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Ozuna v. Countrywide's Home Capital Funding

August 13, 2009

JOSE OZUNA, PLAINTIFF,
v.
COUNTRYWIDE'S HOME CAPITAL FUNDING; SAN DIEGO COUNTY REAL ESTATE SERVICES; [DOC. NO. 14.] COUNTRYWIDE HOME LOANS; AND ALL OTHER CLAIMANTS OF WHATSOEVER KIND AND CHARACTER AGAINST REAL PROPERTY COMMONLY KNOWN AS 4342 HIGHLAND AVENUE, #3 SAN DIEGO, CA 92115; AND DOES 1 THROUGH 100 INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT MOTION TO DISMISS

Presently before the Court is defendant Countrywide Home Loans's ("Countrywide") motion to dismiss pursuant to Rule 12(b)(6). (Doc. No. 14.) For the reasons stated herein, the Court GRANTS IN PART AND DENIES IN PART Countrywide's motion.

BACKGROUND

Plaintiff Jose Ozuna ("Plaintiff") is the owner of 4342 Highland Avenue, #3, San Diego, California 92115 (the "Property"). On January 5, 2006, Plaintiff obtained a loan from defendant Home Capital Funding ("Home Capital"), secured by the Property. Defendant San Diego Real Estate Services ("Real Estate Services") acted as the broker for the loan.

During the issuance of the loan, Home Capital and Real Estate Services allegedly violated both federal and state laws. First, Home Capital and Real Estate Services allegedly misrepresented the interest rate and the material terms of the loan. Second, Home Capital and Real Estate Services allegedly failed to disclose, among other things, Plaintiff's right to cancel. Third, Plaintiff claims the terms of the loan could not be reasonably understood by the average consumer. Subsequently, Countrywide allegedly acquired Home Capital's interest in the loan and is currently the loan's servicer.

Plaintiff's complaint contains seven causes of action: (1) violation of the Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2605, et seq; (2) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq.; (3) violation of California Civil Code § 1632; (4) negligent misrepresentation; (5) rescission under TILA; (6) unjust enrichment; and (7) quiet title. Countrywide filed its motion to dismiss on May 19, 2008. Plaintiff filed an opposition and Countrywide replied. The Court finds this motion amenable to disposition without oral argument. Local Civil Rule 7.1(d).

LEGAL STANDARD

A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations; rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S.544, 570 (2007). The court's review is limited to the contents of the complaint and it must accept all factual allegations pled in the complaint as true, drawing all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). Notwithstanding this deference, it is improper for a court to assume "the [plaintiff] can prove facts which [he or she] has not alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). Furthermore, a court need not credit conclusory legal allegations cast in the form of factual allegations, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

DISCUSSION

I. RESPA Violations

i. Parties' Arguments

Plaintiff alleges Countrywide violated RESPA in two ways: (1) by failing to adequately respond to his Qualified Written Requests ("QWRs") and (2) by failing to provide certain disclosures at the loan's origination.*fn1 (Compl. ¶¶ 26-29).

Countrywide urges the Court dismiss the first portion of the claim because the Complaint cannot function as a QWR. Further, Countrywide requests dismissal of the remaining RESPA claim because these alleged violations occurred at the loan's origination, prior to Countrywide's acquisition of assignee rights. Plaintiff claims he sent multiple QWRs and has properly alleged Countrywide was part of the loan origination.

ii. Analysis

The first issue is whether the Court should dismiss the portion of the RESPA claim premised on Countrywide's alleged failure to respond to Plaintiff's QWRs. A "QWR" is defined as: a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that-- [¶] (i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and [¶] (ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

12 U.S.C. ยง 2605(e)(1)(B). When a loan servicer receives a QWR, it must either correct the borrower's account or, after conducting an investigation, provide the borrower with a written explanation of: (1) why the servicer believes the account is correct; or (2) why the ...


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