1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 PATRICIA E. FLYNN, No. 2:19-cv-00116-WBS-KJN 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE:

MOTION TO DISMISS PLAINTIFF’S

15 WELLS FARGO BANK, N.A.; and DOES SECOND AMENDED COMPLAINT 1-47 inclusive, 16 Defendants. 17

18 ----oo0oo---- 19 Plaintiff Patricia E. Flynn asserts state statutory and 20 common law claims against defendant Wells Fargo Bank. 21 Plaintiff’s claims arise out of Wells Fargo’s alleged mishandling 22 of her loan modification application and alleged wrongful 23 foreclosure on her home. Presently before the court is 24 defendant’s Motion to Dismiss Plaintiff’s Second Amended 25 Complaint (“SAC”). (Docket No. 24.) 26 I. FACTUAL AND PROCEDURAL BACKGROUND 27 In January 2006, plaintiff entered into a consumer loan 28 transaction with defendant Wells Fargo to refinance her home, a 1 single-family residency located at 2540 6th Avenue in Sacramento, 2 California (“the subject property”). (SAC ¶¶ 1, 10.) Shortly 3 thereafter, Wells Fargo took a security interest in the subject 4 property; it also recorded a deed of trust with the Sacramento 5 County’s Recorder’s Office. (Id. ¶ 10.) 6 In May 2016, plaintiff submitted a request for a loan 7 modification to Wells Fargo. (Id. ¶ 14.) She had experienced a 8 “material change in financial circumstance” and wanted to secure 9 a lower interest rate. (Id.) Plaintiff then received three 10 letters from defendant, all dated July 19, 2016. (Id. ¶ 16.) 11 One letter denied plaintiff’s modification application on the 12 grounds that Wells Fargo did not have the contractual authority 13 to modify plaintiff’s loan. (Id.) The second letter stated that 14 Wells Fargo was unable to create an affordable mortgage payment 15 for plaintiff based on her gross monthly income and stated that 16 “[y]ou or a co-borrower have reached the allowable number of 17 modifications.” (Id.) The third letter acknowledged receipt of 18 plaintiff’s application and advised her that she may need to 19 submit additional documents. (Id.) 20 Plaintiff alleges that in the months that followed, she 21 received multiple solicitations from Wells Fargo for home loan 22 modifications. (Id. ¶ 17.) Under California’s Homeowner Bill of 23 Rights, Wells Fargo was required to provide plaintiff a “single 24 point of contact” who could assist her in the loan modification 25 process. Plaintiff alleges that throughout the period at issue 26 in the complaint, she was subjected to a “revolving door” of 27 single points of contact (id. ¶ 20) and Wells Fargo changed her 28 single point of contact as many as four times in a single month. 1 (Id. ¶ 81.) She alleges that the frequency with which Wells 2 Fargo changed her designated single point of contact hindered her 3 ability to navigate the loan modification process. (Id. ¶ 87.) 4 Plaintiff alleges that on March 30, 2017, defendant 5 Wells Fargo recorded a Notice of Default against the subject 6 property, though at that time, Wells Fargo had her complete loan 7 modification application which it had not reviewed. (Id. ¶ 35.) 8 On April 25, 2017, plaintiff attended Wells Fargo’s 9 annual shareholder meeting as the guest of Sister Nora Nash, the 10 director of the Interfaith Center on Corporate Responsibility 11 (“Interfaith Center” or “ICCR”). (Id. ¶ 37.) The Interfaith 12 Center represents a coalition of more than 300 global 13 institutional investors who collectively hold more than $400 14 billion in managed assets. (Id.) At the meeting, plaintiff 15 publicly shared her negative experiences with the loan 16 modification process. (Id.) Defendant Timothy Sloan, Wells 17 Fargo’s CEO, then promised plaintiff he would “personally 18 investigate” her case. (Id. ¶ 38.) Plaintiff alleges that Sloan 19 made this representation because he wanted to placate Sister Nora 20 Nash and other interested shareholders at the meeting. (Id.) 21 Sloan then directed plaintiff to go into the foyer and speak to 22 Anthony Bennum, a Wells Fargo representative. (Id.) She did so, 23 and Anthony Bennum told her that he would be her new single point 24 of contact and would “help” her. (Id. ¶ 40.) Plaintiff alleges 25 that Bennum “specifically reiterated the promise of Timothy Sloan 26 that they would investigate her home loan modification 27 application and that if mistakes were found in the process, 28 Plaintiff’s home certainly would not be foreclosed without a new 1 application being appropriately evaluated and processed by Wells 2 Fargo.” (Id.) 3 Plaintiff alleges that after her conversation with 4 Bennum at the Wells Fargo annual shareholder meeting, Bennum 5 repeatedly made false representations to her. Specifically, she 6 alleges that even though Bennum and Wells Fargo knew that 7 plaintiff was ineligible for loan modification, Bennum told 8 plaintiff that Wells Fargo would work on a loan modification for 9 plaintiff. (Id. ¶ 100.) Plaintiff alleges that during 10 telephone conversations on June 15, 2017, July 25, 2017, and 11 August 10, 2017, Bennum again deceitfully told plaintiff that 12 Wells Fargo was working on the proposed loan modification. (Id.) 13 Plaintiff also alleges that on July 3, 2017, Bennum emailed her 14 and said he was submitting the results of Wells Fargo’s review to 15 Keep Your Home California,1 though plaintiff alleges that at the 16 time of this email, Bennum knew that this was a “futile act.” 17 (Id.) On July 14, 2017, Wells Fargo employee Grace Yang emailed 18 plaintiff’s loan modification proposal to Keep Your Home 19 California. On July 20, 2017, however, Grace Yang acknowledged 20 to Keep Your Home California that the wrong debt to income ratio 21 had been used on plaintiff’s file. (Id. ¶¶ 47, 49.) 22 On August 17, 2017, Wells Fargo informed plaintiff that 23 her loan modification had been denied because the property had 24 already received the maximum number of modifications allowed. 25 (Id. ¶ 53.) On October 6, 2017, plaintiff received a letter from 26 Wells Fargo stating that her loan was in default and that Wells 27 1 Keep Your Home California is a state-sponsored mortgage 28 assistance program. 1 Fargo would pursue foreclosure alternatives. (Id. ¶ 55.) On 2 November 7, 2017, Wells Fargo recorded a Notice of Trustee’s Sale 3 against the subject property. (Id. ¶ 56.) The sale took place 4 on December 1, 2017. On December 12, 2017, plaintiff received 5 the trustee’s deed upon sale that was recorded against the 6 subject property and was served with a 3-Day Notice to Quit. 7 (Id. ¶¶ 57-58.) 8 Plaintiff alleges that “if plaintiff’s home loan [was] 9 in fact not one that could be modified, the President’s office of 10 Wells Fargo could deliver such news within a month, if not 11 minutes.” (Id. ¶ 41). She alleges that she was subjected to the 12 months long back-and-forth with Bennum about her loan 13 modification application as part of a deliberate subterfuge 14 designed by Wells Fargo to “distract Sister Nora Nash, [the 15 Interfaith Center on Corporate Responsibility] and others from 16 [Wells Fargo’s] wrongful business practices.” (Id.) This 17 subterfuge, plaintiff alleges, left plaintiff “as the innocent 18 pawn in a much broader scheme of potentially securing of 400 19 billion dollars of investment money to Wells Fargo.” (Id.) 20 Plaintiff further alleges that, acting in reliance on 21 Bennum’s misrepresentations, she declined to pursue available 22 private money loans. (Id. ¶ 110.) Subsequently, by the time her 23 appeal of the modification denial was denied, on September 21, 24 2017, she did not have sufficient time to refinance her mortgage 25 loan or cure her arrearage. (Id.) This inability was also due 26 in part, the Second Amended Complaint alleges, to the fact the 27 plaintiff’s loan balance with Wells Fargo “included misapplied 28 payments to her principal and thousands of dollars of additional 1 fees, including fees from the multiple failed modification 2 processes, totaling approximately $10,000.”2 (Id.) “Had 3 [p]laintiff known the true amount she owed at the time of the 4 denial of her appeal . . . she could have obtained the financing 5 to correct her arrearage.” (Id.) 6 In November 2018, plaintiff filed this action in the 7 Superior Court, State of California, County of Sacramento. (See 8 Docket No. 1-1.) Defendant Wells Fargo removed the case to this 9 court on January 17, 2019 (Docket No. 1), and on March 18, 2019, 10 plaintiff filed her First Amended Complaint, which added Wells 11 Fargo CEO Timothy Sloan as well as two individual Wells Fargo 12 employees as defendants. (See Docket No. 9.) 13 The court granted Wells Fargo’s Motion to Dismiss the 14 First Amended Complaint (“FAC”) as to all claims against Sloan 15 and as to all claims except certain alleged violations of 16 California’s Homeowners Bill of Rights. (See Order Re: Mot. to 17 Dismiss (Docket No. 19).) Plaintiff then filed her Second 18 Amended Complaint asserting violations of the Homeowner Bill of 19 Rights, fraud, negligent misrepresentation, negligence, wrongful 20 foreclosure, and violations of California’s Unfair Competition 21 Law (“UCL”), Cal. Bus & Prof. Code § 17200, et seq. (Docket No. 22 23.) Defendant now moves to dismiss plaintiff’s fraud, negligent 23 misrepresentation, negligence, wrongful foreclosure, and UCL 24 claims, as well as plaintiff’s requests for punitive and treble 25 damages. (Docket No. 24.) 26 27 2 Plaintiff had previously, unsuccessfully, attempted to 28 correct these alleged accounting errors with Wells Fargo. (Id.) 1 II. LEGAL STANDARD 2 On a motion under Federal Rule of Civil Procedure Rule 3 12(b)(6), the inquiry before the court is whether, accepting the 4 allegations in the complaint as true and drawing all reasonable 5 inferences in the plaintiff’s favor, the plaintiff has stated a 6 claim to relief that is plausible on its face. See Ashcroft v. 7 Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is 8 not akin to a ‘probability requirement,’ but it asks for more 9 than a sheer possibility that a defendant has acted unlawfully.” 10 Id. “A claim has facial plausibility when the plaintiff pleads 11 factual content that allows the court to draw the reasonable 12 inference that the defendant is liable for the misconduct 13 alleged.” Id. 14 III. DISCUSSION 15 A. Fraud 16 Under California law, “the elements of fraud are: (1) a 17 misrepresentation (false representation, concealment, or 18 nondisclosure); (2) knowledge of falsity (or scienter); (3) 19 intent to defraud, i.e., to induce reliance; (4) justifiable 20 reliance; and (5) resulting damage.” Robinson Helicopter Co. v. 21 Dana Corp., 34 Cal. 4th 979, 990 (2004). 22 Fraud claims are held to a higher pleading standard 23 than other claims; to survive a motion to dismiss, such claims 24 must “state with particularity the circumstances constituting 25 fraud or mistake.” Fed. R. Civ. P. 9(b) (“Rule 9(b)”). Under 26 Rule 9(b), “[a]verments of fraud must be accompanied by the ‘who, 27 what, where, when, and how’ of the misconduct charged.” Vess v. 28 Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) 1 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). 2 In addition to identifying the particulars of the alleged fraud, 3 Rule 9(b) requires that a plaintiff “must ‘set forth what is 4 false or misleading about a statement, and why it is false.’” 5 Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1161 (9th Cir. 6 2009) (quoting Yourish v. Cal. Amplifier, 191 F.3d 983, 993 (9th 7 Cir. 1999)). 8 In its order regarding defendant’s Motion to Dismiss 9 Plaintiff’s First Amended Complaint, the court found that 10 plaintiff’s allegations regarding Bennum’s alleged 11 misrepresentations to plaintiff were insufficiently particular 12 under Rule 9(b)’s heightened pleading standard. (Order Re: Mot. 13 to Dismiss FAC at 23-25.) The Second Amended Complaint remedies 14 this deficiency by providing concrete details about the content, 15 timing, and delivery of Bennum’s misrepresentations to plaintiff. 16 For example, the Second Amended Complaint alleges that during a 17 telephone conversation on April 28, 2017, Bennum told plaintiff 18 that Wells Fargo would work with Keep Your Home California on a 19 loan modification. (SAC ¶ 100.) This representation was 20 misleading, the SAC alleges, because, at the time he made it, 21 Bennum knew that Wells Fargo did not have the ability to make any 22 loan modifications to plaintiff’s loan. (Id.) The Second 23 Amended Complaint also adequately alleges with particularity that 24 these misrepresentations were made to deceive plaintiff. 25 Specifically, plaintiff alleges that Bennum and Wells Fargo 26 sought to deceive plaintiff about the prospects of her loan 27 modification application “so as to deflect attention away from 28 their flawed loan modification application” and to “placate 1 Sister Nora Nash, the $400 billion of investment dollars [sic] 2 and Wells Fargo’s investors.” (Id. ¶ 102.) 3 The Second Amended Complaint also adequately alleges 4 that (1) plaintiff reasonably relied on Wells Fargo’s alleged 5 misrepresentations and (2) she was harmed by such reliance. 6 Plaintiff states that between April 2017 and August 2017, she 7 acted in reliance on Bennum’s misrepresentation in declining to 8 pursue alternatives to loan modification. (See id. ¶¶ 110-111.) 9 The reasonableness or justifiability of plaintiff’s alleged 10 reliance is a question of fact not appropriately addressed at the 11 motion to dismiss stage. See Gerard v. Wells Fargo Bank, N.A., 12 No. CV-14-03935-MMM-SHx, 2014 WL 12599606, at *9 (C.D. Cal. Sept. 13 11, 2014) (declining to dismiss fraud claims arising out of loan 14 modification negotiations based on purported unreasonable 15 reliance because the reasonableness of the plaintiff’s alleged 16 reliance on defendant’s statements “is a question of fact to be 17 resolved at a later stage of the proceedings.”). The court 18 cannot say at this stage that it was unreasonable for plaintiff 19 to not fully pursue other options to stay in her home while she 20 was pursuing a loan modification and appeal with Wells Fargo. 21 With respect to causation, plaintiff must allege a 22 causal nexus between plaintiff’s reliance and her injuries. See 23 Conrad v. Bank of Am., 45 Cal. App. 4th 133, 159–160 (3d Dist. 24 1996) (“Misrepresentation, even maliciously committed, does not 25 support a cause of action [for fraud] unless the plaintiff 26 suffered consequential damages.”). The Second Amended Complaint 27 does so by alleging that “if Wells Fargo had advised [p]laintiff 28 in May or June 2017 that they [sic] could not modify her loan, 1 she would have been able to overcome the time frame, clear up 2 misapplied payments and fees on her account, and could have paid 3 her arreage or finalized the refinance of her loan[.]” (SAC ¶ 4 111.) Notwithstanding defendant’s arguments to the contrary, the 5 court cannot say that as a matter of law, plaintiff was not 6 harmed by defendant’s alleged fraud after she learned her 7 modification request had been denied on August 17, 2017. The 8 Second Amended Complaint alleges that she pursued an unsuccessful 9 appeal of her loan modification and was not informed of that 10 denial until September 21, 2017, only 60 days before the 11 scheduled foreclosure sale. (Id. ¶ 110.) Overall, plaintiff has 12 plausibly alleged that if she had more time, i.e., she had 13 learned of the alleged fraud earlier, she could have in fact 14 obtained private money loans to prevent the foreclosure sale and 15 remain in her home. Accordingly, the court will deny the Motion 16 to Dismiss the fraud claim. 17 B. Negligent Misrepresentation 18 The elements of negligent misrepresentation under 19 California law are: “(1) the misrepresentation of a past or 20 existing material fact, (2) without reasonable ground for 21 believing it to be true, (3) with intent to induce another’s 22 reliance on the fact misrepresented, (4) justifiable reliance on 23 the misrepresentation, and (5) resulting damage.” Apollo Capital 24 Fund, LLC v. Roth Capital Partners, LLC, 158 Cal. App. 4th 226, 25 243 (2d Dist. 2007). To succeed with a claim for negligent 26 misrepresentation, a plaintiff must show a “causal nexus” between 27 the alleged misrepresentation and the damage. Goehring v. 28 Chapman Univ., 121 Cal. App. 4th 353, 366 (4th Dist. 2004). The 1 court’s reasoning with respect to the Second Amended Complaint’s 2 fraud claim applies equally to the negligent misrepresentation 3 claim. Accordingly, the court will deny the Motion to Dismiss as 4 to the negligent misrepresentation claim. 5 C. Negligence 6 To prevail on a negligence claim under California law, 7 a plaintiff must show the existence of a legal duty, that that 8 duty was breached, and that the breach was a proximate or legal 9 cause of plaintiff’s injuries. Merrill v. Navegar, Inc., 26 Cal. 10 4th 465, 477 (2001). The existence and scope of a duty are legal 11 questions for the court. Id. (citation omitted). Generally, “a 12 financial institution owes no duty of care to a borrower when the 13 institution’s involvement in the loan transaction does not exceed 14 the scope of its conventional role as a mere lender of money.” 15 Nymark v. Heart Fed. Sav. & Loan Ass’n, 231 Cal. App. 3d 1089, 16 1096 (3d Dist. 1991) (citations omitted). However, this rule is 17 not a “sweeping conclusion that a lender never owes a duty of 18 care to a borrower.” Newson v. Countrywide Home Loans, Inc., No. 19 C 09–5288 SBA, 2010 WL 4939795, at *5 (N.D. Cal. Nov. 30, 2010) 20 (emphasis in original); see Jolley v. Chase Home Fin., LLC, 213 21 Cal. App. 4th 872, 901 (1st Dist. 2013) (“Even when the lender is 22 acting as a conventional lender, the no-duty rule is only a 23 general rule.”). 24 In the order dismissing the negligence claim from 25 plaintiff’s First Amended Complaint, this court reaffirmed its 26 longstanding view that absent some special relationship, in the 27 context of a claim for negligence, a lender does not owe a duty 28 of care to borrowers. (Docket 19 at 27-28 (and citations 1 therein).)3 After reviewing the First Amended Complaint’s 2 allegations regarding Wells Fargo CEO Timothy Sloan’s statement 3 that he would “look into” plaintiff’s application and Bennum’s 4 representation that he would “help” plaintiff with her 5 application, the court found that these statements did not 6 indicate the existence of a “special relationship” between 7 plaintiff and Wells Fargo. It noted that, “[t]o plausibly claim 8 that her relationship with Wells Fargo or Bennum was not a 9 conventional relationship between a borrower and a lender, but 10 rather, a ‘special relationship’ giving rise to a duty of care, 11 plaintiff would need to allege more substantial expressions of 12 solidarity and solicitations of trust by Sloan or Bennum.” (Id.) 13 The Second Amended Complaint reiterates its 14 predecessor’s allegations that Sloan told plaintiff he would 15 “personally look into” plaintiff’s case and that Bennum said he 16 would “help” her with her loan modification application. (SAC ¶¶ 17 38, 40.) It also, however, contains new, more detailed 18 allegations regarding the scope of Bennum’s involvement with 19 plaintiff during the loan modification process. Some of these 20 allegations concern conduct that falls clearly within the scope 21

22 3 After this motion was filed, the California Court of Appeal for the Second District weighed in on whether a lender 23 owes a duty of care during the loan modification process, surveying various court opinions in and outside California and 24 holding that a lender does not owe a borrower a common law duty to offer, consider, or approve a loan modification. Sheen v. 25 Wells Fargo Bank, N.A., No. B289003, --- Cal. Rptr. 3d ----, 2019 WL 3543079, at *3-7 (Ct. App. Aug. 5, 2019). However, this new 26 decision is not dispositive, given the continuing conflict among 27 California Courts of Appeal (and federal district courts within California), as well as the absence of guidance from the 28 California Supreme Court. 1 of the conventional relationship between a borrower and a lender. 2 For example, the Second Amended Complaint alleges that on August 3 10, 2017, Bennum “solicited [p]laintiff’s trust by stating that 4 both he and Alfredo Medina would be working directly with [Keep 5 Your Home California].” (Id. ¶ 128.) Other allegations, 6 however, collectively suggest that plaintiff’s relationship with 7 Wells Fargo exceeded the bounds of the typical relationship 8 between a lender and borrower. 9 For example, the Second Amended Complaint alleges that: 10 (1) On April 25, 2017, when Bennum spoke with plaintiff in 11 the lobby of the shareholders’ meeting, he told 12 plaintiff that if her complaints about the loan 13 modification process were well-grounded then 14 plaintiff’s “home would not be foreclosed upon without 15 the process starting anew.” (Id. ¶ 100.) 16 (2) On April 27, 2017, Bennum spoke with plaintiff over the 17 phone and stated “as an expression of solidarity that 18 her experience with Wells Fargo’s loan modification 19 process was ‘not okay.’” (Id. ¶ 128.) 20 (3) On April 28, 2017, Bennum told plaintiff about a 21 meeting he attended with Franklin Codel, head of 22 Consumer Lending for Wells Fargo, and with other senior 23 executives regarding her loan. Bennum told plaintiff 24 that he had never attended another such meeting and 25 that the meeting was a “big deal.” He said everyone at 26 the meeting agreed plaintiff’s experiences were not 27 okay. The Second Amended Complaint alleges that 28 “Bennum solicited [p]laintiff’s trust by sharing that 1 the consensus of the meeting was that Wells Fargo was 2 going to do everything they could to help plaintiff 3 keep her home.” (Id.) 4 These facts suggest a frequency and intensity of 5 interaction between plaintiff and Bennum that is atypical in the 6 loan modification process. Bennum actively empathized with 7 plaintiff by telling her that her experiences were “not okay” and 8 solicited her trust by sharing the contents of a high-level 9 corporate meeting with her. The Second Amended Complaint also 10 sufficiently alleges that Bennum and plaintiff were in regular 11 contact and that Bennum led plaintiff to believe that if any of 12 her complaints regarding the revolving door of “single points of 13 contact” or general mishandling of her application were true, 14 then she would spared foreclosure until a new application could 15 be properly evaluated. 16 Overall, these alleged facts distinguish plaintiff’s 17 relationship with Wells Fargo from a typical relationship between 18 a lender and borrower. A comparison with Griffin v. Green Tree 19 Servicing, LLC, No. CV-14-09408-MMM(VBKx), 2015 WL 10059081 (C.D. 20 Cal. Oct. 1, 2015), is instructive. In Griffin, the court 21 rejected plaintiff’s argument that the defendants “stepped 22 outside their conventional duties as a lender and servicer” when 23 they “dispatched letters advertising mortgage assistance programs 24 and undertook efforts to consider borrowers, including 25 Plaintiffs, for loss mitigation options, including, but not 26 limited to, loan modifications.” See Griffin, 2015 WL 10059081, 27 at *15. Here, unlike the plaintiff in Griffin, Flynn alleges 28 that Bennum actively empathized with her by implicitly critiquing 1 his employer’s previous handling of her application. She alleges 2 that Bennum sought to convey that to her that her application, in 3 particular, was receiving special treatment, i.e., by telling her 4 it was a “big deal” that her situation was discussed at a meeting 5 with high-level executives. 6 Collectively, these allegations indicate that 7 plaintiff’s experience in the loan-modification process with 8 Wells Fargo was not “[a]n arm’s length transaction between lender 9 and borrower [that] does not create an actionable duty of care.” 10 See Jent v. N. Tr. Corp., No. CIV 13-01684 WBS CKD, 2013 WL 11 5806024, at *3 (E.D. Cal. Oct. 28, 2013) (citing Saldate v. 12 Wilshire Credit Corp., 711 F. Supp. 2d 1126, 1132 (E.D. Cal. 13 2010) (O’Neill, J.) The court thus finds that the Second Amended 14 Complaint sufficiently alleges a special relationship between 15 plaintiff and Wells Fargo that exceeds the bounds of the typical 16 relationship between borrower and lender and gives rise to a duty 17 of care. The Second Amended Complaint also plausibly alleges 18 that Wells Fargo breached that duty by acting negligently with 19 respect to plaintiff’s loan modification application. 20 The court’s reasoning regarding causation, discussed in 21 the context of plaintiff’s fraud claim, also applies to the 22 negligence claim. Further, this claim encompasses broader 23 conduct than the fraud claim. The negligence claim is based on 24 not only Bennum’s misrepresentations, but also Wells Fargo’s 25 alleged misrepresentations in connection with its overvaluation 26 of plaintiff’s property in 2006 and the futility of plaintiff’s 27 appeal of her loan modification application denial, which 28 allegedly prevented her from clearing up misapplied payments and 1 fees and obtaining private money to pay off her arrearage or 2 refinance her loan. (SAC ¶¶ 138-140.) Taking these allegations 3 as true, plaintiff has sufficiently alleged causation with 4 respect to her negligence claim. Accordingly, the court will 5 deny defendant’s Motion to Dismiss plaintiff’s negligence claim. 6 D. Wrongful Foreclosure 7 A claim for wrongful foreclosure generally requires 8 that: (1) the trustee or mortgagee caused an illegal, 9 fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a 10 mortgage or deed of trust; (2) the party attacking the sale . . . was prejudiced or 11 harmed; and (3) . . . the trustor or mortgagor tendered the amount of the secured indebtedness 12 or was excused from tendering. 13 Rockridge Tr. v. Wells Fargo, N.A., 985 F. Supp. 2d 1110, 1145 14 (N.D. Cal. 2013) (quoting Lona v. Citibank, N.A., 202 Cal. App. 15 4th 89, 104 (6th Dist. 2011)). 16 Plaintiff alleges that Wells Fargo wrongfully 17 foreclosed on the subject property because it “failed to properly 18 process the documents, failed to use the proper income figures, 19 and proceed with the foreclosure process and illegal dual 20 tracking” and because it “had a revolving door” of single points 21 of contact in violation of California Civil Code Sections 2923.6 22 and 2923.7. (SAC ¶¶ 148-155.) While the Second Amended Complaint 23 alleges that defendant did not in fact have authority to modify 24 her loan, (see, e.g., SAC ¶ 100(a)), plaintiff has sufficiently 25 alleged that she would have been able to pursue private loans to 26 prevent the foreclosure of her home, if these various acts by 27 defendant had not kept her “tangled up in the modification 28 process,” (see SAC ¶ 151). Accordingly, the court will deny the 1 Motion to Dismiss the wrongful foreclosure claim. 2 E. UCL Claim 3 A private person has standing to sue under California’s 4 Unfair Competition Law if she can “(1) establish a loss or 5 deprivation of money or property sufficient to qualify as injury 6 in fact, i.e., economic injury, and (2) show that that economic 7 injury was the result of, i.e., caused by, the unfair business 8 practice or false advertising that is the gravamen of the claim.” 9 Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 322 (2011) 10 (emphasis removed). “A plaintiff cannot show causation if she 11 would have suffered ‘the same harm whether or not a defendant 12 complied with the law.’” London v. Wells Fargo Bank, N.A., No. 13 2:17-CV-00687 KJM AC, 2018 WL 621262, at *10 (E.D. Cal. Jan. 29, 14 2018) (quoting Daro v. Superior Ct., 151 Cal. App. 4th 1079, 1099 15 (1st Dist. 2007)). 16 Like plaintiff’s wrongful foreclosure claim, 17 plaintiff’s UCL claim plausibly alleges that her injuries were 18 caused by defendant’s unfair business practices. The Second 19 Amended Complaint sufficiently alleges that had defendant not 20 engaged in various practices such as failing to process 21 documents, failing to provide a single point of contact, failing 22 to use improper income figures, and illegally dual tracking, 23 plaintiff could have pursued private money loans and prevented 24 her foreclosure. (See, e.g., SAC ¶¶ 160-163.) Accordingly, the 25 court will deny the Motion to Dismiss the UCL claim. 26 F. Punitive and Treble Damages 27 Defendant seeks to dismiss the Second Amended 28 1 Complaint’s requests for punitive damages and treble damages.4 2 Pursuant to California Civil Code section 3294, a plaintiff may 3 recover punitive damages “[i]n an action for the breach of an 4 obligation not arising from contract, where it is proven by clear 5 and convincing evidence that the defendant has been guilty of 6 oppression, fraud, or malice.” Cal. Civ. Code § 3294(a). 7 Meanwhile, the California Homeowners Bill of Rights provides for 8 trebled actual or statutory damages for material violations that 9 were intentional, reckless, or resulted from willful misconduct. 10 Cal. Civ. Code § 2924.12(b). 11 Because the court has already determined that the 12 Second Amended Complaint sufficiently alleges a claim for fraud, 13 the court will deny the motion to dismiss the request for 14 punitive damages. Further, taking plaintiff’s allegations as 15 4 Defendant seeks in the alternative to strike the 16 request for punitive and treble damages. Federal Rule of Civil Procedure 12(f) permits the court to “strike from a pleading an 17 insufficient defense or any redundant, immaterial, impertinent, 18 or scandalous matter.” Fed. R. Civ. P. 12(f). The Ninth Circuit has made clear, however, that “Rule 12(f) does not authorize 19 district courts to strike claims for damages on the ground that such claims are precluded as a matter of law.” Whittlestone, 20 Inc. v. Handi–Craft Co., 618 F.3d 970, 974-75 (9th Cir. 2010). Following Whittlestone, courts in this district have declined to 21 strike prayers for unavailable forms of relief. See, e.g., 22 Estate of Prasad ex rel. Prasad v. Cty. of Sutter, 958 F. Supp. 2d 1101, 1128 (E.D. Cal. 2013) (Nunley, J.) (“Plaintiffs’ prayer 23 for punitive damages satisfies ‘none of the five categories’ of material that may be stricken under Rule 12(f).” (alterations 24 omitted)). The court follows this approach and thus declines to strike the Second Amended Complaint’s requests for punitive and 25 treble damages, though it will consider whether to dismiss them under Rule 12(b)(6). See Price Simms Holdings LLC v. Candle3, 26 LLC, No. 2:18-cv-1851 WBS KJN, 2019 WL 2024597, *3-4 (E.D. Cal. 27 May 8, 2019) (declining to strike request for punitive damages but dismissing them as unavailable as a matter of law given 28 plaintiff’s remaining claims). 1 true, plaintiff has plausibly alleged that defendant acted 2 recklessly by dual tracking and failing to provide a single point 3 of contact. Accordingly, the court declines to dismiss the 4 Second Amended Complaint’s request for treble damages. 5 IT IS THEREFORE ORDERED that defendants’ Motion to 6 Dismiss (Docket No. 24) be, and hereby is, DENIED. 7 | Dated: August 29, 2019 bet¢ . ak. 1 / 8 WILLIAM B. SHUBB 9 UNITED STATES DISTRICT JUDGE

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19