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Zarlasht Zarif, An Individual, and Ezatullah Zarif, An Individual v. Wells Fargo Bank

March 23, 2011

ZARLASHT ZARIF, AN INDIVIDUAL, AND EZATULLAH ZARIF, AN INDIVIDUAL,
PLAINTIFFS,
v.
WELLS FARGO BANK, NA, A CORPORATION; WACHOVIA MORTGAGE CORPORATION, A CORPORATION; CAL-WESTERN RECONVEYANCE CORPORATION, A CORPORATION; AND DOES 1 THROUGH 50 INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge:

ORDER

The matter before the Court is the Motion to Dismiss the Complaint filed by Defendants Wells Fargo Bank, N.A. ("Wells Fargo") and Wachovia Mortgage Corporation ("Wachovia"). (ECF No. 7).

I. Background

On November 12, 2010, Plaintiffs initiated this action by filing a Complaint in San Diego Superior Court. (ECF No. 1, Ex. A).

A. Allegations of the Complaint

In 2002, Plaintiffs executed a Deed of Trust secured by real property located at 519 Avenida Blanco, San Marcos, California for the loan amount of $245,600. See id. at ¶¶ 3, 8. The Deed of Trust stated that the Lender was World Savings Bank, FSB and the Trustee was Golden West Savings Association Co.

Plaintiffs "began falling behind on their mortgage payments," and notices of default and trustee's sale were recorded with the San Diego County Recorder's Office in 2008. Id. ¶ 10. "Plaintiffs tried making partial payments but tellers at Wachovia bank expressed to Plaintiffs that they were instructed not to take any payments." Id. "Wachovia told them at that time, the only option was to reinstate their loan and pay the past due amount." Id. ¶ 13.

"Plaintiffs then made arrangements and borrowed over $25,000 to become current on their loan." Id. ¶ 14. "They opened an account with Wachovia, deposited the $25,000.00 and told Wachovia that the money was ready to be deposited for reinstatement." Id. "[J]ust before making that payment, a representative from the bank personally came to the house and informed Plaintiffs that they were eligible for a loan modification under the Mortgage Assistance Plan ... and that they should apply...." Id. ¶ 15. "Plaintiffs relied on this advice, and in or about February 2009, instead of reinstating the loan," Plaintiffs applied for loan modification. Id. ¶ 16. Plaintiffs told the bank, which was in the process of being acquired by Wells Fargo, that Plaintiffs "would like to make payments while waiting for the Loan Modification to be completed." Id. ¶ 18. The bank told Plaintiffs that "the payments would not be accepted unless it was pursuant to a reinstatement quote, and if payments were made, the loan modification process would be interrupted." Id. ¶ 19.

After a lengthy period of communications between Plaintiffs and Defendants, in 2010, Defendants tooks steps to proceed with a trustee's sale of the property. On the Notice of Trustee's Sale, "Defendant Cal-Western was listed as the trustee, even though Plaintiffs had not been notified about any substitution and no substitution was recorded with the County Recorder's Office." Id. ¶ 28. Defendants "do not have the legal right to foreclose as the real party in interest as a result of Defendants' failure to properly record transfers and assignments of rights resulting in an invalid Notice of Trustee Sale...." Id. ¶ 36.

The Complaint alleges eight causes of action: (1) quiet title; (2) violation of California Civil Code § 2923.5; (3) violation of California Business and Professions Code § 17200 et seq.; (4) intentional misrepresentation; (5) negligent misrepresentation; (6) promissory estoppel; (7) injunctive relief; and (8) rescission.

Plaintiffs seek a declaration that Defendants have no right to record the Notice of Default and the Notice of Trustee Sale, an injunction enjoining Defendants from proceeding with the trustee's sale of the property at issue, "[f]or [r]escission of the notice of default and any notice of trustee's sale," and for punitive damages. Id. at 28.

B. Procedural History

On December 29, 2010, Wells Fargo and Wachovia removed the action to this Court on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332(a) and 28 U.S.C. § 1441(a). (ECF No. 1).

On January 6, 2011, this Court sua sponte issued an Order requiring the removing Defendants to show cause why this action should not be remanded for lack of ...


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