Malveaux v. Wells Fargo Bank, N.A.

JAMES P. MALVEAUX, Plaintiff, v. WELLS FARGO BANK, N.A.; BARRETT DAFFIN FRAPPIER TREDER & WEISS, LLP;FIRST AMERICAN TITLE COMPANY; BANK OF NEW YORK MELLON f/k/a BANK OF NEW YORK as Trustee forWORLD SAVINGS REMIC TRUST, MORTGAGE PASS-THROUGH CERTIFICATES,SERIES 19; RALPH PARTNERS II, LLC; AND ALL PERSONS KNOWN ORUNKNOWN CLAIMING AN INTEREST IN THE SUBJECT PROPERTY,and DOES 2 through 50, inclusive, Defendants.

Case No. 17-cv-05004-CW

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

October 2, 2018

ORDER GRANTING MOTIONS TO DISMISS SECOND AMENDED COMPLAINT

(Docket Nos. 53, 60, 63, 65, 71)

Now pending are motions to dismiss the Second Amended Complaint (2AC) by Wells Fargo Bank, N.A., formerly known as Wachovia Mortgage, FSB and World Savings Bank, FSB (Wells Fargo), and the Bank of New York Mellon, formerly known as the Bank of New York, Docket Number 53; Barrett Daffin Frappier Treder & Weiss, LLP (Barrett Daffin), Docket Number 60; First American Title Company (First American), Docket Number 63; Ralph Partners II, LLC (Ralph Partners), Docket Number 65; and Billie Malveaux, Docket Number 71. For the reasons set forth below, the motions are GRANTED.

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BACKGROUND AND PROCEDURAL HISTORY

The 2AC is the third complaint filed in this action by Plaintiff James P. Malveaux, who is represented by counsel. Docket No. 49. On December 28, 2017, the Court granted motions to dismiss the prior iteration of the complaint, the First Amended Complaint (1AC). In that Order, the Court noted that it would "grant[] one further opportunity for Plaintiff to amend his claims," and that "Plaintiff may replead any or all of his dismissed claims if he can truthfully allege, without contradicting the allegations in his previous complaints, facts sufficient to show that he is entitled to relief." Docket No. 36 at 2, 20. Plaintiff filed the 2AC on January 28, 2018. Docket No. 49.

In the 2AC, Plaintiff alleges the following facts. Plaintiff owns a single-family residence (the property) in Pacifica, California. On or about June 16, 2005, Plaintiff and his then-wife, Billie Malveaux, executed an adjustable rate mortgage secured by the property, consisting of a deed of trust, note, and adjustable rate rider. Plaintiff alleges that the loan was a "Pick-a-Payment" loan. 2AC ¶ 8 at 3.¹ The deed of trust identifies World Savings Bank, FSB, as the lender and original servicer and Defendant First American Title Company as the title insurance company.

Defendant Wells Fargo "holds itself out as the current servicer of Plaintiff's mortgage loan." Id. ¶ 2 at 2. BarrettDaffin provides legal services and "default and foreclosure services." Id. ¶ 3 at 2. The Bank of New York Mellon serves as trustee for the World Savings Remic Trust, Mortgage Pass-Through Certificates, Series 19. The role of Ralph Partners is not described in the 2AC, but in the 1AC, Plaintiff alleged that Ralph Partners had purchased the property in a foreclosure sale. See 1AC ¶ 79.

A notice of default and election to sell under the deed of trust was recorded on August 22, 2010. A notice of rescission of this notice of default was recorded on August 8, 2014.

On October 29, 2015, a substitution of trustee was recorded, appointing Barrett Daffin as trustee under the deed of trust. Plaintiff alleges that this substitution violates the terms of the deed of trust.

A second notice of default and election to sell under the deed of trust was issued on February 18, 2016, by Barrett Daffin, and recorded on February 22, 2016. Plaintiff alleges that this notice was defective due to a July 2005 securitization of his loan. A notice of trustee's sale was recorded on December 20, 2016.

In January 2017, Plaintiff, represented by different counsel, filed a lawsuit in San Mateo County Superior Court, challenging Defendants' right to foreclose. Malveaux v. Wells Fargo Bank, N.A., San Mateo Superior Court No. 17-civ-00328. On January 25, 2017, the state court denied Plaintiff's petition for a temporary restraining order (TRO) enjoining foreclosure. Defendants filed a demurrer to the complaint, which the state court sustained at a hearing on April 25, 2017, followed by awritten order filed May 11, 2017. The state court granted Plaintiff leave to amend, but Plaintiff did not timely amend his complaint and, on June 14, 2017, voluntarily dismissed the action without prejudice. Plaintiff alleges that he did so because a Wells Fargo representative informed him that the bank would allow him to sell his home through his realtor or give him a loan modification only if he dismissed his state court lawsuit. Id. ¶¶ 74 at 21, 130 at 34.

Plaintiff alleges that he began submitting the requested documents for a loan-modification application around the time that he voluntarily dismissed his state court lawsuit. On July 3, 2017, a representative of Wells Fargo spoke with Plaintiff and indicated that Plaintiff's loan-modification application was missing three documents. Id. ¶ 78 at 22. Plaintiff submitted the documents. Id. ¶ 80 at 22. Weeks later, in August 2017, a different Wells Fargo representative asked Plaintiff to have his ex-wife "sign over the deed for the property to Plaintiff." Id. ¶ 86 at 22. Plaintiff alleges that this prevented him from submitting the documents required for the loan modification. Id. ¶ 129 at 30 (alleging that his application was "complete but for the note"); id. ¶ 86-87 at 22 (alleging that Wells Fargo asked Plaintiff to have his ex-wife "sign over the deed for the property to Plaintiff," which "prevented" him "from submitting the 'required' documents"); id. ¶ 140 at 36 (alleging the Billie Malveaux "interfered with Plaintiff's ability to successfully complete the loan modification process"). On August 25, 2017, "Defendant" emailed Plaintiff indicating that "they were not going to proceed with the loan modification process." Id. ¶ 93at 23.

On August 29, 2017, Plaintiff filed this action and a motion for a TRO enjoining a foreclosure of the property scheduled for August 30, 2017. On the same day, this Court denied the motion for a TRO because Plaintiff had neither notified Defendants of the motion nor shown why he should be excused from doing so. On September 30, 2017, Plaintiff recorded with the San Mateo Assessor-County Clerk-Recorder a notice of the pendency of this action, and brought a copy of that notice to the place where the foreclosure sale was being held. Id. ¶¶ 96-97 at 23. The person conducting the sale took a picture of it with his cell phone. The property was sold in a foreclosure. Id. ¶ 121 at 27.

In the 2AC, Plaintiff asserts claims for: (1) wrongful foreclosure; (2) quiet title; (3) unjust enrichment; (4) violation of California Civil Code section 2923; (5) violation of California Civil Code section 2924; (6) violation of California's Unfair Competition Law (UCL), Civil Code section 17200; (7) accounting and verification of the alleged debt; (8) bank fraud under 18 U.S.C. § 1344; (9) fraud in the inducement; (10) promissory estoppel; (11) slander of title; (12) violation of "the Federal Consumer Protection Bureau Rules"; (13) tortious interference with a contract.²

// Plaintiff asserts these claims against Defendants³ (1) Wells Fargo; (2) Barrett Daffin; (3) First American; (4) Bank Of New York As Trustee For World Savings Remic Trust, Mortgage Pass-Through Certificates, Series 19; (5) Ralph Partners; and (7) Billie Malveaux.⁴

LEGAL STANDARD

A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). The plaintiff must proffer "enough facts to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). On a motion under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. Twombly, 550 U.S. at 555. A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

In considering whether the complaint is sufficient to statea claim, the court will take all material allegations as true and construe them in the light most favorable to the plaintiff. Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1061 (9th Cir. 2008). The court's review is limited to the face of the complaint, materials incorporated into the complaint by reference, and facts of which the court may take judicial notice. Id. at 1061. However, the court need not accept legal conclusions, including threadbare "recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555).

Rule 9(b) provides that in "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). "It is well-settled that the Federal Rules of Civil Procedure apply in federal court, 'irrespective of the source of the subject matter jurisdiction, and irrespective of whether the substantive law at issue is state or federal.'" Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (quoting Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003). The allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985).

When granting a motion to dismiss, the court is generally required to grant the plaintiff leave to amend, even if no request to amend the pleading was made, unless amendment would be futile. Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv.Inc., 911 F.2d...