Garcia v. Wachovia Mortg. Corp.

• Decision Date: 14 October 2009
• Docket Number: Case No. 2:09-cv-03925-FMC-FMOx.
• Citation: 676 F. Supp.2d 895
• Parties: Lillian GARCIA, v. WACHOVIA MORTGAGE CORPORATION a North Carolina corporation; Golden West Savings Association Service, Co., a California Corporation; and Does 1 through 10, inclusive, Defendant.
• Court: U.S. District Court — Central District of California

676 F.Supp.2d 895

Lillian GARCIA, v.WACHOVIA MORTGAGE CORPORATION a North Carolina corporation; Golden West Savings Association Service, Co., a California Corporation; and Does 1 through 10, inclusive, Defendant.

Case No. 2:09-cv-03925-FMC-FMOx.

United States District Court, C.D. California.

October 14, 2009.

Carlo O. Reyes, Law Offices of Carlo O. Reyes, Canoga Park, CA, for Lillian Garcia.

Christopher Alan Carr, Robert A. Bailey, Anglin Flewelling Rasmussen Campbell and Trytten, Pasadena, CA, for Defendant.

ORDER GRANTING WACHOVIA MORTGAGE, FSB'S MOTION TO DISMISS FIRST AMENDED COPLAINT, AND DENYING AS MOOT WACHOVIA MORTGAGE, FSB'S MOTION TO DISMISS COPLAINT

FLORENCE-MARIE COOPER, District Judge.

The matter is before the Court on Wachovia Mortgage, FSB's ("Wachovia" or "Defendant")Motion to Dismiss(docket no. 12), filed on July 21, 2009, and on Wachovia's Motion to Dismiss(docket no. 24), filed on September 14, 2009.The Court has read and considered the moving and opposing documents (there has to date been no reply) submitted in connection with this motion.The Court deems the matter appropriate for decision without oral argument.SeeFED. R. CIV. P. 78;Central District of California, Local Rule 7-15.The hearing scheduled for October 26, 2009 is removed from the Court's calendar.For the reasons and in the manner set forth below Defendant's Motion to Dismiss(docket no. 24) is GRANTED and Defendant's Motion to Dismiss(docket no. 12) is DENIED AS MOOT.

I.FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff is the owner of a principal dwelling known as 533 Redfield Avenue, Los Angeles, CA 90042 (the "Property"), has resided therein at all relevant times, and still does reside therein.(SeeFAC, ¶ 5.)At some point prior to February 21, 2008, Plaintiff was contacted by "Defendants regarding the refinancing of her mortgage loan."(SeeFAC, ¶ 14-15.)

On or about February 21, 2008Plaintiff entered into the relevant mortgage transaction, (SeeFAC, ¶ 14.) and executed a Deed of Trust, and an Adjustable Rate Note (seeFAC, ¶ 18, Exs. 2-3.)The Adjustable Rate Note is in the amount of $440,000.00 with an initial interest rate of 7.740%, and a maximum of 11.950%, and the amount "secured by the Deed of Trust is $550,000.00."(SeeFAC, ¶ 19, Exs. 2-3.)"Defendant Wachovia was the originating Lender."(SeeFAC, ¶ 6.)

A demand letter was sent on March 12, 2009 requesting rescission and offering to tender.(SeeFAC, ¶ 37, Exs. 7-8.)A letter titled "RESPA Qualified Written Request; TILA Request; Notice of Rescission" was sent to Wachovia on March 9, 2009.(SeeFAC, ¶ 1, Exs. 9.)

On June 2, 2009Plaintiff filed suit against Defendants, alleging claims for relief for: (1) rescission under the Truth in Lending Act, 15 U.S.C. § 1601 et seq.("TILA") and 12 CFR part 226 et seq.("Regulation Z");(2) damages and other apparent forms of relief under TILA and Regulation Z; (3) violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.("FDCPA");(4) violation of California's so-called "Unfair Competition Law,"California Business and Professions Code § 17200 et seq.; and (5) quiet title.Plaintiff demanded a jury trial.

On July 21, 2009, Defendant Wachovia filed a Motion to Dismiss this Complaint(docket no. 12), noticed for hearing on September 14, 2009.On August 25, 2009the Court continued the hearing date to October 5, 2009, after Plaintiff failed to file timely opposition.On August 31, 2009, Plaintiff filed an Opposition to the Motion to Dismiss(docket no. 19), yet also filed a "First Verified Amended Complaint for Damages and Declaratory Relief,"(the "FAC") with multiple exhibits attached (docket no. 23).The FAC purported to be verified, but contained no verification.The FAC asserted the same five claims as the Complaint did, and added a new claim under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq.("RESPA").On September 1, 2009the Court allowed the First Amended Complaint to be filed.

On September 14, 2009 Wachovia filed a Motion to Dismiss the First Amended Complaint(docket no. 24),¹ which Plaintiff opposed on October 5, 2009(docket nos. 27-28), including at that time a verification as an exhibit to the opposition.

II.LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a defendant to seek dismissal of a complaint that "fails to state a claim upon which relief can be granted."FED. R. CIV. P. 12(b)(6).Dismissal is proper where a complaint lacks a cognizable legal theory.Balistreri v. Pacifica Police Dep't,901 F.2d 696, 699(9th Cir.1988).All material factual allegations in the complaint are assumed to be true and construed in the light most favorable to the plaintiff.Nursing Home Pension Fund, Local 144 v. Oracle Corp.,380 F.3d 1226, 1229(9th Cir.2004)("The general rule for 12(b)(6) motions is that allegations of material fact made in the complaint should be taken as true and construed in the light most favorable to the plaintiff.")(citingBurgert v. Lokelani Bernice Pauahi Bishop Trust,200 F.3d 661, 663(9th Cir.2000)).However, the Court"is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot be reasonably drawn from the facts alleged."Clegg v. Cult Awareness Network,18 F.3d 752, 754-55(9th Cir.1994)(citations omitted);see alsoBell Atl. Corp. v. Twombly,550 U.S. 544, 555, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929(2007)("While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.").

In ruling on a 12(b)(6) motion, a court generally cannot consider material outside of the complaint (e.g., facts presented in briefs, affidavits, or discovery materials).See, e.g., Knievel v. ESPN,393 F.3d 1068, 1076(9th Cir.2005).A court may, however, consider exhibits submitted with the complaint.Knievel,393 F.3d at 1076;see alsoVan Winkle v. Allstate Ins. Co.,290 F.Supp.2d 1158, 1162 n. 2(C.D.Cal.2003).A "court may also consider evidence on which the complaint `necessarily relies' if: (1) the complaint refers to the document; (2) the document is central to the plaintiffs claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion."Marder v. Lopez,450 F.3d 445, 448(9th Cir.2006)(citations omitted).A court may treat such a document as "part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)."United States v. Ritchie,342 F.3d 903, 908(9th Cir.2003).Such consideration prevents "plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting reference to documents upon which their claims are based."Parrino v. FHP, Inc.,146 F.3d 699, 706(9th Cir.1998)(superseded by statute on other grounds as recognized inAbrego Abrego v. The Dow Chemical Co.,443 F.3d 676, 681-82(9th Cir.2006)).

In addition, a "court may disregard allegations in the complaint if contradicted by facts established by exhibits attached to the complaint."Sumner Peck Ranch v. Bureau of Reclamation,823 F.Supp. 715, 720(E.D.Cal.1993)(citingDurning v. First Boston Corp.,815 F.2d 1265, 1267(9th Cir.1987)).Moreover, "judicial notice may be taken of a fact to show that a complaint does not state a cause of action."Sears, Roebuck & Co. v. Metropolitan Engravers, Ltd.,245 F.2d 67, 70(9th Cir.1956);see alsoEstate of Blue v. County of Los Angeles,120 F.3d 982, 984(9th Cir.1997).

If the Court dismisses the complaint, it must decide whether to grant leave to amend.Denial of leave to amend is "improper unless it is clear that the complaint could not be saved by any amendment."Livid Holdings Ltd. v. Salomon Smith Barney, Inc.,416 F.3d 940, 946(9th Cir.2005)(citation omitted).However, the district court's discretion to deny leave to amend is broader where the plaintiff has previously filed an amended complaint.Miller v. Yokohama Tire Corp.,358 F.3d 616, 622(9th Cir.2004)("Where the plaintiff has previously filed an amended complaint, . . ., the district court's discretion to deny leave to amend is `particularly broad.'")(quotingChodos v. W. Publ'g Co.,292 F.3d 992, 1003(9th Cir.2002)).

IV.DISCUSSION

A.Claim for Rescission Under TILA and Regulation Z

Plaintiff seeks rescission because of Defendant's alleged failure to provide accurate TILA disclosures.Because of the way the Court resolves this issue, it need not recite all the disclosure violations alleged by Plaintiff.(See generally, without limitationFAC, ¶¶ 19-33, 36, 42.)Defendant argues Plaintiff's claim must be dismissed because Plaintiff has failed to allege an ability to tender loan proceeds.Because the Court finds in favor of Defendant, this Claim is DISMISSED WITOUT PREJUDICE.

TILA requires that loan documents state specifically the last date on which a borrower may rescind the loan agreement without penalty.Semar v. Platte Valley Federal Sav. & Loan Ass'n,791 F.2d 699, 701(9th Cir.1986)(citing15 U.S.C. § 1635(a) and former 12C.F.R. § 226.23(b))."TILA's `buyer's remorse' provision allows borrowers three business days to rescind, without penalty, a consumer loan that uses their principal dwelling as security."Semar,791 F.2d at 701;15 U.S.C. § 1635(a).²TILA and its Regulation Z require the lender to provide a form stating the specific date on which the three-day rescission period expires.Semar,791 F.2d at 701(citing15 U.S.C. § 1635(a)).If the lending institution omits the expiration date and fails to cure the omission by subsequently providing the information, the borrower may rescind the loan within three years after it was consummated.Semar,791 F.2d at 701-02(citing15 U.S.C. § 1635(f)).

By far, the majority of Courts to...