United States District Court, C.D. California
Honorable CHRISTINA A. SNYDER
IN CHAMBERS DEFENDANT WELLS FARGO BANK, N.A.’S
MOTION TO DISMISS FIRST AMENDED COMPLAINT DKT. 16, FILED MAY
CHRISTINA A. SNYDER Honorable Judge
Court finds this motion appropriate for decision without oral
argument. See Fed. R. Civ. P. 78; C.D. Cal. Local
Rule 7-15. Accordingly, the hearing date of June 20, 2016, is
vacated, and the matter is hereby taken under submission.
March 8, 2016, plaintiffs Stephen Harris and Ozelia Harris
(collectively, “plaintiffs”) initiated this
action in the San Bernadino Superior Court against defendants
Wells Fargo Bank, N.A. (“Wells Fargo”) and Does 1
through 100. Dkt. 1, Notice of Removal, at 3. On April 8,
2016, Wells Fargo removed this action to this court on the
basis of diversity jurisdiction. Id. Thereafter, on
April 29, 2016, plaintiffs filed a First Amended Complaint
(“FAC”) against Wells Fargo, NBS Default Services
(“NBS”), and Does 1 through 100 (collectively,
“defendants”). Dkt. 11. In the FAC, plaintiffs
assert claims against defendants for (1) violation of
California Civil Code § 2923.6 of the Homeowner’s
Bill of Rights (“HBOR”); (2) violation of
California Business and Professions Code § 17200,
et. seq (“the UCL”); (3) promissory
estoppel; and (4) negligence. Id. The gravamen of
plaintiffs’ action is that defendant Wells Fargo
invited plaintiffs to submit an application for a loan
modification and, while plaintiffs’ application was
still pending, proceeded to initiate foreclosure proceedings
on plaintiffs’ residence.
16, 2016, Wells Fargo filed a motion to dismiss the FAC
pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt.
16. On May 30, 2016, plaintiffs filed an opposition, Dkt. 22,
and on June 2, 2016, Wells Fargo filed a reply, Dkt. 25.
Having carefully considered the parties’ arguments, the
Court finds and concludes as follows.
about April 12, 2016, plaintiffs obtained a loan of $393, 750
from World Savings Bank, FSB (“World Savings”) in
order to purchase real property located at 7284 Abigail
Place, Fontana, California 92336 (the “Subject
Property”). Request for Judicial Notice
(“RJN”), Ex. A, Adjustable Rate Mortgage Note
(“Note”). This loan was memorialized in a note and
secured by a deed of trust, both of which were recorded in
the official records of the County of San Bernadino. RJN, Ex.
A Note, Ex. B. Deed of Trust.
around January 1, 2008, World Savings was renamed Wachovia
Mortgage, FSB. RJN, Ex. C, at 2, World Saving Bank Notice of
Amendment. Thereafter, in November 2009, Wachovia Mortgage,
FSB changed its name to Wells Fargo Bank Southwest, N.A. and
subsequently merged into defendant Wells Fargo. Id.,
at 6, FDIC Profile of Wachovia Mortgage, FSB.
to plaintiffs, on July 9, 2015, a Wells Fargo representative
approached plaintiffs to inquire whether they were interested
in applying for a loan modification with respect to the
Subject Property. FAC ¶ 11. Plaintiffs state that they
completed a loan modification application, which they
submitted to Wells Fargo on August 10, 2015. Id.
¶ 12. Nevertheless, plaintiffs allege that, on December
10, 2015, prior to completing its review of plaintiffs’
loan modification application, Wells Fargo, through its
authorized agent NBS, recorded a Notice of Default against
the Subject Property, thus placing plaintiffs at risk of
losing their home at a trustee’s sale. Id.
¶ 14. Plaintiffs contend that they were not informed of
any determination with respect to their loan modification
application, and were in fact informed on March 3, 2016 by a
representative for Wells Fargo that review of their
application had not been completed. FAC ¶ 15-16.
now bring the instant action asserting, in brief, that
defendants acted unlawfully when they recorded a Notice of
Default against the Subject Property prior to completing
their review of plaintiffs’ loan modification
application. FAC ¶ 17-18.
motion pursuant to Federal Rule of Civil Procedure 12(b)(6)
tests the legal sufficiency of the claims asserted in a
complaint. Under this Rule, a district court properly
dismisses a claim if “there is a ‘lack of a
cognizable legal theory or the absence of sufficient facts
alleged under a cognizable legal theory.’”
Conservation Force v. Salazar, 646 F.3d 1240, 1242
(9th Cir. 2011) (quoting Balisteri v. Pacifica Police
Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)).
“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 ‘entitlement to
relief’ requires more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action
will not do.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). “[F]actual allegations must
be enough to raise a right to relief above the speculative
considering a motion pursuant to Rule 12(b)(6), a court must
accept as true all material allegations in the complaint, as
well as all reasonable inferences to be drawn from them.
Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998).
The complaint must be read in the light most favorable to the
nonmoving party. Sprewell v. Golden State Warriors,
266 F.3d 979, 988 (9th Cir. 2001). However, “a court
considering a motion to dismiss can choose to begin by
identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a
complaint, they must be supported by factual
allegations.” Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009); see Moss v. United States Secret
Service, 572 F.3d 962, 969 (9th Cir. 2009) (“[F]or
a complaint to survive a motion to dismiss, the
non-conclusory ‘factual content, ’ and reasonable
inferences from that content, must be plausibly suggestive of
a claim entitling the plaintiff to relief.”).
Ultimately, “[d]etermining whether a complaint states a
plausible claim for relief will . . . be a context-specific
task that requires the reviewing court to draw on its
judicial experience and common sense.” Iqbal,
556 U.S. at 679.
a court converts a Rule 12(b)(6) motion into a motion for
summary judgment, a court cannot consider material outside of
the complaint (e.g., facts presented in briefs,
affidavits, or discovery materials). In re American
Cont’l Corp./Lincoln Sav. & Loan Sec. Litig.,
102 F.3d 1524, 1537 (9th Cir. 1996), rev’d on other
grounds sub nom Lexecon, Inc. v. Milberg Weiss Bershad Hynes
& Lerach, 523 U.S. 26 (1998). A court may, however,
consider exhibits submitted with or alleged in the complaint
and matters that may be judicially noticed pursuant to
Federal Rule of Evidence 201. In re Silicon Graphics Inc.
Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee
v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir.
general rule, leave to amend a complaint which has been
dismissed should be freely granted. Fed.R.Civ.P. 15(a).
However, leave to amend may be denied when “the court
determines that the allegation of other facts consistent with
the challenged pleading could not possibly cure the
deficiency.” Schreiber Distrib. Co. v. Serv-Well