Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04248/USCOURTS-cand-3_14-cv-04248-16/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1446 Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

KAYODE POWELL,

Plaintiff,

v.

WELLS FARGO HOME MORTGAGE, et 

al.,

Defendants.

Case No. 14-cv-04248-TSH 

ORDER GRANTING MOTION FOR 

SUMMARY JUDGMENT

Re: Dkt. No. 180

I. INTRODUCTION

Kayode Powell brings this action against Wells Fargo Bank, N.A., for alleged servicing 

violations related to his home loan. Pending before the Court is Wells Fargo’s Motion for 

Summary Judgment. ECF No. 180. The Court finds this motion suitable for disposition without 

oral argument and VACATES the June 20, 2019 hearing. See Civ. L.R. 7-1(b). Having 

considered the parties’ positions, relevant legal authority, and the record in this case, the Court 

GRANTS Wells Fargo’s motion for the following reasons.

II. REQUEST FOR JUDICIAL NOTICE

As a preliminary matter, Wells Fargo requests the Court take judicial notice of ten public 

records in support of its motion: (1) Deed of Trust recorded with the Alameda County Recorder’s 

Office as document number 2005447163 on October 17, 2005; (2) Grant Deed recorded with the 

Alameda County Recorder’s Office as document number 2005447162 on October 17, 2005; (3) 

Stipulation and Order Amending Judgment Regarding Real Property entered on July 16, 2012 in 

the Superior Court of California, County of Alameda, case number RF08380232; (4) Grant Deed 

recorded with the Alameda County Recorder’s Office as document number 2012296860 on 

September 11, 2012; (5) Voluntary Chapter 7 Bankruptcy Petition Docket in the United States 

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Bankruptcy Court, Northern District of California Case No. 08-42856, as of October 26, 2018; (6)

Notice of Default and Election to Sell Under Deed of Trust recorded with the Alameda County 

Recorder’s Office as document number 2008342907 on December 3, 2008; (7) Trustee’s Deed 

Upon Sale recorded with the Alameda County Recorder’s Office as document number 

2010091485 on April 1, 2010; (8) Voluntary Chapter 7 Bankruptcy Petition Docket in the United 

States Bankruptcy Court, Northern District of California Case No. 10-43283, as of October 26, 

2018; (9) Notice of Rescission of Declaration of Default and Demand for Sale and of Notice of 

Breach and Election to Cause Sale recorded with the Alameda County Recorder’s Office as 

document number 2011354436 on December 6, 2011; and (10) Notice of Default and Election to 

Sell Under Deed of Trust recorded with the Alameda County Recorder’s Office as document 

number 2010353346 on December 1, 2010. Request for Judicial Notice (“RJN”), ECF No. 184. 

The Court may take judicial notice of facts not subject to reasonable dispute that “can be 

accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” 

Fed. R. Evid. 201(b). “[M]atters of public record” are the appropriate subjects of judicial notice. 

Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001), overruled on other grounds by

Galbraith v. Cty. of Santa Clara, 307 F.3d 1119, 1125-26 (9th Cir. 2002). As Wells Fargo’s 

request consists entirely of public records, and Powell does not oppose the request, the Court 

GRANTS Wells Fargo’s request for judicial notice.

III. BACKGROUND

A. Background on the Property and Loan

Around October 17, 2005, Kayode and Charlene Powell (together, the “Powells”) obtained 

a loan from Wells Fargo in the amount of $473,400 to purchase a duplex commonly known as 

4770-4776 Tompkins Avenue, Oakland, California (the “Property”). Fourth Am. Compl. (“FAC”) 

¶¶ 4, 6, ECF No. 149; Smith Decl., Exs. A (Adjustable Rate Note and Addendum to Note) & B

(Deed of Trust), ECF No. 182. 

The Powells divorced on October 31, 2009. FAC ¶ 7; RJN, Ex. C (Stipulation and Order 

Am. J. Re: Real Property). On September 11, 2012, they recorded a grant deed transferring the 

Property to Kayode Powell. FAC ¶ 7; RJN, Ex. D (Interspousal Grant Deed). 

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B. Default on the Loan and Foreclosure Proceedings

The Powells were late on their Loan payment obligations on November 1, 2006, and the 

Loan is currently past due for the payment that would have due on February 1, 2008 and all 

payments due after that date. Smith Decl., ¶ 4 & Ex. C (letters sent to the Powells dated 

December 7, 2006, September 24, 2007, and September 19, 2008); Ladi Decl., Ex. A (Powell 

Dep.) at 152:20-22, ECF No. 181 (“Q: Mr. Powell, when’s the last time you made a payment on 

your loan? A: It was June 2008, I believe.”). 

In March 2008, Wells Fargo approved the Powells for a special forbearance plan. Smith 

Decl. ¶ 5 & Ex. D (special forbearance agreement, dated March 6, 2008). That agreement 

required the Powells to make four payments, each in the amount of $4,996.79, through July 1, 

2008, and upon completion they would continue to be reviewed for a loan modification. Id., Ex. 

D. The Powells initially made payments but breached the agreement by failing to make all 

required payments. Id. ¶ 6, Powell Dep. at 152:20-25. On June 5, 2008, Powell filed a Voluntary 

Chapter 7 Bankruptcy in the Northern District of California, Case No. 08-42856. RJN, Ex. E

(bankruptcy case docket). 

In a March 19, 2009 letter of hardship to Wells Fargo, Powell explained the reason for his 

inability to make his mortgage payments was a combination of factors: (1) he was laid off from his 

full-time job in December 2006 and was only working intermittently afterwards; (2) he was unable 

to keep the Property consistently rented due to his household financial and emotional instability 

during the three years before the letter and due to the volatile housing market; (3) he and his wife 

had a number of family members who suffered significant medical events in 2005, 2007, and early 

2008, which took a financial toll on the household; and (4) he and his wife separated in September 

2007, which led to additional financial costs and burdens. Powell Dep. at 272:21-273:7 & Ex. 21 

(March 19, 2019 hardship letter); see also id. at 136:6-137:11 (explaining he began asking for 

modification assistance because of unexpected expenses and decreased income); id. at 273:11-19

& Ex. 22 (April 1, 2013 hardship letter).

Wells Fargo subsequently offered the Powells a loan modification on August 11, 2009, but 

they did not accept the offer. Smith Decl. ¶¶ 7-8 & Ex. F; Ladi Decl., Ex. C (Pl.’s Interrog. 

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Resps.), Resp. to Interrog. No. 13; Powell Dep. at 183:23-185:1. Powell testified he would have 

accepted the loan modification, but Charlene Powell “refused it because she had stated that we 

were no longer married and she wanted to sell the property.” Powell Dep. at 184:21-24.

As a result of the default on the Loan, a Notice of Default was recorded on December 3, 

2008. RJN, Ex. F. A trustee’s sale followed on March 25, 2010, but it was rescinded because 

Powell filed a bankruptcy on the date of the sale, triggering an automatic stay. RJN, Exs. G 

(Trustees Deed Upon Sale), H (docket for Voluntary Ch. 7 Bankr. in the N. Dist. of Cal., Case No. 

10-43283), I (Not. of Rescission). A second Notice of Default was recorded on December 1, 2010 

for the same default dating back to February 1, 2008. RJN, Ex. J.

C. Loan Modification Reviews

Since the time of the second notice of default, Powell has sought a loan modification on 

numerous occasions and alleges Wells Fargo was negligent in its handling of four applications: (1) 

an application submitted on or around July 17, 2012; (2) an application submitted on or around 

October 19, 2012; (3) an application submitted on or about April 8, 2013; (4) and an application 

submitted on or about May 27, 2015. FAC ¶¶ 18-44.

1. The July 17, 2012 Application

Sometime in May 2012, Powell inquired about the process for submitting a request for 

mortgage assistance (“RMA”). Id. ¶ 18; Smith Decl., Ex. G. Wells Fargo initially denied the 

request because it sought further documentation, namely the Powells’ divorce decree and the quit 

claim deed that awarded him the Property. Smith Decl., Exs. G (denial letter from Wells Fargo) & 

H (Wells Fargo’s loss mitigation notes reflecting a phone call with Powell on May 17, 2012 in 

which he was told that Wells Fargo needed both a divorce decree and quit claim deed). 

Powell alleges he submitted an RMA on July 17, 2012. FAC ¶ 18. Wells Fargo states that 

it has no record of an RMA from that time, but it did receive an RMA from Powell on August 21, 

2012 that was dated August 17, 2012. Smith Decl. ¶ 10 & Ex. I. After reviewing the RMA, Wells 

Fargo sent the Powells a letter dated September 5, 2012, requesting their 2011 tax return by 

September 20, 2012. Id. ¶ 11 & Ex. J. Thereafter, Wells Fargo spoke with Powell on September 

11, 2012, at which time Powell indicated his tax returns were stolen from his vehicle, but he 

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subsequently provided his 2006 tax return. Id. ¶ 12 & Ex. K (loss mitigation notes). Because 

Powell did not provide the requested information from 2011, Wells Fargo denied his RMA 

application on October 17, 2012. Id. ¶ 13 & Ex. L (Oct. 12, 2012 decision letter). 

2. The October 19, 2012 Application

Wells Fargo received another RMA from Powell on or about October 22, 2012. Id. ¶ 14 & 

Ex. M. In this RMA, Powell listed his total monthly gross income as $2,330.05 and his total 

debt/expenses as $4,338.17. Id., Ex. M. Around that same time, Wells Fargo received an 

escalated inquiry from the Office of Congresswoman Barbara Lee regarding Powell’s RMA. Id. ¶ 

16. Thereafter, Sean Meier from Wells Fargo’s Office of Executive Complaints communicated 

with both Congresswoman Lee’s office and Powell regarding the items still needed to complete 

the RMA application. Id. & Ex. O (letters dated October 29, November 7, and November 13, 

2012 from Sean Meier to the Powells and Congresswoman Lee’s office). Powell submitted his 

2011 tax return on October 30, 2012. Id. ¶ 18 & Ex. P; FAC ¶ 25. 

After Wells Fargo collected the documentation it deemed necessary to review Powell’s 

application, it calculated Powell’s gross monthly income as $2,293. Smith Decl. ¶ 20 & Exs. MQ; see also Powell Dep. at 191:24–192:13 & Ex. 7. Wells Fargo determined it could not create an 

affordable loan modification for Powell because the proposed modified payments under the 

federal government’s Home Affordable Modification Program (“HAMP”) exceeded the 

acceptable housing to income ratio (“HTI”) that is the limit for HAMP. Smith Decl. ¶ 20 & Ex. Q. 

Wells Fargo also determined it could not create an affordable payment under a non-HAMP 

program based on Powell’s income. Id. ¶ 21 & Ex. R. Wells Fargo denied the application on 

December 18, 2012. Id. ¶¶ 19, 21 & Exs. Q, R; Powell Dep. at 197:21–198:14, 199:10–20 & Exs. 

9-10. 

3. The April 8, 2013 Application

Wells Fargo received another RMA from Powell, dated April 7, 2013, in which he listed 

his monthly income as $4,888 and his monthly expenses as $3,541. Smith Decl. ¶ 22 & Ex. S. In 

response, Wells Fargo sent a letter dated April 8, 2013, requesting additional items and 

information. Id. ¶ 23 & Ex. T. On May 6, 2013, Wells Fargo sent a follow-up letter requesting 

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information from Powell regarding his application. Id. ¶ 24 & Ex. V. After receiving the 

requested documentation, Wells Fargo denied Powell’s April 2013 application because it still 

could not, based on Powell’s income, create an affordable payment under either HAMP or a nonHAMP program. Id. ¶¶ 25-27 & Exs. W, X; Powell Dep. at 217:2-218:18, 221:7-222:23 & Exs. 

13-14. This time Wells Fargo calculated Powell’s gross monthly income as $4,579, but the HTI

still exceeded the acceptable limit under HAMP. Smith Decl. ¶ 26. Powell attempted to appeal 

this decision by telephone and by submitting a pay stub showing new income. FAC ¶¶ 36-37. 

However, Wells Fargo denied the appeal because the new income was from a contract position 

and was not permanent in nature. Smith Decl. ¶ 28 & Exs. Y, Z. Powell alleges a foreclosure sale 

was then scheduled on July 22, 2013, FAC ¶ 39, but Wells Fargo states no such foreclosure sale 

took place then or any time since. Smith Decl. ¶ 29. 

4. The May 27, 2015 Application

Powell submitted another RMA application on May 27, 2015. FAC ¶ 40; Smith Decl. ¶ 

30. In response, on June 15, 2015, Wells Fargo requested further items by July 15, 2015 to 

complete his application. Smith Decl. ¶ 30 & Ex. AA. Because Wells Fargo did not receive the 

requested materials by the deadline, it denied the application on August 20, 2015. Id. ¶ 31 & Ex. 

AB. 

D. Procedural Background

Powell filed this action in Alameda County Superior Court on September 3, 2014, seeking 

“equitable relief and damages precipitated by the events and acts of Defendants resulting in an 

imminent threat of wrongful foreclosure.” Compl. ¶ 2, ECF No. 1-1. 1 He asserted 17 claims: (1) 

Negligence; (2) Declaratory Relief; (3) Temporary Restraining Order and Preliminary Injunction; 

(4) Intentional Infliction of Emotional Distress (“IIED”); (5) Breach of Good Faith and Fair 

Dealing; (6) Quiet Title; (7) Accounting; (8) violation of California’s Rosenthal Act; (9) Fraud; 

 

1

In addition to Wells Fargo, Powell also named as defendants HSBC USA, N.A., First American 

Loanstar Trustee Services, Fidelity National Title Insurance Company, Doe Credit Reporting 

Agencies, Nicole Miles-Todd (a Wells Fargo agent), Recorder Patrick O’Connell, John Kennerty 

(a Wells Fargo agent), Chet Sconyers (a Wells Fargo agent), and Hank Duong (a First American 

Agent). Id. ¶ 4. 

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(10) Specific Performance by Promissory or Equitable Estoppel; (11) Breach of Written and Oral 

Contract; (12) Quia Timet; (13) Racketeering Influenced Corrupt Organizations Act; (14) 

Rescission of Note and Deed of Trust and Restitution; (15) violation of California Civil Code 

section 789.3; (16) violation of the Fair Credit Reporting Act; and (17) Discrimination. Id. ¶¶ 35-

182. 

On September 19, 2014, Wells Fargo removed the action to this Court. Not. of Removal, 

ECF. No. 1. The case was assigned to Magistrate Judge Maria-Elena James, who presided over 

the case through several motions to dismiss.2 See ECF Nos. 8, 12, 71, 79, 85, 100, 107, 109, 131, 

148. A more detailed procedural background can be found in Judge James’s previous orders. See 

ECF Nos. 131, 148. By the time Powell filed the operative Fourth Amended Complaint on July 

14, 2017, Wells Fargo was the sole remaining defendant and Powell alleged only two causes of 

action: (1) Negligence; and (2) violation of California’s Unfair Competition Law (“UCL”), Cal. 

Bus. & Prof. Code § 17200. 

Wells Fargo filed the present motion on October 29, 2018, seeking summary judgment as 

to both remaining claims. Powell filed his opposition on May 23, 2019. ECF No. 211.3

IV. LEGAL STANDARD

Summary judgment is proper where the pleadings, discovery and affidavits demonstrate 

that there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a). The party moving for summary judgment bears the initial 

burden of identifying those portions of the pleadings, discovery and affidavits that demonstrate the 

 

2

Judge James retired on August 31, 2018, after which the case was reassigned to the undersigned. 

ECF No. 169. 

3 Powell does not address the merits of Wells Fargo’s motion in his opposition. Instead, he 

requests a stay to locate an attorney to represent him. Opp’n at 3. However, on February 12, 2019 

(over three months ago), Powell requested that he be permitted to represent himself (ECF No. 

193), and the Court subsequently granted his former counsel’s motion to withdraw based on 

Powell’s request. ECF Nos. 197, 200. Prior to his opposition, Powell made no indication that he 

would seek new counsel despite his stated intention to represent himself. Regardless, he has had 

ample time to find new counsel and further delay is not warranted. Accordingly, Powell’s request 

for a stay to locate new counsel is DENIED. Powell also requests additional time to review 

discovery in this case, despite the fact that discovery closed on July 31, 2018. Opp’n at 2-3; Case 

Management Order, ECF No. 158. Powell’s request is DENIED because, as discussed below, his 

remaining claims fail as a matter of law and further discovery would not remedy this failure. 

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absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 

477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence 

for a reasonable jury to return a verdict for the nonmoving party. Id.

Where the moving party will have the burden of proof on an issue at trial, it must 

affirmatively demonstrate that no reasonable trier of fact could find other than for the moving 

party. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). On an issue where 

the nonmoving party will bear the burden of proof at trial, the moving party can prevail merely by 

pointing out to the district court that there is an absence of evidence to support the nonmoving 

party’s case. Celotex, 477 U.S. at 324-25.

If the moving party meets its initial burden, the opposing party must then set forth specific 

facts showing that there is some genuine issue for trial in order to defeat the motion. Fed. R. Civ.

P. 56(c)(1); Anderson, 477 U.S. at 250. All reasonable inferences must be drawn in the light most 

favorable to the nonmoving party. Olsen v. Idaho State Bd. of Med., 363 F.3d 916, 922 (9th Cir. 

2004). However, it is not the task of the Court to scour the record in search of a genuine issue of 

triable fact. Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). The Court “rel[ies] on the 

nonmoving party to identify with reasonable particularity the evidence that precludes summary 

judgment.” Id.; see also Simmons v. Navajo Cty., Ariz., 609 F.3d 1011, 1017 (9th Cir. 2010). 

Thus, “[t]he district court need not examine the entire file for evidence establishing a genuine 

issue of fact, where the evidence is not set forth in the opposing papers with adequate references 

so that it could conveniently be found.” Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1031 

(9th Cir. 2001). If the nonmoving party fails to make this showing, “the moving party is entitled 

to a judgment as a matter of law.” Celotex, 477 U.S. at 322 (internal quotations omitted).

Finally, “[w]hile the evidence presented at the summary judgment stage does not yet need 

to be in a form that would be admissible at trial, the proponent must set out facts that it will be 

able to prove through admissible evidence.” Norse v. City of Santa Cruz, 629 F.3d 966, 973 (9th 

Cir. 2010) (citations omitted). Accordingly, “[t]o survive summary judgment, a party does not 

necessarily have to produce evidence in a form that would be admissible at trial, as long as the 

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party satisfies the requirements of Federal Rules of Civil Procedure 56.” Block v. City of L.A., 253 

F.3d 410, 418-19 (9th Cir. 2001); Celotex, 477 U.S. at 324 (a party need not “produce evidence in 

a form that would be admissible at trial in order to avoid summary judgment.”); see also Fed. R. 

Civ. P. 56(c)(4) (“An affidavit or declaration used to support or oppose a motion must be made on 

personal knowledge, set out facts that would be admissible in evidence, and show that the affiant 

or declarant is competent to testify on the matters stated.”).

V. DISCUSSION

A. Negligence

Wells Fargo first argues Powell’s negligence claim should be dismissed because it owed 

him no duty of care in the loan modification process. Mot. at 6. 

To prevail on his negligence claim, Powell must show Wells Fargo owed him a legal duty, 

that it breached the duty, and that the breach was a proximate or legal cause of his injuries. 

Merrill v. Navegar, Inc., 26 Cal. 4th 465, 477 (2001); see also Cal. Civ. Code § 1714. The 

California Supreme Court has identified six factors, known as the Biakanja factors, to determine 

whether there is a duty of care: 

(1) the extent to which the transaction was intended to affect the 

plaintiff, (2) the foreseeability of harm to [the plaintiff], (3) the degree 

of certainty that the plaintiff suffered injury, (4) the closeness of the 

connection between the defendant's conduct and the injury suffered, 

(5) the moral blame attached to the defendant's conduct, and (6) the 

policy of preventing future harm. 

Biakanja v. Irving, 49 Cal. 2d 647, 650 (1958). “Whether a duty of care exists is a question of law 

to be determined on a case-by-case basis.” Alvarez v. BAC Home Loans Servicing, L.P., 228 Cal. 

App. 4th 941, 944 (2014) (citing Lueras v. BAC Home Loans Serv., LP, 221 Cal. App. 4th 49, 62 

(2013)).

“As a general rule in California, a ‘financial institution owes no duty of care to a borrower 

when the institution’s involvement in the loan transaction does not exceed the scope of its 

conventional role as a mere lender of money.” Alvarez, 228 Cal. App. 4th at 944 (citing Lueras, 

221 Cal. App. 4th at 62. However, in applying this general rule, California courts are divided on 

whether a loan servicer owes a duty of care in the residential loan modification context. Compare 

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Lueras, 221 Cal. App. 4th at 67 (holding loan service providers do not owe a plaintiff a duty of 

care when considering a loan modification application) with Alvarez, 228 Cal. App. 4th at 948

(concluding that “because defendants allegedly agreed to consider modification of the plaintiffs’

loans, the Biakanja factors clearly weight in favor of a duty [of care].”). Wells Fargo urges the 

Court to follow Lueras. Mot. at 6-7.

Federal courts, even within this district, have disagreed as to whether Lueras or Alvarez is 

more persuasive. Compare Romo v. Wells Fargo Bank, N.A., 2016 WL 324286, at *9 (N.D. Cal. 

Jan. 27, 2016) (stating that “most federal district courts have followed Alvarez”) with Marques v. 

Wells Fargo Bank, N.A., 2016 WL 5942329, at *7 (N.D. Cal. Oct. 13, 2016) (“A growing number 

of courts that have addressed this issue since Lueras and Alvarez have adopted the holding in 

Lueras in finding that a mortgage servicer does not owe borrowers a duty of care in processing a 

residential loan modification”). Although there does not appear to be a published Ninth Circuit 

decision addressing this split, there are several unpublished decisions in which the Ninth Circuit 

addresses the question and agrees with the reasoning set forth in Lueras. See Anderson v. 

Deutsche Bank Nat’l Tr. Co. Americas, 649 Fed. App’x. 550, 552 (9th Cir. 2016) (“[W]hen ‘the 

lender did not place the borrower in a position creating a need for a loan modification no moral 

blame . . . attaches to the lender’s conduct.’”) (quoting Lueras, 221 Cal. App. 4th at 67); Badame 

v. J.P. Morgan Chase Bank, N.A., 641 Fed. App’x. 707, 709-10 (9th Cir. 2016) (“Chase did not 

owe Plaintiffs a duty of care when considering their loan modification application because ‘a loan 

modification is the renegotiation of loan terms, which falls squarely within the scope of a lending 

institution’s conventional role as a lender of money.”) (quoting Lueras, 221 Cal. App. 4th at 67); 

Deschaine v. IndyMac Morg. Servs., 617 Fed. App’x. 690, 692 (9th Cir. 2015) (“IndyMac had no 

duty to offer Deschaine a loan modification based on an income determined by Deschaine or to 

handle Deschaine’s loan ‘in such a way to prevent foreclosure and forfeiture of his property’”)

(citing Lueras, 221 Cal. App. 4th at 68); Benson v. Ocwen Loan Servicing, LLC, 562 Fed. App’x. 

567, 569-70 (9th Cir. 2014) (citing Lueras for the proposition that a loan servicer did not owe a 

borrower “a common law duty of care”); see also Galindo v. Ocwen Loan Servicing, LLC, 282 F. 

Supp. 3d 1193, 1200 (N.D. Cal. 2017) (“‘[T]he Ninth Circuit has repeatedly relied on Lueras to 

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find there is no duty of care in the loan modification process.’”) (quoting Newman v. Bank of N.Y. 

Mellon, 2017 WL 1831940, at *11 (E.D. Cal. May 8, 2017)).

Moreover, numerous district courts in the Ninth Circuit have similarly found the reasoning 

of the Lueras court persuasive. See Saldana v. Wells Fargo Bank, N.A., 367 F. Supp. 3d 1063 

(N.D. Cal. 2019) (“And where, as here, ‘the lender did not place the borrower in a position 

creating a need for a loan modification, no moral blame attaches to the lender’s conduct.’”) 

(quoting Anderson, 649 Fed. App’x at 551-52); Haynish v. Bank of Am., N.A., 284 F. Supp. 3d 

1037, 1051 (N.D. Cal. 2018) (“This Court has repeatedly considered the issue and concluded that 

lenders owe no duty of care in the loan modification context, even when the lender apparently 

agreed to consider a borrower’s modification application.”) (citation omitted); Forster v. Wells 

Fargo Bank, N.A., 2018 WL 509967, at *4 (N.D. Cal. Jan. 23, 2018) (“This Court finds the Lueras

line of cases to be more persuasive and therefore concludes that, were it to address the issue, the 

California Supreme Court most likely would find that a mortgage servicer does not owe a 

borrower a duty of care in processing an application for a residential loan modification.”); 

Galindo, 282 F. Supp. 3d at 1200 (“Because the weight of Ninth Circuit authority, albeit 

unpublished, follows Lueras, this Court does the same.”); Nikoopour v. Ocwen Loan Servicing, 

LLC, 2018 WL 1035210, at *6 (S.D. Cal. Feb. 23, 2018) (“Here, the Court finds the Lueras line of 

cases to be more persuasive and concludes that pursuant to Lueras, Plaintiff cannot establish that 

Ocwen owed Plaintiff a duty of care in the loan modification process.”); Shupe v. Nationstar 

Mortgage LLC, 231 F. Supp. 3d 597, 605 (E.D. Cal. 2017) (“This Court agrees that the Lueras

court is more persuasive[.]”).

Here, the Court agrees that the Lueras line of cases is more persuasive and therefore finds 

that mortgage servicers do not owe borrowers a duty of care in the processing of loan modification 

applications because such activities “are indistinguishable from the process of providing an 

original loan, and therefore, fall within the lender’s conventional role as a lender of money.” 

Marques, 2016 WL 5942329, at *8 (citations and quotation marks omitted). There is also sound 

policy reason to find no duty of care because “financial institutions would be less likely to assist 

borrowers with defaulted loans if the financial institution would be held to a higher duty of care 

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for exercising leniency.” Casault v. Fannie Mae, 915 F. Supp. 2d 1113, 1131 (C.D. Cal. 2012).

Thus, the Court concludes that Powell cannot, as a matter of law, establish Wells Fargo owed him

a duty of care in the loan modification process and his negligence claim is therefore subject to 

dismissal. Accordingly, the Court GRANTS Wells Fargo’s motion as to Powell’s negligence 

claim.

B. Unfair Competition Law 

In his claim under the UCL, Powell alleges Wells Fargo engaged in “unlawful, unfair, 

fraudulent or deceptive business act[s] or practice[s]” by “the unlawful foreclosure, damage to 

credit, losing viable long-term tenants, difficulty in renting out the Subject Property (due to the 

legal requirement that homeowners facing foreclosure disclose the same to their tenants), and 

other damages.” FAC ¶¶ 50, 52. He further alleges “the complained of actions by Wells Fargo is 

part of a pattern and practice of unlawful activities which are regularly and routinely carried out by 

this Defendants [sic] in the course of their business with California consumers.” Id. ¶ 53. Wells 

Fargo argues Powell’s UCL is solely predicated on his negligence claim and therefore must fail. 

Mot. at 21. The Court agrees. 

California’s Unfair Competition Law prohibits any “unlawful, unfair or fraudulent 

business act or practice.” Cal. Bus. & Prof. Code § 17200. “Each of these three adjectives 

captures ‘a separate and distinct theory of liability.’” Rubio v. Capital One Bank, 613 F.3d 1195, 

1203 (9th Cir. 2010) (quoting Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009)). 

The unlawful category of the UCL “borrows violations of other laws and treats them as unlawful 

practices that the unfair competition law makes independently actionable.” Cel-Tech Commc’ns, 

Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999). “To state a claim based on an 

unlawful business act or practice, a plaintiff must allege facts sufficient to show a violation of 

some underlying law.” Johnson v. PNC Mortg., 2014 WL 3962662, at *11 (N.D. Cal. Aug. 12, 

2014) (citations omitted). With respect to the unfair prong, an act or practice is unfair if the 

practice “offends an established public policy or when the practice is immoral, unethical, 

oppressive, unscrupulous or substantially injurious to consumers.” Lueras, 221 Cal. App. 4th at 

81. With respect to the fraudulent prong, the UCL requires “only a showing that members of the 

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public are likely to be deceived” by the allegedly fraudulent practice. Id. Additionally, to sustain 

a claim under the fraudulent prong of the UCL, plaintiffs must plead “with particularity the 

circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b); see also Hutson v. Am. Home 

Mortg. Servicing, Inc., 2009 WL 3353312, at *16 (N.D. Cal. Oct. 16, 2009).

Powell focuses on the unlawful prong of the UCL, alleging Wells Fargo engaged in 

“unlawful foreclosure.” FAC ¶ 52. However, the only other claim in his FAC is for negligence. 

And, since Powell’s negligence claim fails, his UCL claim must also fail to the extent he relies on 

it as his predicate claim. Newsom v. Countrywide Home Loans, Inc., 714 F. Supp. 2d. 1000, 1010 

(N.D. Cal. 2010) (“Where a plaintiff cannot state a claim under the ‘borrowed law’, he or she 

cannot state a UCL claim either”); Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 

1177, 1190 (N.D. Cal. 2009) (“In this case, since the Court has dismissed all of Plaintiff’s 

predicate violations, Plaintiff cannot state a claim under the unlawful business practices prong of 

the UCL.”); Warner v. Tinder Inc., 105 F. Supp. 3d 1083, 1095 (C.D. Cal. 2015) (“Where the 

predicate claims on which a plaintiff’s UCL claim are based fail, the UCL claim fails as well.”)

(citing Khan v. CitiMortgage, Inc., 975 F. Supp. 2d 1127, 1146 (E.D. Cal. 2013)); Bejou v. Bank 

of Am., N.A., 2013 WL 1759126, at *5 (E.D. Cal. Apr. 24, 2013)). 

As part of his UCL claim, Powell also alleges “[t]he Declaration of Compliance to Cal. 

Civ. Code § 2923.5 by Wells Fargo that was attached to the Notices of Default contained the 

following false statement: ‘Due Diligence to contact the borrower was exercised pursuant to Cal. 

Civ. Code § 2923.5(g)(2) by the Beneficiary.’” FAC ¶ 51. Section 2923.5 requires that before a 

notice of default is filed, a servicer must contact the borrower in person or by telephone to assess 

the borrower’s financial situation and options to prevent foreclosure. Cal. Civ. Code § 2923.5; 

Mabry v. Superior Court, 185 Cal. App. 4th 208, 213-14 (2010) (“Civil Code section 2923.5 

requires, before a notice of default may be filed, that a lender contact the borrower in person or by

phone to ‘assess’ the borrower’s financial situation and ‘explore’ options to prevent foreclosure”). 

However, when a plaintiff pleads a cause of action for violation of section 2923.5, the only 

remedy available is postponement of the foreclosure sale. Mabry, 185 Cal. App. 4th at 235 (“We 

would merely note that under the plain language of section 2923.5, read in conjunction with 

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section 2924g, the only remedy provided is a postponement of the sale before it happens”). Thus, 

where a violation of section 2923.5 is the predicate for a claim under the UCL’s unlawful prong, 

the available remedy is an injunction against conducting the foreclosure sale until the lender 

assesses the borrower’s financial status and explores options to avoid foreclosure. See Rivac v. 

NDEX West LLC, 2013 WL 3476659, at *9 (N.D. Cal. July 10, 2013) (concluding that “plaintiffs 

cannot base a UCL claim on a violation of the due diligence requirements of Civil Code § 2923.5, 

as the remedy for violation of § 2923.5 is limited to postponement of the foreclosure sale”); 

Robinson v. Bank of America, 2012 WL 1932842, at *10 (N.D. Cal. May 29, 2012) (“As discussed 

above, the court finds that plaintiff has stated a claim under both [sections 2923.5 and 2924.] The 

court therefore denies the motion to dismiss the UCL claim insofar as it seeks injunctive relief. 

However, because the only remedy available under Sections 2923.5 and 2924 is the postponement 

of the foreclosure sale, plaintiff’s prayer for restitution under the UCL is dismissed”). 

The problem with Powell’s invocation of section 2923.5 is that there is no trustee’s sale to 

postpone. Smith Decl. ¶ 29 (“No foreclosure sale took place on the Loan on July 22, 2013 or 

since then.”); FAC ¶ 4 (“At all material times, Plaintiff was, and remains, the owner of the Subject 

Property.”). Consequently, he cannot base a UCL claim on Wells Fargo’s purported failure to 

comply with the statute. See, e.g., Crane v. Fargo, 2014 WL 1285177, at *7 (N.D. Cal. Mar. 24, 

2014) (“Although Plaintiff identifies §§ 2923.4 and 2923.5 as the underlying statutes [that support 

his UCL claim], this Court finds that since the notice of default has been rescinded and there is no 

sale pending, Plaintiff’s claims that Wells Fargo violated those statutes must be dismissed with 

prejudice”); Croshal v. Aurora Bank, F.S.B., 2014 WL 2796529, at *7 (N.D. Cal. June 19, 2014) 

(“because there is no trustee’s sale to postpone, Plaintiff’s claim is unripe. Accordingly, 

Plaintiff’s third claim for relief is DISMISSED”); Tamburri v. Suntrust Mortgage, Inc., 2013 WL 

4528447, at *4 (N.D. Cal. Aug 26, 2013) (“Here, no sale has occurred and none is pending 

because the second notice of default, which gave rise to this action, has been rescinded. Section 

2923.5 does not provide any relief beyond that which Plaintiff has already obtained. 

Consequently, Defendants’ motions for summary judgment on Plaintiff’s first cause of action will 

be granted and judgment entered in their favor on Plaintiff’s section 2923.5 claim”). Accordingly, 

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the Court GRANTS Wells Fargo’s motion as to Powell’s UCL claim.

VI. CONCLUSION

Based on the analysis above, the Court hereby GRANTS Well’s Fargo’s motion for 

summary judgment. The Court shall enter a separate judgment, after which the Clerk of Court 

shall terminate this case.

IT IS SO ORDERED.

Dated: May 29, 2019

THOMAS S. HIXSON

United States Magistrate Judge

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