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Curcio v. Wachovia Mortgage Corp.

October 14, 2009

ANTHONY M. CURCIO, PLAINTIFF,
v.
WACHOVIA MORTGAGE CORPORATION AND DOES 1-10, DEFENDANTS.



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

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS THE COMPLAINT (Doc. No. 5)

Presently before the Court is defendant Wachovia Mortgage, FSB's*fn1 ("Wachovia") motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). Plaintiff has filed an opposition and Wachovia has filed a reply. The Court finds the motion appropriate for disposition without oral argument pursuant to Local Civil Rule 7.1(d)(1). For the reasons stated herein, the motion is granted.

BACKGROUND

On June 9, 2006 Plaintiff entered into a loan transaction ("Loan") with World Savings Bank, FSB ("WSB"). The loan was secured by Plaintiff's primary residence, located at 1020 Harding Street, Escondido, California 92027 (the "Property"). Plaintiff alleges the loan was subsequently assigned to Wachovia, and that he is currently in default on the Loan. (Compl. ¶¶ 7 and 17.)

On June 5, 2009, Plaintiff brought the instant action in the Superior Court of the State of California for the County of San Diego, "based, in part, on [Wachovia's] failure to provide accurate material disclosures and a loan modification for the subject loan transaction." (Compl. ¶ 1.) The complaint contains 12 causes of action: (1) violation of the Federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq. for failure to provide Plaintiff with two "Right to Cancel" forms for the Loan; (2) violation of TILA for failure to make required loan disclosures; (3) violation of Cal. Civ. Code § 2923.6; (4) violation of California's Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), Cal. Civ. Code § 1788(e) and (f); (5) violation of Cal. Bus. & Prof. Code § 17200 et seq.; (6) breach of the implied covenant of good faith and fair dealing; (7) cancellation of instrument; (8) quiet title; (9) accounting; (10) unconscionability; (11) rescission in equity; and (12) unjust enrichment. Wachovia removed the case to this Court on July 10, 2009. (Doc. No. 1.) Wachovia now seeks to dismiss all claims Plaintiff has brought against it.

DISCUSSION

I. Legal Standard

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). A complaint survives a motion to dismiss under Fed. R. Civ. P. 12(b)(6) if it contains "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 only reviews the contents of the complaint, accepting all factual allegations as true, and drawing all reasonable inferences in favor of the nonmoving party. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). Notwithstanding this deference, the court need not accept "legal conclusions" as true. Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949 (2009). Moreover, it is improper for a court to assume "the [plaintiff] can prove facts that [he or she] has not alleged." Assoc. Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Accordingly, a reviewing court may begin "by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 129 S.Ct. at 1950.

However, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949 (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.' " Id. (citing Twombly, 550 U.S. at 557). The Court may deny leave to amend the complaint where a complaint previously has been amended, or where amendment would be futile. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990).

II. Plaintiff's Request for Judicial Notice*fn2

Plaintiff has requested that the Court take judicial notice of several documents pursuant to Fed. R. Evid. 201: (1) Plaintiff's designation of Howard, Nassiri, LLP as his attorney; (2) the "Treasury's Bank Bailout List" published by Propublica.com; (3) The U.S. Department of the Treasury's Home Affordable Modification Program Guidelines; (4) an order from the Supreme Court of South Carolina which "temporarily stopped all foreclosure actions in the state;" and (5) Wachovia's Home Affordable Modification Participation Agreement with the United States of America. The Court has reviewed these documents and finds they have no bearing on the Court's decision in this order. Accordingly, the Court denies Plaintiff's request for judicial notice in its entirety as moot.

III. Preemption

Plaintiff has alleged eight state law causes of action: (1) violation of Cal. Civ. Code § 2923.6; (2) violation of Cal. Civ. Code § 1788; (3) Cal. Bus. & Prof. Code § 17200 et seq.; (4) breach of implied covenant of good faith and fair dealing; (5) cancellation of instrument; (6) quiet title; (7) accounting; (8) unconscionability; (9) rescission in equity; and (10) unjust enrichment.

Wachovia argues all of Plaintiff's state law claims are preempted by federal law because Wachovia is a federally chartered savings bank regulated by the Office of Thrift Supervision ("OTS") pursuant to the Home Owners Loan Act ("HOLA"). Plaintiff disputes Wachovia's status as a federal savings association, and argues even if Wachovia is subject to HOLA, his claims are not preempted.

A. HOLA and the OTS

"The HOLA, a product of the Great Depression of the 1930's, was intended 'to provide emergency relief with respect to home mortgage indebtedness' at a time when as many as half of all home loans in the country were in default." Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 159 (1982). HOLA provided for the creation of a system of federal savings and loan associations, Id., which are also termed "thrift institutions" or "thrifts."*fn3 "Through HOLA, Congress gave the OTS broad authority to issue regulations governing thrifts." Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1005 (9th Cir. 2008); see also 12 U.S.C. ยง 1464 (2009) (entitled "Federal Savings Associations" and providing, inter alia, that the Director of the OTS "is authorized, under such regulations as the Director may prescribe--(1) to provide for the organization, incorporation, examination, operation, and regulation of associations to be known as Federal savings ...


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