ORDER ON MOTION TO ) DISMISS AND ORDER ON ) MOTION FOR SANCTIONS ) (Doc. Nos. 2, 5)
This is a mortgage foreclosure case brought by Plaintiffs against Defendants. This is the fourth lawsuit brought by Plaintiffs relating to the same mortgage. Defendants move to dismiss Plaintiffs' Complaint and for sanctions. Plaintiffs have not filed an opposition or a response of any kind. For the reasons that follow, both of the motions will be granted.
On June 21, 2006, Plaintiff Rafael Valtierra and his wife, Ofelia Valtierra, obtained a $488,000 mortgage from World Savings Bank, FSB ("World Savings Bank"), which through a number of corporate changes has become Defendant Wells Fargo Bank, N.A. ("Wells Fargo"). See Complaint ¶ 21; Request for Judicial Notice ("RJN") Exs. A-E.*fn1 The loan was memorialized by promissory note and secured by a Deed of Trust against 1921 Katherine Court, Turlock, CA. See Complaint ¶ 2; RJN Ex. F. Plaintiff fell behind on payments, and a Notice of Default was recorded on August 3, 2009. See RJN Ex. G. A Notice of Trustee Sale was recorded on November 5, 2009. See RJN Ex. H. The sale took place on March 8, 2010, and a trustee's deed upon sale was recorded on March 16, 2010. See RJN Ex. I. Wells Fargo purchased the property at the sale. See id.
Plaintiffs have filed three previous lawsuits relating to this mortgage and the subsequent foreclosure. See RJN Exs. J, K, L. The first case was filed in this Court and was dismissed with prejudice for failure to state a claim. See Doc. No. 41 in Case No. 1:10-CV-849 AWI MSJ ("Valtierra I"). The second case, which dealt with credit reporting, was also filed in this Court and dismissed with prejudice for failure to prosecute. See Doc. No. 20 in Case No. 1:10-CV-1455 AWI GSA. The third case was filed in the Stanislaus County Superior Court and was dismissed without prejudice in 2011 for lack of prosecution. See RJN Ex. L.
I. Rule 12(b)(6) Motion To Dismiss
Defendants argue that each of the claims alleged in this Complaint are barred by res judicata. Plaintiffs have already attempted to challenge the foreclosure sale. The only new allegations in this case relate to securitization of Plaintiffs' mortgage and transfers by the original lender, World Savings Bank. However, the new allegations do not defeat res judicata.
Defendants also argue that Wells Fargo had standing to foreclose and properly did foreclose on the property. Despite the allegations of a transfer, World Savings Bank changed its name to Wachovia Mortgage, and Wachovia Mortgage merged into Wells Fargo. The deed of trust denotes that the lender/trustee is "World Savings Bank, FSB, its Successors and/or Assignees." The transition from World Bank into Wells Fargo shows that no transfer of Plaintiffs' note occurred.
Plaintiffs have filed no opposition or response of any kind.
Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To "avoid a Rule 12(b)(6) dismissal, "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); see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949; see Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
Discussion Plaintiffs allege four causes of action in their Complaint: fraud, wrongful foreclosure, quiet title, and declaratory relief. These claims are all based on the premise that World Savings Bank improperly transferred the note and/or deed of trust to unnamed Doe Defendants. See Doc. No. 1 at ¶¶ 20-26. However, Defendants assert that Plaintiffs' loan was not sold or transferred to any other entity and that Wells Fargo had standing to foreclose.
Judicially noticed documents show that World Savings Bank changed its name to Wachovia Bank, and then merged into Wells Fargo. See RJN Exs. A to E. This transition has been acknowledged in other federal judicial proceedings. See Wolf v. Wells Fargo Bank, N.A., 2011 U.S. Dist. LEXIS 117835, *3 (N.D. Cal. Oct. 12, 2011); Nguyen v. Wells Fargo Bank, N.A., 749 F.Supp.2d 1022, 1035 (N.D. Cal. 2010); DeLeon v. Wells Fargo Bank, N.A., 729 F.Supp.2d 1119, 1121 (N.D. Cal. 2010). Accordingly, Wells Fargo is the successor to World Savings Bank following the merger, and any "transfer" of Plaintiffs' note and deed of trust between World Savings Bank ...