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Gil v. Wells Fargo Bank, N.A.

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

July 13, 2016

ERLINDA GIL, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.


          EDWARD J. DAVHA United States District Judge

         Plaintiff Erlinda Gil (“Plaintiff”) contends in this action that Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) engaged in misconduct related to a “bad faith review” of loan modification applications, and recorded documents containing false statements against her real property. Presently before the court is Wells Fargo’s Motion to Dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), which Plaintiff opposes. Dkt. Nos. 23, 28.

         Federal jurisdiction arises under 28 U.S.C. § 1332. Having carefully reviewed the pleadings in conjunction with the arguments of counsel, the court has determined that all causes of action are barred by the judicial estoppel doctrine. Thus, Wells Fargo’s Motion to Dismiss will be granted and the causes of action will be dismissed without leave to amend for the reasons explained below.

         I. BACKGROUND

         In October, 1997, Plaintiff and her now-deceased husband purchased real property located in Milpitas, California, with a “mortgage loan they received from a third party lender.” Compl., Dkt. No. 1, at ¶ 15. The $345, 000 loan was secured by a deed of trust to the Milpitas property. Id. Plaintiff later refinanced the loan in April, 2007, through Wachovia Bank, FSB, and executed a promissory note in the amount of $750, 000 to Wachovia. Id. at ¶ 16; Req. for Judicial Notice (“RJN”), Dkt. No. 24, at Ex. A.[1] The note was also secured by a deed trust to the Milpitas property. Id.; RJN at Ex. B. Plaintiff alleges she “received a high interest, negative amortization, variable rate mortgage loan” from Wachovia. Id. at ¶ 17. Wachovia subsequently merged with Wells Fargo. Id. at ¶ 19; RJN at Exs. C-G.

         Although Plaintiff made payments under the loan for several years, the monthly payment eventually became “unsustainable/unaffordable.” Id. at ¶ 18. Plaintiff alleges she “had no choice but to default” in 2009. Id. In response, Wells Fargo caused a Notice of Default to be recorded on February 4, 2010, which Plaintiff alleges falsely stated that it tried to contact her with due diligence. Id. at ¶¶ 20-23. A Notice of Trustee’s Sale was recorded on behalf of Wells Fargo on May 7, 2010. Id. at ¶ 24.

         Plaintiff applied to Wells Fargo for a loan modification in late 2011. Id. at ¶ 25. On March 16, 2012, Plaintiff alleges the single point of contact assigned by Wells Fargo notified her she was approved for a Trial Payment Plan, or “TPP.” Id. at ¶ 26. Plaintiff was also informed the TPP documents would be sent to her and that in order to accept the offer, she would need to make all three TPP payments on time. Id. at ¶ 27.

         Plaintiff alleges, however, that she never received the TPP documents and, after several inquiries, was eventually told her application had “gotten stale” and that a new loan modification application would need to be submitted. Id. at ¶¶ 28-35. Plaintiff faxed a new, complete application to Wells Fargo on June 30, 2012, which was denied for “insufficient income.” Id. at ¶¶ 36, 37. Three subsequent applications submitted by Plaintiff were also denied, and a second Notice of Trustee’s Sale was recorded on March 27, 2015. Id. at ¶¶ 38-41, 44.

         Plaintiff initiated this action on April 21, 2015, and asserts the following causes of action against Wells Fargo: (1) violation of California Civil Code § 2923.7; (2) violation of California Civil Code § 2923.5; (3) violation of California Civil Code § 2924.17; (4) negligence; (5) breach of the covenant of good faith and fair dealing; (6) promissory estoppel; (7) intentional misrepresentation; (8) violation of California Welfare & Institutions Code § 15610.30; and (9) violation of the Unfair Competition Law, California Business & Professions Code § 17200.

         The instant motion followed.


         Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). The factual allegations “must be enough to raise a right to relief above the speculative level” such that the claim “is plausible on its face.” Id. at 556-57. A complaint that falls short of the Rule 8(a) standard may be dismissed if it fails to state a claim upon which relief can be granted. 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).

         When deciding whether to grant a motion to dismiss, the court must generally accept as true all “well-pleaded factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). The court must also construe the alleged facts in the light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1988). However, “courts are not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678.

         Also, the court generally does not consider any material beyond the pleadings for a Rule 12(b)(6) analysis. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990). Exceptions to this rule include material submitted as part of the complaint or relied upon in the complaint, and material subject to ...

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