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Kakarala V Wells Fargo - Federal Court - Motion To Amend-Alter Judgment Per Rule 59e - FILED
Kakarala V Wells Fargo - Federal Court - Motion To Amend-Alter Judgment Per Rule 59e - FILED
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VINCE RABAGO, Esq. (Bar No. 015522) VINCE RABAGO LAW OFFICE 500 N. Tucson Blvd., Suite 100 Tucson, Arizona 85716 Telephone: (520) 955-9038 - Facsimile: (888) 371-4011 Email: [email protected] Attorney for Plaintiff IN THE UNITED STATES DISTRICT FOR THE DISTRICT OF ARIZONA ANNE MERCY KAKARALA, Plaintiff,
VS.
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Defendant.
PLAINTIFF'S MOTION TO ALTER/AMEND THE JUDGMENT PURSUANT TO FED. R. CIV. PROC. 59(e)
Plaintiff respectfully moves to amend/alter the Court's April 27, 2012 judgment pursuant to Fed. R. Civ. Proc. 59(e) for the following reasons: First, it would be a manifest injustice to Plaintiff, a foreign-born resident whose native language is not English, for this Court to resolve her allegations by relying on her limited English word choices in how this
18 allegation was written as a pro se plaintiff (i.e., the allegation that they "would work with 19 her"). Second, the Court should have remanded pendant state law claims for such claims to be 20 decided by the state court instead of ruling on the merits of such state law claims, and should 21
remanded state law claims back to state court, especially since Plaintiff opposed removal and
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filed a timely opposition which has not yet been decided. Finally, there is clear error regarding Claim Three, as this Court has not considered that the HUD rules and regulations
25 were incorporated into the Deed of Trust in the instant case, and thus provides a private cause 26 of action as a contractual (private law) matter. 27 28 1
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deceiving her into believing she was no longer in foreclosure. Plaintiff filed suit pro se against Defendant in September 2009, in state court, and the case was later removed on April 12, 2012 by Defendant. Plaintiff filed a timely opposition to removal on April 29, 2010,
8 which was never ruled upon. On April 14, 2011, Defendant Wells Fargo Bank filed a Motion 9 to Dismiss, which was granted on April 27, 2012. 10 11 12 13 14 15 16
speaker of English from statements made in prior pleadings while Plaintiff was acting pro se. Plaintiffs counsel only entered the litigation at the Motion to Dismiss stage, however the majority of the court record was developed by Plaintiff pro se. Plaintiff Kakarala is originally a citizen of India, and asserts that all parties were on notice that she was not a native
II.
17 correct clear error or prevent manifest injustice." Duckett v. United States, (2011 U.S. Dist. 18 LEXIS 3754 (W.D. Okla. Jan. 14, 2011). See also Servants of Paraclete v. Does, 204 F.3d 19
1005, 1012 (10th Cir. 2000); Phelps v. Hamilton, 122 F.3d 1309, 1324 (10th Cir. 1997). A
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Rule 59(e) motion "is appropriate where the court has misapprehended the facts, a party's position, or the controlling law. It is not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing." Duckett.
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ARGUMENT
Here, the Court has misapprehended the facts as they affect the controlling law. This
Court's ruling also does not account for Plaintiffs legal rights arising from contractual rights.
First, the heightened notice pleading requirements for fraud propounded by Twombly
2 & lqbali do not apply to pro se litigants. Hebbe v. Plyler, 627 F.3d 338, 341-342 (9th Cir. 3 2010). Plaintiff here was not only acting pro se for most of the litigation, but also is a speaker 4
of English as a second language, therefore the Court should have looked beyond the poorly
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informed choice of words used to describe Plaintiffs complaints, and looked to the underlying actions of Defendants, which adequately described claims for fraud and negligent
8 misrepresentation. In the documents presented in Defendant's Notice of Removal, Plaintiffs 9 original complaint drafted as a pro se Plaintiff explained that after Defendant's 10 representatives promised that they would not foreclose, Plaintiff then went to India. 11 12 13 14 15 16
Court was unaware of it, Plaintiff presents an affidavit confirming her language and cultural disadvantage for the Court's consideration, in order to effect justice. Exhibit A. Additionally, this Court erred in finding that Plaintiffs reliance on the verbal Meanwhile, after the misrepresentations, Defendant then foreclosed while Plaintiff was away and out of the country visiting her country of origin. (Dckt No. 1-1 at p. 22.) In the event this
17 assurances unjustifiable, given the language in various letters from Wells Fargo which initially 18 claimed that it would not delay any foreclosure. Finally, the court's conclusion there was no 19
written contract of a loan modification (and thus the bank's promises are barred by the statute
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of frauds) erroneously undervalues the fraud allegations had the initial misrepresentations not occurred, Plaintiff would have taken other actions to prevent the foreclosure, including bankruptcy. Under the circumstances, Plaintiff reasonably relied on Defendant Wells Fargo's oral
25 representations, and generally speaking, such reasonableness (justifiable reliance) is a jury 26 question under Arizona law. 27 28
'Bell Atlantic Corp. V Twombly, 50 U. S 544 (2007); Ashcroft v. lqbal, 556 U.S. 662 (2009).
591, 739 P. 2d 806 (Ariz. Supreme Court 1987) (exhibits supported inference of
2 reasonableness, and "trial court correctly determined that this was a question for the jury"). 3 Here, it is undisputed that Plaintiff actually paid money Wells Fargo in response to their oral 4
representations that they would not foreclose, bolstered by the written letters which
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cumulatively suggested that she had to act in order to keep her home. To have actually paid money under these circumstances is circumstantial evidence that her reliance was
8 reasonable/justifiable. If a foreclosure was certain, there would be no reason to pay any more 9 money if Wells Fargo indicated they were taking the home no matter what. 10
Under Arizona law, the evidence here did not indisputably show unjustifiable reliance
Dawson v. Withycombe, 163 P. 3d 1034, 1047-49
(Ariz. App. 2007). This is especially true given the fact that federal HUD regulations
precluded Wells Fargo from foreclosing under the circumstances without having a face to face
15 meeting first at least least 30 days before the commencement of foreclosure proceedings, 16 along with other requirements precluding foreclosure under the circumstances. 17
24 C.F.R. 203.606(a) requires that "[b]efore initiating foreclosure, the mortgagee
18 must ensure that all servicing requirements of this subpart have been met." (Emphasis added.) 19 20 21 22
Responsibilities." The first section in Subpart C is 24 C.F.R. 203.500, which further states that "[i]t is the intent of the Department that no mortgagee shall commence foreclosure or
23 acquire title to a property until the requirements of this subpart have been followed." 24 (Emphasis added.) In addition, the Regulation itself provides that "Nile mortgagee must have 25 a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a 26
meeting, before three full monthly installments due on the mortgage are unpaid." 24 C.F.R.
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203.604(b) (emphasis added).4 The Regulation is codified in Subpart C and therefore is a
servicing requirement that Wells Fargo had to meet "[b]efore initiating foreclosure." 24 C.F.R. 203.606(a) (emphasis added). When federal regulations require our lenders to comport with federal guidelines (and they have not, thus making that foreclosure attempt improper per the guidelines), and a borrower simultaneously believes the bank's representatives' verbal misrepresentations that the foreclosure will not proceed and the borrower makes various payments in accordance such reliance is patently reasonable despite any contradictory language in letters disavowing any delay. To allow banks to have a verbal system that tells borrowers one thing, while saying other things in writing, merely allows banks to insulate themselves while defrauding homeowners. Second, if all federal claims are eliminated from an action, federal courts have discretion to remand the remaining state law claims. Harrell v. 20th Century Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991) ("It is generally within a district court's discretion to retain jurisdiction to adjudicate the pendent state claims or remand them to state court."). In choosing whether to retain jurisdiction, the court should consider "the values of judicial economy, convenience, fairness, and comity." Carnegie-Melon, 484 U.S. [343] at 350. Based upon these factors, "it is generally preferable for a district court to remand remaining pendent claims to state court." Harrell, 934 F.2d at 205; see also Carnegie-Melon 484 U.S. at 350 n.7 ("these factors usually will favor a decision to relinquish jurisdiction when state issues substantially predominate") (internal quotation marks and citation omitted). Moats v. City of Bakersfield (E.D. Cal., 2012). Here, this Court retained jurisdiction and decided Plaintiffs state law claims on the merits, dismissing them along with the federal law claims. However, for the purposes of convenience, fairness and comity, the state law claims should have been remanded to state court rather than dismissed on the merits. This is critical for a previously pro se plaintiff, who actually filed a timely opposition to removal, which was fought against by the Defendant, and
where this Court to this day erroneously never ruled on Plaintiffs timely April 29, 2010,
2 Opposition to removal and request for remand to state court. Dckt. No. 8 and Dckt. No. 9. 3 4 5 6 7
Defendant Bank could accelerate "except as limited by regulations issued by the [HUD] Secretary" and Paragraph 9(c) of the Deed of Trust further states that "In many circumstances Third, the Deed of Trust in this case acknowledges that the lender's ability to foreclose may be limited by HUD regulations. Dckt. 40-2, at pp. 5-6. Paragraph 9(a) provides that the
8 regulations issued by the Secretary will limit Lender's rights, in the case of payment defaults, 9 to require payment in full and foreclose if not paid. This security instrument does not 10 authorize acceleration or foreclosure if not permitted by regulations of the Secretary." 11 12 13 14
(S.D. Tex., 2011), under similar circumstances, the court considered the same argument made Therefore the terms in the Deed as a contract provide a private right of action via the right of private individuals to agree to the terms of a contract. In Motten v. Chase Home Fin.,
15 by Defendants here, that HUD regulations do not provide a private right of action. However, 16 the Motten court noted, 17 18 19 20 21 22 Id at 27. 23 24
Here, such specific HUD regulations (noted earlier) were included as part of the Deed An exception has been recognized where the HUD regulations are incorporated into a contract between mortgagee and the government so that it permits a basis for a breach of contract claim). Baker, 2009 WL 1810336 at 5 (A "failure to comply with regulations made part of the parties' agreement may give rise to liability on a contract theory because the parties incorporated the terms into their contract. Indeed, courts have recognized that claims for failure to comply with HUD regulations . . . are best classified as a breach of contract."), citing Buis v. Wells Fargo Bank, N.A., 401 F. Supp. 2d 612, 616 (N.D. Tex. 2005).
25 of Trust (paragraph 9(c) of the Deed of Trust marked Defendant's Exhibit 2, Doc. 40-2, p. 6) 26 27
therefore Wells Fargo and the Deed of Trust intentionally provided a private cause of action for Plaintiff, contrary to this Court's Order dismissing for failure to state a claim. Even if there
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is not a direct right to enforce federal regulations under a private right of action, there is a direct contractual right to enforce such terms here.
III. CONCLUSION For the foregoing reasons, Plaintiff requests this Court amend its judgment in accordance with the arguments set forth above. If the Court intends to stand by its order with respect to dismissing the federal claims, Plaintiff respectfully urges the Court to withdraw its rulings on the State court claims, and remand the State claims for proceedings in state court. DATED this 25' day of May, 2012. VINCE RABAGO LAW OFFICE PLC
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CERTIFICATE OF SERVICE
I hereby certify that on May 25', 2012, I electronically transmitted the foregoing
3 document to the Clerk's office using the ECF system for transmittal and filing of Notice of 4
Electronic Filing to the following ECF registrants:
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Gregory Marshall, Esq. 7 Melissa Marcus, Esq. 8 Snell and Wilmer
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EXHIBIT A IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
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VS.
AFFIDAVIT
Defendant.
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I, ANNE M. KAKARALA being first duly sworn upon oath, deposes and says that 1. My name is Anne M. Kakarala. 2. I am originally from India.
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3. I am not a native English speaker. 4. Upon Wells Fargo misrepresenting to me that they would not foreclose if I made certain payments and applied for a loan modification, I relied on them and made the payments, sent them documents multiple time as requested, and thereafter traveled to
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India, but the bank foreclosed in my absence despite their representations. Yv2_ Yk. ANNE M. KAKARALA SUBSCRIBED AND SWORN to before me by AP M May, 2012.
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CHARLENE M. LOPEZ
NOTARY PUBLIC - ARIZONA PIMA COUNTY
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