Bock v. Wells Fargo Bank, N.A.

• Court: District Court, S.D. California
• Decided: March 17, 2020
• Docket: 3:19-cv-02241
• Status: Unknown

Opinion

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8 UNITED STATES DISTRICT COURT □ SOUTHERN DISTRICT OF CALIF ORNIA 10 11 ||] BERTABOCK, | Case No.: 19-cv-2241-WQH-AHG 12 . Plaintiff, ORDER 13 14 || WELLS FARGO BANK, N.A.; CLEAR| 15 RECON CORP.; and DOES 1 through 50, . inclusive, . 16 Defendants; = 17 1g || HAYES, Judge: .

19 The matter before the Court is the Motion to Dismiss Plaintiffs Complaint filed by 20 ||Defendant Wells Fargo Bank, N.A.(ECFNo.3). 2 || I. BACKGROUND | 22 |} On October 23, 2019, Plaintiff Berta Bock filed a Complaint in the Superior Court 93 ||for the State of California, County of San Diego, against Defendants Wells Fargo Bank, NA. (“Wells Farge”), Clear Recon Corp. (“Clear Recon”), and Does | through 50, inclusive. (Ex. A, ECF No. 1-2). In the Complaint, Bock alleges that she obtained a loan Wells Fargo to purchase property located at 659 Crescent Drive, Chula □□□□□□ □ California 91911 (the “Property”), “by virtue of a Trust Deed and Notes securing the loan.” (Id. | 6). Bock alleges that Wells Fargo failed to disclose certain charges during the loan

1 |ltransaction and “calculate[ed] the annual percentage rate (‘APR’) based upon improperly 2 || calculated and disclosed amounts... .” (Id. | 69). Bock alleges that Defendants determined 3 || that Bock defaulted on the loan, and Defendant Clear Recon executed a Notice of Default.

4 ||Bock alleges that the Notice of Default is invalid and that Defendants made false 5 \\representations as to the validity of the Notice of Default. Bock alleges that Defendants 6 |jhave commenced a “non-judicial foreclosure” on the Property. (Ud. § 12). Bock alleges that 7 Defendants “have threatened to commence an invalid foreclosure sale” of the Property. Ud 8 11922). □

9 Bock brings a claim against Defendant Wells Fargo for violation of the federal Truth

~ 10 Lending Act (“TILA”). Bock brings claims against all Defendants for violations 0. 11 || sections 1572, 2923.5, and 2923.6 of the California Civil Code; violations of section 1720( 12 || of the California Business and Professions Code; fraud; and intentional misrepresentation

- 13 \|Bock seeks damages, including punitive damages; rescission of “the transaction;” “

14 |\ declaration of the rights and duties of the parties relative to Plaintiff's [h]ome to determin 15 ||the actual status and validity of the loan, Deed of Trust, and Notice of Default;” “

16 preliminary injunction and permanent injunction enjoining all Defendants, their agent: 17 ||assigns, and all person|s] acting under, for, or in concert with them, from foreclosing Oo 18 ||Plaintiff's [h]ome or from conducting a trustee’s sale or causing a trustee’s sale to □ 19 conducted relative to Plaintiffs [h]ome;” “[c]ancellation of any future sale and restitutio 20 || of the home to [ ] Plaintiff] ];” “an [o}rder enjoining Defendants from continuing to violat

21 ||the statutes alleged a restraining order preventing Defendant and his, hers, or i 22 |lagents, employees, officers, attorneys, and representatives from engaging in or performit 23 |\any of the following acts: (4) offering, or advertising [the] [Property for sale and (1 24 attempting to transfer title to this property and or (iii) holding any auction therefore;” ar

25 ||attorneys’ fees and costs. (/d. at 21-22). □ 26 On November 25, 2019, Defendant Wells Fargo removed this case to this Cor 27 pursuant to 28 U.S.C. §§ 1441 and 1446, on the grounds that this Court has origin 28 jurisdiction over Bock’s TILA claim and supplemental jurisdiction over Bock’s state le

1 ||claims.' On December 2, 2019, Wells Fargo filed a Motion to Dismiss Complaint for 2 || failure to state a claim on which relief can be granted pursuant to Rule 12(b)(6) of the 3 ||Federal Rules of Civil Procedure. (ECF No. 3). On December 17, 2019, Bock filed an 4 || Opposition to Wells Fargo’s Motion to Dismiss. (ECF No. 4). On December 23, 2019, 5 || Wells Fargo filed a Reply. (ECF No. 5). 6 LEGALSTANDARD 7 Rule 12(b){6) of the Federal Rules of Civil Procedure permits dismissal for “failure 8 state a claim upon which relief can be granted.” In order to state a claim for relief, a 9 || pleading “must contain .. . ashort and plain statement of the claim showing that the pleader 10 |/is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Dismissal under Rule 12(b)(6) “is proper only 11 || where there is no cognizable legal theory or an absence of sufficient facts alleged to support 12 ||a cognizable legal theory.” Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 13 || 1041 (9th Cir. 2010) (quotation omitted). (14 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, {5 accepted as true, to ‘state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 16 ||556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 17 ||“A claim has facial plausibility when the plaintiff pleads factual content that allows the 18 ||court to draw the reasonable inference that the defendant is liable for the misconduct 19 |\alleged.” Iqbal, 556 U.S. at 678 (citation omitted). However, “a plaintiff s obligation to 20 ||provide the ‘grounds’ of his ‘entitle[ment] to relief? requires more than labels and 21 |/conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 22 || Twombly, 550 U.S. at 555 (quoting Fed. R. Civ. P. 8(a)). A court is not “required to accept 23 true allegations that are merely conclusory, unwarranted deductions of fact, or 24 jf 29 All defendants who have been properly joined and served must join the removal petition or file written 26 consent to removal. Hewitt v. City of Stanton, 798 F.2d 1230, 1232 (9th Cir. 1986) (citations omitted); □□□ Cmty, Bldg. Co. v. Md. Cas. Co., 8 F.2d 678, 679 (9th Cir. 1925) (“[D]efendants over whom the court has 27 |! not acquired jurisdiction may be disregarded in removal proceedings, and [ | the defendants who have 8 been summoned must of necessity be allowed to exercise their right of removal.” (citations omitted)), The Docket does not reflect that Clear Recon has been served.

1 unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2 ||2001). “In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual 3 ||content, and reasonable inferences from that content, must be plausibly suggestive of < 4 claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir 5 || 2009) (quotation omitted).

6 JUDICIAL NOTICE 7 Wells Fargo requests that the Court take judicial notice of 1) the December 10, 2002 8 || Deed of Trust reflecting Bock and her spouse as the “Borrower” and World Savings Bank 9 FSB (“World Savings Bank”), as the “Lender;” 2) the April 30, 2019, Notice of Default 10 3) the January 7, 2013, Certification of a Federal Savings Association Title Chang 11 || showing that on December 31, 2007, World Savings Bank changed to Wachovia Mortgage 12 FSB (“Wachovia”); and 4) the January 7, 2013, Certificate of Authenticity acknowledgin; 13 November 1, 2009, merger of Wachovia with and into Wells Fargo. Bock does no 14 || object to the Court taking judicial notice of these documents. . 15 “As a general rule, ‘a district court may not consider any material beyond th 16 || pleadings in ruling on a Rule 12(b)(6) motion.”” Lee v. City of Los Angeles, 250 F.3d 668 17 (9th Cir. 2001) (quoting Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994)). “Ther 18 however, two exceptions to the requirement that consideration of extrinsic evidenc 19 || converts a 12(b)(6) motion to a summary judgment motion.” Id. 20 First, Rule 201 of the Federal Rules of Evidence provides that “[t]he court ma

21 judicially notice a fact that is not subject to reasonable dispute because it: (1) is generall 22 |) known within the trial court’s territorial jurisdiction; or (2) can’be accurately and readil 23 || determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evic 24 201(b). “[U]nder Fed. R. Evid. 201, a court may take judicial notice of ‘matters of publi 25 llrecord.’” Lee, 250 F.3d at 689 (quoting Mack v. 5. Bay Beer Distrib., 798 F.2d 1279, 128 26 (9th Cir. 1986)). □ 27 Second, “the incorporation by reference doctrine . . . permits a court to consider 28 document ‘if the plaintiff refers extensively to the document or the document forms tk

1 basis of the plaintiff's claim.’” Steinle v, City & Cty. of San Francisco, 919 F.3d 1154, 2 {| 1162-63 (9th Cir. 2019) (quoting United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 3 }}2003)). Under the doctrine of incorporation by reference, “[a] district court ruling on a 4 || motion to dismiss may consider documents ‘whose contents are alleged in a complaint and 5 |l whose authenticity no party questions, but which are not physically attached to the 6 || [plaintiff s] pleadings.”” Parrino v. FHP, Inc., 146 F.3d 699, 705 (9th Cir. 1998) (second 7 |lalteration in original) (quoting Branch, 14 F.3d at 454), amended by 1998 U.S. LEXIS 8 || 7284 (9th Cir. July 28, 1998), superseded by 28 U.S.C. § 1453 on other grounds as stated 9 in Abrego v. Dow Chem Co., 443 F.3d 676, 681 (9th Cir. 2006). The “incorporation by 10 reference” doctrine has been extended “‘to situations in which the plaintiff's claim depends |/on the contents ofa document, the defendant attaches the document to its motion to dismiss, 12 the parties do not dispute the authenticity of the document, even though the plaintiff 13 does not explicitly allege the contents of that document in the complaint.” Knievel v. ESPN, 14 F.3d 1068, 1076 (9th Cir, 2005) (citing Parrino, 146 F.3d at 706). 15 The January 7, 2013, Certification of a Federal Savings Association Title Change 16 the Certificate of Authenticity are “matters of public record.” Lee, 250 F.3d at 689 17 |} (quotation omitted). Bock alleges the contents of the Notice of Default and the Deed of {8 || Trust? in the Complaint but does not attach either as an exhibit. Bock’s claims depend on 19 the contents of these documents. No party has questioned the authenticity of the Notice of 20 || Default or the Deed of Trust. The Court takes judicial notice of the requested documents. 21 TRUTH IN LENDING ACT CLAIM _ 22 Wells Fargo contends that Bock’s TILA claim is barred by the statute of limitations. 23 || Wells Fargo contends that the limitations period expired in 2003, one year after the loan 24 || transaction was consummated. Wells Fargo contends that any right to rescission of the loan 25 26 . . □ 2 The Deed of Trust submitted by Wells Fargo is dated December 10, 2002. The Notice of Default is dated 27 April 30, 2019. In the Complaint, Bock alleges that the Deed of Trust is dated April 30, 2019, and the 28 Notice of Default is dated December 10, 2002. In Bock’s Opposition, she clarifies that she executed the Deed of Trust on December 10, 2002. □

1 ||expired in 2005, three years after the loan transaction was consummated. Wells Farge 2 || further contends that Bock fails to state a TILA claim because she does not allege that she 3 willing and able to tender the balance owed. 4 Bock contends that the Complaint sufficiently states a claim for relief. Bock 5 contends that she has standing to bring a claim. Bock requests that the Court remand thi: 6 action to California state court. 7 TILA, 15 U.S.C. §§ 1601 ef seq., and its implementing regulations, 12 CER. 8 ||226 et seg. (“Regulation Z”), require lenders to disclose certain information to borrower: part of a loan transaction, including a “separate written itemization of the amoun 10 financed,” the “finance charge,” and the APR. See 12 C.F.R. §§ 226.18(c)-(d), 226.22 11 ||“Congress enacted TILA ‘to assure a meaningful disclosure of credit terms so that th 12 consumer will be able to compare more readily the various credit terms available to hin 13 and avoid the uninformed use of credit, and to protect the consumer against inaccurate an 14 unfair credit billing and credit card practices.” Hauk v. JP Morgan Chase Bank USA, 55: 15 ||F.3d 1114, 1118 (9th Cir. 2009) (quoting 15 U.S.C. § 1601). “To effectuate TILA’ 16 || purpose, a court must construe ‘the Act’s provisions liberally in favor of the consumer’ an 17 require absolute compliance by creditors.” Id, (quoting Inve Ferrell, 539 F.3d 1186, 118' (9th Cir. 2008)). Ifa lender fails to make the required disclosures, a borrower may bring 19 i|claim for damages or may “rescind any credit transaction in which a security interest i 20 || created in the obliger’s home.” King v. California, 784 F.2d 910, 913 (9th Cir. 1986) (citin 21 U.S.C. § 1635). 22 15 U.S.C. § 1640(e) provides that any action for damages under TILA “may b 23 ||brought . ... within one year from the date of the occurrence of the violation... .” Thi limitations period “runs from the date of consummation of the transaction[,} but [ ] th 25 || doctrine of equitable tolling may, in the appropriate circumstances, suspend the limitation || period until the borrower discovers or had reasonable opportunity to discover the fraud ¢ 27 || nondisclosures that form the basis of the TILA action.” King, 784 F.2d at 915; see Meve 28 |\v. Ameriquest Mortg. Co., 342 F.3d 899, 902 (9th Cir. 2003) (explaining that “[t]here

1 ||some debate on whether the period of limitations commences on the date the credit contract 2 executed, or at the time the plaintiff discovered, or should have discovered, the acts 3 ||constituting the violation.” However, where the borrower “produce[s] no evidence of 4 undisclosed credit terms, or of fraudulent concealment or other action on the part of [the 5 || lender] that prevented the [borrower] from discovering their claim,” the limitations period 6 || begins to run “at the time the loan documents were signed” (internal citations omitted)), as 7 || amended. . 8 15 U.S.C. § 1635(f) provides that any “right of rescission shall expire three years llafter the date of consummation of the transaction or upon the sale of the property, 10 || whichever occurs first... .” 15 U.S.C. § 1635(f). “[R]escission is effected when the 11 || borrower notifies the creditor of his intention to rescind.” Jesinoski v. Countrywide Home 12 || Loans, Inc., 574 USS. 259, 262 (2015). “[S]o long as the borrower notifies within three 13 || years after the transaction is consummated, his rescission is timely.” Id.; see Hoang v. Bank 14 |iof Am., N.A., 910 F.3d 1096, 1101 (9th Cir. 2018) (applying state catch-all statute of 15 ||limitations. to a rescission enforcement claim where the plaintiffs timely notified the 16 ||creditor in writing of their intention to rescind within the three-year TILA limitations 17 j/period), ... 18 In this case, Bock alleges that Wells Fargo “failed to include and disclose certain 19 || charges in the finance charge shown on the TIL statement, which charges were imposed 20 |lon Plaintiff] ] incident to the extension of credit and were required to be disclosed □□ □ .” 21 A, ECF No. 1-2 7 69). Bock alleges that Wells Fargo improperly “calculated the 22 annual percentage rate (‘APR’) based upon improperly calculated and disclosed amounts . 23 ||...” Ud. 970). Bock alleges that Wells Fargo’s “failure to provide the required disclosures 24 || provides Plaintiff] ] with the right to rescind the transaction, and Plaintiff] ], through this 25 || public Complaint which is intended to be construed, for purposes of this claim, as a form 26 || Notice of Rescission, hereby elect[s] to rescind the transaction.” (/d. J 71). □ 27 The Deed of Trust shows that borrowers “Jeffrey M Bock and Berta Bock, husband 28 || and wife,” obtained a loan from lender World Savings Bank in the amount of $235,000.00,

1 || secured by the Property. World Savings Bank is Wells Fargo’s predecessor in interest or 2 loan. Jeffrey and Berta Bock signed the Deed of Trust on December 4, 2002, and it wa: 3 recorded on December 10, 2002. The transaction was consummated on December 10. 4 2002, at the latest. Wells Fargo’s alleged failure to make the required disclosures occurred 5 llif at all, at the time the loan documents were finalized. There are no facts alleged □□ 6 || evidence presented from which the Court can infer Bock did not possess “all informatior relevant to the discovery of a TILA violation .. . on the day the loan papers were signed.’ || Meyer, 342 F.3d 899; see Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005) “Generally, 9 litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he 10 || has been pursuing his rights diligently, and (2) that some extraordinary circumstances stoot ul in his way.”). Taking Bock’s allegations as true, and upon consideration of the judicially 12 ||noticed documents, the Court concludes that the statute of limitations began to run o1 13 ||December 10, 2002, at the latest. The statute of limitations on Bock’s claim for damage 14 under TILA expired by December 10, 2003. The time for Bock to notify the lender of he 15 || intention to rescind expired by December 10, 2005. Bock filed the Complaint and □□□□□□□□ 16 || Wells Fargo of her intention to rescind on October 23, 2019. The Court concludes the 17 || Bock’s cause of action under TILA is barred by the statute of limitations. 18 Wells Fargo’s Motion to Dismiss Bock’s seventh cause of action is granted. io STATELAWCLAIMS Bock’s remaining claims arise under California state law and include □□□□□□ 21 |/action for violations of sections 1572, 2923.5 and 2923.6 of the California Civil Code 22 violations of section 17200 of the California Business and Professions Code; fraud; an 23 intentional misrepresentation. 24|| ‘The federal supplemental jurisdiction statute provides, “[I]n any civil action c 25 ||which the district courts have original jurisdiction, the district courts shall hav 26] supplemental jurisdiction over all other claims that are so related to claims in the actio 27 || within such original jurisdiction that they form part of the same case or controversy unde 28 || Article III of the United States Constitution.” 28 US.C. § 1367(a). “The district courts ma

1 |/decline to exercise supplemental jurisdiction” for a number of reasons, including if “the 2 || district court has dismissed all claims over which it has original jurisdiction[.]” 28 □□□□□□ 1367(0)3). “Depending on a host of factors, then—including the circumstances of the particular 5 case, the nature of the state law claims, the character of the governing state law, and the 6 relationship between the state and federal claims—district courts may decline to exercise jurisdiction over supplemental state law claims.” Chicago v. Int’l Coll. of Surgeons, 522 8 ||US. 156, 173 (1997). “While discretion to decline to exercise supplemental jurisdiction 9 || over state law claims is triggered by the presence of one of the conditions in § 1367(c), it 10 informed by the [United Mine Workers of America v.| Gibbs[,] [383 U.S. 715 □□□□□□□ 11 || values of economy, convenience, fairness, and comity.” Acri v. Varian Assocs., 114 F.3d 12 1001 (9th Cir. 1997) (quotation omitted). “‘[I]n the usual case in which federal-law 13 claims are eliminated before trial, the balance of factors ... will point toward declining to 14 exercise jurisdiction over the remaining state law claims.”” Schneider v. TRW, Ine., 938 15 || F.2d 986, 993 (9th Cir. 1991) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 16 ||n. 7 (1970). 17 In this case, Bock fails to state a claim against Defendant Wells Fargo over which 18 || this Court has original jurisdiction. Bock does not bring any claim against Defendant Clear 19 ||Recon over which this Court has original jurisdiction. The Court cannot conclude that it 20 diversity jurisdiction over this action. The Court declines to exercise supplemental 21 {jurisdiction over Bock’s state law claims and remands this action to the Superior Court for 22 ||the State of California, County of San Diego, where it was originally pending as Case No. 23 37-2019-00056225 -CU-OR-CTL. See Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 24 ||637 (2009) (recognizing district court’s authority to remand case to state court after 25 declining to exercise supplemental jurisdiction). 26 Wells Fargo’s Motion to Dismiss Bock’s remaining state law claims is denied as 27 28

CONCLUSION = = ——————— IT IS HEREBY ORDERED that Wells Fargo’s Motion to Dismiss □□□□□□□□□□□ 3 Complaint (ECF No. 3) is granted in part and denied as moot in part. It is further ordered 4 || that this action is remanded to the Superior Court of California for the County of San Diego 5 || where it was originally filed as Case No. 37-201 9-00056225-CU-OR-CTL.

7 || DATED: Lfrr(ee 8 WILLIAM Q. HAYES

9 United States District Judge □

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