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Gahan v. Wells Fargo Bank, N.A.

United States District Court, W.D. Washington, Seattle

July 30, 2019

SARA GAHAN, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          ORDER

          JOHN C. COUGHENOUR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant's motion to dismiss (Dkt. No. 9). Having thoroughly considered the parties' briefing and the relevant record, the Court hereby GRANTS in part and DENIES in part the motion for the reasons explained herein.

         I. BACKGROUND

         In 2008, Plaintiff Sara Gahan purchased real property in Mt. Vernon, Washington (the “Property”) with a loan in the amount of $248, 391 obtained through Linear Financial. (Dkt. Nos. 5, 10-1 at 2-25.) That loan was subsequently assigned to Defendant Wells Fargo Bank, N.A. (Dkt. No. 10-1 at 26.) In 2010, a Notice of Trustee's Sale of the Property was recorded, and two years later, a Notice of Discontinuance of Trustee's Sale was recorded. (Id. at 28-33.) In March 2012, Plaintiff entered a loan modification agreement with Defendant, which stated that the new principal balance of Plaintiff's loan was $266, 153.88. (Id. at 35-40; Dkt. No. 5 at 3.)

         In February 2017, Plaintiff received a letter from Defendant stating that her loan was in default. (Id. at 4.) In mid-2017 and early 2018, Plaintiff alleges that she received a series of letters from “Home Preservation Specialist Omolarah Hasan” insinuating that Plaintiff was under review for a loan modification (Id.) These letters confused Plaintiff because she believed she was already in a loan modification program. (Id. at 4-5.) By early 2018, Plaintiff would have been in the loan modification program for nearly six years. Plaintiff alleges that she had been making a $1, 300.15 monthly payment for over two years. (Id. at 5.)

         In February 2018, Plaintiff received a letter stating that Defendant would commence foreclosure proceedings on the Property unless she paid $232, 388.45. (Id. at 5.) In March 2018, a second Notice of Trustee's Sale of the Property was recorded, and on June 12, 2018, a Notice of Discontinuance of Trustee's Sale was recorded. (Dkt. No. 10-1 at 42-47.) In June 2018, Plaintiff sold her home and Defendant received $240, 550.25 of the sale proceeds. (Id. at 49-57; Dkt. No. 5 at 5.) Plaintiff alleges that she was not credited for the loan modification payments that she made for over two years. (Id. at 5.) Conversely, Defendant alleges that Plaintiff stopped making payments on her loan in August 2017, which is why Defendant planned to commence foreclosure proceedings. (See Dkt. No. 9 at 7.) Plaintiff filed this lawsuit, bringing a breach of contract claim and a claim for violation of the Washington Consumer Protection Act (“CPA”). (Id. at 3, 5-6.) Defendant moves to dismiss Plaintiff's claims for failure to state a claim. (Dkt. No. 9.)

         II. DISCUSSION

         A. Federal Rule of Civil Procedure 12(b)(6) Legal Standard

         The Court may dismiss a complaint that “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). 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. Id. at 678.

         A plaintiff is obligated to provide grounds for his or her entitlement to relief that amount to more than labels and conclusions or a formulaic recitation of the elements of a cause of action. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).

         B. Judicial Notice

         Defendant asks the Court to take judicial notice of the following documents: (1) a promissory note dated April 14, 2008, executed by Plaintiff (“Exhibit 1”); (2) a deed of trust dated April 14, 2008, executed by Plaintiff and her husband, Jason Gahan, recorded April 16, 2008 (“Exhibit 2”); (3) an assignment of the April 14, 2008 deed of trust to Defendant, executed by Plaintiff, recorded on April 23, 2008 (“Exhibit 3”); (4) a Notice of Trustee's Sale dated September 7, 2010, recorded on September 9, 2010 (“Exhibit 4”); (5) a Notice of Discontinuance of Trustee's Sale dated March 20, 2012, recorded on March 22, 2012 (“Exhibit 5”); (6) a loan modification agreement entered between Plaintiff and Defendant, dated February 29, 2012 (“Exhibit 6”); (7) a Notice of Trustee's Sale dated March 23, 2018, recorded on March 27, 2018 (“Exhibit 7”); (8) a Notice of Discontinuance of Trustee's Sale dated June 12, 2018, recorded on June 14, 2018 (“Exhibit 8”); (9) a statutory warranty deed dated May 29, 2018, executed by Plaintiff and Jason Gahan, recorded on June 6, 2018 (“Exhibit 9”); (10) a deed of reconveyance dated June 14, 2018, recorded July 23, 2018 (“Exhibit 10”); and (11) a real estate tax affidavit executed by Plaintiff and Jason Gahan on June 5, 2018 (“Exhibit 11”). (See Dkt. No. 10.)

         Generally, the Court may not consider material outside of the pleadings when assessing the sufficiency of a complaint under Federal Rule of Civil Procedure 12(b)(6). Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). There are two exceptions to this rule. First, the incorporation-by-reference doctrine allows the Court to treat certain documents as though they are part of the complaint itself. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018). “[A] court may consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.” Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). Second, the Court is permitted to take judicial notice of facts that are “not subject to reasonable dispute.” Fed.R.Evid. 201(b). One way that a fact is not subject to reasonable dispute is if it “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b).

         Every exhibit except for Exhibits 1 and 6 are subject to judicial notice because they are official public records that can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned. See Fed. R. Evid. 201(b)(2); Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866 n.1 (9th Cir. 2004). Exhibits 1 and 6 are subject to judicial notice via the incorporation-by-reference doctrine. Plaintiff's complaint refers to both her initial purchase of the Property and the loan modification agreement. (Dkt. No. 5.) Both of these documents are central to Plaintiff's claim because the crux of her complaint is that she made payments, in compliance with the requirements of her note and subsequent loan modification agreement, and was never credited ...


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