United States District Court, N.D. California
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
WITHOUT LEAVE TO AMEND RE: DKT. NO. 51
NATHANAEL M. COUSINS UNITED STATES MAGISTRATE JUDGE.
Wells Fargo Bank moves to dismiss plaintiffs Ronnie L.
Townsend and Iris Townsend's third amended complaint.
See Dkt. No. 51. Because the Court previously
dismissed Plaintiffs' complaint and they have been unable
to cure their complaint's deficiencies, the Court GRANTS
the motion to dismiss without leave to amend.
Allegations in the Third Amended Complaint
purchased a house in San Jose in 2007 with a loan originally
held by World Savings Bank and now held by Wells Fargo.
See Dkt. No. 50 (“TAC”) ¶¶ 4,
7, 10. That loan originally featured escalating payments,
increasing to over $4, 000 per month within the first three
years of the loan. Id. ¶ 10. In 2009, after
suffering a financial hardship, Plaintiffs approached Wells
Fargo to apply for a loan modification. Id. ¶
11. That modification changed the maturity date of the loan
from 2037 to 2049 and increased the total amount to be paid
over the life of the loan. See Id. ¶¶
2016, Plaintiffs again applied for a loan modification.
See Id. ¶ 15. Wells Fargo advised Plaintiffs to
include both Ronnie and Iris's income on their
application despite the fact that Iris's income was
sporadic. Id. Later that year, Wells Fargo gave
Plaintiffs contradictory advice regarding whether to continue
to make payments on their loans. Id. ¶¶
16-17. By November 2016, Wells Fargo denied their loan
modification application, stating that Plaintiffs'
combined income was too high. Id. ¶¶ 15,
18. Plaintiffs appealed Wells Fargo's decision, but their
appeal was also denied. Id. ¶ 20.
April 2017, Plaintiffs secured conditional approval of a
third-party loan for up to 65% of their property value in an
attempt to refinance their mortgage. Id. ¶ 21.
The third-party loan was conditioned on Plaintiffs reducing
the principal on their mortgage by about $20, 000.
Id. Plaintiffs petitioned Wells Fargo to accept a
$20, 000 payment in conjunction with the conditional loan.
Id. Wells Fargo rejected Plaintiffs' proposal.
again applied for loan modification in April 2017.
Id. ¶ 22. After Wells Fargo denied their
application, Plaintiffs filed for bankruptcy in June 2017 to
stave off foreclosure, which was pushed to February 2018.
sale date drew near, Plaintiffs again filed for bankruptcy
and sought additional funding with another lender.
Id. ¶ 23. The third-party lender refused to
give final approval while Plaintiffs' property was in
active foreclosure. Id. Plaintiffs asked Wells Fargo
to remove the property from active foreclosure, but Wells
Fargo refused. Id. Because Plaintiffs' second
bankruptcy filing did not include an automatic stay,
Plaintiffs' property was sold at public auction on May
10, 2018. Id.
filed their third amended complaint on June 24, 2019,
alleging (1) violations of the Truth In Lending Act
(“TILA”), 15 U.S.C. §§ 1601 et
seq.; (2) violation of California's Unfair
Competition Law (“UCL”), Cal. Bus. & Prof.
Code §§ 17200 et seq.; (3) quiet title;
and (4) violations of the California Homeowner Bill of Rights
(“HBOR”), Cal. Civ. Code §§ 2923.6,
2923.7. See Id. Wells Fargo now moves to dismiss the
third amended complaint. See Dkt. No. 51.
Fargo also requests judicial notice of a loan modification
agreement. See Dkt. No. 52. Courts may take judicial
notice of documents if they are matters of public record or
if the complaint necessarily relies on them. See Lee v.
City of Los Angeles, 240 F.3d 754, 774 (9th Cir. 2001);
see also Fed. R. Evid. 201(b)(2). The Court declines
to take judicial notice of the loan modification agreement.
Townsend disputes the authenticity of that document and
contends that it is not publicly available. See Dkt.
No. 55 at 2-3.
motion to dismiss for failure to state a claim under Rule
12(b)(6) tests the legal sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
On a motion to dismiss, all allegations of material fact are
taken as true and construed in the light most favorable to
the non-movant. Cahill v. Liberty Mut. Ins. Co., 80
F.3d 336, 337- 38 (9th Cir. 1996). The Court, however, need
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). Although a complaint
need not allege detailed factual allegations, it must contain
sufficient factual matter, accepted as true, 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 it “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).
court grants a motion to dismiss, leave to amend should be
granted unless the pleading could not possibly be cured by
the allegation of other facts. Lopez v. Smith, 203
F.3d 1122, 1127 (9th Cir. 2000); see also Fed. R.
Civ. P. 15(a) (“The court should freely give leave [to
amend] when justice so requires.”).