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Terry Appling v. Wachovia Mortgage

February 7, 2011

TERRY APPLING,
PLAINTIFF,
v.
WACHOVIA MORTGAGE, FSB, A FEDERAL SAVINGS BANK; WORLD SAVING BANK, FA, A
FEDERAL SAVINGS BANK; WELLS FARGO BANK, NA, A NATIONAL BANKING ASSOCIATION MEMBER;
IQ HOME LOANS AND REALTY CORPORATION, A CALIFORNIA CORPORATION; ALI MIRZAEI AND WILLIAM CHEN,
DEFENDANTS.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

United States District Court For the Northern District of California

ORDER GRANTING MOTION TO DISMISS WITH PREJUDICE

Defendants Wachovia Mortgage (formerly known as World Savings Bank, FSB, and Wachovia Mortgage, FSB, now a division of Wells Fargo Bank, NA) and Wells Fargo Bank, NA, 22 move to dismiss Plaintiff's complaint. Pursuant to Civil Local Rule 7-1(b), the Court finds that this 23 motion is appropriate for determination without oral argument and vacates the motion hearing and 24 case management conference scheduled for February 10, 2011. Having considered the submissions 25 of the parties and the relevant law, the Court grants the motion to dismiss with prejudice. The 26 Court also dismisses this action, without prejudice, as to Defendants IQ Home Loans and Realty Corporation, Ali Mirzaei, and William Chen.

I.Background

A.Procedural History

On May 3, 2010, Plaintiff filed the instant action against Wachovia Mortgage, FSB ("Wachovia"), World Savings Bank, FA ("World Savings"), Wells Fargo Bank, NA ("Wells Fargo"), IQ Home Loans and Realty Corporation ("IQ"), Ali Mirzaei, and William Chen.*fn1

Plaintiff's original complaint alleged eight causes of action: (1) violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq.; (2) negligent misrepresentation; (3) violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq.; (4) breach of fiduciary duty; (5) 9 violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Profs. Code § 17200, et seq.; (6) conversion; (7) breach of contract; and (8) wrongful foreclosure. Also on May 3, 2010, Appl. for TRO and Mot. for Prelim. Inj. (TRO Appl.) 1, ECF No. 3. The Court granted the TRO, Order Granting Appl. for TRO and Setting Hearing on Preliminary Injunction, ECF No. 9, but subsequently denied Plaintiff's motion for a preliminary injunction. Appling v. Wachovia Defendants Wachovia and Wells Fargo then moved to dismiss the entire action. On September 17, 2010, the Court granted Defendants' motion in part and dismissed all of Plaintiff's claims against Wachovia and Wells Fargo with prejudice, except for his TILA cause of action.

Order Granting in Part and Denying in Part Defendants' Mot. to Dismiss, ECF No. 37. Defendants 21 had challenged Plaintiff's TILA claims only on statute of limitations grounds. Because the Court 22 found that equitable tolling of the statute of limitations appeared to be a possibility, the Court 23 denied Defendants' motion as to one basis for Plaintiff's TILA claim and granted leave to amend to 24 allege grounds for equitable tolling as to the other basis. On October 1, 2010, Plaintiff filed a First Amended Complaint ("FAC") that includes a single cause of action for TILA violations.

Defendants now move to dismiss this claim, and the entire action, pursuant to Rule 12(b)(6).

2007, Plaintiff entered into a fixed-rate "pick-a-payment" loan originated by World Savings and secured by the Property. FAC ¶ 12. During the duration of the loan, Plaintiff could choose among 8 four payment options each month, including: 1) a payment covering enough interest and principal 9 to pay off the loan within its scheduled 30-year term; 2) a payment covering interest only; 3) a 10 minimum payment representing the smallest payment permitted, which may not be sufficient to

Prelim. Inj. (TRO Decl.) Ex. 3, ECF No. 4.*fn2 The minimum payment amount is subject to change 14 every twelve months on the "payment change date." TRO Decl. Ex. 4. If the borrower makes 15 minimum payments less than the interest owing on the loan, any unpaid interest is deferred and 16 added to the principal. TRO Decl. Ex. 3. If this happens, then on the payment change date, the 17 minimum payment is increased to the amount necessary to pay the principal and interest by the 18 maturity date of the loan (subject to a payment cap that limits the amount by which the monthly 19 payments can be increased, but which is overridden if the principal balance exceeds 125 percent of 20 the original loan amount). TRO Decl. Ex. 4. 21

B.Factual History

At the time Plaintiff initiated this action, he owned real property located at 175 N. Sunnyvale Avenue, Sunnyvale, CA 94086 (the "Property"). FAC ¶ 6. On or about November 5,

cover the interest due on the loan; and 4) a payment covering enough interest and principal to pay off the loan within 15 years. Decl. of Terry ...


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