Wells Fargo Bank, N.A. v. Fidelity Nat'l Title Ins. Co. ( 2021 )

NOT FOR PUBLICATION FILED
NOV 5 2021
UNITED STATES COURT OF APPEALS
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
WELLS FARGO BANK, N.A., as Trustee No. 19-17332
for Option One Mortgage Loan Trust 2007-5
Asset-Backed Certificates, Series 2007-5, D.C. No.
3:19-cv-00241-MMD-WGC
Plaintiff-Appellant,
v. MEMORANDUM*
FIDELITY NATIONAL TITLE
INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Nevada
Miranda M. Du, Chief District Judge, Presiding
Argued and Submitted October 20, 2021
San Francisco, California
Before: WALLACE and GOULD, Circuit Judges, and VITALIANO,** District
Judge.
Plaintiff-Appellant Wells Fargo Bank, N.A., (Wells Fargo) appeals from the
district court’s order granting Defendant-Appellee Fidelity National Title
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Eric N. Vitaliano, United States District Judge for the
Eastern District of New York, sitting by designation.
Insurance Company’s (Fidelity) motion to dismiss without leave to amend. We
have jurisdiction under 28 U.S.C. § 1291. We review a dismissal without leave to
amend de novo and a dismissal is appropriate only “when it is clear that the
complaint cannot be saved by further amendment.” Dumas v. Kipp, 90 F.3d 386,
389 (9th Cir. 1996) (citation omitted). For the following reasons, we vacate and
remand so that the district court may consider whether leave to amend is
appropriate in light of newly discovered evidence.
At the outset, we acknowledge that the district court did not expressly decide
the issue of leave to amend and dismissed several of Wells Fargo’s claims without
prejudice. But although Wells Fargo did not file a motion for leave to amend, it
did request leave to amend in its opposition brief to Fidelity’s motion to dismiss.
See Dist. Ct. Dkt. No. 7 at 23 (“If the Court is persuaded that Wells Fargo has not
pled the ‘who, what, when, how, and why’ to support its claim for violation of
NRS § 686A.310, Wells Fargo requests permission of this Court to seek leave to
amend its Complaint to include the necessary allegations”). To be sure, Wells
Fargo did not provide the district court with a proposed amended complaint or any
information about what it would add to its complaint. It was only on appeal, where
Wells Fargo indicated that had it been granted leave to amend its complaint it
would have added allegations pertaining to Fidelity’s endorsement manuals.
However, because the issue was expressly brought before the district court, “raised
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on appeal, and fully briefed by both parties, it is subject to review by this court.”
U.S. v. Corinthian Colls., 655 F.3d 984, 995 (9th Cir. 2011); see also Kimes v.
Stone, 84 F.3d 1121, 1126 (9th Cir. 1996) (holding that we may consider an issue
raised for the first time on appeal when it is purely a question of law and
consideration of the issue will not prejudice the opposing party).
In addition, we granted Wells Fargo’s motion to take judicial notice of an
order by the district court in HSBC Bank USA, N.A. v. Fid. Nat’l Title Grp., a
different but closely related case involving identical claims. See 2021 WL
1579896 (D. Nev. Apr. 22, 2021); Dkt. No. 86. In that order, the same district
court judge acknowledged the existence of certain Fidelity’s claims manuals as
newly discovered evidence that is potentially relevant to the underlying claims and
stated that if we “were to remand the case, the [district court] would grant the
motion for reconsideration to permit Plaintiff to amend its complaint.” HSBC,
2021 WL 1579896 at *4. We do not take this statement lightly, as the district court
judge is well aware that there are several cases against Fidelity involving the same
underlying claims before her and on appeal before our court. See e.g., Deutsche
Bank Nat’l Tr. Co. v. Fid. Nat’l Title Ins. Co., No. 20-15849; HSBC Bank USA,
N.A. v. Fid. Nat’l Title Ins. Co., No. 20-15387. By taking judicial notice, we
allowed Wells Fargo to introduce the district court’s HSBC order and Fidelity’s
claims manuals into the record of this case.
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Moreover, Fidelity’s claims manuals are clearly relevant to Wells Fargo’s
claims in this case. In a related case with identical claims against Fidelity, we
held that the Fidelity insurance claims manual is “probative of a variety of
insurance products Fidelity offered that provide title insurance for property located
within a homeowners’ association.” Deutsche Bank Nat’l Tr. Co. v. Fid. Nat’l
Title Ins. Co., No. 20-15849, 2021 WL 5002215, at *1 (9th Cir. Oct. 28, 2021).
Thus, the manual is clearly probative to the same claims that Wells Fargo raises
here. For instance, the manual could be read to support the amendment of Wells
Fargo’s statutory claim for unfair claims settlement practices and misrepresentation
under NRS § 686A.310. Similarly, since Nevada law permits courts to consider
the custom and practices of the trade even when construing a contract that is
unambiguous in its terms, see Galardi v. Naples Polaris, LLC, 301 P.3d 364, 367
(Nev. 2013), the manual might be relevant to the breach of contract claim as well.
Because we vacate and remand so that the district court may consider
Fidelity’s claims manual in deciding Wells Fargo’s request for leave to amend, we
need not decide the merits of whether the original complaint sufficiently pleaded
claims for relief.
VACATED AND REMANDED.
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