Valenzuela v. Wells Fargo Bank Nat'l Ass'n

• Decision Date: 28 January 2014
• Docket Number: CASE NO. CV F 13-1620 LJO JLT
• Court: U.S. District Court — Eastern District of California
• Parties: MARIO VALENZUELA, Plaintiff, v. WELLS FARGO BANK NATIONAL ASSOCIATION, et al., Defendants.

MARIO VALENZUELA, Plaintiff, v. WELLS FARGO BANK NATIONAL ASSOCIATION, et al., Defendants.

CASE NO. CV F 13-1620 LJO JLT

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

Dated: January 28, 2014

ORDER TO DISMISS DEFENDANTS

WELLS FARGO AND NORTHWEST

TRUSTEE SERVICES AND JUDGMENT

THEREON

(Docs. 18, 25.)

PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

Judges in the Eastern District of California carry the heaviest caseload in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. This Court cannot address all arguments, evidence and matters raised by parties and addresses only the arguments, evidence and matters necessary to reach the decision in this order given the shortage of district judges and staff. The parties and counsel are encouraged to contact United States Senators Dianne Feinstein and Barbara Boxer to address this Court's inability to accommodate the parties and this action.

INTRODUCTION

Defendants Wells Fargo Bank, N.A. ("Wells Fargo") and Northwest Trustee Services, Inc. ("Northwest") seek to dismiss as meritless and legally barred plaintiff Mario Valenzuela's("Mr. Valenzuela's") wrongful foreclosure and related claims arising from his loan default and initiation of foreclosure on Mr. Valenzuela's Bakersfield property ("property"). This Court considered Wells Fargo's and Northwest's F.R.Civ.P. 12(b)(6) motions to dismiss on the record without a hearing, pursuant to Local Rule 230(c), (g), and in the absence of Mr. Valenzuela's timely opposition or amended complaint as a matter of course. This Court construes Mr. Valenzuela's action as an attempt to thwart, delay and complicate property foreclosure and, for further reasons discussed below, DISMISSES this action against Wells Fargo and Northwest.

BACKGROUND

Mr. Valenzuela's Loan And Its Assignment

Mr. Valenzuela executed a deed of trust ("DOT") to secure the property for a $94,299 note ("note") payable to Accubanc Mortgage Corporation ("Accubanc"). The DOT was recorded on December 24, 1997¹ and named Mr. Valenzuela as borrower and trustor and Accubanc as lender, trustee and beneficiary. The DOT addresses its assignment: "The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower . . ."

By a corporation assignment of deed of trust recorded on July 8, 1999, Accubanc assigned the DOT and its underlying note to PNC Mortgage Corp. of America ("PNC"). In 2001, PNC changed its name to Washington Mutual Home Loans, Inc. ("WMHLI"), which according to Mr. Valenzuela's operative complaint,² merged into defendant WMHLI Transfer Interim LP ("Transfer Interim LP"). The complaint notes that in 2002, Transfer Interim LP filed with the Ohio Secretary of State a Certificate of Cancellation/Cancellation Amendment Withdrawal of Limited Partnership or Partnership Having Limited Liability based on "Partnership ceasing to have a least two partners."

Mr. Valenzuela's Initial Default And Loan Assignment To Wells Fargo

By the end of 2004, Mr. Valenzuela had failed to make loan payments to result in theDecember 22, 2004 recording of a notice of default and election to sell under deed of trust. A notice of trustee's sale was recorded to set a June 8, 2005 property sale. To avoid the trustee's sale, Mr. Valenzuela and Washington Mutual Bank, F.A. ("Washington Mutual"), as lender, entered into a June 1, 2005 Loan Modification Agreement to adjust Mr. Valenzuela's loan terms. Wells Fargo characterizes Washington Mutual as WMHLI's successor. On January 26, 2007, a Corporate Assignment of Deed of Trust ("Wells Fargo assignment") was recorded to assign to Wells Fargo the interest under the DOT of Washington Mutual Bank f/k/a Washington Mutual Bank, FA, successor by merger to Washington Mutual Home Loans, Inc., f/k/a PNC Mortgage Corp. of America.

By a corporate assignment of deed of trust recorded on October 27, 2011, Wells Fargo assigned its interest under the DOT to EMC Mortgage LLC ("EMC"). Wells Fargo thereafter serviced Mr. Valenzuela's loan for EMC.

Mr. Valenzuela's Further Default

After Mr. Valenzuela again failed to make loan payments, a notice of default and election to sell under deed of trust was recorded on March 26, 2012. On June 27, 2012, a substitution of trustee was recorded to substitute Northwest as DOT trustee. On September 16, 2013, Northwest recorded a notice of trustee's sale to set an October 9, 2013 trustee's sale.

On October 8, 2013, Mr. Valenzuela filed the complaint, and the trustee's sale apparently did not proceed.

Mr. Valenzuela's Claims

The gist of the complaint is that neither Wells Fargo, Northwest nor Transfer Interim LP "can establish an independent ownership interest in the Note and Deed of Trust against the Property" to authorize property foreclosure. In particular, the complaint alleges:

All of Defendants' actions are predicated on a void assignment of the Note and Deed of Trust against the Property to Defendant Wells Fargo . . . from Washington Mutual Bank . . . because Washington Mutual Bank never acquired the Note and Deed of Trust against the Property as the only assignee's successor and last known beneficiary of the Note and Deed of Trust was Defendant Interim LP . . . . Defendant Interim LP cancelled its limited partnership without making any further assignment or designating any other party to wind up its assets . . . . Therefore, it is unknown what entity or party, if any, actually has any beneficial rights and there is no record that anyentity or party has a secured right under any deed of trust against the Property.

The complaint, among other things, challenges property foreclosure, seeks to quiet title in Mr. Valenzuela's favor, and alleges California and federal statutory claims which are addressed below.

DISCUSSION

F.R.Civ.P. 12(b)(6) Motion To Dismiss Standards

A F.R.Civ.P. 12(b)(6) dismissal is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9^th Cir. 1990); Graehling v. Village of Lombard, Ill., 58 F.3d 295, 297 (7^th Cir. 1995). A F.R.Civ.P. 12(b)(6) motion "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9^th Cir. 2001).

In addressing dismissal, a court must: (1) construe the complaint in the light most favorable to the plaintiff; (2) accept all well-pleaded factual allegations as true; and (3) determine whether plaintiff can prove any set of facts to support a claim that would merit relief. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). Nonetheless, a court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Sciences Securities Litig., 536 F.3d 1049, 1055 (9^th Cir. 2008) (citation omitted). A court "need not assume the truth of legal conclusions cast in the form of factual allegations," U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643, n. 2 (9^th Cir.1986), and must not "assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated . . . laws in ways that have not been alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897 (1983). A court need not permit an attempt to amend if "it is clear that the complaint could not be saved by an amendment." Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9^th Cir. 2005).

A plaintiff is obliged "to provide the 'grounds' of his 'entitlement to relief' [which] requires more than labels and conclusions, and a formulaic recitation of the elements of a causeof action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 554,127 S. Ct. 1955, 1964-65 (2007) (internal citations omitted). Moreover, a court "will dismiss any claim that, even when construed in the light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action." Student Loan Marketing Ass'n v. Hanes, 181 F.R.D. 629, 634 (S.D. Cal. 1998). In practice, a complaint "must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562, 127 S.Ct. at 1969 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7^th Cir. 1984)).

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009), the U.S. Supreme Court explained:

. . . a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." . . . 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. (Citations omitted.)

After discussing Iqbal, the Ninth Circuit summarized: "In sum, for a complaint to survive [dismissal], the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Service, 572 F.3d 962, 989 (9^th Cir. 2009) (quoting Iqbal, 556 U.S. 662, 129 S.Ct. at 1949).

The U.S. Supreme Court applies a "two-prong approach" to address dismissal:

First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. . . . Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that

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