Park v. Wells Fargo Bank, N.A.
Filing
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ORDER by Judge Hamilton granting 6 Motion to Dismiss (pjhlc1, COURT STAFF) (Filed on 8/13/2012) (Additional attachment(s) added on 8/13/2012: # 1 Certificate/Proof of Service) (nah, COURT STAFF).
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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HYUK H. PARK,
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For the Northern District of California
United States District Court
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Plaintiff,
No. C 12-2065 PJH
v.
ORDER GRANTING MOTION
TO DISMISS
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WELLS FARGO BANK, et al.,
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Defendants.
_______________________________/
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Now before the court is defendant’s motion for an order dismissing the complaint for
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failure to state a claim. Plaintiff filed no opposition to the motion within the time allowed
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under Civil Local Rule 7-3. Having read defendant’s papers and carefully considered its
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arguments and the relevant legal authority, the court hereby GRANTS defendant’s motion.
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BACKGROUND
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In September 2007, plaintiff Hyuk H. Park borrowed $656,000 from World Savings
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Bank, FSB (“World Savings”), secured by a deed of trust against real property located in
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Daly City, California (“the Property”). In January 2008, World Savings was renamed
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Wachovia Mortgage, FSB (“Wachovia”), which in turn was merged into Wells Fargo Bank,
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N.A. (“Wells Fargo”) in November 2009.
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Plaintiff failed to make the payments on the loan as agreed, and in August 2011, a
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Notice of Default and Election to Sell Under Deed of Trust was recorded against the
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Property. Also in August 2011, NDeX West, LLC (“NDeX”) was substituted as trustee
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under the deed of trust. A Notice of Trustee Sale was executed on October 27, 2011,
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noticing a sale date of November 22, 2011. The Property was sold that day.
Plaintiff filed this action in the Superior Court of California, County of San Mateo, on
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February 3, 2012, alleging six causes of action under state law – fraudulent concealment,
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intentional misrepresentation, negligent misrepresentation, injunctive relief, unfair
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competition under Business and Professions Code § 17200, and violation of the Rosenthal
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Fair Debt Collection Practices Act.
On April 25, 2012, defendant Wells Fargo Bank, N.A. a/k/a Wachovia Mortgage, a
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Division of Wells Fargo Bank N.A., and f/k/a Wachovia Mortgage, FSB c/o NDEX West,
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LLC, f/k/a World Savings Bank, FSB (“Wells Fargo”), filed a notice of removal, alleging
diversity jurisdiction.
On May 2, 2012, Wells Fargo filed the present motion to dismiss. On May 14, 2012,
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For the Northern District of California
United States District Court
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Wells Fargo consented to the jurisdiction of the Magistrate Judge to whom the case was
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then assigned. However, when plaintiff failed to file an opposition to the motion to dismiss,
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the Magistrate Judge vacated the hearing date and ordered the case reassigned. On July
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11, 2012, the case was reassigned to the undersigned District Judge.
DISCUSSION
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A.
Legal Standard
Federal Rule of Civil Procedure 8 requires that a complaint include a “short and plain
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statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
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A complaint may be dismissed under Rule 12(b)(6) for failure to state a claim if the plaintiff
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fails to state a cognizable legal theory, or has not alleged sufficient facts to support a
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cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.
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1990). The court is to “accept all factual allegations in the complaint as true and construe
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the pleadings in the light most favorable to the nonmoving party.” Outdoor Media Group,
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Inc. v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir. 2007).
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To survive a motion to dismiss for failure to state a claim, the plaintiff must allege
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“enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v.
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Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff
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pleads factual content that allows the court to draw the reasonable inference that the
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defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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(citation omitted). In the event dismissal is warranted, it is generally without prejudice,
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unless it is clear the complaint cannot be saved by any amendment. See Sparling v. Daou,
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411 F.3d 1006, 1013 (9th Cir. 2005).
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Additionally, in actions alleging fraud, “the circumstances constituting fraud or
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mistake shall be stated with particularity.” Fed. R. Civ. P. 9(b). Under Rule 9(b), the
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complaint must allege specific facts regarding the fraudulent activity, such as the time,
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date, place, and content of the alleged fraudulent representation, how or why the
representation was false or misleading, and in some cases, the identity of the person
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For the Northern District of California
United States District Court
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engaged in the fraud. In re GlenFed Sec. Litig., 42 F.3d 1541, 1547-49 (9th Cir.1994).
A pleading filed by a pro se plaintiff must be liberally construed. Balistreri, 901 F.2d
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at 699. Pro se status, however, does not excuse a litigant from complying with the
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requirement of alleging facts, not conclusions, in his or her pleadings. See Brazil v. United
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States Dept. of Navy, 66 F.3d 193, 199 (9th Cir. 1995).
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B.
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Defendant’s Motion
As an initial matter, Wells Fargo asserts that plaintiff’s claim that Wells Fargo is not
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the true lender or mortgager is without merit. The court agrees. Numerous courts have
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addressed this very claim and have concluded that Wells Fargo is the successor to
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Wachovia and World Savings. See, e.g., Nguyen v. Wells Fargo Bank, N.A., 749 F.Supp.
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2d 1022, 1035 (N.D. Cal. 2010); DeLeon v. Wells Fargo Bank, N.A., 729 F.Supp. 2d 1119,
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1121 (N.D. Cal. 2010).
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Next, Wells Fargo argues that each of plaintiff’s six causes of action must be
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dismissed for failure to state a claim. The court finds that the motion must be GRANTED.
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First, the first through third causes of action fail to plead facts sufficient to support
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the elements of the claims. To state a claim for fraudulent concealment, the plaintiff must
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allege that (1) the defendant concealed or suppressed a material fact, (2) the defendant
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was under a duty to disclose the fact to the plaintiff, (3) the defendant intentionally
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concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff was
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unaware of the fact and would not have acted as he did if he had known of the concealed
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or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the
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plaintiff suffered damage. Kaldenbach v. Mutual of Omaha Life Ins. Co., 178 Cal. App. 4th
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830, 850 (2009).
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To state an intentional misrepresentation claim, the plaintiff must allege (1) a false
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representation as to material fact, (2) knowledge of its falsity, (3) intent to defraud,
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(4) actual and justifiable reliance, and (5) resulting damage. Wilhelm v. Pray, Price,
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Williams & Russell, 186 Cal. App. 3d 1324, 1331 (1986).
The elements of negligent misrepresentation are (1) the misrepresentation of a past
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For the Northern District of California
United States District Court
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or existing material fact, (2) without reasonable ground for believing it to be true, (3) with
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intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the
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misrepresentation, and (5) resulting damage. National Union Fire Ins. Co. v. Cambridge
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Integrated Servs. Group, Inc., 171 Cal. App. 4th 35, 50 (2009).
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In addition, as noted above, under Federal Rule of Civil Procedure 9(b), allegations
of fraud are required to be pled with particularity.
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Here, the fraud and misrepresentation claims do not come close to meeting these
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standards. Plaintiff makes broad and conclusory allegations about information that was
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supposedly suppressed or misrepresented. However, she provides no details regarding
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any of the alleged misrepresentations. Nor does she identify the person who made the
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alleged misrepresentations. In addition, the fraudulent concealment and negligent
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misrepresentation claims fail because plaintiff fails to plead any facts showing the existence
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of a duty of care.
Finally, the fraud claims are time-barred under California Code of Civil Procedure
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§ 338(d) (three-year statute of limitations), and the negligent misrepresentation claim is
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time-barred under California Code of Civil Procedure § 339 (two-year statute of limitations),
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as the allegations appear to relate to the loan transaction, which occurred in September
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2007.
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The claim for injunctive relief is based on an alleged failure to comply with California
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Civil Code § 2923.5. Wells Fargo contends that this claim fails because it is preempted by
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the federal Home Owners’ Loan Act, and because § 2923.5 provides no remedy once a
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property has been sold. The court agrees, and notes in particular that under Mabry v.
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Superior Court, 185 Cal. App. 4th 208 (2010), the sole remedy provided under § 2923.5 is
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a postponement of the foreclosure sale. Id. at 235. Once the sale has taken place, the
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statute does not provide a remedy. Id. at 214-15. Here, since the Property has been sold,
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plaintiff cannot seek a remedy under § 2923.5.
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Wells Fargo asserts that the unfair competition claim under § 17200 must also be
dismissed. To state a claim under § 17200, the plaintiff must allege particular facts
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For the Northern District of California
United States District Court
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showing that the defendant engaged in an unlawful, unfair, or fraudulent business act or
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practice. Plaintiff alleges that “defendants” violated § 17200 in various ways, including by
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“inducing [p]laintiff to accept mortgages for which they [sic] were not qualified based on
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inflated property valuations and undisclosed disregard of their own underwriting standards
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and the sale of overpriced collateralized mortgage pools, all the while knowing that the plan
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would crash and burn, taking [p]laintiff down and costing him [sic] the equity in her [sic]
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home and other damages;” and by “selling off overpriced loans by making willful and
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inaccurate credit disclosures regarding [d]efendants’ borrowers, including [p]laintiff, to third
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parties.” Cplt ¶¶ 75-76. However, the allegations are insufficient to state a claim.
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A UCL “unlawful” business practices claim “borrows” violations of other laws and
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treats those violations as unlawful practices, independently actionable under § 17200.
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Farmers Ins. Exch. v. Superior Court, 2 Cal. 4th 377, 383 (1992). Here, plaintiff has not
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stated a claim for unlawful business acts and practices, as there are no allegations
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sufficient to support a claim that Wells Fargo violated any specific law.
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To the extent that the complaint can be read as alleging a violation of the Fair Credit
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Reporting Act, 15 U.S.C. § 1681s-2(a), et seq., see Cplt ¶ 77, based on Wells Fargo’s
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alleged furnishing of inaccurate credit information, there is no private right of action under
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that section. See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153, 1154 (9th
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Cir.2009). To the extent that the complaint can be read as alleging a violation of the
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Gramm-Leach-Bliley Act, 15 U.S.C. § 6801, et seq., see Cplt ¶ 83, based on alleged
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disclosures of private information, there is also no private right of action for violations of
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that Act. See 15 U.S.C. § 6805(a). To the extent that the complaint purports to allege
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violation of the California Financial Information Privacy Act, Cal. Fin. Code § 4052.5 (with
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certain exceptions, prohibiting financial institutions from disclosing nonpublic personal
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information with “nonaffiliated third parties”), or violations of Article 1, § 1 of the California
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Constitution, plaintiff has failed to allege facts sufficient to put Wells Fargo on notice of the
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specific actions that form the basis of the alleged violation.
A UCL “unfair” business practices claim must allege conduct that threatened
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For the Northern District of California
United States District Court
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incipient violation of antitrust law, or that otherwise significantly threatens or harms
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competition. Byars v. SCME Mortg. Bankers, Inc., 109 Cal. App. 4th 1134, 1147 (2003);
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Scripps Cliinic v. Superior Court, 108 Cal. App. 4th 917, 940 (2003). Plaintiff has alleged
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no facts sufficient to state a claim under this standard.
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As for the UCL “fraudulent” business practices claim, any such claim is dismissed for
failure to plead fraud with particularity, as required by Rule 9(b).
As a further basis for dismissing the UCL claim, Wells Fargo argues that it is time-
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barred. As far as the court can ascertain from the rather incoherent allegations of the
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complaint, the alleged wrongdoing – based on underwriting, promotional activity,
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inadequate disclosures, and improper terms – all accrued by September 2007. Thus, as
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§ 17200 has a four-year statute of limitations, the statute had run by the time plaintiff filed
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the complaint in this action in February 2012.
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Finally, Wells Fargo argues that because the complaint challenges processing,
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origination, servicing, or sale or purchase of, or the investment or participation in, plaintiff’s
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mortgage, the state law claims asserted therein are preempted by HOLA. See 12 C.F.R. §
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560.2(b). The court agrees that the state-law claims appear to be preempted, but finds the
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allegations so inadequately pled that it is not possible to determine with certainty whether
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HOLA preemption applies.
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CONCLUSION
In accordance with the foregoing, the motion is GRANTED. The dismissal is with
leave to amend, as follows.
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To the extent that plaintiff alleges any claims based on actions taken within
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the limitation period, the complaint may be amended to allege such facts, subject to the
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proviso that any claim of fraud based on conduct occurring within the limitation period must
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be pled with particularity, as required by Rule 9(b).
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2.
To the extent that plaintiff alleges violations of any state laws that are not
preempted by HOLA – that is, any claim that does not involve a challenge to the
processing, origination, servicing, or sale or purchase of, or the investment or participation
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For the Northern District of California
United States District Court
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in, plaintiff’s mortgage – the complaint may be amended to allege such facts.
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3.
The cause of action for injunctive relief is dismissed with prejudice.
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4.
The § 17200 claim is dismissed with leave to amend to state a claim in
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accordance with the above discussion.
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Any amended complaint must be filed no later than September 17, 2012. No
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new causes of action or new defendants may be added without leave of court. If no
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amended complaint has been filed by that date, the action will be dismissed with prejudice.
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IT IS SO ORDERED.
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Dated: August 13, 2012
______________________________
PHYLLIS J. HAMILTON
United States District Judge
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