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Rubic v. Fargo

United States District Court, D. Oregon, Portland Division

February 13, 2015

MICHAEL PAUL RUBIC, Plaintiff,
v.
WELLS FARGO, NATIONAL ASSOCIATION (INC.), individually and with WELLS FARGO HOME MORTGAGE, INC., Defendants.

OPINION AND ORDER

MICHAEL W. MOSMAN, District Judge.

On November 24, 2014, Magistrate Judge Acosta issued his Findings and Recommendation ("F&R") [25] in the above-captioned case recommending that I deny Defendants Wells Fargo Bank, N.A. and Wells Fargo Home Mortgage's (collectively, "Wells Fargo") Motion to Dismiss and grant Wells Fargo's Motion for a More Definite Statement [16]. I agree that because Plaintiff Michael Paul Rubic's claim under Oregon's Unlawful Trade Practices Act ("UTPA") arises out of loan modification negotiations that occurred after March 23, 2010, it is not foreclosed as a matter of law. Consequently, I deny Wells Fargo's Motion to Dismiss and grant Wells Fargo's Motion for a More Definite Statement.

BACKGROUND

In 2009, Mr. Rubic refinanced a property located in Oregon City, Oregon, with Wells Fargo. First Am. Compl. [15] at ¶ 6. In 2011, Mr. Rubic sought a loan modification. Id. at ¶ 8. Mr. Rubic's claims of promissory estoppel, unlawful trade practices, common law fraud, and breach of contract concern his subsequent negotiations with Wells Fargo. Id. at ¶¶ 65-81.

Wells Fargo moved to dismiss Mr. Rubic's unlawful trade practices claim for failure to state a claim upon which relief could be granted under Federal Rule of Civil Procedure ("Rule") 12(b)(6) [16].[1] In the alternative, Wells Fargo moved for a more definite statement under Rule 12(e). After briefing and oral argument on the issue, Magistrate Judge Acosta issued his F&R, recommending that I deny Wells Fargo's Motion to Dismiss and grant Wells Fargo's Motion for a More Definite Statement [25]. Wells Fargo subsequently filed objections [28].

LEGAL STANDARD

The magistrate judge makes only recommendations to the court, to which any party may file written objections. The court is not bound by the recommendations of the magistrate judge, but retains responsibility for making the final determination. The court is generally required to make a de novo determination regarding those portions of the report or specified findings or recommendation as to which an objection is made. 28 U.S.C. § 636(b)(1)(C). However, the court is not required to review, de novo or under any other standard, the factual or legal conclusions of the magistrate judge as to those portions of the F&R to which no objections are addressed. See Thomas v. Arn, 474 U.S. 140, 149 (1985); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). While the level of scrutiny under which I am required to review the F&R depends on whether or not objections have been filed, in either case, I am free to accept, reject, or modify any part of the F&R. 28 U.S.C. § 636(b)(1)(C).

A well-pleaded complaint requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A federal claimant is not required to detail all factual allegations; however, the complaint must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id. While the court must assume that all facts alleged in a complaint are true and view them in a light most favorable to the nonmoving party, it need not accept as true any legal conclusion set forth in the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Additionally, a plaintiff must set forth a plausible claim for relief - a possible claim for relief will not do. Id. "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. US. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S.Ct. at 1949).

DISCUSSION

Wells Fargo raises two objections to the F&R. First, Wells Fargo argues that the UTPA does not apply to Mr. Rubic's claim because the underlying loan was originated before the UTPA was amended to bring loans and extensions of credit within its purview. Second, Wells Fargo argues that the UTPA does not apply to Mr. Rubic's claim because a loan modification does not qualify as an extension of credit. Neither argument prevails.

I. Applicability of the UTPA to Mr. Rubic's Claim

The UTPA did not originally protect consumers from unlawful trade practices arising out of "loans and extensions of credit." See Lamm v. Amfac Mortgage Corp., 605 P.2d 730, 731 (Or. Ct. App. 1980). On March 23, 2010, Oregon amended the UTPA to include "loans and extensions of credit" within the definition of "real estate, goods or services." Or. Laws Spec. Sess. Ch. 94 (2010) (amending OR. REV. STAT. § 646.605) ("2010 Amendment"). However, because the 2010 Amendment created civil liability for acts not previously covered by the UTPA, and because the legislature gave no indication otherwise, the 2010 Amendment does not apply retroactively. See Wist v. Grand Lodge A.O.U.W., 29 P. 610, 612 (Or. 1892) (explaining that a statutory amendment that "creates a new obligation, or imposes a new duty... must be presumed, out of respect to the legislature, to be intended not to have a retroactive operation").

Wells Fargo argues that because Mr. Rubic's underlying loan was originated in 2009, the 2010 Amendment's expansion of the UTPA to cover "loans and extensions of credit" does not apply to Mr. Rubic's claim. Wells Fargo cites three cases to support its position that courts look to the date the loan at issue was originated-rather than the date the conduct relating to the loan occurred-to determine whether the 2010 Amendment applies. See Roisland v. Flagstar Bank, FSB, 989 F.Supp.2d 1095, 1108 (D. Or. 2013) (Mosman, J.) (holding that the Plaintiff could not support a claim under the UTPA because her claim "arises from the loan she received and deed of trust she granted in 2009"); Mikityuk v. Nw. Tr. Servs., Inc., 952 F.Supp.2d 958, 962 (D. Or. 2013) (dismissing the Plaintiffs' UTPA claims without prejudice because the claims arose from a loan the Plaintiff's obtained in 2003); Hernandez v. BAC Home Loan Servicing, LP, No. 3:12-CV-00106-MO, 2012 WL 1941745, *3 (D. Or. May 23, 2012) (Mosman, J.) (dismissing the Plaintiff's UTPA claim because it "stems from a credit arrangement occurring in 2006").

However, Wells Fargo misconstrues the test it draws from these cases when it limits its analysis to the date the " loan at issue" was originated. The 2010 Amendment expanded the UTPA's reach to cover both "loans and extensions of credit." Therefore, accepting the reasoning of the cited cases, the proper analysis for determining whether the 2010 Amendment applies looks to the date the loan or extension of credit at issue was originated. As the F&R correctly noted, Mr. Rubic's claim arises out of an extension of credit that originated after the 2010 Amendment.[2] Since the UTPA ...


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