(PS) Ahmad v. World Savings Bank, FSB et al, No. 2:2009cv00520 - Document 55 (E.D. Cal. 2010)
Court Description: FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Kimberly J. Mueller on 05/05/10 RECOMMENDING that the 1 Complaint be DISMISSED. Objections to F&R due within 14 days. (Williams, D)
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(PS) Ahmad v. World Savings Bank, FSB et al Doc. 55 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 NAEEM AHMAD, 11 Plaintiff, 12 13 No. CIV S-09-520 GEB KJM PS vs. WORLD SAVINGS BANK, et al., 14 Defendants. 15 FINDINGS AND RECOMMENDATIONS / 16 Defendants’ motion to dismiss came on for hearing before the court on March 17, 17 2010. Plaintiff appeared representing himself. Defendants were represented by Douglas Matsui, 18 appearing telephonically. Upon review of the documents in support and opposition (including 19 documents filed pursuant to stipulation following the hearing), upon considering the arguments 20 made by plaintiff and defense counsel at hearing, and good cause appearing therefor, THE 21 COURT FINDS AS FOLLOWS: 22 In this action, plaintiff asserts claims under the Truth in Lending Act (“TILA”), 23 15 U.S.C.A. § 1601, et. seq., and other claims under state law. Plaintiff alleges that defendants 24 failed to comply with the requirements of TILA’s implementing regulations, specifically, 12 25 C.F.R. § 226.17 and 12 C.F.R. § 226.19, by not disclosing clearly and conspicuously the interest 26 ///// 1 Dockets.Justia.com 1 rate upon which the payments listed in his truth-in-lending disclosure statements are based. First 2 Am. Compl. (FAC) ¶¶ 51-52. 3 Plaintiff borrowed $324,432.00 from World Savings Bank on or about September 4 24, 2004. The purpose of the purchase money loan was to finance plaintiff’s purchase of real 5 property known as 9352 Oreo Ranch Circle, Elk Grove, California 95624. 6 This action was filed on February 23, 2009. Defendants move to dismiss on the 7 ground that plaintiff’s TILA claim is time-barred by the one year limitations period provided 8 under 15 U.S.C. § 1640(e). Defendants also move to dismiss the remaining state law claims. 9 I. TILA Claim 10 Any action under § 1640 may be brought in any United States District Court, or in 11 any other court of competent jurisdiction, within one year from the date of the occurrence of the 12 violation. 15 U.S.C. § 1640(e). However, the Ninth Circuit has held that the doctrine of 13 equitable tolling “may, in appropriate circumstances, suspend the limitations period” in 14 § 1640(e). See King v. State of California, 784 F.2d 910 (9th Cir. 1986). In other words, “as a 15 general rule the limitations period starts at the consummation of the transaction.” Id. The court, 16 however, “can evaluate specific claims of fraudulent concealment and equitable tolling to 17 determine if the general rule would be unjust or frustrate the purpose of [TILA] and adjust the 18 limitations period accordingly.” Id. 19 “When equitable tolling is at issue, its applicability generally ‘depends on matters 20 outside the pleadings, so it is rarely appropriate to grant a 12(b)(6) motion to dismiss (where 21 review is limited to the complaint).’” Huynh v. Chase Manhattan Bank, 465 F.3d 992, 1003-04 22 (9th Cir. 2006). Nevertheless, when a plaintiff does not alleged any facts showing he could not 23 have discovered the alleged violations through the exercise of due diligence, “dismissal may be 24 appropriate.” Curtis v. Option One Mortg. Corp., 2010 WL 599816, at *7 (E.D. Cal.); see also 25 Quiroz v. Countrywide Bank, N.A., 2009 WL 3849909, at *3 (C.D. Cal.). 26 ///// 2 1 Here, the statute of limitations could be equitably tolled if plaintiff, "despite all 2 due diligence," was "unable to obtain vital information bearing on the existence of his claim." 3 Santa Maria v. Pacific Bell, 202 F.3d 1170, 1178 (9th Cir. 2000). The test is whether "a 4 reasonable plaintiff would not have known of the existence of a possible claim within the 5 limitations period." Id. A proponent of equitable tolling need not show affirmative misconduct 6 on behalf of the opposing party; rather, all one need show is that by the exercise of reasonable 7 diligence, the proponent could not have discovered essential information bearing on the claim. 8 See Socop-Gonzalez v. I.N.S., 272 F.3d 1176, 1184 (9th Cir. 2001). 9 Applying the equitable tolling rule, courts have found a plaintiff’s complaint 10 time-barred when the alleged failure to make required disclosures occurs at the time the loan 11 documents are signed, when no evidence is produced to indicate that the mortgage company 12 prevented a plaintiff from discovering this violation, and when it has been more than a year since 13 the consummation of the transaction. Meyer, 342 F.3d at 902. See also Carlos v. Ocwen Loan 14 Servicing, LLC, 2009 WL 1295873, *1 (E.D. Cal.) (because the alleged failure to make the 15 required disclosures occurred on the date plaintiffs signed the loan papers, plaintiffs could have 16 compared those documents to the TILA regulations and therefore equitable tolling did not 17 apply); Adams v. SCME Mortgage Bankers, INC., 2009 WL 1451715, *9 (E.D. Cal.) (plaintiff’s 18 claim was dismissed as time-barred where complaint did not state that she was prevented from 19 comparing the alleged absence of required disclosures regarding the cost of her loan with the 20 TILA requirements at the time the loan was signed). 21 Plaintiff asserts in his opposition that defendants failed to provide him with copies 22 of his signed loan documents after closing and that defendants fraudulently concealed the actual 23 rate the payments were based upon in the truth-in-lending disclosure statements. Opp’n at 37:1- 24 4. However, at oral argument, plaintiff conceded that he did not request copies of his loan 25 documents, which he signed on or about September 24, 2004, until February 2009. See also 26 Opp’n at 41:4. Nowhere in his pleadings does plaintiff indicate that he was ever prevented from 3 1 obtaining his loan documents from defendants or the title company. Plaintiff began receiving 2 monthly loan account statements shortly after signing his loan documents, with the first 3 statement dated October 3, 2004. The loan account statements filed with the court following the 4 hearing show plaintiff’s payment options and the current interest rate, and also provide phone 5 numbers to call with questions. Against this backdrop, plaintiff has made no allegations 6 contravening the conclusion that he had a “reasonable opportunity” to discover the basis of his 7 TILA claim, or that the claim could have been discovered earlier through the exercise of 8 reasonable diligence.” King, 784 F.2d at 915; see also Socop-Gonzales, 272 F.3d at 1184-85. 9 See Yulaeva v. Greenpoint Mortg. Funding, Inc., 2009 WL 2880393, at *14 (E.D. Cal.). 10 Plaintiff’s claim in his opposition, that he was first alerted to defendant’s alleged 11 fraud scheme on or about September 5, 2008, when he received the notice of trustee’s sale, also 12 is an insufficient basis for invoking equitable tolling. Plaintiff had a reasonable opportunity to 13 discover the kind of fraud or nondisclosures that could form the basis of a TILA claim within the 14 first year after his loan closed. See FAC ¶ 54, Ex. 7. Neither in his opposition nor during oral 15 argument on this matter, did plaintiff advance any theory under which he could amend his 16 complaint to overcome the statute of limitations. The TILA claim should therefore be dismissed. 17 II. State Law Claims 18 19 Plaintiff’s TILA claim provides the sole basis for federal subject matter jurisdiction. All of the remaining claims are pendent state law claims. 20 While federal courts may exercise supplemental jurisdiction over state-law claims 21 “that are so related to claims in the action within [the court's] original jurisdiction that they form 22 part of the same case or controversy under Article III of the United States Constitution,” 28 23 U.S.C. § 1367(a), a court may decline to exercise supplemental jurisdiction where it “has 24 dismissed all claims over which it has original jurisdiction,” 28 U.S.C. § 1367(c)(3). Because 25 plaintiff’s TILA claim should be dismissed as time-barred, the court should decline to exercise 26 jurisdiction over the remaining claims in this action. 4 1 Accordingly, IT IS HEREBY RECOMMENDED that: 2 1. Plaintiff’s claim under TILA be dismissed. 3 2. The court decline to exercise supplemental jurisdiction over the pendent state 4 law claims. 5 3. This action be closed. 6 These findings and recommendations are submitted to the United States District 7 Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within 8 fourteen days after being served with these findings and recommendations, any party may file 9 written objections with the court and serve a copy on all parties. Such a document should be 10 captioned "Objections to Magistrate Judge's Findings and Recommendations." Any reply to the 11 objections shall be served and filed within fourteen days after service of the objections. The 12 parties are advised that failure to file objections within the specified time may waive the right to 13 appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). 14 DATED: May 5, 2010. 15 16 17 18 19 20 21 22 23 24 25 26 6.ber/ahmad.09520.w pd 5
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