Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-07094/USCOURTS-cand-4_18-cv-07094-4/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332 Diversity-(Citizenship)

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

VIOLETA S. VILLANUEVA,

Plaintiff,

v.

WELLS FARGO BANK, N.A.,

Defendant.

Case No. 18-cv-07094-KAW 

ORDER GRANTING MOTION TO 

DISMISS

Re: Dkt. No. 26

Plaintiff Violeta S. Villanueva filed the instant case against Defendant Wells Fargo Bank, 

N.A. (Dkt. No. 1.) Pending before the Court is Defendant's motion to dismiss Plaintiff's first 

amended complaint. (Def.'s Mot. to Dismiss, Dkt. No. 26.) Having considered the parties' filings, 

the relevant legal authority, and the arguments made at the April 4, 2019 hearing, the Court 

GRANTS Defendant's motion to dismiss.

I. BACKGROUND

On March 29, 2018, Plaintiff filed the instant case in state court, asserting a single cause of 

action for breach of contract. (Compl., Dkt. No. 1-1.) Plaintiff alleged that around 2011, she and 

Defendant entered into a "Home Affordable Modification Program Agreement (HAMP) to 

refinance the first mortgage on [her] property . . . ." (Compl. ¶ BC-1 (all caps omitted).) Plaintiff 

further alleged that Defendant breached the agreement on March 29, 2014 when it "denied the 

application for invalid reasons." (Compl. ¶ BC-2 (all caps omitted).)

Defendant was not served with the complaint until October 23, 2018. (Not. of Removal at 

4-5, Dkt. No. 1.) On November 21, 2018, Defendant removed the case. (Not. of Removal at 1.) 

On November 28, 2018, Defendant filed a motion to dismiss. (Dkt. No. 7.) After Plaintiff failed 

to file her opposition, the Court issued an order to show cause why Defendant's motion should not 

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be granted as unopposed. (Dkt. No. 11 at 1.) Plaintiff did not file a response to the order to show 

cause.

On January 10, 2019, the Court granted Defendant's motion to dismiss as unopposed. 

(Dismissal Ord., Dkt. No. 13.) The Court also found "that on the merits, Plaintiff fails to allege 

sufficient factual matter to state a facially plausible claim to relief in her complaint," including not 

providing "any information about the terms of the contract at issue, what term Defendant allegedly 

breached, and why Defendant's alleged breach was a violation of specific terms." (Id. at 2 

(internal quotation omitted).) The Court gave Plaintiff "thirty days from the date of th[e] order to 

file an amended complaint which addresses the deficiencies identified in th[e] order." (Id. at 3.)

On February 9, 2019, Plaintiff filed the operative complaint. (First Amended Compl. 

("FAC"), Dkt. No. 22.) Plaintiff alleges that Defendant's software contained calculation errors that 

denied Home Affordable Modification Program ("HAMP") loan modifications to borrowers who 

were otherwise qualified. (FAC ¶ 20.) Plaintiff alleges that Defendant miscalculated her loan 

modification, which resulted in Defendant threatening foreclosure procedures. (FAC ¶ 12.) 

Although Plaintiff "fought foreclosure for years," she ultimately sold her home in 2014 to avoid 

foreclosure. (FAC ¶ 12.) Defendant later admitted in an SEC filing that it knew about the 

software errors as early as October 2015. (FAC ¶ 23.) On September 21, 2016, Defendant sent 

Plaintiff a letter stating that it "may not have properly reviewed your loan for the federal 

government's Home Affordable Modification Program (HAMP)." (FAC ¶¶ 13, 18, Exh. C at 1.) 

Defendant offered Plaintiff $5,000 if Plaintiff signed a confidentiality and release agreement. (Id.) 

The confidentiality and release agreement stated that the loan modification was denied in January 

2013. (FAC, Exh. C at 2.) Based on these facts, Plaintiff brought claims for: (1) negligence, (2) 

conversion, (3) violation of the Unfair Competition Law ("UCL"), and (4) negligence per se. 

(FAC ¶¶ 27-56.) Plaintiff no longer pleads her breach of contract claim.

On February 22, 2019, Defendant filed the instant motion to dismiss and a request for 

judicial notice. (Def.'s Mot. to Dismiss, Dkt. No. 26; Def.'s Request for Judicial Notice ("RJN"), 

Dkt. No. 27.) On March 14, 2019, Plaintiff late-filed her opposition. (Plf.'s Opp'n, Dkt. No. 28.) 

On March 25, 2019, Defendant filed its reply. (Def.'s Reply, Dkt. No. 32.)

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II. LEGAL STANDARD

A. Request for Judicial Notice

A district court may take judicial notice of facts not subject to reasonable dispute that are 

"capable of accurate and ready determination by resort to sources whose accuracy cannot 

reasonably be questioned." Fed. R. Evid. 201(b); United States v. Bernal-Obeso, 989 F.2d 331, 

333 (9th Cir. 1993). A court may, therefore, take judicial notice of matters of public record. 

United States v. Wilson, 631 F.2d 118, 119 (9th Cir. 1980).

B. Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a party may file a motion to dismiss based 

on the failure to state a claim upon which relief may be granted. A motion to dismiss under Rule 

12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Block, 250

F.3d 729, 732 (9th Cir. 2001).

In considering such a motion, a court must "accept as true all of the factual allegations 

contained in the complaint," Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (citation 

omitted), and may dismiss the case or a claim "only where there is no cognizable legal theory" or 

there is an absence of "sufficient factual matter to state a facially plausible claim to relief." 

Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citing 

Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Navarro, 250 F.3d at 732) (internal quotation 

marks omitted).

A claim is plausible on its face when a plaintiff "pleads factual content that allows the 

court to draw the reasonable inference that the defendant is liable for the misconduct alleged." 

Iqbal, 556 U.S. at 678 (citation omitted). In other words, the facts alleged must demonstrate 

"more than labels and conclusions, and a formulaic recitation of the elements of a cause of action 

will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

"Threadbare recitals of the elements of a cause of action" and "conclusory statements" are 

inadequate. Iqbal, 556 U.S. at 678; see also Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th 

Cir. 1996) ("[C]onclusory allegations of law and unwarranted inferences are insufficient to defeat 

a motion to dismiss for failure to state a claim."). "The plausibility standard is not akin to a 

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probability requirement, but it asks for more than a sheer possibility that a defendant has acted 

unlawfully . . . When a complaint pleads facts that are merely consistent with a defendant's 

liability, it stops short of the line between possibility and plausibility of entitlement to relief." 

Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557) (internal citations omitted).

If the court grants a motion to dismiss, it should grant leave to amend even if no request to 

amend is made "unless it determines that the pleading could not possibly be cured by the 

allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (citations omitted).

III. DISCUSSION

A. Request for Judicial Notice

Defendant requests that the Court take judicial notice of: (A) the June 12, 2007 deed of 

trust, (B) the October 7, 2014 grant deed, (C) the November 19, 2007 letter from the Office of 

Thrift Supervision, and (D) the Official Certification of the Comptroller of the Currency regarding 

the conversion of Wachovia Mortgage, FSB to Wells Fargo Bank Southwest, N.A. (Def.'s RJN at 

2.) Plaintiff did not oppose.

The Court takes judicial notice of the deed of trust and grant deed because they are true 

and correct copies of official public records, whose authenticity is capable of accurate and ready 

determination by resort to sources whose accuracy cannot reasonably be questioned. The Court 

also takes judicial notice of the Office of Thrift Supervision letter and the Comptroller of the 

Currency certification, as both are government records not subject to reasonable dispute. Courts in 

this district have taken judicial notice of both documents. See DeLeon v. Wells Fargo Bank, N.A., 

Case No. 10-cv-1390-LHK, 2011 WL 311376, at *2-3 (N.D. Cal. Jan. 28, 2011).

B. Motion to Dismiss

Defendant argues that dismissal is warranted because: (1) Plaintiff exceeded the scope of 

the Court's order giving leave to amend by adding new claims, (2) Plaintiff's claims are timebarred, and (3) Plaintiff fails to adequately plead her claims. (Def.'s Mot. to Dismiss at 1.) The 

Court agrees that Plaintiff's claims are time-barred.

As an initial matter, dismissal is warranted because Plaintiff was not given leave to add 

new claims. "California district courts have occasionally considered new claims submitted in an 

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amended complaint where the prior order of dismissal granted leave to amend without limitation." 

DeLeon v. Wells Fargo Bank, N.A., Case No. 10-cv-1390-LHK, 2010 WL 4285006, at *3 (N.D. 

Cal. Oct. 22, 2010). Where, however, "leave to amend is given to cure deficiencies in certain 

specified claims, courts have agreed that new claims alleged for the first time in the amended 

pleadings should be dismissed or stricken." Id. In the instant case, the Court gave Plaintiff leave 

to amend to "address[] the deficiencies identified in this order." (Dismissal Ord. at 3.) It did not 

give Plaintiff leave to amend without limitation, and thus Plaintiff's addition of new claims is 

improper. Compare with DeLeon, 2010 WL 4285006, at *3 ("the prior order granting leave to 

amend was limited in scope, and Plaintiffs were therefore required to seek leave of the Court 

before adding new claims."); Cover v. Windsor Surry Co., Case No. 14-cv-5262-WHO, 2016 WL 

3421361, at *3 (N.D. Cal. June 22, 2016) (dismissing newly added claim because the "claim 

exceeds the scope of allowable amendment under [the] previous order").

Even if the added claims were proper, the Court finds that dismissal is still warranted 

because the claims fall outside of the statute of limitations. The parties do not dispute that the 

statute of limitations for negligence and negligence per se claims is two years, while the statute of 

limitations for UCL claims is four years.1 (Def.'s Mot. to Dismiss at 3; Plf.'s Opp'n at 11.) Rather, 

the parties dispute whether equitable tolling and the delayed discovery rule apply.

"Equitable tolling is generally applied in situations where the claimant has actively pursued 

his judicial remedies by filing a defective pleading during the statutory period, or where the 

complainant has been induced or tricked by his adversary's misconduct into allowing the filing 

deadline to pass." O'Donnell v. Vencor, Inc., 465 F.3d 1063, 1068 (9th Cir. 2006). "If a 

reasonable plaintiff would not have known of the existence of a possible claim within the 

limitations period, then equitable tolling will serve to extend the statute of limitations for filing 

suit until the plaintiff can gather what information he needs." Lukovsky v. City & Cty. of S.F., 535 

F.3d 1044, 1052 (9th Cir. 2008). "Similarly, 'the discovery rule only delays accrual until the 

plaintiff has, or should have, inquiry notice of the cause of action.' 'A plaintiff has reason to 

 

1 Plaintiff concedes she cannot bring a conversion claim. (Plf.'s Opp'n at 16.)

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discover a cause of action when he or she has reason at least to suspect a factual basis for its 

elements.'" McFarland v. JP Morgan Chase Bank, No. EDCV 13-1838-JGB (OPx), 2014 WL 

4119399, at *9 (C.D. Cal. Aug. 21, 2014) (quoting Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 

797, 807 (2005)). The discovery rule likewise concerns whether a reasonable person was put on 

inquiry notice; "[a] plaintiff is held to her actual knowledge as well as knowledge that could 

reasonably be discovered through investigation of sources open to her." Jolly v. Eli Lilly & Co., 

44 Cal. 3d 1103, 1109 (1988).

Plaintiff argues that "she was not aware of her claims until she received the September 21, 

2016 letter from [Defendant] acknowledging that they may have failed to properly process her 

loan modification." (Plf.'s Opp'n at 13.) The Court disagrees. While Defendant may not have 

informed Plaintiff of its potential error until September 2016, Plaintiff knew the factual basis for 

her claims as of the January 2013 denial, sufficient to put her on inquiry notice. In Burrington v. 

Ocwen Loan Servicing, LLC, the Ninth Circuit upheld the dismissal with prejudice of the 

plaintiff's Montana Consumer Protection Act claim based on the statute of limitations. 736 Fed. 

Appx. 649, 651 (9th Cir. 2018). The Ninth Circuit explained that the plaintiff had been told he 

was not considered for a HAMP loan modification as of December 22, 2010, which meant he had 

been "provided . . . with the information needed for his claim, regardless of whether [the plaintiff] 

actually believed the statements or understood the reasons for the denial." Id. 

Such is the case here. As in Burrington, Plaintiff knew her loan modification request was 

denied as of January 2013. (FAC, Exh. C. at 2.) Moreover, the HAMP guidelines were publicly 

available, such that Plaintiff had access to information as to whether her application was 

improperly denied. Indeed, Plaintiff alleges in her complaint that she continued to fight the 

foreclosure proceedings even after the denial, implying that Plaintiff did in fact suspect the denial 

was in error. (See FAC ¶ 12.) Thus, the statute of limitations would have expired in January 2015 

for the negligence claims and January 2017 for the UCL claim, requiring dismissal with prejudice.

At the hearing, Plaintiff argued, without authority, that the September 2016 letter served as 

a "second" inquiry notice that restarted the statute of limitations. There is no legal basis for this 

proposition. Even if Plaintiff received additional inquiry notice via the September 2016 letter, this 

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does not change the wrongful conduct that occurred when Defendant allegedly incorrectly denied 

the loan modification application. It is this wrongful conduct that Plaintiff had inquiry notice of as 

of January 2013. The September 2016 letter does not create a new statute of limitations based on 

this same conduct.

Accordingly, the Court finds that Plaintiff fails to allege adequate facts that would support 

tolling of the statute of limitations. Because the Court finds that Plaintiff's complaint must be 

dismissed with prejudice based on the expiration of the statute of limitations, the Court need not 

consider Plaintiff's claims on the merits.

IV. CONCLUSION

For the reasons stated above, the Court GRANTS Defendant's motion to dismiss with 

prejudice.

IT IS SO ORDERED.

Dated: April 5, 2019

__________________________________

KANDIS A. WESTMORE

United States Magistrate Judge

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