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Lina Gladkihk v. National City Mortgage


January 26, 2011


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


This action arises out of a mortgage loan transaction in which Plaintiff Lina Gladkihk ("Plaintiff") purchased and financed a home in 2004. Presently before the Court is a Motion by Defendants Green Tree Servicing LLC, Federal National Mortgage Association, National City Mortgage Company, and PNC Mortgage Company (collectively, "Defendants") to Dismiss the claims alleged against them in Plaintiff's Second Amended Complaint for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). ///


Plaintiff purchased a home and financed the mortgage in late 2004. In mid-2009, Plaintiff requested a loan modification from Defendant National City Mortgage. After attempting to comply with the requirements of the trial loan modification period, Plaintiff was notified her loan was sold to Defendant Green Tree, who failed to honor the terms of her modification with National City Mortgage. Plaintiff's property was ultimately sold in April 2010, and she never received notice of the sale. Plaintiff further alleges that she did not receive the required disclosures at the time of financing the home (2004), and requests equitable tolling as to her TILA claim.


On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." ///

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotations omitted). Though "a complaint attacked by a Rule 12(b)(6) motion" need not contain "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." Id. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 2869 (1986)). A plaintiff's "factual allegation must be enough to raise a right to relief above the speculative level." Id. (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) ("[T]he pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.")).

Further, "Rule 8(a)(2)...requires a 'showing,' rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing...grounds on which the claim rests." Twombly, 550 U.S. at 555 n.3 (internal citations omitted). A pleading must then contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. If the "plaintiffs...have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id.

Once the court grants a motion to dismiss, they must then decide whether to grant a plaintiff leave to amend. Rule 15(a) authorizes the court to freely grant leave to amend when there is no "undue delay, bad faith, or dilatory motive on the part of the movant." Foman v. Davis, 371 U.S. 178, 182 (1962). In fact, leave to amend is generally only denied when it is clear that the deficiencies of the complaint cannot possibly be cured by an amended version. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992); Balistieri v. Pacifica Police Dept., 901 F. 2d 696, 699 (9th Cir. 1990) ("A complaint should not be dismissed under Rule 12(b)(6) unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.") (internal citations omitted).


Plaintiff alleges violations of state and federal law and requests relief accordingly. However, the issue before the Court is not the substance of these various claims, but whether Plaintiff has plead enough facts on the federal claim as a general matter, for any to stand. While the complaint does not need detailed factual allegations, it must still provide sufficient facts alleged under a cognizable legal theory. See supra.

A. TILA Claim

Plaintiff seeks to rescind her loan and recover damages pursuant to the Truth in Lending Act ("TILA"), 15 U.S.C. § 1600 et. seq. Defendants argue that Plaintiff's claim is time-barred because civil damages are subject to a one-year statute of limitations, and claims for rescission have a three-year statute of limitations.

For a plaintiff to collect civil damages from a defendant who failed to provide disclosures mandated by TILA, the statute of limitations requires plaintiff to file suit within one year from the "date of occurrence" of the alleged violation.

15 U.S.C. § 1640(e). The "date of occurrence" is the date the transaction is consummated, which in the case of a mortgage loan, is when the plaintiff closed on the loan. See Walker v. Washington Mut. Bank FA, 63 F. App'x. 316, 317 (9th Cir. 2003).

To sustain a claim for rescission under TILA, a consumer may elect to cancel their residential mortgage loan within three days of either the consummation of the transaction or delivery of required disclosures and rescission forms. 15 U.S.C. § 1635(f)(3). If the required disclosures are not provided, then the right to cancel the transaction extends to three years after the date the loan closed. 15 U.S.C. § 1635(f).

In the instant case, Plaintiff is time-barred from asserting any damages under TILA, as the date of occurrence (the date of the loan transaction) was more than one year from the date the case was filed, and more than three years after any material disclosures should have been provided and Plaintiff should have subsequently discovered the omission.

However, to save her claim, Plaintiff argues that equitable tolling should apply to suspend the statutes of limitations. 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, a court "focuses on whether there was 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 his 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).

Here, Plaintiff has failed to demonstrate she conducted the requisite due diligence. In the Second Amended Complaint, Plaintiff argues she did not have a reasonable opportunity to discover any TILA violations within the one year statute of limitations because they "did not reveal" themselves "until within the past year." (Sec. Am. Compl. ¶ 42.) Plaintiff does not provide any further facts or information about the documents she read and reviewed, or any conduct on her part, that suggests excusable delay occurred. Plaintiff's lack of information about her conduct leaves the Court an insufficient basis to invoke equitable tolling. While Plaintiff suggests Defendants concealed facts about the mortgage, she has not shown a scintilla of due diligence on her part. Equitable tolling will not be applied, and thus the statute of limitations period has run. Accordingly, Defendants' Motion to Dismiss Plaintiff's TILA claim is granted.

There are few material differences between Plaintiff's First Amended Complaint and Second Amended Complaint in regards to the TILA claim, and it is clear to this Court that no amendment will cure Plaintiff's deficiencies with respect to TILA's definitive statutes of limitations. As a result, leave to amend this cause of action is denied.

B. Plaintiff's Remaining Causes of Action

Plaintiff's federal claim presently dismissed, the Court declines to exercise supplemental jurisdiction over the remaining state causes of action.

The Court need not address the merits of Defendants' Motions to Dismiss with respect to the remaining state law causes of action, as those issues are now moot.


As a matter of law, and for the reasons set forth above, Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint (ECF No. 31) is GRANTED. Plaintiff's TILA claim is dismissed without leave to amend, and therefore the case is dismissed with prejudice. The Clerk is ordered to close the case.


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