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Davis v. Wells Fargo Bank

April 29, 2010

DAVID L. DAVIS AND KAREN A. DAVIS, PLAINTIFFS,
v.
WELLS FARGO BANK, N.A., A CORPORATION, D/B/A AMERICA'S SERVICING COMPANY; NDEX WEST, LLC, AS DULY APPOINTED TRUSTEE; MORTGAGEIT, INC., A SUBSIDIARY OF DEUTSCHE BANK SECURITIES, INC.; HSBC BANK USA, N.A., AS TRUSTEE FOR MORTGAGEIT SECURITIES CORPORATION; AND DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on the motions of defendant Wells Fargo Bank, N.A. ("Wells Fargo") and defendants MortgageIT, Inc. ("MortgageIT") and Deutsche Bank Securities, Inc. ("Deutsche Bank") (collectively "defendants") to dismiss plaintiffs David Davis and Karen Davis' ("plaintiffs") First Amended Complaint ("FAC") pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiffs oppose the motion. For the reasons set forth below,*fn1 defendants' motions to dismiss are GRANTED.

BACKGROUND

Plaintiffs brought this action against defendants for conduct arising out of a mortgage loan transaction. Plaintiffs are the owners of real property located at 7920 Oak Forest Street, Citrus Heights, California (the "Property"). (FAC, filed Nov. 25, 2009, ¶ 7.) On February 26, 2007, plaintiffs refinanced the Property through a mortgage loan with defendant MortgageIt. (Id. ¶¶ 22-23.) At the time of closing, plaintiffs were provided various documents, including a Notice of Right to Cancel. (Id. ¶ 24.) At some point after entering into the loan, plaintiffs defaulted on the loan and a non-judicial foreclosure proceeding was initiated against the Property.*fn2 (Docket # 25, Req. for Judicial Notice ("RJN"), filed Dec. 23, 2009, Ex. E.) On November 3, 2009, the Property was sold in connection with the foreclosure proceedings.*fn3 (Id.)

Plaintiffs allege that defendants did not provide all the material disclosures regarding plaintiffs' loan at the time of signing as required by the Federal Truth in Lending Act ("TILA"), giving plaintiffs up to three years to rescind the loan.*fn4 (FAC ¶¶ 29-30, 35.) Specifically, plaintiffs allege that the Notice of Right to Cancel "failed in one or more material respects to disclose . . . the [loan's] true rescission period." (Id. ¶ 29.)

Plaintiffs originally filed this action on October 29, 2009, but amended their complaint on November 25, 2009.*fn5 Based on the alleged TILA violations, plaintiffs seek to (1) rescind the loan transaction, and (2) obtain damages pursuant to 15 U.S.C. § 1640(a)(2). Defendants move to dismiss plaintiffs' FAC, arguing, inter alia, that the express limitations set forth in TILA bar plaintiffs' rescission and damages claims.

STANDARDS

Under Federal Rule of Civil Procedure 8(a), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Twombly, 550 U.S. at 570. "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." Iqbal, 129 S.Ct. at 1949.

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Id. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."); Twombly, 550 U.S. at 555. Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged."

Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (citing Bell Atl. Corp., 550 U.S. at 570). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.

In ruling upon a motion to dismiss, the court may consider only the complaint, any exhibits thereto, and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of U.S., Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).

ANALYSIS

A. Defendants' ...


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