Alma Bell v. Wells Fargo Bank
663 F. App'x 549
| 9th Cir. | 2016Background
- Plaintiff Alma Bell defaulted on her mortgage; a Notice of Default was recorded in December 2011 and defendants Wells Fargo and NDeX proceeded with a nonjudicial foreclosure attempt on her La Habra Heights home.
- Bell sued in federal court alleging wrongful foreclosure-related claims: violation of Cal. Civ. Code § 2924(a)(6) (HBOR securitization/beneficial-interest requirement), § 2923.5 (pre-default contact/loan-modification requirement), quiet title, and violations of California’s Unfair Competition Law (UCL).
- The district court dismissed all claims under Rule 12(b)(6); Bell appealed. She had amended her complaint twice and sought further leave to amend but did not specify additional factual allegations.
- The Ninth Circuit reviewed whether the HBOR securitization provision applied, whether Bell pleaded adequate facts under Iqbal/Twombly, whether § 2923.5’s remedy was already satisfied, and whether causation for a UCL claim was adequately alleged.
- The panel affirmed dismissal, holding the HBOR provision was not retroactive to a December 2011 Notice of Default and that Bell’s pleading failed to allege sufficient factual detail to state claims; the court also found the § 2923.5 remedy was effectively provided and UCL causation was not pleaded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Cal. Civ. Code § 2924(a)(6) (HBOR securitization requirement) | Bell: her loan was defectively securitized, so defendants lacked the beneficial interest required to initiate foreclosure under § 2924(a)(6). | Defendants: § 2924(a)(6) took effect Jan 1, 2013 and does not apply to a Notice of Default recorded Dec 2011. | Held: § 2924(a)(6) is not retroactive; claim fails. |
| Sufficiency of securitization allegations under Iqbal/Twombly | Bell: alleged defective securitization and assignment deprived defendants of authority to foreclose. | Defendants: allegations are conclusory and lack factual enhancement required by pleading standards. | Held: Pleading was conclusory and lacked factual detail; claim dismissed. |
| Cal. Civ. Code § 2923.5 (pre-default contact/loan-modification) | Bell: lender did not comply with required contact to assess finances and explore alternatives. | Defendants: Wells Fargo considered at least two loan modification applications; the statute’s remedy (postponement to permit compliance) was effectively provided. | Held: Even if violation occurred, Bell already received the statute’s only remedy; claim dismissed. |
| Quiet title | Bell: title is clouded by defective securitization/assignment. | Defendants: quiet title duplicative of § 2924(a)(6) claim and lacks specific factual support. | Held: Duplicative and insufficiently pleaded; dismissed. |
| UCL (unfair/unlawful business practices) — causation | Bell: defendants’ wrongful acts caused the foreclosure. | Defendants: Bell’s July 2011 payment default predated defendants’ acts and caused the foreclosure; no causal link. | Held: Bell failed to plead causation; UCL claim dismissed. |
| Leave to amend | Bell: requested further amendment but did not specify new facts. | Defendants: plaintiff had already amended twice and offered no specifics for cure. | Held: District court did not abuse discretion denying leave to amend. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual enhancement beyond conclusions)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must state a plausible claim)
- Myers v. Philip Morris Cos., 50 P.3d 751 (Cal. 2002) (statutes are not retroactive absent express provision or clear intent)
- Saterbak v. JPMorgan Chase Bank, N.A., 199 Cal. Rptr. 3d 790 (Ct. App. 2016) (HBOR not retroactive)
- Mabry v. Superior Court, 110 Cal. Rptr. 3d 201 (Ct. App. 2010) (§ 2923.5 remedy is postponement to permit compliance)
- Rossberg v. Bank of Am., N.A., 162 Cal. Rptr. 3d 525 (Ct. App. 2013) (discussions about modifications can satisfy § 2923.5 contact requirement)
- Jenkins v. JP Morgan Chase Bank, N.A., 156 Cal. Rptr. 3d 912 (Ct. App. 2013) (default preceding alleged wrongful acts defeats causation for foreclosure-related claims)
- Yvanova v. New Century Mortgage Corp., 365 P.3d 845 (Cal. 2016) (addressing standing for pre-foreclosure challenges to securitization)
- Bowen v. Oistead, 125 F.3d 800 (9th Cir. 1997) (district court’s discretion on leave to amend)