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Wilson v. First Franklin Financial Corp.

November 4, 2009

BEVERLY J. WILSON, PLAINTIFF,
v.
FIRST FRANKLIN FINANCIAL CORP., DEFENDANT.



ORDER AND FINDINGS AND RECOMMENDATIONS

Plaintiff is proceeding in this action pro se and in forma pauperis. This proceeding was referred to this court by Local Rule 72-302(c)(21). Defendant's motion to dismiss was taken under submission. (April 28, 2009 Order.) Upon review of the motion and the documents in support and opposition, and good cause appearing therefor, THE COURT MAKES THE FOLLOWING FINDINGS:

Plaintiff alleges violations of the Truth in Lending Act ("TILA") and the Fair Debt Collection Practices Act, fraud, and seeks declaratory and injunctive relief including resolution of a quiet title action, rescission and damages.

Plaintiff states she resides at 2651 Mysin Way, Sacramento, California, and that on or about April 12, 2007, plaintiff entered into "consumer credit transactions" in which defendant "retained a security interest" . . . "for a first mortgage note in the amount of $347, 851.77 and a second mortgage note in the amount of $87,000.00." (Complt. at 6.) Plaintiff contends that the material terms of the loan were misrepresented and differed from the good faith estimate provided, her payments were misapplied, resulting in a notice of default and setting of a trustee's foreclosure sale on or about February 19, 2008. (Id.) Plaintiff admits she received the notice of default and notice of trustee's sale. (Id.)

On March 23, 2009, defendant filed a request to take judicial notice providing copies of title documents filed with the Sacramento County Recorder. Rule 201(b) of the Federal of Evidence provides

A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.

Id. Defendants' request for judicial notice will be granted as these documents are matters of public record. See MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986) (A court may take judicial notice of matters of public record outside the pleadings on a motion to dismiss.); W. Fed. Sav. v. Heflin, 797 F.Supp. 790, 792 (N.D.Cal.1992) (taking judicial notice of documents in a county public record, including deeds of trust). These title documents reflect the following:

On May 8, 2008, a notice of default was recorded as document 200805081299. On August 14, 2008, a notice of trustee's sale was recorded as document 200808140367.

On October 20, 2008,*fn1 plaintiff executed a grant deed in favor of King Solomon II Archbishop Corporation Sole ("King Solomon"), divesting plaintiff of all interest in the property. On November 3, 2008, that grant deed was recorded as document 200811031121.

The instant action was filed on October 29, 2008. On October 31, 2008, the district court denied plaintiff's request for a temporary restraining order. (Docket No. 6.)

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, , 127 S.Ct. 1955, 1974 (2007). Thus, a defendant's Rule 12(b)(6) motion challenges the court's ability to grant any relief on the plaintiff's claims, even if the plaintiff's allegations are true.

In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). In addition, the court may disregard allegations in the complaint if they are contradicted by facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).

The court is permitted to consider material properly submitted as part of the complaint, documents not physically attached to the complaint if their authenticity is not contested and the complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). Matters of public record include pleadings and other papers filed with a court. Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986). The court need not accept as true conclusory allegations, unreasonable inferences, or unwarranted deductions of fact. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

Rule 12(e) of the Federal Rules of Civil Procedure is designed to strike at unintelligibility, rather than want of detail. See Woods v. Reno Commodities, Inc., 600 F. Supp. 574, 580 (D. Nev. 1984); Nelson v. Quimby Island Reclamation Dist., 491 F. Supp. 1364, 1385 (N.D. Cal. 1980). The rule permits a party to move for a more definite statement "[i]f a pleading is so vague that a party cannot reasonably be required to frame a responsive pleading." Fed. R. Civ. P. 12(e). The function of such a motion is thus not to require the pleader to disclose details of the case, see Boxall v. Sequoia Union High Sch. Dist., 464 F. Supp. 1104, 1114 (N.D. Cal. 1979), or to provide the evidentiary material that may properly be obtained by discovery, see Famolare, Inc. v. Edison Bros. Stores, Inc., 525 F. Supp. 940, 949 (E.D. Cal. 1981). A motion for more definite statement should be denied if a pleading meets federal standards by providing a short and plain statement of the claim showing that the pleader is entitled to relief. See Fed. R. Civ. P. 8(a)(2).

Because the complaint addresses various statutory violations in each cause of action, the court will address specific statutes and requests for relief rather than individual causes of action alleged in the complaint.

1. Truth in Lending Act

Plaintiff alleges that defendant entered into a consumer credit transaction wherein defendant extended to plaintiff consumer credit in the form of a loan which was subject to a finance charge. Plaintiff alleges defendant violated the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 and Regulation Z, 12 C.F.R. § 226, by the lender's failure to provide accurate material disclosures, deceptive loan practices and lender misrepresentations.

Defendant contends that TILA requires that damages claims be brought within one year of the date the loan transaction is consummated. Defendant contends that a TILA rescission claim expired three years after the date the loan transaction is consummated or upon the sale of the property, whichever occurs first.

Violations of TILA requirements give rise to remedies of both rescission and damages. Damages claims under TILA must be brought "within one year from the date of the occurrence of the violation." 15 U.S.C. § 1640(e). "[A]s a general rule the limitations period starts at the consummation of the transaction." King v. California, 784 F.2d 910, 915 (9th Cir.1986). For rescission, TILA provides for an initial three-day period during which consumers have an unconditional right to cancel the loan transaction for any reason. 15 U.S.C. § 1635(a). Rescission claims under TILA "shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first." 15 U.S.C. § 1635(f). Where the creditor fails to provide to the consumer a notice of right to rescind and all material disclosures, TILA implementing Regulation ...


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