In Re: Gates v. Wachovia Mortgage, FSB, No. 2:2009cv02464 - Document 27 (E.D. Cal. 2010)
Court Description: MEMORANDUM AND ORDER granting in part and denying in part 24 Motion to Dismiss signed by Judge Frank C. Damrell, Jr on 6/28/10. (Kaminski, H)
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In Re: Gates v. Wachovia Mortgage, FSB Doc. 27 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 LISA GATES, NO. 2:09-cv-02464-FCD/EFB 13 14 Plaintiff, v. MEMORANDUM AND ORDER 15 WACHOVIA MORTGAGE, FSB, 16 Defendant. ____________________________/ 17 18 19 ----oo0oo---This matter is before the court on the motion of defendant 20 Wachovia Mortgage, FSB (“Wachovia”) to dismiss plaintiff Lisa 21 Gates’ (“plaintiff”) second amended complaint (“SAC”) pursuant to 22 Federal Rule of Civil Procedure 12(b)(6). 23 motion. 24 dismiss is GRANTED in part and DENIED in part. 25 Plaintiff opposes the For the reasons set forth below,1 defendant’s motion to ///// 26 27 28 1 Because oral argument will not be of material assistance, the court orders this matter submitted on the briefs. E.D. Cal. L.R. 230(g). 1 Dockets.Justia.com 1 2 BACKGROUND The court adopts the factual and procedural background set 3 forth in its Order on Wachovia’s motion to dismiss plaintiff’s 4 first amended complaint (“FAC”). 5 Pl.’s FAC (“Order”), Filed Feb. 2, 2010 (docket # 18).) 6 moves to dismiss plaintiff’s SAC for failure to plead facts 7 sufficient to state cognizable claims for relief. 8 9 (Order on Def.’s Mot Dismiss Wachovia STANDARDS Under Federal Rule of Civil Procedure 8(a), a pleading must 10 contain “a short and plain statement of the claim showing that 11 the pleader is entitled to relief.” 12 S. Ct. 1937, 1949 (2009). 13 court, the complaint must “give the defendant fair notice of what 14 the claim is and the grounds upon which it rests.” 15 Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations 16 omitted). 17 liberal discovery rules and summary judgment motions to define 18 disputed facts and issues and to dispose of unmeritorious 19 claims.” 20 See Ashcroft v. Iqbal, 129 Under notice pleading in federal Bell Atl. “This simplified notice pleading standard relies on Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). On a motion to dismiss, the factual allegations of the 21 complaint must be accepted as true. 22 322 (1972). 23 every reasonable inference to be drawn from the “well-pleaded” 24 allegations of the complaint. 25 Schermerhorn, 373 U.S. 746, 753 n.6 (1963). 26 allege “‘specific facts’ beyond those necessary to state his 27 claim and the grounds showing entitlement to relief.” 28 550 U.S. at 570. Cruz v. Beto, 405 U.S. 319, The court is bound to give plaintiff the benefit of Retail Clerks Int’l Ass’n v. A plaintiff need not Twombly, “A claim has facial plausibility when the 2 1 plaintiff pleads factual content that allows the court to draw 2 the reasonable inference that the defendant is liable for the 3 misconduct alleged.” 4 Iqbal, 129 S. Ct. at 1949. Nevertheless, the court “need not assume the truth of legal 5 conclusions cast in the form of factual allegations.” 6 States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th 7 Cir. 1986). 8 allegations, “it demands more than an unadorned, the defendant- 9 unlawfully-harmed-me accusation.” United While Rule 8(a) does not require detailed factual Iqbal, 129 S. Ct. at 1949. A 10 pleading is insufficient if it offers mere “labels and 11 conclusions” or “a formulaic recitation of the elements of a 12 cause of action.” 13 elements of a cause of action, supported by mere conclusory 14 statements, do not suffice.”); Twombly, 550 U.S. at 555. 15 Moreover, it is inappropriate to assume that the plaintiff “can 16 prove facts which it has not alleged or that the defendants have 17 violated the . . . laws in ways that have not been alleged.” 18 Associated Gen. Contractors of Cal., Inc. v. Cal. State Council 19 of Carpenters, 459 U.S. 519, 526 (1983). 20 Id. at 1950 (“Threadbare recitals of the Ultimately, the court may not dismiss a complaint in which 21 the plaintiff has alleged “enough facts to state a claim to 22 relief that is plausible on its face.” 23 (citing Bell Atl. Corp., 550 U.S. at 570). 24 plaintiff has failed to “nudge [his or her] claims across the 25 line from conceivable to plausible,” is the complaint properly 26 dismissed. 27 not akin to a probability requirement, it demands more than “a 28 sheer possibility that a defendant has acted unlawfully.” Id. at 1952. Iqbal, 129 S. Ct. at 1949 Only where a While the plausibility requirement is 3 Id. at 1 1949. 2 requires the reviewing court to draw on its judicial experience 3 and common sense.” This plausibility inquiry is “a context-specific task that Id. at 1950. 4 In ruling upon a motion to dismiss, the court may consider 5 only the complaint, any exhibits thereto, and matters which may 6 be judicially noticed pursuant to Federal Rule of Evidence 201. 7 See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 8 1988); Isuzu Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. 9 Supp. 2d 1035, 1042 (C.D. Cal. 1998). 10 ANALYSIS 11 A. 12 Wachovia’s Exhibits The court adopts the analysis of judicial notice of 13 Wachovia’s exhibits set forth in its Order on Wachovia’s motion 14 to dismiss plaintiff’s FAC. 15 specifically the Notice of Right to Cancel, form the basis of the 16 relevant causes of action, the court considers them for the 17 purpose of defendant’s motion to dismiss.2 18 Pl.’s SAC (“MTD”), Filed April 6, 2010 (docket # 20).) 19 B. 20 Because the loan documents, (Def.’s Mot. Dismiss Truth in Lending Act Plaintiff’s first cause of action alleges defendant Wachovia 21 violated the Truth in Lending Act (“TILA”) 25 U.S.C. § 1601, et 22 seq. (1) by failing to provide accurate copies of the required 23 disclosures to plaintiff at the time of closing as required by 24 the statute, and (2) by failing to respond to plaintiff’s letter 25 of “rescission.” (SAC ¶¶ 27-30, 40-41, 43.) Wachovia moves to 26 2 27 28 Defendant also requested judicial notice of various documents that prove its name was changed from World Savings Bank, FSB, on or about December 31, 2007. (RFJN ¶ 2.) The court also considers these documents for the purpose of this motion. 4 1 dismiss plaintiff’s first cause of action, arguing that paragraph 2 72 of plaintiff’s SAC is an attempt to revive her recission claim 3 in direct contradiction of this court’s Order. 4 Wachovia asserts: (1) plaintiff is barred from reasserting her 5 recission claim following this court’s Order; and (2) plaintiff’s 6 recission claim is time barred by TILA’s three-year statute of 7 limitations. 8 reassert her recission claim contrary to this court’s Order, but 9 merely “attempt[ing] to plead damages in the broadest form Specifically, Plaintiff responds that she is not attempting to 10 possible.” 11 2010 (docket # 24) 3.) 12 paragraph 72's “alternative requests” are merely an element of 13 plaintiff’s notice pleading, and necessary for a complete 14 discussion of plaintiff’s damages under her TILA claim. 15 at 4.) 16 (Pl.’s Opp’n to Mot Dismiss (“Opp’n”), Filed June 3, More specifically, plaintiff alleges that (Opp’n As noted by this court in its prior Order, if a borrower 17 files his or her suit over three years from the date of a loan’s 18 consummation, a court is powerless to grant rescission. 19 309 F.3d at 1164 (“[S]ection 1635(f) represents an ‘absolute 20 limitation on rescission actions which bars any claims filed more 21 than three years after the consummation of the transaction.” 22 (quoting King v. California, 784 F.2d 910, 913 (9th Cir. 1986)); 23 accord Beach, 523 U.S. at 412 (“[Section] 1635(f) completely 24 extinguishes the right of rescission at the end of the 3-year 25 period.”). 26 within the three-year limitation period, such action only 27 entitles the borrower to damages, not rescission. 28 Household Fin. Corp., No. CV 04-6887 DSF, 2005 U.S. Dist. LEXIS Miguel, If a borrower exercises his or her right to rescind 5 Cazares v. 1 39222, at *24-25 (C.D. Cal. 2005) (citing 15 U.S.C. § 1640(a); 2 Belini v. Wash. Mut. Bank, FA, 412 F.3d 17 (1st Cir. 2005)). 3 see Santos v. Countrywide Home Loans, No. 1:09-CV-00912-AWI-SM, 4 2009 WL 2500710, at *3-5 (E.D. Cal. Aug. 14, 2009) (finding that, 5 if creditor does not properly respond to notice of rescission 6 provided by borrower within limitations period, borrower could 7 file suit after three-year period of repose). 8 because a recision action is time barred in the present action, 9 this court granted Wachovia’s motion to dismiss plaintiff’s But Accordingly, 10 recision claim and did not allow plaintiff leave to amend. (Order 11 at 10.) 12 As such, plaintiff is barred from reasserting a recision 13 claim in her amended complaint, and this court will not consider 14 a recission claim brought under TILA by plaintiff. 15 while plaintiff incorporates elements of a recission claim into 16 her first cause of action3, these requests are presented as an 17 alternate prayer for relief, following a thorough discussion of 18 plaintiff’s claim for damages under TILA, which this court 19 allowed in its prior Order. 20 plaintiff’s recission claim has been dismissed and cannot be 21 pressed in this litigation. 22 acknowledges the dismissal of this claim, Wachovia’s motion to 23 dismiss plaintiff’s first cause of action is DENIED. 24 C. 25 However, The court emphasizes that However, as plaintiff unequivocally RESPA Violation Plaintiff’s second cause of action alleges Wachovia violated 26 27 28 3 Plaintiff requests, inter alia, a voiding of the security interest and promissory note or lien as a matter of law, and a negation of Wachovia’s interest in the property. 6 1 12 U.S.C. § 2605 by failing to provide a written response to 2 plaintiff’s letter dated January 15, 2009, which she claims is a 3 valid qualified written request (“QWR”). 4 Wachovia moves to dismiss this claim on the basis that, inter 5 alia, the letter of January 15, 2009 does not contain a valid QWR 6 as defined by RESPA § 2605(e). (SAC ¶¶ 82-85.) (MTD at 3-4.) 7 In order to qualify as a QWR, a borrower’s inquiry must 8 include a statement of the reasons for the belief of the borrower 9 . . . that the account is in error or provide sufficient detail 10 to the servicer regarding other information sought by the 11 borrower.” 12 “servicing” refers to “receiving any scheduled periodic payments 13 from a borrower pursuant to the terms of any loan.” 14 2605(i)(3). 15 requires a loan servicer to provide disclosures “relating to the 16 servicing of [the] loan,” Id. at § 2605(e)(1)(A), and may be 17 liable for damages for failing to do so. 18 Courts routinely interpret section 2605 as requiring a QWR to 19 relate to the servicing of a loan, rather than the creation or 20 modification of a loan. 21 Hillery, 658 F. Supp. 2d 1002 (N.D. Cal. 2009) (dismissing RESPA 22 claim with prejudice because plaintiff’s “QWR” disputed the 23 validity of a loan and not its servicing); MorEquity, Inc. v. 24 Naeem, 118 F. Supp. 2d 885, 901 (N.D. Ill. 2000) (dismissing 25 plaintiff’s RESPA claim after finding that none of the 26 irregularities alleged in the “QWR” related to servicing as 27 defined by section 2605); Philips v. Bank of Am. Corp., 2010 U.S. 28 Dist. LEXIS 35131 (finding defendant had no duty under RESPA to 12 U.S.C. § 2605(e)(1)(B)(ii). Under RESPA, the term Id. at § When presented with a valid QWR, section 2605 id. at § 2605(f)(1). See Consumer Solutions REO, LLC. v. 7 1 respond to plaintiff’s “QWR” because it related to origination 2 and modification of a loan, not its servicing). 3 In this case, exhibit B fails to relay any servicing error. 4 The purported QWR contains no statement of plaintiff’s belief as 5 to the existence of a servicing error, nor does it contain 6 anything to put Wachovia on notice of a servicing error. 7 the letter is primarily aimed at uncovering documents relating to 8 the ownership of the obligation, as well as seeking recission or 9 modification by calling into question the validity of the loan. Rather, 10 (Pl.’s Ex. B at 49 (“The loan being serviced is defective.”).) 11 However, neither an inquiry into the ownership of a loan, nor an 12 allegation of defective loan documentation, are sufficient to 13 transform an otherwise non-qualifying correspondence into a QWR. 14 See Hillery, 658 F. Supp. 2d 1002; MorEquity, 118 F. Supp. 2d 15 885, 901. 16 “statement of all payments made on this loan,” this request is 17 similarly insufficient to meet the requirements of RESPA. 18 simple inquiry into payments made, without more, cannot be 19 interpreted as either “a statement of the reasons for the belief 20 of the borrower, to the extent applicable, that the account is in 21 error,” or, “provid[ing] sufficient detail to the servicer 22 regarding other information sought by the borrower,” as required 23 by RESPA. 24 unadorned request for a statement of payments made toward a loan 25 is not an allegation of a servicing error. Moreover, while plaintiff’s letter requests a 12 U.S.C. § 2605(e)(1)(B)(ii). A In other words, an 26 Thus, plaintiff’s correspondence fails to meet the 27 requirement of section 2605 that a QWR put a loan servicer on 28 notice of a servicing error. Because plaintiff’s letter does not 8 1 meet the requirements of a QWR, Wachovia was under no obligation 2 to respond. 3 Wachovia’s failure to provide a written response to plaintiff’s 4 correspondence. 5 Accordingly, there can be no liability for Therefore, Wachovia’s motion to dismiss plaintiff’s second 6 cause of action is GRANTED. 7 action is predicated on her having submitted a valid QWR to 8 Wachovia, there is no possibility that the claim can be cured by 9 amendment. Because plaintiff’s RESPA cause of Because leave to amend would be futile, plaintiff’s 10 RESPA cause of action is dismissed with prejudice. 11 D. 12 RFDCPA Violation Plaintiff’s third cause of action alleges a violation of 13 California’s Rosenthal Fair Debt Collection Practices Act 14 (“RFDCPA”). 15 and time of 6 phone calls allegedly placed by Wachovia to 16 plaintiff after plaintiff’s January 15, 2009 letter to Wachovia 17 requesting communications cease pursuant to RFDCPA. 18 moves to dismiss this cause of action arguing, inter alia, that 19 plaintiff has failed to allege a violation of the RFDCPA with 20 sufficient factual specificity. 21 Wachovia contends that plaintiff’s amended cause of action fails 22 because contact alone is not enough to allege a violation of the 23 RFDCPA. 24 (SAC ¶¶ 105-111.) Plaintiff’s SAC notes the date (MTD at 5-6.) Wachovia Specifically, (Id. at 6.) The RFDCPA precludes a debt collector from collecting or 25 attempting to collect from a debtor on a consumer debt in a 26 threatening or harassing manner. 27 seq. (West 2010). 28 obscenity, misleading or false communications, and overreaching. See Cal. Civ. Code § 1788 et Specifically, the RFDCPA prohibits threats, 9 1 Id. §§ 1788.10-.12, 1788.14-.16. 2 property pursuant to a deed of trust is not the collection of a 3 debt within the meaning of the FDCPA.” 4 LLC, 589 F. Supp. 1193, 1199 (C.D. Cal. 2008) (quoting Ines v. 5 Countrywide Home Loans, 2008 WL 4791863, at *2 (S.D. Cal. Nov. 3, 6 2008)). 7 collection within the meaning of the RDFCPA. 8 9 However, “foreclosing on [a] Izenberg v. ETS Servs., Nor does foreclosure meet the requirements of a debt Id. While the federal rules contemplate a short and plain statement of the factual basis for a plaintiff’s claims, the 10 allegations must be sufficiently pled to allow the court to 11 determine whether the conduct violates the statute. 12 129 S. Ct. at 1950; Twombly, 550 U.S. at 555. 13 has improved upon the FAC’s factually deficient claim by listing 14 the date and time of the alleged debt collection phone calls, due 15 to the unadorned nature of these added allegations, plaintiff’s 16 RFDCPA cause of action still fails to meet the applicable 17 pleading requirements. 18 plaintiff’s assertion that Wachovia “repeatedly called” plaintiff 19 does not by itself constitute a violation of the RFDCPA. 20 Plaintiff’s SAC alleges little more than the FAC’s bald assertion 21 of harassment. 22 allegation regarding the nature of the phone calls, only that 23 they were placed. 24 infer that there has been conduct violating the statute. 25 26 See Iqbal, Although the SAC As noted by the court in its prior Order, Taken as true, plaintiff’s SAC makes no This alone is not enough to allow the court to Accordingly, Wachovia’s motion to dismiss plaintiff’s third claim for relief is GRANTED with leave to amend. 27 ///// 28 ///// 10 1 2 CONCLUSION For the foregoing reasons, Wachovia’s motion to dismiss is 3 GRANTED in part and DENIED in part. 4 (15) days from the date of this order to file a third amended 5 complaint in accordance with this order. 6 thirty (30) days from the date of service of plaintiff’s third 7 amended complaint to file a response thereto. 8 9 Plaintiff is granted fifteen Defendant is granted IT IS SO ORDERED. DATED: June 28, 2010 10 11 12 FRANK C. DAMRELL, JR. UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11
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