff's mortgage, was a federally 2007. See RJN, Ex. F. In November, 2009, Wachovia Mortgage FSB merged with Wells Fargo

In Plaintiff's Complaint, she alleges the following claims for relief: (1) violation of

II.LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if 503 F.3d 974, 978 (9th Cir. 2007) (taking judicial notice of a government publication); Fed. R. Evid. 201(b).

plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. 2 Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "facial plausibility" standard requires the 3 plaintiff to allege facts that add up to "more than a sheer possibility that a defendant has acted 4 unlawfully." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). In deciding whether the plaintiff has 5 stated a claim, the Court must assume the plaintiff's allegations are true and draw all reasonable 6 inferences in the plaintiff's favor. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987).

However, the court is not required to accept as true "allegations that are merely conclusory, 8 unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 9 F.3d 1049, 1055 (9th Cir. 2008). Leave to amend must be granted unless it is clear that the 10 complaint's deficiencies cannot be cured by amendment. Lucas v. Dep't. of Corrections, 66 F.3d

HOLA applies to this action. Federal savings associations, including federal savings banks, are 16 subject to HOLA and regulated by the OTS. 12 U.S.C. § 1464; Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1005 (9th Cir. 2008). Although Wells Fargo is a federally chartered bank not subject to HOLA, Plaintiff's loan originated with World Savings Bank, which was a federal savings bank subject to HOLA and OTS regulations. RJN Ex. C. World Savings Bank later 20 changed its name to Wachovia Mortgage, FSB. RJN Ex. F. Wachovia Mortgage is now a division of Wells Fargo. Id. Thus, although Wells Fargo itself is not subject to HOLA and OTS regulations, this action is nonetheless governed by HOLA because Plaintiff's loan originated with a federal savings bank and was therefore subject to the requirements set forth in HOLA and OTS regulations. See Lopez v. Wachovia Mortg., 2010 U.S. Dist. LEXIS 72439, at *6 ...


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