Tyshkevich v. Wells Fargo Bank, N.A.

• Decision Date: 14 January 2016
• Docket Number: No. 2:15-cv-2010 JAM AC (PS),2:15-cv-2010 JAM AC (PS)
• Parties: SVETLANA TYSHKEVICH, Plaintiff, v. WELLS FARGO BANK, N.A., etc.; et al., Defendants.
• Court: U.S. District Court — Eastern District of California

SVETLANA TYSHKEVICH, Plaintiff, v. WELLS FARGO BANK, N.A., etc.; et al., Defendants.

No. 2:15-cv-2010 JAM AC (PS)

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

January 14, 2016

ORDER & FINDINGS AND RECOMMENDATIONS

This is a mortgage foreclosure case. The First Amended Complaint ("Complaint") alleges violations of (1) the Trust in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667f, (2) the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p, and (3) California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.¹ Plaintiff sues Wells Fargo Bank, N.A. ("Wells Fargo" or "Harbor View Trust"),² Select Portfolio Servicing, Inc. ("SPS"), National Default Servicing Corporation ("NDSC"), Bank of New York Mellon ("BoNY"),³ and Real TimeResolutions, Inc. ("Real Time"). This proceeding was referred to the undersigned by E.D. Cal. R. ("Local Rule") 302(c)(21).

Defendants move to dismiss this action on several grounds. Their principal argument, however, is that the entire lawsuit is dependent upon plaintiff's alleged rescission of her loans, but that the rescission was made nine (9) years after the loans were made, long past the three (3) year period for rescission permitted by 15 U.S.C. § 1635(f). For the reasons set forth below, the undersigned will recommend that the motions be granted, and that the Complaint be dismissed with leave to amend.

I. BACKGROUND

A. Allegations of the Complaint

In her First Amended Complaint ("Complaint") (ECF No. 17), plaintiff alleges that she "rescinded" her Wells Fargo ("Harbor View Trust") loan on March 14, 2015, and that she "rescinded her second trust deed loan" with Bank of New York ("BoNY") on July 2, 2015. Complaint ¶¶ 10 & 11. Plaintiff does not allege the date the loans were made, nor attach any documentation of the loan from which the court could determine the date. However, implicitly acknowledging that the rescission must occur within 3 years after the date the loan was made, see 15 U.S.C. § 1635(f), plaintiff does allege that she "is able to rescind after three years from the date of the loan transactions because there has never been consummation of the loans." Complaint ¶ 17 n.2. By way of explanation, plaintiff alleges:

There was never consummation with the named parties within the transaction. A binding contract requires identifiable parties. Here, the pertinent loan documents failed to identify the true parties to the transactions.

Id.

B. The Claims

The Complaint's first three Causes of Action allege that all the defendants violated the FDCPA by: (1) taking collection activity against her that "cannot legally be taken" (violating 15 U.S.C. § 1692e(5); (2) falsely represented the legal status of the debt (violating 15 U.S.C. § 1692e(2)(A)); and (3) threatened "to collect an amount not authorized by law" (violating 15U.S.C. § 1692f(1)). Each of these claims is predicated upon plaintiff's implicit allegation (reading the Complaint in the light most favorable to her) that she had properly rescinded the loans under TILA, before defendants took these actions.

The Complaint's Fourth Cause of Action alleges that all the defendants violated the California Business & Professions Code § 17200 by violating the FDCPA.

The Complaint's Fifth Cause of Action alleges that defendants Wells Fargo and BoNY violated TILA by failing to comply with their obligations once her loans had been rescinded.

II. MOTIONS TO DISMISS

Wells Fargo⁴ and BoNY move to dismiss the TILA claim, arguing that (1) it is untimely under 15 U.S.C. § 1635(f), and (2) plaintiff failed to "tender the amounts due under the loan." ECF Nos. 29 at 6-8 (Wells Fargo), 33 at 7-9 (BoNY).

All defendants have moved to dismiss all the FDCPA claims, arguing that plaintiff's TILA right to rescind her mortgage loans - upon which all of her FDCPA claims are based - expired years ago under TILA's three-year statute of repose, as set forth at 15 U.S.C. § 1635(f). ECF Nos. 27-1 at 4-7 (Real Time), 29 at 6-7 (Wells Fargo), 33 at 7-8 (BoNY). The defendants have also made the following arguments.

Real Time moves to dismiss (1) the FDCPA claims and the state claim, for failure to allege that it violated any provision of the FDCPA, (2) all claims against it, arguing that the Complaint does not comply with the "short and plain statement" requirement of Fed. R. Civ. P. 8, and (3) California's Unfair Competition Law claim, for lack of standing. ECF No. 27-1 at 7-9.

BoNY moves to dismiss the FDCPA claims, arguing that it is not engaged in the collection of any debt. ECF No. 33 at 9. The undersigned interprets this to be an argument that BoNY is not a "debt collector" within the meaning of the FDCPA, 15 U.S.C. § 1692a(6). Wells Fargo and BoNY also argue that the FDCPA statute only applies to the collection of debt, and that non-judicial foreclosures are not the collection of "debt," within the meaning of the FDCPA,15 U.S.C. § 1692a(5). ECF Nos. 29 at 9 (Wells Fargo), 33 at 9-10 (BoNY).

A. Dismissal Standards

All defendants have moved to dismiss based upon Rule 12(b)(6) and/or Rule 8(a). However, since defendants' motions are predicated in part upon 15 U.S.C. § 1635(f), which is a jurisdictional statute of repose, the court must also consider the standards applicable to Rule 12(b)(1) motions to dismiss for lack of jurisdiction.⁵

1. Rule 12(b)(1) Standards

To invoke a federal court's subject-matter jurisdiction, a plaintiff needs to provide only "a short and plain statement of the grounds for the court's jurisdiction." Fed. R. Civ. P. 8(a)(1). The plaintiff must allege facts, not mere legal conclusions, in compliance with the pleading standards established by Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). SeeHarris v. Rand, 682 F.3d 846, 850-51 (9th Cir. 2012). Assuming compliance with those standards, the plaintiff's factual allegations will ordinarily be accepted as true unless challenged by the defendant. See 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1363, at 107 (3d ed.2004).

Under Rule 12(b)(1), a . . . "facial" attack accepts the truth of the plaintiff's allegations but asserts that they "are insufficient on their face to invoke federal jurisdiction." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). The district court resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6): Accepting the plaintiff's allegations as true and drawing all reasonable inferences in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction. Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir. 2013).

Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir.), cert. denied, 135 S. Ct. 361 (2014).⁶

In this case, defendants have mounted a "facial" attack, because they base the attack on the face of the Complaint, together with matters that may be considered by the court through judicial notice. Specifically, defendants argue that the Deeds of Trust for plaintiff's loans, which they assert are subject to judicial notice, show that plaintiff's lawsuit was filed more than three years from the date the loans were made. Defendants further argue that plaintiff's opposition to their motion is based upon allegations of the Complaint that contradict matters subject to judicial notice. Accordingly, all of defendants' motions will be decided under Rule 12(b)(6) standards.

2. Rule 12(b)(6) Standards

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the Complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

In order to survive dismissal for failure to state a claim, a complaint must contain more than a "formulaic recitation of the elements of a cause of action;" it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to contain a statement of facts that "merely creates a suspicion" that the pleader might have a legally cognizable right of action. Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-35 (3d ed. 2004)). Rather, the complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

In reviewing a complaint under this standard, the court "must accept as true all of the factual allegations contained in the complaint," construe those allegations in the light most favorable to the plaintiff, and resolve all doubts in the plaintiffs' favor. See Erickson v. Pardus, 551 U.S. 89, 94 (2007); Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954,960 (9th Cir. 2010), cert. denied, 131 S. Ct. 3055 (2011); Hebbe v. Pliler, 627 F.3d 338, 340 (9th Cir. 2010). However, the court need not accept as true, legal conclusions cast in the form of factual allegations, or allegations that contradict matters properly subject to judicial notice. See Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.), as amended, 275 F.3d 1187 (2001).

Pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520 (1972). Pro se complaints are construed liberally and may only be dismissed if it appears beyond doubt that the plaintiff can prove no set of...