Carnero et al v. EMC Mortgage Corp (EMC) et al, No. 5:2009cv04696 - Document 57 (N.D. Cal. 2010)

Court Description: ORDER GRANTING 41 , 42 MOTIONS TO DISMISS SECOND AMENDED COMPLAINT WITHOUT LEAVE TO AMEND AND DISMISSING ACTION. Signed by Judge Jeremy Fogel on 11/22/2010. (jflc2, COURT STAFF) (Filed on 11/22/2010)

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Carnero et al v. EMC Mortgage Corp (EMC) et al Doc. 57 1 **E-Filed 11/22/2010** 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 JOSE R. CARNERO, et al., Plaintiffs, 13 v. 14 15 Case Number C 09-4696 JF (HRL) ORDER1 GRANTING MOTIONS TO DISMISS SECOND AMENDED COMPLAINT WITHOUT LEAVE TO AMEND AND DISMISSING ACTION EMC MORTGAGE CORPORATION, et al., [re: document nos. 41, 42] Defendants. 16 17 18 19 Before the Court are two motions to dismiss the operative second amended complaint 20 (“SAC”) of pro se Plaintiffs Jose and Marta Carnero (“the Carneros”): a motion brought by 21 Defendant Real Time Resolutions, Inc. (“Real Time”) and a motion brought by Defendants EMC 22 Mortgage Corporation, JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., and Wells Fargo 23 Bank (collectively “JPMorgan”). The Court has considered the moving and responding papers as 24 well as the oral argument presented at the hearing on November 19, 2010. For the reasons 25 discussed below, the motions will be granted without leave to amend and the action will be 26 dismissed. 27 28 1 This disposition is not designated for publication in the official reports. Case No. C 09-4696 JF (HRL) ORDER GRANTING MOTIONS TO DISMISS SAC WITHOUT LEAVE TO AMEND AND DISMISSING ACTION (JFLC2) 1 2 I. BACKGROUND The Carneros, a married couple, filed the instant action on October 1, 2009, alleging 3 federal and state law claims arising out of the refinancing of their home located at 1558 4 Minnesota Avenue, San Jose, California. Federal subject matter jurisdiction appears to be based 5 on the existence of a federal question, specifically, the Carneros’ claim for violation of the Truth 6 in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. The Court dismissed the complaint and first 7 amended complaint (“FAC”) for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). The 8 Carneros filed the operative SAC on August 23, 2010. 9 10 II. LEGAL STANDARD Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed for 11 failure to state a claim upon which relief may be granted. “Dismissal can be based on the lack of 12 a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal 13 theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). For purposes of 14 evaluating a motion to dismiss, the court “must presume all factual allegations of the complaint 15 to be true and draw all reasonable inferences in favor of the nonmoving party.” Usher v. City of 16 Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). 17 However, mere conclusions couched as factual allegations are not sufficient to state a 18 cause of action. Papasan v. Allain, 478 U.S. 265, 286 (1986); see also McGlinchy v. Shell Chem. 19 Co., 845 F.2d 802, 810 (9th Cir. 1988). The complaint must plead “enough facts to state a claim 20 to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A 21 claim is plausible on its face “when the plaintiff pleads factual content that allows the court to 22 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft 23 v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Thus, “for a complaint to survive a motion to dismiss, the 24 non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly 25 suggestive of a claim entitling the plaintiff to relief. ” Moss v. U.S. Secret Serv., 572 F.3d 962, 26 969 (9th Cir. 2009). 27 28 III. DISCUSSION In its order dismissing the FAC, the Court concluded that the FAC was so lengthy and 2 Case No. C 09-4696 JF (HRL) ORDER GRANTING MOTIONS TO DISMISS SAC WITHOUT LEAVE TO AMEND AND DISMISSING ACTION (JFLC2) 1 disjointed that the Court was “is at a loss to understand which loan is at issue and what each 2 defendant is alleged to have done with that loan – in short, what happened.” Order of July 22, 3 2010 p. 3. The Court also noted that the FAC improperly referred the reader to the original 4 complaint for background or clarification on some points in violation of Civil Local Rule 10-1 5 (providing that “[a]ny party filing or moving to file an amended pleading must reproduce the 6 entire proposed pleading and may not incorporate any part of a prior pleading by reference”). Id. 7 Because it could not make any meaningful assessment of the Carneros’ claims as presented in the 8 FAC, the Court dismissed the FAC with leave to amend. Id. The Court suggested strongly that 9 any amended complaint be limited to approximately ten or twelve pages consistent with Federal 10 Rule of Civil Procedure 8, which directs a plaintiff to set forth “a short and plain statement of the 11 claim,” Fed. R. Civ. P. 8(a)(2), and requires that “[e]ach allegation must be simple, concise, and 12 direct,” Fed. R. Civ. P. 8(d)(1). The Court noted that “[i]t would be helpful to the Court if the 13 Carneros were to describe the circumstances surrounding the loan at issue in simple, 14 straightforward language. The Carneros’ numerous general allegations regarding the mortgage 15 industry are not useful and add nothing to their claims.” Id. The Court went on to state that: 16 “[i]t is important that the Carneros explain precisely what role each defendant played in the loan 17 transaction at issue, and how each defendant’s actions violated particular provisions of TILA.” 18 Id. at p. 4. The Court cautioned that “[i]f the Carneros once again fail to allege a viable federal 19 claim, the Court will dismiss this action without leave to amend.” Id. 20 The SAC omits all of the Carneros’ previously pled state law claims, instead setting forth 21 a single claim for violation of TILA. This claim again suffers from numerous deficiencies. For 22 example, the only allegation asserted with respect to Defendant Real Time is as follows: 23 II.12. Real Time committed the following violations related to the rescission of the second loan: 24 25 II.12.1. Violations of Regulation Z 226.32(e) failed to do research about the second loan being rescinded by Plaintiffs on April 23, 2009, see Exhibit A. 26 SAC p. 11. As Real Time points out in its motion, there is no Regulation “Z 226.32(e),” and this 27 conclusory allegation is inadequate to state any kind of claim. The Carneros did not file 28 opposition to Real Time’s motion. Accordingly, their claims against Real Time will be 3 Case No. C 09-4696 JF (HRL) ORDER GRANTING MOTIONS TO DISMISS SAC WITHOUT LEAVE TO AMEND AND DISMISSING ACTION (JFLC2) 1 2 dismissed without leave to amend. With respect to the JPMorgan defendants, the loans about which the Carneros complain 3 were originated in June 2007. See SAC p. 5; JPMorgan’s Req. For Jud. Notice Exhs. 1-2. 4 Accordingly, it appears from the face of the SAC that the Carneros’ claims for damages under 5 TILA are barred by TILA’s one-year statute of limitations. See 15 U.S.C. § 1640(e). Ordinarily, 6 the one-year limitations period begins to run when the transaction underlying the violation is 7 “consummated.” King v. California, 784 F.2d 910, 915 (9th Cir. 1986). However, “the doctrine 8 of equitable tolling may, in the appropriate circumstances, suspend the limitations period until 9 the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that 10 form the basis of the TILA action.” King, 784 F.2d at 915. The district court must evaluate a 11 request for equitable tolling to determine if application of the one-year limitations period “would 12 be unjust or frustrate the purpose of the Act.” Id. The Carneros have failed to allege facts giving 13 rise to equitable tolling in any of their three pleadings. 14 The Carneros’ claims for rescission under TILA have been extinguished because it 15 appears that the property has been sold. See 15 U.S.C. § 1635(f) (right of rescission is 16 extinguished by sale of the property). Moreover, the Carneros have failed to allege that they have 17 the present or future ability to tender all of the loan proceeds. See Powell v. Residential Mortg. 18 Capital, C 09-4928 JF (PVT), 2010 WL 2133011, at *4-5 (N.D. Cal. May 24, 2010) (explaining 19 this Court’s rationale for requiring a plaintiff to allege an ability to tender before permitting the 20 plaintiff to pursue a TILA rescission claim). 21 Because the Carneros have failed to allege a viable claim2 despite having had several 22 opportunities to do so, their claims against the moving defendants will be dismissed without 23 leave to amend and with prejudice. In addition to the moving defendants, the Carneros sue 24 National Default Servicing Corporation, Randy Miguel, Chicago Title Company, and Bear 25 Stearns Residential Mortgage Corporation. There is no indication in the record that service of 26 27 28 2 Defendants raise numerous additional grounds for dismissal in their motions, all of which appear to be well-taken. However, the Court need not reach these arguments in light of its disposition of the motions on the grounds discussed above. 4 Case No. C 09-4696 JF (HRL) ORDER GRANTING MOTIONS TO DISMISS SAC WITHOUT LEAVE TO AMEND AND DISMISSING ACTION (JFLC2) 1 process has been effected with respect to any of these additional defendants.3 Accordingly, the 2 Carneros’ claims against these defendants will be dismissed without prejudice for failure to 3 prosecute. 4 5 IV. ORDER (1) 6 Defendants’ motions to dismiss are GRANTED WITHOUT LEAVE TO AMEND; 7 (2) All claims against the moving defendants are DISMISSED WITH PREJUDICE; 8 (3) All claims against the remaining defendants are DISMISSED WITHOUT 9 10 PREJUDICE; and (4) The Clerk of the Court shall close the file. 11 12 13 14 DATED: November 22, 2010 __________________________________ JEREMY FOGEL United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Although the record does not contain a proof of service of the summons and complaint upon it, Defendant National Default Servicing Corporation filed a Declaration Of Nonmonetary Status pursuant to California Civil Code § 2924. The Carneros apparently interpreted the Declaration as a motion to dismiss, and filed opposition to it. Neither the allegations of the SAC nor the assertions made in the Carneros’ brief suggest that the Carneros would be able to state a viable federal claim against Defendant National Default Servicing Corporation. 5 Case No. C 09-4696 JF (HRL) ORDER GRANTING MOTIONS TO DISMISS SAC WITHOUT LEAVE TO AMEND AND DISMISSING ACTION (JFLC2) 1 Copies of Order served on: 2 3 Christopher Lee Peterson 4 Robin Prema Wright 5 Jose and Marta Carnero 1558 Minenesota Avenue ½ San Jose, CA 95125-4445 6,, 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Case No. C 09-4696 JF (HRL) ORDER GRANTING MOTIONS TO DISMISS SAC WITHOUT LEAVE TO AMEND AND DISMISSING ACTION (JFLC2)
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