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Kira B. Christensen v. American Home Mortgage Servicing


January 7, 2011


The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge


This matter is before the court on the motion of defendants' American Home Mortgage Servicing, Inc. ("AHMSI"), Deutsche Bank National Trust Company ("Deutsche Bank"), as trustee for American Home Mortgage Assets Trust (collectively "defendants", and Mortgage Electronic Registration Systems, Inc. ("MERS") to dismiss plaintiff Kira B. Christensen's ("plaintiff" or "Christensen") second amended complaint ("SAC") pursuant to Federal Rules of Civil Procedure 12(b)(6), 8(a), and 9(b).*fn1

Plaintiff opposes the motion.*fn2 For the reasons set forth below, defendants' motion is GRANTED.*fn3


Plaintiff originally filed a complaint against defendants in April 2010 arising out of allegations that defendants knowingly entered false information on the application relating to plaintiff's monthly income, misstated the value of the property, and misrepresented, inter alia, the desirability of the loan, the loan's premium, and plaintiff's ability to modify the loan in the future. On August 3, 2010, the court granted defendants' motion to dismiss because it concluded that plaintiff did not allege any facts to demonstrate the applicability of equitable tolling to her facially time barred claims for relief. Plaintiff filed her first amended complaint on August 23, 2010. The court again granted defendants' motion to dismiss, concluding that plaintiff had failed to allege facts supporting equitable tolling and rejecting plaintiff's legally unsupported argument that the continuing violation doctrine applied to her claims.*fn5 On November 5, 2010, plaintiff filed a second amended complaint, alleging that equitable tolling should apply even though she knew the representations on the application were false at the time of the origination of the loan because she did not know it gave rise to a possible claim. (See Second Am. Compl. ("SAC"), filed Nov. 5, 2010, ¶¶ 32-34.)

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." 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). On a 12(b)(6) motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963).

A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.

The application of the equitable tolling doctrine is dependant on the plaintiff's "excusable ignorance of the limitations period" and lack of prejudice to the defendant. Santa Maria v. Pac. Bell, 202 F.3d 1170, 1176 (9th Cir. 2000). It is well established that the doctrine of equitable tolling may be applied in circumstances where a plaintiff's failure to comply with the time limitations was because he had neither actual nor constructive notice of the factual basis for the claim within the filing period. Leorna v. U.S. Dep't of State, 105 F.3d 548, 551 (9th Cir. 1997); see Santa Maria, 202 F.3d at 1178 ("If a reasonable plaintiff would not have known of the existence of a possible claim within the limitations period, then equitable tolling will serve to extend the statute of limitations for filing suit until the plaintiff can gather what information he needs."). Equitable tolling focuses on the plaintiff's excusable ignorance, but the doctrine is not available to avoid the consequences of a plaintiff's own negligence. Lehman v. U.S., 154 F.3d 1010, 1016 (9th Cir. 1998); see Scholar v. Pacific Bell, 963 F.2d 264, 268 (9th Cir. 1992) (noting that courts are generally unforgiving when a civil action is filed late due to the claimant's failure to "exercise due diligence in preserving his legal rights") (citations omitted).

Like plaintiff's original and first amended complaint, the allegations in the SAC fail to demonstrate that plaintiff was unable to obtain the information needed to file her claim until after the alleged statutory period. Plaintiff's claims are premised on the alleged wrongful conduct that took place at the origination of her loan, including, inter alia, misstating her monthly income, excessive fees, abusive prepayment penalties, kickbacks to brokers, and over valuation of the property. (See SAC ¶ 11-33). Indeed, plaintiff alleges that "she had some misgivings" and raised "concern" regarding the overstatement of her income at the time the application was filed. (Id. ¶ 28.) Plaintiff, however, simultaneously alleges that all the misrepresentations and allegations made were discovered within the past year and that she was not aware until within a year before filing the instant lawsuit that overstating her income was wrongful or that the bank did not verify her income with the IRS. (Id. ¶¶ 28, 31).

As noted by the court in its previous orders, plaintiff's allegations demonstrate that she was aware of at least some, if not all, of the alleged wrongful conduct at the time the loan originated. Plaintiff acknowledges that she "was aware at the time the application was submitted that it indicated income that was grossly incorrectly overstated." (Id. ¶ 28). Plaintiff does not allege that she did not receive documentation regarding her loan; rather, she conclusorily asserts that review was not reasonable because "the documents were of such a voluminous nature that a reasonable person would not be expected to have them independently reviewed by additional experts beyond her broker." (Id. ¶ 30).

Accepting the allegations in plaintiff's complaint as true and drawing all reasonable inferences therefrom, the court cannot conclude that plaintiff's allegations are sufficient to establish a factual predicate for plaintiff's excusable ignorance of the factual basis for her claim or the applicable statute of limitations period. Because plaintiff's allegations fail to demonstrate the applicability of equitable tolling to her facially time barred claims for relief, defendants' motion to dismiss plaintiff's complaint is GRANTED.*fn6

The clerk of Court is directed to close this case. IT IS SO ORDERED.

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