Marialuz Banares v. Wells Fargo Bank
681 F. App'x 638
| 9th Cir. | 2017Background
- Banares obtained a home loan from Wells Fargo secured by a deed of trust and later defaulted; Wells Fargo sold the loan through a series of assignments into a securitized trust for which HSBC served as trustee.
- Three assignments are challenged by Banares: (1) Wells Fargo → WFASC (on or before June 28, 2007); (2) WFASC → HSBC (on or before June 28, 2007); and (3) Wells Fargo → HSBC (March 26, 2013).
- Banares sued Wells Fargo and HSBC before a scheduled foreclosure sale, alleging wrongful foreclosure, RESPA violations (failure to respond to a Qualified Written Request), fraud, UCL violation, quiet title, unjust enrichment, Civil Code § 2934a violation, and slander of title.
- The district court dismissed the complaint; Banares appealed. The Ninth Circuit affirmed, largely on the ground that Banares failed to plead legally cognizable damages or that the challenged assignment was void rather than merely voidable.
- The court emphasized that the March 26, 2013 assignment, if valid, would cure defects in earlier assignments; Banares did not plausibly allege that this assignment was void (as opposed to voidable), so her wrongful-foreclosure claim failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful foreclosure — validity of March 26, 2013 assignment into NY securitized trust | Banares: assignment into trust violated trust terms and was defective, so foreclosure was wrongful | Wells Fargo/HSBC: even if earlier assignments had defects, the 2013 assignment cured them; plaintiff did not allege it was void | Court: Plaintiff failed to allege the 2013 assignment was void rather than voidable; claim fails |
| RESPA (12 U.S.C. § 2605) — failure to respond to QWR | Banares: Wells Fargo’s failure to answer QWR violated § 2605(e) and caused harm | Defendants: any informational response would not have prevented default or foreclosure — no cognizable damages | Court: Failure to plead damages causally linked to the QWR violation; RESPA claim dismissed |
| Fraud and UCL (Cal. Bus. & Prof. Code § 17200) — damages from ownership misidentification | Banares: misstatements about loan ownership caused injury/injury in fact | Defendants: any harm arose from default and foreclosure risk, not from which entity nominally owned the loan | Court: Insufficient allegation of damages independent of loan default; claims fail |
| Quiet title / tender requirement | Banares: seeks to quiet title against foreclosure claimant | Defendants: plaintiff must tender outstanding balance to challenge validity of lien | Court: Plaintiff failed to tender; quiet title claim dismissed |
| Unjust enrichment / § 2934a / slander of title | Banares: payments retained by alleged invalid beneficiary unjustly enriched them; HSBC not true beneficiary | Defendants: retention would injure true beneficiary, not Banares; assignment not plausibly shown void; slander claim forfeited on appeal | Court: Unjust enrichment and § 2934a fail for lack of showing HSBC is not true beneficiary; slander waived for lack of argument |
| Leave to amend | Banares: proposed amendments could cure defects | Defendants: prior opportunity given; amendments are futile | Court: Denial of further leave not an abuse; further amendment would be futile |
Key Cases Cited
- Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919 (2016) (clarifies wrongful-foreclosure standing post-sale: only void assignments, not merely voidable, support post-sale challenge)
- Rajamin v. Deutsche Bank Nat’l Tr. Co., 757 F.3d 79 (2d Cir. 2014) (collection of New York authority holding assignments into securitized trusts in violation of trust terms are voidable)
- Jenkins v. JP Morgan Chase Bank, Nat’l Ass’n, 216 Cal. App. 4th 497 (2013) (California Court of Appeal decision on wrongful-foreclosure standing and damages concepts)
- Glaski v. Bank of Am., N.A., 218 Cal. App. 4th 1079 (2013) (contrasting California decision on when borrowers may challenge assignments)
- Tamburri v. Suntrust Mortg., Inc., 875 F. Supp. 2d 1009 (N.D. Cal. 2012) (holding an informational response to a QWR would not have prevented foreclosure where borrower remained in default)
- Lueras v. BAC Home Loans Servicing, LP, 221 Cal. App. 4th 49 (2013) (tender requirement to maintain certain equitable claims to challenge a mortgage)
- Chaset v. Fleer/Skybox Int’l, LP, 300 F.3d 1083 (9th Cir. 2002) (standard for denying leave to amend after prior opportunity)