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Garibay v. American Home Mortgage Corp.

March 26, 2010

CYNTHIA GARIBAY, AN INDIVIDUAL, PLAINTIFF,
v.
AMERICAN HOME MORTGAGE CORP., A NEW YORK CORPORATION, WELLS FARGO HOME MORTGAGE, INC., A CALIFORNIA CORPORATION & DOES 1 THROUGH 20, DEFENDANTS.



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

ORDER

The matter before the Court is the Motion to Dismiss Plaintiff's First Amended Complaint Or Alternatively for a More Definite Statement ("Motion to Dismiss") filed by Defendant Wells Fargo Home Mortgage, Inc. ("Wells Fargo"). (Doc. # 17).

I. Background

On July 7, 2009, Plaintiff Cynthia Garibay initiated this action by filing a Complaint in this Court. (Doc. # 1).

On October 29, 2009, Defendant American Home Mortgage Corp. ("American") filed a "Suggestion of Bankruptcy" with this Court. (Doc. # 8). The Suggestion of Bankruptcy notified the Court that on August 6, 2007, American filed a voluntary petition with the United States Bankruptcy Court of the District of Delaware.

On November 13, 2009, the Court issued an Order staying this action as to Defendant American only. (Doc. # 11).

On December 1, 2009, Plaintiff filed a First Amended Complaint. (Doc. # 14).

A. Allegations of the First Amended Complaint

On July 31, 2006, Plaintiff "purchased a house as a primary residence," located at 1011 Calle Estrella, Brawley, California ("Property"). (Doc. # 14 ¶ 6). "Plaintiff financed the Property by signing a note in the principal amount of $297,500, secured by a first deed of trust from Defendant American, the originating lender." (Doc. # 14 ¶ 7). Wells Fargo is the "current servicing company/lender/beneficiary" of the loan. (Doc. # 14 ¶ 8). "Plaintiff accurately provided her yearly income" during the loan application process, which would have resulted in "Plaintiff [being] unable to qualify for the loan under industry underwriting standards." (Doc. # 14 ¶ 9-10). "Defendant DOE 11" stated Plaintiff's income "well in excess of what [Plaintiff's] 2004 and 2005 federal income taxes indicated" on the loan application, and "submitted the inflated stated [income] amount which American needed to approve the loan." (Doc. # 14 ¶ 10-11). During the loan application process, Plaintiff was not provided with "two copies of the Notice of Right to Cancel" and "the initial disclosure and final disclosure documents." (Doc. # 14 ¶ 12-13). "Based on the foregoing facts, Plaintiff began having difficulty paying her mortgage." (Doc. # 14 ¶ 14).

The First Amended Complaint alleges three federal law claims: (1) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605(e), and Regulation X of RESPA, 24 C.F.R. § 3500, for failure to respond to Plaintiff's Qualified Written Request (Doc. # 14 ¶¶ 30-35); (2) violation of RESPA, 12 U.S.C. §§ 2601 et seq., for failure to give Plaintiff required disclosures (Doc. # 14 ¶¶ 46-51); and (3) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq., and Regulation Z of TILA, 12 C.F.R. § 226 (Doc. # 14 ¶¶ 36-45). The First Amended Complaint also alleges the following state law claims: accounting (Doc. # 14 ¶ 34); intentional misrepresentation (Doc. # 14 ¶¶ 15-24); quiet title of the Property (Doc. # 14 ¶¶ 25-29); and violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 (Doc. # 14 ¶¶ 52-55).

B. Motion to Dismiss

On December 18, 2009, Wells Fargo filed the Motion to Dismiss. (Doc. # 17). Wells Fargo contends that Plaintiff's claims fail as a matter of law. Wells Fargo contends Plaintiff cannot successfully amend her claims, and therefore requests that the Court dismiss the First Amended Complaint with prejudice, or, alternatively, order Plaintiff to provide a more definite statement.

On January 8, 2010, Plaintiff filed an opposition to the Motion to Dismiss. (Doc. # 18). Plaintiff contends that the Motion to Dismiss should be denied in its entirety, or, alternatively, Plaintiff should be granted leave to amend the First Amended Complaint or submit a more definite statement.

On January 15, 2010,Wells Fargo filed a reply brief. (Doc. # 19).

II. Discussion

A. Standard of Review

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). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal ...


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