The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
SCHEDULING CONFERENCE ORDER
Class Certifications Motion
Opposition to Class Certification Motion Filing
Certification Motion Filing Reply to Class
Deadline: 11/12/09) Class Certification Hearing
Date: 12/7/09 10:00 Ctrm. 3
I. Date of Scheduling Conference. April 17, 2009
II. Appearances Of Counsel
Browne Woods George LLP by Lee A. Weiss, Esq., appeared on behalf of Plaintiff.
Severson & Werson by Erik Kemp, Esq., appeared on behalf of Defendants American Home Mortgage Investment Trust 2005-2 and Deutsche Bank National Trust Company.
III. Summary of Pleadings
1. This is a Putative Class Action
Plaintiffs filed their Class Action Complaint (the "Complaint") on August 12, 2008, which asserts numerous causes of action, including claims for violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., violations of California's Unfair Competition Law ("UCL"), Bus. & Prof. Code § 17200, et seq., fraudulent omissions, breach of contract, and tortious breach of the implied covenant of good faith and fair dealing. The Court recently dismissed the breach of contract and tortious breach of the implied covenant of good faith and fair dealing claims. The Complaint seeks a variety of equitable remedies and damages.
1. Plaintiffs, individually and on behalf of the proposed classes, allege that Defendants failed to disclose important material information in connection with the Option Adjustable Rate Mortgage loans ("Option ARM") Defendants sold to Plaintiffs and other consumers. Plaintiffs allege that the loan documents Defendants used to sell the Option ARM loans violate TILA. Plaintiffs contend that TILA requires all lenders, including Defendants, to make certain disclosures to borrowers concerning the terms and conditions of their home loans in a clear and conspicuous manner. Plaintiffs allege that Defendants failed to clearly and conspicuously disclose, in their loan documents and in the federally required TILA disclosure statements: (i) the actual interest rate Defendants charged Plaintiff and consumers on their loans; (ii) that payments on the notes at the initial low interest rate would absolutely result in negative amortization and that the principal balance absolutely would increase as a result; and (iii) that the initial interest rate provided was discounted and does not reflect the actual interest that Plaintiffs and others, were paying on the loans. Defendants also failed to provide to Plaintiffs the low interest rate in the manner agreed to by the Parties.
2. Plaintiffs, individually and on behalf of the Class, seek an order declaring that Defendants violated TILA, 15 U.S.C. § 1601, et seq.; that Plaintiffs have a right to rescind pursuant to 15 U.S.C. § 1635 and 12 C.F.R. § 226.23; and for an order rescinding Plaintiffs' individual mortgage; and for an order awarding other relief as the court deems just and proper. Plaintiffs also seek an order awarding Plaintiffs and Class members damages, restitution, and for declaratory and injunctive relief under Plaintiffs' state law claims for violation of the UCL and fraudulent omissions, and such other relief as is just and proper. Plaintiffs also seek litigation costs and attorneys fees.
1. Defendants deny that they are liable to Plaintiffs in any respect.
2. Defendants contend that Plaintiffs' claims that Defendants committed violations of TILA entitling them to rescission or damages, violated the UCL, or committed fraudulent concealment are wholly without merit. Defendants did not originate Plaintiffs' loan or the putative class members' loans. The terms of Plaintiffs' loans were properly disclosed and Plaintiffs knowingly and voluntarily agreed to those terms.
Defendants will show that Plaintiffs can establish neither liability or damages and all of these claims will fail.
IV. Orders Re Amendments To Pleadings
1. At this time, the parties do not anticipate any amendment of the pleadings. However, Plaintiffs anticipate that if a class is certified, they will seek to amend their complaint to include the subsequent purchasers of the loans of currently absent class members. Defendants believe addition of new parties after class certification would be inappropriate.
A. Admitted Facts Which Are Deemed Proven Without Further Proceedings
1. Plaintiffs, Elvin Valenzuela and Phyllis Valenzuela, at the time of the loan transaction, were residents of the Eastern District of California, Fresno Division.
2. Plaintiffs received an option ARM loan from American Home Mortgage Acceptance, Inc., on or about June 23, 2005.
3. Defendant American Home Mortgage Investment Trust 2005-2 presently holds Plaintiffs' Option ARM loan as part of a pool of securitized loans as an assignee.
4. Defendant Deutsche Bank National Trust Company is the indenture trustee under the mortgage pool for American Home Mortgage Investment Trust 2005-2.
5. The Valenzuelas' loan is current.
1. Whether Defendants failed to disclose that negative amortization was certain to occur.
2. Whether Defendants failed to disclose clearly that the initial interest rate was discounted.
3. Whether Defendants failed to disclose clearly that the initial interest rate would not apply for more than one month.
4. Whether Defendants failed to disclose clearly the loan's true cost.
5. Whether Defendants' loan documents failed to disclose material facts regarding the terms of Plaintiffs' Option ARM loan.
1. Whether Plaintiffs or any putative class members actually and reasonably relied on any allegedly improper disclosures.
2. Whether Defendants made any disclosures to Plaintiffs or the putative class members, and whether they had any duty to do so.
3. What information did plaintiffs and putative class members have or review regarding the nature of ...