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Bennett v. Wells Fargo Bank, N.A.

United States District Court, Ninth Circuit

August 9, 2013

Case ROBERT N. BENNETT, Plaintiff,
WELLS FARGO BANK, N.A., et al., Defendants.


KANDIS A. WESTMORE, Magistrate Judge.

On May 28, 2013, Defendant Wells Fargo filed a motion to dismiss Plaintiff Robert N. Bennett's first amended complaint. (Mot. to Dismiss, Dkt. No. 14.) On July 18, 2013, the Court held a hearing, and after careful consideration of the parties' arguments, for the reasons set forth below, the Court GRANTS Well Fargo's Motion to Dismiss causes of action one, two, four, five, six, seven and eight without leave to amend, because any amendment to the pleadings would be futile. Plaintiff's third of action is dismissed with leave to amend consistent with this order.


Plaintiff filed this action in Alameda Superior Court on March 5, 2013 alleging nine causes of action against Defendants based on conduct during the origination of Plaintiff's mortgage loan, loan servicing, and foreclosure proceedings on Plaintiff's rental property.

On April 15, 2013, Defendants removed the case federal court. On May 13, 2013, Plaintiff filed his first amended complaint. On May 28, 2013, Defendants filed a motion to dismiss the first amended complaint.

Plaintiff's first amended complaint contains eight causes of action: Unfair and Deceptive Business Practices in Loan Servicing, Unfair and Deceptive Business Practices in Foreclosure Process, violation of the Real Estate Settlement Procedures Act (RESPA), Negligent Advice Inducing Default, Breach of the Implied Covenant of Good Faith and Fair Dealing, Reformation of Void Contract and Restitution, Quiet Title, and Declaratory Relief. (FAC, Dkt. No. 13.)

Plaintiff alleges that in or about July 1999, Plaintiff contacted an unknown agent ("Agent") for the refinancing of the loan on his rental property. ( Id. at ¶ 15.) Plaintiff informed Agent that he wanted a 30 year fixed rate loan with a rate lower than what he currently had. Id. Plaintiff filled out the loan application at Agent's office, and signed the loan documents at the escrow office in the presence of an escrow officer. Id. Upon reviewing the loan documents during signing, Plaintiff noticed that the terms of the loan had changed. Id. Plaintiff was told that this was the best loan product for him and that he could get out of the biweekly payments at a later time. Id. Plaintiff felt pressured and felt that he had no choice but to sign the loan documents. Id. Instead of a 30 year fixed rate mortgage, Plaintiff obtained an adjustable rate mortgage (ARM) in the amount of $91, 000 from World Savings Bank (since acquired by Defendant Wells Fargo). ( Id. at ¶¶ 16-17, 21.)

In April 2011, Plaintiff began contacting Wells Fargo to inquire about obtaining a loan modification. ( Id. at ¶ 18.) Wells Fargo told him "that falling behind in mortgage payments was the only way Plaintiff could apply for a modification." Id. Plaintiff did so on the advice of the representative and applied for a loan modification, which was denied based on "excessive financial obligations." Id.

On July 22, 2011, Wells Fargo, through NDEX, recorded a Notice of Default on the Subject Property allegedly without prior notification to Plaintiff. ( Id. at ¶ 20.) A Notice of Trustee's Sale was recorded on October 19, 2011. ( Id. at ¶ 20.)

At the hearing, the parties were unaware of whether a date was set for the sale of the property.


A. Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss based on the failure to state a claim upon which relief may be granted. A motion to dismiss a complaint under Rule 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001).

In considering a 12(b)(6) motion, the court must "accept as true all of the factual allegations contained in the complaint, " Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (citation omitted), and may dismiss the case "only where there is no cognizable legal theory" or there is an absence of "sufficient factual matter to state a facially plausible claim to relief." Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)) (quotation marks omitted).

A claim has facial plausibility when a plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citation omitted). In other words, the facts alleged must demonstrate "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "Threadbare recitals of the elements of a cause of action" and "conclusory statements" are not adequate. Iqbal, 556 U.S. at 678; see also Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996) ("However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim."). "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.... When a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557) (internal citations omitted).

Generally, if the court dismisses the complaint, it should grant leave to amend even if no request to amend is made "unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) ( quoting Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990)).

B. Request for Judicial Notice

As a general rule, a district court may not consider any material beyond the pleadings in ruling on a 12(b)(6) motion to dismiss for failure to state a claim. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). A district court may take notice of facts not subject to reasonable dispute that are "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b); United States v. Bernal-Obeso, 989 F.2d 331, 333 (9th Cir.1993). "[A] court may take judicial notice of matters of public record, '" Lee, 250 F.3d at 689 (citing Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986)), and may also consider "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading" without converting a motion to dismiss under Rule 12(b)(6) into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds ...

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