Copeland-Turner v. Wells Fargo Bank, N.A.
800 F. Supp. 2d 1132
D. Or.2011Background
- Plaintiff signed a Promissory Note for $150,050 and a Deed of Trust secured by Eugene, Oregon property in Oct 2004/2005, with World Savings Bank as beneficiary and First American Title as original trustee.
- WSB was purchased by Wachovia, which was later acquired by Wells Fargo; Cary is plaintiff's trustee and acted as agent for Wells Fargo.
- Foreclosure notices were issued in March 2010 with an August 26, 2010 sale date; plaintiff sought a loan modification starting July 2010, with representations that foreclosure would be paused.
- Wachovia denied the loan modification on Oct 13, 2010 but told plaintiff to re-apply within 30 days; the sale occurred Oct 27, 2010.
- Plaintiff asserts a conversion claim based on (i) invalid Deed of Trust due to WSB not being the beneficiary, (ii) Cary lacking authority as successor trustee, and (iii) Wachovia/Wells Fargo misrepresenting a sale-stay to obtain a modification.
- Wells Fargo moved to dismiss or for summary judgment; the court granted dismissal on HOLA preemption grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HOLA preempts plaintiff's conversion claims | Copeland-Turner argues state-law claims survive and target non-judicial foreclosure actions. | Wells Fargo contends HOLA preempts under 12 C.F.R. § 560.2 and Silvas analysis. | Preemption applies; claims dismissed. |
| Effect of Dodd-Frank amendments on HOLA preemption | Amendments remove field preemption and alter analysis. | Amendments do not apply to pre-enactment contracts and do not foreclose preemption here. | Dodd-Frank does not apply to this contract; preemption remains. |
| Whether HOLA preempts foreclosure-related claims in Oregon | Foreclosure process flaws are not purely related to lending regulations. | Foreclosure disclosures and processing are preempted by § 560.2(b)/(c). | HOLA preempts; Oregon foreclosure claims barred. |
| Whether Wells Fargo, as successor to WSB, is subject to HOLA preemption | Wells Fargo not a federal savings bank; HOLA should not apply. | Wells Fargo's status is controlled by predecessor entities; HOLA applies to the loan origination/servicing. | HOLA applies to plaintiff's claims against Wells Fargo. |
Key Cases Cited
- Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001 (9th Cir. 2008) (establishes the preemption framework under 12 C.F.R. § 560.2)
- Watters v. Wachovia Bank, N.A., 550 U.S. 1 (U.S. 2007) (regulation of national bank operations tied to Commerce Clause; Tenth Amendment not implicated)
- DeLeon v. Wells Fargo Bank, N.A., 729 F. Supp. 2d 1119 (N.D. Cal. 2010) (foreclosure-related claims preempted where based on disclosures/foreclosure processes)
- Mabry v. Superior Ct., 185 Cal.App.4th 208 (Cal. Ct. App. 2010) (California authority cited on preemption of certain section 17200/loan-related claims)