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Tanuvasa v. Federal Deposit Insurance Corp.

September 23, 2009

FREDA TANUVASA, PLAINTIFF,
v.
FEDERAL DEPOSIT INSURANCE CORPORATION, ("FDIC") SUCCESSOR TO WASHINGTON MUTUAL SAVINGS BANK ("WAMU"), JP. MORGAN CHASE BANK, NA ("CHASE"), PURCHASER OF WAMU FROM FDIC, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

Order Granting Motion to Dismiss [Motion filed on June 17, 2009]

This matter comes before the Court on defendant J.P Morgan Chase's ("Chase") motion to dismiss for failure to state a claim. After reviewing the materials submitted by the parties, the Court grants the motion with respect to plaintiff's federal law claims.

The Court grants plaintiff leave to amend her complaint with respect to her Truth in Lending Act damages claim. If she fails to amend the complaint such that it states a federal claim on which relief can be granted, the Court will likely decline to exercise supplemental jurisdiction over the pendant state law claims. See 28 U.S.C. § 1367(c). Plaintiff must file an amended complaint within twenty (20) days of the date of this Order.

I. Background

Pro se plaintiff Freda Tanuvasa obtained a $669,755 mortgage loan in connection with the purchase of real property located at 13236 Rutgers Avenue in Downey, California. (Compl. ¶ 7.) The loan was secured by a Deed of Trust that was recorded with the Los Angeles County Recorder's Office on December 11, 2006. (Id.) The Deed of Trust identifies defendant Washington Mutual Bank ("WaMu") as the lender, and the California Reconveyance Company as the trustee. Chase acquired WaMu's banking operations from the Federal Deposit Insurance Corporation ("FDIC") on September 25, 2008. (Request for Judicial Notice ("RJN") Ex. 1.)*fn1

Plaintiff alleges that at the time of purchase, both she and the lender believed the property was worth more than $700,000. (Compl. ¶ 45.) She asserts that, as of April 2009, the property was worth less than $350,000. (Compl. ¶ 46.) At some point, plaintiff defaulted on the loan and lost her home in a foreclosure action. (Compl. ¶ 26.) Chase, after acquiring title to the property in the foreclosure sale, has moved to evict her. Id.

In her complaint, plaintiff contends that WaMu, the original lender, failed to make material loan disclosures in accordance with the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq., and the Home Owner Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639 et seq. She argues, for example, that WaMu did not inform her of her right to rescind, calculate the annual percentage rate of interest on the loan, or disclose the direct and indirect fees associated with the transaction. Compl. ¶¶ 11-13. She brought the present action seeking damages and declaratory and injunctive relief on May 15, 2009.

II. Legal Standard

A. Motion to Dismiss under Rule 12(b)(6)

Pursuant to Federal Rule of Procedure Rule 12(b)(6), a complaint is subject to dismissal when the plaintiff's allegations fail to state a claim upon which relief can be granted.*fn2 When considering a Rule 12(b)(6) motion, courts accept the plaintiff's allegations of material fact as true, and construe the complaint in the light most favorable to the non-moving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-338 (9th Cir. 1996).

In Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), the Supreme Court explained that a court considering a 12(b)(6) motion should first "identify[] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Next, the court should identify the complaint's "well-pleaded factual allegations, . . . assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id.

III. Discussion

A. Chase's Successor Liability

Chase contends that, pursuant to the FDIC-Chase purchase agreement, it did not assume "any liabilities for tortious or other conduct" arising from WaMu's lending activity. (Reply Br. at 1.) Because Chase raised the successor liability argument for the first time in its reply brief, the Court declines to ...


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