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Real v. Countrywide Home Loans

February 2, 2009

ABIGAIL REAL AND BIENVENIDO REAL, PLAINTIFFS,
v.
COUNTRYWIDE HOME LOANS, INC., A NEW YORK CORPORATION; AMERIQUEST MORTGAGE COMPANY, A DELAWARE CORPORATION; ALL VALLEY HOME LOANS, INC., A CALIFORNIA CORPORATION; CHARLES SHEYA, AN INDIVIDUAL; AND DOES 1 THROUGH 50, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matters before the Court are: 1) the motion to dismiss (Doc. 12) filed by Defendant Countrywide Home Loans; 2) the motion to strike (Doc. 13) filed by Defendant Countrywide Home Loans; 3) the motion for leave to amend the complaint (Doc. 27) filed by Plaintiffs Abigail and Bienvenido Real; 4) the motion for a preliminary injunction (Doc. 29) filed by Plaintiffs; and 5) the motion to remand (Doc. 30) filed by Plaintiffs.

BACKGROUND

1. Procedural History

On October 10, 2008, Plaintiffs Abigail and Bienvenido Real filed a complaint and an ex parte application for a temporary restraining order against Defendants Countrywide Home Loans, Ameriquest Mortgage Company, All Valley Home Loans, Charles Sheya, and Does 1 -50 in the California Superior Court for the County of San Diego. (Complaint, Doc. 1, Ex. 1; Ex Parte Application for TRO, Doc. 1, Ex. 2). On October 14, 2008, the state court issued an order temporarily restraining Defendants from proceeding with a foreclosure sale of Plaintiffs' real property. (Order of San Diego Superior Court, Doc. 1, Ex. 6).

On October 22, 2008, Defendant Countrywide Home Loans*fn1 (hereinafter Defendant) removed this action to the United States District Court for the Southern District of California pursuant to 28 U.S.C. §§ 1331 & 1441(b). (Notice of Removal, Doc. 1).

On November 10, 2008, Defendant filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim or, in the alternative, for a more definite statement pursuant to Fed. R. Civ. P. 12(e). (Doc. 12).

On December 29, 2008, Plaintiffs filed a motion for leave to amend the complaint (Doc. 27), a proposed first amended complaint (Doc. 28), a motion for a preliminary injunction (Doc. 29), and a motion to remand (Doc. 30).

2. Allegations of the Complaint

Plaintiffs allege that in February 2005, "Plaintiffs engaged the mortgage brokerage services of Ameriquest, and its real estate agent, [Charles] Sheya, to refinance her [sic] home." (Complaint, Doc. 1, Ex. 1 at 4). Plaintiffs allege that they were falsely informed by Sheya that the mortgage was a 30 year fixed loan, "when in fact, unbeknownst to Plaintiffs, Defendants funded a variable interest loan with Countrywide." (Id.). Plaintiffs allege that their monthly payments increased in January 2006 and "continued to increase, despite Plaintiffs' timely payments." (Id.). In January 2007, Plaintiffs "could not make the [monthly] payments due to the interest rate increase and financial hardship." (Id.).

The complaint alleges causes of action for (1) cancellation of written instrument based on fraud in factum, (2) damages for fraud, and (3) preliminary and permanent injunction. In their first cause of action for cancellation of instrument based on fraud in factum, Plaintiffs seek "to enforce Plaintiffs' right to rescind consumer transactions, to void any security interest in the subject property claimed by defendants, and to recover reasonable attorney's fees and costs" pursuant to Truth in Lending Act (TILA), 15 U.S.C. §§ 1601 et seq. (Doc. 1, Ex. 1 at 4). In their second cause of action for fraud against Defendant Sheya and Does 1 - 50, Plaintiffs allege that "Defendants suppressed and concealed the true terms of said loan" at the time it was presented to Plaintiffs for their signature "with the intent to defraud and deceive Plaintiffs and with the intent to induce Plaintiffs to obtain a loan through Defendants." (Doc. 1, Ex. 1 at 6). Plaintiffs' third cause of action for a preliminary and permanent injunction asserts that "any foreclosure of the deed is wrongful because on October 10, 2008, Plaintiffs timely rescinded the loan because the loan is void ab initio due to fraud in factum. Defendants are therefore required to terminate any security interest they hold in the subject property." (Doc. 1, Ex. 1 at 8).

DISCUSSION

1. Motion to Dismiss and Motion for Leave to Amend the Complaint

Defendant moves to dismiss the complaint on the following two grounds: 1) Plaintiffs' first cause of action for rescission of the loan instrument and damages is barred by the TILA statute of limitations; and 2) Plaintiffs' second cause of action for fraud must be dismissed because it has not been pled with the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure. (Doc. 12 at 5). Plaintiffs move for leave to file an amended complaint "to replace their original complaint which was previously filed in California Superior Court of the County of San Diego and removed to this Court by Defendants." (Doc. ...


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