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Poolis v. Countrywide

September 29, 2010

CHARLES POOLIS AND CARMEN POOLIS, AN INDIVIDUAL, PLAINTIFFS,
v.
COUNTRYWIDE, N.A., A NEW YORK CORPORATION; REMAX PROPERTIES WEST DBA WEST COAST FINANCIAL, A CALIFORNIA CORPORATION; BANK OF AMERICA, N.A., A DELAWARE CORPORATION; COUNTRYWIDE BANK, N.A., A CALIFORNIA CORPORATION AND DOES 1-10, INCLUSIVE, DEFENDANTS.



ORDER RE: MOTION TO DISMISS (Docs. 17 and 25)

I. History*fn1

Plaintiffs Charles and Carmen Poolis are native Persian speakers and lived at 1601 Georgetown Avenue, in Turlock, CA. On October 25, 2006, Plaintiffs obtained an adjustable rate mortgage on that property from Defendant Countrywide Bank that was brokered by Defendant Remax Properties West. Plaintiffs represent that there is a threat of foreclosure on the mortgage.

Plaintiffs filed suit against Defendants Countrywide and ReMax Properties West on April 14, 2009, alleging a number of causes of action related to the procedures by which the mortgage was negotiated and executed. Doc. 1. Plaintiffs filed a first amended complaint on September 18, 2009. Doc. 14. Defendant Bank of America (successor in interest to Countrywide) filed a motion to dismiss. No opposition was filed. Plaintiffs were represented by Timothy Thurman.

It came to light that Mr. Thurman resigned from the California State Bar on November 2, 2009. Calls to his office were met with a recording advised existing clients to search for new counsel. The court took the motion under submission. Doc. 24. Meanwhile, Magistrate Judge Dennis Beck issued an order to show cause why the case should not be dismissed for Plaintiffs' failure to appear at the mandatory scheduling conference. Doc. 22. Plaintiffs, on their own behalf, filed a motion stating, "To this date I have no knowledge of what the contents and basis of this case are....I am asking the honorable Judge to postpone/halt any action taken against us by the Bank and give us more time to find out: A) what the details of such litigation [are] and what they are based on?? B) To give me enough time to consult with an attorney in the Fresno area C) If there is an eviction notice prepare my family for a move if not successful in negotiating with the bank." Doc. 25. The court attempted to contact Plaintiffs by phone to direct them to the State Bar of California, which had taken custody of Mr. Thurman's records. Defendant's motion to dismiss was reset for hearing on August 9, 2010. Doc. 27. Plaintiffs again failed to file an opposition. The matter was taken under submission without oral argument.

II. Legal Standards

Under Federal Rule of Civil Procedure 12(b)(6), a claim may be dismissed because of the plaintiff's "failure to state a claim upon which relief can be granted." 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. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "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)....a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007), citations omitted. "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, 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 complaint has alleged -- but it has not shown that the pleader is entitled to relief." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009), citations omitted. The 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). The court must also assume that "general allegations embrace those specific facts that are necessary to support the claim." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 (1990), citing Conley v. Gibson, 355 U.S. 41, 47 (1957), overruled on other grounds at 127 S.Ct. 1955, 1969. Thus, the determinative question is whether there is any set of "facts that could be proved consistent with the allegations of the complaint" that would entitle plaintiff to some relief. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002). At the other bound, courts will not assume that plaintiffs "can prove facts which [they have] not alleged, or that the defendants have violated...laws in ways that have not been alleged." Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983).

In deciding whether to dismiss a claim under Rule 12(b)(6), the Court is generally limited to reviewing only the complaint. "There are, however, two exceptions....First, a court may consider material which is properly submitted as part of the complaint on a motion to dismiss...If the documents are not physically attached to the complaint, they may be considered if the documents' authenticity is not contested and the plaintiff's complaint necessarily relies on them.

Second, under Fed. R. Evid. 201, a court may take judicial notice of matters of public record." Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001), citations omitted. The Ninth Circuit later gave a separate definition of "the 'incorporation by reference' doctrine, which permits us to take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff's pleading." Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005), citations omitted. "[A] court may not look beyond the complaint to a plaintiff's moving papers, such as a memorandum in opposition to a defendant's motion to dismiss. Facts raised for the first time in opposition papers should be considered by the court in determining whether to grant leave to amend or to dismiss the complaint with or without prejudice." Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003), citations omitted.

If a Rule 12(b)(6) motion to dismiss is granted, claims may be dismissed with or without prejudice, and with or without leave to amend. "[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc), quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995). In other words, leave to amend need not be granted when amendment would be futile. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002).

III. Discussion

A. Truth in Lending Act

Plaintiffs allege that Defendants failed to comply with TILA requirements of disclosure. For damages, TILA has a one year statute of limitation: "Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation." 15 U.S.C. §1640(e). The limitations period runs from the date of consummation of the transaction, with "consummation" defined as "the time that a consumer becomes contractually obligated on a credit transaction." 12 C.F.R. §226.2(a)(13); Grimes v. New Century Mortg. Corp., 340 F.3d 1007, 1009 (9th Cir. 2003). The mortgage was signed on October 25, 2006, which means that the statute of limitations period ran out October 26, 2007, well before Plaintiffs filed suit on April 14, 2009.

The Ninth Circuit has held that "the doctrine of equitable tolling may, in appropriate circumstances, suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA action." King v. State of California, 784 F.2d 910, 915 (9th Cir. 1986). In determining justifiable application of the equitable tolling doctrine, the court "focuses on excusable delay by the plaintiff." Johnson v. Henderson, 314 F.3d 409, 414 (9th Cir. 2002). To establish excusable delay, the plaintiff must show "fraudulent conduct by the defendant resulting in concealment of the operative facts, failure of the plaintiff to discover the operative facts that are the basis of its cause of action within the limitations period, and due diligence by the plaintiff until discovery of those facts." Federal Election Com'n v. Williams, 104 F.3d 237, 240-41 (9th Cir. 1996). Plaintiffs argue:

Plaintiffs are not familiar with, or have any expertise in, mortgage transactions, and do not speak English as a first language, and were never provided any of the loan transaction documentation in their native Persian language, Plaintiffs did not and could not have reasonably discovered these violations despite due diligence. As such, this action is timely as any and all ...


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