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Baker v. Wells Fargo Bank, N.A

United States District Court, E.D. California

March 9, 2017

WELLS FARGO BANK, N.A., et al ., Defendants.




         On October 26, 2016, Plaintiff Kenneth Baker filed suit in Stanislaus County Superior Court against Defendants World Savings Bank; Wells Fargo Home Mortgage (a division of Wells Fargo Bank); Barrett, Daffin, Frappier, Treder & Wiess, LLP (“Barrett”); “All Persons or Entities Unknown Claiming Any Legal or Equitable Right, Title, Estate, or Interest in the Property Described in this Complaint Adverse to Plaintiff's Title, or Any Cloud Upon Plaintiff's Title Thereto, ” and Does 1-100, inclusive. Complaint, ECF No. 1, Ex. A (“Compl.”). Through this suit, Plaintiff is attempting to stop a pending non-judicial foreclosure commenced by Defendant Wells Fargo Bank (“Wells Fargo”) of real property commonly known as 2117 Shaddox Avenue, Modesto, California (“the Property”), and to void the previously recorded foreclosure notices related to the Property. Id. Plaintiff brings the following claims against Defendants: 1) Quiet Title; 2) Wrongful Foreclosure; 3) Declaratory Relief; 4) Cancellation of Instrument; 5) Slander of Title; 6) Violation of California Homeowner Bill of Rights; 7) Violation of California Civil Code § 2936; 8) Violation of California Civil Code § 2934(a)(1)(A); 9) Violation of Unfair Business Practices under California Business & Professional Code §§ 17200, et seq.; and 10) Fraud. Id.

         Wells Fargo, invoking diversity jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1441(b), removed the case to this Court on December 30, 2016. ECF No. 1. On January 6, 2017, Wells Fargo filed a motion to dismiss the Complaint pursuant to Federal Rule[1] of Civil Procedure 12(b)(6), setting the motion hearing for February 9, 2017. ECF No. 6. Following the expiration of the opposition and reply filing deadlines, the Court took Wells Fargo's motion to dismiss under submission for decision on the papers. ECF No. 8; see also E.D. Cal. L.R. 230(c) & (d).

         On the same day the Court issued its minute order, Plaintiff filed both a motion to remand the Complaint, setting the motion hearing for March 6, 2017 (ECF No. 9), and an untimely opposition to Wells Fargo's motion to dismiss (ECF No. 10). In the opposition, Plaintiff's counsel apologized for her failure to file a timely opposition, and indicated her failure to do so was on account of the fact that the Court had not yet ruled on Plaintiff's simultaneously-filed motion to remand, and that Wells Fargo did not serve her with a copy of its motion to dismiss. ECF No. 10 at 2.[2] Wells Fargo subsequently filed a reply in connection with its motion to dismiss, in which it contests both of Plaintiff's assertions (ECF No. 11) and has filed an opposition to Plaintiff's motion to remand (ECF No. 12). Plaintiff did not file a reply in connection with his motion to remand. See ECF No. 13.

         The pending matters are suitable for disposition without oral argument. See E.D. Cal. L.R. 230(g); ECF No. 13. For the reasons the follow, the Court DENIES Plaintiff's motion to remand, GRANTS Wells Fargo's motion to dismiss for lack of standing, and ORDERS Plaintiff's counsel Laleh Ensafi to show cause why she should not be sanctioned for violating Rule 11(b).


         The crux of the Complaint is that Defendants failed to comply with the requirements of the California Civil Code in executing a non-judicial foreclosure of the Property, as follows:

         On or around October 19, 2006, Lamar and Lena Baker executed as borrowers “that Certain Deed of Trust in the amount of $175, 000, (‘Deed of Trust') securing a Promissory Note in like amount, (‘Note'), secured by the Property.” ECF No. 1 at 17. The Property is located in Modesto, Stanislaus County, California. Id. at 14. The Deed of Trust reflects that its beneficiary is World Savings Bank, and its trustee is Golden West Savings Association Service Co. Id. “No assignments of the Deed of Trust or Substitutions of Trustees have ever been recorded concerning the obligations and parties reflected in the Deed of Trust.” Id.

         On October 12, 2012, Wells Fargo, through its “agent” NDEX West LLC, caused a Notice of Default to be recorded in relation to the Property. Id. Deutsche[3] recorded or cause to be recorded another Notice of Default (“NOD1”), and listed itself as the entity to contact, and declared that it had complied with the requirements of section 2923.5 of the California Civil Code (“§ 2923.5”), when it had not in fact complied with this section. Id. The NOD1 incorrectly named Wells Fargo as the beneficiary, because it did not reflect when Wells Fargo “allegedly became” the beneficiary of the Deed of Trust. Id. at 17-18. Because Wells Fargo was not the current beneficiary at the time Deutsche recorded the NOD1, NDEX had no basis to execute the NOD1. Id. at 18. On January 25, 2013, NDEX noticed a Trustee Sale for February 19, 2013, in relation to the Property. Id. The Trustee Sale was postponed several times. Id.

         On November 22, 2013, a certificate of death for Lamar Baker (indicating that he had passed away on November 22, 2011) was filed with the Stanislaus County Recorder in connection with an “Affidavit - Death of Joint Tenant” relating to the Property. Id. at 18.

         On February 18, 2014, the interest in the Property was conveyed via quitclaim deed from Lena Baker, the original borrower, to Plaintiff. Id. at 16. Lena Baker passed away on February 26, 2014. Id. Since that time, the Property “as fully and legally described [in the Complaint], and the essence of the instant action was residential real property indisputably owned of record by Plaintiff, in fee simple.” Id. Plaintiff is the trustee[4] of the Lena Mae Baker Trust. Id. at 14.

         On June 23, 2015, NDEX published another Trustee Sale, noticing a sale date of July 16, 2015. Id. at 18. While the NOD1 which had resulted in the first two Trustee Sales was still pending, “Defendants initiated another concurrent duplicate foreclosure process by recording a new Notice of Default on July 29, 2016.” Id. Defendants then rescinded the NOD1 on August 31, 2016. Id.

         In the Declaration of Compliance pursuant to § 2923.5 attached to the Notice of Default recorded on July 29, 2016, Evelia Garcia, an agent of Wells Fargo, declared that Wells Fargo had contacted the borrower [of the Property] “to assess the borrower's financial situation and explore options to avoid foreclosure.” Id. at 19. Furthermore, Jeffrey Joplin, another agent of Wells Fargo, declared that Wells Fargo had been unable to contact the borrower. Id. However, because both Lamar and Lena Baker had passed away by July 2016, the declarations signed by Garcia and Joplin constitute a violation of § 2923.5. Id.


         Because it concerns the Court's subject matter jurisdiction, the Court will first address Plaintiff's motion to remand.

         A. Legal Standard

         Removal to federal court is governed by 28 U.S.C. § 1441, which in relevant part states that “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants.” Original jurisdiction may be based on diversity or the existence of a federal question, as set forth in 28 U.S.C. §§ 1331 and 1332. District courts have diversity jurisdiction over all civil actions between citizens of different states where the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332. “Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992) (per curiam). The defendant always bears the burden of establishing that removal is proper, and the Court “resolves all ambiguity in favor of remand.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir.2009)

         B. ...

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