United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO DISMISS SECOND AMENDED COMPLAINT
DOCKET NO. 29
M. CHEN United States District Judge
the Court granted in part and denied in part Defendant Wells
Fargo Bank, N.A.'s (“Wells”) motion to
dismiss Plaintiffs Chris Romo and Maria Dulia Romo's
first amended complaint (“FAC”). More
specifically, the Court denied the motion with respect to the
negligence claim but granted the motion with respect to the
claims for negligent misrepresentation and fraudulent
misrepresentation. The Court gave Plaintiffs leave to amend
both dismissed claims. See Docket No. 26 (order).
Thereafter, Plaintiffs filed their second amended complaint
(“SAC”). Wells has now moved to dismiss the SAC -
not only the misrepresentation-based claims but also the
negligence claim which the Court previously allowed to
considered the parties' briefs and accompanying
submissions, as well as the oral argument of counsel, the
Court hereby GRANTS in part and DENIES in part Wells's
motion to dismiss.
their SAC, Plaintiffs allege as follows. Plaintiffs are the
owners of certain real property located in Healdsburg,
California. See SAC ¶¶ 9, 16. In 2004,
Plaintiffs refinanced their loan on the property, obtaining a
“Pick A Pay” loan from Wachovia Bank (a
predecessor of Wells). SAC ¶ 18. “Plaintiffs chose
the 'Pick a Pay' loan because they believed that the
loan Wachovia agents advised them of was a great loan. The
agents made no mention to the Plaintiffs of any fees and
unpaid interest that would be added to the loan.” SAC
¶ 24. In addition, agents failed to make proper
disclosures to Plaintiffs as required by the Truth In Lending
Act, including about the interest rate that would be charged.
See SAC ¶ 26.
about July 2009, after experiencing financial difficulties,
Plaintiffs contacted Wachovia about refinancing the loan
and/or loan modification. See SAC ¶ 28 et
seq. Between July 2009 and April 2015, Plaintiffs
submitted over nine applications for a loan modification;
none were approved. See SAC ¶ 165. Based on
Wachovia/Wells's conduct during this period, Plaintiffs
assert claims for negligence, negligent misrepresentation,
and fraudulent misrepresentation. Plaintiffs'
misrepresentation-based claims are based on the following
allegations: (1) that Wachovia/Wells misrepresented that
Plaintiffs had to stop making payments on their loan in order
to be considered for a loan modification, see, e.g.,
SAC ¶¶ 172, 191; (2) that Wachovia/Wells
misrepresented that Plaintiffs would get a HAMP trial loan
modification, see, e.g., SAC ¶¶ 173, 186;
and (3) that Wachovia/Wells promised that Plaintiffs would
get a permanent HAMP loan modification so long as they were
qualified (which they were). See, e.g., SAC
¶¶ 174-75, 187.
Federal Rule of Civil Procedure 12(b)(6), a party may move to
dismiss based on the failure to state a claim upon which
relief may be granted. See Fed. R. Civ. P. 12(b)(6).
A motion to dismiss based on Rule 12(b)(6) challenges the
legal sufficiency of the claims alleged. See Parks Sch.
of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir.
1995). In considering such a motion, a court must take all
allegations of material fact as true and construe them in the
light most favorable to the nonmoving party, although
“conclusory allegations of law and unwarranted
inferences are insufficient to avoid a Rule 12(b)(6)
dismissal.” Cousins v. Lockyer, 568 F.3d 1063,
1067 (9th Cir. 2009). While “a complaint need not
contain detailed factual allegations . . . it must plead
enough facts to state a claim to relief that is plausible on
its face.” Id. “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, 556 U.S. 662 (2009); see also
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).
“The plausibility standard is not akin to a
'probability requirement' but it asks for more than
sheer possibility that a defendant acted unlawfully.”
Iqbal, 556 U.S. at 678.
initial matter, Wells challenges the negligence claim on the
ground that “the SAC does not identify any [HAMP]
guideline that required Wells Fargo to grant Plaintiffs a
modification. . . . If a guideline requiring Wells Fargo to
grant a TPP [Trial Period Plan] exists, Plaintiffs can and
must identify it.” Mot. at 6. In response, Plaintiff
argues that Wells “raises additional arguments that
were not raised in the original motion to dismiss” in
violation of Federal Rule of Civil Procedure 12(g)(2).
Opp'n at 5.
12(g)(2) states that, “[e]xcept as provided in Rule
12(h)(2) or (3), a party that makes a motion under this rule
must not make another motion under this rule raising a
defense or objection that was available to the party but
omitted from its earlier motion.” Rule 12(h)(2), in
turn, provides that arguments which pertain to a
plaintiff's “[f]ailure to state a claim upon which
relief can be granted . . . may be raised: (A) in any
pleading allowed or ordered under Rule 7(a); (B) by a motion
under Rule 12(c); or (C) at trial.” To summarize,
under Rule 12(g)(2) and Rule 12(h)(2), a party that seeks to
assert a defense that was available but omitted from an
earlier Rule 12 motion can only do so in a pleading allowed
or ordered under Rule 7(a), a Rule 12(c) motion, or at trial.
Here, Wells seeks to assert “a defense . . . that was
available . . . but omitted from [an] earlier motion”
to dismiss. Fed R. Civ. P. 12(g)(2). However, Wells has not
asserted this defense in a pleading, a Rule 12(c) motion, or
at trial. Instead, Wells has asserted this defense in a
motion to dismiss brought under Rule 12(b)(6). Wells is
foreclosed from doing so because of Rule 12(g)(2) and Rule
12(h)(2). See Herron v. Best Buy Stores, LP, No.
12-CV-02103-GEB-JFM, 2013 WL 4432019, at *4 (E.D. Cal. Aug.
16, 2013) (refusal to consider argument Toshiba had
“failed to squarely raise . . . in its initial
dismissal motion”); Fed. Agr. Mortgage Corp. v.
It’s A Jungle Out There, Inc., No. C 03-3721 VRW,
2005 WL 3325051, at *5 (N.D. Cal. Dec. 7, 2005) (where the
complaint is amended after the defendant has filed a Rule
12(b) motion, the defendant may not thereafter file a second
Rule 12(b) motion asserting objections or defenses that could
have been asserted in the first motion.”); see
also Wright & Miller, 5C Fed. Prac. & Proc.
§ 1388, 491-95 (3d ed. 2004) (citing additional cases
applying Federal Rule 12(g)(2) and Rule 12(h)(2)). Thus,
Wells's newly asserted argument about the identification
of “any [HAMP] guideline” with respect to Wells
Fargo's negligence claim, which it failed to assert in
its prior Rule 12(b)(6) motion, may not properly be
indicated above, Plaintiffs' claim for negligent
misrepresentation (as well as fraudulent misrepresentation)
is based on the following allegations: (1) that
Wachovia/Wells misrepresented that Plaintiffs had to stop
making payments on their loan in order to be considered for a
loan modification, see, e.g., SAC ¶ 191; (2)
that Wachovia/Wells misrepresented that Plaintiffs would get
a HAMP trial loan modification, see, e.g., SAC
¶ 186; and (3) that Wachovia/Wells promised that
Plaintiffs would get a permanent HAMP loan modification so
long as they were qualified (which they were). See,
e.g., SAC ¶ 187. In its motion to dismiss, Wells