Susilo v. Wells Fargo Bank, N.A.
796 F. Supp. 2d 1177
C.D. Cal.2011Background
- Plaintiff Franciska Susilo filed suit in state court; Wells Fargo removed to federal court based on diversity.
- Plaintiff alleged eleven claims including negligence, breach of contract, fraud, misrepresentation, and wrongful foreclosure.
- Loan originated April 2008 from Wachovia Mortgage FSB, secured by property at 1100 Wilshire Blvd., Los Angeles.
- Wachovia was converted to Wells Fargo and merged into Wells Fargo Bank, N.A. in 2009; trustee was ETS Services, LLC.
- Notice of Default was recorded July 21, 2010; a trustee’s sale was scheduled for November 12, 2010 following a partial reinstatement dispute.
- Plaintiff alleged failure to timely disclose reinstatement amount, misstatements regarding the October 7, 2010 payment, and improper foreclosure procedures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HOLA preemption of state-law claims | Susilo argues some claims fall outside HOLA preemption. | Wells Fargo argues broad preemption of loan-related claims. | States claims not fully preempted; some are not about lending operations. |
| Negligence duty and breach | Susilo asserts Wells Fargo/ETS breach duties in loan servicing. | Defendants argue no duty or improper focus on trust management. | ETS lacks a duty; Wells Fargo owes statutory duties; negligence claim against Wells Fargo survives. |
| Breach of contract and implied covenant | Oral agreements to reinstate and delay foreclosure breached; notes written contract modifications. | Oral modifications barred by statute of frauds and deed of trust terms. | Contract claims survive against Wells Fargo; ETS claims dismissed; oral-modification theory rejected for ETS. |
| Fraud and related misrepresentation claims | Fraud, negligent misrepresentation, and promissory fraud pleaded with particularity. | Defendants contend lack of specificity and lack of misrepresentation. | Fraud claims upheld; particularity satisfied; liability findings against all defendants. |
| Wrongful foreclosure and set-aside relief | Foreclosure invalid due to failure to reinstate and misrepresentations; seek set-aside. | Foreclosure proper under power-of-sale; presumption of validity. | Claims to set aside sale/deed denied or proceeding not barred by privilege; relief granted in part. |
Key Cases Cited
- Kachlon v. Markowitz, 168 Cal.App.4th 316 (Cal. Ct. App. 2008) (common interest privilege in nonjudicial foreclosure)
- Anderson v. Heart Fed. Sav. & Loan Ass'n., 208 Cal.App.3d 202 (Cal. Ct. App. 1989) (duty to provide accurate information in response to inquiry under § 2924/2924c)
- La Jolla Group II v. Bank of America, 129 Cal.App.4th 706 (Cal. Ct. App. 2005) (statutory protections and reinstatement duties in foreclosure)
- Andrade v. Wachovia Mortg., 2009 WL 1111182 (S.D. Cal. 2009) (preemption scope under 12 C.F.R. § 560.2 governing thrift operations)
- Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001 (9th Cir. 2008) (broad preemption of lending-related state-law claims)