Saldana v. Wells Fargo Bank, N.A.
367 F. Supp. 3d 1063
N.D. Cal.2019Background
- In 2006 Amelia and Jose Saldana obtained a $420,000 mortgage from World Savings, recorded against 1413 Spring St., St. Helena, CA. The Deed of Trust named World Savings and Golden West entities.
- Plaintiffs allege World Savings securitized the subject loan in 2006 into the WSR 24 Trust (for which BNYM is trustee), thereby alienating all beneficial interest in the loan.
- Wachovia acquired Golden West (mid-2008) and Wells Fargo later acquired Wachovia; Wells Fargo serviced the loan and later assigned its interest to U.S. Bank (trustee for Truman 2016 SC6 Title Trust). A foreclosure process began in 2017.
- Plaintiffs sued Wells Fargo, BNYM, and U.S. Bank asserting seven claims (declaratory relief, quiet title, RESPA §2605(e), negligence, UCL §17200, unjust enrichment, cancellation of instruments), seeking to clear liens and damages.
- Defendants moved to dismiss. The court found Plaintiffs’ securitization theory inadequately pled, dismissed most claims with leave to amend, dismissed the RESPA claim without leave to amend, and dismissed plaintiff Jose Jr. for lack of standing (with leave to amend limitedly). Court ordered Plaintiffs’ counsel to show cause for omitting contradictory language from an attached Form 10‑Q.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether borrower may challenge foreclosing party's authority based on prior securitization/assignment | World Savings sold and thereby alienated all interest in the loan in 2006, so Wells Fargo/US Bank never held beneficial interest and lack authority to foreclose | Securitization does not strip power of sale if beneficial interest is retained; plaintiffs fail to plead specific facts proving this loan was transferred in a way that deprived subsequent transferees of interest | Theory is legally viable but Plaintiffs failed to plead specific, non‑conclusory facts tying this loan to a 2006 transfer that alienated all interests; claims based on this theory dismissed with leave to amend under strict pleading conditions |
| Whether the two letters qualify as Qualified Written Requests (QWRs) under RESPA §2605(e) | The June 23 and Oct 18, 2016 letters were QWRs seeking servicing information and validation | Letters only disputed loan validity, not servicing, so they are not QWRs triggering §2605(e) duties | Letters challenged validity of the debt, not servicing; RESPA claim dismissed without leave to amend |
| Whether Wells Fargo owed a tort duty in processing loan modification/communications (negligence) | Wells Fargo breached duties in handling modification negotiations and communications, causing harm | No special duty beyond lender role; any harm from denial of modification is primarily due to borrower’s inability to pay, not lender’s processing | Negligence claim dismissed with leave to amend; court follows Ninth Circuit guidance limiting lender duty in modification context |
| Standing of Jose G. Saldana Jr. | Plaintiff included Jose Jr. as a trust beneficiary and resident of the property | Defendants challenge adequate standing allegations | Court found Jose Jr. lacked adequate standing allegations and dismissed his claims with leave to amend only for claims not otherwise dismissed |
Key Cases Cited
- Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097 (9th Cir.) (pleading standard for cognizable legal theory under Rule 12(b)(6))
- Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (9th Cir.) (accept factual allegations as true at pleading stage)
- In re Gilead Scis. Secs. Litig., 536 F.3d 1049 (9th Cir.) (courts need not accept conclusory allegations or unwarranted deductions)
- Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir.) (court may reject allegations contradicted by exhibits)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (factual allegations must allow reasonable inference of liability)
- Medrano v. Flagstar Bank, FSB, 704 F.3d 661 (9th Cir.) (letters challenging only loan validity are not QWRs under §2605(e))
- Lopez v. Smith, 203 F.3d 1122 (9th Cir.) (leave to amend should be granted unless amendment cannot cure pleading defects)