Diaz–Amador v. Wells Fargo Home Mortgs.

Decision Date24 February 2012
Docket NumberNo. CV–11–243–TUC–DCB.,CV–11–243–TUC–DCB.
Citation856 F.Supp.2d 1074
PartiesGabriel DIAZ–AMADOR, et al., Plaintiffs, v. WELLS FARGO HOME MORTGAGES, et al., Defendants.
CourtU.S. District Court — District of Arizona

OPINION TEXT STARTS HERE

Gregory L. Droeger, Law Offices of Gregory L. Droeger, Nogales, AZ, for Plaintiffs.

Gregory James Marshall, Snell & Wilmer LLP, Phoenix, AZ, for Defendants.

ORDER

DAVID C. BURY, District Judge.

Magistrate Judge Estrada signed a Report and Recommendation on February 6, 2012, recommending that the District Court grant the Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint and allow Plaintiffs leave to file a Second Amended Complaint. A copy was sent to all parties on February 7, 2012, notifying all parties that written objections must be filed within fourteen days of service. Fed.R.Civ.P. 72(b)(2). No objections to the Magistrate Judge's Report and Recommendation have been filed. Consequently, any objections that have not been raised are waived and will not be addressed by the Court.

The Court, having made an independent review of the record, orders as follows:

IT IS ORDERED that Magistrate Judge Estrada's Report and Recommendation (Doc. 16) is ACCEPTED and ADOPTED by this Court as the findings of fact and conclusions of law.

IT IS ORDERED that Defendants' Motion to Dismiss (Doc. 13) is GRANTED without prejudice to Plaintiffs filing a Second Amended Complaint on or before March 16, 2012 and attempt to cure any pleading infirmities. This action will not be referred back to the Magistrate Judge, consequently all future filings should bear the following case number: CV–11–243–TUC–DCB.

REPORT & RECOMMENDATION

HÉCTOR C. ESTRADA, United States Magistrate Judge.

Pending before the Court is Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss Plaintiffs' First Amended Complaint.1 (Doc. 13). Plaintiffs have filed their Response (Doc. 14) and Defendant has filed a Reply (Doc. 15). For the foregoing reasons, the Magistrate Judge recommends that the District Court grant in part and deny in part Defendant's Motion to Dismiss Plaintiff's First Amended Complaint.

I. FACTUAL & PROCEDURAL BACKGROUND

On April 21, 2011, this matter was removed from the Superior Court of the State of Arizona for the County of Santa Cruz on the basis of diversity jurisdiction. (Doc. 1). On May 23, 2011, Plaintiffs, through counsel, filed their First Amended Complaint (hereinafter “FAC”) (Doc. 11). The following is a summary of Plaintiffs' allegations in their FAC. Plaintiffs previously owned a single family residence at 1693 Ruido Court, Rio Rico, Santa Cruz County, Arizona, which is the subject of this lawsuit. (FAC ¶ 1). On or about November 20, 2002, they, “as borrower and trustor, executed a promisory note and deed of trust ( [hereinafter] “deed of trust”), securing the subject property to a loan made by WF[HM] to Plaintiffs in the sum of $135,751.00.” ( Id. at ¶ 5). Thereafter, on October 22, 2010, WFHM “noticed a trustee sale, A.R.S. § 33–801, et seq., for the subject property, with a sale date of January 21, 2011.” ( Id. at ¶ 6). Upon notification of the notice of trustee sale, Plaintiffs requested “a loan modification, offering as an inducement a lien on two adjoining unencumbered lots wholly owned by Plaintiffs and necessary to the full enjoyment of the single family residence.” ( Id. at ¶ 7). WFHM informed Plaintiffs that the trustee sale would be postponed until February 2011, while WFHM “fully investigated the offer.” ( Id. at ¶ 9). Prior to February 16, 2011, WFHM rejected Plaintiffs' offer and informed Plaintiffs that the sale would proceed on February 25, 2011. ( Id. at ¶ 10). On February 16, 2011, Plaintiffs wrote to Mark C. Oman, Senior Executive Vice President of WFHM to request further review of their offer. ( Id. at ¶ 11). On February 22, 2011, Robin Webb, who identified herself as a Vice President of WFHM, informed Plaintiffs that WFHM agreed to further investigation of their offer and that the sale would be postponed until March 2, 2011. ( Id. at ¶ 12). Plaintiffs did not exercise their right to reinstate, A.R.S. § 33–813, by 5:00 p.m., February 24, the day prior to a sale set for February 25.” ( Id. at ¶ 13).

On or about February 26, 2011, WFHM informed Plaintiffs “that the sale had inadvertently gone forward on February 25, and that Defendant Wells Fargo was now the owner by trustee deed recorded on March 3, 2011....” ( Id. at ¶ 14). On March 21, 2011, Plaintiffs were informed “by an attorney from Wells Fargo ...” that a forcible entry and detainer action “had been filed or would be filed naming ...” them as defendants. ( Id. at ¶ 15).

Plaintiffs' action is based upon four counts: (1) Contract (Count One); (2) Breach of A.R.S. § 33–813 (Count Two); (3) Reformation (Count Three); and (4) Injunction (Court Four). Plaintiffs allege that they have lost the equity in their residence.2 (FAC, ¶ 19).

Defendant moves for dismissal of Plaintiffs' FAC for failure to state a claim.

II. DISCUSSIONA. STANDARD

To state a claim for relief under Rule 8(a) of the Federal Rules of Civil Procedure, a plaintiff must make ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order 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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations omitted). Further, [t]o survive a motion to dismiss [under Fed.R.Civ.P. 12(b)(6) ], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face;’ that is, plaintiff must ‘plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir.2010), cert. denied,––– U.S. ––––, 132 S.Ct. 95, 181 L.Ed.2d 24 (2011) ( quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)); see also Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir.2009) (to defeat a motion to dismiss, the “non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.”). Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1990).

[T]he tenet that a court must accept as true all of the allegations contained in a complaint ...” does not apply to legal conclusions. Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949;see also Telesaurus, 623 F.3d at 1003 (pleadings that are no more than legal conclusions ‘are not entitled to the assumption of truth.’ ( quoting Iqbal, 556 U.S. at 679, 129 S.Ct. at 1950)). Thus, [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949. Moreover, the court “cannot assume any facts necessary to [the plaintiffs'] ... claim that they have not alleged.” Jack Russell Terrier Network of Northern Calif. v. American Kennel Club, Inc., 407 F.3d 1027, 1035 (9th Cir.2005).

However, the court will assume ‘well-pleaded factual allegations,’ ... to be true, ‘and then determine whether they plausibly give rise to an entitlement to relief.’ Telesaurus, 623 F.3d at 1003 ( quoting Iqbal, 556 U.S. at 678, 129 S.Ct. at 1950);see also Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949 (“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949. Determining plausibility is a “context-specific task ...” that requires the court to “draw on its judicial experience and common sense.” Id. at 679, 129 S.Ct. at 1950. A complaint cannot survive dismissal where the court can only infer that a claim is merely possible rather than plausible. Id.

B. Count One: Contract

Plaintiffs allege that “the agreement to forebear foreclosure until March 2, 2011 was an executory accord between [WFHM] and Plaintiffs and that by allowing the trustee sale to proceed on February 25, 2011, Defendants materially breached the terms of the accord. (FAC, ¶¶ 17–18). Thus, Plaintiffs' claim appears to be that the alleged February 22, 2011 phone call from Robin Webb informing them that WFHM “agreed to further investigation and that the sale had accordingly been postponed to March 2, 2011 constituted an executory accord.3 ( Id. at ¶ 12). No reading of the FAC leads to the conclusion that Plaintiffs are contending that the agreement, i.e., “executory accord” was an acceptance of the actual loan modification proposed by Plaintiffs, that being a lien on the two lots wholly owned by Plaintiffs that adjoined the subject property.

“An agreement between the parties to the satisfaction of an existing claim by a future substituted performance is an accord executory.” Leschorn v. Xericos, 121 Ariz. 77, 79, 588 P.2d 370, 373 (App.1978). See also 13 Sarah Howard Jenkins, Corbin on Contracts, § 69.1, p. 273 (Revised ed.2003) (hereinafter Corbin on Contracts”) (“The term ‘accord executory’, more commonly referred to as an ‘executory accord,’ means an agreement for the future discharge of an existing claim by a substituted performance.”) (emphasis in original). [T]o constitute discharge of a claim by way of an accord and satisfaction, in the form of an express or implied contract[,] ... [t]he following elements are essential: (1) a proper subject matter; (2) competent parties; (3) an assent or meeting of the minds of the parties[;] and (4) a consideration....” Rossi v. Stewart, 90...

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