United States District Court, N.D. California
ORDER RE: DKT., 7
PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE
Wells Fargo Bank, N.A.'s (“Wells Fargo”)
motion to dismiss came on for hearing before this court on
April 25, 2018. Plaintiff Ezequiel Villegas appeared through
Samuel Pooler, who appeared on behalf of his counsel, Laleh
Ensafi. Defendant appeared through its counsel, Le Duong.
Having read the papers filed by the parties and carefully
considered their arguments and the relevant legal authority,
and good cause appearing, the court hereby rules as follows.
case concerns Wells Fargo's foreclosure on Villegas's
home mortgage. Plaintiff filed this case on December 28, 2017
in the Superior Court of California, County of Mendocino.
Dkt. 1. Defendant removed the case to this court based on
both diversity and federal question jurisdiction.
January 19, 2006, Villegas took out a mortgage in the amount
of $280, 000 on his home, located at 224 Margie Drive,
Willits, CA 95490 (the “Property”), with Resmae
Mortgage Corporation. Dkt. 19-1 (“Compl.”) at 2,
6; Dkt. 7 (“Mot.”) at 1. The mortgage is made up
of a loan (the “Note”, Ex. B) and a deed of
trust (“DOT”, Ex. A). Mot. at 1. Villegas alleges
that the mortgage was then sold or assigned to an unknown
securitized trust that it will identify through discovery.
Compl. at 6.
Villegas failed to make mortgage payments, and he defaulted
in 2009. Id. at 7. The loan servicer, America's
Servicing Company, recorded a notice of default on January
14, 2009. Id. Villegas alleges a number of entities
owned or acted as trustee of the mortgage from 2009-2012.
Id. at 8-9. Sometime in 2012, Wells Fargo had
acquired the servicing of the mortgage while the debt was in
default. Id. at 8.
alleges that he entered into a modified loan agreement on
July 23, 2013 with Wilmington Trust National Association
(“Wilmington”), and that Wells Fargo acted as
attorney-in-fact in that transaction, during which time Wells
Fargo misrepresented the character and legal status of the
debt obligation. Id. at 9, Ex. F. Plaintiff also
alleges that he entered into a modified loan agreement with
the alleged owner of the debt obligation in August 2013 to
avoid foreclosure. Id. at 7. Villegas alleges that
Wells Fargo had no authority to collect on the debt, service
the debt, or proceed with a non-judicial foreclosure to
enforce the security interest. Id.
8, 2017, Wells Fargo executed and recorded a Substitution of
Trustee, which purported to make Quality Loan Service
Corporation the new trustee. Id. at 9-10, Ex. G.
Then, on May 8, 2017, Wells Fargo recorded a notice of
default on plaintiff's Property, stating that Wilmington
was acting as trustee of a trust that was the beneficiary of
the debt. Id. at 10, Ex. H. Plaintiff argues that
Wells Fargo and the supposed debt beneficiary are in fact
“debt collectors” instead of beneficiaries, so
they cannot enforce a security interest or attempt to collect
any payments from Villegas. Id. at 11.
sent Wells Fargo a letter asking about the ownership of the
debt obligation, and Wells Fargo replied on July 26, 2017,
stating that a trust owns the debt, with Wilmington acting as
trustee. Id. at 7, Ex. C. Plaintiff alleges that
letter falsely represented the character and legal status of
the alleged debt. Id. at 7. On August 25, 2017, a
notice of trustee's sale was executed and recorded
against the Property. Id. at 10, Ex. I. At the
hearing, plaintiff's counsel did not know whether the
home had been sold, but defendant's counsel represented
that the house has not been sold and that plaintiff continues
to live in the house.
seeks compensatory, special, and general damages of no less
than $750, 000; punitive damages; injunctive relief
compelling Wells Fargo to remove any instrument that could be
construed as a cloud upon plaintiff's title to the
Property; declaratory judgment that defendant does not have
any rights as to plaintiff, the Property, or plaintiff's
debt; a restraining order to prevent Wells Fargo from
undertaking any action against the Property; costs of the
suit; attorneys' fees; and any other relief the court
now moves to dismiss the case.
Rule of Civil Procedure 12(b)(6) tests for the legal
sufficiency of the claims alleged in the complaint. Ileto
v. Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003).
Under the minimal notice pleading requirements of Federal
Rule of Civil Procedure 8, which requires that a complaint
include a “short and plain statement of the claim
showing that the pleader is entitled to relief, ”
Fed.R.Civ.P. 8(a)(2), a complaint may be dismissed under Rule
12(b)(6) if the plaintiff fails to state a cognizable legal
theory, or has not alleged sufficient facts to support a
cognizable legal theory. Somers v. Apple, Inc., 729
F.3d 953, 959 (9th Cir. 2013).
the court must accept as true all the factual allegations in
the complaint, legally conclusory statements, not supported
by actual factual allegations, need not be accepted.
Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The
complaint must proffer sufficient facts to state a claim for
relief that is plausible on its face. Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555, 558-59 (2007).
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citation
omitted). “[W]here the well-pleaded facts do not permit
the court to infer more than the mere possibility of
misconduct, the complaint has alleged-but it has not
‘show[n]'-‘that the pleader is entitled to
relief.'” Id. at 679. Where dismissal is
warranted, it is generally without prejudice, unless it is
clear the complaint cannot be saved by any amendment.
Sparling v. Daou, 411 F.3d 1006, 1013 (9th Cir.
is generally limited to the contents of the complaint,
although the court can also consider a document on which the
complaint relies if the document is central to the claims
asserted in the complaint, and no party questions the
authenticity of the document. See Sanders v. Brown,
504 F.3d 903, 910 (9th Cir. 2007). The court may consider
matters that are properly the subject of judicial notice
(Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.
2005); Lee v. City of L.A., 250 F.3d 668, 688-89
(9th Cir. 2001)), exhibits attached to the complaint (see
Hal Roach Studios, Inc. v. Richard Feiner & Co.,
Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989)),
documents referenced extensively in the complaint, and
documents that form the basis of a the plaintiff's claims
(see No. 84 Emp'r-Teamster Jt. Counsel Pension Tr.
Fund v. Am. W. Holding Corp., 320 F.3d 920, 925 n.2 (9th
Fargo moves to dismiss each of Villegas's five claims:
(1) violation of 15 U.S.C. § 1692f(6), the Fair Debt
Collection Practices Act (“FDCPA”); (2) violation
of California Homeowner's Bill of Rights
(“HBOR”), California Civil Code §§
2924(a)(6) & 2924.17; (3) violation of HBOR §
2934a(a)(1)(A)(C); (4) negligent representation; and (5)
violation of Cal. Bus. Prof. Code § 17200
15 U.S.C. § 1692f(6)-FDCPA
U.S.C. § 1692f(6) provides:
collector may not use unfair or unconscionable means to
collect or attempt to collect any debt. Without limiting the
general application of the foregoing, the following conduct
is a violation of this section:
[. . .
Taking or threatening to take any nonjudicial action to
effect dispossession or disablement of property if-
(A) there is no present right to possession of the property
claimed as collateral through an enforceable ...