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Rivas v. New Century Mortgage Corp.

January 20, 2010


The opinion of the court was delivered by: Hayes, Judge


The matter before the Court is Defendant Countrywide Home Loans's Motion to Dismiss the First Amended Complaint. (Doc. # 9).


This action concerns Plaintiff's mortgage. On April 10, 2009, Plaintiff initiated this action by filing her complaint. (Doc. # 1). On August 7, 2009, Defendant Countrywide Home Loans ("Countrywide") filed a motion to dismiss. (Doc. # 4). On September 4, 2009, Plaintiff filed her First Amended Complaint ("FAC") as of right. (Doc. # 6). The FAC alleges nine causes of action: (1) Violation of the Real Estate Settlement Procedures Act ("RESPA"), (2) Violation of the Truth In Lending Act ("TILA"), (3) Violation of California Civil Code § 1632, (4) Violation of California Business & Professions Code § 17200, (5) Negligent Misrepresentation, (6) Fraud, (7) Rescission, (8) Quasi Contract, and (9) Determination of Validity of Lien. Id. at 1. On September 24, 2009, Countrywide filed its Motion to Dismiss the First Amended Complaint. (Doc. # 9).

The FAC alleges Plaintiff is the owner of property at 3061-3603 Webster Avenue, San Diego, California, 92113, APN 545-442-06-00. (Doc. # 6 at 2). The FAC alleges Defendant San Diego County Real Estate Services ("SDCRES"), the broker, Defendant New Century Mortgage Corporation ("New Century"), the originating lender, Countrywide, a mortgage servicer, and American Service Company ("ASC"), a second mortgage servicer, were involved in mortgage loans on Plaintiff's property. Id. The FAC alleges that there were two mortgages on the property, both from New Century. Id. The FAC alleges that it is a "qualified written request" which requires Defendants to provide certain information to Plaintiff. Id. at 2-3. The FAC alleges all of the Defendants "have pursued a common course of conduct" to wrong the Plaintiff. Id. at 4.

The FAC alleges Defendants "represented to Plaintiff that very favorable loans, loan terms, and interest rates were available to her" and encouraged her to refinance her mortgage. Id. at 5. The FAC alleges that Defendants "knew or intended that Plaintiff receive a worse loan" which "produced a higher commission for them because it was at a higher interest rate and subject to higher fees." Id. at 5-6. The FAC alleges the loan was less favorable to Plaintiff than Defendants had stated it would be. Id. The FAC alleges Defendants violated state and federal law by failing to disclose and misrepresenting terms of the loan and by failing to inform defendant of her right to cancel the transaction. Id. The FAC alleges the TILA disclosure is inconsistent with the loan documents. Id. at 6. The FAC alleges Plaintiff is a Spanish speaker and was taken advantage of by Defendants, who failed to provide translated documents. Id. The FAC alleges Plaintiff sent a qualified written request to Defendants and did not receive a response. Id. at 7.

The FAC alleges Countrywide purchased the loans. Id. at 9. The FAC alleges proper disclosures of the transfer were not given to Plaintiff. Id. The FAC alleges Defendants are fiduciaries of Plaintiff and breached their fiduciary duty. Id. at 10. The FAC alleges these damages include "monetary loss, medical expenses, emotional distress, [and] loss of employment." Id. at 11. The FAC alleges Defendants have fraudulently concealed relevant facts from Plaintiff, and that Plaintiff is therefore entitled to equitable tolling.


Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides: "A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

To sufficiently state a claim to relief and survive a Rule 12(b)(6) motion, a complaint "does not need detailed factual allegations" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1950 (2009). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see, e.g., Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009) ("Plaintiffs' general statement that Wal-Mart exercised control over their day-to-day employment is a conclusion, not a factual allegation stated with any specificity. We need not accept Plaintiffs' unwarranted conclusion in reviewing a motion to dismiss."). "In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted).


1. RESPA Violations

In support of the first cause of action for RESPA Violations, Plaintiff alleges Countrywide failed to respond to a qualified written request sent on or about May 15, 2008. (Doc. # 6 at 12). Plaintiff alleges Countrywide is a servicer pursuant to RESPA because Plaintiff made payments to Countrywide. Id. at 13. Plaintiff alleges Countrywide violated RESPA at the origination of the loan because there were inconsistencies in various loan documents. Id. Plaintiff alleges she sustained damages including "monetary loss, medical expenses, emotional distress, [and] loss of employment" as a result of Countrywide's RESPA violations. Id.

Countrywide contends Plaintiff's RESPA claim fails to state a claim because the purported qualified written request is not attached to the FAC, and because Plaintiff fails to allege facts which support her conclusion that the letter she sent meets the legal requirements for a qualified written request. (Doc. # 9 at 14-15). Countrywide contends that the allegations in the FAC which relate to the origination of the loan do not pertain to Countrywide, which later purchased the loan ...

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