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Verduzco v. Indymac Mortgage Services

May 27, 2010

ARTURO VERDUZCO AND DELILA VERDUZCO, PLAINTIFFS,
v.
INDYMAC MORTGAGE SERVICES, A DIVISION OF ONE WEST BANK FSB; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; SIERRA PACIFIC MORTGAGE; WBJ, INC.; DANIEL RUPP, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS PLAINTIFFS' FEDERAL CLAIMS AND DECLINING TO EXERCISE SUPPLEMENTAL OVER PLAINTIFFS' REMAINING STATE CLAIMS*fn1

Defendants IndyMac Mortgage Services, a division of One West Bank FSB ("IndyMac") and Mortgage Electronic Registration Systems, Inc. ("MERS") filed a motion to dismiss Plaintiffs' first amended complaint under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. Defendant Sierra Pacific Mortgage ("Sierra") also filed a motion to dismiss under Rule 12(b)(6). Plaintiffs oppose each motion.*fn2 For the reasons stated below, Plaintiffs' federal claims are dismissed with prejudice and Plaintiffs' state claims are dismissed without prejudice under 28 U.S.C. § 1367(c)(3).

I. LEGAL STANDARD

A Rule 12(b)(6) motion "challenges a complaint's compliance with... pleading requirements." Champlaie v. BAC Home Loans Servicing, LP, No. S-09-1316 LKK/DAD, 2009 WL 3429622, at *1 (E.D. Cal. Oct. 22, 2009). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief...." Fed. R. Civ. P. 8(a)(2). The complaint must "give the defendant fair notice of what the [plaintiff's] claim is and the grounds upon which relief rests...." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Further, "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

To avoid dismissal, a plaintiff must allege "only enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 547. "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. Plausibility, however, requires more than "a sheer possibility that a defendant has acted unlawfully." Id. "When a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (quotations and citation omitted).

In evaluating a dismissal motion under Rule 12(b)(6), the court "accept[s] as true all facts alleged in the complaint, and draw[s] all reasonable inferences in favor of the plaintiff." Al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, neither conclusory statements nor legal conclusions are entitled to a presumption of truth. See Iqbal, 129 S.Ct. at 1949-50.

II. BACKGROUND

A. Plaintiffs' Allegations

Plaintiffs allege that in July 2005, Defendant Daniel Rupp represented that he was a loan officer for Defendant WBJ, Inc. and solicited Plaintiffs to refinance the loan on their residence, located at 425 South Sixth Street in Oakdale, Sacramento County, California. (First Amended Compl. ("FAC") ¶¶ 7, 39.) Plaintiffs allege that Rupp told them "he could get the 'best deal' and the 'best interest rates' available on the market." (Id. ¶ 41.) Plaintiffs also allege that Rupp overstated their income on their loan applications without their knowledge or permission. (Id. ¶ 42.)

Plaintiffs allege that on October 7, 2005 they obtained a $256,000 loan. (Id. ¶ 43, 50.) Plaintiffs also obtained a $32,000 home equity line of credit. (Id.) Plaintiffs allege: "The terms of the loans were memorialized in two Promissory Notes, which was secured by two Deeds of Trust on the Property. The Deeds of Trust identified Greenhead Investments, Inc. as Trustee, and Defendant Sierra as Lender." (Id. ¶ 50.)

Plaintiffs allege they "were not given a copy of any of the loan documents prior to [the] closing as required" and "were only given a few minutes to sign the documents." (Id. ¶ 48.) Plaintiffs also allege they "did not receive the required copies of a proper notice of cancellation." (Id.) Plaintiffs further allege that "[w]hen the loan was consummated, [they] did not receive the required documents and disclosures, including, but not limited to the TILA disclosure, and the required number of copies of the Notice of Right to Cancel stating the date that the rescission period expires." (Id. ¶ 65.)

B. Procedural Background

Plaintiffs filed their initial complaint in this federal court on August 25, 2009, alleging eleven claims under federal and California law against eight named defendants. Defendants IndyMac and MERS; Sierra; and WBJ, Inc. and Daniel Rupp each filed dismissal motions on October 1, 10, and 23, 2009, respectively. These dismissal motions, however, were mooted when Plaintiffs filed their now operative, first amended complaint on November 10, 2009. Plaintiffs' first amended complaint is the subject of each Defendants' now pending dismissal motion. Plaintiffs' only remaining federal claims are: (1) a Truth in Lending Act claim alleged against Sierra; and (2) a Real Estate Settlement Procedures Act claim alleged against Sierra and IndyMac.

III. DISCUSSION

A. Defendants' ...


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