Mullins v. Wells Fargo Bank, N.A.
| Decision Date | 24 May 2013 |
| Docket Number | No. 2:13-cv-0453 JAM KJN PS,2:13-cv-0453 JAM KJN PS |
| Court | U.S. District Court — Eastern District of California |
| Parties | BRUCE A. MULLINS & WORLANDA F. MULLINS, Plaintiffs, v. WELLS FARGO BANK, N.A., Defendant. |
Plaintiffs Bruce A. Mullins and Worlanda F. Mullins, proceeding without counsel, initially commenced this action in the Solano County Superior Court on January 30, 2013, asserting several federal and state law claims related to their residential home loan against defendant Wells Fargo Bank, N.A., successor by merger with Wells Fargo Bank Southwest, N.A., formerly known as Wachovia Mortgage, FSB, formerly known as World Savings Bank, FSB ("Wells Fargo"). (See Complaint, Ex. A to Notice of Removal, ECF No. 1 at 18-36, ["Compl."].)1 Thereafter, on March 6, 2013, Wells Fargo removed the action to this court,invoking the court's federal question and diversity of citizenship jurisdiction. (ECF No. 1.)2
Subsequently, on March 20, 2013, Wells Fargo filed the instant motion to dismiss plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 7.) The motion was initially noticed for hearing on May 2, 2013, but the hearing was later continued to May 23, 2013, on the court's own motion. (ECF Nos. 7, 9.) On May 8, 2013, plaintiffs filed an opposition to the motion, and Wells Fargo filed a reply brief on May 9, 2013. (ECF. Nos. 10, 11.)
At the hearing on May 23, 2013, plaintiff Bruce A. Mullins appeared on behalf of himself and his wife, plaintiff Worlanda F. Mullins, who was absent for medical reasons. Attorney David Newman appeared telephonically on behalf of Wells Fargo. After considering the parties' briefs, the parties' oral arguments, and the applicable law, the court grants Wells Fargo's motion to dismiss with leave to amend.
The background facts are taken from plaintiffs' operative complaint and certain public records and government documents offered by Wells Fargo that are subject to judicial notice.3 According to a deed of trust dated October 6, 2006, and recorded on October 13, 2006, plaintiffs borrowed $446,000.00 from World Savings Bank, FSB,4 pursuant to a written promissory note and secured by a deed of trust on real property located at 3017 Overlook Drive, Vallejo, California (the "Property"), where plaintiffs currently reside. 5 Plaintiffs allege that, although they met the credit criteria for a prime fixed rate mortgage loan, World Savings (now Wells Fargo), in events leading up to the origination of the loan, recommended that plaintiffs instead opt for a "Pick-A-Pay" adjustable rate mortgage loan, suggesting that after plaintiffs' credit rating increased over a couple of years, plaintiffs could refinance for an exceptional prime rate. (Compl. ¶¶ 3-4.)
According to plaintiffs, they subsequently began to experience difficulties in affording their monthly payments when the mortgage interest rate increased on a cyclical basis, and the value of the Property also significantly diminished. (Compl. ¶ 4.) Plaintiffs were apparently at one point offered a one-year trial modification of the loan, and were thereafter presented with two (2) Loan Modification Options with incremental payment adjustments and optional balloon payments. (Id.) Plaintiffs assert that the proposed modified principal balances under these options provided them with no credit for monthly payments made over several past years, and that they would never realize any equity value in their home. (Id.) Plaintiffs generally assert that Wells Fargo had no intent of actually providing plaintiffs with a meaningful loan modification. (Id. ¶ 33.) Additionally, plaintiffs claim that despite Wells Fargo reassuring them that they were getting a loan modification, Wells Fargo was also actively foreclosing on the Property. (Id. ¶ 34.) In that regard, plaintiffs further allege that Wells Fargo issued a Notice of Default around July 2009, without first contacting plaintiffs to explore options to avoid foreclosure in accordance with California Civil Code section 2923.5. (Id. ¶¶ 43-46.)
Plaintiffs also state that a mortgage loan forensic analysis and audits have revealed a number of procedural improprieties with respect to the loan origination process, including with respect to certain statements, notices, disclosures, and booklets that were either not in the loan file, not provided to plaintiffs, or were not dated and signed properly. (Compl. ¶¶ 7-15, 17.) Plaintiffs state that they did not understand the loan documents they were signing and that they were not encouraged to read them. (Id. ¶ 16.) Plaintiffs further include vague allegations regarding "Improper Securitization" of the loan/note and "Improper Assignment" of the mortgage or deed of trust. (Id. ¶ 18.)
Based on these allegations, plaintiffs assert the following seven causes of action for: (1) fraudulent inducement to breach of contract; (2) violation of the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. ("TILA"); (3) fraud and conspiracy to commit fraud; (4) violation of California Civil Code section 2923.5; (5) predatory lending in violation of TILA; (6) unlawful business practices in violation of California Business and Professions Code section 17200, predicated on violation of California Civil Code section 2923.5; and (7) fraudulent business practices in violation of California Business and Professions Code section 17200, predicated on violation of California Civil Code section 2923.5. (Compl. ¶¶ 19-66.) Liberally construed, plaintiffs' complaint, in addition to these explicitly stated causes of action, also purports to assert claims for violation of the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq. ("RESPA") and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 et seq. ("ECOA"). (See, e.g., Compl. ¶¶ 7-15.)
As noted above, after removing the action to federal court, Wells Fargo filed the instant motion to dismiss.
A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the pleadings set forth in the complaint. Vega v. JPMorgan ChaseBank, N.A., 654 F. Supp. 2d 1104, 1109 (E.D. Cal. 2009). Under the "notice pleading" standard of the Federal Rules of Civil Procedure, a plaintiff's complaint must provide, in part, a "short and plain statement" of plaintiff's claims showing entitlement to relief. Fed. R. Civ. P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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." Id.
In considering a motion to dismiss for failure to state a claim, the court accepts all of the facts alleged in the complaint as true and construes them in the light most favorable to the plaintiff. Corrie v. Caterpillar, Inc., 503 F.3d 974, 977 (9th Cir. 2007). The court is "not, however, required to accept as true conclusory allegations that are contradicted by documents referred to in the complaint, and [the court does] not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Paulsen, 559 F.3d at 1071. The court must construe a pro se pleading liberally to determine if it states a claim and, prior to dismissal, tell a plaintiff of deficiencies in his complaint and give plaintiff an opportunity to cure them if it appears at all possible that the plaintiff can correct the defect. See Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000) (en banc); accord Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990) (); see also Hebbe v. Pliler, 627 F.3d 338, 342 & n.7 (9th Cir. 2010) ().
In ruling on a motion to dismiss filed pursuant to Rule 12(b)(6), the court "may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Outdoor Media Group, Inc. v. City ofBeaumont, 506 F.3d 895, 899 (9th Cir. 2007) (citation and quotation marks omitted). Although the court may not consider a memorandum in opposition to a defendant's motion to dismiss to determine the propriety of a Rule 12(b)(6) motion, see Schneider v. Cal. Dep't of Corrections, 151 F.3d 1194, 1197 n.1 (9th Cir. 1998), it may consider allegations raised in opposition papers in deciding whether to grant leave to amend, see, e.g., Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003).
With these principles in mind, the court now turns to Wells Fargo's motion to dismiss.
After reviewing Wells Fargo's request for judicial notice in support of its motion to dismiss, the court grants it in part and denies it in part. "The court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). A court may take judicial notice of "matters of public record." Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).
The court takes judicial notice of Exhibit A to the request for judicial notice, a deed of trust dated October 6, 2006, because it was recorded in the official records of the Solano County Recorder's office...
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