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Sun v. Wells Fargo Bank, National Association

United States District Court, N.D. California

March 25, 2014

PATRICIA SUN, Plaintiff,
v.
WELLS FARGO BANK, NATIONAL ASSOCIATION; and DOES 1-100, inclusive, Defendants.

ORDER GRANTING MOTION TO DISMISS AND VACATING HEARING AND CASE MANAGEMENT CONFERENCE

WILLIAM ALSUP, District Judge.

INTRODUCTION

In this foreclosure action, defendants move to dismiss the complaint for failure to state a claim pursuant to Rule 12(b)(6) and preemption. To the extent stated below, defendants' motion is GRANTED. The hearing and case management conference set for April 3, 2014, is hereby VACATED.

STATEMENT

The following allegations are assumed to be true for the purposes of defendants' motion to dismiss. The complaint alleges that plaintiff purchased her home in 1969 and re-financed in 2007 with World Savings Bank, FSB, the predecessor of Wells Fargo Bank, N.A. Plaintiff allegedly made monthly mortgage payments on time for more than forty years, until hardship overwhelmed her ability to make regular payments on or about July 2011 (Compl. ¶¶ 26, 27, 29).

The complaint alleges that plaintiff had a lecturing and consulting business that she ran out of her home. In June 2008, the house was almost completely destroyed by a fire. As a result, plaintiff's consulting business was severely affected and the substantial loss of income allegedly caused her to stop making payments. The complaint alleges that plaintiff immediately contacted Wells Fargo and requested mortgage assistance but to no avail. In December 2010, plaintiff reportedly took a loan to pay off arrears and catch up on mortgage payments ( id. at ¶ 29).

The complaint alleges that plaintiff continued to struggle to make her mortgage payments due to the fact that the house was only partially insured and it took more than two years to settle the claim. At 72 years old, plaintiff's only source of steady income has been social security. Plaintiff allegedly submitted a request for mortgage assistance to Wells Fargo. The complaint alleges that on December 18, 2012, while plaintiff awaited a response, Wells Fargo recorded a notice of default. Subsequently, while still under review, Wells Fargo recorded a notice of trustee's sale on March 21, 2013 ( id. at ¶ 30).

The complaint alleges that over the last three years, Wells Fargo has not contacted plaintiff with foreclosure options as required by the Home Affordable Modification Program guidelines and California foreclosure statutes, most notably, the Homeowner Bill of Rights, California Civil Code Sections 2923.5, 2923.6, and 2923.7 ( id. at ¶ 31).

Wells Fargo allegedly scheduled a trustee's sale for December 5, 2013. The complaint alleges that plaintiff's consulting business has increased, her hardship is over, she can easily make a modified payment with her present income, and that Wells Fargo's refusal to approve plaintiff for a modification is bad faith conduct ( ibid. ).

Plaintiff filed this action in Alameda County Superior Court on December 5, 2013, alleging: (1) breach of contract; (2) constructive fraud; (3) promissory estoppel; (4) negligence; (5) negligent misrepresentation; (6) violation of California's Unfair Competition Law ("UCL"), Section 17200 of the California Business and Professions Code; and (7-9) violations of Sections 2923.5, 2923.6, and 2923.7 of the California Civil Code.

In January 2014, defendants removed the action on the basis of federal-question jurisdiction and diversity. Defendants moved to dismiss the action for failure to state a claim and preemption. This case was reassigned to the undersigned judge in February 2014 after plaintiff declined to proceed before a magistrate judge and two district judges recused themselves.

ANALYSIS

1. DEFENDANTS' MOTION TO DISMISS.

To survive a motion to dismiss for failure to state a claim, a pleading must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). In ruling on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), courts "accept all factual allegations in the complaint as true and construe the pleadings in ...


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