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Andrade v. Wachovia Mortgage

April 21, 2009


The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge


Doc. No. 6

Pending before the court is a motion by Defendant Wachovia Mortgage, FSB ("Wachovia," formerly, World Savings Bank) to dismiss Plaintiff's Complaint (Doc. No. 1, Exh. A, "Compl.") under Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 6, "Mot.") To date, Plaintiff has neither filed an opposition nor sought additional time to do so. When an opposing party does not file papers in the manner required by Civ.L.R. 7.1(d)(2), the court may deem the failure to "constitute a consent to the granting of a motion or other request for ruling by the court." Civ.L.R. 7.1(f)(3)(c). Notwithstanding Plaintiff's failure to respond, the court reviews the motion on the merits to ensure dismissal is appropriate. Pursuant to Civ.L.R. 7.1(d), the matter was taken under submission by the court without oral argument on April 17, 2009. For the reasons set forth below, the motion to dismiss is granted with 20 days leave to amend from the date of entry of this order.


On August 3, 2004, Plaintiff obtained a home mortgage loan from Wachovia through which she refinanced and consolidated two existing loans she had with Wachovia. (Compl. ¶ 12.) The loan was secured by a Deed of Trust on Plaintiff's property. (Id. ¶ 17; Req. for Jud. Not., Exh. 3.) Plaintiff later defaulted on the loan, leading to the initiation of foreclosure proceedings. (Compl. ¶¶ 11, 15, 20.) The present status of any pending or completed foreclosure sale is unclear from the parties' submissions.*fn1 Plaintiff alleges that although Defendants knew she could not afford the mortgage payments, they induced her to sign the loan documents through inadequate disclosures, misrepresentations about her ability to pay, and promises of readily available refinancing options. (Compl. ¶¶ 13, 22, 57.)

Plaintiff asserts federal causes of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"), the Truth in Lending Act, 15 U.S.C. § 1601 et seq. ("TILA"), and the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. ("RESPA"). Plaintiff also raises state law claims to quiet title and for fraud, negligent infliction of emotional distress, negligence, and cancellation based on fraud and impossibility. Plaintiff seeks injunctive relief (labeled as a "first cause of action"), damages, attorneys' fees and costs, and rescission.


A. Legal Standards

A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of the pleadings. De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). In evaluating the motion, the court must construe the pleadings in the light most favorable to the plaintiff, accepting as true all material allegations in the complaint and any reasonable inferences drawn therefrom. See, e.g., Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003). While Rule 12(b)(6) dismissal is proper only in "extraordinary" cases, the complaint's "factual allegations must be enough to raise a right to relief above the speculative level...." U.S. v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981); Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007) (allegations must provide "plausible grounds to infer" that plaintiff is entitled to relief). The court should grant 12(b)(6) relief only if the complaint lacks either a "cognizable legal theory" or facts sufficient to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). In testing the complaint's legal adequacy, the court may consider material properly submitted as part of the complaint or subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Furthermore, under the "incorporation by reference" doctrine, the court may consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading." Janas v. McCracken (In re Silicon Graphics Inc. Sec. Litig.), 183 F.3d 970, 986 (9th Cir. 1999) (internal quotation marks omitted).*fn2

B. Analysis of Plaintiff's State Law Claims

1. Statutes of Limitations

Wachovia argues Plaintiff's state law claims should be dismissed because the governing statutes of limitations expired before she filed her Complaint.*fn3 Specifically, Wachovia contends Plaintiff's claims are subject to two-, three-, or four-year limitations periods, yet she filed her Complaint more than four years after her loan with Wachovia closed. Wachovia insists Plaintiff's causes of action accrued at the time the loan closed in August 2004. However, Plaintiff's allegations deal with misrepresentations about the terms of the loans and the availability of future refinancings which may have not been evident at the time the loan was made. From the record before the court, it is unclear when Plaintiff became aware (or should have been aware) of Defendants' alleged wrongful conduct. Thus, the court is unable to determine when her causes of action may have accrued and cannot grant Wachovia's motion on these grounds.

2. Preemption of State Law Claims

Wachovia, a federally chartered savings bank, contends all of Plaintiff's state law claims are preempted by the Home Owners' Loan Act of 1933, 12 U.S.C. ยง 1461 et seq. ("HOLA"), and the regulations issued thereunder by the Office of Thrift Supervision ("OTS"), because the factual ...

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