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Usher v. Chase Home Finance LLC

October 8, 2010


The opinion of the court was delivered by: Gregory G. Hollows U. S. Magistrate Judge


Plaintiffs are proceeding pro se in this action, referred to the undersigned pursuant to Local Rule 302(c)(21). Previously pending on this court's law and motion calendar for September 30, 2010 was a motion to dismiss, filed August 23, 2010 by defendants Chase Home Finance LLC and Federal National Mortgage Association.*fn1 Plaintiffs filed an opposition and represented themselves at the hearing. Defendants appeared telephonically by counsel Christopher Yoo. Having heard oral argument and reviewed the papers in support of the motion, the undersigned now issues the following order and findings and recommendations.


This foreclosure action was removed from state court to this court on August 16, 2010, by defendants Chase Home Finance LLC ("Chase") and Federal National Mortgage Association ("Fannie Mae"). The complaint alleges claims for violations of TILA (15 U.S.C. § 1611), FDCPA (15 U.S.C. § 1692), California's Rosenthal Act (Cal. Civ. Code §§ 1788 et seq.), holder in due course (Cal. Comm. Code § 3302), fraud, breach of the covenant of good faith and fair dealing, and injunctive and declaratory relief. Defendants move to dismiss for failure to state a claim in regard to all claims, for failure to specifically plead fraud, and that the entire amended complaint is uncertain, requiring plaintiffs to provide a more definite statement under Fed. R. Civ. P. 12(e).


I. Legal Standard for Motion to Dismiss

In order to survive dismissal for failure to state a claim pursuant to Rule 12(b)(6), a complaint must contain more than a "formulaic recitation of the elements of a cause of action;" it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). "The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action." Id., quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

In considering a motion to dismiss, the court must accept as true the allegations of the complaint in question, Hospital Bldg. Co. v. Rex Hospital Trustees, 425 U.S. 738, 740, 96 S.Ct. 1848, 1850 (1976), construe the pleading in the light most favorable to the party opposing the motion and resolve all doubts in the pleader's favor. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1849, reh'g denied, 396 U.S. 869, 90 S.Ct. 35 (1969). The court will "'presume that general allegations embrace those specific facts that are necessary to support the claim.'" National Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 256, 114 S.Ct. 798, 803 (1994), quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 2137 (1992). Moreover, pro se pleadings are held to a less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 596 (1972).

The court may consider facts established by exhibits attached to the complaint. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The court may also consider facts which may be judicially noticed, Mullis v. United States Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987); and matters of public record, including pleadings, orders, and other papers filed with the court, Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986). The court need not accept legal conclusions "cast in the form of factual allegations." Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

A pro se litigant is entitled to notice of the deficiencies in the complaint and an opportunity to amend, unless the complaint's deficiencies could not be cured by amendment. See Noll v. Carlson, 809 F. 2d 1446, 1448 (9th Cir. 1987).

II. Truth in Lending Act

Plaintiffs' TILA claim seeks damages from defendants on the ground that defendant Chase "did not disclose and or concealed the vital fact that [Chase] was not making Plaintiffs a loan, but used 'check kiting'" in violation of the law. (Compl., ¶ 16.) The alleged violations pertain to plaintiffs' mortgage for which the loan agreement was entered into on or about May 15, 2007.*fn2 (Id. at ¶ 5.)

As correctly argued by defendants, it is evident that plaintiffs' TILA claim is barred by TILA's one year statute of limitations for damages claims. 15 U.S.C. § 1640(e). Here, plaintiffs' TILA claim arises in part out of failure to make required disclosures at the time the loan was entered, which was on or around May, 2007. (Compl. ¶ 5; RJN Exs. 1, 2.) The limitations period began to run at that time, King v. California, 784 F.2d 910, 914 (9th Cir. 1986), and would normally have expired in May, 2008. According to defendants' representations at hearing, the complaint was filed in state court on March 2, 2010.

Although TILA's limitations period for civil damages may be equitably tolled, King, 784 F.2d at 915, and subject to equitable estoppel, Ayala v. World Sav. Bank, FSB, 616 F. Supp. 2d 1007 (C.D. Cal. 2009), plaintiffs do not argue that either of these doctrines apply here. Nor does the amended complaint allege facts showing the potential applicability of the equitable tolling doctrine. See Cervantes v. City of San Diego, 5 ...

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