Walter H. Hackett, III v. Wells Fargo Bank, N.A. at al

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

Present: The Honorable CHRISTINA A. SNYDER

Catherine Jeang Laura Elias N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Eric Mercer David Newman

Proceedings: WELLS FARGO BANK, N.A.’"S MOTION FOR SUMMARY

JUDGMENT (ECF No. 41, filed October 2, 2019)

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT (ECF

No. 44, filed October 4, 2019)

I. INTRODUCTION

This case arises out of plaintiffs Walter H. Hackett III and Lorinda D. Hackett’s

attempts to modify and/or request information regarding the terms of their home loan with

their lender, defendant Wells Fargo Bank, N.A. (“Wells Fargo” or “the bank”). In general,

the Hacketts allege that Wells Fargo failed to comply with federal regulations requiring

federally-insured lenders to provide adequate notices to prospective borrowers within

established timeframes following the receipt of certain qualifying requests.

The Hacketts filed their first complaint in this Court on October 6, 2017. See ECF

No. 1 (“Compl.”). The complaint asserted a claim for relief pursuant to the Equal Credit

Opportunity Act (“ECOA”), 15 U.S.C. § 1691(d)(1), two claims for relief pursuant to the

Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605(f), a claim for

negligence pursuant to California law, as well as a claim pursuant to California Business

and Professions Code § 17200, the California Unfair Competition Law (“UCL”). On

March 4, 2018, the Court granted the bank’s motion to dismiss the Hacketts’ ECOA,

negligence, and UCL claims, but denied the motion as to the RESPA claims. See ECF No.

24 (“First MTD Order”).

The Hacketts filed their first amended complaint (“FAC”) on April 4, 2018. See

ECF No. 25. The FAC asserts the same five claims for relief that were previously alleged

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

in the complaint. On June 25, 2018, the Court granted the bank’s motion to dismiss the

FAC as to the Hacketts’ negligence claim, but denied the motion as to the Hacketts’ other

claims for relief. See ECF No. 31 (“Second MTD Order’). The four surviving claims for

relief contained within the FAC—(1) the ECOA claim (which arises from two separate

alleged violations), (2-3) the RESPA claims, and (4) the UCL claim—comprise the

operative pleading before the Court.

Wells Fargo moved for summary judgment, or in the alternative, partial summary

judgment on all four of the Hackett’s remaining claims on October 2, 2019. See ECF No.

41 (“Bank’s MSJ”). On October 4, 2019, the Hacketts filed their own motion for summary

judgment, or partial summary judgment, on one of the violations alleged in their ECOA

claim and one of their RESPA claims. See ECF No. 44 (“Hacketts’ MSJ”’). On October

11, 2019, the Bank filed its opposition to the Hacketts’ motion, as well as a statement of

genuine disputes in response to the Hacketts’ asserted undisputed facts. See ECF No. 46

(“Bank’s Opp.”), ECF No. 46-3 (“BSGD”). The Hacketts filed their opposition to the

bank’s motion on October 15, 2019, as well as their own statement of genuine disputes.

See ECF No. 47 (“Hacketts’ Opp.”), ECF No. 47-1 (“HSGD”). The parties filed replies

on October 21, 2019. See ECF No. 48 (“Bank’s Reply’), ECF No. 51 (“Hacketts’ Reply”).

A hearing was held at which both parties appeared on November 4, 2019. Having

considered the parties arguments, the Court finds and concludes as follows.

Wells Fargo contends that the Court should deny the Hacketts’ motion, and refuse

to consider their opposition to the bank’s motion, because the Hacketts failed to adhere to

Local Rules 7-3 and 7-9. See Bank’s MSJ Opp. at 8-10; Bank’s MSJ Reply at 9-10. The

parties shall follow the Local Rules. However, finding no prejudice to the bank, the Court

will consider the Hacketts’ motion and their opposition to the bank’s motion. See Miranda

v. S. Pac. Transp. Co.,710 F.2d 516, 521 (9th Cir. 1983) (“District courts have

broad discretion in interpreting and applying their local rules.”); see also Brunet, Parry &

Redish, Summ. J. Fed. L. & Prac. § 4.6 (2018) (reviewing circuit court decisions that

“support judicial discretion to overlook counsel’s failure to follow local rules” to reach the

merits of a summary judgment motion).

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

Il. FACTUAL BACKROUND

The following facts are not materially disputed and are set forth for purposes of

background. Unless otherwise noted, the Court references only facts that are

uncontroverted and as to which evidentiary objections have been overruled.

A. The Hacketts’ Loan And Related Bankruptcy

The Hacketts own a home in West Covina, California, where they live. HSGD 4 1.

In June 2006, the Hacketts refinanced their home loan with Pinnacle Financial. Id. Wells

Fargo began servicing that loan shortly afterward, and the bank remains the servicer of that

loan to this day. HSGD 4 2. In 2010, the Hacketts defaulted on the loan by failing to make

two loan payments, totaling approximately $6,000. HSGD 3. That same year, the

Hacketts filed the first of several bankruptcy petitions. BSGD 4 2. The final bankruptcy

petition was filed in 2012 and discharged in February 2015. HSGD 4 7. The Hacketts

claim that they fully satisfied all of the arrears related to those bankruptcies by May 2014.

Id. Wells Fargo, however, contends that only $929.39 of the $6,000.00 loan arrearage was

paid by the Hacketts through the bankruptcy. Id. According to Wells Fargo, the

bankruptcy trustee’s final report indicates that the bank was stilled owed more than $5,000

on the loan at the time the bankruptcy discharged in February 2015. Id.

B. The 2013 Loan Modification Request

Wells Fargo records indicate that the Hacketts filed paperwork applying for a loan

modification on January 18, 2013. BSGD 4 6.* These same records indicate that a bank

The bank disputes this fact on grounds that the Hacketts’ evidence—a record

created by Wells Fargo, and available to its customers online, containing a log of electronic

communications and between customers and Wells Fargo, see W. Hackett Decl., Ex. 2—

was not properly disclosed to Wells Fargo during discovery, and is thus inadmissible

pursuant to Federal Rule of Civil Procedure 37(c). See Wells Fargo’s Evidentiary

Objections, ECF No. 46-2. Rule 37(c) does not bar the use of undisclosed evidence,

however, “if the parties’ failure to disclose the required information is substantially

justified or harmless.” Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106

(9th Cir. 2001). Here, the “failure to disclose is harmless since the information . . . is

already in | Wells Fargo’s] possession.” Maharaj v. California Bank & Tr., 288 F.R.D. 458,

463 (E.D. Cal. 2013) (citing Creswell v. HCAL Corp., No. 04-CV-0388 BTM (RBB), 2007

WL 628036, at *2 (S.D. Cal. Feb. 12, 2007)): see also Brighton Collectibles, Inc. v. RK

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

representative opened a file on the application on February 12, 2013. BSGD 49. The bank

next communicated with the Hacketts on April 22, 2013, at which time the bank stated that

their “file is under review.” Id. In May 2013, the Hacketts’ counsel at the time requested

a status update on the application. Id. The bank representative stated she would investigate

the status, and sent several messages to the Hacketts between May, June, and July 2013 to

the effect that their application remained under review. Id, On July 25, 2013, the bank

representative informed the Hacketts’ that their application “documents have expired” and

instructed the Hacketts to provide “all updated documents for the file at this time.” Id.

The Hacketts resubmitted application documents to the bank in September 2013.

HSGD 4] 8. The bank sent a response letter on September 11, 2013 indicating that the bank

was reviewing the application. HSGD 4 9. After its review, the bank sent the Hacketts a

letter on October 3, 2013 including an offer for a “Special Forbearance Plan.” HSGD § 10.

The plan confirmed that (i) the loan was in default, (11) the Hacketts would make three

monthly loan payments in a reduced amount of $1,543.77, and (11) the loan would still not

be current even if the three payments were made. HSGD § 11. The Hacketts made the

three payments pursuant to the plan. Id.

Wells Fargo and the Hacketts subsequently executed a one year Loan Modification

Agreement in May 2014 (“the 2014 Modification”). HSGD § 12. The 2014 Modification

lowered the Hacketts’ interest rate to 2.875% and reduced the monthly payment amount to

$1,198.12 for the period between June 1, 2014 and July 1, 2015. Id. The 2014

Modification also established a total loan arrearage of $7,716.31. Id. The Hacketts made

the required payments pursuant to the 2014 Modification agreement during its term.

HSGD § 14.

C. The 2015 Loan Modification Request

The Hacketts applied for a second loan modification on July 15, 2015, two weeks

after the terms of the 2014 Modification expired. HSGD § 15. Wells Fargo sent a response

letter the following day. HSGD § 17. That July 16 letter stated that it was a “response to

[the Hacketts’] recent request for mortgage assistance,” and confirmed that the bank

Texas Leather Mfg., No. 10-CV-0419-GPC (WVG), 2013 WL 4716210, at *4 (S.D. Cal.

Sept. 3, 2013) (same). There is no prejudice to Wells Fargo in relying on a document that

Wells Fargo created and possesses to this day. The bank’s objection to Exhibit 2 to the W.

Hackett Declaration is therefore overruled.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

“recently recerved documentation from you requesting mortgage assistance.” Id. The

letter instructed the Hacketts to call the bank to “determine what options might be

available” to assist them, and directed the Hacketts to “gather” certain identified

information “and have it handy when you call.” Id. The Hacketts then spoke with the

bank by phone on July 22, 2015. HSGD 4 18. On the phone, Wells Fargo advised the

Hacketts that the bank required additional documentation: (1) two paycheck stubs from

Lorinda Hackett: (11) a Social Security award letter from Walter Hackett: and (111)

documents showing proof of change of circumstances. Id. Apart from the July 16 letter,

there is no evidence in the record demonstrating that any of these requests were provided

to the Hacketts in writing.

The next day, July 23, 2015, Wells Fargo informed the Hacketts in writing that the

bank had closed the file on their request for modification because the Hacketts had failed

to submit a complete application. HSGD 4 19.

D. The 2016 Requests For Information

On February 1, 2016, the Hacketts wrote to bank representatives requesting

information related to their loan. HSGD 20. The letter requested information that, the

Hacketts contended, were related to their efforts to obtain another loan modification. Id.

Wells Fargo sent the Hacketts a response dated that same day. HSGD § 21. The Hacketts

deny receiving the letter, and contest that Wells Fargo in fact sent the letter, even though

the bank attaches the letter to its motion. Id. The bank’s letter states that it would

“complete our research” for the requested information “and provide you with the results

on or before 02/15/2016.” Id. On February 15, 2016, the bank sent another letter indicating

that a substantive response could be expected before February 29, 2016. HSGD 4 22.

Wells Fargo wrote to the Hacketts again on February 24, 2016. HSGD § 23. The

February 24 letter attached more than 50 pages of documents and information requested

by the Hacketts, including the relevant deed of trust, promissory notes, loan information

report, as well as recent correspondence between the bank and the Hacketts. Id. The bank

stated that 1t was “unable to provide any further information because” the Hacketts’

“remaining requests are too broad.” Id. The bank invited the Hacketts to submit “more

specific details about what you’re seeking,” after which time they committed to review the

request again. Id.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

The Hacketts submitted a second request for information on March 1, 2016. HSGD

Wells Fargo acknowledged receipt on March 7, 2016. HSGD § 27. On March 21,

2016, the bank sent the Hacketts documents that responded to the requested information,

but again indicated that it could not comply with all of the Hacketts requests since some of

those requests were too broad. HSGD § 28.°

E. The Hacketts’ Current Status

The Hacketts have been current on their loan payments since 2016. HSGD 4 16.

There have been no foreclosure proceedings. HSGD 34. The Hacketts’ credit ratings

have neither increased nor decreased since 2015. HSGD § 35. The Hacketts have

approximately $300,000 in equity in their home, and do not plan to sell. HSGD § 38. The

Hacketts claim that, as a result of the bank’s alleged misconduct, they have had to rely on

short-term loans and retirement savings to make their mortgage payments. HSGD □□□

> The letter also stated that the bank was simultaneously reviewing the Hackett’s

loan in consideration for a possible modification. HSGD 4 28. The bank claims it never

received certain requested information in connection with that 2016 modification request,

and accordingly closed the file on July 26, 2016. HSGD 4§ 30-33. The Hacketts deny that

they ever applied for a loan modification in 2016, and contend that what Wells Fargo

construed as a modification request was, in fact, another (concurrent) request for

information. Id. From what the Court can tell from what the Hacketts assert in their

statement of genuine disputes and affidavits, the Hacketts retained the Dann Law Firm to

assist with their requests for information, but the firm instead pursued a loan modification

application on their behalf. See W. Hackett Decl. 35-37, ECF No. 47-3 (“On May 22,

2016, Plaintiffs received a letter from the Dann Law Firm regarding documents needed for

a loan modification review. However, The Dann Law Firm was never retained or

authorized to discuss loan modification. I hired the Dann Law Firm solely for the purpose

of submitting and receiving a proper response to an RFI/NOE.”). The Hacketts claim they

sent Wells Fargo a “Notice of Error” in “late February 2016” explaining that the bank

and/or the Dann Law Firm had misconstrued the Hacketts intentions, but they do not attach

that letter to any of their moving papers, and provide no other evidence to indicate that

Wells Fargo would have or should have known about this second request for information.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

Il. LEGAL STANDARD

Summary judgment is only appropriate where “there 1s no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). The moving party bears the initial burden of identifying relevant portions of the

record that demonstrate the absence of a fact or facts necessary for one or more essential

elements of each claim upon which the moving party seeks judgment. See Celotex Corp.

v. Catrett, 477 U.S. 317, 323 (1986).

If the moving party meets its initial burden, the opposing party must then set out

specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); see also Fed. R. Civ. P. 56(c), (e). Summary

judgment must be granted for the moving party if the nonmoving party “fails to make a

showing sufficient to establish the existence of an element essential to that party’s case,

and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322;

see also Abromson v. Am. Pac. Corp., 114 F.3d 898, 902 (9th Cir. 1997).

In light of the evidence presented by the nonmoving party, along with any

undisputed facts, the Court must decide whether the moving party is entitled to judgment

as a matter of law. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d

626, 631 & n.3 (9th Cir. 1987). When deciding a motion for summary judgment, “the

inferences to be drawn from the underlying facts . . . must be viewed in the light most

favorable to the party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 587 (1986) (citation omitted); Valley Nat’] Bank of Anz. v. □□□□

Rouse & Co., 121] F.3d 1332, 1335 (9th Cir. 1997). Summary judgment for the moving

party is proper when a rational trier of fact would not be able to find for the nonmoving

party on the claims at issue. See Matsushita, 475 U.S. at 587.

IV. DISCUSSION

The parties cross move for summary judgment. For the reasons discussed below, the

Court DENIES the Hacketts’ motion, GRANTS the bank’s motion in part, and DENIES

the bank’s motion in other respects.

A. Hacketts’ ECOA Claim

The ECOA “makes it illegal “for any creditor to discriminate against any applicant,

with respect to any aspect of a credit transaction . . . on the basis of race, color, religion,

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

national origin, sex or marital status or age.’” Schlegel v. Wells Fargo Bank, 720 F.3d

1204, 1210 (9th Cir. 2013) (quoting 15 U.S.C. § 1691(a)(1)).

Apart from this principal purpose, the ECOA also imposes procedural notice

requirements. One requirement states that “[w]ithin thirty days .. . after receipt of a

completed application for credit, a creditor shall notify the applicant of its action on the

application.” 15 U.S.C. § 1691(d)(1). Another requires creditors to provide “each

applicant against whom an adverse action is taken” with “a statement of reasons for such

action from the creditor.” 15 U.S.C. § 1691(d)(2). An “adverse action” is a “denial or

revocation of credit, a change in the terms of existing credit arrangement, or a refusal to

grant credit in substantially the amount or on substantially the terms requested. Such term

does not include a refusal to extend additional credit under an existing credit arrangement

where the applicant is delinquent or otherwise in default.” 15 U.S.C. § 1691(d)(6). When

a creditor fails to give the required notice of taking an adverse action, the applicant may

sue for a violation of ECOA. Schlegel, 720 F.3d at 1210.

The Hacketts claim that Wells Fargo violated these requirements in connection with

their 2013 and 2015 loan modification applications to the bank. Specifically, they claim

that the bank violated subsection (d)(1) in its handling of the Hacketts’ 2013 application,

and subsection (d)(2) in its handling of their 2015 application. Both parties move for

summary judgment on these claims.

1. The 2013 Application Claim

Wells Fargo moves for summary judgment on the ECOA claim arising out of the

2013 loan modification application on grounds that the ECOA’s notice provisions

contained in § 1691(d)(1) do not apply to borrowers who are in default. The Hacketts’

respond that the default exception only bars ECOA claims brought pursuant to

§ 1691(d)(2), which involve deficient notice following an adverse action, rather than the

claims asserted here pursuant to § 1691(d)(1), which applies to notice deficiencies in non-

adverse action settings. The Hacketts further contend that they are entitled to summary

judgment on this claim because the undisputed evidence shows that its 2013 application to

Wells Fargo was complete, and Wells Fargo failed to respond with its intended action

within 30 days after receipt of the Hacketts’ completed application.

“District courts in this circuit are split on whether a complete application to modify

an existing loan in default falls within the scope of the ECOA notice requirements.” Craig

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

v. Capital One, N.A., No. 17-CV-3788-DMG (AJWx), 2018 WL 5857987, at *4 (C.D. Cal.

Apr. 10, 2018). Some courts, considering the statute in isolation, have concluded that the

default exception does not apply to claims brought pursuant to § 1691(d)(1). See, e.g.,

McMahon v. JPMorgan Chase Bank, N.A., No. 2:16-CV-1459-JAM (KJN), 2017 WL

2363690, at *3 (E.D. Cal. May 31, 2017) (concluding that “applicants are entitled to a

determination on their application within thirty days whether or not they defaulted on their

existing loan obligations”) (citing MacDonald v. Wells Fargo Bank N.A, No. 14-CV-

04970-HSG, 2015 WL 1886000, at *3 (N.D. Cal. Apr. 24, 2015), Banks v. JPMorgan

Chase Bank, N.A., No. 14-CV-06429 JAK, 2014 WL 6476139, at *13 (C_D. Cal. Nov. 19,

2014), and Vasquez v. Bank of Am., N.A., No. 13-CV-02902-JST, 2014 WL 1614764, at

*2-3 (N.D. Cal. Apr. 22, 2014), each of which reached the same conclusion).

However, these courts did not consider, or were not presented with, the relevant

implementing regulations. See 12 C.F.R. § 202.2(c)(2)(11); 12 C.F.R. § 202.9(a)(1)(i).

“{CJourts interpreting the implementing regulations,” by comparison, “find that ‘to the

extent the statute was ambiguous about whether a notification is required where the

applicant is already in default, the implementing regulations state clearly that no notice is

required’ when a borrower is in default.” Craig, 2018 WL 5857987, at *4 (quoting Coury

v. Caliber Home Loans, Inc., No. 16-CV-05583-RS, 2016 WL 6962882, at *5 (N.D. Cal.

Nov. 29, 2016), and collecting cases). That is also what this Court concluded in the First

MTD Order in this case. See Hackett v. Wells Fargo Bank, N.A., No. 17-CV-07354-CAS

(ASx), 2018 WL 1224410, at *4 (C_D. Cal. Mar. 5, 2018) (“Hackett I’) (“To the extent

that ECOA 1s ambiguous about whether notification is required under section 1691(d)(1)

to an applicant who is in default, the implementing regulations clarify that no notice is

required in that circumstance.”) (citing Smith v. Wells Fargo Bank, N.A., No. 15S—CV-—

01779-YGR, 2016 WL 283521, at *7 (N.D. Cal. Jan. 25, 2016)). The Court continues to

find these cases persuasive, and concludes that § 1291(d)(1) does not require notification

to a loan modification applicant already in default. See Craig, 2018 WL 5857987, at *4

(concluding that, because applicant was in default, creditor “was not obligated to abide by

the notification requirements set out in 15 U.S.C. § 1691(d)(1) and 12 C.F.R. §

202.9(a)(1)(1) unless it approved or countered the terms of her applications”).

The threshold question as to the Hacketts’ 2013 ECOA claim is therefore whether

or not the Hacketts were in default at the time they submitted their application materials to

Wells Fargo on January 18, 2013. See BSGD § 6. The undisputed facts here establish that

the Hacketts were in default at that time. The Hacketts first defaulted on their home loan

in 2010. HSGD § 3. In October 2013, the Hacketts and Wells Fargo agreed to a Special

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

Forbearance Plan that confirmed, among other things, that the Hacketts were still in default

on their home loan at that time. HSGD 4§ 10-11. Walter Hackett also conceded at his

deposition that the Hacketts were in default on their home loan “[a]t the time that [the

modification] request was made to Wells Fargo.” See ECF No. 41-1 at 163:9-18.4

Because the undisputed evidence establishes that the Hacketts were in default on the

loan they sought to modify in January 2013, and because the notice requirements of ECOA

§ 1291(d)(1) do not apply to loan modification applicants already in default, Wells Fargo

is entitled to judgment on the Hacketts’ ECOA claim predicated on the 2013 application

as a matter of law. The bank’s motion for summary judgment is accordingly GRANTED

as to the ECOA claim arising out of the 2013 application, while the Hacketts’ motion

related to that same claim is DENIED.

2. The 2015 Application Claim

The Hacketts claim that Wells Fargo also violated its ECOA obligations in

connection with its handling of the Hacketts’ 2015 loan modification application.

Specifically, the Hacketts contend that Wells Fargo failed to provide the Hacketts with a

“statement of reasons” pursuant to 15 U.S.C. § 1691(d)(2) after taking an adverse action

against them in July 2015, and/or failed to provide adequate notice that the Hacketts’

application was incomplete. Wells Fargo moves for summary judgment on grounds that it

was not obligated to provide the Hacketts with a “statement of reasons” because the

Hacketts’ application was incomplete. The bank contends that it also gave the Hacketts

sufficient notice of the incompleteness of their application materials, and that the Hacketts

do not submit evidence that they suffered damages as a result of the bank’s alleged

4 The Hacketts contend that, because they were in bankruptcy proceedings at the

time, their default was excused. See Hacketts’ MSJ Opp. at 10-12; Hacketts’ MSJ Reply

at 3. The Court disagrees. A bankrupt mortgagee does not become current on his or her

prepetition arrears when he or she files a Chapter 13 petition, but when the bankrupt

mortgagee makes all plan payments on the debt. See In re Rivera, 599 B.R. 335, 341

(Bankr. D. Ariz. 2019) (explaining that Chapter 13 bankrupt mortgagees “cure” their “pre-

petition defaults to a secured creditor” when they make “plan payments disbursed by the

trustee”) (citing In re Lopez, 372 B.R. 40 (9th Cir. BAP 2007), aff'd 550 F.3d 1202 (9th

Cir. 2008)). The Hacketts did not do so until at least May 2014. See HSGD 4 7.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

misconduct, in any case. The Hacketts do not move for summary judgment on this ECOA

claim.

The undisputed facts establish that the Hacketts applied for a loan modification on

July 15, 2015. HSGD § 15. Wells Fargo accordingly had an obligation to give notice to

the Hacketts of the bank’s action on that application within 30 days. See 15 U.S.C.

§ 1691(d)(2). Even though the bank determined that the application was incomplete, the

bank had an obligation to give the Hacketts notice of incompleteness within 30 days. See

12 C_F.R. § 202.9(c). Oral communication, by itself, would not have been enough. See

id. at § 202.9(c)(3) (explaining that while “a creditor may inform the applicant orally of

the need for additional information,” if an “application remains incomplete the creditor

shall send a notice in accordance with paragraph (c)(1) of this section,” which requires

written notification pursuant to either 12 C_F.R. § 202.9(a) or 12 C.F.R. § 202.9(c)(2)).

Here, the bank contends it gave the Hacketts sufficient notice of incompleteness in

its July 16, 2015 letter. See Bank’s MSJ at 10. That letter states that the Hacketts should

contact Wells Fargo and have certain materials “handy.” HSGD 4 17. The bank also

submits undisputed evidence demonstrating that a bank representative spoke with the

Hacketts on July 22, 2015 about the materials missing from their application. HSGD □ 18.

The Hacketts argue that these communications do not satisfy the bank’s ECOA obligations.

See Hacketts’ Opp. at 14-15.

Based on these facts, and construing the evidence in the light most favorable to the

Hacketts, who are the non-moving parties, the Court finds that a reasonable jury could

conclude that the bank’s response to the Hackett’s 2015 loan modification application fell

short of the ECOA’s notification requirements. While it is undisputed that a bank

representative had a telephone conversation with the Hacketts addressing missing

materials, the bank was obligated to send a written notice to the Hacketts if the application

remained incomplete. And to the extent the Hacketts rely on the July 16 letter as evidence

of written notice, that letter does not expressly state that certain documents were missing

from the Hacketts’ loan modification application. The letter only instructed the Hacketts

to “gather” those documents and have them “handy.” Because the letter is ambiguous,

whether it supplied adequate notice of incompleteness is a disputed material question of

fact, and a triable issue that precludes summary judgment.

Moreover, the Hacketts have submitted sufficient evidence of actual damages to

satisfy the summary judgment standard. Specifically, the Hacketts submit affidavits stating

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

they used retirement savings, and were forced to obtain expensive short term loans, to make

payments on their mortgage as a result of the bank’s failure to timely process their

modification application. HSGD § 39. This evidence carries the Hacketts’ burden on

summary judgment.°

The Court accordingly DENIES the bank’s motion for summary judgment on the

Hacketts’ ECOA claim arising out of the 2015 application.

B. Hacketts’ RESPA Claims

Regulations implementing RESPA require creditors that receive a loss mitigation

application from a borrower to “[n]otify the borrower in writing within 5 days” that (1) “the

servicer acknowledges receipt of the loss mitigation application,” and (11) “that the servicer

has determined that the loss mitigation application is either complete or incomplete.” 12

C.F.R. § 1024.41(b)(2)()(B) (emphasis added). “If a loss mitigation application is

incomplete, the notice shall state the additional documents and information the borrower

must submit to make the loss mitigation application complete and the applicable date . . .

by which the borrower should submit the documents and information necessary to make

the loss mitigation application complete.” Id. at §§ 1024.41(b)(2)()(B), 1024.41(b)(2)(a1).

After receiving “a complete loss mitigation application,” a creditor has 30 days to

“[p|rovide the borrower with a notice in writing stating the servicer’s determination of

which loss mitigation options, if any, it will offer to the borrower on behalf of the owner

or assignee of the mortgage.” Id. at § 1024.41(c)(1)(ii). If a creditor in receipt of a

completed application makes a loss mitigation offer pursuant to (c)(1)(11), the creditor must

also “permit a borrower to make an appeal within 14 days after the servicer provides the

offer of a loss mitigation option to the borrower.” Id. at § 1024.41(h).

> At oral argument, the bank contended that, since evidence demonstrates that the

Hacketts had previously used some of their retirement savings to make their mortgage

payments before the bank’s alleged violations, the bank’s alleged violations cannot be said

to have “proximately caused” the Hacketts to expend these resources. But the material

question is whether the bank’s alleged violations proximately caused the Hacketts to

expend additional retirement savings. If so, those additional expenditures could be actual

damages the Hacketts would be entitled to recover. The question, and the evidence in the

record, accordingly presents a triable issue of fact that defeats summary judgment.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

Other RESPA regulations require a creditor to respond to a borrower’s request for

information within 30 days, either by “[p|roviding the borrower with the requested

information,” or by “[c]onducting a reasonable search for the requested information and

providing the borrower with a written notification that states that the servicer has

determined that the requested information is not available to the servicer.” 12 C_F.R.

§§ 1024.36(d)(1)-(2). In the event a creditor determines that the requested information is

not available, the creditor is required to “provide[| the basis for the servicer’s

determination.” Id. at § 1024.36(d)(2). Similarly, other regulations require a creditor to

respond to a borrower’s “notice of error” by acknowledging receipt within five days and

either “[c]Jorrecting the error or errors identified” by the borrower, or “[c]onducting a

reasonable investigation and providing the borrower with a written notification that

includes a statement that the servicer has determined that no error occurred, a statement of

the reason or reasons for this determination, a statement of the borrower’s right to request

documents relied upon by the servicer in reaching its determination,” as well as

“information regarding how the borrower can request such documents.” Id. at

§§ 1024.35(d)-(e).

The Hacketts contend that they are entitled to summary judgment on their claim that

Wells Fargo violated § 1024.41 by failing to provide adequate written notice that their 2015

loan modification application was incomplete (as the bank claims), and by failing to

provide the Hacketts an opportunity to appeal prior to closing the review. See Hacketts’

MSJ at 20-21. Wells Fargo cross-moves for summary judgment on the same claim on

grounds that it had no notification obligations pursuant to RESPA because the Hacketts’

2015 application was not their “first” application, because RESPA only applies to

completed applications, because the bank in any case complied with the asserted RESPA

obligations, and because the Hacketts’ do not present evidence of any damages cognizable

pursuant to RESPA. See Bank’s MSJ at 14-16, 18-23.

The Hacketts also claim that Wells Fargo violated § 1024.36 and/or § 1024.35 by

failing to conduct a “reasonable search” for the requested information it did not provide,

and by failing to conduct a “reasonable search” and submit an adequate response to its

“notice of error.” The Hacketts do not move for summary judgment on this claim, but

Wells Fargo does. See Bank’s MSJ at 16-18, 18-23. The bank contends it is entitled to

judgment as a matter of law because undisputed evidence establishes that it timely and

adequately responded to both requests for information, and because the Hacketts do not

present evidence of any damages cognizable pursuant to RESPA. Id.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

The Court addresses each claim in turn.

1. The § 1024.41 Claim Arising From The July 2015 Modification

Wells Fargo raises three threshold arguments that, it claims, bar the Hacketts from

prevailing on their § 1024.41 theory as a matter of law. None has merit.

The bank first contends that 12 C.F.R. § 1024.41(i) bars RESPA claims predicated

on a duplicative application. Because the Hacketts applied for a loan modification in 2013,

the bank argues, they are not entitled to RESPA remedies in connection with their second

loan modification application from 2015. The Court thoroughly considered and rejected

this argument in its first First MTD Order, where it explained that

would be unreasonable to conclude that Wells Fargo could have complied with section

1024.41’s loan evaluation requirements with respect to plaintiffs’ 2013 application, before

the new requirements [of section 1024.41(1)| went into effect,” especially because “section

1024.41 contains no express language evincing an intent that its requirements should apply

retroactively to transactions prior to January 2014.” Hackett I, 2018 WL 1224410, at *6.

Observing that “numerous other federal district courts” had reached the same conclusion,

the Court found “that Wells Fargo was obligated to comply with section 1024.41’s notice

requirements when it reviewed plaintiffs’ June 2015 application, which was plaintiffs’ first

loan modification application after section 1024.41 became effective.” Id. at *6-7.

Nothing has changed.

The bank next contends that the Hacketts’ RESPA claims fail because they did not

submit a complete application. The bank cites Gelinas v. Bank of America, N_A., No. 16-

CV-1355-RAJ, 2017 WL 1153859 (W.D. Wash. Mar. 28, 2017) for the proposition that “a

“complete loss mitigation application’ is required for the RESPA provision to apply.” Id.

at *4. This case is inapposite. Gelinas concerned an alleged violation of 12 C.F.R. §

1024.41(g). That “provision” of RESPA does require a completed application, since it

involves a creditor’s obligation to consider and respond to a loss mitigation application

“pursuant to (c)(1)(11)” before it can pursue foreclosure proceedings against borrower. See

12 C_F.R. § 1024.41(g). Subsection (c)(1)(i1) concerns a creditor’s obligation to respond

to a “[c]omplete loss mitigation application.” Id. § 1024.41(c)(1). Here, the Hacketts

principally assert a RESPA claim pursuant to § 1024.41(b), which requires a creditor that

receives a loss mitigation application from a borrower to “[n]otify the borrower in writing

within 5 days” that (1) “the servicer acknowledges receipt of the loss mitigation

application,” and (ii) “that the servicer has determined that the loss mitigation application

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

is either complete or incomplete.” 12 C.F.R. § 1024.41(b)(2)G)(B) (emphasis added). That

provision, on its face, plainly applies to incomplete applications. So does the ensuing

sentence in that subparagraph, which sets forth a creditor’s response obligations to an

incomplete application. Id. The bank’s “completeness” argument accordingly lacks merit,

as well.

Third, the bank argues that it is entitled to summary judgment on the § 1024.41 claim

fails because the Hacketts fail to put forth evidence that creates a triable issue as to whether

the Hacketts suffered any statutorily cognizable damages. RESPA allows borrowers to

recover “any actual damages” they suffer “as a result” of the RESPA violation, as well as

“any additional damages, as the court may allow, in the case of a pattern or practice of

noncompliance” with RESPA’s requirements. 12 U.S.C. § 2605(f)(1)(B). To establish

actual damages, a RESPA plaintiff must put forth evidence of “some pecuniary loss”

attributable to the asserted RESPA violation. Lawther v. Onewest Bank, No. 10-CV-0054-

RS, 2010 WL 4936797, at *6 (N.D. Cal. Nov. 30, 2010) (citing Garcia v. Wachovia Mortg.

Corp., 676 F.Supp.2d 895, 909 (C.D. Cal. 2009): see also Molina v. Washington Mut.

Bank, No. 09-CV-00894-IEG (AJB), 2010 WL 431439, at *7 (S.D. Cal. Jan. 29, 2010)

(“Numerous courts have read Section 2605 as requiring a showing of pecuniary damages

in order to state a claim.”) (collecting cases). The bank contends that the Hacketts fail to

put forward evidence that they have suffered any actual damages. See Bank’s MSJ at 18-

19. The Court disagrees. As noted above in connection with the Hacketts’ ECOA claim,

the Hacketts have submitted affidavits stating that they have had to obtain expensive short

term loans, and exhaust some of their retirement savings, in order to make their mortgage

payments as a result of the bank’s failure to timely consider and act upon their loan

modification applications. See HSGD 4 39. This is evidence that creates a triable issue

for trial. The bank is accordingly not entitled to summary judgment on this basis.

This brings the Court to the central issue raised by the present motions on the

§ 1024.41 claim: whether undisputed evidence establishes that Wells Fargo’s response to

the Hacketts’ July 15, 2015 loan application satisfied the notification requirements set forth

by the regulation. Construing the evidence presented in the light most favorable to the non-

moving party in connection with each motion, the Court cannot conclude that either the

bank or the Hacketts are entitled to judgment as a matter of law. After receiving the

Hacketts’ application on July 15, Wells Fargo had five days to acknowledge receipt and

indicate in writing whether the application was complete or not. 12 CFR.

§ 1024.41(b)(2)()(B). The only writing sent to the Hacketts by the bank within that time

period was the July 16, 2015 letter. HSGD 4 17. But as discussed above, that letter—

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

which instructed the Hacketts to “gather” certain documents and have them “handy’”—does

not clearly state, or fail to state, whether or not the loan modification application was

incomplete. Nor does it clearly state, or fail to state, what missing documents the bank

required. Nor does it clearly state, or fail to state, when the Hacketts would have needed

to submit the documents to complete their application. Because the letter is ambiguous,

a reasonable jury could reach either conclusion.® The letter accordingly raises a triable

material question of fact that precludes the Court from granting summary judgment to

either the bank or the Hacketts.

The parties’ motions for summary judgment on the § 1024.41 RESPA claim are

accordingly DENIED.

2. The §§ 1024.35/36 Claim Arising From The 2016 Requests

Wells Fargo moves for summary judgment on the §§ 1024.35/36 claim on grounds

that its responses to the 2016 requests for information and/or notice of error were timely,

adequate, and that, in any event, the Hacketts’ do not present evidence of actual damages

cognizable pursuant to RESPA. For the reasons discussed above in connection with the

Hacketts’ § 1024.41 claim, the Hacketts have put forth sufficient evidence to raise a triable

issue of fact as to damages. See HSGD 4 39. And it is undisputed that Wells Fargo’s

responses to the February 1, 2016 and March 1, 2016 responses—sent on February 1 and

March 7, 2016, respectively—fell within five business days and were timely. HSGD □ 21,

27. The question is whether those responses were adequate.

RESPA requires Wells Fargo to provide the Hacketts with the requested information,

or else conduct a “reasonable investigation” 1n response to the Hacketts’ requests and

© At oral argument, the Hacketts contended that the July 16 letter was deficient as a

matter of law, and that the Hacketts are accordingly entitled to summary judgment.

According to the Hacketts’ counsel, the evidence shows that the Hacketts “already

provided” all of the documents that the bank requested in its July 16 letter. The Hacketts

argue that there is, therefore, no question that the Hacketts’ application was complete and,

as a result, no question that the bank’s response fell short of its obligations. However,

whether the Hacketts actually provided all of the documents that the bank deemed

necessary to complete their application, and whether the bank’s completeness

determination was made in good faith and adequately communicated presents a question

of fact for the jury.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

explain why the requests were not amenable to a response. 12 C.F.R. §§ 1024.36(d)(1)-

(2); 12 C_F.R. §§ 1024.35(d)-(e). See eg., Amini v. Bank of Am. Corp., No. 11-CV-

0974-RSL, 2013 WL 1898211, at *2 (W.D. Wash. May 6, 2013) (“Under RESPA, the

servicer has two choices when responding to a borrower’s request for information

regarding the servicing of his loan: to provide the information requested by the borrower

or to provide ‘an explanation of why the information requested is unavailable or cannot be

obtained by the servicer.’”) (quoting 12 U.S.C. § 2605(e)(2)(C)G)). Compliance with

requests that the bank “reasonably determines” to be “overbroad or unduly burdensome”

is “not required.” 12 C.F.R. § 1024.36(f)(1).

Here, Wells Fargo contends that its responses to the Hacketts’ requests were

“perfectly acceptable under RESPA.” See Bank’s MSJ at 17. The bank notes that it

“enclosed numerous loan documents as well as a loan information sheet that included

significant detail about the loan,” which, it claims, were responsive to the Hacketts’

requests. Id. It is undisputed that Wells Fargo sent a number of documents to the Hacketts

on February 24 and March 21, 2016, and it is undisputed that these responses also explained

that the bank could not, in its view, reasonably complete the Hacketts’ other requests

because they were overbroad, despite revisions. See HSGD {J 23, 28. However, the

Hacketts dispute the reasonableness of that determination. See HSGD §§ 23-24, 26.’

The reasonableness of a creditor’s response to a borrower’s request is an issue of

fact that, when disputed, has been found to preclude summary judgment on a RESPA

notification claim. See, eg. Amini, 2013 WL 1898211, at *3 (“Because the

reasonableness of Bank of America’s purported concern and responses to the QWRs is an

issue of fact, the Court finds that summary judgment is inappropriate.”): Weber v. Seterus,

Inc., No. 16-CV-6620-TMD, 2018 WL 1519163, at *9 (N_D. Ill. Mar. 28, 2018) (denying

summary judgment on RESPA notification claim where the court found “issues of material

fact as to what a reasonable investigation would have uncovered, and therefore what should

have been reflected in [defendant’s] notice of error response”); Diehl v. Money Source,

Inc., No. 17-CV-0125-WS-B, 2018 WL 2995721, at *6 (S.D. Ala. June 13, 2018)

(concluding “that a jury question remains as to whether TMS performed any reasonable

7 Although neither party actually submits the requests for information as attachments

to their moving papers, the Court is able to discern some information about the contents of

these requests from reviewing the deposition transcript of Walter Hackett, attached as

Exhibit R to the Newman Declaration, ECF No. 41-1.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

investigation” where plaintiff argued that the bank’s “failure to perform a reasonable

investigation may be inferred from its unhelpful and largely unresponsive June 6 letter’’).

Consistent with these decisions, and construing the evidence in the light most favorable to

the Hacketts, the Court concludes that the reasonableness of the bank’s response 1s a triable

issue that precludes summary judgment on the § 1024.35 and § 1024.36 RESPA claim.

The bank’s motion for summary judgment on the § 1024.35 and § 1024.36 RESPA

claim is accordingly DENIED.

C. Hacketts’ UCL Claim

To prove a claim pursuant to the UCL, a plaintiff must establish “that the defendant

committed a business act that is either fraudulent, unlawful, or unfair.” Levine v. Blue

Shield of California, 189 Cal. App. 4th 1117, 1136 (2010). Where, as here, the allegation

is that a defendant violated the “unlawful” prong of the UCL, the plaintiff must establish

that the defendant’s challenged business practice violated some other law. See Cel-Tech

Comme’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999) (“By

proscribing any unlawful business practice, section 17200 borrows violations of other laws

and treats them as unlawful practices that the unfair competition law makes independently

actionable.”) (citations and internal marks omitted).

A UCL plaintiff must also establish standing to obtain one of the remedies available

under the statute. “[R]emedies for individuals under the UCL are restricted to injunctive

relief and restitution.” Walker v. Geico Gen. Ins. Co., 558 F.3d 1025, 1027 (9th Cir. 2009)

(quoting Buckland v. Threshold Enters. Ltd, 155 Cal. App. 4th 798, 817 (2007)).

Injunctive relief is only available if the assertedly wrongful conduct is ongoing or likely to

recur. Nelson v. Pearson Ford Co., 186 Cal. App. 4th 983, 1015 (2010). Otherwise, to

establish an entitlement to restitution, “a plaintiff must demonstrate that the defendant is in

possession of money or property taken from [him or] her.” Asghari v. Volkswagen Grp. of

Am., Inc., 42 F. Supp. 3d 1306, 1324 (C.D. Cal. 2013); see also Zeppeiro v. Green Tree

Servicing, LLC, No. 14-CV—01336-MMM-JCX, 2015 WL 12660398, at *11 (C.D. Cal.

Apr. 15, 2015), aff'd, 679 Fed. Appx. 592 (9th Cir. 2017) (affirming same). The failure to

establish an entitlement to injunctive relief or restitution requires dismissal of, or judgment

against, a UCL claim. See Walker, 558 F.3d at 1027.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘Oo’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

Wells Fargo moves for summary judgment on the UCL claim on grounds that there

are no predicate violations of law to support UCL liability, and because the Hacketts have

not submitted evidence to establish that they are entitled to injunctive relief or restitution.

The Court agrees with the bank’s second argument. Even though, as discussed

above, a reasonable jury could find Wells Fargo liable to the Hacketts on their 2015 ECOA

claim, or either of their RESPA claims, the Hacketts have not presented evidence (or even

argument) that establishes their entitlement to injunctive relief or restitution. First, with

respect to an entitlement to injunctive relief, there is no evidence in the record that any of

the Hacketts’ alleged harms are ongoing, or likely to recur. Nor do the Hacketts argue in

any of their moving papers that they are. Second, the only injuries the Hacketts assert are

not compensable by restitution. The emotional distress the Hacketts claim gives rise to a

request for non-economic damages, not to recover unjustly retained “money or property.”

Lectrodryer_v. SeoulBank, 77 Cal. App. 4th 723, 726 (2000) (restitution requires the

“unjust retention” of an unentitled benefit). And the actual damages that the Hacketts

claim—interest payments to third-party short term lenders, and diminished retirement

savings, see HSGD 4 39—are not “money or property” that Wells Fargo has “taken” from

them, either. Asghar, 42 F. Supp. 3d at 1324. Rather, these out of pocket expenses are

consequential damages that the Hacketts claim to have inured as a result of the bank’s

failure to timely or adequately respond to their submissions. The Hacketts’ request to

recover these expenses amounts to a request for economic damages, not a request

restitution, since the expenses are not “money or property” that could be disgorged from

the bank.®

The bank’s motion for summary judgment on the UCL claim 1s accordingly

GRANTED?

In fact, because the only money Wells Fargo received was money it was already

owed, it could not have been unjustly retained. Compare Sutcliffe v. Wells Fargo Bank,

NA., 283 F.R.D. 533, 553 (N.D. Cal. 2012) (holding that payments plaintiffs made

pursuant to a challenged loan agreement did not constitute recoverable damages pursuant

to contract counterclaim because there was already a preexisting duty to make those

payments on the loan).

° In its Second MTD Order, the Court refused to dismiss the UCL claim on the same

standing grounds that it now relies upon to enter summary judgment. See Hackett v. Wells

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES —- GENERAL ‘O’

Case No. 2:17-CV-07354-CAS-ASx Date November 4, 2019

Title HACKETT V. WELLS FARGO BANK, N.A., ET AL.

V. CONCLUSION

In accordance with the foregoing, the Court DENIES the Hacketts’ motion for

summary judgment, GRANTS the bank’s motion for summary judgment as it relates to

the 2013 ECOA and UCL claims, and DENIES the bank’s motion for summary judgment

in all other respects.

IT IS SO ORDERED. 00 15

Initials of Preparer CMJ

Fargo Bank, N.A., No. 17-CV-07354-CAS (ASx), 2018 WL 3197698, at *7 (C.D. Cal.

June 25, 2018) (“Hackett IT’). As the Court explained at that time, the Hacketts’ allegations

that the bank “charged excess interest, late fees, and other fees” as a result of the ECOA

and RESPA violations were sufficient to state a claim. Id. However, the Hacketts did not

come forward with any evidence to support these allegations on summary judgment. See

Celotex, 477 U.S. at 322 (holding that summary judgment must be granted for the moving

party if the nonmoving party “fails to make a showing sufficient to establish the existence

of an element essential to that party’s case, and on which that party will bear the burden of

proof at trial”).