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Mosley v. Wells Fargo Bank NA,

United States District Court, N.D. California

November 15, 2017

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


          JACQUELINE SCOTT CORLEY United States Magistrate Judge.

         This dispute concerns an attempt by Wells Fargo Bank, N.A. (“Wells Fargo”) and Northwest Trustee Services, Inc. (“Northwest”) (together, “Defendants”) to initiate foreclosure proceedings against Plaintiff Marlene Jean Mosley. Now pending before the Court are Plaintiff's motion to remand and Defendants' motion to dismiss. (Dkt Nos. 11, 16.) Having reviewed the parties' briefing, the Court concludes that oral argument is unnecessary, see N.D. Cal. Civ. L.R. 7-1(b), and DENIES Plaintiff's motion to remand and GRANTS in part and DENIES in part Defendants' motion to dismiss with leave to amend.


         Plaintiff obtained a loan from World Savings Bank in the amount of $492, 000, secured by a Deed of Trust recorded against the property. (Complaint ¶ 16.) The beneficial interest under the Deed of Trust was later assigned to Wells Fargo, and Northwest Trustee Services Inc. was substituted as the trustee of the Deed of Trust. (Id. ¶ 18.)

         Approximately ten years after Plaintiff secured the home loan, Northwest recorded a Notice of Default on the property. (Id. ¶ 19.) Plaintiff was never notified of any changes regarding her loan. (Id. ¶ 21.) Plaintiff's loan was transferred from one beneficiary to another, without any notification from any parties. (Id.)

         Sometime before Plaintiff received the Notice of Default, she submitted a loan modification application. (Id. ¶ 24.) Plaintiff alleges she was verbally denied the loan modification. (Id.) Plaintiff was informed there was a chance she might be able to later apply for a loan modification, her application might be approved, and she would be able to save her home. (Id.) Instead, Defendants filed and recorded the Notice of Default. (Id.) Defendants breached their duty to provide recourse by failing to notify Plaintiff of default, as required by paragraph 26 and 28 of the Deed of Trust. (Id. ¶¶ 78, 79.) Paragraphs 26 and 28 also require the notice to specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given by which the default must be cured; and (d) that failure to cure before the date specified may result in acceleration of the security instrument and sale of the property. (Id.) Defendants also breached their duty to review the loan modification documents “fairly and diligently.” (Id. ¶ 80.)

         Three months after the Notice of Default, a notice of trustee sale was recorded. (Id. ¶ 19.) Defendants never contacted Plaintiff to discuss her financial situation or options for avoiding foreclosure. (Id. ¶ 25.) Plaintiff requested a single point of contact, but none was provided. (Id. ¶ 29.)

         Plaintiff is an 84 year old woman who has lived on the property at issue since she was a young child. (Id. ¶ 22.) Her living expenses are based on her pension, which has been reduced to a lesser amount than her monthly mortgage payments. (Id.) Plaintiff takes costly life-maintenance medications and now also has anxiety about losing her home. (Id.) Plaintiff seeks general damages, compensatory damages, interest, consequential damages, injunctive relief “prohibiting any further sale of the [s]ubject [p]roperty, ” equitable injunctive and/or declaratory relief, restitution of profits that Defendants have unfairly obtained, and costs and expenses. (Id. at 29.)

         DEED OF TRUST

         The Deed of Trust is attached to Plaintiff's complaint as “Exhibit A.” (Dkt. No. 1 at 30-46.) It is signed by Plaintiff as the borrower. (Id. at 45.) Paragraph 26 concerns the lender's right to accelerate the sums secured by the Deed of Trust. (Id. at 42.) The lender has the right to enforce paragraph 26 if the property is sold or if the borrower is not a natural person and a beneficial interest in borrower is sold or transferred without the lender's prior written permission. (Id.) The lender may not, however, require immediate payment in full if such action is prohibited by federal law. (Id.) If the lender chooses to exercise paragraph 26 to require immediate payment in full it must give Plaintiff notice of acceleration. (Id.)

         Paragraph 28 concerns the rights of the lender if Plaintiff breaches her duty to pay the full amount of each regularly scheduled payment or any of the promises in the Deed of Trust. (Id. at 43.) If there is a breach, the lender may exercise the power of sale, take action to sell the property, and invoke other remedies as may be permitted under the law. (Id.) The lender is not required to give Plaintiff notice of a breach of duty. (Id.)

         In the Notice of Default, Wells Fargo signed a “declaration of compliance” confirming Plaintiff was contacted to assess her financial situation and explore options for Plaintiff to avoid foreclosure. (Id. at 51.)


         Plaintiff originally filed this action in Alameda County Superior Court on July 31, 2017. (Dkt. No. 1 at 7.) Wells Fargo filed a notice of removal to federal court on August 31, 2017. (Id. at 5.) The notice of removal states in part that “[Wells Fargo] is authorized to represent defendant Northwest Trustee Services, Inc.” who “joins in and consents to this removal.” (Id. ¶ 4.) Ms. Tara Mohseni, Well Fargo's attorney of record, signed the notice of removal. (Id. at 5.) The parties subsequently filed the motions at issue.


         I. Defendants' Request for Judicial Notice

         Facts appropriate for judicial notice are those “not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). Courts may take judicial notice of publicly available official information filed with a governmental agency or posted on a governmental website. See Dudum v. Arntz, 640 F.3d 1098, 1102 & n. 6 (9th Cir. 2011) (taking judicial notice of official information posted on a governmental website); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998-99 (9th Cir.2010) (taking judicial notice of official information posted on a governmental website, the accuracy of which was undisputed).

         Wells Fargo requests that the Court take judicial notice of four documents: (1) Wells Fargo's articles of incorporation; (2) a document entitled “National Banks Active as of 8/31/2017” published on the U.S. Department of Treasury website; (3) a business search of the Secretary of State of California regarding Northwest's registration as a foreign corporation in California; and (4) the statement of information for Northwest filed in the office of the Secretary of State of California. Wells Fargo's request for judicial notice is granted as the accuracy of Wells Fargo's articles of incorporation and Northwest's statement of information are not in question. Furthermore, the document reflecting active national banks and Northwest's registration with the State of California consists of information posted on a governmental website whose accuracy is not disputed.

         II. Motion to Remand

         Plaintiff moves to remand to Alameda County Superior Court. She argues diversity jurisdiction fails because: (1) Defendants and Plaintiff are citizens of California, (2) the amount in controversy is not greater than $75, 000, and (3) consent was not obtained from all defendants to remove the action.

         A district court must remand a removed action “if at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). Courts must “strictly construe the removal statute against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “Th[is] ‘strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.” Id.

         In federal courts, subject matter jurisdiction may arise from either “federal question jurisdiction” or “diversity of citizenship” when the amount in controversy exceeds $75, 000. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Defendants removed on the grounds of diversity jurisdiction. To properly allege diversity jurisdiction, a plaintiff must claim damages in excess of $75, 000. 28 U.S.C. § 1332(a). In addition, “diversity jurisdiction requires complete diversity between the parties-each defendant must be a citizen of a ...

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