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Ibarra v. Loan City

April 20, 2010

ARMANDO IBARRA, AN INDIVIDUAL, PLAINTIFF,
v.
LOAN CITY, A CALIFORNIA CORPORATION AUTHORIZED TO DO BUSINESS IN CALIFORNIA, AURORA LOAN SERVICES INC., A FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN CALIFORNIA; CAL-WESTERN RECONVEYANCE CORPORATION, A CALIFORNIA CORPORATION AUTHORIZED TO DO BUSINESS IN CALIFORNIA; WACHOVIA FINANCIAL SERVICES, INC., FKA WORLD SAVINGS BANK, FSB, A FEDERAL SAVINGS BANK AND REGISTERED FOREIGN CORPORATION DOING BUSINESS IN CALIFORNIA; HARBORSIDE FINANCIAL NETWORK, A CALIFORNIA CORPORATION AUTHORIZED TO DO BUSINESS IN CALIFORNIA, AND DOES 1 THROUGH 50, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S FIRST AMENDED COMPLAINT DEFENDANT'S MOTION TO DISMISS [Doc. No. 33]

Presently before the Court is Defendant Aurora Loan Services LLC's ("Aurora") motion to dismiss Plaintiff Armando Ibarra's ("Plaintiff") First Amended Complaint. (Doc. No. 33.) Plaintiff filed an opposition, and Aurora filed a reply.

The Court finds the motion suitable for disposition without oral argument pursuant to Local Civil Rule 7.1(d)(1). For the reasons stated herein, the Court grants in part and denies in part the motion to dismiss.

BACKGROUND

This matter concerns the refinancing of Plaintiff's principal residence in Chula Vista, San Diego (the "Property"). The following facts are drawn from Plaintiff's First Amended Complaint ("FAC") unless otherwise noted.

On September 6, 2006, Plaintiff obtained a loan from Loan City, brokered by Equipoint Financial Network, Inc. d/b/a Harborside Financial Network ("Harborside"). According to Plaintiff, Aurora later assumed the loan. In early 2009, foreclosure proceedings were initiated. Also in early 2009, Plaintiff discovered that he had not been provided certain notices and disclosures at the time of the loan origination in violation of the Truth in Lending Act ("TILA"). On July 9, 2009, Plaintiff sent a letter to Loan City, World Savings, and Harborside rescinding the loan contract. Five days later on July 14, 2009, Plaintiff sent the same letter to Aurora.

OnAugust 18, 2009, Plaintiff initiated the action in the Superior Court for the County of San Diego, naming Aurora, Loan City, Cal-Western Reconveyance Corp., Wachovia Financial Services, Inc., and Harborside as defendants. The defendants subsequently removed the case to this Court. (Doc. No. 1.) In September of 2009, Aurora purchased the property at the trustee's sale.

On January 27, 2010, the Court granted in part Aurora's motion to dismiss Plaintiff's original Complaint for failure to state a claim, and denied as moot Aurora's motion to strike. (Doc. No. 31.) The Court dismissed with prejudice all causes of action in the Complaint, except for Plaintiff's cause of action for violation of TILA, which was dismissed with leave to amend.

On February 3, 2010, Plaintiff timely filed the FAC, which sets forth one cause of action for violation of TILA. (Doc. No. 32.) Plaintiff seeks rescission and damages for violation of TILA, 15 U.S.C. § 1601, et seq., and TILA's implementing regulation ("Regulation Z"), 12 C.F.R. § 226, which sets out TILA's general disclosure requirements. Subsequently, Aurora filed the instant motion to dismiss the FAC. (Doc. No. 33.)

DISCUSSION

I. Legal Standard

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a) (2009). A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pled in the complaint as true, and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556).

However, "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." Twombly, 550 U.S. at 555 (citation omitted). A court need not accept "legal conclusions" as true. Iqbal, 129 S.Ct. at 1949. In spite of the deference the court is bound to pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that defendants have violated the . . . ...


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