ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
This matter is before the Court on Wells Fargo, NA's ("Defendant") Motion to Dismiss Complaint (Doc. # 5). *fn1 Defendant seeks dismissal on the grounds that Plaintiffs Norman and Suzanne Safley's ("Plaintiffs") claims should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) because they are preempted by federal lending law, Plaintiffs are judicially estopped from bringing their claims, and because Plaintiffs failed to adequately plead a claim that entitles them to relief. Plaintiffs oppose the motion (Doc. # 13). Defendant also filed a Request for Judicial 2 Notice ("RJN") (Doc. # 7), which Plaintiffs oppose. Because the 3 Court finds that Plaintiffs lack standing to bring the present suit 4 and that the claims presented here are precluded by Plaintiffs' 5 prior bankruptcy action, Defendant's motion is GRANTED. 6 7
This lawsuit originated when Plaintiffs filed a Complaint in 9 the Superior Court of California, Sacramento on February 15, 2012 (Doc. # 1, Ex. A). Plaintiffs bring eight causes of action against Defendant: 1) Fraud/Deceit, 2) Conspiracy to Defraud, 3) Promissory Estoppel, 4) Negligent Misrepresentation, 5) Negligence, 6) Negligent Infliction of Emotional Distress, 7) Violations of California Business and Professions Code § 17200, et seq., and 8) Reformation Under California Civil Code § 1670.5. Defendant removed the action to federal court pursuant to 28 U.S.C. § 1441(b) claiming federal jurisdiction under 28 U.S.C. § 1332, Diversity of Citizenship (Doc. # 1), on the grounds that Defendant is a citizen of South Dakota and Plaintiffs are citizens of California.
Plaintiffs' Complaint generally challenges the origination of and later refusal of Defendant to modify the terms of a mortgage taken to refinance existing debt on 13700 Indio Drive, Sloughhouse, CA, 95683 (the "Property) in July, 2006. Plaintiffs originally obtained a mortgage to refinance the debt on the Property from World Savings, to which Defendant is the successor in interest.*fn2
In 2008, Plaintiffs applied for loan relief from Defendant and were 2 denied. In March of 2010, Plaintiffs allege that Defendant 3 informed them that they would qualify for a modification if they 4 were 3 months delinquent in their mortgage payments. Plaintiffs 5 allege that after they fell behind on payments, relying on 6
Defendant's alleged representation, they applied for a mortgage 7 modification. Defendant allegedly denied their application, 8 sending letters to that effect on December 30 and 31, 2010, which 9
Plaintiffs received on January 7, 2011. Plaintiffs again applied for a modification in April, 2011 and the Complaint indicates that no modification was ever granted to Plaintiffs by Defendant.
On December 30, 2010 Plaintiffs filed a Chapter 7 Bankruptcy Petition. Plaintiffs did not disclose any pending or outstanding claims against Defendant in the Bankruptcy Proceeding. On April 19, 2011, Plaintiffs received a discharge of debts from the Bankruptcy Court.
1. Standing "[F]ederal courts are required sua sponte to examine jurisdictional issues such as standing." Bernhardt v. Cnty. of L.A., 279 F.3d 862, 868 (9th Cir. 2002) (quoting B.C. v. Plumas Unified Sch. Dist., 192 F.3d 1260, 1264 (9th Cir. 1999)) (alterations in original). The United States Constitution limits the judicial authority of federal courts to cases and controversies. U.S. Const. Art. III, § 2. A court will not have subject matter jurisdiction over an action unless a live case or 2 controversy exists, United States Nat'l Bank of Or. v. Independent 3 Ins. Agents of Am., 508 U.S. 439 (1993), and Article III requires 4 that a plaintiff have standing throughout litigation. See Flast v. 5 Cohen, 392 U.S. 83, 97 (1968). If subject matter jurisdiction is 6 lacking "at any time . . ., the court must dismiss the action." 7 Fed. R. Civ. P. 12(h)(3). 8
Prudential standing requires that a party have a personal 9 stake in an action. Warth v. Seldin, 422 U.S. 490, 498--99 (1975). Thus, "The Art. III judicial power exists only to redress or otherwise to protect against injury to the complaining party . . . . A federal court's jurisdiction therefore can be invoked only when the plaintiff himself has suffered 'some threatened or actual injury resulting from the putatively illegal action . . . .'" Id. (quoting Linda R.S. v. Richard D., 410 U.S. 614, 617 (1973)).
2. 12(b)(6) 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 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 (1974), 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, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 ...