United States District Court, N.D. California, San Francisco Division
ORDER GRANTING IN PART AND DENYING IN PART WELLS FARGO'S MOTION TO DISMISS PLAINTIFF'S THIRD AMENDED COMPLAINT [Re: ECF No. 46]
LAUREL BEELER, Magistrate Judge.
Plaintiff U.S. Distressed Mortgage Fund, LLC (the "Fund") sued Wells Fargo Bank, N.A. ("Wells Fargo") and Wells Fargo Home Mortgage, Inc., a division of Wells Fargo Bank, N.A. ("Wells Fargo Home Mortgage"). See Third Amended Complaint ("TAC"), ECF No. 44. The parties stipulated to the dismissal of Wells Fargo Home Mortgage, Stipulation, ECF No. 41, and now Wells Fargo moves to dismiss the Fund's Third Amended Complaint. See Motion, ECF No. 46. Pursuant to Civil Local Rule 7-1(b), the court finds this matter suitable for determination without oral argument and vacates the September 4, 2014 hearing. Upon consideration of the Third Amended Complaint, the briefs submitted, and the applicable legal authority, the court GRANTS IN PART and DENIES IN PART Wells Fargo's motion to dismiss.
On or about January 13, 2000, World Savings Bank, FSB ("World Savings"), a federal savings bank, made a loan of $431, 200 to Manoj Rijhwani and Lisa Rijhwani. TAC ¶ 5, ECF No. 44 at 2; RJN, Ex. A, ECF No. 47 at 6. The loan was consummated through a promissory note and was secured by a deed of trust recorded against the Rijhwanis' home located at 1044 Rudder Lane, Foster City, California (the "Property"). TAC ¶ 5, ECF No. 44 at 2; RJN, Ex. A, ECF No. 47 at 6. For purposes of this order, this loan will be referred to as the "First Loan" and this deed will be referred to as the "First Deed."
On or about July 5, 2007, the Rijhwanis took out a $77, 845 equity line of credit with World Savings to refinance the Property. TAC ¶ 5, ECF No. 44 at 2; RJN, Ex. B, ECF No. 47 at 31. This loan also was consummated through a promissory note and was secured by a deed of trust recorded against the Property. TAC ¶ 5, ECF No. 44 at 2; RJN, Ex. B, ECF No. 47 at 31. For purposes of this order, this loan will be referred to as the "Second Loan" and this deed will be referred to as the "Second Deed."
On December 31, 2007, World Savings changed its name to Wachovia Mortgage, FSB ("Wachovia"), and remained a federal savings bank. RJN, Exs. D-E, ECF No. 47 at 55-60. In November 2009, Wachovia changed its name to Wells Fargo Bank Southwest, N.A., became a national association (and ceased being a federal savings bank), and immediately merged into Wells Fargo, which was and is a national association. RJN, Exs. F-G, ECF No. 47 at 61-64. The Fund alleges that both the Rijhwanis' "mortgage[s]" and/or the" promissory note[s] and deed[s] of trust" underlying those loans were eventually "transferred" to Wells Fargo. See TAC ¶ 5, ECF No. 44 at 2.
In 2011, the Rijhwanis defaulted on the First Loan and the Second Loan. TAC ¶ 6, ECF No. 44 at 2. A Notice of Default relating to the Second Loan and was recorded on February 28, 2012. RJN, Ex. H, ECF No. 47 at 65-69. A Notice of Trustee's Sale relating to the Second Deed was recorded on May 30, 2012. RJN, Ex. I, ECF No. 47 at 71-72. On March 4, 2013, "Wells Fargo completed a foreclosure" under the Second Deed and a Trustee's Deed Upon Sale was recorded on March 15, 2013. TAC ¶ 6, ECF No. 44 at 2; RJN, Ex. J, ECF No. 47 at 73-76. The Fund was the successful bidder with a bid of $231, 600. TAC ¶ 6, ECF No. 44 at 2; RJN, Ex. J, ECF No. 47 at 73-76. The amount owed on the Second Loan at the time of the sale was $85, 468.94. TAC ¶ 6, ECF No. 44 at 2; RJN, Ex. J, ECF No. 47 at 73-76.
The Rijhwanis, however, had defaulted on the First Loan, too, so after purchasing the Property, the Fund began taking steps to find out how much money was still owed on it. See TAC ¶¶ 7-9, ECF No. 44 at 2. On March 13, 2013, the Fund contacted Wells Fargo's foreclosure department to request a beneficiary statement. Id. ¶ 7. The Fund was informed it would need to fax proof of the Trustee's Deed Upon Sale, the Sale Receipt, and a written request for the payoff and reinstatement amounts to (210) 509-1174. Id. The Fund faxed the request to the number provided. Id.
On March 26, 2013, the Fund again contacted Wells Fargo again to check on the status of the beneficiary statement. Id. ¶ 8. As before, the Fund was told to fax the paperwork to (210) 509-1174. Id. The Fund faxed the paperwork to that number and also mailed it to Wells Fargo at 4101 Wiseman Blvd., San Antonio, Texas 78251. The Fund contacted Wells Fargo again on April 8, 2013, for an update on the status of the beneficiary statement. Id. ¶ 9. Wells Fargo informed the Fund that it had received the March 13, 2013 requests and still were processing them. Id.
On April 9, 2013, the Rijhwanis "executed two Authorization to Inquire forms prepared by Wells Fargo authorizing [the Fund] to assist [the Rijhwanis] in obtaining information about their loans. Id. ¶ 10. The Fund contacted Wells Fargo again on April 12, 2013. Id. ¶ 11. The Fund spoke with an Agent Adriana who told it to call back on April 15 for a status update. Id. The Fund contacted Wells Fargo again on April 15. Id. During that call with an Agent Johnny, the Fund was informed that Wells Fargo had received the authorization and would need five to seven days to verify it. Id.
On April 22, 2013, the Fund contacted Wells Fargo once again. Id. ¶ 12. This time, it spoke with an Agent Armon, who confirmed that the authorization had been approved. Id. He asked the Fund to resend all of the information it had previously submitted, and the Fund complied. Id. On April 29, 2013, the Fund contacted Wells Fargo again, and spoke with an Agent Natalee. Id. ¶ 13. She told the Fund to send its request yet again. Id. Agent Natalee provided the Fund with the estimated reinstatement amount but she would not provide the payoff amount. Id. The Fund contacted Wells Fargo again on May 6, 2013. Id. ¶ 14. This time, the Fund was informed that Wells Fargo would not provide any payoff information. Id.
On May 20, 2013, the Rijhwanis and the Fund entered into a stipulation regarding possession of the Property. Id. ¶ 15, ECF No. 44 at 3. In that stipulation, the Rijhwanis agreed to vacate the Property by July 31, 2013. Id. Since that time, the Fund has been in possession of the Property. Id.
On June 4, 2013, Wells Fargo, through its agent, Regional Trustee Services Corporation ("RTSC"), which is not a party to this ligation,  recorded a Notice of Default under the First Loan. TAC ¶ 16, ECF No. 44 at 3; RJN, Ex. K, ECF No. 47 at 77-81. This notice stated that the amount owed on the First Loan as of May 31, 2013 was $129, 063.76. RJN, Ex. K, ECF No. 47 at 77-81. A Notice of Trustee's Sale was recorded on September 11, 2013. See TAC ¶ 16, ECF No. 44 at 3; RJN, Ex. L, ECF No. 47 at 83-84.
On October 11, 2013, the Fund tendered the funds necessary to pay the outstanding balance on the loan. TAC ¶ 17, ECF No. 44 at 3. The payoff was processed and the trustee's sale was cancelled. Id.
II. PROCEDURAL HISTORY
The Fund originally filed suit on October 8, 2013 in San Mateo County Superior Court. See Notice of Removal, ECF No. 1. On November 6, 2013, Wells Fargo removed the action to this court on diversity of citizenship grounds. See id. The Fund filed amended complaints on December 12, 2013, and April 4, 2014. See First Amended Complaint, ECF No. 15; Second Amended Complaint ("SAC"), ECF No. 33.
On April 18, 2014, Wells Fargo moved to dismiss the second, third, fourth, and fifth claims in the SAC. See Motion to Dismiss SAC, ECF No. 34. The motion was fully briefed. See Opp'n to Motion to Dismiss SAC, ECF No. 36; Reply Supp. Motion to Dismiss SAC, ECF No. 38. The court granted in part and denied in part the motion to dismiss on June 10, 2014. See Order, ECF No. 43.
On June 20, 2014, the Fund filed the operative TAC. See TAC, ECF No. 44. It claims violations of the following statutes and regulations: (1) California Civil Code § 2941; (2) California Civil Code § 2943; (3) 12 C.F.R. 1026.36; and (4) California Business and Professions Code § 17200. See id. ¶¶ 19-40, ECF No. 44 at 4-6.
Wells Fargo moved to dismiss all of the claims in the TAC on July 21, 2014. Motion to Dismiss TAC ("Motion"), ECF No. 46. The Fund filed an opposition on August 4, 2013, Opp'n, ECF No. 49, and Wells Fargo filed a reply on August 11, 2014, Reply, ECF No. 50.
I. LEGAL STANDARD
Federal Rule of Civil Procedure 8(a) requires that a complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A complaint therefore must provide a defendant with "fair notice" of the claims against it and the grounds for relief. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation and citation omitted).
A court may dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) when it does not contain enough facts to state a claim to relief that is plausible on its face. See id. at 570. "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." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "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." Id. (quoting Twombly, 550 U.S. at 557.). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (internal citations and parentheticals omitted).
In considering a motion to dismiss, a court must accept all of the plaintiff's allegations as true and construe them in the light most favorable to the plaintiff. See id. at 550; Erickson v. Pardus, 551 U.S. 89, 93-94 (2007); Vasquez v. Los Angeles County, 487 F.3d 1246, 1249 (9th Cir. 2007).
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. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990)). But when a party repeatedly fails to cure deficiencies, the court may order dismissal without leave to amend. See Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992) (affirming dismissal ...