United States District Court, N.D. California, San Jose Division
PURISIMA C. LACONICO, Plaintiff,
CAL-WESTERN RECONVEYANCE CORPORATION, et al., Defendants.
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [Re:
LABSON FREEMAN United States District Judge
Purisima Laconico (“Laconico”) brings various
causes of action against Wells Fargo, N.A. (“Wells
Fargo”), World Savings Bank (“WSB”), and
Cal-Western Reconveyance Corporation
(“Cal-Western”). Laconico alleges that the
defendants failed to deal with her and her mortgage fairly,
and failed to follow the proper procedures when conducting a
non-judicial foreclosure sale of Laconico's home. See
generally Ex. A to Notice of Removal
(“Compl.”), ¶¶ 50-52, 89, 42-44, 81,
121-122, ECF 1. Before the Court is Wells Fargo's
unopposed motion to dismiss Laconico's complaint. Mot. to
Dismiss (“MTD”), ECF 7. Pursuant to Civ. L.R.
7-1(b), the Court finds Wells Fargo's motion to dismiss
suitable for submission without oral argument and hereby
VACATES the hearing scheduled for July 27, 2017. For reasons
discussed below, the Court GRANTS Wells Fargo's motion to
filed the instant action (“Current Action”), in
Santa Clara Superior Court on December 30, 2016. See
generally, Compl. Laconico names as defendants:
Cal-Western Conveyance Corporation, Wells Fargo Bank, N.A.,
and World Savings Bank, FSB. Id.
Fargo removed this case to this Court on February 10, 2017.
See generally, Notice of Removal, ECF 1.
complaint concerns real property located at 875 Plaza Drive,
San Jose, CA 95125 (“Property”). Compl. ¶ 8.
In September 2006, Laconico obtained a loan for $925, 000
(“Loan”) from World Savings Bank, FSB.
See Ex. F to Request for Judicial Notice
(“RJN”), (“Deed”), ECF 8. The loan
was for the purchase of, and was secured by, the Property.
WSB memorialized and secured the loan with a promissory note
and a deed of trust. Deed; Ex. G to RJN (“Note”).
The Deed states that “World Savings Bank, FSB, its
successors and assignees” are the Loan's
beneficiaries. Deed 1-2. Similarly, the Note specifies that
“World Savings Bank, FSB, a federal savings bank, its
successors and assignees” are the Loan's lenders.
went into default on the Loan in October of 2008.
See Ex. H to Request for Judicial Notice (Notice of
default references failure to make October 15, 2008 payment).
Since 2009, Laconico has filed twenty-five bankruptcy
actions. Ex. J to RJN. Every action was dismissed for failure
to file the schedules necessary for the bankruptcy to
proceed. Id. Because Laconico remained in default,
Wells Fargo recorded a notice of default of March 12, 2010,
and a notice of sale on November 10, 2014. Exs. H and I to
claims can be summarized as the following. First, she claims
that the process of securitization destroyed defendants'
right to foreclose her home. See Compl. ¶¶
29, 42-44, 49, 73, 81, 104, 114, 121-122, 140. Second, she
claims that Defendants fraudulently misled her about her
mortgage, Compl. ¶¶ 50-52, 89, and that
Defendants' attempted foreclosure is not procedurally
sound, Compl. ¶¶ 16-18, 25, 26, 28, 70-71. Laconico
asserts eleven causes of action based on these claims: (1)
“Homeowner's Bill of Rights, ” (2)
“violation of California Business and Professions Code
Sections 17200 Et Seq, ” (3) “Negligence, ”
(4) “Declaratory Relief, ” (5) “Fraud in
the Concealment, ” (6) “Intentional Infliction of
Emotional Distress, ” (7) “slander of tile,
” (8) “quiet title, ” (9) “recession,
” (10) “injunctive relief, ” (11)
“predatory lending practices.” See
named defendants besides Wells Fargo are defunct
organizations. In 2006, when Laconico obtained her mortgage,
WSB was a federal savings bank overseen by the Office of
Thrift Supervision (“OTS”). See Exs. A
and C to RJN. WSB changed its name to Wachovia Mortgage, FSB
on December 31 2007, Ex. B to RJN, but remained chartered
under the Homeowner's Loan Act (HOLA) and overseen by the
OTS. Ex. C to RJN. On November 1, 2009, Wachovia Mortgage
later merged and became part of Wells Fargo Bank, N.A. Ex. D
to RJN. As to Cal-Western Conveyance, it petitioned for
bankruptcy on June 25, 2013 and has filed a notice of
bankruptcy in the instant action. Notice of Bankruptcy and
Permanent Injunction 2, ECF 3. On December 19, 2013, the
Bankruptcy Court for the District of Delaware permanently
enjoined all but a small subset of claims against
The Prior Action
Court also recounts a prior suit filed by Laconico concerning
the Property because it will be relevant to Wells Fargo's
motion to dismiss. Laconico filed suit against Wells Fargo
Home Mortgage in state court on April 13, 2015. Ex. A to
Notice of Removal (“Prior Action Compl.”),
Laconico v. Wells Fargo Home Mortgage (“Prior
Action”), No. 5:15-cv-02364-EJD (N.D. Cal. May 27,
2017), ECF 1. In that case, Laconico's complaint made
three main claims. The first was that Wells Fargo Home
Mortgage had intentionally misled her about the costs of her
mortgage. See Prior Action Compl. ¶¶
28-35, 82, 128, 162, 196, 212. The second was that Wells
Fargo Home Mortgage could not foreclose her property because
it lacked the original note or deed of trust since the Loan
was converted into a mortgage-backed security. See
Prior Action Compl. ¶¶ 26, 46, 49-53, 60, 93-94,
104-07, 124, 144, 172. Finally, Laconico claimed that Wells
Fargo Home Mortgage failed to properly follow
California's non-judicial foreclosure procedure.
See Prior Action Compl. ¶¶ 12, 17, 61.
Based on these claims, Laconico brought ten causes of action:
(1) “declaratory relief, ” (2) “fraud,
” (3) “Tortious Violation of Statute, ” (4)
“quiet title, ” (5) “reformation, ”
(6) “violations of business and profesions [sic] code
§17200, ” (7) “violation of CA Civ. Code
§2923.6, ” (8) “violation of CA Civ. Code
§1788.17, ” (9) “violation of CA Civ. Code
§1572, ” and (10) “injunctive relief.”
See generally Prior Action Compl. On May 27, 2015,
the defendant timely removed the case to the Northern
District of California where the Prior Action was assigned
Case Number No. 5:15-cv-02364-EJD. Notice of Removal,
Prior Action, ECF 1. On September 23, 2015, the
Court dismissed the Prior Action with prejudice for failure
to prosecute under Federal Civil Procedure Rule 41. Ex. I to
RJN (“41(b) dismissal”).
Fargo is a citizen of South Dakota. Notice of Removal, 3, ECF
1. Since WSB is a predecessor of Wachovia Mortgage, which
eventually merged into Wells Fargo, the Court need not
consider its citizenship. Exs. C and D to RJN; e.g.,
Breitman v. May Co. California, 37 F.3d 562, 564
(9th Cir. 1994) (noting that divisions of corporations lack
“the formal separateness” to be relevant to
citizenship determination for diversity
jurisdiction). Wells Fargo acknowledges that
Cal-Western is a citizen of California. Notice of Removal, 2,
ECF 1. However, Wells Fargo argues that this Court may still
exercise jurisdiction over this matter because Cal-Western is
fraudulently joined. Notice of Removal, 4.
Fargo provides three arguments in support of finding
fraudulent joinder. Wells Fargo first argues that many other
courts have found Cal-Western to be fraudulently joined under
similar circumstances. Notice of Removal 4:10-17. Wells Fargo
then avers that because Cal-Western is merely a former
trustee of Laconico's mortgage, it does not bear a close
enough relationship to the controversy to be a proper
plaintiff. Id. at 4:17-20. Wells Fargo also argues
that all of Laconico's claims against Cal-Western ...