CLAUDIA WILKEN, District Judge.
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.
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.
Defendant Wells Fargo "holds itself out as the current servicer of Plaintiff's mortgage loan."
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.
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.
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.
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.
Plaintiff asserts these claims against Defendants
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."
In considering whether the complaint is sufficient to state a claim, the court will take all material allegations as true and construe them in the light most favorable to the plaintiff.
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.'"
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.
In its Order of December 28, 2017, the Court dismissed most of Plaintiff's claims on the ground that "Plaintiff has failed to allege any defect in the chain of title, or securitization, of his loan." Docket No. 36 at 8. The Court found that judicially noticeable documents demonstrate that, due to the name change of World Savings to Wachovia Mortgage, FSB, and Wachovia's subsequent merger into Wells Fargo, Wells Fargo is the successor-in-interest to World Savings.
The claims that the Court dismissed on December 28 because they were predicated on this chain-of-title or securitization theory were the entirety of Claims 1, 2, 3 and 11, and Claims 4, 6, 7, 8, 10 and 12 to the extent they relied on that theory. The Court granted Plaintiff leave to amend these claims but noted that, in any amended complaint, Plaintiff "must allege facts plausibly supporting each claim and set forth a viable legal theory." Docket No. 36 at 10.
In the 2AC, the vast majority of the claims continue to be predicated on the same securitization or chain-of-title theory that the Court previously rejected.
Because (1) judicially noticeable documents demonstrate that due to the name change of World Savings to Wachovia Mortgage, and Wachovia's subsequent merger into Wells Fargo, Wells Fargo is indeed the successor-in-interest to World Savings, Defs.' RJN Ex. A-E, and (2) courts routinely hold that this corporate transaction does not constitute a defect in the chain of title, the claims that are predicated on this theory—namely, the entirety of Claims 1,
Plaintiff's fourth and fifth claims seek relief under California's Homeowner Bill of Rights (HBOR), Cal. Civil Code §§ 2923.55 and 2924.
The Court previously dismissed these claims with leave to amend on the ground that (1) they were predicated on the same chain-of-title or securitization theory discussed above; (2) that Plaintiff's claim that Defendants violated HBOR's prohibition on "dual-tracking" —the practice of a mortgage servicer continuing to pursue foreclosure of a property while a complete loan-modification application is pending—failed because Plaintiff did not allege that he had submitted a complete loan-modification application; and (3) that Plaintiff's claim that Defendants did not provide him with information in writing in violation of Section 2923.55(b)(1) failed because Plaintiff did "not adequately allege what information he requested and when, or what, if any, response he received from Defendants," or "facts supporting a claim that Defendants' contacts with him prior to foreclosure were insufficient under section 2923.55(a)."
Plaintiff's HBOR claims in the 2AC continue to fail to state a claim for relief.
First, the HBOR claims in the 2AC are based at least in part on the chain-of-title or securitization theory that the Court has rejected, as discussed above.
Second, Plaintiff's claim that Defendants violated the HBOR's prohibition on "dual-tracking" fails on the ground that Plaintiff admits in the 2AC that his loan-modification application was never completed because he was unable to submit the required documents as a result of non-cooperation by his ex-wife. 2AC ¶ 129 at 30 (alleging that his application was "complete but for the note");
Third, Plaintiff's claim that Defendants did not provide him with information in writing upon his request, in violation of section 2923.55(b)(1), also is insufficiently pleaded, because, once again, Plaintiff does not adequately allege what information he requested and when, or what, if any, response he received from Defendants. Likewise, he once again does not allege facts supporting a claim that Defendants' contacts with him prior to foreclosure were insufficient under section 2923.55(a) despite the declaration of compliance attached to the recorded notice of default.
Finally, Plaintiff alleges that he was "prejudiced" by Wells Fargo's failure to assign a "single point of contact" to his loan-modification application. 2AC ¶ 129 at 29-30. It appears that Plaintiff does not intend to seek relief under HBOR based on this theory, as he does not even mention it in his opposition.
Accordingly, because Plaintiff previously was granted leave to amend his HBOR claims, and because his claims continue to fail to state a claim for relief under HBOR, the fourth and fifth claims in the 2AC are DISMISSED WITH PREJUDICE.
In its order of December 28, 2017, the Court dismissed with leave to amend Plaintiff's sixth claim under the UCL on the grounds that it was derivative of Plaintiff's HBOR and wrongful foreclosure claims, and that Plaintiff had failed to adequately allege that he lost money or property as a result of Defendants' actions (i.e., he failed to show the causation and injury required by the UCL). Docket No. 36 at 13-14.
Defendants once again move to dismiss this claim on the basis that it is entirely derivative of Plaintiff's other defective claims. In his opposition, Plaintiff concedes that this is the case; he argues that his UCL claim is based on the same allegations that formed the predicate for his HBOR and wrongful foreclosure claims.
In its Order of December 28, 2017, the Court dismissed with leave to amend Plaintiff's seventh claim for an accounting, and it noted that, in any amended complaint, "among the other elements that Plaintiff must plead in support of any amended claim for an accounting, he must plead facts giving rise to a plausible claim that Defendants have not already provided him with the information that he seeks, or that he does not already have ready access to the information" in connection with any amounts that Defendants may owe him based on the sale of the property. Docket No. 36 at 14-15.
Defendants move to dismiss this claim on the ground that Plaintiff cannot plead the necessary relationship between the parties, and does not plead that any Defendant owes Plaintiff a definite sum of money. In his opposition, Plaintiff offers the same response he previously offered, namely that Defendants owe him a sum of money represented by the value of his home over and above the amount that he owed Defendants when the home was sold. Docket No. 56 at 17. He also repeats the same arguments he made in support of his wrongful foreclosure claims, namely that Defendants "must prove that the amount claimed in the Notice of Default is not only a valid debt, but they are the beneficiaries of the original lender entitled to enforce the note and deed of trust."
Because the Court previously granted Plaintiff leave to amend this claim but he has failed to allege any facts in the 2AC to support a viable claim for an accounting, the Court DISMISSES the seventh claim WITH PREJUDICE.
Plaintiff's eighth, ninth, and tenth claims allege, under various legal theories, that Defendants defrauded him by offering him a loan modification to induce him to dismiss his state court lawsuit, and then recanting the offer and foreclosing on the property without adequate notice after he dismissed his state court lawsuit in reliance. The Court previously dismissed these claims on the ground that Plaintiff's allegations did not support the theory that Defendants breached an agreement to give Plaintiff a loan modification; Plaintiff did not plead (1) any misrepresentation by Defendants, (2) a failure by Defendants to consider him for a loan modification after he dropped his state court lawsuit, or (3) a promise of a loan modification if he dropped his lawsuit in state court. Docket No. 36 at 15-16. The Court noted that Plaintiff's allegations in the 1AC showed that Wells Fargo offered to "consider him" for a loan modification if he qualified for one.
Defendants move to dismiss these claims on the ground that the claims continue to suffer from the same defects that the Court previously recognized. In his opposition, Plaintiff repeats the same arguments he made in connection with his "dual-tracking" HBOR claims.
The Court finds that the claims at issue are once again subject to dismissal. In the 2AC, Plaintiff repeated the same allegations that supported his fraud claims in the prior iteration of the complaint without adding any new allegations that would suggest a misrepresentation by any Defendant in connection with the loan modification, or a failure by Wells Fargo to consider him for a loan modification. Additionally, Plaintiff concedes in the 2AC his failure to submit all documents required for the loan modification, albeit due to his ex-wife's failure to cooperate, as discussed above.
Plaintiff's tenth claim for promissory estoppel is subject to dismissal for the additional reason that it is barred by the statute of frauds, which provides that any agreement "for the sale of real property, or of an interest therein," is invalid unless it is "in writing and subscribed by the party to be charged or by the party's agent." Cal. Civil Code § 1624(a), (a)(3). A mortgage is subject to the statute of frauds. Cal. Civil Code § 2922. The Court previously dismissed this claim with leave to amend, noting that, in any amended complaint, Plaintiff would need to allege facts supporting the existence of a settlement agreement or other writing that would satisfy the statute of frauds. Plaintiff did not plead any such allegations in the 2AC. And, in his opposition to Defendants' motions to dismiss this claim, Plaintiff merely repeats the same arguments he made in support of his wrongful foreclosure claims.
Because the Court previously granted Plaintiff leave to amend his eighth, ninth, and tenth claims, and because the claims as alleged in the 2AC continue to fail to state a claim for relief, the Court DISMISSES these claims WITH PREJUDICE.
Plaintiff alleges that "Defendant Wells Fargo violated each the [sic] rules of the Federal Consumer Protection Bureau that are commensurate and correspond to those of the California homeowners bill of rightsst [sic]." 2AC ¶ 139 at 36. The Court previously dismissed this claim on the ground that it was derivative of Plaintiff's HBOR claims and because Plaintiff failed to address it in his opposition to prior motions to dismiss.
Defendants once again move to dismiss this claim on the ground that it is derivative of Plaintiff's HBOR claims. In his opposition, Plaintiff essentially concedes the derivative nature of this claim.
Because the Court previously granted Plaintiff leave to amend this claim; because the 2AC does not contain any new allegations that would entitle Plaintiff to relief; and because this claim is derivative of Plaintiff's HBOR claims, which the Court has dismissed, the Court DISMISSES the twelfth claim WITH PREJUDICE.
Plaintiff alleges that Billie Malveaux, his ex-wife, "interfered" with his ability to successfully complete the loan-modification process "by failure to calling Wells Fargo and altering information. In their files [sic]." 2AC ¶ 140 at 36. Plaintiff also alleges that "Wells cooperated with Defendant Malveaux in the tortious interference with both the real estate contract and the loan modification process," and that "Defendant violated several consumer protection laws."
Wells Fargo moves to dismiss this claim on the ground that no contract between it and Plaintiff is adequately alleged with respect to a loan modification, that a claim predicated on any such contract is barred by the statute of frauds, and that, even if Plaintiff had sufficiently alleged a contract with Wells Fargo, any claim for tortious interference with that contract by Wells Fargo would fail as a matter of law because a claim for interference with a contract cannot lie against a party to the contract.
Billie Malveaux also moves to dismiss this claim. In her motion, she states that the 2AC is "frivolous," that she did not interfere with Plaintiff's attempts at loan modification, and that there is "no factual basis to support collusion with Wells Fargo in this lawsuit." Docket No. 71 at 2.
In his opposition, Plaintiff's only statement as to this claim is that unspecified Defendants "are the beneficiaries of the original lender for the reasons plead succinctly." Docket No. 56 at 20.
The Court finds that the claim as to Wells Fargo is subject to dismissal. The claim appears to be predicated on the notion that an agreement between Plaintiff and Wells Fargo existed regarding a loan modification. As discussed above in connection with claims eight, nine, and ten, Plaintiff has failed to sufficiently allege in two separate iterations of the complaint that an agreement existed between himself and Wells Fargo pursuant to which Wells Fargo agreed to provide Plaintiff with a loan modification. But even if such an agreement had been adequately alleged, a claim against Wells Fargo for tortious interference with a contract would fail as a matter of law to the extent that Wells Fargo is alleged to be a party to the contract.
Because the Court has dismissed with prejudice all claims over which it has original jurisdiction, the Court declines to exercise supplemental jurisdiction over the remaining state-law claim against Billie Malveaux
The Court DISMISSES WITHOUT PREJUDICE the claim against Billie Malveaux for tortious interference with the performance of a contract. Plaintiff may re-file that claim in state court.
The Court DISMISSES all other claims in the 2AC WITH PREJUDICE. The Clerk shall close the file.
IT IS SO ORDERED.
