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Cook v. Wells Fargo Bank

July 7, 2010

CHRISTOPHER R. COOK, AN INDIVIDUAL; DEBRA K. POWERS-COOK, AN INDIVIDUAL, PLAINTIFFS,
v.
WELLS FARGO BANK, A FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN CALIFORNIA; DOES 1 THROUGH 10 INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matter before the Court is Defendant Wells Fargo Bank's Motion to Dismiss Plaintiff's First Amended Complaint. (Doc. #11).

BACKGROUND

On April 20, 2010 Plaintiffs filed this First Amended Complaint*fn1 ("FAC"). (Doc. #10). Plaintiffs allege five causes of action: (1) violations of the Truth in Lending Act ("TILA"), (2) Declaratory Relief, (3) Breach of Fiduciary Duty, (4) Fraud, and (5) Negligent Misrepresentation. Id. On May 4, 2010, Defendant filed a Motion to Dismiss Plaintiffs' FAC. (Doc. #11).

Plaintiffs allege they are the owners of property located at 507 Ocean Bluff Way, Encinitas, California 92024. (Doc. #10 ¶ 19). Plaintiffs allege they obtained a mortgage on their property from Defendant in the amount of $1,500,000.00 on October 19, 2007. Id. ¶ 20. Plaintiffs allege Defendant "acquired a security interest, namely a Deed of Trust, on the Property." Id. ¶ 22. Plaintiffs allege they "paid settlement fees, finance charges, interest and other costs" as part of the loan transaction. Id. ¶ 21.

Plaintiffs allege they mailed a Notice of Rescission rescinding the loan contract pursuant to TILA to Defendant on May 16, 2009, "[a]fter discovering a defective disclosure related to the right to cancel." Id. ¶ 23. Plaintiffs allege 16 instances of "deceptive or misleading disclosures" within the loan contract, which they allege violate "both state and federal law." Id. ¶ 27. Plaintiffs rely on the alleged violations of state and federal law as the basis for the rescission claim, and assert these violations extend their "right to rescind the transaction up to three years after [the] consummation [of the loan]." Id. ¶¶ 27-28.

In the alleged Notice of Rescission, attached to the FAC as exhibit 1, Plaintiffs offered to tender "an amount due after appropriate credits [had been] made by [Defendant] to the account." Id., Ex. 1. Plaintiffs allege Defendant "failed to take any action necessary or appropriate to reflect the termination of any security interest created under the transaction" within 20 days of receipt of the Notice of Rescission. Id. ¶ 25. Plaintiffs allege Defendant "indicated that it [would] proceed with a foreclosure on the property" after Plaintiffs sent the Notice of Rescission. Id. ¶ 25.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides: "A pleading that states a claim for relief 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). Dismissal under Rule 12(b)(6) is appropriate where the Complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

To sufficiently state a claim for relief, a Complaint "does not need detailed factual allegations" but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v.Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1950 (2009). However, a court is not "required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see, e.g., Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009) ("Plaintiffs' general statement that Wal-Mart exercised control over their day to day employment is a conclusion, not a factual allegation stated with any specificity. We need not accept Plaintiffs' unwarranted conclusion in reviewing a motion to dismiss."). "In sum, for a Complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted).

ANALYSIS

I. TILA Violations

Plaintiffs allege they are entitled to actual and statutory damages as a result of TILA violations. (Doc. #10 ΒΆ 33). Plaintiffs request the Court grant "a temporary restraining order, a temporary injunction and permanent injunction declaring that Plaintiffs have the right to rescind the loan, are entitled to possession of the Property due to ...


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