Forbes v. Wells Fargo Bank, National Association

Background

Thomas Forbes sued Wells Fargo Bank, National Association, and other defendants over foreclosure-related events. The complaint included claims concerning an alleged breach of a security instrument, violations of California’s Homeowners Bill of Rights, lack of standing, intentional infliction of emotional distress, declaratory relief, a claim under the California Business and Professions Code, slander of title, and quiet title.

The court stated that the complaint was often difficult to follow and conclusory, and that the causes of action did not clearly identify the conduct relevant to each claim. The court addressed examples of the problems with each cause of action.

Reasons for Dismissal

For the breach-of-security-instrument claim, the court held that the statute of limitations barred claims based on alleged misconduct more than four years old. The remaining allegations concerned a 2021 Notice of Default and Section 22 of the deed of trust. The court found that the notice provided Forbes notice and did not itself accelerate the debt. The complaint did not identify another communication that accelerated the debt without notice. The allegation that the notice was executed without proper corporate signatory capacity was conclusory and did not support a claim. The court also explained that California Corporations Code § 313 does not invalidate agreements based on a lack of signatory capacity.

For the Homeowners Bill of Rights claims, the court held that Forbes lacked standing—meaning he could not ask the court to decide the issue—based on allegations concerning the securitization and transfer of the deed of trust. The court distinguished between an assignment that is void, which may support a challenge, and one that is merely voidable, which does not give Forbes the right to enforce another party’s contractual rights. The court found that Forbes’s allegations concerned only voidability and noted that he did not address the standing argument in his opposition brief.

The court also found that Forbes merely recited the elements of claims under California Civil Code §§ 2924 and 2924.17 without supporting facts. Regarding alleged violations of § 2923.5, the court explained that the Homeowners Bill of Rights provides a remedy for a material violation. Forbes alleged that he was actively discussing loan modification with Wells Fargo when the Notice of Default was issued, so his own allegations showed that he was aware of the default even if communications were defective. The court also noted that Forbes did not explain why the alleged violations were material. As to the alleged prohibition on “dual tracking,” the complaint did not allege that a complete and timely loan-modification application was pending when the Notice of Default was issued.

The court rejected the separately labeled claim for lack of standing because California law does not recognize lack of standing as a cause of action. To the extent the claim was intended as wrongful foreclosure, the court found that Forbes lacked standing for the same reasons concerning securitization and assignment. The court also held that a wrongful-foreclosure claim generally requires an offer to pay the secured debt, unless an exception applies, and that Forbes made no such offer and showed no reason to excuse that requirement.

The intentional-infliction-of-emotional-distress claim failed because the allegations did not describe conduct that was extreme and outrageous. The declaratory-relief claim failed because the sale had already occurred, leaving no actual controversy for that remedy, and Forbes lacked standing to seek an injunction. Recasting the foreclosure challenges as declaratory relief did not fix the other defects.

The Business and Professions Code claim was vague, nonspecific as to any individual defendant, and conclusory. The court also found that Forbes had not shown causation because his default, rather than the manner in which the note and deed of trust were transferred, triggered the foreclosure. The slander-of-title claim failed for lack of standing and because the only timely publications identified—the 2021 Notice of Default and 2022 Notice of Trustee Sale—were privileged. The quiet-title claim failed for reasons including lack of standing, the tender requirement, and conclusory allegations.

Ruling

The court granted the motions to dismiss and dismissed the complaint in its entirety. Judge Vince Chhabria expressed skepticism that amendment could cure the defects and raised concerns that the lawsuit might be frivolous and that sanctions against the attorneys might be possible, but the court did not impose sanctions in this order. The court allowed Forbes to amend within fourteen days. The order states that if he did not do so, the case would be dismissed with prejudice.