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Peters v. Wells Fargo Bank, N.A.

United States District Court, S.D. Texas

January 12, 2018

WELLS FARGO BANK, N.A., Defendant.



         Before the Court is Defendant Wells Fargo Bank's Motion to Transfer Venue. ECF No. 22. For the reasons below, the Court grants the motion.

         I. BACKGROUND

         This action concerns Wells Fargo's practice of collecting post-payment interest on loans insured by the Federal Housing Administration (“FHA”). ECF No. 17 (“Compl.”) ¶ 1. Post-payment interest is interest that a lender collects after the borrower has paid the full unpaid principal of the loan. Id. ¶ 2. Plaintiff, Michael Peters, alleges that the U.S. Department of Housing and Urban Development's (“HUD”) regulations “prohibit lenders from collecting post-payment interest unless two strict conditions are met: (a) the borrower makes payment of the full unpaid principal on a day other than the first of the month” and (b) the lender must provide the borrower with “a form approved by the FHA.” Id. ¶ 4 (quoting 24 C.F.R. § 203.558(c)). According to Peters, Wells Fargo does not use an approved form, and instead uses its own unauthorized form which “does not fairly disclose the terms under which Wells Fargo can collect post-payment interest or properly explain how borrowers can avoid such charges.” Id. ¶ 6.

         Peters owns a home in Montgomery, Texas. Id. ¶ 53. In early 2017, Wells Fargo held a loan secured by Peter's home. Id. In February 2017, Peters' refinanced his home. Id. ¶ 55. Peters alleges that he requested a payoff statement from Wells Fargo so he could pay off his loan and that he was not provided with an HUD-approved form. Id. ¶¶ 55, 61. Peters then paid interest for the entire month of February 2017, even though he had paid the full unpaid principal by February 21, 2017. Id. ¶ 60.

         Peters now brings a putative class action seeking relief under the California Unfair Competition Law (UCL) and the Texas Debt Collection Act (TDCA). See ECF No. 17 at 18-19. Peters proposes a nationwide class consisting of “[a]ny person in the United States other than in California who had a FHA-insured loan for which (i) the Date of the Note is during a period beginning on June 1, 1996 and ending on January 20, 2015; (ii) as of the date the total amount due on the loan was brought to zero, Wells Fargo was the Lender, Mortgagee, or otherwise held legal title to the Note; and (iii) Wells Fargo collected interest for any period after the total amount due on the loan was brought to zero.” Compl. ¶ 71. He also proposes a Texas subclass consisting of “[a]ny person who had a FHA-insured loan secured by a mortgage on real property located in Texas” who meets the same conditions as the nationwide class. Id.

         Wells Fargo brought the instant action to transfer venue to the Southern District of Texas, where Peters and his property are located. ECF No. 22 at 7.


         “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district where it might have been brought.” 28 U.S.C. § 1404(a). The purpose of section 1404(a) is to “prevent the waste of time, energy, and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (internal citation and quotation marks omitted). A motion for transfer lies within the broad discretion of the district court, and must be determined on an individualized basis. See Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (“Under § 1404(a), the district court has discretion ‘to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness.'” (quoting Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29 (1988))).

         As the moving party, Defendant bears the burden of showing that transfer is warranted. Id. at 499. The statute defines three factors that courts must consider: the convenience of the parties, the convenience of the witnesses, and the interests of justice. 28 U.S.C. § 1404(a). The Ninth Circuit requires that courts consider a variety of factors in determining whether to transfer an action. See Jones, 211 F.3d at 498; Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). The relevant factors are: (1) plaintiff's choice of forum, (2) convenience of the parties, (3) convenience of the witnesses, (4) ease of access to the evidence, (5) familiarity of each forum with the applicable law, (6) feasibility of consolidation of other claims, (7) any local interest in the controversy, and (8) the relative court congestion and time of trial in each forum. Barnes & Noble v. LSI Corp., 823 F.Supp.2d 980, 993 (N.D. Cal. 2011).


         A. Venue in the Target District

         Transfer is only appropriate if the action could have been brought in the Southern District of Texas. 28 U.S.C. § 1404(a). “A district court is one in which an action could have been brought originally if (1) it has subject matter jurisdiction; (2) defendants would have been subject to personal jurisdiction; and (3) venue would have been proper.” Duffy v. Facebook, Inc., No. 16-CV-06764-JSC, 2017 WL 1739109, at *3 (N.D. Cal. May 4, 2017) (citing Hoffman, 363 U.S. 333, 343-44 (1960).

         The Southern District of Texas satisfies these requirements. First, it has subject-matter jurisdiction under the Class Action Fairness Act. See 28 U.S.C. § 1332(d). Second, Defendant would have been subject to personal jurisdiction there. As Wells Fargo states, “there is no dispute that Wells Fargo maintains branches throughout the State of Texas” and Peters “specifically alleges that he received payoff disclosure statements that purportedly were not compliant at his home in Montgomery, Texas.” ECF No. 22 at 16. Finally, venue is proper in the ...

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