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Hocker v. Wells Fargo Home Mortgage Inc.

United States District Court, D. Arizona

March 4, 2019

John Hocker and Heather Hocker, husband and wife, Plaintiffs,
v.
Wells Fargo Home Mortgage, Inc., a California corporation, now known as Wells Fargo Bank, a national association; John Does I-X; Jane Does I-X; Black Corporations I-X; White Partnerships I-X; and Red Limited Liability Companies I-X, Defendants.

          ORDER

          HONORABLE BRUCE G. MACDONALD UNITED STATES MAGISTRATE JUDGE

         Currently pending before the Court is Defendant Wells Fargo Bank, N.A.'s (“Wells Fargo”) Motion to Dismiss (Doc. 7). Plaintiffs filed a Response (Doc. 10), and Defendant subsequently replied (Doc. 14). The motion is fully briefed and ripe for adjudication.

         In its discretion, the Court finds this case suitable for decision without oral argument. See LRCiv. 7.2(f). The Parties have adequately presented the facts and legal arguments in their briefs and supporting documents, and the decisional process would not be significantly aided by oral argument.

         I. FACTUAL BACKGROUND

         Plaintiffs live at 495 Earl Drive, Sierra Vista, Arizona 85635 (“Plaintiffs' home”). Compl. (Doc. 1-4) at ¶ 6. On February 13, 2003, Plaintiffs executed a Promissory Note in the amount of $93, 000.00 in favor of Defendant. Id. at ¶ 7. Plaintiff's home was used as collateral for the February 2003 loan, and Plaintiffs executed a Deed of Trust in favor of Defendant and naming First American Title of AZ as Trustee. Id. at ¶ 8. On February 21, 2003, the Deed of Trust was recorded at Instrument number 030206096, in Cochise County. Id.

         On December 17, 2015, Defendant informed Plaintiffs that it had initiated foreclosure proceedings on Plaintiffs' home. Id. at ¶ 9. On December 21, 2015, Defendant informed Plaintiffs that the total amount past due under the Promissory Note was $4, 625.76. Compl. (Doc. 1-4) at ¶ 10 & Wells Fargo Reinstatement Quote to Hockers 12/21/2015 (Exh. “1”). On December 23, 2015, First American Title Insurance Company recorded a Notice of Trustee Sale with the Cochise County Recorder, indicating that Plaintiffs' home would be sold at public auction on March 28, 2016. Id. at ¶ 11. On January 7, 2016, First American Title Insurance Company recorded a Cancellation of Trustee's Sale, thereby cancelling the March 28, 2016 public auction. Id. at ¶ 13.

         On January 8, 2016, Plaintiffs paid Defendant $4, 625.76 to reinstate the loan and avoid foreclosure. Id. at ¶ 14. On January 11, 2016, First American Title Insurance Company recorded a second Notice of Trustee Sale with the Cochise County Recorder, indicating the Plaintiffs' home would be sold at public auction on April 13, 2016. Id. at ¶ 15. On February 16, 2016, Defendant sent Plaintiff a statement, which indicated their loan had been reinstated from foreclosure.[1] Compl. (Doc. 1-4) at ¶ 16 & Wells Fargo Statement, Loan No. 0017768391 2/16/2016 (Exh. “3”). Plaintiffs allege that they did not receive notice of the second Notice of Trustee Sale, and only learned of the foreclosure from a “third party” mailing. Id. at ¶ 19. Plaintiffs contacted a representative of the Defendant and were informed that the property was not in foreclosure and no sale or public auction was scheduled. Id. at ¶ 20. Plaintiffs allege that Defendant refused to take any action to cancel the April 13, 2016 trustee sale. Id. at ¶ 21. On April 12, 2016, Plaintiffs filed for Chapter 13 bankruptcy in the United States Bankruptcy Court, District of Arizona to avoid foreclosure. Id. at ¶¶ 22-23. The following day, First American Title Insurance Company recorded a Cancellation of the Notice of Trustee's Sale. Compl. (Doc. 1-4) at ¶ 24.

         On May 9, 2016, Plaintiffs filed their Bankruptcy Schedules and Statements. In re: Hocker, D. Ariz., Case No. 16-BK-03848-BMW, Official Form 106Sum (Doc. 15). In the Bankruptcy Schedules, Plaintiffs denied having any claims against third parties or other contingent and unliquidated claims. Id. at ¶¶ 33, 34. Plaintiffs failed to identify any claims against Wells Fargo in their Bankruptcy Schedules. See id. On November 16, 2017, Plaintiffs' Second Amended Chapter 13 Plan was confirmed. In re: Hocker, D. Ariz., Case No. 16-BK-03848-BMW, Stipulated Order Confirming Second Amended Chapter 13 Plan (Doc. 44).

         On May 17, 2018, Plaintiffs filed a Complaint in the Superior Court of Arizona, Cochise County, alleging claims for a Violation of A.R.S. § 33-420; Breach of Contract; and Breach of the Implied Covenant of Good Faith and Fair Dealing. Compl (Doc. 1-4). Plaintiffs allege “Defendant knew that the Second Notice of Trustee Sale was forged, groundless, contained a material misstatement and/or false claim.” Id. at ¶ 27. Plaintiffs further allege that the recording of the Second Notice violated A.R.S. § 33-420 and that Defendant's alleged wrongful initiation of the second foreclosure proceeding forced Plaintiffs to hire an attorney and file for bankruptcy. Compl. (Doc. 1-4) ¶¶ 33, 35, 39. On June 22, 2018, Defendant removed the case to this Court. Notice of Removal (Doc. 1). Defendant seeks dismissal of the Complaint pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure.

         II. STANDARD OF REVIEW

         A complaint is to contain a “short and plain statement of the claim showing that the pleader is entitled to relief[.]” Rule 8(a), Fed.R.Civ.P. While Rule 8 does not demand detailed factual allegations, “it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.; Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998) (“conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.”).

         Dismissal is appropriate where a plaintiff has failed to “state a claim upon which relief can be granted.” Rule 12(b)(6), Fed.R.Civ.P. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft, 556 U.S. at 678, 129 S.Ct. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007)). Further, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (citations omitted).

         “When ruling on a motion to dismiss, [the Court must] accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Association for Los Angeles Deputy Sheriffs v. County of Los Angeles, 648 F.3d 986, 991 (9th Cir. 2011) (quoting Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005)). “The court draws all reasonable inferences in favor of the plaintiff.” Id. (citing Newcal Industries, Inc. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008)). This Court is not required, however, to accept conclusory statements as a factual basis. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007); Mann v. City of Tucson, 782 F.2d 790, 793 (9th Cir. 1986) (“Although we must, in general, accept the facts alleged in the complaint as true, wholly vague and conclusory allegations are not sufficient to withstand a motion to dismiss.”).

         “As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Lee v. City of Los Angeles, 250 F.3d. 668, 688 (9th Cir. 2001) (quotations and citations omitted). “There are, however, two exceptions to the requirement that consideration of extrinsic evidence converts a 12(b)(6) motion to a summary judgment motion. Id. “First, a court may consider material which is properly submitted as part of the complaint[.]” Id. Second, “[a] court may take judicial notice of ‘matters of public record' without converting a ...


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