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Connors v. Home Loan Corp.

December 11, 2008


The opinion of the court was delivered by: M. James Lorenz United States District Court Judge


Defendants America's Servicing Company and U.S. Bank, N.A. (collectively "defendants") move to dismiss the first amended complaint ("FAC") under Federal Rule of Civil Procedure 12(b)(6). [doc. #25] The motion has been fully briefed. For the reasons set forth below, defendants' motion is granted.


Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory or where the complaint presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). The complaint is construed in the light most favorable to the non-moving party and all material allegations in the complaint are taken as true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). But the court is not required to accept legal conclusions cast in the form of factual allegations, if those conclusions cannot reasonably be drawn from the facts alleged. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Conclusory allegations without more are insufficient to defeat a motion to dismiss for failure to state a claim upon which relief may be granted. McGlinchy v. Shell Chemical Co., 845 F.2d 802, 810 (9th Cir. 1988). Even under the liberal pleading standard of Federal Rule of Civil Procedure 8(a) (2), a plaintiff must do more than recite the elements of the claim and must "provide the grounds of [its] entitlement to relief." Bell Atlantic v. Twombly, 127 S.Ct. 1955, 1959 (2007) (citations omitted). In addition, the pleading must not merely allege conduct that is conceivable, but it must also be plausible. Id. at 1974.



Plaintiff Richard A. Connors ("Connors" or "plaintiff") filed this action on June 24, 2008, alleging that defendants had violated various federal statutes and state laws concerning his home mortgage loan. By defaulting on the loan, plaintiff's house was subject to foreclosure. Plaintiff sought a TRO to prevent defendants from foreclosing on his home on July 3, 2008. After two hearings, the Court granted a TRO, set an order to show cause hearing and required the filing of an amended complaint.

On July 3, 2008, plaintiff filed an amended complaint against the same defendants.*fn1 In the amended complaint, plaintiff alleged violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1640 et seq.; the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605; the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1602 et seq.; Fair Debt Collections Practice Act, 26 U.S.C. § 1692; breach of fiduciary duty; breach of covenant of good faith and fair dealing; to quiet title; and for declaratory relief. Plaintiff did not dispute that he failed to make mortgage payments and was in default on the home loan.

On August 22, 2008, at the preliminary injunction hearing, the parties entered into an agreement on the record that would required plaintiff to make a payment of $10,000 and then make monthly mortgage payments. The agreement also continued the foreclosure of the home in order for the parties to continue working on a settlement of this case. Subsequently, the parties filed a joint motion vacating the temporary restraining order and denying as moot the motion for preliminary injunction. Although one settlement conference was held before the magistrate judge, a second conference was vacated based on plaintiff's failure to make payments as agreed.

Defendants ASC and U.S. Bank filed the present motion to dismiss [doc. #25] on August 13, 2008. Defendant Cal-Western Reconveyance Corp. entered into an agreement with plaintiff that it is not required to respond to any of the pleadings in this action, and is not required to appear at any hearings or the trial in this matter. (See Joint motion of non-monetary status as to Cal-Western Reconveyance Corp. at 2 [doc. #15].). Plaintiff has not filed separate returns of service with respect to defendants Home Loan Corp. or Mortgage Electronic Registration Systems.

Plaintiff's Causes of Action

Defendants contend that plaintiff's claims under TILA, RESPA, HOEPA, breach of fiduciary duty, breach of the covenant of good faith and fair dealing are insufficiently pleaded, time-barred and/or not legally cognizable against ASC and US Bank.


In the amended complaint, plaintiff asserts that defendants violated TILA when they did not "validate and otherwise make a full accounting and required disclosures as to the true finance charged and fees;" "improperly retained funds belonging to Plaintiff;" and refused to ...

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