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Farhat v. Wells Fargo Bank, N.A.

United States District Court, N.D. California

July 19, 2019

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



         Pending before the Court is a motion to dismiss Plaintiff Suhaila Farhat's second amended complaint (“SAC”) brought by Defendant Wells Fargo Bank, N.A (“Wells Fargo”), Dkt. No. 23 (“Mot.”), and joined by Clear Recon Corp. (“Clear Recon”), Dkt. No. 37. Having considered Wells Fargo's motion, Plaintiff's opposition, and all related papers, the Court finds the matter appropriate for disposition without oral argument. See Civil L.R. 7-1(b). For the reasons below, the Court GRANTS the motion to dismiss without leave to amend.[1]

         I. BACKGROUND

         In May 2007, Plaintiff refinanced her home loan and borrowed $750, 000. SAC ¶¶ 9, 24. The loan was memorialized in a promissory note and secured by a deed of trust. SAC, Exs. A (“Deed of Trust”), B (“Promissory Note”). Defendant Wells Fargo is the “current beneficiary and/or servicer” of the loan. Id. ¶ 4. Plaintiff in March 2018 received notice from Wells Fargo that the total amount she owed on the loan was $1, 178, 580.14, which included an “Unpaid Principal Balance” of $848, 490.44 and unpaid interest of $273, 947.69. Id. ¶ 26. According to Plaintiff, based on language in the Deed of Trust and Promissory Note, Wells Fargo improperly increased the loan's principal balance, as the “Unpaid Principal Balance” purportedly could not exceed $937, 500, or 125% of the initial principal amount of $750, 000.[2] Id. ¶¶ 24-26.

         Plaintiff thereafter commenced this action against Wells Fargo and Clear Recon, the trustee of Plaintiff's loan. See Dkt. No. 1. On October 30, 2018, the Court dismissed Plaintiff's first amended complaint, Dkt. No. 12 (“FAC”). See Dkt. No. 21 (“Dismissal Order”). The Court held that language in the Promissory Note unambiguously does not prohibit Wells Fargo from billing Plaintiff for a balance exceeding 125% of the original amount borrowed. Dismissal Order at 4. Although the Court was doubtful that Plaintiff would be able to amend her complaint to plausibly state a claim, the Court granted Plaintiff an opportunity to amend. Id. Plaintiff subsequently filed her SAC, alleging the same four causes of action as asserted in the FAC: (1) declaratory relief; (2) violation of California Civil Code § 1788.17; (3) breach of contract; and (4) violation of California Business and Professions Code § 17200 et seq. (“UCL”). SAC ¶¶ 45-81.


         Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). Fed.R.Civ.P. 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

         In addition, dismissal without leave to amend is proper when it is clear that the complaint could not be saved by any amendment. See McKesson HBOC v. New York State Common Ret. Fund, Inc., 339 F.3d 1087, 1090 (9th Cir. 2003).

         III. ANALYSIS

         The SAC does not plead new facts or arguments not advanced in the FAC. All four causes of action alleged in the SAC rely on the same argument asserted in the FAC. Compare SAC ¶¶ 48, 50, 62, 71, 75-76, with FAC ¶¶ 16, 26, 28, 37, 41-42. In both complaints, Plaintiff posits that provisions in the Promissory Note and Deed of Trust preclude Wells Fargo from recovering more than $937, 500 as the principal balance, and that Wells Fargo improperly attempts to collect more than that “cap” (hereinafter Plaintiff's “excess principal” argument). See SAC ¶¶ 46, 48, 62, 71; FAC ¶¶ 16, 26, 28, 37.

         The Court previously rejected Plaintiff's “excess principal” argument. Dismissal Order at 4. Absent new allegations, the Court rejects Plaintiff's arguments again.

         A. The Language of the Promissory Note is Unambiguous

         As in the FAC, Plaintiff's SAC relies on a specific interpretation of the following two ...

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