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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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6 ROBERT LAWRENCE, an Individual 1:19-cv-00302-LJO-EPG

7 Plaintiff, MEMORANDUM DECISION AND

ORDER GRANTING DEFENDANT’S

8 v. MOTION TO DISMISS WITH LEAVE

TO AMEND.

9 WELLS FARGO BANK, N.A., a National Association; FIRST AMERICAN TITLE (ECF No. 4) 10 INSURANCE COMPANY, a Nebraska Corporation; and DOES 1 through 100 11 inclusive.

12 Defendants. 13 14 I. PRELIMINARY STATEMENT TO PARTIES AND COUNSEL 15 Judges in the Eastern District of California carry the heaviest caseloads in the nation, and this 16 Court is unable to devote inordinate time and resources to individual cases and matters. Given the 17 shortage of district judges and staff, this Court addresses only the arguments, evidence, and matters 18 necessary to reach the decision in this order. The parties and counsel are encouraged to contact the 19 offices of United States Senators Feinstein and Harris to address this Court’s inability to accommodate 20 the parties and this action. The parties are required to reconsider consent to conduct all further 21 proceedings before a Magistrate Judge, whose schedules are far more realistic and accommodating to 22 parties than that of U.S. Chief District Judge Lawrence J. O’Neill, who must prioritize criminal and 23 older civil cases. 24 Civil trials set before Chief Judge O’Neill trail until he becomes available and are subject to 25 suspension mi d-trial to accommodate criminal matters. Civil trials are no longer reset to a later date if 2 Division randomly and without advance notice reassigns civil actions to U.S. District Judges throughout

3 the Nation to serve as visiting judges. In the absence of Magistrate Judge consent, this action is subject

4 to reassignment to a U.S. District Judge from inside or outside the Eastern District of California.

5 II. INTRODUCTION

6 Plaintiff Robert Lawrence (“Plaintiff” or “Lawrence”) brings the present action against Wells

7 Fargo Bank, N.A. (“Wells Fargo” or “Defendant”) and First American Title Insurance Company (“First 8 American”)1 for the alleged wrongful foreclosure of Plaintiff’s home. Plaintiff brings claims of wrongful

9 foreclosure, fraudulent misrepresentation, negligent misrepresentation, promissory estoppel, and for

10 violation of California’s Unfair Competition Law (UCL), California Business & Professions Code §

11 17200 et seq.

12 Under review is Wells Fargo’s motion to dismiss for failure to state a claim under Federal Rule

13 of Civil Procedure 12(b)(6). ECF No. 4. For the reasons set forth below, the Court grants Defendant’s

14 motion to dismiss with leave to amend.

15 III. BACKGROUND2

16 Plaintiff Robert Lawrence was the owner of the residential real property located at 935 East

17 Laurel Avenue, Porterville, California 93257 (the “Property”). ECF No. 1-1 ¶ 1. Defendant Wells Fargo

18 Bank, N.A. is a national association conducting business in Tulare County California. ECF No. 1-1 ¶ 2.

19 First American is a Nebraska corporation conducting business in Tulare County California.

20 On or around August 15, 2003, Lawrence entered into a loan agreement (“Loan”) with Wells

21 Fargo for $190,000 to finance the purchase of the Property. ECF No. 1-1 ¶ 12. To secure the note and

22

23 1 First American has yet to make an appearance in this matter.

24 2 Unless otherwise noted, the facts are taken from the Complaint, ECF No. 1-1. For purposes of the motion to d ismiss all alleged material facts are taken as true and viewed in the light most favorable 25 2 and Fidelity National Title Insurance Company was named as the trustee under the deed of trust. Id.

3 In 2013, Lawrence began to experience a financial hardship from an illness that caused medical

4 expenses and time away from work. Id. ¶ 13. Lawrence fell behind on his payments on the Loan. Id. ¶

5 13. Lawrence claims he sought to reinstate the Loan and requested a payoff quote from Wells Fargo. Id.

6 ¶ 14. In or around May 2016, Lawrence made a payment of $15,244.75 according to a reinstatement

7 quote from Wells Fargo to reinstate the Loan. Id. Lawrence contends he “immediately followed up with

8 Wells Fargo to ensure that his payment was applied to the Loan but never received confirmation.” Id. ¶

9 14.

10 Lawrence continued to make monthly payments on the Loan. ECF No. 1-1 ¶ 15. Shortly

11 thereafter, Lawrence discovered that the reinstatement funds had been applied to a separate account

12 rather than to the Loan. Id. ¶ 16.

13 On September 26, 2017, First American, on behalf of Wells Fargo issued a notice of default on 14 the Property that was recorded on October 2, 2017.3 ECF No. 1-1, Ex. B at 29, 32. The notice of default

15 declared that Lawrence was in default for the installment due May 1, 2017 and all subsequent

16 installments. Id., Ex. B at 31. The total amount in default as of September 26, 2017 was $6,953.65. Id.,

17 Ex. B at 29.

18 In January 2018, Lawrence applied for a loan modification with Wells Fargo and Wells Fargo

19 denied the request. Id. ¶ 18.

20 On May 15, 2018, the Property sold at foreclosure sale to Wells Fargo as the highest bidder for

21 $144,000. ECF No. 1-1, Ex. C at 45-46.

22 On January 22, 2019, Lawrence filed the present lawsuit against Wells Fargo, First American,

23 and 1 to 100 unknown defendants, the “DOES” defendants. ECF 1-1, at 1.

24 3 Lawr ence contends that he never received notice of the change in trustee and avers that the 25 2 A. Motion to Dismiss under Rule 12(b)(6)

3 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the legal

4 sufficiency of the opposing party’s pleadings. Dismissal of an action under Rule 12(b)(6) is proper

5 where there is either a “lack of a cognizable legal theory or the absence of sufficient facts alleged under

6 a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). When

7 considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of

8 material fact must be accepted as true and construed in the light most favorable to the pleading

9 party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). The inquiry is generally

10 limited to the allegations made in the complaint. Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th

11 Cir. 2008).

12 Under Federal Rule of Civil Procedure 8(a), a complaint must contain “a short and plain

13 statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair

14 notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550

15 U.S. 544, 570 (2007). A plaintiff is required to allege “enough facts to state a claim to relief that is

16 plausible on its face.” Id. “A claim has facial plausibility when the plaintiff pleads factual content that

17 allows the court to draw the reasonable inference that the defendant is liable for the misconduct

18 alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a

19 ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

20 unlawfully.” Id. (quoting Twombly, 550 U.S. at 556).

21 While Rule 8(a) does not require detailed factual allegations, “it demands more than an

22 unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is

23 insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the elements of a

24 cause of action.” Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the

25 elements of a cause of action, supported by mere conclusory statements, do not suffice.”). Moreover, it 2 have violated the . . . laws in ways that have not been alleged[.]” Associated Gen. Contractors of Cal.,

3 Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). In practice, “a complaint . . . must

4 contain either direct or inferential allegations respecting all the material elements necessary to sustain

5 recovery under some viable legal theory.” Twombly, 550 U.S. at 562. In other words, the complaint must

6 describe the alleged misconduct in enough detail to lay the foundation for an identified legal claim.

7 V. ANALYSIS

8 1. Fraudulent Misrepresentation and Negligent Misrepresentation

9 In Lawrence’s second cause of action, he contends that “Defendants . . . knowingly and willfully

10 made false representations to Plaintiff, as described above.” ECF No. 1-1 ¶ 32. Lawrence purports that

11 Wells Fargo made a false statement when it told him he could reinstate the loan. Id. ¶ 26. Under

12 Lawrence’s negligent misrepresentation claim (third cause of action), he contends that Defendants made

13 a false representation that they knew or should have known was false. Id. ¶ 39. For the elements of

14 fraud, the Court looks to state law. Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009). In

15 California, the elements of fraud are (1) a misrepresentation; (2) made with knowledge of its falsity

16 (scienter); (3) with the intent to defraud and induce reliance; (4) which did induce reasonable reliance;

17 and (5) resulting damages. Id. The elements for the cause of action for negligent misrepresentation are

18 the same as those of a claim of fraud, except that the defendant need not actually know the

19 representation was false. Neilson v. Union Bank of California, N.A., 290 F. Supp. 2d 1101, 1141 (C.D.

20 Cal. 2003). For negligent misrepresentation, it is sufficient to allege that the defendant lacked reasonable

21 grounds to believe that the representation was true. Id.

22 Because these claims sound in fraud, Lawrence must meet the heightened pleading standard of

23 Federal Rule of Civil Procedure 9(b). Vess v. Ciba-Geigy Corp., 317 F.3d 1097, 1103-04 (9th Cir.

24 2003). Rule 9(b) requires a party alleging fraud to “state with particularity the circumstances

25 constituting [the] fraud[.]” In the Ninth Circuit, claims for fraud and negligent misrepresentation must 2 (E.D. Cal. 2013); Neilson, 290 F. Supp. 2d at 1141. This heightened pleading standard requires the party

3 to do more than simply identify a transaction and allege in a conclusory manner that the transaction was

4 fraudulent. See In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded

5 by statute on other grounds. Rather, the party must set forth in detail “the who, what, when, where, and

6 how” of the misconduct charged. Vess, 317 F.3d at 1106 (citation omitted). In a fraud action against a

7 corporation, a plaintiff must allege the names of the persons who made the fraudulent representation,

8 their authority to speak, to whom they spoke, what they said, and when the representation was made.

9 Khann, 975 F. Supp. 2d at 1140.

10 The purpose of Rule 9(b) is to protect defendants from factually baseless claims of fraud as much

11 as it is meant to give defendants notice of the claims asserted against them. See Kearns, 567 F.3d at

12 1125. When a party averring fraud fails to meet the heightened pleading standard of Rule 9(b), dismissal

13 of the claim is proper. See Vess, 317 F.3d at 1107 (“A motion to dismiss a complaint or claim ‘grounded

14 in fraud’ under Rule 9(b) for failure to plead with particularity is the functional equivalent of a motion to

15 dismiss under Rule 12(b)(6) for failure to state a claim.”).

16 The Court dismisses the claims of fraudulent and negligent misrepresentation because Lawrence

17 fails to plead the circumstances of the fraud with particularity. Lawrence’s complaint does not set forth

18 the who, what, when, where, and how the fraudulent conduct occurred. Instead, the complaint vaguely

19 alleges that Wells Fargo falsely informed Lawrence that he could reinstate the loan when Wells Fargo

20 knew this was false or should have known this to be false. ECF 1-1, ¶¶ 32-33, 39. Lawrence then alleges

21 that “[i]n bad faith, Defendants wrongfully refused to honor its promise to reinstate the Loan.” Id. ¶ 35.

22 According to the allegations in the complaint, Lawrence experienced financial hardship in or

23 around 2013, and he “shortly thereafter” requested a payoff quote. ECF No. 1-1, ¶ 13. Then in May

24 2016, Lawrence made the required $15,244.75 payment to reinstate the loan. Id. ¶ 14. Lawrence fails to

25 allege when Wells Fargo provided the reinstatement quote, only offering a timeframe spanning from on 2 who provided the quote. The complaint alludes to an oral promise to reinstate the loan, ECF No. 1-1 ¶

3 44, but fails to identify who made such a promise.

4 The vague allegations that Wells Fargo promised to reinstate the loan for a specific amount and

5 subsequently failed to honor the promise does not apprise Wells Fargo of its allegedly fraudulent

6 conduct.

7 “Dismissal without leave to amend is proper if it is clear that the complaint could not be saved by

8 amendment.” Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1051 (9th Cir. 2008). If the court concludes

9 that dismissal under Rule 12(b)(6) is warranted, the court should not dismiss the complaint “unless it

10 determines that the pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss

11 and Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted).

12 Given the opportunity, Plaintiff may be able to state the ostensibly fraudulent conduct with

13 particularity which would place Defendants on notice of the who, what, when, where, and how the

14 conduct was committed. Accordingly, the claims of fraudulent misrepresentation and negligent

15 misrepresentation are dismissed with leave to amend.

16 2. Wrongful Foreclosure

17 Lawrence’s first cause of action alleges that Wells Fargo engaged in wrongful foreclosure of the

18 Property in violation of California’s Homeowner Bill of Rights (“HBR”), California Civil Code Section

19 2923, et seq. Lawrence contends that Wells Fargo acted in bad faith by misapplying Lawrence’s

20 reinstatement payment to another account. ECF No. 1-1 ¶ 26. According to the complaint, Wells Fargo

21 falsely stated that Lawrence could reinstate the Loan and Wells Fargo knew the statements were false.

22 Id. In addition, Lawrence argues that Wells Fargo violated the HBR by failing to comply with the

23 requirements of California Civil Code Section 2923.5 (“Section 2923.5”) and the notice of default

24 provisions of California Civil Code Section 2924, et seq. ECF No. 1-1 ¶ 28.

25 The Court holds that the complaint fails to allege facts that give rise to a plausible claim of 2 (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party

3 attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or

4 mortgagor tendered the amount of the secured indebtedness or was excused from tendering.

5 Lona v. Citibank, N.A., 202 Cal. App. 4th 89, 104 (2011).

6 Alleged facts do not show illegal, fraudulent, or willfully oppressive sale

7 First, Lawrence fails to adequately plead how Wells Fargo caused an illegal, fraudulent, or

8 willfully oppressive sale of real property. Plaintiff argues that the complaint states a claim under the

9 “illegal” and “willfully oppressive” prongs of this element, claiming that Wells Fargo violated Section

10 2923.5, which requires a lender or its agent to attempt to contact a defaulted borrower prior to

11 foreclosure. See ECF No. 10 at 6. Section 2923.5(a)(2) requires a “mortgagee beneficiary or authorized

12 agent” to “contact the borrower in person or by telephone in order to assess the borrower’s financial

13 situation and explore options for the borrower to avoid foreclosure.” Section 2923.5(b) requires a default

14 notice to include a declaration of compliance with Section 2923.5, including an attempt “with due

15 diligence to contact the borrower as required by this section.” Lawrence also points to California Civil

16 Code Section 2924.11 (“Section 2924.11”), which prohibits a trustee’s sale while a complete foreclosure

17 prevention alternative application is pending. See ECF No. 10 at 6.

18 It is not clear from the complaint how Lawrence claims that the requirements of Section 2923.5

19 or Section 2924.11 were not followed. The complaint states, “Defendants cannot prove that the non-

20 judicial foreclosure proceedings have complied with the statutory requirements of California Civil Code

21 Sections 2923.5 and 2924, et seq.” ECF No. 1-1 ¶ 28. Plaintiff continues, “[a]s set forth above,

22 Defendants have failed to comply with the requirements of California Civil Code [S]ections 2923.5 and

23 2924.” ECF No. 1-1 ¶ 28. Plaintiff must allege “enough facts to state a claim to relief that is plausible on

24 its face.” Twombly, 550 U.S. at 570. These conclusory allegations fail to plausibly allege that Wells

25 2 mortgage or deed of trust.4

3 To the extent Plaintiff attempts to base this claim upon “fraudulent” conduct, that claim fails for

4 the reasons set forth above in the discussion on the claims of fraudulent and negligent misrepresentation.

5 Failure to tender full amount of secured indebtedness

6 Lastly, in a wrongful foreclosure claim, the plaintiff must show that the mortgagor tendered the

7 amount of the secured indebtedness (or at least the amount the plaintiff was in default), or was excused

8 from tendering. Compare, e.g., Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 578 (Ct. App.

9 1984) (“It is settled that an action to set aside a trustee’s sale for irregularities in sale notice or procedure

10 should be accompanied by an offer to pay the full amount of the debt for which the property was

11 security.”), Alicea v. GE Money Bank, 2009 WL 2136969, at *3 (N.D. Cal. 2009) (same), Lona, 202 Cal.

12 App. 4th at 104 (allowing for exceptions to full tender requirement), with, e.g., Miller v. Washington

13 Mut. Bank FA, 776 F. Supp. 2d 1064, 1069 (N.D. Cal. 2011) (requiring tender of amount in default);

14 Lopez v. Chase Home Fin., LLC, 2009 WL 1120318, at *6 (E.D. Cal. 2009) (same). The basic rule is

15 that an offer of performance is of no effect if the person making it is not able to perform. Karlsen v.

16 American Sav. & Loan Assn., 15 Cal. App. 3d 112, 118 (Cal. Ct. App. 1971).

17 In the complaint, Lawrence makes the blanket statement that “Plaintiff stands ready, willing, and

18 able to tender and pay the amounts due under the Loans . . . and is ready, willing, and able to make such

19 payment at the times required of them by law.” ECF No. 1-1 ¶ 24. This is insufficient to establish a

20 credible tender offer by Plaintiff. Attempting to obscure the absence of tender by alleging that the

21 plaintiff is ready, willing, and able to tender will not satisfy the tender requirement. Flores v. EMC

22 4 To the extent Plaintiff is attempting to base his wrongful foreclosure claim on the assertion that 23 he did not receive notice that “First American had replaced, substituted, and removed the prior named trustee under the Deed of Trust,” ECF No. 1-1 ¶ 17, any amended complaint must make it clear that he 24 is doing so. Counsel is warned, however, that any assertion that the procedure underlying the trustee substitution vo ided the notice of default must comport with Counsel’s obligations under Rule 11, and 25 2 the complaint tends to show the absence of such an offer. Lawrence complains of a failed promise to

3 reinstate the Loan in May 2016, yet Wells Fargo initiated foreclosure in September 2017 for defaulted

4 payments starting in May 2017. Following the notice of default, Lawrence sought to modify the Loan

5 which was denied in January 2018. These facts suggest that Lawrence was not able to tender the amount

6 he was in default, let alone the full amount of secured indebtedness prior to the May 15, 2018

7 foreclosure sale. Accordingly, the complaint fails to allege a credible tender as required.

8 Prejudice or harm to Lawrence

9 To prevail on a claim of wrongful foreclosure, the plaintiff must show that she was prejudiced or

10 harmed. Lona, 202 Cal. App. 4th at 104. Because the Court finds the claim defective on other grounds, it

11 will not address prejudice or harm.

12 For these reasons, the complaint fails to make a plausible claim for relief under the theory of

13 wrongful foreclosure. That claim is dismissed with leave to amend.

14 3. Promissory Estoppel

15 Lawrence alleges promissory estoppel as his fourth cause of action. ECF No. 1-1 ¶¶ 43-49. A

16 promissory estoppel claim requires a showing that (1) the defendant made a promise that is definite and

17 clear; (2) the plaintiff reasonably relied on the promise; and (3) the plaintiff suffered substantial

18 detrimental effect because of the reliance. U.S. Ecology, Inc. v. State, 129 Cal. App. 4th 887, 901 (2005).

19 Promissory estoppel is “a doctrine which employs equitable principles to satisfy the requirement

20 that consideration must be given in exchange for the promise sought to be enforced.” Raedeke v.

21 Gibraltar Sav. & Loan Assn., 10 Cal. 3d 665, 672 (1974). “[P]romissory estoppel claims are aimed

22 solely at allowing recovery in equity where a contractual claim fails for a lack of consideration, and in

23 all other respects the claim is akin to one for breach of contract . . . .” US Ecology, Inc., 129 Cal. App.

24 4th at 904. “The vital principle is that he who by his language or conduct leads another to do what he

25 would not otherwise have done shall not subject such person to loss or injury by disappointing the 2 Wells Fargo argues that any alleged oral promise to reinstate the loan was not a definite and clear

3 promise. ECF No. 4, at 13. Similarly, Wells Fargo argues that Lawrence fails to show reliance on any

4 alleged promise by Wells Fargo because the default occurred in October 2017, one year and five months

5 after Lawrence made the reinstatement payment. Id., at 13-14. In addition, the notice of default declares

6 that Lawrence was in default on the installment due May 1, 2017 and for all subsequent installments.

7 ECF No. 1-1, Ex. B, at 31. Therefore, by evaluating the notice of default, even if we assume that Wells

8 Fargo promised to reinstate the Loan in May 2016, the foreclosure arose out of defaults on payments

9 that occurred between May 2017 and October 2017. Accordingly, Lawrence cannot show that he relied

10 on the promise or that he suffered a substantial detrimental impact as a result of such reliance. For these

11 reasons, the promissory estoppel claim is dismissed with leave to amend.

12 4. Unfair Competition Law (UCL) Claims

13 Lastly, Lawrence brings a claim under the Unfair Competition Law (“UCL”), California

14 Business and Professions Code Section 17200, et seq. Under the UCL, any person or entity that has

15 engaged, is engaging or threatens to engage in unfair competition may be enjoined in any court of

16 competent jurisdiction. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012) (citing Cal.

17 Bus. & Prof. Code §§ 17201, 17203). Unfair competition includes any “unlawful, unfair or fraudulent

18 business act or practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof. Code

19 § 17200. A business act or practice needs to meet one of three criteria—unlawful, unfair, or

20 fraudulent—to be considered unfair competition under the UCL. Abramson v. Marriott Ownership

21 Resorts, Inc., 155 F. Supp. 3d 1056, 1066 (C.D. Cal. 2016) (citing Daro v. Superior Court, 151 Cal.

22 App. 4th 1079, 1093 (2007)).

23 Lawrence claims to have statutory standing to bring the UCL claim by the mere fact that Wells

24 Fargo initiated foreclosure proceedings against him. Because the Court holds that the complaint fails to

25 state a plausible claim for relief under the UCL, the Court does not need to address whether Lawrence 2 “Unlawful” prong

3 The complaint fails to identify unlawful conduct that would support a UCL claim.

4 The UCL’s “unlawful” prong “borrows violations of other laws and treats them as independently

5 actionable.” Wilson, 668 F.3d at 1140. A violation of another law is a predicate for stating a cause of

6 action under the UCL’s unlawful prong. DocMagic, Inc. v. Ellie Mae, Inc., 745 F. Supp. 2d 1119, 1146

7 (N.D. Cal. 2010). Where a plaintiff cannot state a claim under the borrowed law, she cannot state

8 a UCL claim under the “unlawful” prong either. See Smith v. State Farm Mutual Automobile Ins. Co., 93

9 Cal. App. 4th 700, 718 (2001).

10 Lawrence alleges that the Defendants committed unlawful business practices and “said acts and

11 practices violate the contract between the parties, and Defendants’ fiduciary duties.” ECF No. 1-1 ¶ 59.

12 The singular piece of specific misconduct alleged by Lawrence is that Wells Fargo promised to reinstate

13 his loan and instead of applying the lump sum payment to reinstate the loan, applied it to another

14 account. The complaint fails to set forth how Wells Fargo’s conduct violated another law. Even if the

15 Court assumes that Wells Fargo broke its promise to reinstate the loan, Lawrence does not demonstrate

16 how this conduct broke the law.

17 “Unfair” prong

18 The UCL does not define the term “unfair” and the California courts are unresolved as to the

19 exact definition under the statute. Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1169 (9th Cir.

20 2012). The Ninth Circuit Court of Appeals has acknowledged a split in the California courts as to

21 whether a claim under the “unfair” prong may be properly brought by consumers or if the cause of

22 action is limited to competitors. Id. at 1170. Prior to the decision in Cel-Tech Commc’ns Inc. v. L.A.

23 Cellular Tel. Co., 20 Cal. 4th 163 (1999), the California courts held that “unfair” conduct occurs when

24 the practice offends an established public policy or when the practice is immoral, unethical, oppressive,

25 unscrupulous, or substantially injurious to consumers. Davis, 691 F.3d at 1169 (citing S. Bay Chevrolet 2 balance the utility of the defendant’s conduct against the gravity of the harm to the alleged victim. Id.

3 Cel-Tech held that this balancing test provided too little guidance to the courts. 20 Cal. 4th at 185.

4 Accordingly, Cel-Tech adopted a separate analysis, holding that “unfair” means “conduct that

5 threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws

6 because its effects are comparable to or the same as a violation of the law, or otherwise significantly

7 threatens or harms competition.” Id. at 544. California courts have been split on whether to apply the

8 Cel-Tech approach or the pre-Cel-Tech balancing test to consumer actions alleging unfair conduct under

9 the UCL. Davis, 691 F.3d at 1170. The Davis Court declined to decide which approach applied, holding

10 that the plaintiff’s claims failed under either alternative. Id. Similarly, Lawrence’s claim that Wells

11 Fargo’s conduct was unfair fails under either approach.

12 As with Lawrence’s other claims for relief, the UCL claims are overly broad and framed in a

13 conclusory manner. The UCL allegations lack facts of Wells Fargo’s specific wrongdoing to provide fair

14 notice in order to defend the lawsuit.

15 In his opposition to Defendant’s motion to dismiss, Lawrence contends that Wells Fargo’s

16 conduct was unfair because it lacked authority to conduct the foreclosure and it failed to follow its own

17 “pre-Notice of Default outreach requirements.” ECF No. 10, at 13. The complaint makes the

18 unsupported, conclusory allegation that Wells Fargo was without authority to foreclose on Lawrence’s

19 property. Lack of authorization to initiate foreclosure does not support a wrongful foreclosure claim. See

20 Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1154 (2011) (allowing a judicial

21 proceeding to determine the authority of the party initiating foreclosure would be contrary to the

22 comprehensive statutory scheme of nonjudicial foreclosures).

23 “Fraudulent” prong

24 Because Lawrence’s UCL claim is grounded in alleged fraudulent conduct, he must meet the

25 heightened pleading standard of Rule 9(b). He fails to meet that heightened pleading standard. 2 pleading standard of Rule 9(b). See Vess, 317 F.3d at 1103-04. When a plaintiff relies entirely on a

3 unified course of fraudulent conduct as a basis for a UCL claim, the claim must satisfy the particularity

4 requirements of Rule 9(b). Kearns, 567 F.3d at 1126-27.

5 Lawrence’s UCL claim fails to plead the circumstances of the alleged fraudulent conduct with

6 particularity. As analyzed above in the fraudulent and negligent misrepresentation claims, Lawrence

7 fails to plead the who, what, when, where and how the misconduct was committed.

8 In sum, Lawrence does not substantiate his claim that Wells Fargo committed an unlawful,

9 unfair, or fraudulent business act or practice that would allow his UCL claim to proceed. To the extent

10 that his UCL claim relies on fraudulent conduct, he fails to plead with particularity as required by Rule

11 9(b). Therefore, the UCL claim is dismissed with leave to amend.

12 VI. CONCLUSION AND ORDER

13 For the foregoing reasons, Wells Fargo’s motion to dismiss is GRANTED with leave to amend.

14 Plaintiff must file an amended complaint within 21 days of the date of this order. If Plaintiff cannot

15 plead to satisfy the legal requirements outlined in this Order, the Court has no time to reeducate in any

16 subsequent order.

17

18 IT IS SO ORDERED.

19 Dated: August 7, 2019 /s/ Lawrence J. O’Neill _____

UNITED STATES CHIEF DISTRICT JUDGE

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