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Archundia v. Chase Home Finance LLC

June 23, 2009

RAMIRO ARCHUNDIA, PLAINTIFF,
v.
CHASE HOME FINANCE LLC; AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER GRANTING MOTION TO DISMISS THE COMPLAINT

On May 5, 2009, Defendant Chase Home Finance LLC ("CHF") removed this action from the Superior Court of California, in and for the County of San Diego. (Doc. No. 1.) Defendant CHF then filed a motion to dismiss Plaintiff's complaint for failure to state a claim and a request for judicial notice. (Doc. Nos. 3-4.) Plaintiff Ramiro Archundia, proceeding pro se, did not file a response in opposition, as CHF noted in its filing on June 15, 2009. (Doc. No. 5.) The Court held a hearing on the matter on June 22, 2009. Christopher Yoo appeared on behalf of CHF. Plaintiff did not appear at the hearing.

For the reasons set forth below, the Court grants Defendant CHF's motion to dismiss.

Background

Plaintiff Ramiro Archundia's complaint arises from threatened foreclosure proceedings against his home. On March 27, 2009, Archundia filed a complaint against Defendant CHF for: (1) Truth In Lending Act violations; (2) slander of title; (3) fraud (misrepresentation); (4) to void contract based on impossibility of performance; (5) breach of fiduciary duty; (6) violation of California Business and Professions Code §17200, et seq.; (7) intentional infliction of emotional distress; and (8) injunctive relief. (Doc. No. 1, Compl.)

Plaintiff is the owner of real property commonly known as 1037 Alta Vista Drive, Vista, CA 92084, San Diego County, California (the "Property"). (Compl. ¶ 2(b).) Plaintiff alleges that CHF is "Lender 1." (Id. ¶ 11.) On or about February 21, 2007, Plaintiff obtained what he believed to be a fixed rate note from CHF. (Id. ¶ 3.) CHF, however, provided an adjustable rate mortgage. (Id. ¶ 4.)*fn1 CHF prepared and tendered to Plaintiff, along with other loan documents, a Deed of Trust. (Id. ¶ 5.)*fn2 Plaintiff alleges that at the time he applied for the loan, he provided his actual income information to one or more of the Doe defendants and at no time did he state to CHF that his actual monthly income was the amount stated on the residential loan application as typed and prepared by CHF. (Id. ¶¶ 6-7.) Plaintiff alleges that at no time did the original beneficiary of the deed of trust assign its interest in the property to any purported holder in due course of the Note evidencing the loan obligation. (Id. ¶ 8.)

Defendant CHF moves to dismiss Plaintiff's complaint for failure to state a claim upon which relief may be granted. In support of its motion, CHF requests the Court to take judicial notice of three documents, including a copy of a grant deed wherein Plaintiff obtained title to the Property, recorded on or about November 8, 2004, a copy of a deed of trust ("DOT") encumbering the Property recorded on or about February 21, 2007, and a copy of a deed of trust ("Second DOT") encumbering the Property recorded on or about February 21, 2007. (Doc. No. 3, Exs. 1-3.) The DOT lists Plaintiff and his wife as the borrower, JPMorgan Chase Bank, N.A. as the lender, and Commonwealth Land Title Co. as the trustee. (Id. Ex. 2.) The Second DOT lists Plaintiff and his wife as the trustor/borrower and JPMorgan Chase Bank, N.A. as the lender/beneficiary and trustee. (Id. Ex. 3.)

Discussion

I. Motion to Dismiss Pursuant to 12(b)(6)

A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729, 731 (9th Cir. 2001). A complaint generally must satisfy only the minimal notice pleading requirements of Federal Rule of Civil Procedure 8(a)(2) to evade dismissal under a Rule 12(b)(6) motion. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). Rule 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The function of this pleading requirement is to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964--65 (2007). A complaint does not "suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting id. at 556). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 127 S.Ct. at 1965 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235--36 (3d ed. 2004)). "All allegations of material fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir.1996); see also Twombly, 127 S.Ct. at 1964--65. "Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir.1990). The court may, however, consider the contents of documents specifically referred to and incorporated into the complaint. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994). Additionally, the Court may take judicial notice of matters of public record. See Lee v. City of Los Angeles, 250 F.3d 668, 689--90 (9th Cir.2001). Accordingly, the Court takes judicial notice of the documents provided by CHF, as Plaintiff refers to and relies on the documents in his complaint and they are matters of public record as all are recorded with the San Diego County Recorder's Office.

A. TILA

Plaintiff's first cause of action is for Truth in Lending Act ("TILA") violations. (Compl. ¶¶ 12-14.) TILA seeks to protect credit consumers by mandating "meaningful disclosure of credit terms." 15 U.S.C. § 1601(a). Its provisions impose certain duties on creditors. The statute itself defines "creditor" as referring only to "the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness." 15 U.S.C. § 1602(f). TILA has been amended to extend liability to assignees of the original creditor in certain situations. 15 U.S.C. § 1641(a). However, this provision applies "only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary." Id.

Plaintiff fails to sufficiently plead a violation of TILA. Plaintiff alleges that he has maintained all closing documents received at the signing, that he has kept the documents securely at his home, and that he is concluding an audit of all closing loan documents and will amend the complaint at a later date to be determined. (Compl. ¶¶ 13-14.) Plaintiff also alleges that he at no time stated to CHF that his actual monthly income was the amount stated on the residential loan application as typed and prepared by CHF. (Id. ¶ 7.) Plaintiff's allegations that CHF was the lender and prepared the loan application and documents is contradicted by the DOT and Second DOT, which list JPMorgan Chase Bank, N.A. as the lender. Therefore, Plaintiff fails to plead how CHF can be liable for any alleged TILA violations, as CHF was not the original lender and Plaintiff has not alleged that CHF is an assignee of the original creditor or that the violation of TILA was apparent on the face of the disclosure statement. Plaintiff alleges that the original beneficiary of the deed of trust at no point in time assigned its interest in the Property and has not attached any disclosure statements to the complaint evidencing a violation apparent on the face of such statement. Plaintiff also does not allege what provision of TILA CHF or any other defendant allegedly violated. Accordingly, the Court dismisses Plaintiff's claims against CHF for statutory damages and rescission under TILA.

The Court also notes that Plaintiff's request for any damages under TILA is subject to a one year statute of limitations, typically running from the date of the loan execution. 15 U.S.C. §1640(e). Plaintiff's loans were executed in February 2007 and this action was filed in state court on March 27, 2009. (See Doc. No. 3 Exs. 2-3; Compl.) Plaintiff doe not allege that CHF failed to make required disclosures or otherwise violated TILA in the appropriate time frame. The Ninth Circuit has held equitable tolling of civil damages claims brought under TILA may be appropriate "in certain circumstances," such as when a borrower might not have had a reasonable opportunity to discover the nondisclosures at the time of loan consummation. King v. State of California, 784 F.2d 910, 915 (9th Cir. 1986). Courts then have discretion to "adjust the limitations period accordingly." Id. The applicability of equitable tolling often depends on matters outside the pleadings. Supermail Cargo, Inc. v. U.S., 68 F.3d 1204, 1206 (9th Cir. 1995) (citation omitted.) Therefore, the determination "is not generally ...


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