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Jerry D. Lee, et al v. Bac Home Loans Servicing

February 28, 2011

JERRY D. LEE, ET AL., PLAINTIFFS,
v.
BAC HOME LOANS SERVICING, LP, DEFENDANT.



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

FINDINGS AND RECOMMENDATIONS

Presently before the court is defendant BAC Home Loans Servicing's amended motion to dismiss.*fn1 For the reasons set forth herein, defendant's motion should be granted.*fn2 BACKGROUND

Plaintiffs Jerry and Lisa Lee filed this action on October 5, 2010. Plaintiffs allege that defendant induced them into a predatory loan agreement for the refinance*fn3 of their primary residence, and committed numerous acts of fraud in regard to that agreement. (Compl. at 1.) Plaintiffs allege no other facts in their boilerplate complaint; however, the loan documents submitted in support of defendant's motion to dismiss indicate the loan agreement was executed on October 19, 2006. (Def.'s Mot., Exs. A-C.) According to defendant, plaintiffs defaulted on the note in July 2008, and notice of default was filed on September 25, 2009. (Def.'s RJN Ex. B.) Defendant proceeded with the trustee sale, and a trustee deed upon sale was recorded on September 30, 2010. (Id., Ex. D.)

The complaint contains claims for violation of the Truth in Lending Act ("TILA"), Real Estate Settlement Procedures Act ("RESPA"),*fn4 Home Ownership and Equity Protection Act of 1994 ("HOEPA"), unjust enrichment, quiet title, breach of fiduciary duty, negligence, fraud, breach of implied covenant of good faith and fair dealing, and intentional infliction of emotional distress. Plaintiffs seek injunctive relief, rescission, and compensatory and punitive damages.

DISCUSSION

I. Legal Standards 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).

II. Analysis

A. TILA

1. Rescission

Rescission claims under TILA "shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever ...


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