The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court
ORDER GRANTING COMPLAINT DEFENDANTS' MOTIONS TO DISMISS PLAINTIFFS'
On August 5, 2009, Plaintiffs Leo Pineda and Rebecca Pineda filed a complaint in the Superior Court of the State of California for the County of San Diego. (Doc. No. 1, Compl.) The complaint arises out of a foreclosure proceeding on Plaintiffs' home. (Id.) On September 3, 2009, Defendant Wells Fargo Bank, N.A. ("Wells Fargo") (erroneously named Wells Fargo Home Mortgage) filed a notice of removal. (Doc. No. 1.) The notice was joined by Defendants Ruth Reyes, Prudential California Realty, First American Loanstar Trustee Services, LLC ("Loanstar") (erroneously named First American Loanstar Trustee Service), and Tiburon Financial, LLC ("Tiburon Financial") (erroneously named Tiburon Financial). (Doc. Nos. 2-5.) On September 8, 2009, Defendant Loanstar filed a motion to dismiss Plaintiffs' complaint and a request for judicial notice. (Doc. No. 7.) On September 11, 2009, Defendant Wells Fargo filed a motion to dismiss Plaintiffs' complaint. (Doc. No. 8.) Defendants Ruth Reyes, Prudential California Realty, and Tiburon Financial joined the motions to dismiss by Wells Fargo and First Prudential. (Doc. Nos. 9,12,13.) Plaintiffs have not filed a response in opposition.
The Court, pursuant to its discretion under Local Rule 7.1(d)(1), determined these matters are appropriate for resolution without oral argument and submitted them on the parties' papers on October 14, 2009. (Doc. No. 19.) For the reasons set forth below, the Court grants Defendants' motions to dismiss. Plaintiffs may file an amended complaint curing the noted deficiencies no later than thirty days after the issuance of this order.
Plaintiffs' complaint arises from a home loan secured by real property located at 250 South Siena Street, San Diego, CA 92114 (the "Property"). Plaintiffs assert causes of action for: (1) Home Owner Equity Protection Act violations; (2) Real Estate Settlement Procedures Act violations; (3) Federal Truth-In-Lending Act violations; (4) Fair Credit Reporting Act violations; (5) fraudulent misrepresentation; (6) breach of fiduciary duty; (7) unjust enrichment; (8) civil conspiracy; (9) civil RICO; (10) slander of title; (11) usury and fraud; and (12) intentional infliction of emotional distress.
On June 28, 2006, Plaintiffs financed the Property by executing a promissory note that was secured by a Deed of Trust. (Doc. No. 7-2 Ex. A. ) On July 12, 2006, the Deed of Trust was recorded in San Diego County. (Id.) Pursuant to the Deed of Trust, Plaintiffs are the "Borrower," Defendant Wells Fargo is the "Lender" and "Beneficiary," and Fidelity National Title Insurance Company (Fidelity) was the original trustee. (Id.) Defendant Loanstar is the "Successor Trustee" under the Deed of Trust pursuant to a Substitution of Trustee executed by Wells Fargo and recorded in the real estate records of San Diego County on August 11, 2008. (Id. Ex. B.)
On July 8, 2008, Loanstar recorded a "Notice of Default and Election to Sell" in San Diego County. (Id. Ex. C.) Plaintiffs failed to cure the defaults, and, on May 22, 2009, Loanstar recorded a Notice of Trustee Sale in the real estate records of San Diego County. (Id. Ex. D.) On July 15, 2009, the Property was sold to Defendant Wells Fargo at the trustee sale. Defendant Loanstar executed and recorded a Trustee's Deed Upon Sale in the real estate records of San Diego County on July 22, 2009. (Id. Ex. E.)
I. Motion to Dismiss Pursuant to Fed. R. Civ. P. 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, 732 (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." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting 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." Id. 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 Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (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, 550 U.S. at 555. Pro se litigants may be entitled to greater leeway when courts construe their pleading, but "those pleadings must nonetheless meet some minimum threshold in providing a defendant with notice of what it is that it allegedly did wrong." Brazil v. U.S. Dept. of Navy, 66 F.3d 193, 199 (9th Cir. 1995).
"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) overruled on other grounds byGalbraith v. County of Santa Clara, 307 F.3d 1119, 1127 (9th Cir. 2002). 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 Defendants because Plaintiffs rely on the documents in their complaint and they are matters of public record recorded with the San Diego County Recorder's Office.
A. Home Owner Equity Protection Act and Federal Truth-In-Lending Act
Plaintiffs' first and third causes of action are for violations of the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1602, et seq., and the federal Truth in Lending Act ("TILA"), 15 U.S.C. 1601, et seq., including TILA's implementing Regulation Z, 12 C.F.R. § 226.1, et seq. (Doc. No. 1, Compl. ¶¶ 60-71.7, 75-79.) According to Plaintiffs, they are "consumers" and "each Defendant is a 'creditor' as defined by HOEPA." (Id. ¶ 62.) Plaintiffs allege that Defendants violated HOEPA by requiring payment of excessive fees, expenses, and costs, failing to conspicuously make required disclosures, and engaging in a pattern and practice of extending credit to Plaintiffs without regard to their ability to repay. (Id. ¶¶ 62, 65.) Plaintiffs also allege that Defendants violated HOEPA by failing to make additional disclosures, including those related to Plaintiffs' right to rescind the transaction. (Id. ¶ 67.) With respect to TILA, Plaintiffs allege that "Defendants failed to include and disclose certain charges in the finance charge shown on the TIL statement, which charges were imposed on Plaintiffs incident to the extension of credit to the plaintiffs and were required to be disclosed pursuant to 15 USC sec. 1605 and Regulation Z ." (Id. ¶ 76.)
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 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. Section 1639(h) of HOEPA provides that "[a] creditor shall not engage in a pattern or practice of extending credit to consumers under mortgages referred to in section 1602(aa) of this title based on the consumers' collateral without regard to the consumers' repayment ability, including the consumers' current and expected income, current obligations, and employment." 15 U.S.C. § 1639(h). The provisions of HOEPA apply to a mortgage secured by the consumer's principal dwelling if, "the annual percentage rate at consummation of the transaction will exceed by more than 10 percentage points the yield on Treasury securities . . . or the total points and fees payable by the consumer at or before closing will exceed the greater of (i) 8 percent of the total loan amount; or (ii) $400." 15 U.S.C. §1602(aa).
A request for any damages under TILA or HOEPA is subject to a one year statute of limitations, typically running from the date of the loan execution. 15 U.S.C. § 1640(e). The Ninth Circuit has held that 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 amenable to resolution on a Rule 12(b)(6) motion." Id.
Under TILA, "[a]n obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of ...