Becker v. Wells Fargo Bank

Decision Date25 June 2013
Docket NumberNo. 2:12-cv-501 KJM CKD,2:12-cv-501 KJM CKD
PartiesDENNLY R. BECKER, Plaintiffs, v. WELLS FARGO BANK, et al., Defendants.
CourtU.S. District Court — Eastern District of California
ORDER

Plaintiff has filed three motions for reconsideration, two challenging rulings by the assigned magistrate judge and one challenging this court's order adopting findings and recommendations. The court ordered these motions submitted without argument.

I. The Motion for Reconsideration of an Order Adopting Findings and Recommendations
A. Background

On January 23, 2013, the magistrate judge issued findings and recommendations, recommending that plaintiff's complaint be dismissed and that the case be closed. ECF No. 64. Plaintiff filed objections on February 5, 2013, and on April 1, 2013, the court adopted the recommendation that plaintiff's claims for negligence, violation of the Real Estate Settlement Procedures Act (RESPA), violation of California Civil Code § 2923.6, and quiet title be dismissed without leave to amend, but gave plaintiff leave to file an amended complaint raisinghis fraud, false promise, elder abuse, and Unfair Competition Law (UCL) claims. ECF No. 69. On April 10, 2013, plaintiff filed a motion for reconsideration of this order, arguing that the magistrate judge's analysis of the claims dismissed with prejudice assumed that no fraud had been committed and so must be clearly erroneous in light of this court's granting leave to amend the fraud claims. ECF No. 71 at 2.

B. Standard

"A district court's power to rescind, reconsider, or modify an interlocutory order is derived from the common law, not from the Federal Rules of Civil Procedure." City of Los Angeles v. Santa Monica BayKeeper, 254 F.3d 882, 886 (9th Cir. 2001); McConnell v. Lassen County, No. CIV. S-05-0909 FCD DAD, 2008 WL 4482853, at *2 (E.D. Cal. Oct. 3, 2008) ("Where reconsideration of a non-final order is sought, the court has 'inherent jurisdiction to modify, alter, or revoke it.'" (quoting United States v. Martin, 226 F.3d 1042, 1048-49 (9th Cir. 2000)). In addition, Federal Rule of Civil Procedure 54(b) authorizes courts to revise "any order or other decision . . . that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties . . . at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." FED. R. CIV. P. 54(b); Regents v. University of Calif. v. Bernzomatic, No. CIV. 2:10-cv-1224 FCD GGH, 2011 WL 666912, at *2 (E.D. Cal. Feb. 11, 2011) (relying on Rule 54 in deciding whether to reconsider the denial of summary judgment); Ketchum v. City of Vallejo, No. Civ. S-05-1098 RRB JFM, 2007 WL 4356137, at *1 (E.D. Cal. Dec. 11, 2007) (relying on Rule 54 and court's inherent authority to reconsider its order).

Reconsideration is appropriate where there has been an intervening change in controlling law, new evidence has become available, or it is necessary to correct clear error or prevent manifest injustice. Cachil Dehe Band of Wintun Indians v. California, 649 F. Supp. 2d 1063, 1069 (E.D. Cal. 2009) (citing School Dist. No. 1J Multnomah County, Oregon v. AC&S Inc., 5 F.3d 1255, 1263 (9th Cir. 1993)). Accordingly, a motion for reconsideration is not anappropriate vehicle for rehashing arguments the court has already rejected. Howard v. Gutierrez, 571 F. Supp. 2d 145, 150 n.1 (D. D. C. 2008).

C. RESPA

In the original complaint, plaintiff alleged that he "requested information from Wells Fargo in great detail concerning the servicing of his loans" and on August 31, 2011, he sent a Qualified Written Request (QWR) to Wells Fargo Home Mortgage. The letter requests specific servicing information, including "payoff statements and evidence of indebtedness . . . ." ECF No. 1 ¶¶ 193-194. He continued that "[w]ithout the payoff information . . . plaintiff was not able to pay off the two properties and has to continue to make, or accrue, interest payments he otherwise would not have made." Id. ¶ 196.

In response to the magistrate judge's request, plaintiff submitted a copy of the letter. ECF No. 51. In this letter, plaintiff requested several categories of information: the amount of the unpaid balance and the total of all overdue payments; the amounts of periodic payments; the date on which the obligation is due; the date of the payment of real estate taxes; the amount of insurance in effect; the nature of any other charges that have become a lien on the property; and information on the propriety of transferring the obligation secured by the deed of trust to a new borrower. He also asked for a "payoff demand statement," providing the amount necessary to satisfy all obligations secured by the loan. Id. at 2-3.

The magistrate judge dismissed the claim, noting that even if the request for a payoff statement could be deemed a QWR, plaintiff had not alleged he suffered any pecuniary damages. ECF No. 64 at 7-8. In his reconsideration request, plaintiff alleges that his continued interest payments in the absence of payoff information constitutes sufficient pecuniary loss. ECF No. 71 at 5.

Whether or not plaintiff's continued interest payments constitute pecuniary loss under RESPA, the claim is not viable. Tamburri v. Suntrust Mortg., Inc., 875 F.Supp. 2d 1009, 1015 (N.D. Cal. 2012) (discussing the requirement that plaintiff plead pecuniary loss stemmingfrom servicer's failure to respond to QWR). "RESPA defines a 'qualified written request' as including, among other things, 'a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error.'" Petite v. Saxon Mortg. Servs., No. C08-5089RBL, 2009 WL 1325947, at *2 (W.D. Wash. May 12, 2009); 12 U.S.C. § 2605(e)(1)(B). In Eifling v. National City Mortgage, the court found that a borrower's letter was not a QWR, but rather "a general notice of inquiry about the various fees and charges, and a broad request for 22 categories of documentation. It also demanded what amounted to a concession that the loan payoff amount was the original principal amount of the loan." No. CV 10-5713 RBL, 2011 WL 893233, at *3 (W.D. Wash. Mar. 15, 2011). As in Eifling, plaintiff did not suggest that the account was in error, but rather asked for several categories of information and a payoff request. As his letter is not a QWR, there was no clear error of law in dismissing this claim.

D. Civil Code Section 2923.6 and 12 C.F.R. Section 34.621

In the original complaint, plaintiff alleges that he has a Wells Fargo deposit account and owns Wells Fargo stock; that, on information and belief, his money held by Wells Fargo has no specific intended purpose and is used to originate home loans, and "[t]hus Plaintiff is a member of the Wells Fargo loan pool." ECF No. 1 ¶ 135. He then alleges that under 12 C.F.R. section 34.62(b)(1)(i), Wells Fargo's real estate lending policies must be consistent with safe and sound banking practices. Id. ¶ 222. He further alleges that under California Civil Code section 2923.6, a loan servicer's duty to maximize net present value is owed to all parties in a loan pool and a servicer acts in the best interests of all parties to the loan pool if it modifies loans under certain conditions. Id. ¶ 224. He further alleges that for Wells Fargo to comply with the quoted regulation and statute, it "must make plaintiff loan modifications for his Hardy Pace and 244 Stone Quarry Way loans at market conditions when he requested the modifications. Id.¶ 226. The magistrate judge granted the motion to dismiss this claim on the ground that Civil Code section 2923.6 does not create a private right of action. ECF No. 9.2

Plaintiff argues that he is not suing as a borrower, but rather as a member of the loan pool and so the magistrate judge's conclusion is clearly erroneous. The court does not agree. First, plaintiff's claim that he is a member of the loan pool entitled to enforce the cited statute and regulation is wholly conclusory, based only on his allegation that his funds on deposit in Wells Fargo might be used by the bank to fund home loans. Even a claim made on information and belief must contain sufficient factual content that makes the claim plausible. Klohs v. Wells Fargo Bank, 901 F. Supp. 2d 1253, 1260 n.2 (D. Haw. 2012). Plaintiff made no attempt to allege, much less to provide specific factual allegations, that any home loans arose from Wells Fargo's use of the money in his account and has not suggested in any documents filed in opposition or objection that membership in a loan pool arises from deposits or even stock ownership. He has provided nothing suggesting that he can plead a viable claim under the statute. Second, even assuming that 12 C.F.R. section 34.62 regarding real estate lending practices applies to a bank when it acts as a servicer, plaintiff has not suggested that the regulation creates a private right of action. See Alexander v. Sandoval, 532 U.S. 275, 286 (2001); Cort v. Ash, 422 U.S. 66, 78 (1975); Williams v. United Airlines, Inc., 500 F.3d 1019, 1023 (9th Cir. 2007).

Plaintiff says he intends to include his arguments based on these sections as part of his claim that Wells Fargo's practices violated the UCL, California Business and Professions Code section 17200. "To bring a UCL claim, a plaintiff must show either an (1) unlawful, unfair, or fraudulent business act or practice, or (2) unfair, deceptive, untrue or misleading advertising." Lippit v. Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1043 (9th Cir. 2003) (internal quotations omitted); Gardner v. Am. Home Mortg. Servicing, Inc., 691 F. Supp. 2d1192, 1201 (E.D. Cal. 2010). A plaintiff must also show that he or she suffered a loss of money or property and that this economic injury was caused by the challenged business practice. Thomas v. Costco Wholesale Corp., No. 5:12-CV-02908 EJD, 2013 WL 1435292, at *4 (N.D. Cal. Apr. 9, 2013); Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 322-23 (2011).

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