Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-01061/USCOURTS-caed-2_09-cv-01061-1/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1601 Truth in Lending

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This matter is deemed suitable for decision without oral *

argument. E.D. Cal. R. 230(g).

Part of Loanstar’s motion sought dismissal under the 1

litigation privilege in California Civil Code section 47(b). However,

when Plaintiff rejoined that the correct privilege section was the

common-interest privilege under section 47(c), Loanstar agreed in its

reply brief. Since Loanstar did not notice that section in its motion,

the issue is disregarded.

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

MICHAEL KRAVICH and NANCY KRAVICH, )

)

Plaintiffs, ) 2:09-cv-01061-GEB-KJM

)

v. ) ORDER GRANTING DEFENDANTS’

) MOTIONS TO DISMISS

WELLS FARGO HOME MORTGAGE, WELLS ) PLAINTIFFS’ COMPLAINT*

FARGO BANK, N.A., SOUTHSTAR ) 

FUNDING, LLC, FIRST AMERICAN )

LOANSTAR TRUSTEE SERVICES, )

LAWRENCE ORDONIO, )

)

Defendants. )

)

On July 14, 2009, Defendant First American Loanstar Trustee 

Services (“Loanstar”) filed a motion to dismiss Plaintiffs’ First

Amended Complaint (“FAC”) for failure state a claim upon which relief

can be granted under Federal Rule of Civil Procedure 12(b)(6), and for

failure to allege the fraud claims with particularity under Federal

Rule of Civil Procedure 9(b). (Docket No. 14.) On July 27, 2009, 1

Defendant Wells Fargo Home Mortgage, a division of Wells Fargo Bank,

N.A. (“Wells Fargo”) also filed a motion to dismiss Plaintiffs’ FAC

under Rules 12(b)(6) and 9(b). (Docket No. 23.) Alternatively, Wells

Fargo moves under Federal Rule of Civil Procedure 12(f) for an order

striking certain allegations in the FAC.

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I. Plaintiffs’ Factual Allegations in Their First Amended Complaint

In June 2006, Plaintiffs Michael and Nancy Kravich sought to 

purchase the residential property located at 415 Verbena Court in

Roseville, California. (FAC ¶ 7.) Plaintiffs met with Wells Fargo

loan officer Lawrence Ordonio, who informed Plaintiffs he could get

them the “best deal” and the “best interest rates” available on the

market. (FAC ¶ 23.) Plaintiffs requested a single 30-year loan with

a fixed interest rate. (FAC ¶ 25.) “Just prior to closing,”

Plaintiffs agreed to a loan package including a “first mortgage” to

cover 80% of the home and a “second mortgage” to cover 20% of the

home. (Id.) Ordonio informed Plaintiffs that the first mortgage

would be a fixed rate loan for two years and would then adjust

downward and Plaintiffs’ monthly payments would decrease. (Id.) 

Ordonio assured Plaintiffs that if payments ever became unaffordable,

Wells Fargo would refinance both loans. (FAC ¶ 27.)

Plaintiffs were not given a copy of the loan documents prior 

to closing as required, and at the time of closing, Plaintiffs were

rushed to sign the documents. (FAC ¶ 28.) The loan documents were

never explained to Plaintiffs, Plaintiffs were never given an

opportunity to review them, and Plaintiffs never received the required

copies of the notice of cancellation. (FAC ¶¶ 28-29.)

On or about July 21, 2006, Plaintiffs completed the loan 

transaction. (FAC ¶ 30.) The terms of the loans were included in two

promissory notes, each secured by a deed of trust on the property. 

(Id.) The first deed of trust identified Fidelity National Title

Insurance Company as the trustee and Wells Fargo as the lender. (Id.) 

The second deed of trust identified Kirk Smith as the trustee and

Southstar Funding LLC as the lender. (Id.) The deeds of trust also

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identified Mortgage Electronic Registration Systems, Inc. as the named

nominee and beneficiary. (FAC ¶ 31.) 

In August 2008, the interest rates on Plaintiffs’ loans 

adjusted upward and the monthly payments increased substantially. 

(FAC ¶ 32.) Plaintiffs contacted Wells Fargo and were told they were

not eligible to refinance their mortgage. (Id.) Plaintiffs then

contacted Tony Manos, an independent loan modification agent, to

discuss negotiating a loan modification. (FAC ¶ 33.) Manos contacted

Wells Fargo and was told that because Plaintiffs were current on their

loan, they were not eligible for a loan modification. (Id.) 

Subsequently, Plaintiffs failed to make four consecutive loan

payments, and began negotiating a loan modification with Wells Fargo. 

(FAC ¶ 34.) Wells Fargo offered to modify Plaintiffs’ loan by adding

$25,000 principle onto the loan, and fixing the interest rates at 5.5%

on the first loan and 9.5% on the second loan. (FAC ¶ 35.) On

November 12, 2008, Loanstar filed a Notice of Default. (FAC ¶ 34.) 

In the Notice of Default Loanstar “claimed that it was the duly

appointed trustee pursuant to the deed of trust.” (FAC ¶ 23.)

Plaintiffs agreed to the principle increase and fixed rates proposed

by Wells Fargo to prevent foreclosure. (FAC ¶ 36.) 

Plaintiffs sent a Qualified Written Request (“QWR”) to Wells 

Fargo pursuant to the Real Estate Settlement Procedures Act (“RESPA”)

on March 31, 2009, in which Plaintiffs demanded rescission of both

loans under the provisions of the Truth in Lending Act (“TILA”). (FAC

¶ 37.)

Plaintiffs allege the following claims: (1) violation of 

TILA, 15 U.S.C. §§ 1601 et seq.; (2) violation of the Rosenthal Fair

Debt Collection Practices Act (“RFDCPA”); (3) negligence; 

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(4) violation of RESPA, 12 U.S.C. §§ 2601, et seq.; (5) breach of

fiduciary duty; (6) fraud; (7) violation of California Business and

Professions Code § 17200; (8) breach of contract; (9) breach of the

implied covenant good faith and fair dealing; and (10) wrongful

foreclosure. For the following reasons, Defendants’ motions to

dismiss are GRANTED.

II. Legal Standard

“A Rule 12(b)(6) motion tests the legal sufficiency of a 

claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To

avoid dismissal, Plaintiffs must allege “enough facts to state a claim

to relief that is plausible on its face.” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 570 (2007). When considering a dismissal

motion, all “allegations of material fact are taken as true and

construed in the light most favorable to the nonmoving party.” 

Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). However, this

“tenet . . . is inapplicable to threadbare recitals of a cause of

action's elements, supported by mere conclusory statements.” Ashcroft

v. Iqbal, 556 U.S. ---, 129 S.Ct. 1937, 1940 (2009).

III. Analysis

B. Truth in Lending Act

1. Damages

Wells Fargo seeks dismissal of the civil damages portion of 

Plaintiffs’ TILA claim, arguing it is time barred. (Wells Fargo Mot.

to Dismiss (“Mot.”) 4:10-12.) TILA prescribes that any action for

damages may be brought “within one year from the date of the

occurrence of the violation.” 15 U.S.C. § 1640(e). “[A]s a general

rule the limitations period starts at the consummation of the

transaction.” King v. California, 784 F.2d 910, 915 (9th Cir.1986)). 

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Plaintiffs allege the TILA violations occurred on July 21,

2006, the date Plaintiffs entered into the loan agreement with

Defendants and consumed the loan transaction. Since Plaintiffs did

not bring their TILA damages claim until April 17, 2009, which is more

than one year after July 21, 2006, this claim was brought after the

one-year statute of limitations period. 

Plaintiffs argue this limitations period is equitably 

tolled since “the facts surrounding the loan transaction were

purposefully hidden and continue to be hidden from them to this day.” 

(Plt.’s Opp’n to Mot. (“Opp’n”) 5:15-23.) The Ninth Circuit has held

“that equitable tolling [of TILA civil damages claims] may, in 

appropriate circumstances, suspend the limitations period until the

borrower discovers or has reasonable opportunity to discover the fraud

or non-disclosures that form the basis of the TILA action.” King, 784

F.2d at 915. Plaintiffs have not alleged facts explaining why they

did not discover the fraud or non-disclosures that form the basis of

the TILA action within the limitations period. Since Plaintiffs’

allegations do not allege facts showing this claim is equitably

tolled, this claim is dismissed because it is barred by TILA’s one

year statute of limitations. 

2. Rescission

Wells Fargo also seeks dismissal of Plaintiffs’ TILA

rescission claim, arguing “TILA does not afford borrowers a right to

rescind a residential mortgage transaction.” (Mot. 4:15-16.) 

Plaintiffs allege in the FAC “Defendants [are liable] for . . .

unlawful conduct concerning a residential mortgage loan transaction

with Plaintiffs.” (FAC ¶ 6.) 

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[T]he rescission provision of TILA contains a

specific exemption for a ‘residential mortgage

transaction,’ which is defined in the statute as:

‘a transaction in which a mortgage, deed of trust,

purchase money security interest arising under an

installment sales contract, or equivalent

consensual security interest is created or retained

against the consumer's [d]welling to finance the

acquisition or initial construction of such

dwelling.’ 15 U.S.C. § 1602(w). Under TILA, a

residential mortgage transaction includes the

initial construction financing of the principal

dwelling, as well as a permanent loan to satisfy

the construction financing. See 12 C.F.R. 226,

Supp. I 2(a)(24)(4)(1998). Moreover, the exemption

applies whether it is the same lender providing the

permanent financing or an entirely different

lender. Id. In addition, as long as proceeds from

the loan are used to acquire the home, the

residential mortgage transaction exemption applies,

even if some proceeds are used for other purposes.

Zakarian v. Option One Mortg. Corp., 642 F. Supp. 2d 1206, 1214-15 (D.

Hawaii 2009); see also Yazdanpanah v. Sacramento Valley Mortg. Group,

2009 WL 4573381, *6 (N.D. Cal. 2009) (stating no statutory right of

rescission exists “where the loan at issue involves the creation of a

first lien to finance the acquisition of a dwelling in which the

customer resides or expects to reside.”). Since Plaintiffs seek

rescission of their residential mortgage transaction, which is

specifically exempted from TILA, and Plaintiffs’ argument in their 

opposition to the motion did not address this exemption, Wells Fargo’s

motion to dismiss this claim is GRANTED.

C. Rosenthal Fair Debt Collection Practices Act 

Wells Fargo and Loanstar each seek dismissal of Plaintiffs’ 

second claim alleged under the RFDCPA, arguing Plaintiffs “allege[]

mere conclusions.” (Mot. 13:20-21; Loanstar Motion to Dismiss

(“Loanstar Mot.”) 10:9-11.) 

The purpose of the RFDCPA is ‘to prohibit debt

collectors from engaging in unfair or deceptive

acts or practices in the collection of consumer

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debts and to require debtors to act fairly in

entering into and honoring such debts.’ Cal.

Civ.Code § 1788.1(b). Under the RFDCPA, a “debt

collector” is defined as ‘any person who, in the

ordinary course of business, regularly, on behalf

of himself or herself or others, engages in debt

collection.’ (Cal.Civ.Code. § 1788.2(c)). A debt

collector violates the act when it engages in

harassment, threats, the use of profane language,

false simulation of the judicial process, or when

it cloaks its true nature as a licensed collection

agency in an effort to collect a debt.

Keen v. American Home Mortg. Servicing, Inc., --- F. Supp. 2d ----,

2009 WL 3380454, *4 (E.D. Cal. 2009).

Plaintiffs allege “Defendants are debt collectors” and their

“actions constitute a violation of the [RFDCPA] in that they

threatened to take actions not permitted by law, including but not

limited to . . .: collecting on a debt not owed to [them], making

false reports to credit reporting agencies, falsely stating the amount

of a debt, increasing the amount of a debt by including amounts that

are not permitted by law or contract, and using unfair or

unconscionable means in an attempt to collect a debt.” (FAC ¶ 66.) 

Plaintiffs’ allegations, however, “are too vague to give

rise to any inference that a specific defendant has violated” the

RFDCPA. Arikat v. JP Morgan Chase & Co., 430 F. Supp. 2d 1013, 1027

(N.D. Cal. 2006) (dismissing as too vague, RFDCPA claim that alleged

all violations against all defendants without specifying each

defendant’s individual conduct). Plaintiffs do not allege which

Defendants are debt collectors, to whom they reported the debt, and

whether this information was accurate. This claim is also deficient

since it fails to allege which section of the RFDCPA Defendants

violated. See Blanco v. Am. Home Mortg. Servicing, Inc., 2009 WL

4674904, *4 (E.D. Cal. 2009) (dismissing claim under the RFDCPA, in

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part, for failing to identify the provisions of the statute allegedly

violated). Therefore, each Defendant’s motion to dismiss Plaintiffs’

second claim for violation of the RFDCPA is GRANTED.

D. Negligence

Wells Fargo seeks dismissal of Plaintiffs’ third claim for 

negligence, arguing since it was the lender it did not owe Plaintiffs

a duty of care. (Mot. 6:10.) Plaintiffs rejoin, “A general duty not

to harm another is owed to everyone.” (Opp’n 16:7.)

“Under California law, a lender does not owe a borrower or 

third party any duties beyond those expressed in the loan agreement,

except[] those imposed due to special circumstances.” Resolution

Trust Corp. v. BVS Dev., 42 F.3d 1206, 1214 (9th Cir. 1994). Special

circumstances arise when a “lender actively participates in the

financed enterprise beyond the domain of the usual money lender.” 

Wagner v. Benson, 101 Cal. App. 3d 27, 35 (1980) (quotations omitted). 

“Absent the existence of duty . . ., there can be no breach and no

negligence.” Nichols v. Keller, 15 Cal. App. 4th 1672, 1683 (1993).

Plaintiffs do not allege that Wells Fargo actively 

participated in the mortgage transaction beyond the usual practices 

associated with the lending business. Therefore, Plaintiffs have

failed to allege Wells Fargo owed Plaintiffs a duty of care, and 

Wells Fargo’s motion to dismiss Plaintiffs’ negligence claim is

GRANTED.

Loanstar also seeks dismissal of Plaintiffs’ third claim for 

negligence, arguing Plaintiffs have not alleged facts establishing the

required elements of “causation” and “damages,” and have not

“spefic[ied] any duty or breach of duty of Loanstar” which could give

rise to a negligence claim. (Loanstar Mot. 11:4, 9, 19.) In their

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FAC, Plaintiffs allege Loanstar “breached [its] duty by [its] failure

to perform acts in such a manner as to not cause Plaintiffs harm. 

Plaintiffs are informed and believe and thereupon allege that

defendants failed to maintain the original mortgage note, failed to

properly create original documents, and failed to make the required

disclosures . . . .” (FAC ¶ 72.) However, Plaintiffs have not

alleged any facts showing that Loanstar violated a duty by committing

these alleged failures in its capacity as a Substitution trustee that

was not present at the consummation of the loan. Plaintiffs’

conclusory allegations are insufficient to state a cognizable legal

duty owed and breached by Loanstar. Accordingly, Loanstar’s motion to

dismiss Plaintiffs’ third claim is GRANTED.

E. Real Estate Settlement Procedures Act

Wells Fargo also seeks dismissal of Plaintiffs’ fourth claim 

alleged under RESPA, arguing it is premature, since Plaintiffs filed

their initial complaint before Wells Fargo was required to respond to

Plaintiffs’ QWR. (Mot. 5:17-18.) Under RESPA, upon receipt of a QWR,

a loan servicer has twenty days to acknowledge receipt of the QWR and

sixty days to respond to the QWR. 12 U.S.C. § 2605(e)(1)(A), (e)(2). 

Plaintiffs allege, “On March 31, 2009, a [QWR] under RESPA was mailed

to Defendant, Wells Fargo [] which included a demand to rescind both

loans under the provisions of TILA.” (FAC ¶ 37.) Plaintiffs filed

their initial complaint on April 17, 2009, seventeen days after they

mailed the March 31, 2009 letter. Since this lawsuit was filed before

either the twenty or sixty day window had elapsed, Plaintiffs did not 

have a viable RESPA claim when the lawsuit was filed. See Lincoln v.

GMAC Mortg., LLC, 2009 WL 5184413, *2 (C.D. Cal. 2009) (finding RESPA

claim premature and granting motion to dismiss since plaintiff filed

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complaint before the sixty day “window” had elapsed). Therefore,

Wells Fargo’s motion to dismiss Plaintiffs’ RESPA claim is GRANTED.

F. Breach of Fiduciary Duty

Wells Fargo also seeks dismissal of Plaintiffs’ fifth claim 

for breach of fiduciary duty, arguing it owed Plaintiffs no fiduciary 

duty in connection with the loan transaction. (Mot. 6:5-9.) 

Plaintiffs counter Wells Fargo “engaged in a civil conspiracy,” when

it approved a “predatory loan” based on “overstated income . . .

simply to make a substantial profit for itself.” (Opp’n 16:1-5.)

“To state a claim for breach of fiduciary duty, ‘a 

plaintiff must demonstrate the existence of a fiduciary relationship,

breach of that duty and damages.’” Serrano v. Sec. Nat’l Mortg. Co.,

2009 WL 2524528, *5 (S.D. Cal. 2009) (citing Shopoff v. Cavallo LLP v.

Hyon, 167 Cal. App. 4th 1489 (Cal. Ct. App. 2008)). “Absent ‘special

circumstances’ a loan transaction is at arms-length and there is no

fiduciary relationship between the borrower and lender.” Rangel v.

DHI Mortg. Co., Ltd., 2009 WL 2190210, *3 (E.D. Cal. 2009) (quotations

omitted). 

The relationship between a lending institution and

its borrower-client is not fiduciary in nature. A

commercial lender is entitled to pursue its own

economic interests in a loan transaction. This

right is inconsistent with the obligations of a

fiduciary[,] which require that the fiduciary

knowingly agree to subordinate its interests to act

on behalf of and for the benefit of another.

Nymark v. Heart Fed. Saving & Loan Ass’n, 231 Cal. App. 3d 1089, 1093

n.1 (1991) (citations omitted). Plaintiffs allege Wells Fargo is a

lender, but do not allege facts sufficient to show special

circumstances existed creating a fiduciary relationship between the

Plaintiffs and Wells Fargo. Therefore, Wells Fargo’s motion to

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dismiss Plaintiffs’ fifth claim for breach of fiduciary duty is

GRANTED.

G. Fraud

Wells Fargo and Loanstar each seek dismissal of Plaintiffs’ 

sixth claim for fraud, arguing that it fails to satisfy Rule 9(b)’s

heightened pleading requirements. (Mot. 14:12; Loanstar Mot. 11:23-

24.) This standard required Plaintiffs to “state with particularity

the circumstances constituting fraud.” Fed. R. Civ. P. 9(b). 

Plaintiffs do not allege what statements were false and which

Defendants made the false statements. “Rule 9(b) does not allow a

complaint to merely lump multiple defendants together but requires

plaintiffs to differentiate their allegations when suing more than one

defendant . . . and inform each defendant separately of the

allegations surrounding his alleged participation in the fraud.” 

Swartz v. KPMG LLP, 476 F.3d 756, 764-65 (9th Cir. 2007) (quotations

omitted). Therefore, Plaintiffs’ sixth claim is insufficient to state

a claim for fraud, and each Defendant’s motion to dismiss this claim

is GRANTED.

H. Breach of Contract

Wells Fargo also seeks dismissal of Plaintiffs’ eighth claim 

for breach of contract, arguing the “alleged oral promises are not

enforceable,” and “[a] loan agreement is not valid unless it is in

writing and signed by the party to be charged.” (Mot. 12:6-7.) 

Plaintiffs rejoin they “alleged they were promised an affordable fixed

rate 30-year loan.” (Opp’n 17:15-21.) Plaintiffs allege this promise

was made before the loan closed, but do not allege these terms were

part of the Note itself.

//

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“Unless an agreement to restructure a loan embodies definite 

terms, capable of enforcement, it is not a legally valid contract.” 

Price v. Wells Fargo Bank, 213 Cal. App. 3d 465, 483 (1989). 

“Preliminary negotiations or an agreement for future negotiations are

not the functional equivalent of a valid subsisting agreement.” Id. 

Here, Plaintiffs allege Wells Fargo promised to refinance 

Plaintiffs’ loan at a lower rate after two years or when the loan

became unaffordable. (FAC ¶¶ 25, 27.) Plaintiffs allege Wells Fargo

breached this promise by failing to refinance the loan. However,

Plaintiffs’ allegations show these statements were made during

“preliminary negotiations,” and do not show they were “the functional

equivalent of a valid subsisting agreement.” Price, 213 Cal. App. 3d

at 483. Since Plaintiffs have failed to allege the existence of a

valid, enforceable contract, Wells Fargo’s motion to dismiss

Plaintiffs’ eighth claim is GRANTED. 

I. Breach of the Implied Covenant of Good Faith and Fair Dealing

Wells Fargo and Loanstar each seek dismissal of Plaintiffs’ 

ninth claim for breach of the implied covenant of good faith and fair

dealing, arguing Plaintiffs’ allegations “are incoherent and/or

uncertain” and “Plaintiffs fail to allege the existence of any

contract.” (Mot. 11:8; Loanstar Mot. 15:9-11.) Plaintiffs argue

their breach of covenant claim is a “derivative of Plaintiffs’ Breach

of Contract Cause of Action.” (Opp’n 14:18-19.) However, since

Plaintiffs have failed to state a claim for breach of contract, they

have failed to state a claim for breach of the implied covenant of

good faith and fair dealing. Therefore, each Defendant’s motion to

dismiss Plaintiffs’ ninth claim is GRANTED.

//

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J. Wrongful Foreclosure

Wells Fargo and Loanstar each seek dismissal of Plaintiffs’ 

tenth claim for wrongful foreclosure, arguing no claim exists since

there was no foreclosure sale of Plaintiffs’ residence. (Mot. 7:13-

17; Loanstar Mot. 9:9-11.) “Assuming without deciding that a claim

for wrongful foreclosure may be brought when foreclosure has not yet

occurred, Plaintiff[s] ha[ve] failed to allege a violation of any of

the requirements for a non-judicial foreclosure.” Gonzalez v. First

Franklin Loan Svs., 2010 WL 144862, *18 (E.D. Cal. 2010). “A trustee

or mortgagee may be liable to the trustor or mortgagor for damages

sustained where there has been an illegal, fraudulent or wilfully

oppressive sale of property under a power of sale contained in a

mortgage deed or trust.” Id. (quoting Munger v. Moore, 11 Cal. App.

3d 1, 7 (1970)). Here, Plaintiffs have failed to allege facts showing

that Defendants engaged in illegal or fraudulent activity related to

“foreclosure” of the property. 

Plaintiffs also allege Defendants were not in possession of 

the Promissory Note, therefore, they were not entitled to institute a

foreclosure under the deed of trust. However, possession of the

Promissory Note is not required to institute a non-judicial

foreclosure. See Champlaie v. BAC Home Loans Servicing, LP, 2009 WL

3429622, at * 13-14 (E.D. Cal. 2009) (compiling cases and concluding

“that neither possession of the promissory note nor identification of

the party in possession is a prerequisite to non-judicial

foreclosure).

Plaintiffs also allege Defendants “failed to properly record 

and give notice of the Notice of Default.” (FAC 127.) Loanstar has

attached the Notice of Default to its motion to dismiss, arguing it is

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the Notice of Default referenced in Plaintiffs’ FAC, and requesting

that the Court take judicial notice of it. This document is

considered under the “incorporation by reference doctrine [which]

permits courts to takes into account documents” not attached to the

complaint in “situations [such as this] in which the plaintiff’s claim

depends on the contents of the document, the defendant attaches the

document to its motion to dismiss, and the parties do not dispute the

authenticity of the document, even though the plaintiff does not

explicitly allege the contents of the document in the complaint.” 

Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). The Notice of

Default was recorded on November 12, 2008. (Loanstar’s Request for

Judicial Notice Ex. D.). Plaintiffs do not allege facts showing how

the recording was improper or how Defendants failed to give notice of

the default.

Finally, Plaintiffs allege under their wrongful 

foreclosure claim that Wells Fargo has violated the federal Emergency

Economic Stabilization Act of 2008 (“EESA”) and the federal Troubled

Asset Relief Program (“TARP”) by failing to suspend the foreclosure

action to allow Plaintiffs to be considered for alternative

foreclosure prevention options. (FAC ¶¶ 129-131.) However,

Plaintiffs have not alleged under which provisions of these Acts they

are suing or that either Act creates a private cause of action. See

Gonzalez, 2010 WL 144862, *18 (finding that TARP and EESA do not

provide private causes of action). 

Therefore, each Defendant’s motion to dismiss Plaintiffs’ 

tenth claim is GRANTED.

K. California Business and Professions Code

Finally, Wells Fargo and Loanstar each seek dismissal of 

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Plaintiffs’ seventh claim, in which Plaintiffs allege Defendants

violated California Business and Professions Code section 17200 by

participating in unfair and fraudulent business practices, arguing 

Plaintiffs “have not alleged sufficient facts to support” this claim. 

(Mot. 15:16; Loanstar Mot. 14:13-15.) Plaintiffs allege in a

conclusory fashion, “Defendants committed unlawful, unfair, and/or

fraudulent business practices, as defined by California Business and

Professions Code 17200.” (FAC ¶ 103.) 

“A plaintiff alleging unfair business practices under th[is] 

statute[] must state with reasonable particularity the facts

supporting the [] elements of the violation.” Khoury v. Maly’s of

California, Inc., 14 Cal. App. 4th 612, 619 (1993). Here, Plaintiffs

identify no specific practices of Wells Fargo or Loanstar that they

find to be unlawful, unfair, or fraudulent. Plaintiffs conclusory

allegations are insufficient to “state a claim to relief that is

plausible on its face.” Twombly, 550 U.S. at 570. Therefore, each

Defendant’s motion to dismiss Plaintiffs’ seventh claim is GRANTED.

IV. Conclusion

For the stated reasons, each Defendant’s motion to dismiss 

is GRANTED. Wells Fargo’s motion to strike is denied as moot. 

Further, Plaintiffs are granted fourteen (14) days from the date on

which this Order is filed to file a second amended complaint in

accordance with this Order.

Dated: February 10, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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