United States District Court, E.D. California
Decided April 23, 2015
[Copyrighted Material Omitted]
For Josh Meixner, Plaintiff: Danny A. Barak, LEAD ATTORNEY, United Law Center, Roseville, CA.
For Wells Fargo Bank, N.A., HSBC Bank USA, N.A., as trustee for GSAA Home Equity Trust 2005-7, Defendants: Harold Ricky Jones, Jr., Severson & Werson, San Francisco, CA.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
Troy L. Nunley, United States District Judge.
This matter is before the Court pursuant to Defendants Wells Fargo Bank, N.A., Successor by Merger to Wells Fargo Home Mortgage, Inc. (" Wells" ) and HSBC Bank USA, N.A., as Trustee for GSAA Home Equity Trust 2005-7's (" HSBC" ) (collectively " Defendants" ) Motion to Dismiss Plaintiff's Complaint. (Def. s' Mot. to Dismiss, ECF No. 4.) Plaintiff Josh Meixner (" Plaintiff" ) filed an opposition to Defendants' motion. (Pl.'s Opp'n, ECF No. 6.) The Court has carefully considered the arguments raised in Defendants' motion and reply, as well as Plaintiff's opposition. For the reasons set forth below, Defendants' Motion to Dismiss is GRANTED IN PART AND DENIED IN PART.
I. FACTUAL BACKGROUND
In or about January 2005, Plaintiff entered into a purchase money mortgage loan with Wells for $329,855.00 which was evidenced by a Note and was secured by a Deed of Trust on the Subject Property. (Compl., ECF No. 1-1 at 11, ¶ 13.) In or about September 2008, Plaintiff began to
have difficulty making his monthly payments. (ECF No. 1-1 at 11, ¶ 14.) Plaintiff contacted Wells about a loan modification, and a Wells representative allegedly instructed Plaintiff to stop making loan payments in order to be considered for a Home Affordable Modification Program (" HAMP" ) loan modification. (ECF No. 1-1 at 11, ¶ 14.) In or about March 2009, Plaintiff, represented by Pro City Mortgage, began the loan modification process with Wells. (ECF No. 1-1 at 12, ¶ 15.) On or about July 22, 2009, Wells caused to be recorded a Notice of Default with the Sacramento County recorder stating that $16,593.81 was past due on Plaintiff's loan. (ECF No. 1-1 at 12, ¶ 16.)
In or about September 2009, Kelly Robert from Pro City Mortgage informed Plaintiff that she had spoken with Wells and that Wells had told her that Plaintiff had been approved for HAMP. (ECF No. 1-1 at 12, ¶ 17.) Ms. Robert further informed Plaintiff that she did not have any specific details regarding the loan modification because Wells was awaiting final approval. (ECF No. 1-1 at 12, P 17.) On or about October 23, 2009, Ivy Nagel, Plaintiff's negotiator from Pro City Mortgage, informed Plaintiff that he had been approved for a loan modification and that he would receive a package from Wells within seven to ten days. (ECF No. 1-1 at 12, ¶ 18.) Nagel allegedly informed Plaintiff that the terms, as she understood them from Wells, were that Plaintiff's loan was to be modified to a five-year fixed interest rate, probably around 2%, and then increase 1% per year after five years, but not to exceed 6%. Nagel allegedly informed Plaintiff that his modification would result in payments ranging from $1,600 to $1,700 per month. (ECF No. 1-1 at 12, ¶ 18.)
About one week later, Plaintiff allegedly spoke with a representative from Pro City Mortgage who informed Plaintiff that Wells was denying him a loan modification due to " net negative income." (ECF No. 1-1 at 12, ¶ 19.) On or about December 14, 2009, Plaintiff spoke with Lisa Walker from Pro City Mortgage who told Plaintiff that she learned that Plaintiff was still in HAMP review, but his file was taking longer than expected. (ECF No. 1-1 at 12, ¶ 20.)
On or about December 30, 2009, Laurie Adomo from Pro City Mortgage informed Plaintiff that Wells required supplemental income information for Plaintiff's fiancé e, Brooke Petersen, because Wells was aware that Ms. Petersen was living in the Subject Property with Plaintiff. (ECF No. 1-1 at 13, ¶ 21.) According to Adomo, Plaintiff was qualified for HAMP and his modification would be approximately $2,058.40 per month on a trial basis, but his file needed to go through one more department at Wells. (ECF No. 1-1 at 13, ¶ 21.) In addition, Wells informed Adomo that if Plaintiff completed three months of trial payments, his modification would be finalized and his first payment would be due February 1, 2010. (ECF No. 1-1 at 13, ¶ 21.) On or about December 31, 2009, Wells mailed Plaintiff a HAMP Trial Period Plan (" TPP" ). (ECF No. 1-1 at 13, ¶ 22; ECF No. 1-1 at 50.) Plaintiff alleges that the TPP provided that if Plaintiff complied with the terms of the agreement and qualified, Wells would provide Plaintiff with a permanent loan modification agreement. (ECF No. 1-1 at 13, ¶ 22, 50.)
On or about March 19, 2010, Walter Pajares at Pro City Mortgage informed Plaintiff again that Wells would make Plaintiff's modification permanent after Plaintiff made his third TPP payment. (ECF No. 1-1 at 14, ¶ 28.) Pajares advised Plaintiff to continue making additional modified payments until the modification was finalized. (ECF No. 1-1 at 14, ¶ 28.) On or about June 17, 2010, Plaintiff called Wells (866-359-1569), and a representative from Wells told Plaintiff that there was no time frame for finalization but to continue making payments of $2,058.40 per month. (ECF No. 1-1 at 14, ¶ 29.)
On or about June 23, 2010, Plaintiff allegedly spoke with Howard Welling, who identified himself as a Wells representative. (ECF No. 1-1 at 14, ¶ 30.) Plaintiff contends that Welling advised Plaintiff to continue making modified trial payments, that the loan modification would be finalized soon after, and that the final monthly payment amount would be 31% of Plaintiffs gross monthly wages. (ECF No. 1-1 at 14, ¶ 30.) Welling also stated that Wells had validated all of Plaintiffs information and provided documents, that the modification had gone through two levels of review, and that his file had been sent to underwriting for final approval. (ECF No. 1-1 at 14, ¶ 30.) Welling further stated that while a decision was about three to five weeks away, it looked " good." (ECF No. 1-1 at 14, ¶ 30.) Finally, Welling allegedly confirmed that Plaintiff had been in HAMP review since December 31, 2009, and that Plaintiffs file " definitely" showed that his modification would be 31% of gross income. (ECF No. 1-1 at 14, ¶ 30.)
On or about July 28, 2010, a Wells representative, " Abed," informed Plaintiff that his HAMP loan modification had been denied on July 27, 2010, because he had an income deficit of $1,895.22. (ECF No. 1-1 at 14, ¶ 31.) Abed allegedly explained that while Wells allowed for a deficit under HAMP, the deficit could be no more than $800.00 to $1,000.00. (ECF No. 1-1 at 14, ¶ 31.) However, Abed told Plaintiff that if he filed for Chapter 7 bankruptcy to eliminate his credit card debt, Plaintiff would be approved for a loan modification. (ECF No. 1-1 at 14, ¶ 31.)
On or about August 3, 2010, Plaintiff alleges that a representative of Wells' loss mitigation department (800-416-1472) informed Plaintiff that Wells had instituted a new procedure with respect to loan modifications, and that Plaintiff needed to send in a new HAMP application and supporting documentation with a three-day turnaround on the application. (ECF No. 1-1 at 16, ¶ 35.) Plaintiff inquired as to the method Wells utilized in determining his income, and whether Wells considered his gross monthly income or his net monthly income. (ECF No. 1-1 at 16, ¶ 35.) The representative, who stated he was a HAMP specialist, told Plaintiff that Wells did not have HAMP guidelines regarding deficit income and that Plaintiff was given incorrect information. (ECF No. 1-1 at 16, P 35.) On or about August 6, 2010, Wells allegedly informed Plaintiff that his file was still in review and that the process would take 45 days. (ECF No. 1-1 at 16, ¶ 35.)
Plaintiff allegedly called Wells' Loss Mitigation department again on or about August 20, 2010, and spoke with " Carol," who told Plaintiff that he was still in HAMP review and that he should continue making TPP payments. (ECF No. 1-1 at 16, ¶ 36.) Carol also informed Plaintiff that she would send an escalation email to a " team of supervisors" regarding his file, but that Plaintiff should send in updated documents, a hardship letter, financial worksheet, and updated paystubs. (ECF No. 1-1 at 16, ¶ 36.) Plaintiff alleges he sent in all documents as requested via fax to (866) 359-7363. (ECF No. 1-1 at 16,
¶ 36.) On or about September 2, 2010, Plaintiff called Wells' bankruptcy department (800-274-7025) to inquire about his options, as a sale date was nearing. (ECF No. 1-1 at 16, ¶ 37.) Wells' representative allegedly advised Plaintiff that he was approved for HAMP but implied that he should probably file for bankruptcy in order to eliminate his credit card debt as that was hindering his final approval. (ECF No. 1-1 at 16, ¶ 37.)
On or about September 14, 2010, Plaintiff received a returned payment from Wells for $2,215.11, representing his previous TPP payment of $2,058.40 and an additional $156.71. (ECF No. 1-1 at 17, ¶ 38.) Plaintiff called Wells the next day, on or about September 15, 2010, and allegedly spoke with " Tinika" at collections. (ECF No. 1-1 at 17, ¶ 38.) Tinika informed Plaintiff that his file was no longer active, and that the house would be sold on October 26, 2010. (ECF No. 1-1 at 17, P 38.) On or about September 28, 2010, Plaintiff called Wells and spoke with " Kimberly" (877-335-1909, extension 85549). (ECF No. 1-1 at 17, ¶ 39.) Kimberly allegedly told Plaintiff that he was still in review and that the foreclosure sale was postponed to November 29, 2010, but he needed to send in a new IRS Form 4506-T for HAMP review. (ECF No. 1-1 at 17, ¶ 39.) Kimberly informed Plaintiff that if he filed for bankruptcy, they could not sell the Subject Property while the bankruptcy was pending. (ECF No. 1-1 at 17, ¶ 39.) However, Kimberly advised that he should try a HAMP loan modification first. (ECF No. 1-1 at 17, ¶ 39.)
On or about February 15, 2011, Wells' loss mitigation department (800-416-1472) allegedly told Plaintiff that his file was active in foreclosure but there was no sale date noticed. (ECF No. 1-1 at 17, ¶ 41.) The representative allegedly told Plaintiff that they had received his hardship letter, paystubs, and financial worksheet and that Plaintiff was " pre-approved" for HAMP again. (ECF No. 1-1 at 17, ¶ 41.) The representative told Plaintiff that he simply needed to send in a Dodd-Frank certification and a letter from Plaintiff's fiancé e, Ms. Petersen, confirming that she was able to contribute $1,200.00 per month towards the monthly mortgage payments. (ECF No. 1-1 at 17, ¶ 41.) On or about February 22, 2011, Plaintiff called Wells and spoke with Connie Salgado, a self-identified Wells loan processor. (ECF No. 1-1 at 17, ¶ 42.) Salgado explained the review process to Plaintiff, including how information is inputted into a Treasury Department formula. (ECF No. 1-1 at 17-18, ¶ 42.) Salgado informed Plaintiff that all of his paperwork was submitted and the process should take two to three weeks--about a week for initial approval, then another week or so to get second level approval from " the investor," Goldman Sachs. Salgado told Plaintiff that he was " 20 months behind in payments" but that he had " a 98% chance" of being approved for the loan modification. (ECF No. 1-1 at 17-18, ¶ 42.)
On or about March 8, 2011, Plaintiff called Wells' bankruptcy department who told Plaintiff that he was still under review, but that there was a foreclosure sale date of April 5, 2011 showing. (ECF No. 1-1 at 18, ¶ 43.) Plaintiff was again asked to send in all financial documents, IRS Form 4506-T, Petersen's proof of income, and bank statements. (ECF No. 1-1 at 18, ¶ 43.) On or about March 17, 2011, Plaintiff spoke with Salgado again. (ECF No. 1-1 at 18, ¶ 44.) Salgado allegedly stated that all she needed was Petersen's
2009 tax return, but that Plaintiff's file " looked good" for a loan modification " unless the investor felt the he was too far behind on his payments." (ECF No. 1-1 at 18, ¶ 44.) On or about March 21, 2011, Salgado told Plaintiff that he was denied for a loan modification. (ECF No. 1-1 at 18, ¶ 45.)
From about April 2011 until about November 2011, Plaintiff spoke with various representatives of Wells regarding his denial for a permanent loan modification and was informed that he did not qualify due to the net present value (" NPV" ) calculations. (ECF No. 1-1 at 18-19, ¶ 46-50.) On or about June 21, 2012, Wells caused the Subject Property to be sold at a non-judicial foreclosure sale. (ECF No. 1-1 at 19, ¶ 50.)
Based on Plaintiff's information and belief, Plaintiff alleges the following: Wells was required to follow the Federal Department of the Treasury's servicing guidelines for HAMP loan modifications when offering TPPs and loan modifications in order to receive Troubled Asset Relief Program (" TARP" ) funds, (ECF No. 1-1 at 13, ¶ 23(a)), and under the HAMP servicing guidelines for Fannie Mae in effect at the time the TPP was offered, Plaintiff asserts that he was deemed eligible for a HAMP loan modification because a TPP could only be offered once eligibility was confirmed. (ECF No. 1-1 at 13, ¶ 22(b).) Plaintiff further alleges that Abed's representation regarding Plaintiff's gross monthly income was incorrect and untrue because Wells' calculation of Plaintiff's income did not include reimbursement for mileage or Petersen's income. (ECF No. 1-1 at 15, ¶ 32.) In addition, Plaintiff contends that Wells already calculated a trial modification amount and had determined that it was more profitable to modify the Subject Loan under HAMP than to foreclose upon the Subject Property. (ECF No. 1-1 at 13, ¶ 23(c)-(d).) Plaintiff made all three payments required under the TPP on time. (ECF No. 1-1 at 14, ¶ 25-27.) For these reasons, Plaintiff believes that he was entitled to a permanent loan modification under the TPP. (ECF No. 1-1 at 14, ¶ 24.)
Plaintiff brings this suit against Defendants Wells, HSBC, and DOES 1-50 for: 1) Breach of Contract; 2) Promissory Estoppel; 3) Negligence; 4) Intentional Misrepresentation; 5) Negligent Misrepresentation; 6) Wrongful Foreclosure; 7) Conversion; 8) Violation of Business and Professions Code section 17200; 9) Unjust Enrichment; and 10) Equitable Accounting.
II. STANDARD OF LAW
Federal Rule of Civil Procedure 8(a) requires that a pleading contain " a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 556 U.S. 662, 678-79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Under notice pleading in federal court, the complaint must " give the defendant fair notice of what the claim . . . is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations omitted). " This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts ...