Antitrust Law Daily Wrap Up, ANTITRUST—C.D. Cal.: Wells Fargo avoids homeowner’s claims over failed loan modification and foreclosure, (Apr 1, 2015)

By Linda O’Brien, J.D., LL.M.

A homeowner failed to allege sufficient facts to pursue antitrust and unfair business practices claims against a mortgage lender and property manager for mishandling her mortgage loan modification application and colluding to rig the bidding in the foreclosure sale of her property, the federal district court in Los Angeles has decided (Munguia v. Wells Fargo Bank N.A., March 30, 2015, Snyder, C.).

In July 2014, Leticia Munguia obtained a home mortgage loan from Wells Fargo, which was secured by a promissory note and deed of trust. In January 2014, Munguia contacted Wells Fargo to discuss the possibility of obtaining a loan modification. She was informed by a Wells Fargo representative that, in order to qualify for a loan modification, she was required to be in default of her original loan for three months. Munguia followed the instructions and allowed her payments to fall behind three months.

Munguia submitted a loan modification application and, after learning that her property was scheduled to be sold at a trustee’s sale, was told by Wells Fargo that her application was under review and the sale would be postponed. After resubmitting requested information to Wells Fargo on multiple occasions and being reassured that her application was under review, Munguia learned that her property was sold in September 2014. Subsequently, Munguia filed suit against Wells Fargo and property management company, APB Properties, alleging claims under the Sherman Act and California’s Cartwright Act and Unfair Competition Law (UCL). Wells Fargo and APB moved to dismiss the complaint.

Sherman Act. The court determined that Munguia failed to state an antitrust claim against either Wells Fargo or APB. Munguia asserted that the defendants colluded through bid rigging to deprive her of her property. According to the court, the plaintiff failed to set forth any factual allegations about the content and circumstances of any actual agreement. Moreover, Munguia did not allege that she was a consumer or competitor in the relevant market — the market for the sale of the property — or how the alleged conspiracy harmed competition.

Unfair Competition Law. The UCL prohibits any unlawful, unfair, or fraudulent business act or practice. Munguia alleged that the defendants violated the UCL in connection with processing loan modifications and foreclosures. In dismissing the plaintiff’s UCL claim, the court noted that the plaintiff failed to set forth a separate claim for relief under the UCL.

The case is No. 2:15-cv-00582-CAS.

Attorneys: Leticia Munguia, pro se. Jarlath M. Curran, II (Severson and Werson APC) for Wells Fargo Bank NA. Sam M. Muriella (Kuzyk Law LLP) for APB Properties LLC.

Companies: Wells Fargo Bank NA; APB Properties LLC

Cases: Antitrust StateUnfairTradePractices CaliforniaNews