Foyer v. Wells Fargo, NA.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JESSICA FOYER, an individual; and Case No.: 3:20-CV-00591-GPC-AHG JASON FOYER, an individual, 12 ORDER DENYING DEFENDANT Plaintiffs, 13 WELLS FARGO BANK, N.A.’S v. MOTION TO DISMISS SECOND 14 AMENDED COMPLAINT WELLS FARGO BANK, N.A., a business 15 entity; and DOES 1–50, inclusive, [ECF No. 17] 16 Defendants. 17

18 Before the Court is Defendant Wells Fargo Bank, N.A. (“Wells Fargo”)’s Motion 19 to Dismiss the Fourth cause of action in Plaintiffs’ Second Amended Complaint (the 20 “SAC”), which alleges that Defendants’ conduct, as alleged, constitutes unfair business 21 practices in violation of California Business and Professions Code § 17200 et seq. 22 Based on the SAC, moving papers and related documents, and applicable law, 23 Defendant Wells Fargo’s Motion is DENIED. 24 / / / 25 26 27 1 I. BACKGROUND 2 A. Procedural Background 3 The case was originally filed in state court and on March 30, 2020 removed to 4 federal court. ECF No. 1. On April 27, 2020, Plaintiffs filed the First Amended 5 Complaint (“FAC”), which asserted six causes of action: (1) violation of California Civil 6 Code § 2924; (2) violation of California Civil Code § 2923.7; (3) violation of California 7 Civil Code § 2923.6; (4) violation of California Business & Professions Code § 17200; 8 (5) breach of implied covenant of good faith and fair dealing; and (6) negligence. ECF 9 No. 7. Wells Fargo filed a Motion to Dismiss the FAC on May 11, 2020. ECF No. 9. 10 On July 10, 2020, the Court granted the Motion as to the Fourth and Fifth causes of 11 action and denied the rest; on the dismissed Fourth and Fifth causes of action, the Court 12 allowed Plaintiffs to file an amended complaint (“Order”). ECF No. 15. 13 On July 30, 2020, Plaintiffs filed the SAC. ECF No. 16. Subsequently on August 14 13, 2020, Wells Fargo filed another Motion to Dismiss, specifically moving to dismiss 15 the Fourth cause of action pursuant to Federal Rules of Civil Procedure (“FRCP”) 16 12(b)(6). ECF No. 17. Plaintiffs filed a Response on September 11, 2020, ECF No. 20, 17 and Wells Fargo filed a Reply on September 25, 2020, ECF No. 22. 18 B. Factual Background 19 Plaintiffs are the owners of a single-family home located at 706 Steffy Road, 20 Ramona, California 92065 (the “Property”). SAC, ECF No. 16, ¶ 9. The Property serves 21 as Plaintiffs’ primary residence. Id. In June 2012, Plaintiffs obtained a first lien 22 mortgage loan secured by the Property by executing a promissory note and deed of trust 23 in favor of Prospect Mortgage, LLC in the amount of $662,774.00. Id. ¶ 10. Wells Fargo 24 is the current beneficiary and servicer of the loan. Id. 25 In 2019, Plaintiffs fell behind in their mortgage payments. Id. ¶ 11. On April 18, 26 2019, a Notice of Default and Election to Sell Under Deed of Trust was recorded in the 27 1 San Diego County Recorder’s Office. Wells Fargo’s Request for Judicial Notice 2 (“RJN”)1 Ex. C, ECF No. 17-2 at 17–21. 3 On or around May 29, 2019, Plaintiffs submitted a “complete loan modification 4 application” to Wells Fargo, which acknowledged receipt of the application. SAC, ECF 5 No. 16, ¶ 12. On or around June 11, 2019, Plaintiffs received an email from Wells 6 Fargo’s employee, Selina, who then became Plaintiffs’ “single point of contact.” Id. ¶ 7 13. Selina informed Plaintiffs that underwriting needed additional documents; Plaintiffs 8 submitted them the next day, June 12, 2019. Id. Over the next two weeks Plaintiffs 9 unsuccessfully attempted to reach Selina by phone multiple times. Id. ¶ 14. Plaintiffs 10 also emailed asking about the status of the loan modification and advising that they could 11 not leave voice messages because the voicemail inbox was full. Id. 12 On July 11, 2019, Plaintiffs’ banking portal displayed a status of “No Open Items” 13 as to the pending modification and listed the foreclosure status as “Suspended.” Id. ¶ 15. 14 However, by July 23, 2019, that status changed to “Active.” Id. ¶ 16. Plaintiffs called 15 and emailed Selina, whose voicemail inbox remained full, to explain that two months 16 after submitting a loan modification application, and after being “asked to re-submit the 17 same documents multiple times,” the foreclosure status in the banking portal was now 18 “Active.” Id. ¶ 17. Instead of hearing from Selina directly, Plaintiffs received multiple 19 messages through the banking portal that requested additional documents be submitted. 20 Id. ¶ 18. Plaintiffs “immediately” complied, and on July 31, 2019, the foreclosure status 21 changed back to “Suspended.” Id. 22 23

24 25 1 The Court takes judicial notice of the four documents that have been presented as Exhibits by Wells Fargo, ECF No. 17-2. All four documents are judicially noticeable as true and correct copies of matters 26 of public record. Fed. R. Evid. 201(b); United States v. 14.02 Acres of Land, 547 F.3d 943, 955 (9th Cir. 2008). Plaintiffs in their Response did not object. See ECF No. 20. 27 1 On August 1, 2019, Plaintiffs received an email listing several more documents 2 needed for the loan modification review. Id. ¶ 19. Plaintiffs complied and uploaded the 3 requested documents. Id. On August 14, 2019, Plaintiffs received an automated email 4 message from the banking portal stating the requested documents had been received and 5 were being reviewed. Id. However, on August 20, 2019, Wells Fargo again asked 6 Plaintiffs to provide more documents—Plaintiffs did so. Id. ¶ 20. 7 On October 2, 2019, the Wells Fargo underwriters requested additional documents. 8 Id. ¶ 21. Plaintiffs submitted them, both via portal and email (directly to the single point 9 of contact). Id. Wells Fargo did not confirm receipt. Id. ¶ 22. Instead, Wells Fargo 10 recorded a Notice of Trustee’s Sale against the Property on November 27, 2019, which 11 initially set the sale of the Property to be January 17, 2020. Id.; RJN Ex. D, ECF No. 17- 12 2 at 23–24. 13 On January 7, 2020, the single point of contact confirmed receipt of all documents 14 submitted in “October 2020 [sic]” and stated they were under review. SAC, ECF No. 16, 15 ¶ 23. However, on January 9, 2020, Plaintiffs checked the bank portal and found that (1) 16 Wells Fargo had again listed more documents to be uploaded, (2) the foreclosure was 17 listed as “Suspended,” and (3) the trustee’s sale date remained to be January 17, 2020. 18 Id. ¶ 24. On January 10, 2020, the displays in the bank portal stayed the same; in 19 addition, it again listed additional documents to be submitted. Id. ¶ 26. 20 On January 13, 2020, the single point of contact informed Plaintiffs that “even 21 more documents were needed for review,” and that Plaintiffs should “call the Trustee 22 handling the foreclosure sale for confirmation that the sale would not proceed.” Id. ¶ 27. 23 Plaintiffs called the Trustee, which assured Plaintiffs that the Property would not be sold 24 on January 17, 2020, but instead on February 14, 2020. Id. ¶ 28. However, the Trustee 25 refused to confirm the latter date in writing until after January 17, 2020. Id. 26 27 1 On January 14, 2020, another employee of Wells Fargo, Mr. David Mayers, 2 contacted Plaintiffs with another list of documents needed for review. Id. ¶ 29. The list 3 of documents requested by Mr. Mayers “consisted primarily of the same documents 4 Plaintiffs previously submitted.” Id. Nonetheless, Plaintiffs submitted the documents 5 again on January 15, 2020. Id. ¶ 30. 6 On January 16, 2020, the online banking portal changed the foreclosure status to 7 “Suspended” with no sale date listed. Id. ¶ 31. But on January 23, 2020, the online 8 portal once again listed several documents for the Plaintiffs to upload, and the foreclosure 9 status changed back to “Active.” Id. ¶ 32. Plaintiffs allegedly “were perplexed” because 10 the requested documents were “the same documents that Plaintiffs had submitted 11 following the January 14, 2020 communication.” Id. So the next day on January 24, 12 2020, Plaintiffs reached out to the single point of contact to ask if they needed to do 13 something else, as the banking portal did not indicate that the documents were being 14 under review and instead stated the foreclosure was active. Id. ¶ 33. On January 26, 15 2020, Wells Fargo’s single point of contact responded to Plaintiffs’ email regarding the 16 document status in the portal by, once again, requesting “the same documents that 17 Plaintiffs had already submitted.” Id. ¶ 34. 18 In sum, Plaintiffs allege that despite the “ongoing loan modification application 19 process and the numerous, voluminous and repeated requests for additional documents, to 20 which Plaintiffs fully complied, Defendants have continued to dual track Plaintiffs and 21 have initiated foreclosure proceedings by recording a Notice of Trustee’s Sale.” Id. ¶ 39. 22 Plaintiffs further allege that, given the Notice of Trustee’s Sale, they “have not been 23 considered for a loan modification application.” Id. 24 II. LEGAL STANDARD 25 A motion to dismiss pursuant to FRCP 12(b)(6) tests the sufficiency of a 26 complaint, Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001), and dismissal is 27 1 warranted if the complaint lacks a cognizable legal theory, Robertson v. Dean Witter 2 Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). A complaint may also be dismissed if 3 it presents a cognizable legal theory yet fails to plead essential facts under that theory. Id. 4 While a plaintiff need not give “detailed factual allegations,” a plaintiff must plead 5 sufficient facts that, if true, “raise a right to relief above the speculative level.” Bell 6 Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). 7 “To survive a motion to dismiss, a complaint must contain sufficient factual 8 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft 9 v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 547). A claim is 10 facially plausible when the factual allegations permit “the court to draw the reasonable 11 inference that the defendant is liable for the misconduct alleged.” Id. In other words, 12 “the nonconclusory ‘factual content,’ and reasonable inferences from that content, must 13 be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret 14 Service, 572 F.3d 962, 969 (9th Cir. 2009). Determining the plausibility of the claim for 15 relief is a “context-specific task that requires the reviewing court to draw on its judicial 16 experience and common sense.” Iqbal, 556 U.S. at 679. 17 In reviewing a motion to dismiss under FRCP 12(b)(6), the court must assume the 18 truth of all factual allegations and must construe all inferences from them in the light 19 most favorable to the non-moving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 20 2002). At the same time, legal conclusions need not be taken as true merely because they 21 are cast in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th 22 Cir. 2003). 23 When ruling on the motion to dismiss, the court may consider the facts alleged in 24 the complaint, documents attached to the complaint, documents relied upon but not 25 attached to the complaint when authenticity is not contested, and matters of which the 26 court takes judicial notice. Lee v. Los Angeles, 250 F.3d 668, 688–89 (9th Cir. 2001). 27 1 III. ANALYSIS 2 Wells Fargo moves to dismiss with prejudice the Fourth cause of action in the 3 SAC, which alleges a violation of California’s Unfair Competition Law (“UCL”), Calif. 4 Bus. & Prof. Code § 17200 et seq. Wells Fargo argues that the SAC still fails to show 5 that Plaintiffs lost money or property as a result of any unfair competition by Wells 6 Fargo, a requirement to maintain standing for a UCL claim. ECF No. 17-1 at 1–2; ECF 7 No. 22 at 2. Plaintiffs argue that UCL has a broad scope to grant standing and that 8 specific allegations were made, including allegations on how Plaintiffs accumulated late 9 fees and appraisal fees due to Defendants’ conduct. ECF No. 20 at 5–6. 10 For the reasons stated below, the Court finds that at this stage of the lawsuit, 11 Plaintiffs have sufficiently pled to keep its UCL claim—albeit exclusive to the injuries of 12 “late fees” and “drive by appraisal fees” that have accrued since Plaintiffs filed a 13 complete loan modification application. Accordingly, Wells Fargo’s motion to dismiss 14 the Fourth cause of action with prejudice is DENIED. 15 A. Requirements for Standing 16 To have standing to sue under UCL, a plaintiff must have “suffered injury in fact 17 and ha[ve] lost money or property as a result of the unfair competition.” Calif. Bus. & 18 Prof. Code § 17204. To satisfy this requirement, Plaintiffs must “(1) establish a loss or 19 deprivation of money or property sufficient to qualify as injury in fact, i.e., economic 20 injury, and (2) show that the economic injury was the result of, i.e., caused by, the unfair 21 business practice or false advertising that is the gravamen of the claim.” Kwikset Corp. v. 22 Superior Court, 246 P.3d 877, 885 (Cal. 2011). 23 Plaintiffs argue that UCL’s scope is broad, see ECF No. 20 at 5–6, but they are 24 conflating what practices are actionable under UCL versus who may sue under it. The 25 Court has already decided that Plaintiffs have sufficiently alleged that Defendants’ 26 actions violated the UCL. ECF No. 15 at 22–23. However, even if Defendants’ actions 27 1 violate UCL, Plaintiffs must establish that a valid injury-in-fact occurred because of those 2 actions. 3 B. Ineligible Injuries 4 Accordingly, the Court will assess each alleged injury to determine if it meets the 5 injury-in-fact standard. The Court first observes that even after the Court permitted an 6 amendment to the FAC, the SAC has repeated many of the allegations with little 7 substantive change. See generally Redline Version of Am. Compl., ECF No. 23 (tracking 8 the changes made between the FAC and the SAC). With little changes made in the SAC, 9 most of the SAC’s alleged injuries remain inadequate to justify Plaintiffs’ standing. 10 To start, this Court has already ruled that Plaintiffs’ various emotional harms and 11 attorney’s fees and costs of suit do not constitute “money or property” for the purposes of 12 statutory standing under UCL. ECF No. 15 at 25. The SAC repeats these injuries with 13 no change. See ECF No. 23 at 10. And since the underlying law has not changed either, 14 this Court rejects them again. 15 This Court also has already ruled that Plaintiffs’ allegation of loss of “reputation 16 and goodwill” is conclusory, ECF No. 15 at 25–26, and the SAC makes little change that 17 would make the Court reconsider this time, see ECF No. 23 at 10. The Court found 18 Plaintiffs’ allegation conclusory because the FAC did not explain what the harm termed 19 “loss of reputation and goodwill” means—the SAC does not either. In addition, the 20 Court concluded that Plaintiffs in their FAC could not articulate how the harm can be 21 traced to Defendants’ conduct. The SAC barely moves the needle. Even if “Defendants’ 22 wrongful activities” have “increased [Plaintiffs’] costs and fees,” the SAC stays silent on 23 how those increased costs and fees affected Plaintiffs’ reputation and goodwill. Thus, 24 Plaintiffs’ alleged reputational harm and loss of goodwill remain conclusory. 25 The SAC newly asserts that “damage to [Plaintiffs’] credit . . . has occurred while 26 Plaintiffs have been awaiting a determination on their application.” ECF No. 16, ¶ 63. 27 1 But that passage is the only new addition made in the SAC that explicitly discusses 2 credit. It is still conclusory to just assert that Plaintiffs’ credit got hurt while they waited. 3 Absent more showing, the Court continues to wonder how Defendants’ actions resulted in 4 the damaged credit while pending the loan modification application. 5 Plaintiffs did make substantive amendments on their home ownership claim. The 6 SAC’s amended assertion is that the monthly “accumulated fees”—which consist of “late 7 fees” and “drive by appraisal fees” that are wholly due to Defendants’ wrongful 8 conduct—resulted in “loss of equity” and “imminent loss of their home.” ECF No. 16, ¶ 9 63. Wells Fargo argues that these claims are still invalid because the loss of equity and 10 imminent loss of the Property are the result of Plaintiffs defaulting on their loans. ECF 11 No. 17-1 at 4; ECF No. 22 at 3. Plaintiffs re-assert in their Response that the unlawful 12 conduct prevented the sale of their home. ECF No. 20 at 6. 13 The Court concludes that in spite of the amendments in the complaint, the loss of 14 Property and equity that occurred because of Plaintiff’s default before Defendant’s 15 wrongful acts cannot be traced to Defendants’ conduct. See Toneman v. U.S. Bank, Nat’l 16 Ass’n for Bear Stearns Asset Backed Sec. Tr. 2004-AC7, No. CV1209369MMMMRWX, 17 2013 WL 12132049, at *22 (C.D. Cal. Oct. 21, 2013), aff’d sub nom. Toneman v. U.S. 18 Bank NA, 628 F. App’x 523 (9th Cir. 2016). “Plaintiffs fell behind in their mortgage 19 payments” to Wells Fargo before Wells Fargo initiated the foreclosure process by 20 recording a Notice of Default on April 18, 2019. SAC, ECF No. 16, ¶ 11; RJN Ex. C, 21 ECF No. 17-2 at 17–21. Since the “[Plaintiffs’] home was subject to nonjudicial 22 foreclosure because of [Plaintiffs’] default on [their] loan, which occurred before 23 Defendants’ alleged wrongful acts, [Plaintiffs] cannot assert the impending foreclosure . . 24 . was caused by Defendants’ wrongful actions.” Jenkins v. JPMorgan Chase Bank, N.A., 25 216 Cal. App. 4th 497, 523 (2013), as modified (June 12, 2013), disapproved of in other 26 circumstances by Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919 (2016). 27 1 Given that the loss of equity and potential loss of Property already occurred, and 2 since no part of the SAC alleges that Plaintiffs remedied the default by paying off the due 3 loans, this alleged injury still cannot be grounds for a UCL claim even under the 4 construction of factual allegations and inferences most favorable to the non-moving 5 party. Finally, late fees and drive-by appraisal fees caused by the default that preceded 6 the complete loan modification application similarly cannot be traced to Defendants’ 7 conduct. 8 C. Late Fees and Appraisal Fees 9 But there are inherent financial and monetary implications from “late fees, drive by 10 appraisal fees, etc. that continue to accumulate on the loan on a monthly basis while 11 Plaintiffs await a determination on their loan modification application,” ECF No. 16, ¶ 12 63. Needing to pay fees that one would otherwise not owe plainly constitutes “lost 13 money” under Section 17204 of UCL. See, e.g., Gilliam v. Bank of Am., N.A., No. 14 SACV171296DOCJPRX, 2018 WL 6537160, at *28 (C.D. Cal. June 22, 2018) 15 (acknowledging “increased costs and fees” as injury-in-fact); Guillermo v. Caliber Home 16 Loans, Inc., No. C 14-04212 JSW, 2015 WL 4572398, at *5 to *6 (N.D. Cal. July 29, 17 2015) (finding “late fees” and “incurred fees” from a postponed sale as constituting 18 injury-in-fact); Gardenswartz v. SunTrust Mortg., Inc., No. CV 14-08548 SJO RZX, 19 2015 WL 900638, at *8 (C.D. Cal. Mar. 3, 2015) (recognizing “unwarranted interest and 20 penalties” as injury-in-fact). 21 The remaining question is whether Plaintiffs have sufficiently alleged such fees are 22 “the result of, i.e., caused by, the unfair business practice,” Kwikset Corp. v. Superior 23 Court, 246 P.3d 877, 885 (Cal. 2011). Under the construction of facts and inferences 24 most favorable to Plaintiffs, the Court finds that the accumulated fees were caused by 25 Defendants’ actions, specifically dual tracking and the violation of the “single point of 26 contact rule.” On dual tracking, Plaintiffs sufficiently pled that Wells Fargo unduly 27 1 delayed consideration of their loan modification application. See Order, ECF No. 15 at 2 21–22; see also SAC, ECF No. 16 at 4–6. Similarly, on the single point of contact rule, 3 Plaintiffs have sufficiently alleged that the patterns of untimely/inadequate responses and 4 the vague/contradictory information provided have unduly prolonged the loan 5 modification process. See Order, ECF No. 15 at 14–15; see also SAC, ECF No. 16 at 3– 6 6. And throughout these undue delays and prolongations, Plaintiffs incurred fees that 7 they otherwise would not have. 8 Wells Fargo argues in its Motion and Reply that these fees cannot be fairly traced 9 to Defendants’ conduct because Plaintiffs had a preexisting duty to pay the mortgage loan 10 —in other words, Plaintiffs’ default triggered the fees. ECF No. 17-1 at 4; ECF No. 22 at 11 3–4; see also Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal. App. 4th 497, 523 (2013) 12 (holding that when foreclosure is caused by a pre-existing default, no causation to injury 13 of loss of home is shown), as modified (June 12, 2013), and disapproved of in other 14 circumstances by Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919 (2016). This is 15 partially correct. The late fees and drive-by appraisal fees that accrued before Plaintiffs 16 allegedly submitted a complete loan modification application are not eligible injuries for 17 the purposes of UCL standing. 18 However, once Plaintiffs submitted a complete loan modification application, 19 Defendants had a newly created duty to: (1) “timely, accurately, and adequately inform 20 the borrower of the current status of the foreclosure prevention alternative,” Cal. Civ. 21 Code § 2923.7(b)(3), and (2) “not . . . conduct a trustee’s sale, while the complete first 22 lien loan modification application is pending,” Cal. Civ. Code § 2923.6(c). And 23 construing the facts and inferences most favorable to Plaintiffs, the SAC sufficiently 24 pleads that the amount of fees Plaintiffs owe would at the very least be lower had 25 Defendants not violated those provisions, i.e. processed the application in a timely 26 manner. That difference in payable fees is solely due to Defendants’ actions and is thus a 27 1 valid injury-in-fact. See, e.g., Smith v. Specialized Loan Servicing, LLC, No. 16CV2519- 2 GPC(BLM), 2017 WL 1711283, at *8 (S.D. Cal. May 3, 2017) (finding that plaintiff 3 sufficiently alleged standing for a UCL claim on “marked up charges, excessive fees, and 4 incurred administrative costs due to Defendant’s failure to properly comply with the loss 5 mitigation regulations”). 6 The case law Wells Fargo has provided do not dispute that fees resulting from 7 Defendants’ undue delays are actionable under UCL, even if Plaintiffs defaulted. Wells 8 Fargo first cites Sutcliffe v. Wells Fargo Bank, N.A., 283 F.R.D. 533, 553 (N.D. Cal. 9 2012), where the court agreed that “preexisting duty to make payments on [Plaintiffs’] 10 loan” does not constitute damages. Wells Fargo also cites Reyes v. Wells Fargo Bank, 11 N.A., No. C-10-01667 JCS, 2011 U.S. Dist. LEXIS 2235, at *48 (N.D. Cal. Jan. 3, 2011), 12 which functionally states the same: “where the money paid under an agreement was 13 already owed under a prior agreement, it . . . cannot support a [breach of contract] claim 14 for damages.” However, the mortgage loan already owed is not at issue—Plaintiffs do 15 not contest that. Instead, what is at issue is the newly accrued late fees and appraisal fees 16 due to Defendants’ allegedly undue delays. In fact, the immediately following passage in 17 Sutcliffe states, “an increase in the principal amount owed on the loan, as a result of Wells 18 Fargo’s failure to offer them a permanent modification upon the successful completion of 19 the [loan modification program trial period]” sufficiently qualifies as damages. 283 20 F.R.D. at 553. Case law provided by Wells Fargo clearly distinguishes between what 21 Plaintiffs already owe versus what they do not need to owe. 22 Wells Fargo appears to argue that the mortgage agreement has functionally 23 “contracted out” UCL claims that may arise from fees that resulted from Wells Fargo 24 unduly delaying the loan modification process. See ECF No. 22 at 3 (“What’s more, 25 plaintiffs agreed to pay foreclosure-related costs upon their delinquency.”). Under this 26 legally unsupported theory, Plaintiffs have “agreed” to pay all foreclosure-related costs if 27 1 they default—which would include all late fees and appraisal fees, regardless of 2 Defendants’ illegal conduct. Wells Fargo does not cite to any specific RJN to make this 3 claim, and the inference most favorable to Plaintiffs based on the SAC’s allegations is 4 that Plaintiffs never agreed to such an arrangement. See ECF No. 16, ¶ 63. 5 In its Reply Brief, Wells Fargo also presents a string of case law that generally 6 discusses “proximate cause” as a legal concept. ECF No. 22 at 4. But Wells Fargo never 7 connects the dots. The Reply never explains (1) how Defendants’ conduct is not the 8 proximate cause of the injury, and (2) if UCL claims even need a showing of proximate 9 cause. The Court will not do this work for Wells Fargo. Instead, it leaves with this: 10 based on the allegations, the delays in processing loan modifications, in their “natural and 11 continuous sequence, unbroken by an efficient intervening cause,” Parker v. City & Cty. 12 of San Francisco, 158 Cal. App. 2d 597, 607 (1958), increased fees for Plaintiffs. 13 Finally, Wells Fargo argues that the equitable nature of UCL prohibits recovery of 14 damages. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003). 15 That same case acknowledges restitution under UCL as an appropriate remedy. Id. 16 Restitution in the context of a UCL claim is defined as “compelling a UCL defendant to 17 return money obtained through an unfair business practice to those persons in interest 18 from whom the property was taken, that is, to persons who had an ownership interest in 19 the property or those claiming through that person.” Id. at 1144–45. Here, the SAC has 20 sufficiently pled that Plaintiffs are at least entitled to restitution, which would be 21 recovering the late fees and appraisal fees they paid to Defendants due to Defendants’ 22 delays in processing the complete loan modification application. 23 / / / 24 25 26 27 1 CONCLUSION AND ORDER 2 For the foregoing reasons, the Court DENIES Defendant Wells Fargo’s Motion to 3 || Dismiss the Plaintiffs’ Fourth cause of action in their Second Amended Complaint. The 4 hearing set before this Court for October 9, 2020 is hereby VACATED. 5 IT IS SO ORDERED. 6 7 || Dated: October 6, 2020 2 sale C4 8 Hon. Gonzalo P. Curiel 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 14 28 3:20-CV-00591-GPC-AHG