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Datt v. Wells Fargo Bank, N.A.

United States District Court, N.D. California, San Jose Division

November 5, 2019

KANTA DATT, et al., Plaintiffs,
v.
WELLS FARGO BANK, N.A., Defendant.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS; DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT Re: Dkt. Nos. 8, 21

          EDWARD J. DAVILA UNITED STATES DISTRICT JUDGE

         Plaintiffs Kanta and Ram Datt allege that Defendant Wells Fargo Bank fraudulently, negligently, and willfully caused Plaintiffs to pay excessive mortgage and interest payments. See Complaint (“Compl.”), Dkt. 1. Plaintiffs, however, have already litigated most of the claims arising from the alleged overcharging in state court and are thus foreclosed from relitigating them again. The claim not previously litigated is time-barred.[1] The Court finds this motion suitable for consideration without oral argument. See N.D. Cal. Civ. L.R. 7-1(b). Having considered the Parties' papers, Defendant's motion to dismiss is GRANTED with prejudice and Plaintiff's motion for leave to file an amended complaint is DENIED.

         I. BACKGROUND

         A. Factual Background

         On August 14, 2007, Plaintiffs took out a 30-year mortgage from World Savings Bank. Compl. at 2.[2] Wachovia acquired World Savings Bank on December 31, 2008, then Wells Fargo acquired Wachovia. Id.; see also Scott G. Alvarez, The Acquisition of Wachovia Corporation by Wells Fargo & Company, Fed. Res. (Sept. 1, 2010), https://www .federalreserve.gov/newsevents/ testimony/alvarez20100901a.htm. In December 2009, Plaintiffs and Defendant entered into a loan modification agreement, which lowered the loan balance. Compl. at 3. The term of the modified loan was forty years, with the payments during the first five years set as “interest only.” Id.

         Around 2012, Plaintiffs defaulted on their loan by failing to make two payments. Id. Plaintiffs claim they made-up the delinquent loan payments in 2013 and made all scheduled loan payments until the loan was paid off in 2018. Id. In January 2016, Plaintiffs attempted to refinance their loan. Id. Defendant, however, advised them that because they missed two payments in the past 24 months, they were ineligible to refinance the loan. Id. Plaintiffs and/or their agents then began “calling Defendant to determine why Defendant had reported their payments as being late, when all payments since the modification had been timely to the best of Plaintiffs' knowledge.” Id. Plaintiffs allegedly possessed documentation showing the same. Id. Plaintiffs then attempted to refinance their loan at another institution but were denied due to the late payments on their credit report. Id.

         Plaintiffs allege that Defendant eventually “confirmed that there was an accounting error made and Plaintiffs had not actually missed or made any late payments, ” but still refused to correct the problems so that Plaintiffs could complete the refinance. Id. at 4. The 2016 error, thus, continued to cause Plaintiffs to pay a higher interest rate and more money per month because it prevented them from refinancing. Id. It also caused Plaintiffs to be charged “excess late penalties and fees.” Id.

         Ultimately, Plaintiffs were able to refinance with Chase Bank. Defendants accepted $750, 388.68 in April 2018 as full payment of the loan. Id. Plaintiffs claim the $750, 388.68 was inflated due to the allegedly incorrect accounting of Plaintiff's loan. Id. at 5.

         Plaintiffs assert three claims in their first complaint: (1) fraud, (2) violations of the FCRA, and (3) violations of the Home Owners Loan Act (“HOLA”); they seek to recover punitive damages based on the fraud claim. See generally Compl. In their amended complaint, Plaintiffs continue to seek punitive damages and assert four claims: (1) fraud, (2) violations of the FCRA, (3) negligence, and (4) violations of California Business & Professions Code § 17200 et seq. Dkt. 22, Ex. A.

         B. Procedural History

         On March 6, 2019, Plaintiffs filed this action. See Dkt. 1. About a month later, on April 4, 2019, Defendant filed a Motion to Dismiss Plaintiffs' Complaint. Motion to Dismiss (“Mot.”), Dkt. 8. On April 18, 2019, Plaintiffs filed an opposition to this motion. Opposition/Response re Motion to Dismiss (“Opp.”), Dkt. 18. Defendant filed a reply. Reply re Motion to Dismiss (“Reply”), Dkt. 19.

         On September 25, 2019, Plaintiffs filed a motion for leave to file an amended complaint. Notice of Motion and Motion for Leave to File First Amended Complaint (“Mot. AC”), Dkt. 21, 22. Defendant filed an opposition to this motion. Opposition re Motion for Leave to File (“Opp. AC”), Dkt. 27. Plaintiffs did not submit a reply. See N.D. Cal. Civ. L.R. 7-3(c) (requiring reply be filed within 7 days after the opposition was due).

         Before Plaintiffs initiated this action, they pursued an action in state court. On December 29, 2017, the state court granted Defendant's motion for summary adjudication on Plaintiffs' fraud and Section 17200 claims and request for punitive damages. Declaration of Alejandro E. Moreno (“Moreno Decl.”), Dkt. 27, Ex. 3 at 2. On January 2, 2018, the state court granted Defendant's motion for summary adjudication on Plaintiffs' negligence claim. Id. Additionally, on January 26, 2018, the state court dismissed Defendant, with prejudice and entered judgment in Defendant's favor for all causes of action raised in the complaint (fraud, negligence, violations of Section 17200, and punitive damages). Id.

         II. ...


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