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Gallardo v. Wells Fargo Bank NA

October 26, 2010

MARLON M GALLARDO ET AL
v.
WELLS FARGO BANK NA ET AL



CIVIL MINUTES - GENERAL

Present: The Honorable GARY ALLEN FEESS

Renee Fisher None N/A Deputy Clerk Court Reporter / Recorder Tape No.

Proceedings: (In Chambers)

ORDER RE: MOTION TO DISMISS

I. INTRODUCTION

Plaintiffs Gallardo and Beltran bring suit against Wells Fargo, arising out of the bank's efforts to foreclose on their mortgage loan. Wells Fargo moves to dismiss. The principal issues raised in the motion are whether Plaintiffs have adequately pled their two federal claims brought under the Truth in Lending Act ("TILA") and the Home Affordable Modification Program ("HAMP"). As discussed in greater detail below, the Court concludes that because the TILA claim is time-barred and Plaintiffs have no private cause of action for the alleged violation of HAMP, Defendants' claims should be dismissed without leave to amend. Finally, pursuant to 28 U.S.C. § 1367(c)(3), the Court declines to exercise supplemental jurisdiction over Plaintiffs' state law cause of action under California Civil Code section 2923.5.

II. BACKGROUND

FACTS

Plaintiff Marlon Gallardo ("Gallardo") is the owner of real property located at 357 E. Fromer Street, City of Rialto, California ("the Property"). (Docket No. 1, Not., Ex. 1, [Compl. ¶ 1].) Plaintiff George Beltran ("Beltran") is Gallardo's cousin and silent partner in the acquisition of the Property. (Id.) The subject of this dispute pertains to the bank's efforts to foreclose on the Property under a deed of trust securing a loan obtained by Gallardo on February 13, 2007. On that date, Gallardo, as borrower, executed and delivered to World Savings Bank, FSB ("World Savings") a promissory note in the amount of $290,000, which was secured by a deed of trust naming World Savings as the beneficiary. (Id. ¶¶ 5-6.) Defendant Wells Fargo Bank, N.A. ("Wells Fargo") succeeded to World Saving's interest in the note and trust deed, and on May 19, 2010, substituted Defendant ETS Services, LLC ("ETS") as trustee in place of Golden West Savings Association. (Id., Ex. 2, [Ex Parte Application, Ex. A at 2].)

By April 29, 2010, Gallardo, who had become seriously delinquent on the loan, owed Wells Fargo $22,702.76 in unpaid installments, and ETS recorded a formal notice of default.

¶ 7.) When Gallardo failed to cure, ETS on July 29, 2010, gave Gallardo notice of trustee's sale. (Id., Ex. 2, [Ex Parte Application, Ex. A at 1].) Pursuant to this notice, the Property was to be sold at a public auction on August 26, 2010. (Id.)

On August 13, 2010, Gallardo and Beltran (collectively "Plaintiffs") filed suit against Defendants Wells Fargo and ETS (collectively "Defendants"), in San Bernardino Superior Court seeking: (1) declaratory relief, (2) injunctive relief, and (3) accounting. (See generally Id.) Plaintiffs' claims were based on alleged violations of TILA, HAMP and California Civil Code § 2923.5. On September 10, 2010, Defendants removed the case to this Court. (Docket No. 1,

THE COMPLAINT

In the pending complaint, Plaintiffs assert that ETS, as trustee, violated California Civil Code section 2923.5 because it failed to contact Plaintiffs "to explore all options available to avoid a foreclosure, or give them the opportunity to meet face to face within 14 days with one of their representatives . . . ." (Compl. ¶ 2.) Plaintiffs also claim that Wells Fargo violated TILA when it understated their finance charges by $2,000. (Id. ¶ 5.) Finally, in an attempt to state a violation of HAMP, Plaintiffs allege that they have attempted to negotiate a loan modification with Wells Fargo but Wells Fargo's employees kept losing or claimed that they did not receive the loan ...


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