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Greetis v. National City Mortgage

February 24, 2010


The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge


Defendant PNC Bank, National Association ("PNC"), as successor by merger to National City Bank, p.d.b.a. National City Mortgage (erroneously sued and served as National City Mortgage), moves to dismiss all of Plaintiff's claims contained in the First Amended Complaint ("FAC") for failure to state a claim. Plaintiff Annette Greetis opposes the motion. Pursuant to Local Rule 7.1(d)(1), this matter is appropriate for decision without oral argument. For the reasons set forth below, the motion to dismiss is granted in part and denied in part. The court denies the motion to the extent Plaintiff states a Qualified Written Request claim under RESPA. The motion to dismiss is granted in all other respects. The court also grants Plaintiff 15 days leave to amend from the date of entry of this order.


The FAC, filed on December 21, 2009 alleges two federal claims for violation of RESPA, 12 U.S.C. §2605 et seq. and the Truth In Lending Act ("TILA"), 15 U.S.C. §1601 et seq., and six state law claims for violation of Cal. Bus. Prof. Code §17200, negligent misrepresentation, fraud, rescission, quasi contract, and determination of validity of lien. Plaintiff also seeks an order enjoining any foreclosure proceedings from continuing.

Plaintiff's claims arise from a mortgage provided by Defendants on August 8, 2006 for the refinancing of the mortgages (first and second trust deeds) on his home located in Valley Center, California. (FAC. ¶13). Defendant National City Bank is the originating lender for the transaction and Defendant National City Servicing is the servicer of the loan. (Id. ¶¶2, 3). With respect to the federal claims, Plaintiff alleges that Defendants violated RESPA by failing to adequately respond to three Qualified Written Requests ("QWR") made on November 19, 2008, January 22, 2009 and February 13, 2009 in violation of RESPA. (Id. ¶¶ 36-51). The QWRs broadly "requested information including but not limited to: detailed charges for unpaid principal, interest, escrow, and other charges; interest rate history; a full set of loan-related documents; name, mailing address, phone and fax number of all current owners; documentation and proof of ownership for al owners; confirmation of loan as purchase money, subprime, non-recourse; whether a deficiency would be sought after closure; if the debt is considered an acquisition debt; reasons why any information is not confirmed; intentions as to adverse actions and credit reporting." (Id. ¶¶39, 42, 45). The second portion of the RESPA claim alleges that the HUD sample disclosure made prior to loan origination did not show the contract sales price, amount paid to existing loans, the gross amount due from borrower, the correct interest rate. (Id. ¶48). "As a proximate result of Defendants' breach of duty and all other actions as alleged herein, Plaintiff has suffered severe emotional distress, mental anguish, harm ,humiliation, embarrassment, and mental and physical pain and anguish." (Id. ¶51).

The TILA claim has two parts. First, Plaintiff seeks damages arising from allegations that Defendants failed to accurately disclose the interest rate, the prepayment penalty in the calculation of the APR, and accurate good faith estimates. (Id. ¶¶55-64). The second part of the TILA claim seeks to rescind the contract pursuant to 15 U.S.C. §1635(a), based upon alleged misrepresentations contained in TILA- related disclosures.

On December 1, 2009 the court granted Defendants' Rule 12(b)(6) motion and dismissed the federal claims with leave to amend. The court did not address the state law claims, informing the parties that the court would decline to entertain the state law claims until Plaintiff stated a federal claim. Plaintiff timely filed the FAC and Defendants once again move to dismiss all federal and state law claims for failure to state a claim. Plaintiff opposes the motion.


Legal Standards

Federal Rule of Civil Procedure 12(b)(6) dismissal is proper only in "extraordinary" cases. United States v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981). Courts should grant 12(b)(6) relief only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Courts should dismiss a complaint for failure to state a claim when the factual allegations are insufficient "to raise a right to relief above the speculative level." Bell Atlantic Corp v. Twombly, __550 U.S. __, 127 S.Ct. 1955 (2007) (the complaint's allegations must "plausibly suggest[]" that the pleader is entitled to relief); Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) (under Rule 8(a), well-pleaded facts must do more than permit the court to infer the mere possibility of misconduct). "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. at 1949. Thus, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. The defect must appear on the face of the complaint itself. Thus, courts may not consider extraneous material in testing its legal adequacy. Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir. 1991). The courts may, however, consider material properly submitted as part of the complaint. Hal Roach Studios, Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989).

Finally, courts must construe the complaint in the light most favorable to the plaintiff. Concha v. London, 62 F.3d 1493, 1500 (9th Cir. 1995), cert. dismissed, 116 S.Ct. 1710 (1996). Accordingly, courts must accept as true all material allegations in the complaint, as well as reasonable inferences to be drawn from them. Holden v. Hagopian, 978 F.2d 1115, 1118 (9th Cir. 1992). However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a Rule 12(b)(6) motion. In Re Syntex Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996).

The Federal Claims

The RESPA Claims

a. The QWR ...

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