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Kapanoske v. Wells Fargo Bank, N.A.

United States District Court, C.D. California

June 21, 2017


          Present: The Honorable BEVERLY REID O'CONNELL, United States District Judge.


         Proceedings: (IN CHAMBERS)



         Pending before the Court is Plaintiffs Teri Ann and Gerald E. Kapanoske's ("Plaintiffs") Motion to Remand. (See Dkt. No. 22 (hereinafter, "Mot.").) After considering the papers filed in support of and in opposition to the instant Motion, the Court deems this matter appropriate for resolution without oral argument of counsel. See Fed. R. Civ. P. 78; CD. Cal. L.R. 7-15. For the following reasons, the Court DENIES Plaintiffs' Motion.


         A. Factual Background

         Plaintiffs own the property located at 2950 Glenwood Circle, Corona, California in the County of Riverside (the "Subject Property"). (See Dkt. No. 16 (hereinafter, "FAC") | 3.) Defendant Wells Fargo Bank, N.A. ("Wells Fargo") is a national banking association ("NBA"). (Dkt. No. 1 (hereinafter, "Removal") at 3; see also FAC 1} 4.) Defendant NBS Default Services, LLC ("Defendant NBS"), is a limited liability company.[1] (Removal at 4.)

         On March 4, 2003, Plaintiffs purchased the Subject Property. (FAC j[ 10.) Plaintiffs executed a promissory note and a deed of trust in the amount of $300, 000 with World Savings Bank, FSB ("WSB"). (See FAC | 64; see also Removal at 7.) Plaintiffs' loan with WSB was a conventional thirty-year mortgage with a fixed interest rate of 6.5% and a monthly payment of $1, 896.21. (Declaration of Teri Ann Kapanoske (Removal, Ex. B at 57) | 6.) On or about December 20, 2005, based on advice from WSB, Plaintiffs refinanced their mortgage and executed a promissory note and deed of trust in the amount of $500, 000. (Removal at 7.) Effective December 31, 2007, WSB changed its name to Wachovia Mortgage, WSB ("Wachovia"). (Removal at 3.) In 2009, Wells Fargo acquired Wachovia. (Id.)

         On or about June 1, 2010, Plaintiffs received a "step-rate loan modification" from Wells Fargo. (Removal at 7.) After making payments for three years, Plaintiffs suspected their payments were being misapplied because their loan balance did not decrease, while their monthly payments continued to increase. (Removal at 7-8.) In fall of 2014, Plaintiffs contacted Wells Fargo to resolve these discrepancies and prevent loan default. (Removal at 8.) Wells Fargo allegedly instructed Plaintiffs to cease making payments and remain in default so that Wells Fargo could review their account and provide a loan modification. (Id.; FAC ¶ 14.) However, in early 2015, Wells Fargo allegedly denied their request for a loan modification because Wells Fargo claimed that Plaintiffs' income was too low to afford their home. (Removal at 8; see also FAC If 15.) At the time, Plaintiffs were approximately $27, 000 in arrears on their payments. (FAC ¶ 16.) According to Plaintiffs, Wells Fargo then demanded full payment to make their loan current. (FAC ¶ 15.)

         On or around March 2015, Plaintiffs applied for foreclosure prevention assistance from Keep Your Home California ("KYHC"). (FAC 117.) Plaintiffs allege that Wells Fargo confirmed Plaintiffs' participation in the KYHC program for loan reinstatement assistance. (Id.) Further, Plaintiffs claim that Wells Fargo knew KYHC only provided reinstatement assistance for amounts up to $50, 000. (FAC ¶ 18.) In November 2015, KYHC approved Plaintiffs' eligibility for assistance. (FAC ¶ 19.) However, Plaintiffs further aver that Wells Fargo purposefully increased Plaintiffs' reinstatement amount to exceed KYHC's $50, 000 limit. (See FAC 122.) Thus, on or about December 23, 2015, a Wells Fargo representative told Plaintiffs that KYHC denied them assistance because Plaintiffs' past due balance of $55, 737.86 exceeded $50, 000. (FAC Iflf 20-21.) On or about February 16, 2016, Defendants recorded a Notice of Default. (FAC ¶ 28.) On or about May 23, 2016, Defendants filed a Notice of Trustee's Sale. (FAC jf 29.)

         B. Procedural History

         On May 27, 2016, Plaintiffs filed a complaint against Defendants in the Superior Court of California, County of Riverside. (See Terri [sic] Ann Kapanoske v. Wells Fargo Bank, N.A. (hereinafter, "Kapanoske F\ No. 16-cv-0512-BRO-KK, ECF No. 1, Ex. A; see also FAC ¶ 30.) Defendants removed the action to this Court on July II, 2016. (Kapanoske I, ECF No. 1.) On August 10, 2016, Plaintiffs filed a motion to remand, (Kapanoske I, ECF No. 14), which the Court denied on September 9, 2016, (Kapanoske I, ECF No. 34). Defendants filed a Motion to Dismiss on August 25, 2016, (Kapanoske I, ECF No. 26), which the Court granted on September 30, 2016, (Kapanoske I, ECF No. 41). The Court held the majority of Plaintiffs' claims were preempted by the Home Owners Loan Act, and dismissed Plaintiffs' preempted claims with prejudice. (See id.; see also FAC If 31.) Though the Court dismissed Plaintiffs' breach of contract claim without prejudice, (see Kapanoske I, ECF No. 41), Plaintiffs never amended their complaint to reassert their breach of contract claim, (see FAC ¶ 32). They opted, instead, to pursue informal resolution directly with Defendants. (Id.)

         On March 21, 2017, Plaintiffs filed another Complaint in the Superior Court of California, County of Riverside. (See Removal, Ex. A (hereinafter, "Compl.").) On April 26, 2017, Defendant Wells Fargo removed the action, invoking this Court's diversity jurisdiction. (See Removal.) On May 26, 2017, Plaintiffs filed the instant Motion. (See Mot.) On June 5, 2017, Wells Fargo opposed the Motion. (See ...

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