Individual v. Bank N.A.
Decision Date | 01 June 2010 |
Docket Number | No. CIV-F-09-0916 AWI DLB.,CIV-F-09-0916 AWI DLB. |
Citation | 716 F.Supp.2d 970 |
Parties | Felipe SANTOS Jr., an Individual and Gemma Santos, an Individual, Plaintiffs, v. U.S. BANK N.A., a Delaware Corporation; Aurora Loan Services, LLC, a Delaware Corporation; Greenpoint Mortgage Funding, Inc., a New York Corporation; and Does 1 through 10, inclusive, Defendants. |
Court | U.S. District Court — Eastern District of California |
OPINION TEXT STARTS HERE
COPYRIGHT MATERIAL OMITTED.
Carlo Ocampo Reyes, Law Offices of Carlo Reyes, Canoga Park, CA, for Plaintiffs.
Kalama Mark Lui-Kwan, Sunny S. Huo, Severson & Werson, San Francisco, CA, for Defendants.
Plaintiffs Felipe Santos, Jr. and Gemma Santos purchased a home at 10111 Fitzgerald Drive, Bakersfield, CA 93311 (“Property”). They refinanced their mortgage on the property on February 7, 2007. Defendant Greenpoint Mortgage Funding, Inc. (“Greenpoint”) was the originating lender. Defendant U.S. Bank, N.A. (“US Bank”) was the assignee of the mortgage. Defendant Aurora Loan Services, LLC (“Aurora”) was the loan servicer. Plaintiffs owed $436,206.71 on the prior mortgage, replacing it with a new mortgage for $492,000. The mortgage was a variable rate loan with an initial rate of 7.375% and a maximum rate of 12.375% and minimum rate of 2.750%. As part of the refinance, Plaintiffs paid a number of miscellaneous fees Plaintiffs allege are duplicative and unreasonable. Plaintiffs also allege a number of disclosures were not provided. By April 10, 2009, Plaintiffs fell behind on their mortgage payments.
Plaintiffs filed suit on May 21, 2009 in federal district court. Defendants Greenpoint and Aurora filed motions to dismiss. Plaintiffs filed a First Amended Complaint (“FAC”) on October 12, 2009. In the FAC, Plaintiffs made four claims against all Defendants: (1) rescission under the Truth In Lending Act (“TILA”); (2) monetary damages under TILA; (3) statutory damages under the Real Estate Settlement Procedures Act; and (4) monetary damages under California's Unfair Competition Law (“UCL”). Defendant Greenpoint and Aurora again filed motions to dismiss. No timely opposition was received and the matters were taken under submission. The parties entered into discussions and Plaintiffs voluntarily dismissed all claims against Defendants Aurora and U.S. Bank on February 22, 2010. Plaintiffs maintain their claims against Defendant Greenpoint and filed a late opposition to Greenpoint's motion to dismiss on February 21, 2010. Though Plaintiffs' opposition was filed late, the court will consider Plaintiffs' arguments as they help to advance the course of litigation.
Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's “failure to state a claim upon which relief can be granted.” A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), citations omitted. Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009), citations omitted. The court is not required “to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.2001). The court must also assume that “general allegations embrace those specific facts that are necessary to support the claim.” Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990), citing Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), overruled on other grounds at 550 U.S. 544, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929. Thus, the determinative question is whether there is any set of “facts that could be proved consistent with the allegations of the complaint” that would entitle plaintiff to some relief. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). At the other bound, courts will not assume that plaintiffs “can prove facts which [they have] not alleged, or that the defendants have violated ... laws in ways that have not been alleged.” Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983).
In deciding whether to dismiss a claim under Rule 12(b)(6), the Court is generally limited to reviewing only the complaint.
Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir.2001), citations omitted. The Ninth Circuit later gave a separate definition of “the ‘incorporation by reference’ doctrine, which permits us to take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff's pleading.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.2005), citations omitted. Broam v. Bogan, 320 F.3d 1023, 1026 n. 2 (9th Cir.2003), citations omitted.
If a Rule 12(b)(6) motion to dismiss is granted, claims may be dismissed with or without prejudice, and with or without leave to amend. “[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (en banc), quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995). In other words, leave to amend need not be granted when amendment would be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir.2002).
In the first two counts, Plaintiffs seeks rescission and monetary damages under TILA and Regulation Z (regulation issued by the Federal Reserve to implement TILA) based on allegations that they did not receive required disclosures. TILA Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998), citations omitted.
Greenpoint asserts that Plaintiffs can not rescind the mortgage because they have not alleged the ability and willingness to return the $492,000 principal. Plaintiffs assert that they Doc. 20, FAC, at 10:5-8 and 10:28-11:4. Courts have discretion in determining the sequence of events concerning rescission; ...
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