Von Brincken v. Mortgageclose.com Inc. et al
Filing
74
ORDER signed by Judge John A. Mendez on 6/30/11 ORDERING that all of the claims in the Second Amended Complaint are dismissed with prejudice. CASE CLOSED. (Becknal, R)
<![CDATA[
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
EASTERN DISTRICT OF CALIFORNIA
10
11
12
13
14
15
16
17
18
19
20
)
)
)
Plaintiff,
)
)
v.
)
)
MORTGAGECLOSE.COM, INC.;
)
CALIFORNIA LAND COMPANY OF
)
NEVADA COUNTY; EXECUTIVE TRUSTEE )
SERVICES, dba ETS SERVICES, LLC; )
MORTGAGE ELECTRONIC REGISTRATION )
SYSTEMS, INC.; GMAC MORTGAGE,
)
INC.; and DOES 1-20, inclusive, )
)
Defendants.
)
)
SHELLEY VON BRINCKEN,
Case No. 2:10-CV-2153-JAM-KJN
ORDER GRANTING DEFENDANTS’
MOTION TO DISMISS
This matter comes before the Court on Defendants’ GMAC
21
Mortgage, LLC, Executive Trustee Services, and Mortgage Electronic
22
Registration Systems, Inc.’s (collectively “Defendants”) Motion to
23
Dismiss (Doc. #65) Plaintiff Shelley Von Brincken’s (“Plaintiff”)
24
Second Amended Complaint (“SAC”) (Doc. #62) for failure to state a
25
claim pursuant to Federal Rules of Civil Procedure 12(b)(6).
26
Plaintiff opposes the motion (Doc. #67).
27
Mortgageclose.com, Inc. joined in the Motion to Dismiss (Doc. #66).
28
Plaintiff did not oppose the joinder, accordingly the Court will
1
Defendant
1
consider Mortgageclose.com, Inc. as joined in the motion to dismiss
2
with Defendants.
3
but ordered submitted on the briefs without oral argument.1
The motion was set for hearing on May 4, 2011,
4
5
I.
6
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff borrowed $220,000.00 on January 14, 2009 from
7
Mortgageclose.com, Inc.
On the same date she signed a deed of
8
trust securing the properly located 14738 Wolf Rd., Grass Valley,
9
California, as security for the loan.
Plaintiff subsequently
10
defaulted on the loan, and a Notice of Default was recorded on
11
April 27, 2011.
12
recorded on July 28, 2010, and the property was sold and Trustee’s
13
Deed Upon Sale recorded on September 3, 2010.
14
August 11, 2010, Plaintiff filed a Notice of Pendency of Action
15
(Doc. #3) and filed an unsuccessful motion for a Temporary
16
Restraining Order (Doc. #9).
17
Thereafter, a Notice of Trustee’s Sale was
Prior to the Sale on
Plaintiff alleges that she is the victim of fraud, predatory
18
lending, and an unlawful foreclosure.
Plaintiff was previously pro
19
se, but acquired counsel, who filed the SAC.
20
problems with the chain of title and the Deed of Trust.
21
further alleges that the purported lender/servicer failed, refused
22
or neglected to work with her to avoid foreclosure.
23
contend that despite Plaintiffs slew of general allegations about
24
the mortgage banking industry, Plaintiff fails to state a claim
25
against Defendants.
The SAC alleges
Plaintiff
Defendants
26
27
1
28
This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g).
2
1
II.
OPINION
2
A.
Legal Standard
3
A party may move to dismiss an action for failure to state a
4
claim upon which relief can be granted pursuant to Federal Rules of
5
Civil Procedure 12(b)(6).
6
court must accept the allegations in the complaint as true and draw
7
all reasonable inferences in favor of the plaintiff.
8
Rhodes, 416 U.S. 232, 236 (1975), overruled on other grounds by
9
Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319,
In considering a motion to dismiss, the
Scheuer v.
10
322 (1972).
11
are not entitled to the assumption of truth.
12
129 S. Ct. 1937, 1950 (2009), citing Bell Atl. Corp. v. Twombly,
13
550 U.S. 544, 555 (2007).
14
plaintiff needs to plead “enough facts to state a claim to relief
15
that is plausible on its face.”
16
Dismissal is appropriate where the plaintiff fails to state a claim
17
supportable by a cognizable legal theory.
18
Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).
19
Assertions that are mere “legal conclusions,” however,
Ashcroft v. Iqbal,
To survive a motion to dismiss, a
Twombly, 550 U.S. at 570.
Balistreri v. Pacifica
Upon granting a motion to dismiss for failure to state a
20
claim, the court has discretion to allow leave to amend the
21
complaint pursuant to Federal Rules of Civil Procedure 15(a).
22
“Absent prejudice, or a strong showing of any [other relevant]
23
factor[], there exists a presumption under Rule 15(a) in favor of
24
granting leave to amend.”
25
Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).
26
prejudice and without leave to amend is not appropriate unless it
27
is clear . . . that the complaint could not be saved by amendment.”
28
Id.
Eminence Capital, L.L.C. v. Aspeon,
3
“Dismissal with
1
Generally, the court may not consider material beyond the
2
pleadings in ruling on a motion to dismiss for failure to state a
3
claim.
4
complaint or relied on by the complaint, or when the court takes
5
judicial notice of matters of public record, provided the facts are
6
not subject to reasonable dispute.
7
WL 2241664 at *2 (C.D. Cal. Mar. 30, 2009) (internal citations
8
omitted).
9
#62, Ex. 1) to the SAC.
There are two exceptions: when material is attached to the
Sherman v. Stryker Corp., 2009
In this case, Plaintiff has attached Exhibits A-N (Doc.
Plaintiff relies on these documents in her
10
Complaint (several of which are also public record as they are
11
recorded documents), and Defendants do not object to the Court
12
considering the attached documents.
13
consider documents A-N in ruling on the motion to dismiss.
14
15
16
17
B.
Accordingly, the Court will
Claims for Relief
1.
Violation of the Home Ownership Equity Protection
Act
Plaintiff alleges that Defendants have violated the
18
Homeownership Equity Protection Act (“HOEPA”), 15 U.S.C. § 1639.
19
The SAC seeks rescission and damages under HOEPA.
20
all the defendants together and does not specifically identify the
21
defendant(s) to whom her allegations pertain.
22
that Plaintiff fails to state a claim for violation of HOEPA,
23
because her claim is barred by the statute of limitations and the
24
SAC does not sufficiently allege that her loan falls under HOEPA.
25
However, Defendants only attack the portion of Plaintiff’s claim
26
seeking damages, and not her claim for rescission.
27
28
The SAC lumps
Defendants argue
HOEPA is an amendment to the Truth in Lending Act (“TILA”),
and therefore is governed by the same remedial scheme and statutes
4
1
of limitations as TILA.
2
WL 5418862, *4 (E.D. Cal. Dec. 23, 2010); Wadhwa v. Aurora Loan
3
Services, LLC, 2011 WL 1601593, *2 (E.D. Cal. April 27, 2011).
4
statute of limitations for TILA damages claim is one year from the
5
occurrence of a violation. 15 U.S.C. § 1640(e).
6
§ 1635(f), TILA rescission claims shall expire three years after
7
the date of consummation of the transaction, or upon sale of the
8
property, whichever occurs first.
9
the date of consummation of the transaction.
10
11
12
13
14
15
16
17
Hensley v. Bank of New York Mellon, 2010
The
Under 15 U.S.C.
The limitations period runs from
Wadhwa, supra (citing
King v. California, 784 F.2d 910, 915 (9th Cir. 1986).
The doctrine of equitable tolling may, in the
appropriate circumstance, suspend the limitation
period until the borrower discovers or had reasonable
opportunity to discover the fraud or nondisclosures
that form the basis of the TILA action. While the
applicability of the equitable tolling doctrine often
depends on matters outside the pleadings, dismissal
may be appropriate when a plaintiff fails to allege
facts suggesting that he did not have a reasonable
opportunity to discover the violation.
Wadwha, 2011 WL 1601593 at *2 (internal citations omitted).
18
Here, the loan was issued on January 14, 2009, and Plaintiff
19
filed her complaint on August 11, 2010, more than one year later.
20
Plaintiff has included the cursory allegation throughout the SAC
21
that she did not learn of any violations until November 2009, and
22
thus any applicable statute of limitation should run from this
23
date.
24
allegation that she was unable to compare the allegedly improper
25
disclosure in the loan documents with the required disclosures
26
under HOEPA, nor does she explain why she could not have learned of
27
the alleged violations within the statutory period.
28
Wadhwa, 2011 WL 1601593,at *2-3 (declining to apply equitable
However, the SAC offers no factual support for Plaintiff’s
5
See, e.g.,
1
tolling where plaintiffs did not allege why they could not compare
2
disclosure forms or discover the violation during the statutory
3
period). Accordingly, the statute of limitations for Plaintiff’s
4
HOEPA damages claim has run, and the Court does not find from the
5
SAC’s conclusory tolling allegation that equitable tolling applies.
6
While Plaintiff’s HOEPA claim for rescission is timely, Plaintiff
7
has failed to tender the full amount of the loan or alleged ability
8
to tender. See e.g. Little v. Accent Conservatory and Sunroom
9
Designs, 2011 WL 2215816, *3 (S.D. Cal. June 7, 2011). As when
10
alleging a claim for rescission under TILA, plaintiffs must make an
11
offer of complete tender before seeking rescission of the loan. Id.
12
Additionally, Defendants argue that Plaintiff has not shown
13
that HOEPA applies to her loan.
A loan is subject to HOEPA if the
14
loan’s annual percentage rate at consummation exceeds by more than
15
ten percent the applicable yield on treasury securities, or the
16
total points and fees payable by the consumer at or before closing
17
exceeds eight percent of the total loan amount or $400.00,
18
whichever is greater.
19
§226.32(a)(1).
20
that the plaintiff’s loan satisfies one of the tests cannot
21
withstand a motion to dismiss.
22
Inc., 2009 WL 3126400, *9 (E.D. Cal. 2009).
23
Plaintiff was required to pay excessive fees that exceeded ten
24
percent of the amount financed.
25
the Court is required, Plaintiff has sufficiently alleged that
26
HOEPA may apply to her loan.
27
damages is barred by the statute of limitations, and she has not
28
sufficiently alleged tender so as to maintain her claim for
15 U.S.C. § 1602(aa)(1)(3); 12 C.F.R.
A HOEPA claim that fails to allege facts showing
Rendon v. Countrywide Home Loans,
The SAC states that
Taking this allegation as true, as
However, because her claim for
6
1
rescission, the HOEPA claim is dismissed in its entirety.
2
2.
3
4
Violation of the Real Estate Settlement Procedures
Act
Plaintiff alleges that Defendants violated the Real Estate
5
Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607, because
6
Defendants “accepted charges for the rendering of real estate
7
services which were in fact charges for other than services
8
actually performed.”
9
claim is barred by the one year statute of limitations and fails to
10
11
12
13
14
15
16
17
SAC ¶71.
Defendants argue that the RESPA
state a claim.
The primary ill that section 2607 is designed to
remedy is the potential for unnecessarily high
settlement charges caused by kickbacks, fee-splitting,
and other practices that suppress price competition
for settlement services. This ill occurs, if at all,
when the plaintiff pays for the tainted service,
typically at the closing. 12 U.S.C. § 2614 provides
that a section 2607 claim may be brought within 1 year
from the date of the occurrence of the violation.
Barring extenuating circumstances, the date of the
occurrence of the violation is the date on which the
loan closed.
18
Solano v. America’s Servicing Company, 2011 WL 1669735, *3 (E.D.
19
Cal. May 3, 2011) (internal citations omitted).
20
In this case, Plaintiff’s loan was made on January 14, 2009.
21
Thus, her current claim is barred by the statute of limitations.
22
As discussed above, neither the SAC nor Plaintiff’s opposition
23
brief discuss why she could not have discovered the alleged
24
violation within the one-year statutory period.
25
Plaintiff has not shown that equitable tolling applies to her
26
claim.
27
her conclusory allegation that Defendants violated RESPA, and is
28
thus insufficient to state a claim against Defendants.
Therefore,
Moreover, the claim itself is devoid of factual support for
7
Because
1
Plaintiff lumps all Defendants together, it is unclear against whom
2
she intends to bring the claim.
3
brief that none of them were the original lenders on the loan,
4
therefore none of them were involved at the time that the alleged
5
violations occurred.
6
7
3.
Defendants note in their reply
Accordingly, the RESPA claim is dismissed.
Violation of the Truth in Lending Act
Plaintiff alleges that Defendants violated TILA, 15 U.S.C. §
8
1601, et seq., by failing to disclose certain charges in the
9
finance charge shown on the TILA statement.
Plaintiff seeks
10
rescission and alleges that the SAC serves as formal notice of her
11
intent to rescind her loan under TILA.
12
Plaintiff cannot state a claim for rescission under TILA, without
13
first alleging that she can tender the amount due on the loan.
14
the extent that Plaintiff seeks damages, Defendants argue damages
15
are barred by the one year statute of limitations.
16
Defendants assert that
To
The statute of limitations for rescission under TILA is three
17
years.
Accordingly, Plaintiff’s claim for rescission is timely.
18
However, as discussed in the HOEPA claim, her claim for damages
19
under TILA is barred, as the statute of limitations has run and she
20
has not made sufficient allegations as to why equitable tolling
21
should apply.
22
allege tender in order to bring her claim for rescission, and she
23
has not done so.
24
Servicing, Inc., 2011 WL 2074938, at *2 (E.D. Cal. May 25, 2011).
25
A tender must be one of full performance and must be unconditional
26
to be valid.
27
allegation that she offered to tender in the letter of rescission
28
(Ex. F. to the SAC), conditioned on receiving approximately 4
Further, Defendants are correct that Plaintiff must
(See, e.g., Rose v. American Home Mortg.
Solano, 2011 WL 1669735, at *8.
8
Plaintiff’s
1
million dollars in damages from Defendants, is not sufficient.
2
Accordingly, the claim for TILA rescission and damages is
3
dismissed.
4
5
4.
Violation of the Fair Credit Reporting Act
Plaintiff alleges that Defendants violated the Fair Credit
6
Reporting Act (“FCRA”), 15 U.S.C. § 1681 by reporting negative
7
information about Plaintiff to the major credit reporting agencies.
8
Defendants argue that Plaintiff has not properly alleged a
9
violation of the FRCA and therefore fails to state a claim against
10
11
Defendants.
There is a private right of action for violations of section
12
1681(S)(2()(b) of the FRCA.
13
WL 1833092, *3 (E.D. Cal. May 12, 2011).
14
such a claim, a plaintiff must allege that she had a dispute with a
15
credit reporting agency regarding the accuracy of an account, that
16
the credit reporting agency notified the furnisher of the
17
information, and that the furnisher failed to take the remedial
18
measures outlined in the statute.
19
allege any of these facts.
20
dismissed.
21
22
5.
Matracia v. JP Morgan Chase Bank, 2011
Id.
However, to succeed on
Here, Plaintiff fails to
Accordingly, the FRCA claim is
Fraudulent Misrepresentation
Plaintiff alleges that Defendants fraudulently concealed and
23
misrepresented information about her loan, before and after
24
closing.
25
meet the heightened pleading standard for claims of fraud.
Defendants assert that Plaintiff’s allegations do not
26
Rule 9(b)’s heightened pleading standard applies to averments
27
of fraud in all civil cases, regardless of whether or not fraud is
28
an essential element of the claim.
9
Rule 9(b) proves that in
1
alleging fraud or mistake, a party must state with particularity
2
the circumstances constituting fraud or mistake.
3
specificity includes the time, place and specific content of the
4
false representations as well as the identities of the parties to
5
the misrepresentations.
6
multiple defendants, Rule 9(b) does not allow a complaint to merely
7
lump multiple defendants together but requires plaintiff to
8
differentiate her allegations when suing more than one defendant.”
9
Solano, 2011 WL 1669735, *5-6 (internal citations omitted).
10
The required
Further, in alleging fraud against
As the SAC does not differentiate between the named
11
defendants, and is not plead with the specificity required by Rule
12
9(b), Plaintiff’s claim for fraudulent misrepresentation is
13
dismissed.
14
15
6.
Breach of Fiduciary Duty
Plaintiff alleges that Defendants breached their fiduciary
16
duty by inducing Plaintiff to enter into a mortgage that was
17
contrary to Plaintiff’s intentions and interests.
18
to dismiss for failure to prove that a fiduciary relationship
19
existed.
Defendants move
20
To state a claim for breach of fiduciary duty, a plaintiff
21
must allege: (1) the existence of a fiduciary relationship; (2) the
22
breach of that relationship; and (3) damage proximately caused
23
thereby.
24
transaction is an at arms length transaction and there is no
25
fiduciary relationship between the borrower and lender.
26
loan servicers typically do not have a fiduciary relationship with
27
borrowers.
28
breached their fiduciary duty are identical to allegations of
Solano, supra, at *6.
Id.
As a general rule, a loan
Further,
The allegations in the SAC that Defendants
10
1
breach of fiduciary duty previously dismissed in Solano, 2011 WL
2
1669735 at *6.
3
these defendants are indeed fiduciaries to Plaintiff, the claim for
4
Breach of Fiduciary Duty is dismissed.
5
6
7.
As the allegations in the SAC do not show that
Unjust Enrichment
Plaintiff alleges that Defendants have been unjustly enriched
7
by receiving fees and benefits from the loan transaction, at the
8
expense of Plaintiff.
9
asserting that that Plaintiff cannot bring a claim for unjust
10
enrichment, and has not shown any wrongful act by Defendants.
11
Under California law, it is well settled that an action based upon
12
an implied-in-fact contract or quasi-contract cannot lie where
13
there exists between the parties a valid express contract covering
14
the same subject matter.
15
the SAC alleges the existence of an express contract between the
16
parties that governed the loan transaction, she cannot bring a
17
claim for unjust enrichment based on an alleged implied contract
18
covering the same loan transaction.
19
unjust enrichment is dismissed.
20
21
8.
Defendants move to dismiss this claim,
Solano, 2011 WL 1669735 at *7.
Because
Accordingly, the claim for
Civil Conspiracy
Plaintiff alleges that Defendants engaged in a conspiracy to
22
further illegal acts in the course of the loan transaction.
23
Defendants move to dismiss this claim, arguing that there is no
24
independent claim for civil conspiracy under California law.
25
Conspiracy is not a cause of action, but a legal doctrine that
26
imposes liability on persons who, although not actually committing
27
a tort themselves, share with the immediate tortfeasors a common
28
plan or design in its perpetration.
11
Standing alone, a conspiracy
1
does no harm and engenders no tort liability.
2
by the commission of an actual tort.
3
conspiracy to defraud, a complaint must meet the particularity
4
requirement of Rule 9(b).
5
Plaintiff does not set forth the basis for her claim of conspiracy,
6
and as this Court is dismissing all other claims in the SAC upon
7
which her conspiracy claim could possibly be based, the civil
8
conspiracy claim is dismissed.
9
10
9.
It must be activated
Further, to allege a civil
Solano, supra at *10.
Accordingly, as
Civil RICO Violations
Plaintiff alleges that Defendants participate in a RICO
11
conspiracy to defraud her.
12
arguing that it is not plead with particularity, Plaintiff has not
13
plead any facts to support her allegation of a RICO conspiracy, and
14
has not alleged that Defendants engaged in pattern of activities
15
affecting interstate commerce.
16
for civil damages, a plaintiff must show that defendants, through
17
two or more acts constituting a pattern, participated in an
18
activity affecting interstate commerce.
19
2011 WL 318575, *3 (E.D. Cal. Feb. 1, 2011).
20
raised only conclusory allegations without any factual support, and
21
has failed to allege the essential elements of a RICO claim, her
22
RICO conspiracy claim is dismissed.
23
24
10.
Defendants move to dismiss this claim,
To properly plead a RICO violation
McAnelly v. PNC Mortgage,
As Plaintiff has
Quiet Title
Plaintiff brings a claim to quiet title to the property,
25
seeking full and clear title.
Defendants move to dismiss the claim
26
because Plaintiff has not tendered the amount she owes.
27
California law, it is well settled that a mortgagor cannot quiet
28
his title against the mortgagee without paying the debt secured.”
12
“Under
1
Solano, 2011 WL 1669735 at *8.
2
title claim a plaintiff is required to allege tender of the
3
proceeds of the loan at the pleading stage.
4
of full performance and must be unconditional to be valid.
5
previously discussed, Plaintiff has not sufficiently alleged
6
tender.
7
Therefore, to maintain a quiet
A tender must be one
Id.
As
Accordingly, the claim to quiet title is dismissed.
11.
Usury and Fraud
8
Plaintiff alleges that Defendants have committed usury and fraud.
9
Defendants move to dismiss, arguing that Plaintiff lumps all
10
Defendants together, fails to plead with particularity and has not
11
set forth the basis for her usury claim.
12
elements of a fraud claims are (1) misrepresentation; (2) knowledge
13
of falsity; (3) intent to induce reliance; (4) justifiable
14
reliance; and (5) resulting damage.
15
A claim for fraud in federal court must satisfy Rule 9(b)’s
16
heightened pleading requirements.
17
claim are (1) the transaction must be a loan or forbearance;
18
(2) the interest to be paid must exceed the statutory maximum;
19
(3) the loan an interest must be absolutely repayable by the
20
borrower; and (4) the lender must have a willful intent to enter
21
into a usurious transaction.
22
greater than 10 percent per annum is usurious.
23
has failed to plead her claim with the required particularity, and
24
has not set forth any facts to support her claim for usury and
25
fraud, the claim is dismissed.
26
27
28
12.
Under California law, the
Solano, 2011 WL1669735 at *9.
Id.
The elements of a usury
A loan that charges an interest rate
Id.
As Plaintiff
Wrongful Foreclosure
Plaintiff alleges that Defendant wrongfully foreclosed on her
property, because Defendants are not the beneficiaries of the
13
1
mortgage.
2
before she can challenge the foreclosure sale.
3
foreclosure claim, a plaintiff must allege a credible tender of the
4
amount of the secured debt.
5
above, tender must be one of full performance and must be
6
unconditional to be valid.
7
tender in the SAC, accordingly, the motion to dismiss this claim is
8
granted.
9
10
Defendants contend that Plaintiff must fully tender
13.
To state a wrongful
Solano, supra, at *10.
As discussed
Plaintiff makes no such unconditional
Breach of Trust Instrument
Lastly, Plaintiff brings a claim captioned “Breach of Trust
11
Instrument” in which she alleges that the security instrument was
12
breached.
13
claim is vague, and that plaintiff has not set facts showing
14
wrongful acts or damages to support her claim.
15
allegations were dismissed as conclusory, vague and insufficient to
16
inform each defendant of its liability for breach of the security
17
instrument in Matracia v. JP Morgan Chase Bank, 2011 WL 1833092,
18
at*6 (E.D. Cal. May 12, 2011) (dismissing a complaint brought by
19
Plaintiff’s counsel).
20
failed to state claim for breach of the security instrument, and
21
the claim is dismissed.
Defendants move to dismiss alleging that Plaintiff’s
22
23
Identical
This Court likewise finds that Plaintiff has
III. ORDER
Plaintiff has already amended her complaint twice and has yet
24
to properly plead her claims. Thus it is clear that none of the
25
claims can be saved by further amendment. Accordingly, all of the
26
claims in the SAC are dismissed with prejudice.
27
28
IT IS SO ORDERED.
Dated: June 30, 2011
14
____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE
]]>
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?
