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DiPinto v. U.S. Bank National Association

May 11, 2010


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


This action arises out of a mortgage loan transaction in which Plaintiff James DiPinto ("Plaintiff") refinanced his home in February 2006. Presently before the Court is a Motion by Defendant U.S. Bank National Association ("Defendant") to Dismiss the claims alleged against it in Plaintiff's First Amended Complaint ("FAC") for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1 For the reasons set forth below, Defendant's Motion to Dismiss is granted with leave to amend.


This action arises out of activity surrounding a residential loan transaction for property located at 10137 Bond Road, City of Elk Grove, California ("Property").

Plaintiff originally had a first and second mortgage on his home and paid a combined monthly amount of approximately $5,495.96. Plaintiff decided to remodel his home and provided Defendant with his financial and loan application. Defendant's agent informed Plaintiff that his loan type would be a "Jumbo" loan which required two appraisals of the Property.

In February 2006, after two appraisals, Defendant approved Plaintiff's loan. Plaintiff alleges that Defendant promised him a thirty-year loan with a fixed rate, however Defendant actually sold Plaintiff an adjustable rate loan.

To qualify for this loan, Plaintiff alleges that the appraisers overstated the condition of Plaintiff's home without Plaintiff's knowledge or consent. However, on February 6, 2006, Plaintiff completed the loan on his Property. The terms of the loan were memorialized in a Promissory Note, which was secured by a Deed of Trust on the Property.

Plaintiff contends that he never had a meaningful opportunity to exercise his right to cancel the loan because he did not understand how to do so. Plaintiff states this is due to the fact that Defendant and Defendant's agent "never bothered to make themselves available at the loan signing." (FAC ¶ 55.)

Plaintiff planned to begin remodeling in March 2006 but quickly realized he could not make his monthly payments. He claims that he attempted to modify his loan "but found it impossible because of the enormous disparity between the monthly loan payment and his meager monthly income." (FAC ¶ 58.) On November 9, 2009, Plaintiff alleges that he mailed to Defendant a Qualified Written Request ("QWR") under the Real Estate Settlement Procedures Act ("RESPA"). (FAC ¶ 91.) Plaintiff states that Defendant never properly responded to the QWR.


On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed. 2d 80 (1957). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotations omitted).

Factual allegations must be enough to raise a right to relief above the speculative level. Id. (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action").

If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should "freely give[]" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).


A. Plaintiff's Suit Against Defendant Does Not Offset the ...

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