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Brenda P. Smith v. World Savings and Loan Association

January 28, 2011

BRENDA P. SMITH, PLAINTIFF,
v.
WORLD SAVINGS AND LOAN ASSOCIATION, DBA WORLD SAVINGS BANK; WELLS FARGO BANK, N.A.;SETON CAPITAL GROUP, INC.; AND DOES 1 THROUGH 50, INCLUSIVE, DEFENDANTS.



ORDER GRANTING DEFENDANT‟S MOTION TO DISMISS

This matter comes before the Court on Defendant Wachovia Mortgage‟s ("Defendant") Motion to Dismiss (Doc. #4) and its Motion to Strike Portions of Plaintiff‟s Complaint (Doc. #5). Defendant, a division of Wells Fargo Bank, N.A., was formerly known as Wachovia Mortgage, FSB, which was formerly known as World Savings Bank, FSB. Defendant asks the Court to dismiss the Complaint (Doc. #1) filed by Plaintiff Brenda P. Smith ("Plaintiff"). Plaintiff opposes the motions.*fn1

I. FACTUAL AND PROCEDURAL BACKGROUND

The Complaint centers on allegations involving Plaintiff‟s 3 broker, and brother-in-law, Brandon Caffrey ("Caffrey").

Plaintiff alleges that in or around March 2006, Caffrey offered 5 to get her the best loan possible to refinance her house in Rancho Murieta. Plaintiff avers that Caffrey indicated he could 7 get Plaintiff a loan for $469,000 even though her monthly income 8 was only $900. Plaintiff claims that Caffrey overstated her 9 income by approximately $4,000 without her knowledge and that he knew her monthly payments would start at $1,721 and would increase after the first year. Plaintiff alleges that she did not understand the loan documents, the terms of the loan were not fully explained to her, and she believed the loan would be affordable.

Plaintiff does not make any specific claims involving the Defendant other than a generalized theory alleging predatory lending and foreclosure fraud. Plaintiff theorizes that mortgage lenders loan money to people unable to afford the loans with the intent to profit from the sale and servicing of the loans.

Plaintiff filed a complaint in the Superior Court of California, Sacramento, alleging eleven causes of action:

(1) Fraud; (2) Constructive fraud; (3) Conspiracy to defraud; (4) Negligence; (5) Unlawful/unfair business practices, violation of California Business & Professions Code ("UCL") § 17200 et seq.; (6) Failure to explore foreclosure avoidance, violation of California Civil Code § 2923.5; (7) Wrongful foreclosure, violation of California Civil Code § 2924; (8) Violation of Truth in Lending Act ("TILA"), 15 U.S.C. 2 § 1601, et seq.; (9) Violation of Real Estate Procedures 3 Settlement Act ("RESPA"), 12 U.S.C. § 2601, et. seq.; 4 (10) Restitution and Rescission; (11) Declaratory and Injunctive 5 Relief. The case was removed to this Court on October 22, 2010.*fn2

II. OPINION

A. Legal Standard 9

1. Motion to Dismiss

A party may move to dismiss an action for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure section 12(b)(6). In considering a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). Assertions that are mere "legal conclusions," however, are not entitled to the assumption of truth. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a plaintiff needs to plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Dismissal is 2 appropriate where the plaintiff fails to state a claim 3 supportable by a cognizable legal theory. Balistreri v. 4 Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990). 5

Upon granting a motion to dismiss for failure to state a 6 claim, the court has discretion to allow leave to amend the 7 complaint pursuant to Federal Rule of Civil Procedure § 15(a). 8 "Dismissal with prejudice and without leave to amend is not 9 appropriate unless it is clear . . . that the complaint could not be saved by amendment." Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).

2. Motion to Strike "Rule 12(f) provides in pertinent part that the Court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter . . . Motions to strike are disfavored and infrequently granted. A motion to strike should not be granted unless it is clear that the matter ...


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