United States District Court, E.D. California
DENNLY R. BECKER, ET AL., Plaintiffs,
WELLS FARGO BANK, NA, INC. ET AL., Defendants.
TROY L. NUNLEY, District Judge.
This matter is before the Court pursuant to Plaintiff Dennly Becker's ("Plaintiff") Motion for Application for a Stay Pending Appeal. (ECF No. 208.) Defendant Wells Fargo, Bank, N.A., Inc. ("Defendant") has filed an opposition to Plaintiff's motion (Def's Opp'n, ECF No. 215), and Plaintiff has filed a reply (Pl's Reply, ECF No. 216). The Court has considered the arguments presented by both parties. For the reasons stated below, Plaintiff's Motion to Stay (ECF No. 208) is DENIED.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff lives at and owns both 5462 Betty Circle in Livermore, California and 604 Hardy Place in Lincoln, California. (Def's Statement of Undisputed Facts ("Def.'s SUF"), ECF No. 179-5 at ¶ 1; Decl. of David Newman ("Newman Decl."), ECF No. 179-1 at ¶ 2, Exhibit 1 (Deposition of Dennly Becker) at 37:1-21, 42:24-43:9).) Plaintiff also owns sixteen rental properties in California, all of which he uses for investment purposes. (ECF No. 179-5 at ¶ 2; ECF No. 179-1 at ¶ 2, Exhibit 1 at 43:18-19, 45:13-20.) The present litigation concerns nine of Plaintiff's sixteen investment properties. (ECF No. 179-5 at ¶ 4.)
Plaintiff purchased the nine investment properties between 2000 and 2005 and financed the purchase of each property with a loan from World Savings Bank, FSB. (ECF No. 179-5 at ¶ 5; Decl. of Michael Dolan ("Dolan Decl."), ECF No. 179-2 at ¶ 14, Exhibits B-J, ECF No. 179-3.) In January of 2008, World Savings Bank, FSB changed its name to Wachovia Mortgage. (ECF No. 179-5 at ¶ 6.) Wachovia Mortgage later underwent a second name change to Wells Fargo Bank Southwest N.A. before merging with Wells Fargo Bank, N.A. in November of 2009. (ECF No. 179-5 at ¶ 6.)
The loans for each of Plaintiff's nine investment properties are memorialized by written promissory notes and are secured by recorded deeds of trust. (ECF No. 179-5 at ¶ 7; ECF No. 179-1 at ¶ 2, Exhibit 1 at 45:7-9; ECF No. 179-2 at ¶ 14; ECF No. 179-3.) Plaintiff is in default for the loans on three of the properties: 865 Shelborne Drive in Tracy, California ("Shelborne Property"); 2416 Third Street in Lincoln, California ("Third Street Property"); and 1895 Larkflower Way in Lincoln, California ("Larkflower Property"). (ECF No. 179-5 at ¶ 9; ECF No. 179-1 at ¶ 2, Exhibit 1 at 52:7-21.)
In August of 2008, prior to any loan defaults, Plaintiff requested that Wells Fargo modify the terms of his loans on his investment properties and was told at that time that there were no modification options for non-owner occupied investment properties. (ECF No. 179-5 at ¶ 13; ECF No. 179-1 at ¶ 4, Exhibit 3 at ¶ 1.) Plaintiff made no further attempts to modify the terms of any of the loans on his nine investment properties until after he had defaulted on the Shelborne Property loan more than one year later. (ECF No. 179-5 at ¶ 14; ECF No. 179-1 at ¶ 2, Exhibit 1 at 62:11-15.) Plaintiff had enough funds to make payments on the three defaulted loans, but made a business decision to default. (ECF No. 179-5 at ¶ 15; ECF No. 179-1 at ¶ 2, Exhibit 1 at 64:2-9, 65:1-3, 100:25-101:12.)
On November 4, 2009, after defaulting on the loan for the Shelborne Property, Plaintiff telephoned Defendant and communicated with a representative regarding the possibility of a loan modification for the loans on his rental properties. (ECF No. 179-5 at ¶ 25; ECF No. 179-1 at ¶ 2, Exhibit 1 at 70:21-25, 76:19-23.) During this conversation, Plaintiff verbally provided Defendant's representative his financial information and discussed the possibility of a loan modification. Defendant's representative told Plaintiff that based on Plaintiff's verbal account of his finances he would be eligible for a modification. (ECF No. 179-1 at ¶ 2, Exhibit 1 at 74:12-25, Exhibit 1 at 75:1-21, 96:2-23, 131:13-132:5.) Defendant's representative also determined that Plaintiff did not qualify for the federal Home Affordable Modification Program ("HAMP"). (ECF No. 179-5 at ¶ 26; ECF No. 179-2 at ¶ 16; 179-4 at 239.)
On or about November 21, 2009, Plaintiff received nine letters, each letter corresponding to one of the loans for Plaintiff's nine investment properties, stating that Defendant was unable to modify plaintiff's loans under HAMP. (ECF No. 179-5 at ¶ 31.) On or about November 24, 2009, Plaintiff received additional letters from Defendant stating that Plaintiff's request for a modification on his loans for several of his properties, including the Larkflower Property and Third Street Property, were denied because of something in his credit report. (ECF No. 179-5 at ¶ 33.) On or about December 1, 2009, Plaintiff received a similar letter concerning the loan for the Shelborne Property. (ECF No. 179-5 at ¶ 33.) On December 3, 2009, Plaintiff received a letter from Defendant stating that the loan on the Shelborne Property had been approved for foreclosure. (ECF No. 179-1 at ¶ 2, Exhibit 1 at 83:7-9.) On December 7, 2009, Plaintiff sent Defendant a fax asking Defendant to work with him. (ECF No. 185-3, Exhibit 13.) By December 12, 2009, Plaintiff had withdrawn his requests for loan modifications for all of the loans on his investment properties except for the loan on the Shelborne Property, for which Plaintiff continued his efforts to obtain a modification. (ECF No. 179-5 at ¶ 34.)
On December 16, 2009, Plaintiff engaged in a phone conversation with Teo, one of Defendant's agents. (ECF No. 179-1 at ¶ 2, Exhibit 1 at 88:12-14.) During this conversation, Teo advised Plaintiff that his loan modification could not be approved because the income information he had submitted showed that his income was too low. (ECF No. 179-5 at ¶ 34; Pl.'s SDF, ECF No. 184-1 at ¶ 22.) Plaintiff told Teo that he could take money out of his Individual Retirement Account ("IRA") and asked Teo if a withdrawal of $2, 000 per month would be adequate to make up for Plaintiff's stated income being too low. (ECF No. 179-5 at ¶ 37; ECF No. 184-1 at ¶ 22.) Teo replied by stating that an additional $2, 000 per month would make the difference and encouraged Plaintiff to make the IRA withdrawals and reapply for a modification when he had proof of the additional income; however, Teo did not specifically guarantee that plaintiff would receive a loan modification. (ECF No. 179-1 at ¶ 2, Exhibit 1 at 89:5-10, 94:8-95:5, 95:14-17.) Plaintiff took Teo's statements to mean that if he had an additional $2, 000 in monthly income, then he would receive a loan modification. (ECF No. 179-1 at ¶ 2, Exhibit 1 at 94:8-95:5.) Defendant never provided Plaintiff with anything in writing stating that Plaintiff's withdrawals from his IRA would guarantee a loan modification. (ECF No. 179-5 at ¶ 39; ECF No. 179-1 at ¶ 2, Exhibit 1 at 4-17.)
Around this time, Plaintiff's investments in his IRA were not returning any income. (ECF No. 179-5 at ¶ 44, Third Am. Compl., ECF No. 98 at ¶ 62.) In subsequent months, Plaintiff also indicated to the foreclosure trustee that he was planning on pulling money out of his IRA in order to pay off his three loans that were in foreclosure. (ECF No. 179-5 at ¶ 43; ECF No. 179-1 at ¶ 2, Exhibit 1 at 186:14-17.) Plaintiff made withdrawals of funds from his IRA for the next fourteen months, until early 2011, resulting in a total withdrawal of $28, 000. (ECF No. 179-5 at ¶¶ 43, 59; ECF No. 179-1 at ¶ 2, Exhibit 1 at 118:12-119:10.)
Between January 2010 and August 2010, Plaintiff continued to communicate with Defendant's representatives via phone and by submitting documents requested by Defendant in an attempt to secure a loan modification. (ECF No. 179-5 at ¶ 47; ECF No. 179-1 at ¶ 2, Exhibit 1 at 95:18-25.) On March 10, 2010, Citibank sent a letter to Plaintiff stating that it was suspending his Home Equity Line of Credit because delinquent credit obligations appeared on Plaintiff's credit report, the delinquent credit obligation being Plaintiff's default on the Shelborne Property loan. (ECF No. 184-1 at ¶ 51; ECF No. 179-5 at ¶¶ 19-20; ECF No. 179-1, Exhibit 29.)
On or about April 26, 2010, Plaintiff received from Defendant a forbearance agreement for the loan on the Shelborne Property, which was sent to Plaintiff in order to determine his willingness to make monthly mortgage payments on his loan and required Plaintiff to make three monthly payments in conformity with the terms of the agreement. (ECF No. 179-5 at ¶ 52; ECF No. 179-1, Exhibit 1 at 107:19-25.) The forbearance agreement permitted Plaintiff to apply for a permanent modification of the loan after all three payments had been made, but also required that Plaintiff provide further documentation of his financial information showing he qualified for such a modification. (ECF No. 179-5 at ¶ 54.) Plaintiff signed and returned the forbearance agreement on May 6, 2010. (ECF No. 179-5 at ¶ 53; ECF No. 179-1, Exhibit 1 at 109:12-14.) Plaintiff made all three payments listed in the forbearance agreement, but received another denial letter on August 17, 2010. (ECF No. 179-5 at ¶¶ 55-57; ECF No. 179-1, Exhibit 1 at 115:9-10, 115:19-116:6.) After this denial, Plaintiff filed the present lawsuit on September 16, 2010. (ECF No. 179-1, Exhibit 1 at 166:7-17.)
A Notice of Default ("NOD") was posted on the Third Street Property and recorded with the Placer County Recorder's Office on September 23, 2010. (ECF No. 179-5 at ¶ 67; ECF No. 179-1, Exhibit 1 at 153:11-18.) A NOD was posted on the Shelborne Property and recorded with the San Joaquin County Recorder's Office on September 30, 2010. (ECF No. 179-5 at ¶ 67; ECF No. 179-1, Exhibit 1 at 153:11-18.) A NOD was posted on the Larkflower Property and recorded with ...