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Kenery v. Wells Fargo, N.A.

United States District Court, N.D. California, San Jose Division

January 30, 2015

ILLUMINADA KENERY, Plaintiff,
v.
WELLS FARGO, N.A., a National Association, WELLS FARGO HOME MORTGAGE, INC., NDEX WEST, LLC, and Does 1 through 50, inclusive, Defendants.

ORDER GRANTING NDEX'S MOTION FOR JOINDER IN WELLS FARGO'S MOTION TO DISMISS; GRANTING MOTION TO DISMISS WITHOUT LEAVE TO AMEND AS TO NDEX; AND GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND IN PART AND WITHOUT LEAVE TO AMEND IN PART AS TO WELLS FARGO AND WFHM [Re: ECF 55, 57]

BETH LABSON FREEMAN, District Judge.

Plaintiff Illuminada Kenery filed this action to stop a trustee's sale of her home following her default on a mortgage loan. She sues Wells Fargo, N.A. ("Wells Fargo"), the beneficiary under the deed of trust securing the loan; Wells Fargo Home Mortgage, Inc. ("WFHM"), a division of Wells Fargo, N.A.; and NDeX West, LLC ("NDeX"), the trustee under the deed of trust. Defendants Wells Fargo and WFHM have filed a motion to dismiss Plaintiff's second amended complaint ("SAC") under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. Defendant NDeX has filed a motion for joinder in that motion.

The Court has considered the SAC, the briefing, and the relevant legal authorities.[1] The motion for joinder is GRANTED, as the arguments asserted in the motion to dismiss apply equally to NDeX. For the reasons discussed below, the motion to dismiss is GRANTED WITHOUT LEAVE TO AMEND as to NDeX and GRANTED WITH LEAVE TO AMEND IN PART AND WITHOUT LEAVE TO AMEND IN PART as to Wells Fargo and WFHM.

I. BACKGROUND

In April 2008, Plaintiff entered into an agreement with Wachovia Mortgage, FSB to refinance her home mortgage loan in the amount of $587, 000.[2] SAC ¶ 10, ECF 54. The loan was secured with a first deed of trust on Plaintiff's home. Id. In November 2009, Wachovia Mortgage, FSB converted to Wells Fargo Bank Southwest, N.A., which then merged with and into Wells Fargo Bank, N.A. RJN Exh. F, ECF 56.

In February 2012, Plaintiff's husband died and she suffered economic hardship. SAC ¶ 11. She defaulted on the loan. Id. She submitted at least two applications for loan modification between February and December 2012. Id. ¶ 12. Plaintiff showed increased income, submitted all required documentation, and was eligible for a loan modification under the Home Affordable Mortgage Program ("HAMP") and under California Civil Code § 2923.5. Id. ¶¶ 14-16. Defendants represented to Plaintiff that she was being reviewed for modification, id. ¶¶ 14, 30, and purported to negotiate with her regarding options other than foreclosure, id. ¶ 16. In reliance on Defendants' representations that she was being reviewed for modification, Plaintiff elected to forego seeking other unspecified alternatives to foreclosure. Id. ¶ 30. Defendants in fact never seriously considered Plaintiff for modification and always intended to foreclose on the loan. Id. ¶¶ 14, 16. Plaintiff was not approved for modification. Id. ¶ 14. Defendants scheduled a trustee's sale of Plaintiff's home for January 15, 2013. Id. ¶ 22. Plaintiff's SAC, which was filed nine months after the scheduled sale, does not allege whether the sale has occurred. Nor does the SAC allege the current status of the foreclosure proceedings.

On April 23, 2013, Plaintiff filed this action in the Santa Clara County Superior Court. Notice of Removal Exh. A, ECF 1. Shortly thereafter, on May 16, 2013, Plaintiff sent a qualified written request ("QWR") to Defendant WFHM pursuant to the Real Estate Settlement Procedures Act ("RESPA"). SAC ¶ 17. In the QWR, "Plaintiff requested copies of any assignment of her mortgage or deed of trust required to demonstrate the right of Defendant to foreclose, " and also "requested copies of assignments to, as well as name and address of, each entity who has been assigned the mortgage servicing rights as well as the beneficial interest to the payments on Plaintiff's loan." Id. ¶¶ 18-19. Defendants have not responded to Plaintiff's QWR. Id. ¶¶ 20-21.

On May 28, 2013, Wells Fargo removed the action to federal district court on the basis of diversity of citizenship. Id. at 2. Following two rounds of motion practice, which resulted in dismissal of the majority of Plaintiff's claims without leave to amend, Plaintiff filed the operative SAC asserting a single claim for violations of California's Unfair Competition Law ("UCL"). As remedies for the alleged UCL violations, Plaintiff seeks compensatory, special, and general damages, attorneys' fees and costs of suit, a declaration that she is the prevailing party, an injunction prohibiting Defendants from selling the property and stating that Plaintiff is the rightful owner of the property, and prejudgment interest. SAC Prayer.

II. LEGAL STANDARDS

"A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of a claim.'" Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not "accept as true allegations that contradict matters properly subject to judicial notice" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted). While a complaint need not contain detailed factual allegations, it "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

III. DISCUSSION

A. Judicial Notice

Wells Fargo has filed a request for judicial notice ("RJN") of ten documents, attached to the RJN as Exhibits A through J: (A) Fixed Rate Mortgage Note, Pick-A-Payment Loan, dated April 14, 2008; (B) Deed of Trust dated April 14, 2008; (C) Certificate of Corporate Existence issued by the Office of Thrift Supervision; (D) Office of Thrift Supervision's authorization of name change from World Savings Bank, FSB to Wachovia Mortgage, FSB; (E) Charter of Wachovia Mortgage, FSB; (F) Certification of 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) Notice of Default dated Sept. 21, 2012; (H) Substitution of Trustee; (I) Notice of Trustee's Sale; and (J) printout from the California Secretary of State's website. Defs.' RJN, ECF 56.

Exhibit A, the Note, may be considered under the incorporation by reference doctrine. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Judicial notice is appropriate with respect to all of the remaining documents as matters of public record, see Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); printouts from government websites, see Cachil Dehe Band of Wintun Indians of the Colusa Indian Comm'ty v. Cal., 547 F.3d 962, 969 n.4 (9th Cir. 2008); or records reflecting official acts of the Executive Branch, see Graybill v. Wells Fargo Bank, N.A., 953 F.Supp.2d 1091, 1093 n.2 (N.D. Cal. 2013).

Plaintiff has neither opposed the request for judicial notice nor disputed the authenticity of the documents. The ...


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