Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-02614/USCOURTS-caed-2_15-cv-02614-0/pdf.json

Parties Involved:
Nationstar Mortgage, LLC
Defendant
Ashalatha Vurimi
Plaintiff
Venkateswarlu Vurimi
Plaintiff
Wells Fargo Bank, N.A.
Defendant

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

VENKATESWARLU VURIMI, an 

individual; and ASHALATHA 

VURIMI,

Plaintiffs,

v.

WELLS FARGO BANK, N.A., a 

national association;

NATIONSTAR MORTGAGE, LLC, a 

Delaware Corporation; and 

DOES 1-100, INCLUSIVE,

Defendants.

No. 2:15-cv-02614-JAM-EFB

ORDER GRANTING DEFENDANTS’ 

AMENDED MOTION TO DISMISS

This matter is before the Court on Defendants Wells Fargo 

Bank (“Wells Fargo”) and Nationstar Mortgages’ (“Nationstar”) 

(collectively, “Defendants”) amended motion to dismiss (Doc. 

##14,15) the entirety of Plaintiffs Venkateswarlu and Ashalatha 

Vurimi’s (collectively, “Plaintiffs”) complaint (Doc. #1). For 

the reasons stated below, Defendants’ motion is GRANTED.1

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

scheduled for April 19, 2016.

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I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Plaintiffs formerly resided at 252 W. Arnaudo Blvd., 

Mountain House, CA 95391 (“the Property”). Compl. ¶ 1.

Plaintiffs purchased the Property in 2005 and concurrently 

obtained a loan on the Property with Bank of America. Id. ¶¶ 12, 

13. In 2010 Plaintiffs fell behind on their mortgage payments.

Id. ¶ 14. In 2011 or 2012, the servicing of the loan was 

transferred from Bank of America to Wells Fargo, id. ¶ 16; in

2013, or 2014, the servicing of the loan was transferred from 

Wells Fargo to Nationstar, id. ¶ 17. In March 2015, Plaintiffs 

submitted for a loan modification with Nationstar. Id. ¶ 21.

Plaintiffs allege that in June or July 2015, they were 

purportedly approved for a loan modification with Nationstar, but 

“the terms of the loan modification were so outrageous that it 

amounted to in essence a denial, as there would be no way for the 

Plaintiffs to be able to afford the loan modification.” Id.

¶ 22. Furthermore, Plaintiffs claim that soon after the 

“purported” approval of their loan modification, they appealed 

the terms of the modification. Id. ¶ 23. Plaintiffs were under 

the belief that since they were in the appeal process to their 

loan modification decision, all sale date activity on the 

Property would be postponed and in “August 2015, Plaintiff 

Venkateswarlu Vurimi contacted representatives at Nationstar who 

informed Plaintiff that the sale date on the Property was ‘on 

hold’ due to the appeal.” Id. ¶ 25.

On October 6, 2015, Nationstar foreclosed on the Property 

and on October 13, 2015, a Trustee’s deed was recorded 

transferring the title to the Property to Wells Fargo. Id. ¶ 26. 

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Plaintiffs allege that the foreclosure occurred absent their 

knowledge. Id.

On November, 13, 2015, Plaintiffs brought this action 

against Defendants in San Joaquin County Superior Court and on 

December 17, 2015, Defendants removed this action to the Eastern 

District of California under diversity jurisdiction (Doc. #1). 

The complaint (id.) states five causes of action as follows: (1)

breach of the covenant of good faith and fair dealing, (2) 

violation of California’s Homeowner Bill of Rights (“HBOR”) (Cal. 

Civ. Code §§ 2924(c),(e)), (3) “Unfair Business Practices”, (4) 

“Set Aside Trustee’s Sale,” and (5) “Quiet Title.” Defendants

moved to dismiss (Doc. #7) and Plaintiffs filed an opposition 

brief (Doc. #12). The Court issued a minute order dismissing 

Defendants’ motion without prejudice for failure to comply with 

the Court’s Order requiring counsel to meet and confer prior to 

filing any motion (Doc. #13). Defendants then filed their

amended motion to dismiss which Plaintiffs oppose. The Court now 

addresses the merits of Defendants’ amended motion.

II. OPINION

A. Judicial Notice

Defendants request that the Court take judicial notice 

(Doc. #16) of the following documents related to the foreclosure 

of the Property: Exhibit 1: “Deed of Trust,” recorded on July 27, 

2005; Exhibit 2: “Notice of Default and Election to Sell under 

Deed of Trust,” recorded on December 9, 2010; Exhibit 3: “Notice 

of Trustee’s Sale,” recorded on March 15, 2011; Exhibit 4:

“Notice of Rescission of Declaration of Default and Demand for 

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Sale and of Notice of Default and Election to Sell,” recorded on 

August 9, 2011; Exhibit 5: “Notice of Default,” recorded on 

August 6, 2014; Exhibit 6: “Notice of Trustee’s Sale,” recorded 

on November 21, 2014; Exhibit 7: “Trustee’s Deed Upon Sale,”

recorded on October 13, 2015; and Exhibit 8: “Substitution of 

Trustee and Assignment of Deed of Trust,” recorded on December 

24, 2010. Each of the aforementioned documents is contained 

within the official records of San Joaquin County. Because these 

documents are a part of the public record the Court may consider 

these foreclosure documents. See Angulo v. Countrywide Home 

Loans, Inc., No. 1:09–CV–877–AWI–SMS, 2009 WL 3427179, *3 n.3 

(E.D. Cal. Oct. 26, 2009) (“The Deed of Trust and Notice of 

Default are matters of public record. As such, this court may 

consider these foreclosure documents.”) Therefore, Defendants’

request for judicial notice is GRANTED.

Defendants also submit a supplemental request for judicial 

notice (Doc. #19), in support of their Reply Brief, of Exhibits 

A-D. Exhibits A-D are complaints filed in different state court 

proceedings. However, Defendants have failed to show that the 

contents of Exhibits A-D are relevant to the adjudication of 

Defendants’ motion to dismiss; when a request for judicial notice 

contains “materials . . . therein [that] are not relevant to the 

disposition” of the motion under consideration the request for 

judicial notice is properly denied. Cuellar v. Joyce, 596 F.3d 

505, 512 (9th Cir. 2010). Accordingly Defendants’ supplemental 

request for judicial notice is DENIED. 

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B. Analysis

1. Breach of the Covenant of Good Faith and Fair 

Dealing

“Every contract imposes upon each party a duty of good faith 

and fair dealing in its performance and its enforcement.” Marsu, 

B.V. v. Walt Disney Co., 185 F.3d 932, 937 (9th Cir. 1999)

(quoting Carma Developers (Cal.), Inc. v. Marathon Dev. Cal., 

Inc., 2 Cal.4th 342, 371 (1992)).

Under California law, to allege a claim for breach of 

the covenant of good faith and fair dealing, a

plaintiff must allege the following elements: (1) the 

plaintiff and the defendant entered into a contract; 

(2) the plaintiff did all or substantively all of the 

things that the contract required him to do or that he

was excused from having to do so; (3) all conditions

required for the defendant's performance had occurred; 

(4) the defendant unfairly interfered with the 

plaintiff's right to receive the benefits of the 

contract; and (5) the defendant's conduct harmed the 

plaintiff.

Merced Irrigation Dist. v. Cty. of Mariposa, 941 F.Supp.2d 1237, 

1280 (E.D. Cal. 2013).

Defendants contend that “[i]f Plaintiffs intend to argue the 

Modification Approval was the predicate agreement [to their 

breach of the implied covenant of good faith and fair dealing 

claim], Plaintiffs do not, and cannot, demonstrate the 

Modification Approval was an enforceable contract.” Mot. 4:12 

n.4. In their opposition brief Plaintiffs contend: “Defendants 

incorrectly refer [to] the original ‘Loan’ as the basis for 

Plaintiffs’ Cause of Action for Breach of the Covenant of Good 

Faith and Fair Dealing[; h]owever, Plaintiffs’ complaint clearly 

referred to the terms of the loan modification, not the original 

Loan.’” Opp’n 5:15-18. Within Plaintiffs’ complaint Plaintiffs

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allege that the loan modification is the agreement upon which 

their claim of breach is contingent. Compl. ¶ 33.

Because Plaintiffs never accepted the terms of Nationstar’s 

offer to modify their home loan, no binding agreement was 

created. Weddington Prods., Inc. v. Flick, 60 Cal.App.4th 793, 

811 (1998) (citing Cal. Civ. Code §§ 1550, 1565 and 1580) (“If 

there is no evidence establishing a manifestation of assent to 

the ‘same thing’ by both parties, then there is no mutual consent 

to contract and no contract formation.”) “Without a contractual 

underpinning, there is no independent claim for breach of the 

implied covenant.” Fireman’s Fund Ins. Co. v. Md. Cas. Co., 21 

Cal.App.4th 1586, 1599 (1994). Accordingly, Plaintiffs have 

failed to allege a plausible claim for breach of the covenant of 

good faith and fair dealing and Defendants’ motion to dismiss 

this claim is GRANTED. The Court finds that Defendants have not

demonstrated that amendment is futile and therefore Plaintiffs 

are given leave to amend this portion of their complaint. See

Intri-Plex Techs., Inc. v. Crest Grp., Inc., 499 F.3d 1048, 1056 

(9th Cir. 2007) (Dismissal without leave to amend is proper only 

if it is clear that “the complaint could not be saved by any 

amendment.”)

2. Violation of California’s HBOR

Cal. Civ. Code § 2924.12 permits a borrower to bring a 

lawsuit based upon a violation of the HBOR “[a]fter a trustee’s 

deed upon sale has been recorded” if “actual economic 

damages . . . result[ed] from a material violation of 

[s]ection . . . 2923.6. . . .” Cal. Civ. Code § 2923.6 prohibits 

foreclosing entities from proceeding with a foreclosure sale 

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while a loan modification review is ongoing. Specifically the 

statute prescribes: “If a borrower submits a complete application 

for a first lien loan modification . . .” the foreclosing entity 

“shall not . . . conduct a trustee’s sale, while the complete 

first lien loan modification application is pending.” Cal. Civ. 

Code § 2923.6. This prohibition is lifted if “the borrower does 

not accept an offered first lien loan modification within 14 days 

of the offer.” Cal. Civ. Code § 2923.6 subd. (c)(2).

“If a borrower is denied a modification “the borrower shall 

have at least 30 days from the date of the written denial to 

appeal the denial.” Cal. Civ. Code § 2923.6 subd. (d) (emphasis 

added).

In their complaint Plaintiffs allege that they did not 

accept the modification approval, Compl. ¶¶ 44-45, and that the 

sale did not proceed until three months after they were offered 

this approval, id. ¶¶ 44-45; 26. Accordingly, Nationstars’ sale 

complied with the relevant provisions of the HBOR. Plaintiffs’

contention that “the terms of the loan modification were so 

outrageous that it amounted to in essence a denial” is both 

conclusory and entirely unsupported by statute or case law and 

thus does not entitle them to the protections afforded to a 

borrower whose modification request is denied by Cal. Civ. Code 

§ 2923.6 subd. (d). Defendants’ motion is GRANTED as to this 

claim, however, Plaintiffs are granted leave to amend.

3. Unfair Business Practices

California’s Unfair Competition Law (“UCL”) prohibits any 

“unlawful unfair or fraudulent business act or practice.” 

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Berryman v. Merit Prop. Mgmt., Inc., 152 Cal.App.4th 1544, 1554 

(2007). “A plaintiff alleging unfair business practices under 

these statutes must state with reasonable particularity the facts 

supporting the statutory elements of the violation.” Khoury v. 

Maly's of Cal., Inc., 14 Cal.App.4th 612, 619 (1993). To state a 

claim under the UCL Plaintiffs must “identif[y the] particular 

section of the statutory scheme which was violated and . . . 

describe with . . . reasonable particularity the facts supporting 

violation.” Id. “Under California law, any unlawful business 

practice, including violations of laws for which there is no 

direct private right of action, may be redressed by a private 

action under [the UCL].” Summit Tech., Inc. v. High-Line Med. 

Instruments, Co., 933 F. Supp. 918, 943 (C.D. Cal. 1996). “An 

unfair business practice [exists when] the public policy which is 

a predicate to the action [is] tethered to specific 

constitutional, statutory or regulatory provisions.” West v. 

JPMorgan Chase Bank, N.A., 214 Cal.App.4th 780, 806 (2013) 

(internal citations omitted). 

Defendants contend that “[b]ecause the UCL claim is 

derivative, and . . . Plaintiffs’ other claims fail . . ., so too 

does their third claim for violation of the UCL.” Mot. 8:16-17. 

Plaintiffs counter that “Plaintiffs have properly pled numerous 

causes of action against Defendants.” Opp’n 8:7-8. For the 

reasons stated herein Plaintiffs’ other causes of action against 

Defendants fail to plausibly allege a claim permitting a 

contingent claim under the UCL. Therefore, Defendants’ motion to 

dismiss Plaintiffs’ UCL claim is GRANTED. Plaintiffs are granted 

leave to amend this claim.

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4. Set Aside Trustee’s Sale

“A properly conducted nonjudicial foreclosure sale 

constitutes a final adjudication of the rights of the borrower 

and lender.” Moeller v. Lien, 25 Cal.App.4th 822, 831 (1994). “As 

a general rule, a trustee’s sale is complete upon acceptances of 

the final bid.” Nguyen v. Calhoun, 105 Cal.App.4th 428, 440-41 

(2003). “If the trustee’s deed recites that all statutory notice 

requirements and procedures required by law for the conduct of 

the foreclosure have been satisfied, a rebuttable presumption 

arises that the sale has been conducted regularly and properly.” 

Moeller, 25 Cal.App.4th at 831.

[T]he elements of an equitable cause of action to set 

aside a foreclosure sale are: (1) the trustee or 

mortgagee caused an illegal, fraudulent, or willfully 

oppressive sale of real property pursuant to a power 

of sale in a mortgage or deed of trust; (2) the party 

attacking the sale (usually but not always the trustor 

or mortgagor) was prejudiced or harmed; and (3) in 

cases where the trustor or mortgagor challenges the 

sale, the trustor or mortgagor tendered the amount of 

the secured indebtedness or was excused from 

tendering.

Lona v. Citibank, N.A., 202 Cal.App.4th 89, 104 (2011).

Within Plaintiffs’ complaint Plaintiffs allege that a 

Nationstar representative represented that the sale of the 

Property was on hold due to Plaintiffs’ appeal and that 

Defendants breached this promise by executing the foreclosure 

sale. Compl. ¶¶ 25, 59. Plaintiffs also allege that “Defendants 

knew and intended that Plaintiffs would rely on the 

misrepresentations and agreements made” and that Plaintiffs 

reasonably did so. Id. ¶ 61.

Defendants argue that the “contended misrepresentations by 

Defendants are subject to Federal Rule of Civil Procedure 9(b).” 

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Mot. 9:12-13. Rule 9(b) prescribes in relevant part: “[i]n 

alleging fraud or mistake, a party must state with particularity 

the circumstances constituting fraud or mistake.” Fed. R. Civ. 

P. 9(b). “Merely making general conclusory allegations of fraud, 

and then reciting a list of neutral facts, is not sufficient.” 

Stack v. Lobo, 903 F. Supp. 1361, 1367 (N.D. Cal. 1995). 

Plaintiffs’ conclusory allegation that an unidentified individual 

at an unidentified time made “communications, representations, 

and agreements” that the trustee’s sale was postponed is not 

sufficient to satisfy the specificity required to state a claim 

of misrepresentation under Rule 9(b). Compl. ¶ 59. Accordingly, 

Plaintiffs fail to plead facts sufficient to demonstrate that 

“the trustee . . . caused an illegal, fraudulent, or willfully 

oppressive sale of [the property] pursuant to a power of sale in 

a . . . deed of trust.” Lona, 202 Cal.App.4th at 104.

Defendants’ motion to dismiss this claim is GRANTED, however, 

Plaintiffs are given leave to amend.

5. Quiet Title

Plaintiffs seek to quiet Wells Fargo’s title to the 

Property; specifically Plaintiffs allege that Wells Fargo’s title 

was “wrongfully obtained in violation of the foreclosure 

statutes, making the [t]rustee’s [d]eed] void or voidable.” 

Compl. ¶ 67. For the reasons discussed above, Plaintiffs have 

failed to demonstrate that Defendants violated any foreclosure 

statutes in the course of the foreclosure sale. Accordingly, 

Defendants’ motion to dismiss Plaintiffs’ claim to quiet title is 

GRANTED and, as with the other claims, Plaintiffs are given leave 

to amend.

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III. ORDER

For the reasons set forth above, the Court GRANTS 

Defendants’ Motion to Dismiss WITH LEAVE TO AMEND.

As a final matter, Defendants’ reply is three pages longer 

than the page limit allowed by this Court’s standing order. See

Order re Filing Requirements (Doc. #2-2) at p. 1. In accordance

with that order the Court has not considered any arguments made 

past page 5 of the reply brief and Defendants’ counsel, Severson 

& Werson, is sanctioned in the amount of $150. Id. Counsel is 

to pay this amount within five days of the date of this Order.

Plaintiffs shall file their Amended Complaint within twenty

days of this Order. Defendants’ responsive pleading shall be 

filed within twenty days thereafter.

IT IS SO ORDERED.

Dated: May 4, 2016

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