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Baldev Gill, An Individual, and Gurmeet Gill, An Individual v. Wells Fargo Bank

June 17, 2011

BALDEV GILL, AN INDIVIDUAL, AND GURMEET GILL, AN INDIVIDUAL,
PLAINTIFFS,
v.
WELLS FARGO BANK, N.A., A NATIONAL ASSOCIATION, DOING BUSINESS AS AMERICA‟S SERVICING COMPANY; CAL WESTERN RECONVEYANCE CORPORATION, A CORPORATION; FEDERAL HOME LOAN MORTGAGE CORPORATION, AN AGENCY OF THE FEDERAL GOVERNMENT AND DOES 1 TO 100, INCLUSIVE,
DEFENDANTS.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

MEMORANDUM DECISION AND ORDER RE DEFENDANTS‟ MOTIONS TO DISMISS FIRST AMENDED COMPLAINT (DOCS. 4, 10)

I. INTRODUCTION

Before the court are Defendant Wells Fargo Bank, N.A.‟s ("Wells Fargo") motion to dismiss Baldev Gill and Gurmeet Gills‟ (together, "Plaintiffs") first amended complaint ("FAC") (Doc. 4) and Defendant Federal Home Loan Mortgage Corporation‟s ("Freddie Mac") motion to dismiss the FAC (Doc. 10). Plaintiffs filed oppositions to both motions (Docs. 9 and 13, respectively), to which Wells Fargo replied (Docs. 11, 14). The motions were heard June 6, 2011.

II. BACKGROUND

In June 2002, Plaintiffs purchased a residential property located at 3550 N. Lodi Avenue, Fresno, California 93722, Assessor‟s Parcel Number 511-192-01 ("Property"). In 2003, Plaintiffs obtained a loan for Plaintiff Baldev Gill‟s trucking business; the Property served as security for the loan.

Plaintiffs refinanced the Property on May 12, 2004. The Deed of Trust for the refinancing lists: Preferred Financial Group, Inc., dba Preferred Mortgage Services as the lender; North American Title Company as the trustee; and Mortgage Electronic Registration Systems ("MERS") as the beneficiary and nominee for the lender. (Doc. 5, Ex. A).

From April through July 2009, Plaintiffs fell behind in their mortgage payments. On July 27, 2009, Cal-Western Reconveyance Corporation ("Cal-Western") recorded a Notice of Default. (Doc. 5, Ex. C).

Plaintiffs allege that they contacted America‟s Servicing Company ("ASC") to apply for a modified payment plan sometime in 2009. Plaintiffs also allege that in or about 2009, Plaintiffs spoke to a representative from ASC who identified himself as "Fred," who told Plaintiffs that if they made their payments pursuant to the terms of the repayment plan, their foreclosure would be suspended. Plaintiffs allege that Fred told them: "Don‟t worry; we are going to put you on a repayment plan." Plaintiffs paid the sums due under their repayment plan for four months. Plaintiffs allege that they called ASC after three months and were told to continue making their payments pursuant to the repayment plan. Plaintiffs allege that they spoke with "Kathy" from ASC in late 2009 or early 2010, who told them the repayment plan was still in effect and that Plaintiffs would be "saved" from losing their home.

On September 21, 2009, a Substitution of Trustee was recorded substituting Cal-Western as Trustee under the Deed. (Doc. 5, Ex. B). The Substitution was signed by Lorrie Womack as assistant secretary of MERS. Plaintiffs allege that Ms. Womack was not assistant secretary of MERS or otherwise employed by MERS, but was a trustee sale manager at Cal-Western.

On or about October 30, 2009, Cal-Western recorded a Notice of Trustee‟s Sale. (Doc. 5, Ex. E).

On or about August 23, 2010, Plaintiffs received a letter from ASC indicating that their loan modification had been denied. On or about August 26, 2010, Plaintiffs called ASC to make payment arrangements and were informed that the Property had been sold August 24, 2010.

A Trustee‟s Deed Upon Sale was recorded September 3, 2010, which was signed by Wendy V. Perry. (Doc. 5, Ex. F). Plaintiffs contend that Ms. Perry is not an employee or agent of Wells Fargo, but an employee of Cal-Western, and that Cal-Western falsified documents by signing them purporting to act as "attorney in fact" to streamline the foreclosure process.

On September 14, 2010, Plaintiffs filed a Complaint in the Superior Court of California, Fresno County, asserting eight state law causes of action against Defendants in connection with the foreclosure of the Property (Doc. 1-1). Plaintiffs filed the FAC on November 19, 2010 alleging ten state law causes of action against Defendants. (Doc. 1-8). Freddie Mac removed the case to federal court on February 7, 2011 on the basis of federal question jurisdiction. Doc. 1.

III. LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a "complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face.‟" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007)). A complaint does not need detailed factual allegations, but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.

In deciding a motion to dismiss, the court should assume the veracity of "well-pleaded factual allegations," but is "not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal, 127 S.Ct. at 1950. "Labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. "‟Naked assertion[s]‟ devoid of "further factual enhancement‟" are also insufficient. Iqbal, 127 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 557). Instead, the complaint must contain enough facts to state a claim to relief that is "plausible on its face." Twombly, 550 U.S. at 570.

A claim has facial plausibility when the complaint‟s factual content allows the court to draw the reasonable inference that the defendant is liable for the alleged misconduct. Iqbal, 127 S.Ct. at 1949. "The plausibility standard is not akin to a "probability requirement,‟ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556). "A well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and "that a recovery is very remote and unlikely.‟" Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683 (1974)).

The Ninth Circuit summarizes the governing standard as follows: "In sum, for a complaint to survive a motion to dismiss, the non-conclusory "factual content‟ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009)(quotations omitted).

If a district court considers evidence outside the pleadings, a Rule 12(b)(6) motion to dismiss must be converted to a Rule 56 motion for summary judgment, and the nonmoving party must be given an opportunity to respond. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). "A court may,

however, consider certain materials-documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice-without converting the motion to dismiss into a motion for summary judgment." Id. at 908.

IV. ANALYSIS

A.First Cause of Action: Fraud ...


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