(PS) Collins v. Wells Fargo and Co.

District Court, E.D. California·Decided August 15, 2024·No. 2:23-cv-02676·Unknown

Opinion

STEVEN RAY COLLINS, et al., Case No. 2:23-cv-02676-DAD-CSK Plaintiffs, FINDINGS AND RECOMMENDATIONS RECOMMENDING MOTION TO DISMISS v. BE GRANTED Defendant. (ECF No. 9) Plaintiffs Steven Ray Collins and Sharon Lavette Collins are proceeding in this action pro se. (ECF No. 1.)1 Pending before the Court is Defendants Wells Fargo Bank, N.A. and Wells Fargo & Company’s motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), which is fully briefed. (ECF Nos. 9, 12, 18.) For the reasons stated below, the Court recommends GRANTING Defendants’ motion to dismiss without leave to amend. The Court also recommends that Plaintiff’s motion for preliminary injunction (ECF No. 2) be DENIED as moot. In November 2004, Plaintiffs obtained a loan from Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo Bank”) predecessor-in-interest, World Savings Bank, in the amount 1 This matter was referred to the undersigned pursuant to Local Rule 302(c)(21) and 28 U.S.C. § 636(b)(1). of $185,000.00, secured by a first Deed of Trust against their property located at 5543 Danjac Circle, Sacramento, CA 95822 (“Property”). Compl. at 12, 170 (ECF No. 1); Defs. Request for Judicial Notice (“RJN”), Exh. F, G (ECF No. 10).2 In December 2006, Plaintiffs obtained a second loan from World Savings Bank in the amount of $200,000, secured by a second Deed of Trust against their Property. Compl. at 160; RJN, Exh. I at 51. The second loan was a home equity loan. Id. On November 1, 2009, after a series of name changes and mergers, Wells Fargo Bank became Plaintiffs’ lender. RJN, Exhs. B- D. From 2009 to 2011, Plaintiffs fell behind on their loan payments and on April 19, 2011, a Notice of Default was recorded showing $10,258.70 in arrears. RJN, Exh. H. From 2009 to 2023, Plaintiffs applied for loan modifications with Wells Fargo Bank. Compl. at 17-22, 56, 143-148; RJN, Exh. J at 98-99. In March 2016, Clear Recon Corp. was substituted as the new Trustee under the second Deed of Trust for the Property. RJN, Exh. I. Clear Recon Corp. pursued foreclosure on the loan on multiple occasions, the first was on April 6, 2018 when a Notice of Trustee’s Sale was recorded for a sale to take place on May 17, 2018 (RJN, Exh. I at 91) and a second time was when a Notice of Trustee’s Sale was recorded on August 17, 2023 for a sale to take place on September 21, 2023 (RJN, Exh. L). It appears the trustee’s sale has not yet occurred. See Defs. Mot. at 9, fn.5. 2 In support of its motion to dismiss, Defendants request that the Court take judicial notice of 12 exhibits. (ECF No. 10.) The request is granted in its entirety. When reviewing a motion to dismiss, courts may consider undisputed facts contained in judicially noticeable documents under Federal Rule of Evidence 201 without converting the motion to one of summary judgment. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Here, and when cited, the Court relies on certain undisputed facts from documents attached to the complaint, documents filed alongside the parties’ briefing, recorded notices related to the loan, deed of trust, and foreclosure proceedings, and other documents related to Plaintiff’s previous cases. See Hyatt v. Yee, 871 F.3d 1067, 1076 (9th Cir. 2017) (judicial notice proper of documents from administrative and judicial proceedings); Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (finding judicial notice proper for exhibits “on which the Complaint necessarily relies”); see also Gamboa v. Tr. Corps, 2009 WL 656285, at *3 (N.D. Cal. Mar. 12, 2009) (taking judicial notice of recorded documents related to a foreclosure sale, including grant deed and deed of trust, as they were “part of the public record and [] easily verifiable”). Between 2011 and 2023, Plaintiffs filed multiple bankruptcies in the Eastern District of California. Compl. at 155, 194; Defs. Mot. at 9 (identifying at least eight bankruptcies filed in the Eastern District of California United States Bankruptcy Court, including: Case No. 11-39208, Case No. 11-46417, Case No. 14-25862, Case No. 14- 32084, Case No. 18-20835, Case No. 18-23072, Case No. 18-25595, Case No. 23- 23283). Plaintiff has also conceded this is accurate. See Compl. at 42 (“Plaintiffs have filed chapter 13 over a span Wells Fargo[] counts – eight in all.”). A. The 2018 State Court Action On September 12, 2018, Plaintiffs filed a state court action in Sacramento County Superior Court against Clear Recon Corp and Wells Fargo Bank (“state court defendants”). RJN, Exh. I at 47. Plaintiffs asserted eight causes of action challenging the state court defendants’ pre-foreclosure conduct. Id. at 52-63. Plaintiffs claimed the state court defendants violated state law by (1) recording the Notice of Default without satisfying due diligence requirements pursuant to California Civil Code Section 2923.5 (id. at 53-55); (2) failing to assign a “single point of contact” from Wells Fargo Bank to help with Plaintiffs’ loan modification in violation of California Civil Code Section 2923.7 (id. at 55-57); (3) failing to give proper notice of Plaintiff’s default and acceleration of the loan in breach of the loan agreement (id. at 57-59); (4) failing to give proper notice of Plaintiff’s default and acceleration of the loan in breach of the implied covenant and engaging in “dual lending practices” (id. at 59-60); (5) failing to give proper notice to Plaintiffs regarding foreclosure proceedings amounting to negligence (id. at 60-61); (6) violating California Civil Code Section 2924.12, thereby entitled Plaintiffs to declaratory relief by enjoining the trustee’s sale from taking place pending resolution of the state court matter (id. at 61); (7) failing to provide proper notice of assignment of Plaintiffs’ deed of trust of their Property in violation of California Civil Code Section 2937 (id. at 62); and (8) engaging in unfair competition pursuant to California Business and Professions Code Section 17200, et seq. (id. at 63). / / / The state court dismissed the breach of contract (third cause of action), breach of implied covenant (fourth cause of action), negligence (fifth cause of action), and notice of assignment (seventh cause of action) after a series of demurrers. RJN, Exh. J at 96. The state court action proceeded on the second amended complaint. Id. On July 10, 2020, the state court granted state court defendants’ motion for summary judgment, or in the alternative, summary adjudication on all remaining claims and dismissed the action with prejudice. RJN, Exh. J. On July 30, 2020, judgment was entered in favor of state court defendants and against Plaintiffs. RJN, Exh. K. B. The 2023 Federal Court Action3 Plaintiffs filed this federal action on November 15, 2023 against Wells Fargo Bank and Wells Fargo & Company. Compl. Defendant Wells Fargo Bank was also a named defendant in the state court action. RJN, Exh. I. Similar to the 2018 state court action, Plaintiffs’ complaint here also challenges the foreclosure proceedings of Plaintiffs’ loans with Wells Fargo Bank. Plaintiffs asserts 62 causes of action in the federal complaint. Compl. at 95-123. All of Plaintiffs’ causes of action raise a variety of violations of the Fair Housing Act (“FHA”) pursuant to 42 U.S.C. 3601, et seq. in relation to the loan modification requests, pre-foreclosure conduct and bankruptcy proceedings

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(PS) Collins v. Wells Fargo and Co., (E.D. Cal. 2024).

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