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Case 4:10-cv-00208-FRZ Document 51 Filed 06/11/12 Page 1 of 8

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Gregory J. Marshall (#019886) Melissa A. Marcus (#025209) SNELL & WILMER L.L.P. One South Church Avenue Suite 1500 Tucson, Arizona 85701-1630 Telephone: (520) 882-1200 Facsimile: (520) 882-1294 gmarshall@swlaw.com mmarcus@swlaw.com Attorneys for Defendant Wells Fargo Bank, N.A. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA ANNE MERCY KAKARALA, No. CV 10-208-TUC-FRZ WELLS FARGO BANK, N.A.S RESPONSE TO PLAINTIFFS MOTION TO ALTER/AMEND JUDGMENT PURSUANT TO FED. R. CIV. PROC. 59(e)

10 Plaintiff, 11 v.
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

12 WELLS FARGO BANK, N.A., 13 Defendant. 14 15 16 17 18 19 20 I.

Snell & Wilmer L.L.P.

Wells Fargo Bank, N.A. (Wells Fargo) responds to Plaintiffs Motion to Alter/Amend Judgment Pursuant to Fed. R. Civ. Proc. 59(e) Wells Fargos Response is supported by the following Memorandum of Points and Authorities. MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION Wells Fargo removed the case to this Court on April 12, 2010. See Dkt. 1. In her

21 original complaint, Plaintiff asserted a single claim against Wells Fargo under A.R.S. 3322 808 and 809, alleging that she did not receive notice of the Trustees Sale. After filing her 23 original complaint, Plaintiff filed four (4) successive motions to amend, each alleging more 24 claims than the last. In her final amendment, Plaintiff brought seventeen (17) claims against 25 Wells Fargo. Wells Fargo moved to dismiss those claims pursuant to Fed. R. Civ. P. 8(a), 26 9(b), and 12(b)(6) for failure to state claims on which relief could be granted. Dkt. 40. On 27 April 27, 2012, the Court granted Wells Fargos Motion to Dismiss and entered judgment in 28 favor of Wells Fargo. Dkt. 47, 48.

Case 4:10-cv-00208-FRZ Document 51 Filed 06/11/12 Page 2 of 8

Among other things, the Courts Order explained in detail the reasons that Plaintiff

2 failed to state fraud and HUD claims. With respect to Plaintiffs fraud claim, the Court 3 explained that Plaintiff failed to allege any false statement, much less justifiable reliance. In 4 coming to its decision, the Court primarily relied on correspondence produced by Plaintiff, 5 as opposed to the allegations raised in her pleading. The Court explained its decision as 6 follows: 7 8 9 10 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

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Snell & Wilmer L.L.P.

Nowhere does the complaint allege that Defendant promised to permanently modify the loan and cease foreclosure action throughout the loan modification process. Nor is any such representation made in the correspondence attached to Plaintiffs response. The letter dated March 23, 2009, informed Plaintiff that she was being considered for a loan modification and that foreclosure activity would be suspended for 30 days [i]f you qualify[.] Plaintiff herself admits that Defendants stated only that she might be eligible for a loan modification. Moreover, a subsequent letter sent only two weeks later explicitly warned Plaintiff that Defendant will not delay foreclosure action on your home. While the property ultimately was foreclosed upon, any promise on the part of Defendant to work with Plaintiff to avoid foreclosure cannot reasonably be construed as a false representation given the extensive correspondence between the parties concerning a possible loan modification and the multiple warnings that foreclosure action would not be delayed while the parties attempted to work out a modification. *** Given the absence of an affirmative promise not to foreclose, and the explicit warnings that foreclosure action would not be delayed, Plaintiffs belief that there was no foreclosure active was not justified. *** To the extent Plaintiff claims that she was fraudulently induced to make mortgage payments during the loan modification process, the money [she] paid was already owed to Defendant. Dkt. 47 (citations omitted). With respect to Plaintiffs HUD claim, the Court held that the regulations promulgated under the National Housing Act do not provide a claim to the mortgagor for duties owed or for the mortgagees failure to follow the regulations. Dkt. 47. As the
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Court explained, the HUD regulations govern relations between the mortgagee and the government. Dkt. 47. On May 25, 2012, Plaintiff filed a Motion to alter/amend the judgment in favor of

4 Wells Fargo pursuant to Fed. R. Civ. P. 59(e). In it, Plaintiff once again seeks pardon for 5 her pleading failures because of her pro se status, although she has been represented by 6 counsel for more than a year. See Dkt. 42. She also complains that the Court did not 7 exercise its discretion to remand Plaintiffs state law claims to the Superior Court, although 8 she does not contend it was an abuse of discretion for the Court to retain jurisdiction over 9 those claims. Finally, Plaintiff complains that the Court should ignore well settled law and 10 provide Plaintiff with a private right of action to enforce the HUD regulations. 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Plaintiffs Motion is nothing more than an improper and untimely Motion for

12 Reconsideration, in which Plaintiff asks this Court to rethink what the court had already 13 thought through, rightly or wrongly. Above the Belt, Inc. v. Mel Bohannon Roofing, Inc., 14 99 F.R.D. 99, 101 (E.D.Va. 1983)).1 For the reasons explained below, the Court should 15 deny Plaintiffs Motion. 16 17 18 19 20 21 22 23 24 25 26 27 28 II. ARGUMENT A. PLAINTIFFS MOTION DOES NOT MEET THE STANDARD FOR FED. R. CIV. P. 59 RELIEF.

Snell & Wilmer L.L.P.

Motions to alter or amend a judgment are appropriate only in rare circumstances to correct manifest errors of law or fact or to present newly discovered evidence. Laya v. Pima County, 2009 U.S. Dist. LEXIS 70904, at **2-4 (D. Ariz. Aug. 11, 2009). A motion to amend a judgment based on arguments that could have been raised, but were not raised, before judgment was entered may not properly be granted. See id., citing 11 Wright, Miller & Kane, Federal Practice and Procedure: Civil 2nd 2810.1 at 127-28. Similarly, the motion should not be used to ask a court to rethink what the court had already thought through rightly or wrongly. Id. Rather, arguments that a court was in error on the issues it considered should be directed to the court of appeals. See id. 1 Any motion for reconsideration shall be filed no later than fourteen (14) days after the date of the filing of the Order that is the subject of the motion. See LR Civ 7.2(g).
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Here, Plaintiff offers three bases for reconsideration: (1) the previously briefed argument that Plaintiffs pleading failures should be forgiven because of her supposed pro se status even though she has been represented by counsel for more than a year; (2) the assertion that the Court should have remanded Plaintiffs state law claims to the Superior Court although Plaintiff does not argue that the Court abused its discretion, or that remand would not have resulted in the dismissal of her claims any way; and (3) the renewed argument that the Court should give Plaintiff a private right of action to enforce the HUD regulations although the jurisprudence in the Arizona District Court and elsewhere soundly rejects such claims. None of these arguments are based new facts or changes in the law, and two of the arguments appeared in Plaintiffs Response to Wells Fargos Motion to Dismiss. Accordingly, none are proper grounds for a motion to alter/amend the Courts Judgment. B. THE COURT DID NOT COMMIT MANIFEST ERROR IN DISMISSING PLAINTIFFS FRAUD CLAIM.

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Snell & Wilmer L.L.P.

In her Motion, Plaintiff argues that the Court applied the wrong pleading standard to her fraud claim, and that it was error for the Court to dismiss that claim. Specifically, Plaintiff relies on Hebbe v. Pyler, 627 F.3d 338, 341-42 (9th Cir. 2010) for the proposition that Fed. R. Civ. P. 9(b)s heightened notice pleading requirements for fraud do not apply to pro se litigants, but Plaintiffs reliance on Hebbe is misplaced. As a threshold matter, Hebbe did not involve a fraud claim, and Hebbe did not address the heightened pleading requirements of Fed. R. Civ. P. 9. Instead, the Hebbe court noted that pro se complaints may be liberally construed, but liberal construction does not relieve pro se litigants from their obligation to comply with Fed. R. Civ. P. 9(b). In fact, those cases that have addressed a pro se litigants pleading requirements under Rule 9(b) have consistently held that the heightened pleading standard applies equally to pro se plaintiffs. See Kelley v. Rambus, Inc., 384 Fed. Appx. 570, 573 (9th Cir. 2010); Reddy v. Nuance Communs., Inc., 2012 U.S. Dist. LEXIS 28101 (N.D. Cal. Mar. 2, 2012) (the heightened pleading standard set forth in Rule 9(b) applies equally to pro se plaintiffs).
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Even if pro se litigants were somehow excused from complying with Fed. R. Civ. P. 9(b) and they are not Plaintiff is not entitled to circumvent the rules pleading requirements in this case because she has been represented by counsel for more than a year. See Dkt. 42. And even with the assistance of legal counsel, Plaintiff remains unable to identify any false statement or detrimental reliance that could support fraud. Although Plaintiff complains that her pleadings were drafted prior to retaining counsel and the Court should have looked beyond the poorly informed choice of words used to describe Plaintiffs complaints, see Dkt. 50, at 3, the Court explained that its decision was not based on Plaintiffs choice of words, but rather, on the documents Plaintiff attached to her pleadings: Nowhere does the complaint allege that Defendant promised to permanently modify the loan and cease foreclosure action throughout the loan modification process. Nor is any such representation made in the correspondence attached to Plaintiffs response. The letter dated March 23, 2009, informed Plaintiff that she was being considered for a loan modification and that foreclosure activity would be suspended for 30 days [i]f you qualify[.] Plaintiff herself admits that Defendants stated only that she might be eligible for a loan modification. Moreover, a subsequent letter sent only two weeks later explicitly warned Plaintiff that Defendant will not delay foreclosure action on your home. While the property ultimately was foreclosed upon, any promise on the part of Defendant to work with Plaintiff to avoid foreclosure cannot reasonably be construed as a false representation given the extensive correspondence between the parties concerning a possible loan modification and the multiple warnings that foreclosure action would not be delayed while the parties attempted to work out a modification. Dkt. 47 (citations omitted).

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Snell & Wilmer L.L.P.

For all of these reasons, the Court should deny Plaintiffs Motion to Alter/Amend 24 the Judgment. 25 26 27 28 /// /// ///
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

C.

THE COURT DID NOT COMMIT MANIFEST ERROR IN EXERCISING SUPPLEMENTAL JURISDICTION OVER PLAINTIFFS STATE LAW CLAIMS

Plaintiff also complains that the Court erred by exercising jurisdiction over Plaintiffs state law claims. But Plaintiff has not argued, nor can she, that this Court abused its discretion in exercising that discretion, nor that remand would not have resulted in the dismissal of her claims anyway. Following removal, district courts have discretion to exercise jurisdiction over supplemental state law claims. Acri v. Varian Assocs., Inc., 114 F.3d 999, 1000 (9th Cir. 1997) ([A] federal district court with power to hear state law claims has discretion to keep, or decline to keep, them under the conditions set out in 1367(c).); Kane v. Bosco, 2010 U.S. Dist. LEXIS 128746 (D. Ariz. Nov. 23, 2010) (same). To the extent Plaintiffs argument is based on the recent amendments to the removal statutes, her reliance on those amendments is misplaced. Although the recent amendments to the removal statutes require district courts to remand state law claims under certain circumstances, see 28 U.S.C. 1441(c)(2), those amendments apply only to lawsuits commenced after January 6, 2012, and so have no application here. See 112 P.L. 63, 105. D. THE COURT DID NOT COMMIT MANIFEST ERROR IN DISMISSING PLAINTIFFS HUD CLAIM.

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Snell & Wilmer L.L.P.

Plaintiff exhausts several pages of her Motion re-hashing the requirements of HUD, but regardless of what HUD requires, the jurisprudence in the Arizona District Court and others is that HUD regulations are not imported into the deed of trust to create a private right of action for borrowers. McHatten v. Chase Home Fin. LLC, 2010 U.S. Dist. LEXIS 104281 (D. Ariz. Sept. 29, 2010) (HUD regulations promulgated under the National Housing Act do not provide a claim to the mortgagor for duty owed or for the mortgagees failure to follow the regulations.); Roberts v. Cameron-Brown Co., 556 F.2d 356, 360-61 (5th Cir. 1977) (the National Housing Act and the regulations promulgated hereunder deal only with the relations between the mortgagee and the government, and
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

give the mortgagor no claim to duty owed nor remedy for failure to follow); see also, Fantroy v. Countrywide Home Loans, Inc., 2007 U.S. Dist. LEXIS 53707 (N.D. Tex. 2007). The HUD regulations are between lenders and the HUD. Moreover, although Plaintiff complains that she did not receive a face-to-face meeting per HUD, she has not identified any damages associated with any alleged failure to hold the face-to-face meeting Plaintiff argues was required. Nor can she, because the law does not require Wells Fargo to forgive Plaintiffs indebtedness or modify the terms of her loan. For this reason too, the Court should deny Plaintiffs Motion to Alter/Amend the Judgment. III. CONCLUSION For the foregoing reasons, the Court should deny Plaintiffs Motion to Alter/Amend Judgment. RESPECTFULLY SUBMITTED this 11th day of June, 2012.

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Snell & Wilmer L.L.P.

SNELL & WILMER L.L.P. By: /s/ Melissa A. Marcus Gregory J. Marshall Melissa A. Marcus Snell & Wilmer L.L.P. One South Church Avenue Suite 1500 Tucson, Arizona 85701-1630 Attorneys for Defendant Wells Fargo Bank, N.A.

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

CERTIFICATE OF SERVICE I hereby certify that on June 11th, 2012, I electronically transmitted the foregoing document to the Clerks Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Vince Rabago, Esq. Vince Rabago Law Office 500 N. Tucson, Blvd. Suite 100 Tucson, Arizona 85716 Attorneys for Plaintiff Anne Mercy Kakarala s/Rosemary Farley
13212156

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Snell & Wilmer L.L.P.