PHILLIP R. RUMSEY, J.
Petitioner Town of Chenango (Chenango) commenced this proceeding, pursuant to Eminent Domain Procedure Law § 402(B), seeking an order authorizing it to file an acquisition map vesting it with title to a parcel of land owned by, and located within the bounds of, respondent Town of Fenton (Fenton), which is subject to an easement owned by respondent JAMCAM, LLC (JAMCAM). Fenton answered, asserting nine affirmative defenses and a counterclaim. JAMCAM also answered, asserting two affirmative defenses. In addition, Fenton moves, in part, for dismissal of the petition on the basis of its prior public use of the property.
HISTORICAL BACKGROUND
The historical background is derived from Town of Fenton v Town of Chenango, 23 Misc 3d 1140(A), 2009 NY Slip Op 51207 (U) (2009).
The following history is not in dispute. The Town of Fenton is a municipal corporation located in Broome County. The Town of Chenango, also a municipal corporation located in Broome County, is westerly of, and adjacent to, the Town of Fenton. The boundary line between the parties is the Chenango River. From approximately 1976 through 1999, mining operations were conducted in Fenton adjacent to the Chenango River. Removal of topsoil and gravel resulted in the creation of two large ponds that were originally separated from the Chenango River by a berm, or land barrier. That berm was breached by the Chenango River, and, as a result, the Chenango River now flows primarily through the ponds, before rejoining the main channel south of the mining area. Consequently, the level of water flow through the original main channel in the area adjacent to the ponds has become very low and, at times, has even ceased.
The Chenango wastewater treatment plant (WWTP), located on the west shore of the original Chenango River channel in the vicinity of the ponds, first became operational in 1988. At that time, effluent from the WWTP was discharged into the main channel of the Chenango River. As a result of the diversion of the primary flow of the Chenango River through the ponds, the effluent discharge was no longer satisfactorily diluted, in accordance with Department of Environmental Conservation (DEC) regulations. To solve that problem, Chenango made application to DEC for a permit for extension of the discharge line to a point where the flow of the Chenango River would be sufficient to dilute the effluent to applicable standards. In August 2008, DEC issued a final permit to Chenango for extension of the 16 inch effluent discharge pipe to a point in the western edge of the ponds, and, in September 2008, construction of the extension was completed.
Since 1929, the Town of Fenton has owned and operated a waterworks in a portion of the Town known as Hillcrest, which is east of the ponds. The waterworks, used to supply potable water to properties located in Hillcrest Water District No. 1, draws its water from an aquifer located beneath the Chenango River and the ponds. To protect that water source, the Town of Fenton enacted an Aquifer Protection Law in 1991 (Code of the Town of Fenton, New York, chapter 57; herein Aquifer Law). Fenton contends that the discharge of approximately 500,000 gallons of effluent from the WWTP into the ponds located above the aquifer each day violates the Aquifer Law and threatens to contaminate the water supply for the Hillcrest Water District.
PRIOR LITIGATION HISTORY
On October 28, 2008 — approximately one month after the effluent discharge pipe was relocated to discharge into the ponds — the Town of Fenton commenced an action against the Town of Chenango (the first action), asserting that the relocated effluent discharge line installed by the Town of Chenango violates the Aquifer Law. The court denied Fenton's motion for a preliminary injunction in that action ( see Town of Fenton v Town of Chenango, 23 Misc 3d 1140[A], 2009 NY Slip Op 51207 [U)][2009] [Sup Ct, Broome County, Index No. 2008-2886]), and there are no applications pending therein.
On June 23, 2009, Chenango commenced a hybrid CPLR article 78 proceeding / declatory judgment action challenging the Town of Fenton Planning Board's denial of Chenango's application for issuance of a development permit for the effluent pipe, pursuant to the Aquifer Law ( see Matter of Town of Chenango v Town of Fenton Planning Board, Sup Ct, Broome County Index No. 2009-1533), and seeking declatory judgment, pursuant to CPLR 3001, that its operation of the WWTP and the related installation of the effluent discharge line are immune from the provisions of the Aquifer Law. That proceeding / action, and Fenton's motion for consolidation with the first action, are decided herewith.
By deed dated August 28, 2009 and recorded September 1, 2009, Fenton acquired from JAMCAM, LLC fee ownership of a parcel of land of approximately 12.88 acres which includes the area where the effluent pipe discharges. JAMCAM retained an easement permitting it to use that parcel for its business purposes. Fenton explains that it acquired the parcel to protect the aquifer. On September 16, 2009, Fenton commenced a trespass action against Chenango seeking to compel removal of the pipe ( Town of Fenton v. Town of Chenango, Sup Ct, Broome County Index No. 2009-2454). The parties' motions in that action — Fenton's for summary judgment and Chenango's for consolidation with the prior cases — are decided herewith.
EMINENT DOMAIN VESTING PROCEEDING
Chenango commenced this eminent domain vesting proceeding on July 2, 2010 to acquire ownership of a portion of the parcel owned by Fenton, consisting of a strip of land containing 0.60 acres that is 60 feet wide — centered on the existing effluent discharge pipe — and which extends east from the low water mark of the Chenango River a distance of approximately 440 feet. In its petition, Chenango claims that it is exempt from the public hearing requirement imposed by EDPL article 2 because it followed an alternate procedure which complied with EDPL 206(A) by obtaining a permit from DEC (petition, ¶ 3), and, in addition, because the proposed acquisition is de minimis, as defined by EDPL 206(D) (petition, ¶ 4).
On review of a vesting petition, the court must determine whether the condemnor has complied with the procedural requirements imposed by EDPL article 4 ( see EDPL 402[B][5]; Matter of City of New York [Grand Lafayette Props. LLC] , 6 NY3d 540, 549; Matter of City of Albany , 9 AD3d 551, 553, lv denied 3 NY3d 609), and thereby consider the condemnor's determination that it is exempt from the public hearing requirement imposed by EDPL article 2 ( see Matter of Rockland County Sewer Dist. No. 1 v J. J. Dodge, 213 AD2d 409, 410; Matter of City of Albany, 9 AD3d at 553; Matter of County of Fulton, 136 AD2d 115, 118 — 119 [1988]). Prior to granting a petition which appears to meet the requirements of EDPL article 4, the court must also consider any affirmative defenses, counterclaims, and motions to dismiss properly interposed by respondents ( see Matter of New York State Urban Dev. Corp., 26 Misc 3d 1228[A], 2010 NY Slip Op 50301[U], at *7, *10).
The Supplemental Affidavit, sworn to by Albert J. Millus, Jr., Esq. on October 11, 2010 — submitted by Fenton without leave of court nearly two months after the court heard argument on the petition — and the Affirmation of Donald G. Walls, Esq. dated October 20, 2010, submitted in response by Chenango, are not timely and have not been considered by the court.
EDPL § 402(B)(1) requires that a notice of pendency be filed. Here, the notice of pendency filed by petitioner is insufficient because it contains an incomplete and erroneous property description and because it fails to name respondent JAMCAM as a condemnee. The court further notes that the description of the property to be acquired, as set forth in Exhibit A to the petition, contains the same erroneous property description as Exhibit A to the notice of pendency, which does not describe the parcel intended to be acquired as shown on the proposed acquisition map. Inasmuch as the proposed acquisition map attached as Exhibit C to the petition clearly and unambiguously depicts the parcel sought to be acquired, however, the errors in the metes and bounds property description set forth on Exhibits A to the notice of pendency and the petition do not prejudice a substantial right of any party ( see County of Orange v Metropolitan Transp. Auth., 71 Misc 2d 691, 704 — 706 [1971], affd 39 AD2d 839; cf. City of Plattsburgh v Kellogg, 254 AD 455, 458 — 459 [1938]), and the court, pursuant to CPLR 2001, hereby orders that the errors be corrected as follows: (1) petitioner shall file — prior to, or concurrently with, filing of the acquisition map — an amended notice of pendency which corrects the specified defects by naming JAMCAM as a respondent and attaching a correct description of the property; and (2) Exhibit A to the petition is hereby amended, nunc pro tunc, to accurately describe the parcel which petitioner seeks to acquire.
Exhibit A to the petition is amended to read in its entirety as follows:
All that Tract or Parcel of Land situated in the Town of Fenton, County of Broome, State of New York, bounded and described as follows:
Commencing at an iron stake in the northerly line of premises conveyed by Calvin W. Everett and wife to Walter P. Boland and wife by deed recorded November 13, 1948 in the Broome County Clerk's Office in Book of Deeds No. 695 at page 405, which point is in the southerly line of premises of said Everett and also in the westerly line of premises conveyed by Calvin W. Everett and wife to John J. Bero by deed recorded on October 25, 1949 in Book of Deeds No. 724 at page 54.
Thence North three degrees and 10 minutes east (N 3° 10' E; all bearings referred to being true north) along the westerly line of premises of John J. Bero and that line extended, a distance of one thousand one hundred fifty-six and four tenths feet (1156.4') more or less to an iron stake in the northerly line of the above mentioned premises of Everett and the southerly line of premises of J. Clifford Signor, Sr. and son;
Thence South eighty-two degrees and fifty six minutes west (S 82° 56' W) along the southerly line of the premises of Signors, three hundred seventy feet (370') more or less to the low water mark of the Chenango River;
Thence southwardly along the low water mark of the Chenango River a distance of 335 feet more or less to a point in said line, BEING THE POINT OR PLACE OF BEGINNING;
Thence south eighty-four degrees and 1 minute east (S 84° 1' E) along a line to the intersection with the aforementioned westerly line of John J. Bero a distance of 446 feet more or less;
Thence North three degrees and 10 minutes east (N 3° 10' E) along the aforementioned westerly line of John J. Bero a distance of 60.1 feet more or less;
Thence north eighty-four degrees and 1 minute west (N 84° 1' W) along a line to the intersection with the low water mark of the Chenango River a distance of 431.1 feet more or less;
Thence South seventeen degrees thirteen minutes twenty-three seconds West (S 17° 13' 23" W) along the low water mark of the Chenango River a distance of 61.2 feet to the point or place of beginning, containing 26,311 square feet.
The purpose of this proceeding is to acquire title to a parcel of land 60 feet wide with the pipeline located in the center thereof.
As permitted by EDPL 402(B)(2), petitioners timely provided respondents with notice of the vesting proceeding by personal service, in accordance with the CPLR, of copies of the notice of petition and petition, which contained a copy of the proposed acquisition map ( see CPLR 311; CPLR 311-a; Affirmation of Donald G. Walls, Esq. dated August 5, 2010, Exhibits 5, 6). Accordingly, compliance with the additional notice provisions of EDPL 402(B)(2) is not required ( cf. Village of Valley Falls v Buchman, 179 Misc 2d 840, 842 — 843 [1999]).
The petition contains each of the items required by EDPL 402(B)(3)(a) — (e), including statements identifying the bases of exemption from compliance with the requirements of EDPL article 2 asserted by petitioner. While both respondents generally deny that petitioner's acquisition is exempt from the public hearing requirements of EDPL article 2, neither has provided any evidence to contradict petitioner's showing that information relevant to factors similar to those enumerated in EDPL 206(B) was submitted to, and considered by, the DEC in connection with its grant of the permit for extension of the effluent discharge pipe into the ponds ( see Matter of County of Fulton, 136 AD2d at 118 — 119; Matter of Rockland Co. Sewer Dist. No. 1, 213 AD2d at 411 — 412).
In light of the foregoing, which shows that petitioner has complied with the procedural requirements of EDPL article 4, the court is required to grant the petition unless there is merit to any of the affirmative defenses or counterclaims interposed by respondents ( see EDPL 402[B][4]; Matter of New York State Urban Dev. Corp., 2010 NY Slip Op 50301, at *10).
Respondent Fenton has asserted nine separate affirmative defenses. The first three, unclean hands, waiver, and laches, are equitable in nature and may not be asserted in opposition to a vesting proceeding ( see generally Matter of Parkview Assoc. v City of New York, 71 NY2d 274, 282, rearg denied 71 NY2d 995, cert denied 488 US 801 [estoppel and laches may not be invoked to prevent a municipality from asserting its statutory powers]; Society of NY Hosp. v Johnson, 5 NY2d 102, 107 [eminent domain power cannot be surrendered]; Matter of New York State Urban Dev. Corp., 2010 NY Slip Op 50301, at *28 [owner cannot oppose a vesting petition based on the doctrine of unclean hands]).
In its fifth affirmative defense, Fenton asserts that petitioner lacks a proper public purpose for the proposed acquisition. While the court is well aware of Fenton's objections to the procedure followed by petitioner to obtain the DEC permit and to install the effluent discharge pipe in the ponds located within the Town of Fenton — namely its allegation that it was deprived of the opportunity to participate in the DEC permit process by Chenango's intentional misrepresentation that the pipe would be installed entirely within the Town of Chenango — it is beyond dispute that operation of a wastewater treatment plant is a proper public use ( see Matter of Village of Middleburgh, 120 AD2d 830; see generally Matter of 225 Front St., Ltd. v City of Binghamton , 61 AD3d 1155, 1157 [public use is broadly defined as "any use which contributes to the health, safety, general welfare, convenience or prosperity of the community"] [citations omitted]; Matter of Board of Coop. Educ. Servs. of Albany-Scoharie-Schenectady-Saratoga Counties v Town of Colonie, 268 AD2d 838 [condemnor's determination that a proposed taking will serve a public purpose must be confirmed unless an objecting owner can show that it is without foundation]). Accordingly, the fifth affirmative defense lacks merit.
The sixth and seventh affirmative defenses interposed by Fenton both assert that the vesting proceeding is barred by Fenton's prior public use of the property which Chenango seeks to acquire. Fenton's motion for dismissal of the petition and its counterclaim are also based on its allegations of prior public use. With respect to its prior public use, Fenton explains that it acquired the 12.88 acre parcel from JAMCAM "for the public purpose of protecting the water supply for the Hillcrest area of the Town of Fenton by obtaining the removal of the pipe through the trespass action referred to above [ Town of Fenton v Town of Chenango, Sup Ct, Broome County, Index No. 2009-2454]" (Fenton's verified answer and counterclaim, ¶ 16; see also Affidavit of David C. Hamlin, sworn to July 21, 2010, ¶¶ 2, 12).
In its counterclaim, Fenton seeks a declatory judgment that petitioner has no power to condemn the subject property due to Fenton's prior public use.
Whether Fenton's stated use of the property — protection of the water supply for the Hillcrest Water District — constitutes a public use turns on whether ECL 15-1501 applies to its purchase of the property from JAMCAM. ECL 15-1501 prohibits a municipality from acquiring land for any new or additional water supply, or from utilizing such supplies, without first obtaining a permit from the DEC (ECL 15-1501; Matter of County of Fulton, 136 AD2d 115; Matter of City of Schenectady v Flacke, 100 AD2d 349, lv denied 63 NY2d 603). Here, Fenton concededly did not obtain a permit prior to its acquisition of the property; however, it argues that ECL 15-1501 is inapplicable because the property was not acquired as an additional water source, but for the primary purpose of protecting an existing water supply. In that regard, Fenton explains that the property is located adjacent to its waterworks and directly over the aquifer which has served as the source of the water supply for the Hillcrest Water District since 1929, and contends that its acquisition of the property did nothing to change the source of the water supply, finally noting that "[i]f there is a hydrostatic connection between the pond and the acquifer [sic], it has been there right along" (Supplemental Brief of Respondent and Condemnee Town of Fenton in Opposition to Condemnation Petition, dated August 20, 2010 [Supplemental Brief], p. 5).
Preliminarily, it is well-settled that ECL 15-1501 applies to acquisition by purchase as well as by condemnation ( Williams v City of Schenectady, 115 AD2d 204, 205).
Fenton's argument fails in light of long-standing precedent of the Appellate Division, Third Department, which holds that ECL 15-1501 applies to acquisitions of land made for the stated purpose of protecting an existing water supply ( see Matter of City of Schenectady v Flacke, 100 AD2d 349; Matter of Fulton County, 136 AD2d 115; see also Weinberg, Practice Commentaries, McKinney's Cons Laws of NY, Book 17 ½, ECL C15-1501), and that property is not acquired for a public purpose if a required permit is not obtained ( Matter of Fulton County, 136 AD2d at 118).
The relevant facts at issue in Matter of City of Schenectady v Flacke and in Matter of Fulton County are strikingly similar to the facts presented in this proceeding. In Matter of City of Schenectady v Flacke, two adjoining municipalities agreed to jointly acquire 23 parcels of real property located over the aquifer which served as their existing water source. In a condemnation proceeding which they commenced to acquire the properties, they, like Fenton, argued that the permit requirement imposed by ECL 15-1501 was inapplicable because they were merely acquiring an existing source of water and not a new source. The court held that the lands located over the municipalities' existing water source constituted a potential new source of water for each of them because they — like Fenton — did not already own the land; therefore, the permit requirement was applicable.
Fenton's attempts to distinguish Matter of Fulton County are unavailing. There, the Village of Canajoharie sought dismissal — like Fenton — on the basis of its prior public use, of an eminent domain proceeding commenced by Fulton County to acquire a 51 acre parcel of land located within the boundaries of a proposed landfill. The Village's stated purpose in acquiring the property — like Fenton's — was to protect its existing water supply against the threat of contamination posed by a competing municipal use. Like Fenton, the Village argued that the permit requirement imposed by ECL 15-1501 was not applicable because it had acquired the property as a "buffer" to protect its existing water supply. While Fenton has argued that the pond may by hydrostatically connected to the existing water supply, the Village argued that the property it had acquired was not an integral part of its water supply. The court rejected the Village's argument as being fatally flawed, noting that there would be no threat of contamination unless a hydrogeological connection existed between the subject property and the existing water source, in which case, the property would necessarily serve as an additional water source. Thus, the court concluded that ECL 15-1501 was applicable to the Village's acquisition of property for the intended purpose of protecting its existing water supply and that the property was not being used for a public purpose when the condemnation proceeding was commenced in light of the Village's failure to obtain the necessary permit.
Fenton's argument that the property acquired by the Village was located some distance from its water supply — perhaps as much as 15 miles — is not analytically relevant. The court's decision was based on the logical conclusion that a water supply is threatened only by properties with which a hydrogeological connection exists — a conclusion that does not depend on the length of that connection. The fatal flaw in the argument advanced by the Village is that the property to be acquired poses a threat of contamination only if it is connected to the existing water supply, in which case it is an additional source of water for which a permit is required; while, on other hand, if no connection exists, the property to be acquired does not pose a threat of contamination, in which case, no public purpose would be served by its acquisition.
Fenton's further arguments that Matter of Fulton County may be distinguished on the basis of two additional issues addressed by that court — that the Village lacked a valid public purpose for acquiring the property in light of its attempt to"short circuit" the regulatory process, and that it was barred from relitigating issues resolved in DEC review of the proposed landfill — are also unavailing. The court's determination that the property was not being used for a public purpose due to the failure to obtain a permit is, alone, a sufficient basis for its decision — and for a like determination in this proceeding. Thus, even were Fenton able to successfully establish that its situation is factually dissimilar from the Village of Canajoharie with respect to the two additional issues, the fact that it lacks the required permit is fatal to its efforts to distinguish Matter of Fulton County.
Nor may Matter of Fulton County be distinguished on these two issues, as Fenton argues, on the basis that it did not have an opportunity to participate in DEC review of Chenango's application for a permit. As correctly noted by Fenton, the court found it significant that the Village was attempting to "short circuit" the applicable regulatory process governing siting of landfill facilities by acquiring the property solely for the purpose of preventing construction of the landfill irrespective of DEC approval. The court held that such efforts were an additional basis for concluding that the Village's acquisition of the property lacked a valid public purpose, "irrespective of whether the permit requirement of ECL 15-1501 is also applicable" ( 136 AD2d at 118), thereby establishing, as already observed, that this holding is not necessary to the court's decision that the acquisition lacked a public purpose. Moreover, the court's determination on this issue was based solely on the fact that the Village acquired the property to circumvent the outcome of the DEC regulatory process, not, as Fenton argues, because the Village mounted "vigorous opposition" to the landfill during that process (Supplemental Brief, p. 5).
Fenton also notes that the court held that the Village was barred from relitigating its claim that the landfill would pollute its water supply in the condemnation proceeding because that issue had already been resolved against the Village in the DEC administrative process, in which the Village had participated. Notably, the DEC determination was made in response to the Village's claim that the proposed landfill would destroy its prior public use by contaminating its water supply, thus, it is not relevant to the primary issue of whether the property was being used for a public purpose when the condemnation proceeding was commenced. Rather, it relates to the analytically subordinate issue of whether an exception to the prior public use doctrine applied — which would have arisen only if the Village could have established a prior public use — of whether the prior public use should yield to a greater public need. Inasmuch as Fenton has failed to establish the existence of a prior public use, the court need not consider, in this condemnation proceeding, the subordinate issue of whether Fenton is bound by DEC's issuance of a permit for extension of the effluent discharge pipe.
Thus, inasmuch as the property that Chenango seeks to acquire was not being used for a public purpose by Fenton when the condemnation proceeding was commenced, Fenton's sixth and seventh affirmative defenses and counterclaim lack merit; its motion to dismiss the petition is denied, and its counterclaim is dismissed.
The remaining affirmative defenses asserted by respondents Fenton and JAMCAM have been considered and found to lack merit.
Fenton's fourth affirmative defense is that the petition is barred by virtue of the pending action and hybrid proceeding / action; its eighth is that the proposed action would violate the Comprehensive Plan that it adopted pursuant to Town Law § 272-a; and its ninth incorporates its motion to dismiss. JAMCAM's first affirmative defense is that the proposed taking is illegal and that it would cause irreparable harm to JAMCAM; its second is that petitioner is trespassing on the subject property.
Accordingly, the petition must be, and hereby is, granted. Petitioner shall file the amended notice of pendency and the acquisition map, at which time title to the property depicted on the acquisition map shall vest in petitioner. Inasmuch as the petition has been granted, Fenton's motion to consolidate this proceeding with the prior actions and proceeding has not been considered.
This decision constitutes the order and judgment of the court. The transmittal of copies of this decision, order and judgment by the court shall not constitute notice of entry.
s $822,319 (see Well's Fargo's RJN in support of Motion to Dismiss at Ex. G), and Plaintiff's bankruptcy petition lists the value of the property at $450,000 (see
id. Ex. I, Schedule D). Given the large amount of the loan in question and Plaintiff's own valuation of the property, as well as Plaintiff's claims for general, compensatory, special, statutory, exemplary, treble and punitive damages as well as injunctive relief and rescission, the statutory minimum has been met.
For the foregoing reasons, there is diversity jurisdiction and Plaintiff's Motion for remand is DENIED.
C. Plaintiff's Motion for Sanctions
In conjunction with his Motion to Remand, Plaintiff also moves for attorneys fees pursuant to 28 U.S.C. § 1447(c) and Rule 11 sanctions against both defendants, claiming that the removal was frivolous and done in bad faith. However, because the removal was meritorious, this motion is DENIED.
ETS did not file a separate opposition to the remand motion but did so for the sanctions motion. In its opposition, ETS contends that the motion is procedurally improper because it does not comply with the mandatory Rule 11 safe-harbor provision, which requires that sanctions motions be served 21 days before they are filed. Instead, it was served the same day it was filed and therefore no Rule 11 sanctions can be awarded. See Dkt. #20 (certificate of service showing service on same day as filing). Wells Fargo also opposes the sanctions motion on procedural grounds. Because Plaintiff did not abide by the safe harbor provision of Rule 11, the motion is denied for this additional reason.
V. Defendant's Motion to Dismiss
Wells Fargo has filed a motion to dismiss each of Plaintiff's ten claims on grounds that they are time-barred, preempted by federal law, improperly pled, and/or otherwise not viable. For the following reasons, the Court GRANTS Wells Fargo's motion.
A. Legal Standard
A complaint will survive a motion to dismiss if it contains "sufficient factual matter . . . to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007)). The reviewing court's "inquiry is limited to the allegations in the complaint, which are accepted as true and construed in the light most favorable to the plaintiff." Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). A court need not, however, accept as true the complaint's "legal conclusions." Iqbal, 129 S. Ct. at 1949. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 1950. Thus, a reviewing court may begin "by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id.
Courts must then determine whether the factual allegations in the complaint "plausibly give rise to an entitlement of relief."Id. Though the plausibility inquiry "is not akin to a probability requirement," a complaint will not survive a motion to dismiss if its factual allegations "do not permit the court to infer more than the mere possibility of misconduct. . . ." Id. at 1949 (internal quotation marks omitted) 1950. That is to say, plaintiffs must "nudge[] their claims across the line from conceivable to plausible." Twombly, 550 U.S. at 570.
B. Discussion
1. Judicial Estoppel Applies to the Case As a Whole
Wells Fargo contends that Plaintiff is judicially estopped from pursuing any of his claims because he failed to adequately disclose them in his bankruptcy proceeding. Plaintiff filed for bankruptcy on May 12, 2010 and received a discharge on August 17, 2010. Wells Fargo's RJN Exs. H, J. In his "Schedule D," he listed World Savings and ETS as creditors holding a secured claim but did not indicate that the claim was disputed. Id. Ex. I at Schedule D. He also did not list his claims based on the mortgage in Schedule B, which asks about "counterclaims of the debtor and rights to set off claims" and "other personal property of any kind not already listed." Id. at Schedule B. One day before receiving a discharge, Plaintiff filed an adversary proceeding in the bankruptcy court, but has never amended his schedules to add his claims against Defendants as an asset of the estate. Id. Ex. K
Wells Fargo relies on Conrad v. Bank of America National Trust and Savings Ass'n., 45 Cal. App. 4th 133, 148 (1996), where the court analyzed several federal cases to conclude that a lender liability action was precluded where the plaintiff failed to identify the claims in the earlier bankruptcy action. See also Hay v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557 (9th Cir. 1992) (affirming summary judgment of debtor's claims against creditor where they were not disclosed in underlying bankruptcy case); Hamilton v. State Farm Fire Cas. Co. 270 F.3d 778, 784 (9th Cir. 2001) ("We now hold that Hamilton is precluded from pursuing claims about which he had knowledge, but did not disclose, during his bankruptcy proceedings, and that a discharge of debt by a bankruptcy court, under these circumstances, is sufficient acceptance to provide a basis for judicial estoppel, even if the discharge is later vacated.").
Plaintiff does not dispute that he did not originally list his claims against Defendants on his bankruptcy schedules, and has not yet amended the schedules to include his claims at this time. Instead, he counters that he is not judicially estopped from bringing this action because he can still amend his bankruptcy schedules as a matter of course because the case is not yet closed and Defendants have not shown bad faith or prejudice. See Fed.R. Bankruptcy Proc. 1009 ("A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed."); In Re Magallanes, 96 B.R. 253 (9th Cir. 1988) (amendment of exemption claims allowed if no bad faith or prejudice). Plaintiff relies on cases where courts have allowed amendments to add exemptions in the absence of bad faith or prejudice, but does not cite any cases allowing an amendment to include an additional asset of the estate after discharge.
In its Reply, Wells Fargo cites Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 416 (3d Cir. 1998), where the court held that a debtor who failed to list a claim against its lender on its bankruptcy schedule was estopped from pursuing claims against the lender arising from that dispute. The court emphasized the duty of bankruptcy filers to schedule all of their interests in property rights for the benefit of all creditors, and concluded that: "Although Oneida may be technically correct in its argument that it was never procedurally compelled to raise its claim, we are satisfied that its failure to mention this potential claim either within the confines of its disclosure statement or at any stage of the bankruptcy court's resolution precludes this later independent action. Even absent a specific mandate to file a counterclaim, complete disclosure is imperative to assist interested parties in making decisions relevant to the bankrupt estate." Id. This Court concludes that principles of estoppel similarly bar Plaintiff's claims.
However, even if estoppel did not apply, each of Plaintiff's claims fail for multiple additional reasons as discussed below.
2. Plaintiff's Claims Are Preempted By HOLA
Wells Fargo contends that all of Plaintiff's claims are completely preempted by federal law and must be dismissed because World Savings Bank (renamed Wachovia Mortgage FSB and later a division of Defendant Wells Fargo Bank N.A.) was a federally chartered savings bank regulated by the Office of Thrift Supervision under the Home Owners Loan Act ("HOLA"), 12 U.S.C. § 1461 et seq., at the time the loan was made. See Wells Fargo's RJN Exs. A-E. Pursuant to the Supremacy Clause, federal law preempts state law "when federal regulation in a particular field is so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it." Bank of America v. City and County of San Francisco, 309 F.3d 551, 558 (9th Cir. 2002). In the field of banking, Congress has created "an extensive federal statutory and regulatory scheme." Id. As part of this extensive federal scheme, Congress enacted HOLA during the Great Depression. Silvas v. E*Trade Mortgage Co., 514 F.3d 1001, 1004 (9th Cir. 2008). The purpose of HOLA was to charter savings associations under federal law as a means of restoring public confidence through a nationwide system of savings and loan associations that are centrally regulated according to nationwide "best practices." Id. (citing Fidelity Fed. Saving and Loan Ass'n v. de la Cuesta, 458 U.S. 141, 160-61 (1982)). Through HOLA, Congress gave the OTS broad authority to issue regulations governing federal savings associations. See 12 U.S.C. § 1464;Silvas, 514 F.3d at 1005.
Wells Fargo relies on 12 C.F.R. § 560.2 in support of its argument that the OTS regulations establish that state laws do not apply to the lending practices of federal banks and thrifts and "occup[y] the entire field of lending regulation for federal savings associations." 12 C.F.R. § 560.2(a). That regulation provides that "federal savings associations may extend credit as authorized under federal law, including this part, without regard to state laws purporting to regulate or otherwise affect their credit activities, except to the extent provided in paragraph (c) of this section or § 560.110 of this part." Id. Examples of credit activities that states may not regulate include "terms of credit, including amoritzation of loans and the deferral and capitalization of interest and adjustments to the interest rate, balance, payments due, or term to maturity of the loan," (§ 560.2(b)(4)) "[l]oan-related fees, including without limitation, initial charges, late charges, prepayment penalties, servicing fees, and overlimit fees," (§ 560.2(b)(5)) "disclosure[s] and advertising," (§ 560.2(b)(9)) and "[p]rocessing, origination, servicing, sale or purchase of, or investment or participation in, mortgages." (§ 560.2(b)(10)). A state law of general applicability can be preempted by HOLA if, as applied, it falls under § 560.2(b). See Silvas, 514 F.3d at 1006;Munoz v. Fin. Freedom Senior Funding Corp., 567 F.Supp.2d 1156, 1160 (C.D.Cal. 2008).
However, "[s]tate laws of the following types are not preempted to the extent that they only incidentally affect the lending operations of Federal savings associations or are otherwise consistent with the purposes of paragraph (a) of this section: (1) Contract and commercial law; (2) Real property law; . . . (4) Tort law; (5) Criminal law; and (6) Any other law that OTS, upon review, finds: (I) Furthers a vital state interest; and (ii) Either has only an incidental effect on lending operations or is not otherwise contrary to the purposes expressed in paragraph (a) of this section." Id. § 560.2(c). OTS has stated "that the purpose of paragraph (c) is to preserve the traditional infrastructure of basic state laws that undergird commercial transactions, not to open the door to state regulation of lending by federal savings associations." 61 Fed. Reg. 50951, 50966-50967.
"When analysing the status of state laws under § 560.2, the first step will be to determine whether the type of law in question is listed in paragraph (b). If so, the analysis will end there; the law is preempted. If the law is not covered by paragraph (b), the next question is whether the law affects lending. If it does, then, in accordance with paragraph (a), the presumption arises that the law is preempted. This presumption can be reversed only if the law can clearly be shown to fit within the confines of paragraph (c). For these purposes, paragraph (c) is intended to be interpreted narrowly. Any doubt should be resolved in favor of preemption." Id.
Wells Fargo argues that Plaintiff's third claim for fraudulent misrepresentation, fourth claim for fraudulent concealment, and sixth claim for unconscionability are based solely on allegations that it failed to properly disclose loan terms and improperly approved him for a loan (loan-origination allegations), and that such claims are preempted by section 560.2(b)(4), (5), (9), and (10). Wells Fargo also contends that Plaintiff's first claim for wrongful foreclosure, second claim for failure to comply with pre-foreclosure notification requirements of Civil Code sections 2923.5 and 2924, and seventh claim for quiet title relate entirely to its allegedly improper foreclosure efforts and/or improper transfer of the deed to ETS, and that these claims relate to the "processing, origination, servicing [or] sale" of mortgages under 520.2(b)(10). It contends that the fifth, eighth, ninth, and tenth claims, which are based on a combination of the loan-origination, improper transfer, and foreclosure procedure allegations are preempted as also falling within these categories.
Plaintiff counters that none of the state statutes he relies on are preempted because they do not regulate or otherwise effect Wells Fargo's credit activities, but he does not attempt to justify his non-statutory claims or allegations relating to loan origination or the deed of trust assignment. The claims relying solely on loan-origination allegations (Claims 3, 4 and 6) and wrongful transfer of the deed (Claims 1 and 7) are preempted.
Plaintiff relies on Mabry v. Superior Court, 185 Cal. App. 4th 208, 231 (2010) for the position that his claims based on allegedly improper mortgage foreclosure procedure [apparently claims 2, 5, 8, 9, and 10 but the Court should double check this with Plaintiff], as set forth in California Civil Code § 2923.5, are not preempted by 12 C.F.R. § 560.2(b)(10). However, Mabry limits this preemption determination by finding that relief under § 2923.5 is limited to a postponement of foreclosure, not damages as claimed by Plaintiff here. Further, several federal district courts have concluded that § 2923.5 is preempted because the state law deals with contacting the borrower and requires a specific declaration in the Notice of Default such that it falls "squarely within the scope of HOLA's Section 560.2(b)(10), which deals with the `[p]rocessing, origination, servicing, sale or purchase of, or investment or participation in, mortgages.'" Pinales v. Quality Loan Service Corp., 2010 WL 3749427, *3 (S.D.Cal. 2010); see also Parcay v. Shea Mortgage, Inc., 2010 WL 1659369, at *9 (E.D.Cal. Apr. 23, 2010) (concluding that HOLA preempts plaintiff's claim based on alleged violation of § 2923.5); Gonzalez v. Alliance Bancorp, 2010 U.S.Dist. LEXIS 47943, *15-16 (N.D.Cal. 2010); Murillo v. Aurora Loan Servs., LLC, 2009 WL 2160579, at *4 (N.D. Cal. July 17, 2009) (same); Stephan v. Wachovia, World Savings, et al., 2009 U.S.Dist. LEXIS 113480 (N.D.Cal. 2009). This Court has also previously held that § 2923.5 is preempted by HOLA because the statutory notice requirement "imposes a state law mandate about what information must be given to borrowers, and includes a strict time frame for doing so. Defendant would not be subject to these requirements in other states. Therefore, Plaintiffs' § 2923.5 claim concerns the processing and servicing of Plaintiffs' mortgage and is preempted by HOLA." Odinma v. Aurora Loan Services, 2010 U.S.Dist. LEXIS 28347, *23-24 (N.D.Cal. 2010). Following the reasoning of these cases, Plaintiff's claims based on improper foreclosure procedure are also preempted.
Plaintiff also argues that his § 17200 claim is not preempted. However, it is well-settled that loan-origination disclosure and related claims that involve the activities listed in section 560.2(b), including those brought under § 17200, are preempted.See Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1006 (9th Cir. 2008). As discussed above, Plaintiff's allegations — including those on which his § 17200 claim is based — relate entirely to loan origination, transfer of the deed on the property, and/or foreclosure procedure — all of which bear directly on lending activities listed in § 560.2(b) and are therefore preempted.
Because each of Plaintiff's claims are directed to "disclosures," "terms of credit," "loan related fees," "disclosures and advertising," and/or "processing, origination, servicing, sale or purchase" of mortgages, they are preempted by 12 C.F.R. § 560.2(b)(4), (5), (9) and/or (10) and are dismissed.
3. Failure to Tender Also Requires Dismissal of Claims 1 (Wrongful Foreclosure), 7 (Quiet Title) and 10 (Injunctive and Declaratory Relief)
Wells Fargo also argues that Plaintiffs' claims for wrongful foreclosure, quiet title, and injunctive relief to prevent the foreclosure should be dismissed because Plaintiff has not tendered or offered to tender. "A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust." Karlsen v. American Sav. Loan Assn., 15 Cal.App.3d 112, 117 (1971);see also Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575, 578 (1984) ("It is settled that an action to set aside a trustee's sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security."). California district courts apply the tender rule in examining wrongful foreclosure claims. Anaya v. Advisors Lending Group, 2009 WL 2424037, at *10 (E.D. Cal. Aug. 3, 2009) ("Plaintiff offers nothing to indicate that she is able to tender her debt to warrant disruption of non-judicial foreclosure"); Alicea v. GE Money Bank, 2009 WL 2136969, at *3 (N.D. Cal. July 16, 2009) ("When a debtor is in default of a home mortgage loan, and a foreclosure is either pending or has taken place, the debtor must allege a credible tender of the amount of the secured debt to maintain any cause of action for foreclosure.");Montoya v. Countrywide Bank, 2009 WL 1813973, at * 11-12 (N.D. Cal. June 25, 2009) ("Under California law, the `tender rule' requires that as a precondition to challenging a foreclosure sale, or any cause of action implicitly integrated to the sale, the borrower must make a valid and viable tender of payment of the debt"). The application of the "tender rule" prevents "a court from uselessly setting aside a foreclosure sale on a technical ground when the party making the challenge has not established his ability to purchase the property." Williams v. Countrywide Home Loans, 1999 WL 740375, at *2 (N.D. Cal. Sept. 15, 1999); see also Benham v. Aurora Loan Servs., C-09-2059 SC (N.D. Cal. Oct. 1, 2009) (granting a motion to dismiss a wrongful
foreclosure claim because the plaintiff failed to allege a credible tender offer).
"The rules which govern tenders are strict and are strictly applied." Nguyen v. Calhoun, 105 Cal.App.4th 428, 439 (2003). "The tenderer must do and offer everything that is necessary on his part to complete the transaction, and must fairly make known his purpose without ambiguity, and the act of tender must be such that it needs only acceptance by the one to whom it is made to complete the transaction." Gaffney v. Downey Savings Loan Assn., 200 Cal.App.3d 1154, 1165 (1988) ("An offer of partial payment is of no effect.") (internal quotation marks omitted). The debtor bears "responsibility to make an unambiguous tender of the entire amount due or else suffer the consequence that the tender is of no effect." Gaffney, 200 Cal.App.3d at 1165; see also Aguilar v. Bocci, 39 Cal. App. 3d 475, 478 (1974) (stating that a trustor cannot "quiet title without discharging his debt. The cloud upon his title persists until the debt is paid. He is entitled to remain in possession, but cannot clear his title without satisfying his debt."); Karlson, 15 Cal.App.3d at 117 ("`. . . It is apparent from the general tenor of the decisions that an action to set aside the sale, unaccompanied by an offer to redeem, would not state a cause of action which a court of equity would recognize.'") (quoting Leonard v. Bank of America, 16 Cal.App.2d 341, 344 (1936)).
Plaintiff's opposition does not state an ability or willingness to tender the amount owed. Instead, Plaintiff argues that the original note is "void," not voidable, and therefore the tender rule does not apply. For this position, Plaintiff relies on Dimock v. Emerald Properties, 81 Cal. App. 4th 868, 878 (2000), which did not address the tender rule, but held that a foreclosure sale by a former trustee, after a new trustee had been substituted in and the substitution had been recorded, was void and not merely voidable. Though not entirely clear, Plaintiff's position appears to be that the assignment of the deed of trust to ETS, or perhaps the transfer of the deed and note from World Savings to Wachovia to Wells Fargo, was invalid under California statutory law and therefore the foreclosure is void so the tender rule is inapplicable.
However, judicially noticeable documents reveal that the original lender, World Savings Bank, FSB, simply changed its name to Wachovia Mortgage, FSB, and is now a division of Wells Fargo Bank, N.A., so transfers among those entities were proper. See Wells Fargo's RJN Exs. A-F. Further, a notice of substitution of trustee substituting ETS as the trustee for the deed of trust was recorded in 2008. See id. Ex. M. Therefore Plaintiff's argument that the note is "void" based on improper transfers has no merit, and Plaintiff cites no authority that would make the tender rule inapplicable under these circumstances in any event.
Without citation, Plaintiff also argues that Defendants must produce an original copy of the note in "wet ink." Opp. at 5. However, "California law does not require possession of the note as a precondition to non-judicial foreclosure under a deed of trust." See Putkkuri v. Recontrust Co., 2009 U.S. Dist. LEXIS 32 (S.D. Cal. Jan. 5, 2009) ("Pursuant to section 2924(a)(1) of the California Civil Code, the trustee of Deed of Trust has the right to initiate the foreclosure process. Production of the original note is not required to proceed with a non-judicial foreclosure."); see also Bouyer v. Countrywide Bank, FSB, 2009 U.S. Dist. LEXIS 53940 at *23-24 (N.D. Cal. June 25, 2009) ("Courts have repeatedly held that California's nonjudicial foreclosure statutes are comprehensive and have refused to impose requirements not found in the statute"); Gentsch v. Ownit Mortg. Solutions, Inc., 2009 U.S. Dist. LEXIS 45163 at *13-15 (E.D. Cal. May 14, 2009); I.E. Assocs. v. Safeco Title Ins. Co., 39 Cal. 3d 281, 285 (1985) (noting that California's nonjudicial foreclosure statutes are comprehensive and holding that possession of original promissory note is not required to initiate non-judicial foreclosure). Therefore this argument does not help Plaintiff.
Because Plaintiff has not shown that the note or deed is "void," and has not indicated a willingness or ability to tender the amount owed, Plaintiff's first, seventh and tenth causes of action are dismissed on this basis as well.
4. Plaintiff's Other Claims Fail For Additional Reasons
1. Claim 2 For Violation of California Civil Code § 2923.5
California Civil Code § 2923.5(a)(1) states that "A mortgagee, [etc.] may not file a notice of default pursuant to Section 2924 until 30 days after initial contact is made as required by paragraph (2) or 30 days after satisfying the due diligence requirements. . . ." Cal. Civ. Code § 2923.5(a)(1). Paragraph (2) also specifies the type of initial contact that is required (including exploring options to avoid foreclosure) before filing the notice of default. See Cal. Civ. Code § 2923.5(a)(2). Wells Fargo argues that Plaintiff has failed to state a claim under California Civil Code § 2923.5 because the only remedy available is postponement of foreclosure, and Plaintiff does not seek this remedy. See Compl. ¶¶ 30-38; Mabry v. Superior Court, 185 Cal. App. 4th 208, 225-26, 231-32 (2010).
In his opposition, Plaintiff argues that Mabry was wrongly decided and is "likely to fall" based on a petition for review filed in July 2010. However, that petition for review was denied months before Plaintiff's opposition was filed, so this argument is without merit. See Mabry v. Superior Court, 2010 Cal. LEXIS 8134 (Aug. 18, 2010) (petition for review denied). Because Plaintiff's complaint does not seek postponement of the foreclosure proceedings to allow time for compliance with § 2923.5, this claim is also dismissed on this basis.
2. Claim 3 (Fraudulent Misrepresentation), Claim 4 (Fraudulent Concealment) and Claim 5 (Conspiracy to Defraud and Convert) Also Fail
To establish a cause of action for fraudulent misrepresentation, Plaintiff must plead and prove four elements: (1) a knowingly false representation by Defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by Plaintiffs; and (4) resulting damages. Guiterrez v. Wells Fargo Bank, 2009 WL 322915, at *4 (N.D. Cal. Feb. 9, 2009) (citingService by Medallion, Inc. v. Clorox Co., 44 Cal.App.4th 1807, 1816 (1996)). To establish a cause of action for fraudulent concealment, Plaintiff must plead and prove five elements: (1) Defendant must have concealed or suppressed a material fact; (2) Defendant must have been under a duty to disclose the fact to the plaintiff; (3) Defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; (4) Plaintiffs must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. Id. (citingMarketing West, Inc. v. Sanyo Fisher (USA) Corp., 6 Cal.App.4th 603, 612-13 (1992)).
Wells Fargo moves to dismiss Plaintiff's fraud-related claims on a number of bases. First, it points out that the claims are time-barred because they are based on alleged actions that occurred during the origination of the loan in 2006 but the complaint was not brought until 2010. See Cal. Code Civ. P. § 338(d) (three year statute of limitation for fraud claims). Plaintiff does not address this argument in opposition and the Court finds that the fraud-related claims should also be dismissed as time-barred.
Second, Wells Fargo argues that the fraud-related claims have not been pled with the level of specificity required by Rule 9(b), and Plaintiff does not address this argument or attempt to justify the specificity of these claims. Rule 9(b) requires that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b); Vess v. Ciba-Geigy, Inc., 317 F.3d 1097, 1106 (9th Cir. 1997) ("Rule 9(b) demands that, when averments of fraud are made, the circumstances constituting the alleged fraud "be `specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong.'" Averments of fraud must be accompanied by "the who, what, when, where, and how" of the misconduct charged.") (internal citations omitted).
Plaintiff's allegations of fraud are not pled with particularity. Plaintiff has not alleged any specific information about who made misrepresentations, when those misrepresentations were made or the content of form of the statements. Plaintiff does not allege which facts were material, which were and were not disclosed to them, which Defendant concealed which facts, and which Defendant had a duty to disclose those facts to them. Therefore, the fraud and conspiracy to defraud claims are dismissed on this basis as well.
3. Claim 9 (Conversion) Also Fails
Plaintiff's conversion claim is based on allegations of fraud, which have not been pled with the required specificity as discussed above. See Montoya v. Countrywide Bank, FSB, 2009 U.S. Dist. LEXIS 53920, *23 (N.D. Cal. 2009) ("Plaintiffs' conversion allegations fail to allege facts that make it plausible that Defendants exercised dominion over Plaintiffs' personal property in manner that was inconsistent with Plaintiffs' rights at the time. Plaintiffs' claim is premised on a fraudulently obtained loan by Defendants. However, as discussed above, Plaintiffs have not adequately alleged any causes of action sounding in fraud."). Instead of defending the sufficiency of his allegations supporting conversion, Plaintiff simply argues that he needs discovery in order to have facts to support this claim. See Opp. at 8. This argument does nothing to save this claim.
In his opposition, Plaintiff also appears to demand an accounting based on this claim, though he did not seek such relief in his Complaint. An accounting is a "`species of disclosure, predicated upon the plaintiff's legal inability to determine how much money, if any, is due.'" Teselle v. McLoughlin, 173 Cal.App.4th 156, 180 (2009) (quoting 1A Corpus Juris Secundum, Accounting, § 6, ¶. 7-8, fn. omitted). "[T]he purpose of the accounting is, in part, to discover what, if any, sums are owed to the plaintiff, and an accounting may be used as a discovery device." Teselle, 173 Cal.App.4th at 180. Here, however, it is undisputed that Plaintiff defaulted on the loan so it appears that Plaintiff owes money to Defendants and not the other way around. Further, there are no allegations, other than conclusory ones, that the loan or Wells Fargo's procedures are so complicated that an accounting is necessary. Therefore Plaintiff's request for an accounting, to the extent the opposition can be construed as such, is denied.
4. Claim 6 (Unconscionability) Is Not a Claim
Wells Fargo correctly contends that Plaintiff's sixth claim for unconscionability under California Civil Code section 1670.5 is a defense to the enforcement of a contract, not an affirmative claim. See Dean Witter Reynolds, Inc. v. Superior Court, 211 Cal. App. 3d 758, 766 (1989) (holding that there is no affirmative cause of action created by section 1670.5). Further, as there is no statute of limitations for the claim of "unconscionability," it would be governed by the four-year catch-all limitations period codified in California Code of Civil Procedure section 339(1). Since the claim is based entirely on loan-origination allegations dating back to June 2006 and the complaint was not brought until August 2010, it would necessarily be time-barred. On these bases, the sixth claim is dismissed.
5. Plaintiff Does Not State a Valid UCL Claim
Not only should Plaintiff's eighth claim for violation of California Business Professions Code section 17200 be dismissed because it is preempted as applied in this case, it should also be dismissed because Plaintiff fails to state a claim with the requisite specificity. Section 17200 prohibits "any unlawful, unfair or fraudulent business act or practice. This cause of action is derivative of some other illegal conduct or fraud committed by a defendant, and a plaintiff must state with reasonable particularity the facts supporting the statutory elements of the violation." Lomboy v. SCME Mortgage Brokers, 2009 WL 1457738, at *7 (N.D. Cal. May 26, 2009).
Here, Plaintiff's 17200 claim is not sufficiently particular to satisfy the pleading standards. For example, Plaintiffs do not distinguish between Defendants with respect to the conduct alleged. Plaintiff also alleges that Defendants made improper disclosures, but fails to allege any particular facts to support that claim. Plaintiff's opposition simply summarizes the conclusory allegations of his complaint and does not otherwise attempt to explain how the claim is properly pled. The opposition also does not counter Wells Fargo's persuasive point that, to the extent the claim is based on loan-origination allegations, it is time-barred by the applicable four-year statute of limitations. Accordingly, the sixth claim should be dismissed for failure to state a claim.
6. Claim 10 (Declaratory and Injunctive Relief) Should Be Dismissed
In addition to requesting dismissal based on Plaintiff's failure to indicate an ability or willingness to tender, Wells Fargo moves to dismiss Plaintiff's tenth claim for declaratory and injunctive relief on other grounds.
With respect to declaratory relief, Wells Fargo argues that this claim seeks a declaration of matters already alleged elsewhere in his complaint and should be dismissed because it is superfluous and subsumed within Plaintiffs' other claims. See Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 707-08 (N.D. Cal. 2009) ("A claim for declaratory relief is unnecessary where an adequate remedy exists under some other cause of action."). In Mangindin, Judge Ware dismissed the plaintiff's declaratory relief claim as duplicative and unnecessary because the claim, which sought a declaration that the defendants had no right to foreclose, was "entirely commensurate with the relief sought through the other causes of action." Further, "an actual, present controversy must be pleaded specifically" and "the facts of the respective claims concerning the [underlying] subject must be given." City of Cotati v. Cashman, 29 Cal.4th 69, 80 (2002). Here, Plaintiff has failed to state any claims, so there is no actual and present controversy. Further, there has been no showing as to how the declaratory relief claim is not duplicative of other claims in this case. Accordingly, the declaratory relief claim is dismissed.
With respect to the injunctive relief claim, Wells Fargo correctly points out that injunctive relief is a remedy, not a claim. Further, to the extent that Plaintiffs have not otherwise stated a claim for relief against these Defendants, they are not entitled to injunctive relief. Accordingly, the tenth claim is also dismissed.
VI. Defendant's Motion To Strike
Wells Fargo moves to strike all of the punitive damages claims from Plaintiff's complaint, as well as certain allegations relating to Plaintiff's UCL claim and an un-pled Unfair Debt Collection Practices Act claim. Because all of Plaintiff's claims are DISMISSED WITH PREJUDICE, the Court need not rule on this motion and it is DENIED AS MOOT.
Plaintiff claims punitive damages for each of his claims except for the quiet title and injunctive/declaratory relief claims based on Defendants' alleged malice, fraud, and or oppression.See Compl. ¶¶ 29, 38, 49, 51, 55, 67, 79, 88, 91; Prayer ¶¶ 4, 9, 11.
IT IS SO ORDERED.