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Gomez v. CalPacific Mortgage Consultants Inc.

June 29, 2010

SALOME GOMEZ, PLAINTIFF,
v.
CALPACIFIC MORTGAGE CONSULTANTS, INC.; JP MORGAN CHASE; CHASE HOME FINANCE, LLC; NDEX WEST, LLC, AS TRUSTEE ON THE DEED IN TRUST, E*TRADE BANK; AND DOES 1-20, DEFENDANTS.



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

ORDER GRANTING IN PART DEFENDANT E*TRADE BANK'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [Doc. No. 8]

Presently before the Court is Defendant E*Trade Bank's ("E*Trade") motion to dismiss Plaintiff Salome Gomez's ("Plaintiff") First Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. No. 8.)

Plaintiff has filed an opposition, and E*Trade filed a reply. This motion is 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 the motion to dismiss as to Plaintiff's causes of action for intentional misrepresentation, fraudulent concealment, and quiet title.

FACTUAL BACKGROUND

This matter involves two loans obtained by Plaintiff and secured by deeds of trust on her home. The following facts are taken from Plaintiff's First Amended Complaint.

On or about May 29, 2007, Plaintiff purchased a single family home located at 27239 Latigo Road, Valley Center, CA, 92082 (the "Property"). In order to finance the purchase of the Property, Plaintiff obtained a loan from Defendant JP Morgan Chase in the amount of $456,000, and obtained a concurrent second loan from E*Trade in the amount of $114,000. Defendant CalPacific Mortgage Consultants Inc. ("CalPacific") was the broker.

Plaintiff alleges Defendants Calpacific, JP Morgan Chase, and E*Trade ("Defendants") knew she was not qualified for the loans, but fraudulently represented to her that she was. According to Plaintiff, Defendants "made no effort to see if Plaintiff was properly qualified." During the completion of the loan applications, Defendants asked Plaintiff to state her income, without requesting or requiring supporting documents. Plaintiff alleges she accurately stated her income, but Defendants inflated her income on her loan application, using an income of $11,900*fn1 without her knowledge in order to qualify her for a risky loan. The Debt to Income Ratio ("DTI") of her loan was 42.3%, although the government considers 33% a reasonable DTI. In addition, Defendants qualified her using the lowest possible payment amount, in violation of industry standards.

Plaintiff subsequently fell behind on mortgage payments. On or about September 22, 2009, Plaintiff sent a Qualified Written Request pursuant to the Real Estate Settlement Procedures Act to both Defendant Chase Home Finance and E*Trade through certified mail. On or about November 29, 2009, Plaintiff's counsel sent a Notice of Rescission to Defendant JP Morgan Chase. In December 2009, Plaintiff received a Notice of Sale for the Property informing her of a trustee's sale scheduled for April 23, 2010.

PROCEDURAL HISTORY

On December 30, 2009, Plaintiff filed a complaint against Defendants Calpacific, JP Morgan Chase, E*Trade, Chase Home Finance, NDex West, and Does 1-20. (Doc. No. 1.) On March 23, 2010, E*Trade moved to dismiss the complaint. (Doc. No. 4.) Subsequently, Plaintiff timely filed a First Amended Complaint ("FAC") (Doc. No. 5), and the Court dismissed the motion to dismiss as moot (Doc. No. 7).

The FAC names the same defendants and alleges eight causes of action: (1) intentional misrepresentation, (2) fraudulent concealment, (3) breach of fiduciary duty, (4) constructive fraud, (5) quiet title, (6) violation of the Truth in Lending Act ("TILA"), (7) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607, and (8) violation of RESPA, 12 U.S.C. § 2605. On April 30, 2010, E*Trade filed the instant motion to dismiss Plaintiff's FAC, requesting dismissal of five of the eight causes of action. (Doc. No. 8.)

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 ...


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