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Maria A. Casas v. Wells Fargo Bank N.A.


November 20, 2012


The opinion of the court was delivered by: Edward J. Davila United States District Judge


Presently before the court in this foreclosure-related action is Defendant Wells Fargo Bank N.A.'s ("Defendant") Motion to Dismiss Plaintiff Maria A. Casas' ("Plaintiff") Complaint. 21 Plaintiff, who is proceeding pro se, has not filed an opposition to this motion. This court has 22 jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1332. Having carefully reviewed the complaint and 23 Defendant's arguments, the court GRANTS the Motion to Dismiss. The Motion to Strike is 24 DENIED as moot. 25


The court recounts the relevant facts mainly from judicially-noticeable documents. On or 27 about November 10, 2005, Plaintiff obtained a loan for $450,000 from World Savings Bank, FSB 28 for the purchase of real property located at 2002 Loch Ness Way, San Jose, California 95121 (the 2 "Property"). See Req. for Judicial Notice ("RJN"), Dkt. No. 7, Exs. A and B.*fn1 World Savings 3 Bank was renamed Wachovia Mortgage, FSB on December 31, 2007. RJN, Ex. D. On November 4 1, 2009, Wachovia Mortgage, FSB was converted to a national bank named Wells Fargo Bank 5 Southwest, N.A., and merged with Wells Fargo Bank, N.A.. RJN, Ex. E. 6 A notice of default was recorded against the Property on June 3, 2011. RJN, Ex. F. Shortly thereafter, a notice of sale was recorded. RJN, Ex. G. The Property was sold at non-8 judicial foreclosure to a third party on March 7, 2012. RJN, Ex. H. That same day, Plaintiff filed 9 suit in Santa Clara County superior court asserting the following ten claims:

(1) Fraudulent Misrepresentation (2) Fraudulent Inducement (3) Violation of the Fair Debt Collection Practices Act ("FDCPA") 13 (4) Predatory Lending Practices in Violation of the Home Ownership and Equity Protection 14 Act ("HOEPA"), the Truth in Lending Act ("TILA"), and California Business and 15 Professions Code Section 17200 16 (5) Breach of Contract 17 (6) Violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 (7) Quiet Title 19 (8) Declaratory Relief 20 (9) Injunctive Relief 21 (10) Cease and Desist Defendant removed the action to this district on April 6, 2012. Defendant now moves to dismiss 23 Plaintiff's complaint in its entirety, and, in the alternative, moves to strike portions of Plaintiff's 24 complaint. 25


2 complaint with sufficient specificity to "give the defendant fair notice of what the ... claim is and 3 the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) 4 (internal quotations omitted). A complaint which falls short of the Rule 8(a) standard may be 5 dismissed if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). 6 Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim in the Dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim is "proper only 7 where there is no cognizable legal theory or an absence of sufficient facts alleged to support a 8 cognizable legal theory." Shroyer v. New Cingular Wireless Servs., Inc., 606 F.3d 658, 664 (9th 9 Cir. 2010) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). In considering whether 10 the complaint is sufficient to state a claim, the court must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While a complaint need not contain detailed factual allegations, it "must contain sufficient factual matter, 13 accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 14 If a district court considers evidence outside the pleadings in a motion to dismiss, it must 16 normally convert the Rule 12(b)(6) motion into a Rule 56 motion for summary judgment, and must 17 give the nonmoving party an opportunity to respond. SeeUnited States v. Ritchie, 342 F.3d 903, 18 907 (9th Cir. 2003). A court may, however, consider documents attached to the complaint, 19 documents incorporated by reference in the complaint, or matters of judicial notice without 20 converting the motion to dismiss into a motion for summary judgment. Id. at 908. The court may 21 treat such a document as part of the complaint, and may assume that its contents are true for 22 purposes of a motion to dismiss under Rule 12(b)(6). SeeKnievel v. ESPN, 393 F.3d 1068, 1076 23 (9th Cir. 2005). 24

26 failed to state a claim. Primarily, Plaintiff has not met the pleading standard required by Federal 27 U.S. at 570).


Having reviewed Plaintiff's complaint in its entirety, the court concludes that Plaintiff has Rule of Civil Procedure 8 because she has failed to provide sufficient factual information or 28 present information in a meaningful way. While the court must afford flexibility to a pro se 2 complainant's pleadings, the complaint must still provide fair notice of the claims and must allege 3 enough facts to state the elements of each claim plainly and succinctly. Fed. R. Civ. P. 8(a)(2); 4

Jones v. Comty. Redev. Agency, 733 F.2d 646, 649 (9th Cir. 1984). A complaint will not suffice if 5 it only provides "naked assertions" devoid of "further factual enhancements." Iqbal, 556 U.S. at 6 678 (quoting Twombly, 550 U.S. at 555, 557). Plaintiff here has failed to include sufficient facts to 7 support any of her causes of action. This ground alone will support a grant of Defendant's motion 8 to dismiss. However, because the court dismisses some claims with leave to amend, and some 9 claims without leave, the court will address each of Plaintiff's causes of action.

("OTS"), 12 C.F.R. § 560, preempt Plaintiff's state law causes of action. "[T]he laws of the United States.shall be the supreme law of the land.any Thing in the Constitution or laws of any state to 15 the contrary notwithstanding." U.S. Const. art. VI, cl. 2. Under the Supremacy Clause, a federal 16 law will preempt a state law "when federal regulation in a particular field is so pervasive as to 17 make reasonable the inference that Congress left no room for the States to supplement it." Bank of 18 HOLA was enacted "to charter savings associations under federal law, at a time when record numbers of home loans were in default and a staggering number of state-chartered savings 21 associations were insolvent." Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1004 (9th Cir. 2008). 22

One of HOLA's central purposes was to restore public confidence in the banking system by 23 consolidating the regulation of savings and loan associations with the federal government. Id. To 24 achieve this purpose, Congress authorized the OTS to promulgate regulations governing federal 25 savings associations. 12 U.S.C. § 1464; Silvas, 514 F.3d at 1005. OTS occupies the entire field in 26 that regard. 12 C.F.R. § 560.2(a) (2011). 27 28

A.State Law Claims

Defendant argues that the Home Owners' Loan Act of 1933, 12 U.S.C. § 1461 et seq. ("HOLA") and regulations promulgated by the Treasury Department's Office of Thrift Supervision 13 Am. v. City & Cnty. of S.F., 309 F.3d 551, 558 (9th Cir. 2002) (citation omitted).

2 state laws that are expressly preempted:

HOLA's implementing regulations set forth a list, "without limitation," of the categories of The terms of credit, including amortization of loans and the deferral and capitalization of interest and adjustments to the interest rate, balance, payments due, or term to maturity of the loan, including the circumstances under which a loan may be called due and payable upon the passage of time or a specified event external to the loan; .... Loan-related fees, including without limitation, initial charges, late charges, prepayment penalties, servicing fees, and overlimit fees; .... Disclosure and advertising, including laws requiring specific statements, information, or other content to be included in credit application forms, credit solicitations, billing statements, credit contracts, or other credit-related documents and laws requiring creditors to supply copies of credit reports to borrowers or applicants; .... Processing, origination, servicing, sale or purchase of, or investment or participation in, mortgages.... 12 C.F.R. § 560.2(b)(4)-(5), (b)(9)-(10) (2011).

HOLA and its related regulations have been described as "so pervasive as to leave no room for 20 state regulatory control." Conference of Fed. Sav. & Loan Ass'ns v. Stein, 604 F.2d 1256, 1260 21 HOLA applies to federal savings associations, including federal savings banks. 12 U.S.C. § 1464. Though Defendant Wells Fargo is not a federal savings bank, as successor-in-interest to World Savings Bank, a federal savings bank and the loan originator, Defendant will be treated as 25 such for the purposes of preemption under HOLA. SeeDeLeon v. Wells Fargo Bank, N.A., 729 26 F.Supp.2d 1119, 1126 (N.D. Cal. 2010) (holding that HOLA applies to Wells Fargo Bank, N.A. as 27 successor-in-interest to World Savings Bank, FSB). 28

(9th Cir. 1979), aff'd, 445 U.S. 921 (1980). 22

Professions Code § 17200 (part of Claim 4), breach of contract/fiduciary duty (Claim 5), quiet title 4 Here, Plaintiff asserts seven claims based in state law: fraudulent misrepresentation (Claim 1), fraudulent inducement (Claim 2), predatory lending in violation of California Business & 3 (Claim 7), declaratory relief (Claim 8), and cease and desist (Claim 10). Critical to each of these 5 claims are the allegations either that Defendant failed to verify Plaintiff's ability to repay the loan 6 during the loan origination process, or that Defendant improperly foreclosed on the Property 7 because Defendant was not in possession of the promissory note securing the Property. Because of 8 the nature of the allegations, each of the state laws and doctrines invoked by Plaintiff would 9 regulate lending in a way expressly contemplated by the "origination" or the "sale or purchase of, 10 or investment or participation in, mortgages" portions of § 560.2(b). The court therefore finds that these are DISMISSED.*fn2 claims are preempted by HOLA. The state law claims Since the issue of preemption cannot be cured by amendment, this dismissal will be without leave to amend for 13 futility. Miller v. Rykoff--Sexton, 845 F.2d 209, 214 (9th Cir. 1988) ("A motion for leave to amend 14 may be denied if it appears to be futile or legally insufficient.").


In order to state a claim under the FDCPA, Plaintiff must allege facts establishing that: (1)

Plaintiff has been the object of collection activity arising from a consumer debt; (2) Defendant 18 qualifies as a "debt collector" under the statute; and (3) Defendant has engaged in a prohibited act 19 or has failed to perform one of the statute's requirements. See Uyeda v. J.A. Cambece Law Office, 20 P.C., No. 04-CV-04312, 2005 WL 1168421, at *3 (N.D. Cal. May 16, 2005). Plaintiff has not 21 22 alleged and cannot establish that Defendant acted as a "debt collector" or that the foreclosure 2 constituted a "debt collection."

4 collect ... debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). A "debt 5 collector" under the FDCPA "does not include the consumer's creditors, a mortgage servicing 6 company, or an assignee of a debt, as long as the debt was not in default at the time it was 7 assigned." Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985); Oliver v. U.S. Bank, 8

Bank, FSB's successor-in-interest, Defendant acted as Plaintiff's creditor. Therefore, Defendant 10 cannot be considered a "debt collector" under the FDCPA. Additionally, courts in this circuit have 11

See, e.g., Aniel v. EMC Mortg. Corp., No. 10-CV-5170, 2011 WL 835879, at *5 (N.D. Cal. Mar. 13 Feb.15, 2011) ("Since a transfer in interest is the aim of a foreclosure, and not a collection of debt, 15 the foreclosure proceeding is not a debt collection action under the FDCPA."); Aniel v. T.D. Serv. 16

Elec. Regis. Sys., 618 F.Supp.2d 1184, 1189 (D. Ariz. 2009) ("the activity of foreclosing on [a] 18 property pursuant to a deed of trust is not collection of a debt within the meaning of the FDCPA."), 19 aff'd, 384 Fed. Appx. 609, 2010 WL 2464899 (9th Cir. Jun.17, 2010) (internal quotations omitted). 20

This court agrees. Because Plaintiff cannot establish the first and second prongs of her FDCPA 21 claim, it is DISMISSED without leave to amend. 22

The FDCPA defines a debt collector as "any person ... who regularly collects or attempts to N.A., No. 11-CV-04300, 2012 WL 2376677, at *5 (N.D. Cal. June 22, 2012). As World Savings 9 concluded that a non-judicial foreclosure does not constitute a "debt collection" under the FDCPA. 12 4, 2011); Hanaway v. JPMorgan Chase Bank, No. 10-CV-1809, 2011 WL 672559, at *4 (C.D. Cal. 14 Co., No. 10-CV-03185, 2010 WL 3154087, at *1 (N.D. Cal. Aug. 9, 2010); Deissner v. Mortgage 17 C.Predatory Lending Practices under HOEPA, 15 U.S.C. 1637; TILA, 15 U.S.C. 1601; and Regulation Z, 12 C.F.R. § 226.

Plaintiff's fourth cause of action alleges violation of HOEPA, TILA, Regulation Z, and California Business and Professions Code § 17200. The court will consider the violations of these 26 provisions as separate causes of action. Because Plaintiff's Section 17200 claim has already been 27 dismissed with prejudice in Section III.A, the court will not further address that claim. 28

2 barred. Any request for damages under TILA or HOEPA is subject to a one-year statute of 3 limitations (15 U.S.C. § 1640(e)) and a claim for rescission is subject to a three-year statute of 4 limitations (15 U.S.C. § 1635(f)). A TILA or HOEPA violation occurs at the time the loan 5 documents are signed. Meyer v. Ameriquest Mortg. Co., 342 F.3d 899, 902 (9th Cir. 2003). 6

7 under TILA and/or HOEPA should have been field by November 2006, and a timely claim for 8 rescission should have been filed by November 2008. However, Plaintiff did not bring this action 9 until March 2012, well outside of the statutory time frame. 10

It appears that Plaintiff's claims of predatory lending under TILA and HOEPA are time-

Plaintiff's loan closed in November 2005. From this date, a timely claim for damages

A request for damages under TILA and/or HOEPA is only presumptively time-barred absent allegations that support an equitable exception. 15 U.S.C. § 1640(e); King v. State of Cal., 784 F.2d 910, 915 (9th Cir. 1986) (finding that the limitations period of Section 1640(e) may be 13 equitably tolled "until the borrower discovers or had reasonable opportunity to discover the fraud 14 or nondisclosures that form the basis of the TILA action"); see Hamilton v. Bank of Blue Valley, 15 746 F.Supp.2d 1160, 1179 (E.D. Cal. 2010) (noting that "HOEPA is an amendment of TILA, and 16 therefore is governed by the same remedial scheme and statutes of limitations as TILA"). Plaintiff 17 here has not alleged any facts to support a conclusion that equitable tolling should apply in her 18 case. Given that Plaintiff filed this action more than six years after signing the loan documents and 19 has failed to raise any argument for equitable tolling, the statute of limitations appears to have run 20 on her TILA and HOEPA claims. The court therefore DISMISSES these claims. Plaintiff's claims 21 for rescission under TILA and HOEPA are dismissed without leave to amend because they are 22 absolutely barred. However, since Plaintiff may be able to plead facts to support equitable tolling, 23 the court grants her leave to amend her TILA and HOEPA claims for damages. 24

25 and conclusory assertions fail to provide Defendant with sufficient notice of the claim. Indeed, 26 Plaintiff does not assert any particular facts related to her Regulation Z claim. Therefore, that 27 claim is DISMISSED with leave to amend. 28

As for Plaintiff's claim of predatory lending practices under Regulation Z, Plaintiff's vague


"To state a civil claim for a RICO violation., a plaintiff must show (1) conduct (2) of an 3 enterprise (3) through a pattern (4) of racketeering activity." Rezner v. Bayerische Hypo-Und 4 Vereinsbank AG, 630 F.3d 866, 873 (9th Cir. 2010) (internal citation omitted). Plaintiff's claim is 5 also subject to the heightened pleading standard of Federal Rule of Civil Procedure 9(b), which 6 requires her to "state with particularity the circumstances constituting fraud or mistake." See Moore v. Kayport Package Express, Inc., 885 F.2d 531, 541 (9th Cir. 1989) (applying Rule 9(b)'s 8 heightened pleading standard to a RICO claim). Here, Plaintiff has stated general allegations with 9 no facts to demonstrate how her case falls within the scope of RICO. She has thus failed to 10 sufficiently plead any requisite element of a statutory violation. This claim will be DISMISSED

with leave to amend.

E.Injunctive Relief

Plaintiff's claim for injunctive relief is based entirely on her FDCPA claim. As the FDCPA 14 claim has already been dismissed with prejudice, Plaintiff's claim for injunctive relief is also 15 DISMISSED without leave to amend. 16


For the foregoing reasons, the Court DISMISSES Plaintiff's first, second, third, fifth, 18 seventh, eighth, ninth, and tenth causes of action without leave to amend. The court also 19 DISMISSES Plaintiff's fourth cause of action without leave to amend to the extent it relies on 20 California Business and Professions Code § 17200, and any claim for rescission under HOEPA and 21 TILA. To the extent Plaintiff's fourth cause of action relies on Regulation Z or a claim for 22 damages under HOEPA and/or TILA, the court DISMISSES that claim with leave to amend. 23

Finally, the court DISMISSES Plaintiff's sixth cause of action (RICO) with leave to amend. 24

Any amended complaint must be filed within thirty days of the date this Order is filed.

Plaintiff is advised that she may not add new claims or parties without first obtaining Defendant's 26 consent or leave of court pursuant to Federal Rule of Civil Procedure 15. Plaintiff is further advised that failure to timely file an amended complaint or failure to amend the complaint in a 2 manner consistent with this Order may result in the dismissal of this action. 3

Having dismissed each of Plaintiff's claims, the court finds Defendant's Motion to Strike MOOT. 5 6


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