Martin v. Wells Fargo Bank, N.A.
- Edward Davila
- 5:18-cv-05119
- U.S. District Court · Northern District of California
- 10
In Martin v. Wells Fargo Bank, Judge Davila granted Wells Fargo’s dismissal motion, allowing some claims to be amended but ending the quiet-title and fraud claims.
Rudy Martin’s claims against Wells Fargo Bank, N.A.; the contract and implied-covenant claims could be amended in a limited form, while the quiet-title and fraud claims could not be amended.
What happened
Martin v. Wells Fargo Bank, N.A. concerns Rudy Martin’s claims about charges on a mortgage loan secured by his Pebble Beach property. Martin alleged that Wells Fargo promised to investigate or reverse improper charges, delay payments and late fees, and refrain from foreclosure while the charges were reviewed.
Martin asserted claims for breach of contract, breach of the implied covenant, quiet title, fraudulent inducement, promise without intent to perform, and fraud and intentional deceit. Wells Fargo asked the court to dismiss all six claims, arguing that they lacked sufficient factual or legal support and that the fraud claims did not provide the details required by federal pleading rules.
Judge Davila granted the motion to dismiss. Martin may amend the contract and implied-covenant claims based only on the written 2007 loan agreement; the quiet-title and fraud claims were dismissed without leave to amend, and references to other written or oral agreements were ordered stricken.
The detailed version
- Martin v. Wells Fargo Bank, N.A. · No. 5:18-cv-05119
- Edward Davila
- Jan. 10, 2020
Background
Rudy Martin, proceeding without a lawyer, sued Wells Fargo Bank, N.A. and unnamed defendants over a mortgage secured by property in Pebble Beach, California. Martin alleged that Wells Fargo made improper or unexplained charges to his account, promised to investigate and correct them, and promised not to add certain charges, require payments, or begin foreclosure while the issues were being reviewed. Wells Fargo had recorded a notice of default on the property.
Martin’s First Amended Complaint asserted six causes of action: breach of contract, breach of the implied covenant of good faith and fair dealing, quiet title, fraudulent inducement, promise without intent to perform, and fraud and intentional deceit. Wells Fargo moved to dismiss the First Amended Complaint without leave to amend. After Martin initially failed to respond, the court issued an order to show cause, and Martin filed an opposition and affidavit.
Legal standards
The court applied Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim for relief. The court was required to accept well-pleaded factual allegations as true and view alleged facts favorably to Martin, but the complaint still had to contain enough facts to make the claims plausible. Because Martin was proceeding without a lawyer, the court construed his pleadings liberally.
The court also applied Rule 9(b), which requires fraud claims to identify with particularity who made the statements, what was said, when and where it was said, and how the conduct was fraudulent.
Discussion
Contract and implied-covenant claims. The court found that Martin did not adequately identify the terms of the alleged 2006 agreement or explain how Wells Fargo breached them. The complaint also did not identify which provisions of the written 2007 revised loan were breached. The 2007 loan did not contain provisions addressing many of the subjects Martin raised, including investigating or correcting charges and deferring late fees, payments, or foreclosure.
The court further held that the alleged oral agreements concerning the mortgage were unenforceable under California’s statute of frauds, which generally requires certain agreements involving interests in real property or mortgage modifications to be in a signed writing. The court nevertheless allowed Martin to file amended contract and implied-covenant claims based solely on the written 2007 loan agreement. It ordered references to all other written and oral agreements stricken.
Quiet-title claim. The court dismissed the quiet-title claim without leave to amend. It explained that such a claim requires an allegation that the plaintiff is entitled to ownership against the adverse claim, including that the plaintiff has satisfied obligations under the deed of trust. The court had previously found that Martin’s allegations suggested he had not satisfied his mortgage-payment obligations, and it found that the First Amended Complaint did not cure that defect.
Fraud claims. The court dismissed the claims for fraudulent inducement, promise without intent to perform, and fraud and intentional deceit without leave to amend. Although the First Amended Complaint identified several Wells Fargo employees who allegedly communicated with Martin, it did not state with particularity when, where, and what was said or written, or which individual made each statement. The court concluded that the amended pleading still failed to provide the information required by Rule 9(b).
Disposition
The court granted Wells Fargo’s motion to dismiss as follows: Martin could amend the breach-of-contract and breach-of-implied-covenant claims based solely on the written 2007 loan agreement; the quiet-title claim was dismissed without leave to amend; and the fraud claims were dismissed without leave to amend. The court ordered Martin to file and serve a Second Amended Complaint by January 28, 2020 and stated that failure to do so might result in dismissal of the action without leave to amend.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.