The opinion of the court was delivered by: The Honorable David O. Carter, Judge
PRESENT: THE HONORABLE DAVID O. CARTER, JUDGE
Julie Barrera N/A Courtroom Clerk Court Reporter
ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT: None Present None Present
PROCEEDINGS: (IN CHAMBERS): ORDER GRANTING IN PART DEFENDANTS' MOTION TO DISMISS AS TO CERTAIN CLAIMS AND DENYING IN PART
Before the Court is a Motion to Dismiss (the "Motion") filed by Defendants Citibank, N.A. ("Citibank") and Wells Fargo Bank ("Wells Fargo") (collectively "Defendants"). After reviewing the motion, opposition, and reply, the Court herby GRANTS IN PART Defendants' Motion and DISMISSES certain claims, but also DENIES IN PART as to other claims.*fn1
On February 5, 2008, Plaintiff Dominic Dinh ("Plaintiff") executed a promissory note ("Note") and Deed of Trust in favor of Wells Fargo. Compl. (Dkt. 1) at ¶19. The Note and Deed of Trust secured Plaintiff a loan in the amount of $363,200 to refinance a property located at 5607 West Highland Street, Santa Ana, California 92704. RJN (Dkt. 6) Ex. 1. The Deed of Trust securing Plaintiff's loan named Fidelity National Title Ins. Co. ("Fidelity") as trustee and Wells Fargo as the beneficiary. Id.
On May 26, 2011, First American Trustee Servicing Solutions, LLC ("First American"), acting as an agent for Wells Fargo, recorded a Notice of Default. See RJN Ex. 2. At that time, Plaintiff was $39,380.94 behind in his payments. Id. On June 7, 2011, a Substitution of Trustee was recorded, substituting First American as trustee under the deed of trust. See RJN Ex. 3. On September 6, 2011, First American recorded a Notice of Trustee's Sale. See RJN Ex. 4. On November 16, 2011, an Assignment of Deed of Trust was recorded purportedly transferring all rights under the Deed of Trust from Wells Fargo to Citibank as trustee for the CMLTI Trust (the "Trust"). See RJN Ex. 5. On July 26, 2012, First American recorded a second Notice of Trustee's sale, setting the non-judicial foreclosure sale date for August 20, 2012. See RJN Ex. 6. On August 20, 2012, PennyMac Corp. purchased the Property at the foreclosure sale. See RJN Ex. 7. Throughout this period, Wells Fargo was the servicer of the note and mortgage. Compl. at ¶ 124.
Plaintiff alleges the following: at the time of the loan's origination, Wells Fargo securitized and sold Plaintiff's loan to the Trust. Compl. at ¶ 20. The Trust was created on March 1, 2008 by the execution of trust agreements, also known as Pooling Servicing Agreements ("PSA"). Id. at ¶ 28. Based on industry norms, the Trust likely had a closing date of March 31, 2008. Id. The PSA requires all promissory notes transferred to the Trust to have a complete chain of endorsements in place no later than 90 days after the Trust's closing date. Id. at ¶¶ 30, 31. Plaintiff's promissory note does not contain a complete chain of endorsements. Id. at ¶ 32. Once Defendant's realized the defect in the chain of title resulting from the improper securitization, Defendants implemented a scheme to falsify and backdate documents. Id. at ¶ 35. Employees of Citibank, acting as what is commonly known as robo-signers, falsely claimed to be agents of Wells Fargo so that they could assign the Note years later to Trust's Closing Date. Id. at ¶ 36.
In addition, Plaintiff alleges: Plaintiff became delinquent due to the recommendation of the loan servicer, Wells Fargo. When Plaintiff contacted the servicer to inquire about getting a loan modification under the Making Home Affordable ("HAMP") loan modification program, they were told by the servicer to miss their next two payments and then apply. Id. at ¶ 50. However two months delinquency was not a requirement to qualify for HAMP and the servicer was only interested in earning more fees off of Plaintiff's default. Id. at ¶¶ 50, 51. Once Plaintiff was two months behind, Defendant Wells Fargo failed to put Plaintiff into a loan modification agreement. Id. at ¶ 53.
Plaintiff filed a Complaint on September 10, 2012, alleging seven causes of action for: (1) declaratory relief; (2) negligence; (3) violation of the helping families save their homes act of 2009; (5) wrongful foreclosure and to set aside trustee's sale; (6) violation of 15 U.S.C. 1641(g); and (7) quiet title. See Compl. (Dkt. 1).
Thereafter, Defendants filed the present Motion to Dismiss.
Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). On a motion to dismiss, this court accepts as true a plaintiff's well-pled factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.
In evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents of the complaint and material properly submitted with the complaint. Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc.,896 F.2d 1542, 1555 n.19 (9th Cir. 1990). Under the incorporation by reference doctrine, the court may also consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to ...