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Rosa E. Soriano v. Bank

April 30, 2012

ROSA E. SORIANO,
PLAINTIFF,
v.
BANK, N.A., WELLS WELLS FARGO FARGO HOME MORTGAGE, INC., ,
WELLS FARGO HOME MORTGAGE OF HAWAII, LLC, AND SAMP, LLC, DEFENDANTS.



The opinion of the court was delivered by: Susan Oki Mollway Chief United States District Judge

ORDER

(1) GRANTING IN PART AND DENYING IN PART DEFENDANTS WELLS FARGO BANK, N.A., WELLS FARGO HOME MORTGAGE, INC., AND WELLS FARGO HOME MORTGAGE OF HAWAII LLC'S MOTION TO DISMISS SECOND AMENDED COMPLAINT;

(2) DENYING DEFENDANT SAMP, LLC'S SUBSTANTIVE JOINDER IN DEFENDANTS WELLS FARGO BANK, N.A., WELLS FARGO HOME MORTGAGE, INC., AND WELLS FARGO HOME MORTGAGE OF HAWAII, LLC'S MOTION TO DISMISS PLAINTIFF'S SECOND AMENDED COMPLAINT; AND

(3) DENYING DEFENDANT SAMP, LLC'S MOTION TO DISMISS SECOND AMENDED COMPLAINT

I. INTRODUCTION.

Plaintiff Rosa E. Soriano brings suit against

Defendants Wells Fargo Bank, N.A. ("WF Bank"), Wells Fargo Home Mortgage, Inc. ("WFHM"), and Wells Fargo Home Mortgage of Hawaii, LLC ("WFHM Hawaii") (collectively, "Wells Fargo Defendants"), as well as against SAMP, LLC ("SAMP"), for an allegedly wrongful foreclosure relating to property that she owned. Soriano alleges that, although she complied with Wells Fargo Defendants' instructions to cure her indebtedness, they nevertheless sold the property to SAMP without notifying her of the foreclosure proceedings.

Wells Fargo Defendants now move to dismiss the Second Amended Complaint ("SAC"). See Defs. Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, Inc., and Wells Fargo Home Mortgage of Hawaii, LLC's Mot. to Dismiss Pl.'s Second Am. Compl. filed on Dec. 16, 2011 (the "WF Motion"), ECF No. 70. SAMP joins in the WF Motion and files its own motion to dismiss. See Def. SAMP, LLC's Substantive Joinder in Defs. Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, Inc., and Wells Fargo Home Mortgage of Hawaii, LLC's Mot. to Dismiss Pl.'s Second Am. Compl. filed on Dec. 16, 2011 (the "SAMP Joinder"), ECF No. 71; Def. SAMP, LLC's Mot. to Dismiss Second Am. Compl., filed Dec. 16, 2011 (the "SAMP Motion"), ECF No. 67.

The court GRANTS IN PART and DENIES IN PART the WF Motion and DENIES the SAMP Joinder. The court also DENIES the SAMP Motion without prejudice.

II. BACKGROUND.

Soriano asserts wrongdoing under various legal theories, including fraud and negligence, in connection with the handling of her first and second mortgage loans. Those loans were not made by the same Wells Fargo entity, and possibly not serviced by the same Wells Fargo entity. Some of the allegations underlying Soriano's claims suggest that, among Wells Fargo Defendants, the right hand did not know what the left hand was doing.

Soriano purchased property on Kapolei Parkway, in Ewa Beach, Hawaii 96706, Tax Map Key No. (1) 9-1-127-008, on or around November 17, 2003. SAC ¶ 8, ECF No. 66. Soriano says she bought the property (presumably with her husband) as her principal residence and lived there for several years. Id. ¶ 18. Soriano alleges that the purchase "was financed through" WFHM Hawaii and secured by a first mortgage on the property. The mortgage was then allegedly assigned to WFHM. Id. ¶ 9. Soriano says that WF Bank required her to take out a second loan for $47,098, secured by a second mortgage on the property. Id. ¶ 10. Soriano claims that she was not given copies of loan documents (including the second mortgage) for the second loan. Id. According to the SAC, WF Bank is now characterizing the second loan as a home equity line of credit that she could terminate on written notice to the lender if the account was paid in full. Id. ¶ 11.

Soriano alleges that she paid off the balance of her second loan in 2004 and orally asked WF Bank to close the loan and release the second mortgage. Id. ¶ 13. She says that WF Bank accepted the payment and agreed to close the account and release the second mortgage without asking for anything in writing. Id. ¶¶ 14-15. Soriano alleges that the second loan was credited with her payment in full in 2005 and that she relied on WF Bank's statements that it had closed the loan and had released the second mortgage. Id. ¶¶ 16-17.

In 2006, Soriano's husband died, and she thereafter fell behind on payments on her first loan. Id. ¶¶ 20-21. She alleges that, in 2008, someone from a Wells Fargo entity made an unsolicited call to her, offering a home equity credit line. Id.

¶ 22. Soriano accepted, and the Wells Fargo entity wired $45,000 to her account. Id. ¶¶ 23, 25. Soriano alleges that she did not know which Wells Fargo entity was making the offer, did not receive any documentation regarding the offer, and was not asked to submit anything in writing. Id. ¶¶ 23-26. She says that she believed that she had entered into a new loan with a new second mortgage, although she realizes that WF Bank characterizes the loan as an additional draw on her 2003 home equity line of credit. Id. ¶¶ 27-28.

Soriano alleges that WF Bank, WFHM, and an unspecified Wells Fargo entity made it appear that each was collecting payments she made, and that she was never certain which entity she was dealing with. Id. ¶ 30. She says that WF Bank used the names "Wells Fargo Home Mortgage" and "Wells Fargo" when collecting the second mortgage loan. Id. ¶ 31. The letters from WF Bank to Soriano allegedly indicated that WF Bank was a debt collector governed by the Fair Debt Collection Practices Act ("FDCPA"). Id. ¶ 32. Soriano alleges that a Wells Fargo entity acquired the loan and/or serviced the loan after it was in default. Id. ¶ 33.

According to Soriano, during 2009 and 2010, she spoke with employees at one or more Wells Fargo entities at least 25 times while trying to modify her loans, and someone at a Wells Fargo entity indicated that the entity would modify the loans. Id. ¶ 34. Soriano says that she was told and understood that "Wells Fargo" was collecting her loans, and she only now understands that she was dealing with either WF Bank or WFHM, or both. Id. ¶¶ 35-36.

Soriano alleges that, on or around March 9, 2010, WFHM, WF Bank, and/or a Wells Fargo entity informed her in writing that they would modify her loan. Id. ¶ 38; letter from WFHM to R. Soriano (Mar. 9, 2010), attached as Exhibit "A" to the SAC, ECF No. 66-1. Soriano says that she sent the requested paperwork and payment to the Wells Fargo entity. SAC ¶¶ 39-40, ECF No. 66. The proposed loan modification apparently concerned only the first mortgage.

Soriano alleges that, in or around mid-2010, someone at a Wells Fargo entity told her that, because she had failed to submit requested documents, it planned to foreclose on her property. Id. ¶ 43. She says that she had actually sent the requested documents at least seven times. She further says that, on or around June 18, 2010, WFHM, WF Bank, and/or a Wells Fargo entity sent her a letter confirming that it would enter into a Forbearance Agreement. Id. ¶ 46; letter from WFHM to R. Soriano (June 18, 2010), attached as Exhibit "B" to the SAC, ECF No. 66-2. Soriano says that she complied with the terms of that agreement, including making monthly payments of $1,200. SAC ¶ 47, ECF No. 66.

In or around the fall of 2010, Wells Fargo Defendants allegedly told Soriano that there was no record of a foreclosure proceeding against the property and assured her that as long as her request for a loan modification was being actively reviewed, there would be no foreclosure. Id. ¶ 48.

Soriano alleges that, on or around October 9, 2010, WF Bank, WFHM, or a Wells Fargo entity demanded that she pay $21,577.49 to stop a foreclosure of the property. Id. ¶ 49. Soriano alleges that she paid the requested sum by giving authorization to withdraw the funds from her account. Id. She says that she received a confirmation number for that payment. Id.

Soriano says that, about two weeks later, she learned that the money had not been withdrawn from her account. Id.

¶ 50. Someone from a Wells Fargo entity allegedly told her that she might qualify for a new program requiring a lower monthly payment and that information about the exact amount would be provided at a later date. Id. ¶ 52.

By this time, Soriano was no longer living on the property and was instead renting it out. She says that her tenants informed her that they had been told to vacate the property because it had been sold. Id. ¶ 54. Soriano allegedly tried to contact the purported purchaser, and was directed to Chad Waters, CEO of SAMP, LLC. Id. ¶¶ 56-57. Waters allegedly did not return any of Soriano's calls. Id. ¶ 58.

Also in October 2010, an employee at a Wells Fargo entity allegedly told Soriano that there was no record of a foreclosure or sale of her property, and that her loan was still being actively reviewed. Id. ¶ 59. The court notes that any such statement appears to have been made with respect to the first mortgage. Soriano states that WF Bank and WFHM now say that the foreclosure sale did indeed occur on October 4, 2010. Id. ¶ 60.

In or around December 2010, a Wells Fargo entity allegedly requested payment of $5,788 to place Soriano in the new program previously mentioned. Id. ¶ 62. Soriano claims that she sent the requested payment. Id. ¶ 63; Western Union Customer Receipt, attached as Exhibit "C" to the SAC, ECF No. 66-3. Someone at a Wells Fargo entity allegedly told her that her loan had been transferred to loss mitigation for review for a possible loan modification and that the foreclosure would be postponed. SAC ¶ 62, ECF No. 66. Soriano attaches a copy of a Wells Fargo record noting that "the foreclosure sale was canceled." Id.

¶ 63; consolidated notes log, attached as Exhibit "F" to the SAC, ECF No. 66-6.

Soriano alleges that, in January 2011, her tenants told her that a representative of Mokuaina Properties, LLC, had told them that the property had been purchased at a foreclosure sale by SAMP and that they had to vacate the property. SAC ¶ 64, ECF No. 66; letter from C. Waters to Nathan et al. (Dec. 29, 2010), attached as Exhibit "D" to the SAC, ECF No. 66-4. The tenants were allegedly also served with a complaint for summary possession. SAC ¶ 66, ECF No. 66. The foreclosure sale appears to have related to Soriano's second mortgage.

Around this time, Soriano says that she spoke with Wells Fargo Defendants' counsel, the law firm of Routh Crabtree Olsen, P.S., who allegedly informed her that the loan had been reinstated and the foreclosure sale canceled. Id. ¶ 68. Soriano says that, on or around January 10, 2011, someone from a Wells Fargo entity confirmed that the loan had been reinstated and that there was to be no foreclosure sale. Id. ¶ 69. Soriano was then allegedly told by Wells Fargo Defendants and their attorneys that her loan had been paid in full, in the amount of $244,204, but that they did not know who had paid it. Id. ¶¶ 70-71. A letter from WFHM dated January 8, 2011, also told Soriano that the loan had been satisfied. Id. ¶ 72; letter from WFHM to R. Soriano (Jan 8, 2011), attached as Exhibit "E" to the SAC, ECF No. 66-5. The loan was presumably paid by the buyer at a foreclosure sale initiated by Wells Fargo on the second mortgage.

Soriano alleges that SAMP now holds title to the property, but that the title was improperly transferred to SAMP, which knew or should have known that the foreclosure sale was improper. SAC ¶¶ 74-76, ECF No. 66.

III. STANDARD.

Under Rule 12(b)(6), a court is generally limited to reviewing the contents of the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996). If matters outside the pleadings are considered, the Rule 12(b)(6) motion is treated as one for summary judgment. See Keams v. Tempe Tech. Inst., Inc., 110 F.3d 44, 46 (9th Cir. 1997); Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir. 1996). However, courts may "consider certain materials--documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice--without converting the motion to dismiss into a motion for summary judgment." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Documents whose contents are alleged in a complaint and whose authenticity is not questioned by any party may also be considered in ruling on a Rule 12(b)(6) motion. See Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006); Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).

On a Rule 12(b)(6) motion to dismiss, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Fed'n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996). However, conclusory allegations of law, unwarranted deductions of fact, and unreasonable inferences are insufficient to defeat a motion to dismiss. Sprewell, 266 F.3d at 988. Additionally, the court need not accept as true allegations that contradict matters properly subject to judicial notice or allegations contradicting the exhibits attached to the complaint. Id. Dismissal under Rule 12(b)(6) may be based on either:

(1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988) (citing Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir. 1984)).

To survive a Rule 12(b)(6) motion to dismiss, factual allegations must be enough to raise a right to relief above the speculative level, assuming all allegations in the complaint are true even if doubtful in fact. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (Rule 8 "does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation"). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, 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 (internal citations omitted). The complaint must "state a claim to relief that is plausible on its face." Id. at 570. "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." Iqbal, 556 U.S. 678.

The Ninth Circuit has recently stated, First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.

Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

IV. THE WF MOTION AND SAMP JOINDER.

A. Soriano Adequately Pleads A Violation Of The FDCPA.

In Count I of the SAC, Soriano asserts a violation of the Fair Debt Collection Practices Act ("FDCPA"). The FDCPA provides, among other things, safeguards designed to protect consumers from unscrupulous debt collection practices. Although Wells Fargo Defendants seek dismissal on the ground that their actions do not fall within the purview of the FDCPA, they fail to establish on the present record that the FDCPA is inapplicable to them. The court therefore denies the motion to dismiss Count I.

1. It is Unclear Whether Any Wells Fargo Defendant is A "Debt Collector."

Wells Fargo Defendants first argue that they are not "debt collectors" subject to the FDCPA. The FDCPA defines "debt collector" as follows:

(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include--

(A) any officer or employee of a creditor while, in the name of the creditor, collecting ...


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