Freda Tanuvasa v. Federal Deposit Insurance Corporation ("FDIC") et al, No. 2:2009cv02795 - Document 20 (C.D. Cal. 2009)

Court Description: ORDER granting defendant J.P Morgan Chase Motion to Dismiss 7 . The Court dismisses plaintiff's federal law claims against Chase. With respect to her TILA damages claim, Plaintiff may amend her complaint to state facts relevant to the applicab ility of equitable tolling. She must do so within twenty (20) days of the date of this Order. If plaintiff fails to state a colorable claim under federal law, this Court will likely decline to exercise supplemental jurisdiction over the remaining state law claims by Judge Dean D. Pregerson (lc)

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Freda Tanuvasa v. Federal Deposit Insurance Corporation ("FDIC") et al Doc. 20 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 FREDA TANUVASA, 12 13 14 15 16 17 18 Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, ("FDIC") Successor to Washington Mutual Savings bank ("WaMu"), JP. MORGAN CHASE BANK, NA ("Chase"), purchaser of WaMu from FDIC, Defendants. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 09-02795 DDP (AGRx) Order Granting Motion to Dismiss [Motion filed on June 17, 2009] 19 20 This matter comes before the Court on defendant J.P Morgan 21 Chase’s (“Chase”) motion to dismiss for failure to state a claim. 22 After reviewing the materials submitted by the parties, the Court 23 grants the motion with respect to plaintiff’s federal law claims. 24 The Court grants plaintiff leave to amend her complaint with 25 respect to her Truth in Lending Act damages claim. 26 amend the complaint such that it states a federal claim on which 27 relief can be granted, the Court will likely decline to exercise 28 supplemental jurisdiction over the pendant state law claims. If she fails to See Dockets.Justia.com 1 28 U.S.C. § 1367(c). 2 within twenty (20) days of the date of this Order. 3 I. 4 Plaintiff must file an amended complaint Background Pro se plaintiff Freda Tanuvasa obtained a $669,755 mortgage 5 loan in connection with the purchase of real property located at 6 13236 Rutgers Avenue in Downey, California. 7 loan was secured by a Deed of Trust that was recorded with the Los 8 Angeles County Recorder’s Office on December 11, 2006. 9 Deed of Trust identifies defendant Washington Mutual Bank (“WaMu”) (Compl. ¶ 7.) The (Id.) 10 as the lender, and the California Reconveyance Company as the 11 trustee. 12 Deposit Insurance Corporation (“FDIC”) on September 25, 2008. 13 (Request for Judicial Notice (“RJN”) Ex. 1.)1 14 The Chase acquired WaMu’s banking operations from the Federal Plaintiff alleges that at the time of purchase, both she and 15 the lender believed the property was worth more than $700,000. 16 (Compl. ¶ 45.) 17 was worth less than $350,000. 18 plaintiff defaulted on the loan and lost her home in a foreclosure 19 action. 20 property in the foreclosure sale, has moved to evict her. 21 22 She asserts that, as of April 2009, the property (Compl. ¶ 26.) (Compl. ¶ 46.) At some point, Chase, after acquiring title to the Id. In her complaint, plaintiff contends that WaMu, the original lender, failed to make material loan disclosures in accordance with 23 1 24 25 26 27 28 Chase asks the Court to take judicial notice of the Chase-FDIC purchase agreement. The document is available for public review on the FDIC’s website, and plaintiff quotes it at length in her complaint. The Court concludes that the purchase agreement is a matter of public record, provided by a government agency for public review, and as such, it is judicially noticeable. See See NRDC v. Kempthorne, 539 F. Supp. 2d 1155, 1166-67 (E.D. Cal. 2008)(taking judicial notice of documents from the website of the United States Bureau of Reclamation). 2 1 the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and 2 the Home Owner Equity Protection Act (“HOEPA”), 15 U.S.C. § 1639 et 3 seq. 4 right to rescind, calculate the annual percentage rate of interest 5 on the loan, or disclose the direct and indirect fees associated 6 with the transaction. 7 action seeking damages and declaratory and injunctive relief on May 8 15, 2009. 9 II. She argues, for example, that WaMu did not inform her of her Compl. ¶¶ 11-13. She brought the present Legal Standard 10 A. 11 Pursuant to Federal Rule of Procedure Rule 12(b)(6), a Motion to Dismiss under Rule 12(b)(6) 12 complaint is subject to dismissal when the plaintiff's allegations 13 fail to state a claim upon which relief can be granted.2 14 considering a Rule 12(b)(6) motion, courts accept the plaintiff’s 15 allegations of material fact as true, and construe the complaint in 16 the light most favorable to the non-moving party. 17 Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996). 18 When Cahill v. In Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), the Supreme 19 Court explained that a court considering a 12(b)(6) motion should 20 first “identify[] pleadings that, because they are no more than 21 conclusions, are not entitled to the assumption of truth.” 22 the court should identify the complaint’s “well-pleaded factual 23 allegations, . . . assume their veracity and then determine whether 24 they plausibly give rise to an entitlement to relief.” Next, Id. 25 26 27 28 2 As a general rule, pro se pleadings are to be liberally construed, and courts must give the claims of pro se litigants fair and meaningful consideration. See Haines v. Kerner, 404 U.S. 519 (1972). Pro se plaintiffs are not, however, exempt from the requirement of stating a claim upon which relief may be granted. 3 1 III. Discussion 2 A. 3 Chase contends that, pursuant to the FDIC-Chase purchase 4 agreement, it did not assume “any liabilities for tortious or other 5 conduct” arising from WaMu’s lending activity. (Reply Br. at 1.) 6 Because Chase raised the successor liability argument for the first 7 time in its reply brief, the Court declines to consider it. See 8 Delgadillo v. Woodford, 527 F.3d 919, 930 n. 4 (9th Cir. 2008). 9 Chase’s Successor Liability Accordingly, for the purposes of the present motion, the Court 10 concludes that the FDIC-Chase purchase agreement does not preclude 11 plaintiff’s claims against Chase as a matter of law. 12 B. 13 TILA and its implementing regulations require lenders to make TILA 14 certain disclosures in connection with consumer loans. 15 purpose is to “protect consumers’ choice through full disclosure 16 and to guard against the divergent and at times fraudulent 17 practices stemming from uninformed use of credit.” 18 California, 784 F.2d 910, 915 (9th Cir. 1986). 19 20 21 1. TILA’s King v. Damages Plaintiff contends that defendant’s alleged TILA violations entitle her to statutory damages. 22 TILA provides that an “action [for damages] . . . may be 23 brought in any United States district court, or in any other court 24 of competent jurisdiction, within one year from the date of the 25 occurrence of the violation.” 26 Circuit has held that the one-year window for filing a TILA damages 27 claim generally “runs from the date of the consummation of the 15 U.S.C. § 1640(e). 28 4 The Ninth 1 transaction.” 2 1986). 3 King v. State of Cal., 784 F.3d 910, 915 (9th Cir. TILA’s statute of limitations may, however, be subject to 4 equitable tolling. The doctrine of equitable tolling suspends the 5 applicable limitations period “until the borrower discovers or had 6 reasonable opportunity to discover the fraud or nondisclosures that 7 form the basis of the TILA action.” 8 Diego, 5 F.3d 1273, 1277 (9th Cir. 1993). 9 applicability of equitable tolling whenever a complaint, liberally Cervantes v. City of San Courts must consider the 10 construed, alleges facts showing the “potential applicability of 11 the equitable tolling doctrine.” 12 Here, the Court can discern from the face of the complaint 13 that TILA’s one-year statute of limitations has run. 14 obtained the loan at issue in this case in December 2006. 15 filed her complaint in this action on May 15, 2009. 16 unless equitable tolling applies, TILA’s statute of limitations 17 bars her claim for damages. 18 Plaintiff She Therefore, Plaintiff does not argue that equitable tolling applies, and 19 the Court finds no basis in her complaint for concluding that it 20 should. 21 the alleged TILA violation, and it does not plead facts suggesting 22 that defendant took steps to prevent her from discovering the 23 alleged nondisclosures. 24 dismiss plaintiff’s TILA damages claim, but grants plaintiff leave 25 to amend her complaint to include facts relevant to the 26 applicability of equitable tolling. 27 The complaint does not indicate when plaintiff discovered 2. The Court thus grants Chase’s motion to Rescission 28 5 1 TILA gives a borrower a right to rescind any credit 2 transaction involving a security interest in the borrower’s home if 3 the lender fails to make the required disclosures. 4 1635.3 5 residential mortgage transaction[s].” 6 § 1602(w) defines the phrase “residential mortgage transaction” as 7 “a transaction in which a mortgage, deed of trust, purchase money 8 security interest arising under an installment sales contract, or 9 equivalent consensual security interest is created or retained 15 U.S.C. § The right of rescission, however, “does not apply to [] Id. § 1635(e)(1). 15 U.S.C. 10 against the consumer's dwelling to finance the acquisition or 11 initial construction of such dwelling.” 12 It is clear from the facts set forth in the complaint that the 13 loan plaintiff obtained was a “residential mortgage transaction” 14 within the meaning of 15 U.S.C. § 1635(e)(1). 15 allege that the loan at issue was used for any reason other than to 16 finance the acquisition of her home. 17 dismisses Plaintiff’s TILA rescission claim with prejudice. Plaintiff does not Accordingly, the Court 18 B. 19 Congress enacted HOEPA, which amended TILA in certain HOEPA 20 respects, to “combat predatory lending.” 21 Mortg. Co., 471 F.3d 977, 984 n. 1 (9th Cir. 2006). 22 fall within the scope of HOEPA, the Act requires, in relevant part, 23 that lenders make certain warnings and disclosures at least three In re First Alliance For loans that 24 25 26 27 28 3 Unlike plaintiff's damages claim, any right to rescission under § 1635 has a three-year limitations period. Beach v. Ocwen Federal Bank, 523 U.S. 410, 415-18 (1998). Accordingly, plaintiff’s rescission claim is not time barred. 6 1 business days prior to the consummation of a HOEPA transaction. 2 See 15 U.S.C. § 1639(a)-(b)(1). 3 First, the Court notes that HOEPA is simply a component of 4 TILA, and thus, it is governed by the same statute of limitations. 5 See In re Cmty. Bank of Northern Va., 418 F.3d 277, 304-05 (3d Cir. 6 2005) (noting that there is a “one-year statute of limitations on 7 affirmative TILA and HOEPA claims”). 8 above with respect to plaintiff’s TILA damages claim, her HOEPA 9 damages claim is also untimely. 10 For the reasons discussed Plaintiff also fails to plead facts suggesting that HOEPA 11 applies to the mortgage loan at issue in this case. 12 provides that “[a] mortgage referred to in this subsection means a 13 consumer credit transaction that is secured by the consumer's 14 principal dwelling, other than a residential mortgage transaction, 15 a reverse mortgage transaction, or a transaction under an open end 16 credit plan . . . .” 15 U.S.C. § 1602(aa)(1). The statute 17 As discussed above, plaintiff does not allege that she 18 obtained the mortgage loan at issue in this case for some purpose 19 other financing the purchase of her home. 20 concludes that the loan is a “residential mortgage transaction” 21 within the meaning of 15 U.S.C. § 1602(w), and as such, it is 22 excluded from HOEPA’s reach. 23 with prejudice. 24 IV. 25 Accordingly, the Court Plaintiff’s HOEPA claim is dismissed Conclusion For the reasons set forth above, the Court dismisses 26 plaintiff's federal law claims against Chase. 27 TILA damages claim, Plaintiff may amend her complaint to state 28 facts relevant to the applicability of equitable tolling. 7 With respect to her She must 1 do so within twenty (20) days of the date of this Order.4 2 plaintiff fails to state a colorable claim under federal law, this 3 Court will likely decline to exercise supplemental jurisdiction 4 over the remaining state law claims. If 5 6 IT IS SO ORDERED. 7 8 9 Dated: September 23, 2009 10 DEAN D. PREGERSON 11 United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 4 28 If Plaintiff does not timely file an amended complaint, the TILA damages claim will be dismissed with prejudice. 8

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