United States District Court, E.D. Washington
MONTY AND MICHELLE COORDES, individually and on behalf of all others similarly situated, Plaintiffs,
WELLS FARGO BANK, N.A., Defendant.
ORDER GRANTING IN PART DEFENDANT'S MOTION TO
DISMISS AND DENYING DEFENDANT'S MOTION TO STRIKE CLASS
O. RICE CHIEF UNITED STATES DISTRICT JUDGE.
THE COURT is Defendant's Motion to Dismiss and Strike
Amended Class Action Complaint (ECF No. 26). This matter was
heard with oral argument on October 18, 2019. Gretchen F.
Cappio and Matthew J. Preusch appeared on behalf of
Plaintiffs. Amanda L. Groves and Rudy A. Englund appeared on
behalf of Defendant. The Court has reviewed the record and
files herein and considered the parties' oral arguments,
and is fully informed. For the reasons discussed below, the
Court GRANTS IN PART Defendant's Motion
to Dismiss and DENIES Defendant's Motion
to Strike Amended Class Action Complaint (ECF No. 26).
case arises out of Defendant Wells Fargo N.A.'s
(“Wells Fargo”) use of flawed software to deny
Plaintiffs' request for a mortgage modification in
connection with a federal program created in the aftermath of
the 2008 financial crisis. The following facts are drawn from
Plaintiffs' Amended Complaint and construed in the light
most favorable to Plaintiffs. Schwarz v. United
States, 234 F.3d 428, 436 (9th Cir. 2000).
2005, Plaintiffs Monty and Michelle Coordes built a new home
in Spokane Valley, Washington, secured by a mortgage serviced
and later acquired by Defendant. ECF No. 25 at 2, ¶ 1.
In early 2010, as a result of the economic downturn, Mr.
Coordes became temporarily unemployed. Id. at ¶
2. In March 2010, Plaintiffs contacted Defendant to seek
assistance making their mortgage payments and to request
relief in the form of a mortgage loan modification.
Id. In July 2010, Mr. Coordes obtained full-time
employment. ECF No. 25 at 2, ¶ 3. In August 2010,
Plaintiffs were offered a trial modification, which would
have required Plaintiffs to pay back payments and penalties
that Plaintiffs could not afford. Id.
January 2011, Plaintiffs filed for Chapter 13 bankruptcy and
their bankruptcy plan was approved in May. ECF No. 25 at 2,
¶ 4. In July 2011, Plaintiffs again sought a mortgage
modification from Defendant. Id. In December 2011,
Defendant rejected Plaintiffs' mortgage modification
application. ECF No. 25 at 3, ¶ 6. In January 2012,
Plaintiffs lost their home in a foreclosure sale.
August 2018, Defendant disclosed that a calculation error in
its internal mortgage loan modification underwriting software
resulted in the improper denial of approximately 625
modification applications that should have been granted. ECF
No. 25 at 3, ¶ 7. Defendant discovered this software
error as early as 2015. ECF No. 25 at 4, ¶ 9. The error
was reported to be an “automated miscalculation of
attorneys' fees that were included for purposes of
determining whether a customer qualified for a mortgage loan
modification pursuant to the requirements of
government-sponsored enterprises….” ECF No. 25
at 7, ¶ 26. In November 2018, Defendant disclosed that
the number of wrongful denials had been updated to 870. ECF
No. 25 at 3, ¶ 7.
notice dated September 11, 2018, Defendant contacted
Plaintiffs to inform them that their mortgage loan
modification was erroneously denied based on the calculation
error. ECF No. 25 at 12, ¶ 46. Attached to the letter
was a check for $15, 000. ECF No. 25 at 12, ¶ 47. In
November 2018, Plaintiffs undertook mediation with Defendant
and were awarded an additional $25, 000. ECF No. 25 at 12,
19, 2019, Plaintiffs filed an Amended Complaint against
Defendant claiming violation of the Washington Consumer
Protection Act (“CPA”) and unjust enrichment. ECF
No. 25 at 17-20, ¶¶ 69-87. On August 9, 2019,
Defendant filed the instant Motion to Dismiss and Strike
Class Action Complaint. ECF No. 26.
Motion to Dismiss Standard
motion to dismiss for failure to state a claim “tests
the legal sufficiency” of the plaintiff's claims.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
To withstand dismissal, a complaint must contain
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citation omitted). This requires the plaintiff to provide
“more than labels and conclusions, and a formulaic
recitation of the elements.” Twombly, 550 U.S.
at 555. While a plaintiff need not establish a probability of
success on the merits, he or she must demonstrate “more
than a sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678.
analyzing whether a claim has been stated, the Court may
consider the “complaint, materials incorporated into
the complaint by reference, and matters of which the court
may take judicial notice.” Metzler Inv. GMBH v.
Corinthian Colleges, Inc., 540 F.3d 1049, 1061 (9th Cir.
2008) (citing Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007)). A complaint must
contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). A plaintiff's “allegations of
material fact are taken as true and construed in the light
most favorable to the plaintiff[, ]” however
“conclusory allegations of law and unwarranted
inferences are insufficient to defeat a motion to dismiss for
failure to state a claim.” In re Stac Elecs. Sec.
Litig., 89 F.3d 1399, 1403 (9th Cir. 1996) (citation and
assessing whether Rule 8(a)(2) has been satisfied, a court
must first identify the elements of the plaintiff's
claim(s) and then determine whether those elements could be
proven on the facts pled. The court may disregard allegations
that are contradicted by matters properly subject to judicial
notice or by exhibit. Sprewell v. Golden State
Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The court
may also disregard conclusory allegations and arguments which
are not supported by reasonable deductions and inferences.
Court “does not require detailed factual allegations,
but it demands more than an unadorned,
Iqbal, 556 U.S. at 662. “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.'” Id. at
678 (citation omitted). A claim may be dismissed only if
“it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle
him to relief.” Navarro, 250 F.3d at 732.
Consideration of ...