Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02251/USCOURTS-casd-3_11-cv-02251-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1601 Truth in Lending

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LUZ E GOMEZ,

Plaintiff,

Case No. 11cv2251 BTM(RBB)

ORDER GRANTING MOTION TO

DISMISS AS TO FEDERAL CLAIMS

AND DENYING MOTION FOR

PRELIMINARY INJUNCTION 

v.

WELLS FARGO BANK, N.A., et al.,

Defendants.

Defendants Wells Fargo Bank, N.A., successor by merger with Wells Fargo Bank,

Southwest, N.A., f/k/a Wachovia Mortgage, FSB, f/k/a World Savings Bank, FSB (“Wells

Fargo”) and Golden West Savings Association Service Co. (“Golden West”) have filed a

motion to dismiss and a motion to strike. Plaintiff Luz E. Gomez has moved for a preliminary

injunction that would enjoin Defendants from selling her home at a trustee’s sale. For the

reasons discussed below, Defendants’ motion to dismiss is GRANTED as to the federal

claims, and Plaintiff’s motion for a preliminary injunction is DENIED. The Court defers ruling

on the motion to dismiss Plaintiff’s state claims and the motion to strike. 

I. BACKGROUND FACTS

On August 27, 2004, Plaintiff and her husband borrowed $339,375.00 from World

Savings Bank, FSB. (Request for Judicial Notice in support of Motion to Dismiss (RJN), Ex.

A.) The loan was secured by a Deed of Trust on property located at 132 E. Street, Chula

Vista, CA 91910 (the “Property”). (RJN, Ex. B.) The Deed of Trust identifies the “Lender”

as “World Savings Bank, FSB, its successors and/or assignees.” (Id.) The Deed of Trust

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1

 It appears that the facts of Plaintiff’s Complaint are derived from a form complaint

found at www.msfraud.org/LAW/Lounge/ForeclosureComplaint-CA.doc and

www.docstoc.com/docs/67680461/California-Doc-for-Quiet-Title-for-Bank-Fraud. 

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identifies the Trustee as “Golden West Savings Association Service Co.” (Id.)

On December 31, 2007, World Savings Bank, FSB changed its name to “Wachovia

Mortgage, FSB.” (RJN, Ex. G.). Effective November 1, 2009, Wachovia Mortgage, FSB

changed its name to “Wells Fargo Bank Southwest, N.A.,” and merged into Wells Fargo

Bank, N.A. (RJN, Ex. I.)

On December 7, 2009, a Notice of Default was recorded. (RJN, Ex. C.) The Notice

of Default was issued by Cal-Western Reconveyance Corporation, as “either the original

trustee, the duly appointed substituted trustee, or acting as agent for the trustee or

beneficiary under a deed of trust.” The notice informed Plaintiff and her husband that they

were in default in the amount of $8,556.22, and explained that payments should be made to

“Wells Fargo Bank, N.A., also known as Wachovia Mortgage, a division of Wells Fargo Bank,

N.A., and formerly known as Wachovia Mortgage, FSB, formerly known as World Savings

Bank, FSB.”

In a Substitution of Trustee, recorded on April 1, 2011, Wells Fargo (by Cal-Western

as Attorney in Fact) substituted Cal-Western as the trustee. (RJN, Ex. D.) The form was

notarized on August 18, 2010, but indicates that the “effective date” is December 3, 2009.

On April 14, 2011, a Notice of Trustee’s Sale was recorded. (RJN Ex. E.) The notice,

which was signed by Cal-Western Reconveyance Corporation, set the sale for May 5, 2011.

On August 17, 2011, Plaintiff commenced this action in state court. Defendants

removed the case to federal court, alleging federal question jurisdiction.

In her Complaint, Plaintiff alleges that Defendants failed to credit mortgage payments

that Plaintiff made and initiated non-judicial foreclosure proceedings even though Plaintiff

was not in default. Plaintiff also alleges that Defendants lacked standing to initiate nonjudicial foreclosure proceedings.1

 Plaintiff asserts the following claims: (1) negligence; (2)

fraud; (3) intentional misrepresentation; (4) violation of Cal. Civ. Code § 1572; (5) false light;

(6) breach of contract; (7) breach of the implied covenant of good faith and fair dealing;

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(8) unjust enrichment; (9) violation of Cal. Bus. & Prof Code §§ 17200 et seq.; (10) quiet title;

(11) violation of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et. seq.; (12) violation of

the Truth in Lending Act, 15 U.S.C. §§ 1601, et seq.

In an order filed on October 31, 2011 (“TRO Order”), the Court denied Plaintiff’s

motion for a temporary restraining order and lis pendens. The Court scheduled the motion

for preliminary injunction to be heard simultaneously with Defendants’ motion to dismiss and

motion to strike.

II. STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) should be granted

only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to

support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th

Cir. 1988). When reviewing a motion to dismiss, the allegations of material fact in plaintiff’s

complaint are taken as true and construed in the light most favorable to the plaintiff. See

Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Although detailed

factual allegations are not required, factual allegations “must be enough to raise a right to

relief above the speculative level.” Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955,

1965 (2007). “A plaintiff’s obligation to prove the ‘grounds’ of his ‘entitle[ment] to relief’

requires more than labels and conclusions, and a formulaic recitation of the elements of a

cause of action will not do.” Id. “[W]here the well-pleaded facts do not permit the court to

infer more than the mere possibility of misconduct, the complaint has alleged - but it has not

show[n] that the pleader is entitled to relief.” Ashcroft v. Iqbal, __ U.S. __, 129 S,Ct. 1937,

1950 (2009) (internal quotation marks omitted). 

III. DISCUSSION 

A. Dismissal of Plaintiff’s Federal Claims

Plaintiff’s only explicit federal claim is her eleventh claim for violation of the Fair Credit

Reporting Act, 15 U.S.C. § 1681. However, it appears that Plaintiff’s twelfth cause of action

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 Plaintiff titles the twelfth cause of action “predatory lending/violation of truth in

lending.” In addition, Plaintiff alleges that Defendants engaged in predatory lending by failing

to disclose all material terms and that the loans “do not plainly and prominently disclose the

good faith estimate of closing costs, the site of a yield spread premium paid directly or

indirectly, in whole or in part to a mortgage loan officer.” (Compl. ¶¶ 92-93.) 

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for unfair and deceptive practices under Cal. Bus. & Prof. Code § 17200 is premised on

violations of the federal Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq. 2

 Plaintiff

has failed to state a claim under the FCRA or TILA.

1. FCRA Claim

In her Eleventh Cause of Action, Plaintiff alleges that Defendants violated the FCRA

because they willfully reported to the various reporting agencies that Plaintiff was delinquent

on her loan obligations and willfully and/or negligently failed to remove the negative credit

reporting information of Plaintiff’s credit report. (Compl. ¶ 88.)

Because Defendants are not credit reporting agencies, at most they are “furnishers”

of credit information and are subject to the requirements set forth in 15 U.S.C. § 1681s-2.

Section 1681s-2(a) imposes requirements regarding the furnishing of accurate information.

Among other things, § 1681s-2(a) provides that furnishers of information shall not furnish

information if the furnisher knows or has reasonable cause to believe that the information is

inaccurate, shall correct and update incomplete or inaccurate information already provided,

and provide consumer reporting agencies with notice of any dispute with respect to furnished

information. Section 1681s-2(b) sets forth duties of the furnisher of information after

receiving notice of a dispute under 15 U.S.C. § 1681i(a)(2) (requiring consumer reporting

agencies to provide notification of a dispute to the furnisher of the information). The

furnisher must conduct an investigation, report the results of the investigation to the

consumer reporting agency, and if the disputed information is inaccurate, incomplete, or

cannot be verified, the furnisher must modify, delete, or permanently block the reporting of

that item of information. 

It is well-settled that although there is a private right of action for violations of § 1681s2(b), there is no private right of action for violations of § 1681s-2(a). Gorman v. Wolpoff &

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Abramson, 584 F.3d 1147, 1154 (9th Cir. 2009). Section 1681s-2(c) specifically provides

that §§ 1681n and 1681o, which confer a private right of action for willful or negligent

compliance, do not apply to any violation “of subsection (a) of this section, including

regulations issued thereunder.” 

The duties imposed by subsection (b) are triggered when the furnisher receives notice

of a dispute from a consumer reporting agency. Gorman, 584 F.3d at 1154. “[N]otice of a

dispute received directly from the consumer does not trigger furnishers’ duties under

subsection (b).” Id.

Plaintiff does not allege that she notified a consumer reporting agency of false/

inaccurate information or that Wells Fargo received a notice of dispute from the consumer

reporting agency. Therefore, Plaintiff has not stated a claim under subsection (b). See, e.g.,

Rieger v. American Express Co., 2011 WL 5080188, at *3 (N.D. Cal. Oct. 25, 2011)

(dismissing FCRA claim because plaintiff did not allege that the defendant received any

notice of his dispute from a credit reporting agency); Abouelhassan v. Chase Bank, 2007

WL 3010421, at *3 (N.D. Cal. Oct. 12, 2007) (dismissing FCRA claim because plaintiff had

not alleged that “(1) he notified the CRA of any inaccuracies; (2) the CRA determined they

were viable; and (3) Chase was contacted by the CRA.”). 

2. TILA Claim

In her Twelfth Cause of Action, Plaintiff alleges that Defendants failed to make certain

disclosures, including a good faith estimate of closing costs and information regarding a yield

spread premium, in violation of “truth in lending.” To the extent Plaintiff is attempting to state

a claim under TILA, 15 U.S.C. §§ 1601, et seq., Plaintiff’s claim is time-barred.

The statute of limitations for a TILA claim for damages is one year from the date of the

alleged TILA violation. 15 U.S.C. § 1640(e). Plaintiff’s loan closed in August of 2004.

Plaintiff did not commence this action until August of 2011. Although equitable tolling of TILA

cases is available in some cases, see King v. State of California, 784 F.2d 910, 915 (9th Cir.

1986), Plaintiff has not alleged any facts suggesting that the doctrine of equitable tolling is

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applicable here. 

3. Dismissal

The Court dismisses Plaintiff’s FCRA and TILA claim with leave to amend. Plaintiff

may file an amended complaint correcting the deficiencies with respect to the federal claims

within 20 days of the entry of this Order. If Plaintiff fails to amend the federal claims, the

Court will decline to exercise supplemental jurisdiction over the state claims and will remand

the case to state court. Accordingly, the Court declines to rule upon the adequacy of the

state claims at this time and also defers ruling on the motion to strike.

B. Motion for Preliminary Injunction

Plaintiff’s motion for a preliminary injunction is denied for the same reasons as set

forth in the Court’s TRO Order. Plaintiff has not submitted any additional papers in support

of her motion for preliminary injunction and has not set forth facts supporting her claim that

Defendants lack standing to initiate nonjudicial foreclosure proceedings. 

As explained in the TRO Order, Wells Fargo is a successor to World Savings Bank,

FSB. (RJN, Exs. G-I.) Both the Note and Deed of Trust identify the “Lender” as “World

Savings Bank, FSB, a Federal Savings Bank, its successors and/or assignees, or anyone

to whom this Note is transferred.” (RJN, Exs. A, B.) The Deed of Trust states that the

“Lender” is the “Beneficiary.” Thus, it seems that Wells Fargo, as the successor to World

Savings Bank, FSB, is the “Lender” and “Beneficiary.” 

Because Wells Fargo was the beneficiary, Wells Fargo had the authority to substitute

Cal-Western as the trustee. Even though the Substitution of Trustee was recorded (and

executed) after the filing of the Notice of Default, Cal-Western could still file the notice as an

authorized agent of Wells Fargo. See Cal. Civ. Code § 2924(a)(1) (providing that nonjudicial

foreclosure proceedings can be instituted by “the trustee, mortgagee, or beneficiary, or any

of their authorized agents” by filing a notice of default with the office of the recorder). 

Based on the record before the Court, it appears that Wells Fargo and Cal-Western

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had standing to initiate non-judicial foreclosure proceedings against the Property. Plaintiff

has not alleged any facts establishing otherwise. Therefore, Plaintiff’s motion for preliminary

injunction is denied.

IV. CONCLUSION

For the reasons discussed above, Defendants’ motion to dismiss is GRANTED as to

Plaintiff’s FCRA and TILA claims. Plaintiff is granted leave to file an amended complaint

within 20 days of the filing of this Order. If Plaintiff fails to do so, the Court will decline to

exercise supplemental jurisdiction over the state claims and will remand the case to state

court. The Court defers ruling on the motion to dismiss Plaintiff’s state claims and the motion

to strike. Plaintiff’s motion for a preliminary injunction is DENIED.

IT IS SO ORDERED.

DATED: February 28, 2012

BARRY TED MOSKOWITZ, Chief Judge

United States District Court

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