Mehta v. Wells Fargo Bank, N.A.

737 F.Supp.2d 1185

Jimit H. MEHTA, Plaintiff,

v.WELLS FARGO BANK, N.A.; Wells Fargo Home Mortgage; First American Title Insurance Company; et al., Defendants.

Case No. 10-CV-944 JLS (AJB).

United States District Court, S.D. California.

Aug. 26, 2010.

Deborah L. Raymond, Law Offices of Deborah L. Raymond, Del Mar, CA, for Plaintiff.

Edward D. Vogel, Mark G. Rackers, Sheppard Mullin Richter and Hampton, San Diego, CA, Lawrence D. Harris, Law Offices of Glenn H. Wechsler, Walnut Creek, CA, for Defendants.

ORDER: (1) DENYING DEFENDANTS WELLS FARGO BANK, N.A. AND WELLS FARGO HOME MORTGAGE'S REQUEST FOR JUDICIAL NOTICE, (2) GRANTING DEFENDANT FIRST AMERICAN TITLE INSURANCE COMPANY'S REQUEST FOR JUDICIAL NOTICE, (3) GRANTING DEFENDANTS WELLS FARGO BANK, N.A. AND WELLS FARGO HOME MORTGAGE'S MOTION TO DISMISS, AND (4) GRANTING DEFENDANT FIRST AMERICAN TITLE INSURANCE COMPANY'S MOTION TO DISMISS

JANIS L. SAMMARTINO, District Judge.

Presently before the Court are Defendants Wells Fargo Bank, N.A. and Wells Fargo Home Mortgage's (collectively "Wells Fargo") motion to dismiss (Doc. No. 8 (Wells Fargo MTD)) and Defendant First American Title Insurance Company's motion to dismiss. (Doc. No. 9 (First American MTD).) Also before the Court are Plaintiff's oppositions (Doc. Nos. 16 (Opp. to Wells Fargo's MTD) & 17 (Opp.to First Am.'s MTD)) and Defendants' replies. (Doc. Nos. 18 (Reply ISO First Am.'s MTD) & 20 (Reply ISO Well's Fargo's MTD).) Having fully considered the legal and factual issues surrounding these motions, the Court GRANTS both motions to dismiss.

BACKGROUND

Plaintiff Jimit Mehta is "a co-owner as tenants in common ... of the real property located at 135 5th Street, Encinitas, CA 92024." (Doc. No. 1, Ex. A at 151-230(FAC) ¶ 2.) Plaintiff "refinanced a prior loan secured by [his] Real Property on ... February 26, 2007 by signing a promissory note in favor of WFBNA." ( Id. ¶ 7.) This loan "was in the amount of two million" dollars. ( Id. ¶ 11.) On "March 23, 2009, [Wells Fargo] and FIRST AMERICAN ... claimed that Plaintiff was in default on the Loan as reported on the Notice of Default and Election to Sell Under Deed of Trust ('NOD'). ( Id. ¶ 8.) Defendant First American "recorded a Notice of Trustee Sale ... on June 26, 2009," with the sale scheduled for July 16, 2009. ( Id. ¶ 12.)

On July 9, 2009, Plaintiff hired counsel "to negotiate a loan modification on his behalf." ( Id. ¶ 13.) On July 13, 2009, Plaintiff submitted a loan modification package to Wells Fargo. ( Id. ¶ 14.) Plaintiff's counsel ¹ "spoke with an agent of [Wells Fargo] by the name of Debra DeCristoforo ... who stated that [Wells Fargo] owned the Loan and that a complete loan package had been received." ( Id. ¶ 15.) Ms. DeCristoforo allegedly told Plaintiff's counsel that Plaintiff's "file was being escalated for the postponement of the Trustee's Sale." ( Id. ¶ 16.) On July 29, 2009, Plaintiff's counsel "spoke with an agent of [Wells Fargo] by the name of Josh" who told counsel "that the financial worksheet and profit and loss statements needed to be signed and dated." ( Id. ¶ 17.) Plaintiff claims that he complied. ( Id.) On August 8, 2009, counsel again "spoke with an agent of [Wells Fargo] by the name of Sarah" who told counsel "that no negotiator had yet been assigned and to call back." ( Id. ¶ 18.) Counsel again called Wells Fargo on August 14, 2009. ( Id. ¶ 19.) According to Plaintiff, counsel spoke with "Andrea" who said "that she was emailing the Foreclosure Department to escalate the file and postpone the trustee's sale date." ( Id.) According to Plaintiff, the "sale date was postponed and the new sale date was [ ] set for October 6, 2009." ( Id.)

Counsel placed another call to Wells Fargo on August 21, 2009 and discovered that Wells Fargo believed "that Plaintiff had called in and requested cancellation of the workout, which was not true." ( Id. ¶ 20.) When they cleared up that issue, Defendant "placed Plaintiff in a trial modification." ( Id. ¶ 21.) "Plaintiff complied with the payment terms of the trial modification and made every payment on time." ( Id. ¶ 23.) As such, "the trustee's sale date was again postponed ... to January 5, 2010." ( Id.)

Subsequently, Defendant Wells Fargo sought further information including "a copy of the divorce decree, hardship letter, and updated bank statements for Plaintiff's business and personal tax returns." ( Id. ¶ 24.) Plaintiff sent almost everything, but only a part of his divorce decree. ( Id. ¶¶ 24-25.) When counsel spoke with Wells Fargo on November 30, 2009, she was told "that the modification had been cancelled because all pages of the divorce decree had not been received and that thefile would have to be resubmitted to complete a loan modification." ( Id. ¶ 26.) Plaintiff submitted that information on December 10, 2009 and was told to call back "to set up another trial modification." ( Id. ¶ 27.)

When Plaintiff's counsel called back, she was told "that Plaintiff had to wait for the file to be submitted to loss mitigation before financials could be reviewed." ( Id. ¶ 28.) When counsel again called, Wells Fargo's employee told her "that the file was still not in the loss mitigation department" but "confirmed receipt of the fax and all required items." ( Id. ¶ 29.) That employee also "stated that she was escalating the file to loss mitigation." ( Id.) Later another Wells Fargo employee stated "that the file had been escalated and that [Wells Fargo] was postponing the trustee's sale date." ( Id. ¶ 30.)

However, on January 5, 2010, Plaintiff found out that the sale would be held as scheduled. ( Id. ¶ 31.) Moreover, Plaintiff's counsel was told "that the file had never been escalated." ( Id. ¶ 32.) However, the employee told counsel that he would attempt to have the sale postponed. ( Id.) Shortly thereafter, counsel was told "that the file had been escalated and the loss mitigation department had not responded." ( Id.) After further phone calls to Wells Fargo produced no result, counsel called First American and talked with an employee who told her "that he was going to put the trustee's sale on hold until he could confirm with [Wells Fargo] whether or not [it] would postpone the trustee's sale." ( Id. ¶¶ 33-37.) However, a further call to Wells Fargo determined "that [Wells Fargo] was taking Plaintiff's Residence to sale." ( Id. ¶ 38.) The sale occurred later that day. ( Id. ¶ 42.)

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' ... it [does] demand[ ] more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.' " Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

"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.' " Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955); see also Fed.R.Civ.P. 12(b)(6). A claim is facially plausible when the facts pled "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts " 'merely consistent with' a defendant'sliability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 1950 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief.' " Id.

ANALYSIS

I. Defendants' Requests for Judicial Notice

Both Wells Fargo and First American have requested that this Court take judicial notice of certain documents. ( See Doc. Nos. 8-2 (Wells Fargo's RJN) & 11-1 (First Am.'s RJN).) Generally on a motion to dismiss, a court may only consider three things: (1) "allegations contained in the pleadings," (2) "exhibits attached to the complaint," and (3) "matters properly subject to judicial notice." Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir.2007) (citation omitted). However, a Court may also "consider a writing referenced in a complaint but not explicitly incorporated therein if the complaint relies on the document and its authenticity is unquestioned." Swartz, 476 F.3d at 763 (citation omitted).

Wells Fargo asks the Court to take notice of the Notice of Right to Cancel. (Wells Fargo's RJN at 1.) They do not, however, explain into which of the above-listed categories this document falls. And the Court cannot find a permissible avenue...