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Curtis v. Option One Mortgage Corp.

July 21, 2010



(Documents #26 & #27)


On July 22, 2009, Plaintiff filed a complaint in the Superior Court of the State of California, County of Stanislaus. On November 10, 2009, Defendant removed the complaint to the Eastern District of California, Fresno Division, because this court has federal question jurisdiction over the complaint pursuant to 28 U.S.C. § 1331. On April 28, 2010, the court dismissed the complaint with leave to amend the complaint's TILA rescission claim. The court found that to state a TILA rescission claim, Plaintiff needed to allege in the complaint that she is financially capable of tendering the loan proceeds.

On May 10, 2010, Plaintiff filed a first amended complaint ("complaint"). The complaint alleges a violation of TILA and seeks rescission. The complaint alleges that: "Plaintiff is fully able and willing to tender performance of her obligations by tendering the subject properties as required under 15 U.S.C. § 1635(b)."

On May 20, 2010, American Home Mortgage Servicing, Inc. filed a motion to dismiss.*fn1 On May 21, 2010, Option One Mortgage Corporation f/k/a/ Option One Mortgage Corporation filed a motion to dismiss. Defendants contend that the complaint still does not allege Plaintiff's ability to tender because the complaint does not allege that Plaintiff is capable of tendering loan's proceeds.

On June 3, 2010 and June 9, 2010, Plaintiff filed oppositions to the motions to dismiss. Plaintiff contends that because the complaint states she is capable and willing to tender the "properties", nothing more is required under TILA.

Defendants filed reply briefs. Defendants contend that Plaintiff must allege her financial ability to return the net loan proceeds received, and not the properties securing the loans.

On June 25, 2010, the court reviewed the pending motions to dismiss. The court found that a definition of the term "property", as used in the complaint, is necessary for the court to resolve the pending motions to dismiss. The court noted that it was unclear if by "property" Plaintiff is referring to the real properties that secure the loan or referring to the loan proceeds Plaintiff received from Defendants. The court ordered Plaintiff to file an amendment to the complaint that includes her definition of the term "properties" as used in the complaint.

On July 2, 2010, Plaintiff filed a brief defining the meaning of "properties" as used in the complaint. Plaintiff states that the word "properties" as used in the complaint and opposition briefs refers to the real properties that secure the loans, which are the real properties located at 2585 Carriage Court, Turlock, County of Stanislaus, California and 1634 Arlington Court, Turlock, County of Stanislaus, California.


Under Rule 12(b)(6) of the Federal Rules of Civil Procedure a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A dismissal under Rule 12(b)(6) may be based on the lack of a cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory. Johnson v. Riverside Healthcare Sys., 534 F.3d 1116, 1121 (9th Cir. 2008); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In reviewing a complaint under Rule 12(b)(6), all of the complaint's material allegations of fact are taken as true, and the facts are construed in the light most favorable to the non-moving party. Marceau v. Balckfeet Hous. Auth., 540 F.3d 916, 919 (9th Cir. 2008); Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1999). The court must also assume that general allegations embrace the necessary, specific facts to support the claim. Smith v. Pacific Prop. and Dev. Corp., 358 F.3d 1097, 1106 (9th Cir. 2004). However, the court is not required "to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1056-57 (9th Cir. 2008); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Although legal conclusions may provide the framework of a complaint, they are not accepted as true and "[t]hreadbare recitals of elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009); see also Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). As the Supreme Court has explained: While 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. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949.

The plausibility standard is not akin to a 'probability requirement,' but it asks more than a sheer possibility that a defendant has acted unlawfully. Where 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.' . . .

Determining whether a complaint states a plausible claim for relief will . . . be a context specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the ...

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