GALANG v. WELLS FARGO BANK (2020)

MEMORANDUM **

Plaintiffs-Appellants, Josefino and Elizabeth Galang, appeal from the district court's order of dismissal. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

The district court held that Plaintiffs-Appellants failed to state a claim under Federal Rule of Civil Procedure 12(b)(6) and that a federal statute, the Home Owners Loan Act, preempted their state-law claims. Plaintiffs-Appellants appealed. The district court did not reach Defendants-Appellees’ alternative argument, preserved on appeal, that Plaintiffs-Appellants’ action constituted an impermissible preemptive pre-foreclosure challenge under California law.

While the case was pending on appeal, this Court issued a published opinion in Perez v. Mortgage Electronic Registration Systems, Inc.¹ In the absence of guidance from California's highest court, Perez follows intermediate California courts in holding that California law prohibits “pre-foreclosure judicial actions that preemptively challenge the banks’ authority to foreclose on their properties in the future.”²

Perez controls here. Plaintiffs-Appellants challenge the authority of the Defendants-Appellees to foreclose on their property based on their theory that Wells Fargo's predecessor securitized their loan and sold it to the WSR 20 Trust. Because California law prohibits such preemptive challenges, we affirm the district court's dismissal.

Plaintiffs-Appellants’ claims cannot be remedied by amendment because any amendment would “not change the fact that Appellants filed their suit preemptively.”³ We therefore also affirm the district court's dismissal of Plaintiffs-Appellants’ complaint without leave to amend.

AFFIRMED.

FOOTNOTES

1.   Perez v. Mortgage Electronic Registration Systems, Inc., No. 18-17230, 959 F.3d 334 (May 11, 2020).

2.   Perez, 959 F.3d at 340 (May 11, 2020).

3.   Id.