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Wilson v. First Franklin Financial Corp.

May 25, 2010

BEVERLY J. WILSON, PLAINTIFF
v.
FIRST FRANKLIN FINANCIAL CORP., DEFENDANT.



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 motion of defendant First Franklin Financial Corporation ("defendant" or "First Franklin") to dismiss plaintiff Beverly J. Wilson's ("plaintiff") first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff opposes the motion. For the reasons set forth below,*fn1 defendant's motion is GRANTED.

BACKGROUND

Plaintiff brought this action against First Franklin for conduct arising out of two loans which First Franklin provided to plaintiff in order to purchase her home. (Pl.'s First Am. Complaint ("Compl."), filed Feb. 26, 2010, 1:18-19.) On or about April 12, 2007, plaintiff entered into two concurrent loan transactions, totaling $434,851.77, with defendant. (Id. 1:19-20.) Plaintiff alleges, inter alia, that First Franklin failed to provide her with the proper disclosures as required by the federal Truth in Lending Act ("TILA"), giving plaintiff the right to rescind the loans. (Id. ¶ 16-26.) For instance, plaintiff alleges: "Defendant failed to consider that Plaintiff had only made $9,500.00 in 2006, in violation of 15 U.S.C. § 1639(h)[,]" which "was not enough to cover the property taxes and utilities, let alone maintain a mortgage payment equaling to $3,702.56 each month for the first 24 months of [the] mortgage with her payments then going to $4,039.26 for the remaining life of the loan." (Id. ¶ 18, 21.)

In her first amended complaint, plaintiff asserts claims for: (1) violation of TILA, 15 U.S.C. §§ 1601 et seq.; (2) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq.; (3) violation of the Home Owners Equity Protection ACT ("HOEPA"); (4) violation of Regulation Z, the regulations implementing TILA; (5) breach of fiduciary duty; (6) violations of California Civil Code §§ 1916.5, 1916.7, 1920, 1921, 2948.5(a), and 2923.5 et seq.; (7) violation of California Business and Professions Code § 10241.1; (8) real estate fraud; and (9) quiet title.*fn2

Defendant moves to dismiss plaintiff's complaint for failure to state cognizable claims.

STANDARD

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 Atlantic 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." Twombly, 550 U.S. at 555; Iqbal, 129 S.Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). 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 Twombly, 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 Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. V. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998).

ANALYSIS

A. Plaintiff's HOEPA Claim and Claims for Rescission Under ...


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