United States District Court, N.D. California
ORDER RE DEFENDANT WELLS FARGO BANK, N.A.'S
MOTION TO DISMISS THE FIRST AMENDED COMPLAINT RE: DKT. NO.
M RYU UNITED STATES MAGISTRATE JUDGE
So Young Kang filed this action against Defendants Wells
Fargo Bank, N.A. (“Wells Fargo”) and Clear Recon
Corp (collectively “Defendants”), asserting
violations of California's Homeowner's Bill of Rights
(“HBOR), specifically California Civil Code Sections
2923.55, 2923.6, 2923.7, and 2924.12, as well as the Unfair
Competition Law (“UCL”), California Business
& Professions Code Section 17200, et seq.
Plaintiff seeks damages, equitable and declaratory relief,
and injunctive relief prohibiting the sale of her property.
Wells Fargo moves to dismiss the complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim upon which relief can be granted. [Docket No. 54.]
Clear Recon Corp joins the motion. [Docket No. 57]. The court
held a hearing on the motion on March 22, 2018. For the
following reasons, Defendant's motion is granted with
leave to amend. Plaintiff shall file a Second Amended
Complaint by April 16, 2018.
following facts are allegations that Plaintiff makes in
complaint, all of which are taken as true solely for purposes
of this motion.
February 2, 2007, Plaintiff executed a promissory note for
$595, 000.00 in favor of World Savings Bank, FSB
(“World Savings Bank”), which was secured by a
deed of trust on real property located at 327 Ansel Avenue
Alameda, California 94501 (“the Property”).
(First Amended Complaint (“FAC”) ¶ 18;
Def.'s Req. for Judicial Notice (“RJN”)
[Docket No. 55], Ex. A (Adjustable Rate Mortgage Note); Ex. B
(Deed of Trust)). In November 2007, World Savings Bank became
Wachovia Mortgage, FSB (“Wachovia”), and in
November 2009, Wachovia merged into Wells Fargo. (RJN Ex. C).
about December 1, 2010, Plaintiff defaulted on the loan.
(RJN, Ex. D (Notice of Default) at 2).
2015, Plaintiff requested foreclosure prevention alternatives
and assistance in obtaining such alternatives from
Defendants. (FAC, ¶ 27). Despite her request, Defendants
did not provide her with the name or information of a
“single point of contact” or SPOC. (Id.,
¶ 28). Plaintiff also asserts that if Defendants did
assign her a SPOC, that contact was “either not willing
to or was not provided with the ability to help Plaintiff,
which [was] tantamount to not having a [SPOC].”
February 25, 2016, Clear Recon Corp recorded the Notice of
Default. (RJN, Ex. D (Notice of Default)). Plaintiff alleges
that she was not notified that Clear Recon Corp was
substituted as the Trustee on the Deed of Trust, or of any
subsequent assignments of her loan, in violation of HBOR
section 2937. Attached to the Notice of Default is a
Declaration of Compliance signed by Laura Rodriguez on
February 2, 2016. (RJN, Ex. D (Notice of Default),
Declaration of Compliance). The Declaration attests that the
“mortgage servicer [had] contacted the borrower
pursuant to [Section] 2923.55(b)(2) to assess the
borrower's financial situation and explore options for
the borrower to avoid foreclosure. Thirty (30) days, or more,
[had] passed since the initial contact was made.”
(Id.) Plaintiff alleges that the declaration is a
“fabrication” because she was never contacted by
Defendants to discuss her financial situation or options for
avoiding foreclosure as required under section 2923.55 prior
to the recording of the Notice of Default. (FAC, ¶ 23).
further alleges that she submitted a complete loan
modification application to Defendants in May 2016. (FAC,
¶ 30). Plaintiff asserts that Defendants issued her a
letter on June 6, 2016, which she received on June 14, 2016,
that stated that her loan modification application was in
review. (Id.) Defendants then repeatedly
asked her to submit duplicate copies of paperwork she had
already submitted, and also promised her that the
Trustee's sale of the property would not go forward.
the fact that Plaintiff had submitted a complete loan
modification application, and Defendants had promised
Plaintiff that the sale of the property would not go forward,
Defendants recorded a Notice of Trustee's Sale on June
30, 2016. (RJN, Ex. E (Notice of Trustee's
27, 2016, Plaintiff filed the instant action in Alameda
County Superior Court alleging five claims against
Defendants: 1) violation of HBOR section 2923.55; 2)
violation of HBOR section 2923.6; 3) violation of HBOR
section 2923.7; 4) injunctive relief pursuant to HBOR section
2924.12; and 5) the UCL. (Compl.).
the July 29, 2016 removal to this court, Plaintiff submitted
a request for a loan modification to Wells Fargo's
counsel on August 15, 2016, which was forwarded to Wells
Fargo. (Third Updated Joint Status Report Re: ADR and Motion
for Remand [Docket No. 44] at 2). Plaintiff later submitted a
complete loan modification application to Wells Fargo's
underwriting team. (Id.)
September 8, 2016, the court stayed the action at the
parties' request pending the review of Plaintiff's
loan modification application and the completion of the ADR
process. (Order Granting Joint Stipulation to Stay All
Proceedings Until Completion of Court Mandated ADR Process
[Docket No. 25]). During this review period, Defendants did
not conduct any foreclosure sale, and allowed the Notice of
Trustee's Sale to expire without re-noticing the sale.
2, 2017, Wells Fargo denied Plaintiff's loan modification
application. (Third Updated Joint Status Report Re: ADR and
Motion for Remand at 2). Plaintiff did not appeal the denial.
the parties completed the ADR process and the review of
Plaintiff's loan modification application, the court
lifted the stay on October 19, 2017. (Order on Third Updated