The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge
This matter is before the court on defendants Beazer Homes Holdings Corp., Beazer Homes USA Inc., and Security Title Insurance Company's (collectively "defendants") motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.*fn1 Plaintiffs Richard Gerhart and Donna Gerhart ("plaintiffs") oppose the motion. For the reasons set forth below,*fn2 defendants' motion to dismiss is GRANTED on the basis that plaintiffs' sole federal claim is time barred by the statute of limitations.
Defendants Beazer Homes Holdings Corp. and Beazer Homes USA Inc. (collectively "Beazer") build and sell new homes. (SAC ¶ 4.) In or about March 1999, Beazer created defendant Security Title Insurance Company ("Security Title"), a wholly owned subsidiary, as a title reinsurance company. (Id. at ¶¶ 21, 23.) Reinsurance is a service whereby an insurance company (the "primary" insurer) has a second insurance company (the "reinsurer") reinsure its risk. Beazer allegedly referred business to outside title insurers on the condition that the title insurers use Security Title to reinsure the referred transactions. (Id. at ¶ 21.) Through its reinsurance arrangements, Beazer allegedly obtained monies for the referral of title insurance business. (Id.) Plaintiffs allege that the purported reinsurance services and fees were not bona fide, but instead were a sham established to disguise kickbacks and fee splitting amongst defendants and primary title insurance companies. (Id. at ¶¶ 25, 26, 27.) More specifically, plaintiffs allege that the kickbacks and fee-splits violated the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607, because there was an arrangement with certain primary title insurers that all transactions referred by Beazer would be reinsured with Security Title, and the premium payments to Security Title exceeded the reinsurance risk assumed by Security Title. (Id. at ¶ 27.)
Plaintiffs purchased a new home from Beazer in or about May 2004. (Id. at ¶ 20.) Plaintiffs allege that Security Title acted as a title reinsurer for this transaction and accordingly received part of the premium for title insurance paid to the primary title insurer. (Id. at ¶ 23.) Defendants allegedly made an inadequate and deceptive disclosure regarding the referral arrangement and Security Title's involvement as a purported reinsurer. (Id. at ¶ 28.) In October 2007, defendants settled an action with the United States Department of Housing and Urban Development ("HUD") that had accused defendants of accepting kickbacks in violation of RESPA. (Id. at ¶¶ 29,30.) Plaintiffs allege they did not learn of the kickback arrangements until defendants settled with HUD in October 2007. (Id. at ¶ 31.)
Plaintiffs filed the instant action on March 12, 2008. The SAC asserts a federal claim for violation of RESPA, and state law claims for breach of contract, fraudulent concealment, negligence, unfair business practices, and restitution. Defendants now move to dismiss plaintiffs' claims as untimely.
On a motion to dismiss, the allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give the plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). Thus, the plaintiff need not necessarily plead a particular fact if that fact is a reasonable inference from facts properly alleged. See id.
Nevertheless, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Calif., Inc. v. Calif. State Council of Carpenters, 459 U.S. 519, 526 (1983). Moreover, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986).
Ultimately, the court may not dismiss a complaint in which the plaintiff alleged "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1973 (2007). Only where a plaintiff has not "nudged [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. "[A] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002) (quoting Hudson v. King & Spalding, 467 U.S. 69, 73 (1984)).
In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201.
See Mir v. Little Co. Of Mary Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).
I. Plaintiffs' RESPA Claim
Defendants move to dismiss plaintiffs' RESPA claim on the ground that it is barred by the applicable statute of limitations. Congress enacted RESPA to shield home buyers "from unnecessarily high settlement charges by certain abusive practices." 12 U.S.C. § 2601(a). Title 12 U.S.C. § 2607(a) provides that no person shall give or accept any "fee, kickback, or thing of value" for the referral of a real estate settlement service involving a federal mortgage loan. Likewise, Section 2607(b) provides that no person shall give or accept a portion, split, or percentage of any charge made or received for the rendering of real estate settlement services, except for services actually performed, where a federal mortgage loan is involved.
RESPA, however, provides a qualified exemption from liability for affiliated business arrangements ("ABAs") which refer real estate settlement services between themselves. In particular, Section 2607(c)(4) provides that a ...