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Salazar v. Accredited Home Lenders

July 2, 2010


The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge


On February 9, 2009, Plaintiff Eleazar Salazar filed this lawsuit against Accredited Home Lenders, Inc., Litton Loan Servicing, Inc., Quality Loan Service Corporation, Mortgage Electronic Registration Systems, Inc., and U.S. Bank National Association. On February 16, 2010, U.S. Bank and Litton ("Defendants") moved to dismiss and strike the Complaint. Plaintiff has opposed the motions.

The Court decides the matter on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1). For the following reasons, the Court GRANTS IN-PART and DENIES IN-PART Defendants' motion to dismiss (Doc. 4) and GRANTS Defendants' motion to strike (Doc. 5).


In October 2005, Plaintiff obtained a mortgage loan from Defendants to refinance real property located at 1268 Emerald Way, Calexico, California. (Not. of Removal (NOR) [Doc. 1*fn1 ], 6:27; see also Mt. to Dismiss (MTD) [Doc. 4], 1:11.) In early 2009, Plaintiff began having difficulty making payments on his mortgage, and on May 7, 2009, Defendants served Plaintiff with a "Notice of Default And Election to Sell Under Deed of Trust." (Request for Judicial Not. (RJN) [Doc. 6-2], Ex. B.)

On January 5, 2010, Plaintiff filed a civil action in the Superior Court of Imperial County (Case No. ECU05622) asserting sixteen claims against the Defendants, including (1) Violation of the Truth in Lending Act (TILA), 15 U.S.C. § 1601; (2) Violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601; (3) Violation of Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692; (4) Quiet Title; (5) Wrongful Foreclosure; (6) Order to Set Aside Trustee's Sale; (7) Cancellation of Trustee's Deed; (8) Slander of Title; (9) Civil Conspiracy; (10) Unfair Business Practices; (11) Violation of RICO, 18 U.S.C. § 1961; (12) Imposition of Constructive Trust; (13) Fraud; (14) Violation of California Civil Code § 2923.5; (15) Violation of California Civil Code § 2923.6; and (16) Breach of Contract.

On February 9, 2010, Defendants removed the case to this Court. On February 16, 2010, Defendants moved to dismiss and strike.


A. Legal Standard

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the complaint's sufficiency. See North Star Int'l v. Arizona Corp. Comm'n., 720 F.2d 578, 581 (9th Cir. 1983). All material allegations in the complaint, "even if doubtful in fact," are assumed to be true. Id. The court must assume the truth of all factual allegations and must "construe them in light most favorable to the nonmoving party." Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

As the Supreme Court recently explained, "[w]hile 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 Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). Instead, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id. at 1964-65. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, courts may consider documents specifically identified in the complaint whose authenticity is not questioned by parties. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other grounds). Moreover, courts may consider the full text of those documents, even when the complaint quotes only selected portions. Id. Courts may also consider material properly subject to judicial notice without converting the motion into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994) (citing Mack v. South Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986); abrogated on other grounds by Astoria Federal Savings and Loan Ass'n v. Solimino, 501 U.S. 104 (1991)).

B. Plaintiff's Claims for TILA and RESPA Violations are Time Barred

Defendants argue that Plaintiff's TILA and RESPA claims are time barred. The Court agrees.

TILA damage claims are subject to a one-year statute of limitations. 15 U.S.C. § 1640(e). TILA rescission claims are subject to a three-year statute of limitations. 15 U.S.C. § 1635(f). The statute runs from the consummation of the loan. Meyer v. Ameriquest Mort. Co., 331 F.3d 1028 (9th Cir. 2003).

Here, although the Complaint indicates the loan was consummated in October 2005 (see Compl. ¶ 20-22), Plaintiff alleges in the opposition that the closing documents were delivered a month late and, therefore, the mortgage actually closed "in mid to late November 2005." (Opp. to MTD [Doc. 8], 6:2.) Giving Plaintiff the benefit of the November 2005 closing, this lawsuit is time barred because it was filed in January, 2010, over 4 years later. (Compl., at p.1.)

Plaintiff argues, however, that because Plaintiff did not accept his demand for rescission within the 3-year period, the limitations period is extended by one additional year under 15 U.S.C. 1640(e). But even if the Court were to grant Plaintiff a one-year extension under section 1640(e), because Plaintiff filed the lawsuit more than four years later, the lawsuit would still be time barred.

Plaintiff also argues that equitable tolling should also be applied to the TILA rescission claim. However, Plaintiff has failed to allege facts that suggest tolling is applicable. Equitable tolling "applies in situations . . . 'where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass.'" Velazquez v. GMAC Mortg. Corp., 605 F.Supp.2d 1049, 1061 (C.D.Cal. 2008) (quoting O'Donnell v. Vencor, Inc., 465 F.3d 1063, 1068 (9th Cir. 2008)). Nowhere does the Plaintiff claim that Defendants' "trickery" caused him to miss the TILA deadline. Moreover, the Ninth Circuit has found that the rescission limitations period is an "absolute limitation on rescission actions." Miguel v. Country Funding Corp, 309 F.3d 1161, 1164 (9th Cir. 2002). It represents a "statute of repose, depriving the courts of subject matter jurisdiction when a [TILA] claim is brought outside the three-year limitation period." Id. Accordingly, Plaintiff's TILA claims are time barred.*fn2

Finally, Plaintiff's RESPA claims are also subject to a one-year limitations period. See 12 U.S.C. ยง 2614 (RESPA statute of limitations.) Because Plaintiff filed this lawsuit more than four years after the loan was ...

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