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Penermon v. Wells Fargo Bank, N.A.

United States District Court, N.D. California

June 11, 2014

CHARLOTTE PENERMON, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant

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For Charlotte Penermon, Plaintiff: Matthew David Mellen, LEAD ATTORNEY, Eunji Cho, Sarah Elizabeth Adelaars, Mellen Law Firm, San Mateo, CA.

For Wells Fargo Home Mortgage, a division of Wells Fargo Bank, N.A., Successor, Wells Fargo Bank Southwest, N.A., formerly known as Wachovia Mortgage, FSB, formerly known as World Savings Bank, FSB, Defendant: Elizabeth Christine Hehir, LEAD ATTORNEY, Robert Arthur Bailey, Anglin Flewelling Rasmussen Campbell and Trytten, LLP, Pasadena, CA.

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ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT WELLS FARGO BANK, N.A.'S MOTION TO DISMISS

KANDIS A. WESTMORE, United States Magistrate Judge.

(Dkt. No. 14)

On February 24, 2014, Defendant Wells Fargo Bank, N.A. filed a motion to dismiss Plaintiff Charlotte Penermon's first amended complaint alleging that Wells Fargo violated the California Homeowner Bill of Rights (hereafter " HBOR" ).

On April 17, 2014, the Court held a hearing, and after careful consideration of the parties arguments and the applicable legal authority, for the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART Wells Fargo's motion to dismiss.

I. BACKGROUND

On February 12, 2008, Plaintiff Charlotte Penermon refinanced her mortgage loan, secured bye a deed of trust, with Wachovia Mortage, FSB (" Wachovia" ) for the Subject Property located at 4533 San Carlos Ave., Oakland, California. (Pl.'s First Am. Compl., " FAC," Dkt. No. 12 ¶ 8.) In 2009, Wachovia merged with Defendant Wells Fargo. Id.

Plaintiff asserts that in January 2013, due to deteriorating health conditions, she sent Wells Fargo an authorization to release information to her son, Enrico Penermon (" Enrico" ) so that he could communicate with Wells Fargo on her behalf. (FAC ¶ 9.)

In February 2013, Enrico allegedly contacted Wells Fargo to request a loan modification, and Plaintiff was assigned a single point of contact (" SPOC" ), Britni Ridge, as her Wells Fargo Home Mortgage home preservation specialist. (FAC ¶ ¶ 10-11.) On March 14, 2013, Plaintiff received a letter from Britni Ridge with a loan modification application, which stated that during the review period, Plaintiff's home would not be referred to foreclosure or sold at a foreclosure sale. (FAC ¶ 12.) The letter also provided that if Plaintiff did not qualify for a loan modification, Wells Fargo would work with Plaintiff to explore other options available. Id.

In April 2013, Enrico sent in the loan modification application along with the required documents to Wells Fargo. (FAC ¶ ¶ 13, 39.) Despite this submission, Wells Fargo never acknowledged receipt of the application, and Plaintiff never received a written determination regarding the loan modification application. Id. Plaintiff further alleges that after the submission of the loan modification application, Enrico attempted to contact SPOC Ridge numerous times, and left her several messages, to inquire about the status of the modification application. (FAC ¶ 14.) SPOC Ridge, however, never returned any of Enrico's calls. Id. After not receiving any response from SPOC Ridge, Enrico called Wells Fargo and spoke with another Wells Fargo representative, at which time he was informed that SPOC Ridge was the assigned single point of contact and that she would get back to him with the result of the modification application. (FAC ¶ 15.)

Plaintiff also alleges that in April 2013, Enrico called Wells Fargo to make a single payment, but the Wells Fargo representative refused to take the payment unless it was for the entire amount owed, which, according to the representative, was approximately $3,000. (FAC ¶ 16.)

On May 20, 2013, a Notice of Default (" NOD" ) was recorded with the Alameda County Recorder's Office. (Def.'s Req. for Judicial Notice, " RJN," Dkt. No. 15, Ex. H.) According to the NOD, Plaintiff owed

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$9,441.65 as of May 16, 2013. Id. Plaintiff, however, asserts that she made, and Defendant accepted, payments until February 2013. (FAC ¶ 17.) Plaintiff also believes that the amount listed on the NOD was incorrect, since the Wells Fargo representative informed Enrico that Plaintiff owed $3,000 in April and one month later, the NOD provided that she owed $9,441.65 when the mortgage payment was approximately $1,400 a month. Id.

On August 23, 2013, Plaintiff received a Notice of Trustee's Sale with a scheduled sale date of September 10, 2013. (FAC ¶ 18.) On September 30, 2013, a Trustee's Deed Upon Sale was recorded with the Alameda County Recorder's Office. (FAC ¶ 20; RJN, Ex. K.)

On December 4, 2013, Plaintiff filed this action in Alameda County Superior Court. On January 6, 2014, Wells Fargo removed the case to federal court. On January 13, 2014, Wells Fargo filed a motion to dismiss the initial complaint.

Instead of opposing Wells Fargo's initial motion to dismiss, Plaintiff filed a first amended complaint on February 3, 2014. (FAC, Dkt. No. 12.) Plaintiff's amended complaint alleges seven causes of action: (1) Violation of Cal. Civ. Code § 2924; (2) Violation of Cal. Civ. Code § 2924.17; (3) Violation of Cal. Civ. Code § 2923.6; (4) Violation of Cal. Civ. Code § 2923.7; (5) Violation of Cal. Civ. Code § 2924.10; (6) Negligence; and (7) Unfair Business Practices - Violation of Business and Professions Code § 17200 et. seq. The second through fifth causes of action are for violations of the California Homeowner Bill of Rights (collectively referred to as the " HBOR claims" ), which went into effect on January 1, 2013.

On February 24, 2014, Wells Fargo filed a motion to dismiss the first amended complaint asserting, among other arguments, that Plaintiff's HBOR claims are preempted by the Home Owners' Loan Act (hereafter " HOLA" ). (Def.'s Mot. to Dismiss the First Am. Compl., " Def.'s Mot.," Dkt. No. 14.) On March 12, 2014, Plaintiff filed her opposition. (Pl.'s Opp'n, Dkt. No. 19.) On March 17, 2014, Wells Fargo filed its reply. (Def.'s Reply, Dkt. No. 22.)

On April 17, 2014, the Court held a hearing and asked the parties to file supplemental briefing on the remedies available for wrongful foreclosure in violation of Civil Code § 2924. Plaintiff filed her brief on April 24, 2014. (Pl.'s Suppl. Brief, Dkt. No. 28.) Wells Fargo filed its supplemental brief in response of May 1, 2014. (Def.'s Suppl. Brief, Dkt. No. 29.)

II. LEGAL STANDARD

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

In considering such a motion, a court must " accept as true all of the factual allegations contained in the complaint," Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) (citation omitted), and may dismiss the case or a claim " 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Navarro, 250 F.3d at 732) (internal quotation marks omitted).

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A claim is plausible on its face 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 A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

" Threadbare recitals of the elements of a cause of action" and " conclusory statements" are inadequate. Iqbal, 556 U.S. at 678; see also Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996) (" [C]onclusory 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 grants a motion to dismiss, 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) (citations omitted).

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 by Galbraith v. Cnty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). The court need not accept as true allegations that contradict facts which may be judicially noticed. See Mullis v. United States Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987).

III. DISCUSSION

A. Request for Judicial Notice

As a preliminary matter, Wells Fargo asks that the Court take judicial notice of a number of documents in support of its motion to dismiss. (Req. for Judicial Not., " RJN," Dkt. No. 15.) The documents are purportedly true and correct copies of: A) Adjustable Rate Mortgage Note, dated February 12, 2008; B) a Deed of Trust recorded with the Alameda County Recorder's Office on February 21, 2008; C) a Certificate of Corporate Existence dated April 21, 2006 issued by the Office of Thrift Supervision certifying that World Savings Bank, FSB, is a federal savings bank; D) a letter dated November 19, 2007 issued by the Office of Thrift Supervision

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authorizing a name change from World Savings Bank, FSB to Wachovia Mortgage, FSB; E) the Charter of Wachovia Mortgage, FSB; F) Official Certification of the Comptroller of the Currency stating that effective November 1, 2009, Wachovia Mortgage, FSB converted to Wells Fargo Bank Southwest, N.A., which then merged with and into Wells Fargo Bank, N.A.; G) Printout form the website of the Federal Deposit Insurance Corporation, dated September 2, 2010, showing the history of Wachovia Mortgage, FSB; H) Notice of Default and Election to Sell Under Deed of Trust, dated May 16, 2013, and recorded with the Alameda County Recorder on May 20, 2013; I) Substitution of Trustee, dated May 1, 2013, and recorded with the Alameda County Recorder on May 16, 2013; J) Notice of Trustee's Sale Trust, dated August 21, 2013, and recorded with the Alameda County Recorder on August 23, 2013; K) Trustee Deed upon Sale dated September 24, 2013, and recorded with the Alameda County Recorder on September 30, 2013; L) Office of Thrift Supervision Opinion Letter, dated July 22, 2013, No. P-2003-5; M) Office of the Comptroller of Currency, OCC Bulletin 2011-47, dated December 8, 2011; N) Office of the Comptroller of Currency, OCC Bulletin 2012-2, dated January 6, 2012; O) Office of the Comptroller of Currency, OCC Bulletin 2013-32, dated November 20, 2013; P) Federal Home Loan Bank Board, General Counsel Letter, dated August 13, 1985; and Q) National Mortgage Settlement (NMS) Consent Judgment in United States v. Bank of America Corp., et al., Case No. 1:12-cv-00361-RMC, (D. D.C. April 4, 2012).

Plaintiff did not file an opposition to Defendant's request for judicial notice, and so Plaintiff is not deemed to dispute the authenticity of any of the exhibits. Exhibit A is a copy of the Adjustable Rate Mortgage Note that is referred to in the first amended complaint. Since Plaintiff has not questioned the authenticity of this copy, the Court will take judicial notice of it.

Exhibits B and H through K are true and correct copies of official public records, whose authenticity is capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. See Fed.R.Evid. 201(b).

As for Exhibits C through G and L through P, Defendant argues that they are appropriate for judicial notice because they reflect the official acts of executive branch of the United States government. The California Evidence Code provides that judicial notice is proper for documents that reflect the acts of executive agencies of the United States government. See California Evidence Code§ 452 (c) (judicial notice may be taken of official acts of the legislative, executive or judicial departments). As Plaintiff has not objected to the authenticity of these exhibits, the Court will take judicial notice of them.

As to Exhibit Q, the Court will take judicial notice of the National Mortgage Settlement (NMS) Consent Judgment, as judicial notice may be taken of court records. United ...


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