FINDINGS AND RECOMMENDATIONS
This case came before the court on September 3, 2010, for hearing on defendants' motion to dismiss plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. No. 5.) Ben Spohn, Esq. appeared telephonically for defendants. Plaintiffs did not file written opposition to the motion nor did they appear at the hearing.*fn1 Upon consideration of all materials filed in connection with the motions, arguments at the hearing, and the entire file, the undersigned recommends that defendants' motion to dismiss be granted.
Plaintiffs originally filed their complaint on June 9, 2010, in the Sacramento County Superior Court. On July 16, 2010, defendants removed the action pursuant to 28 U.S.C. § 1441(b) on the grounds that this court has original jurisdiction over the claims brought by plaintiffs in their complaint, including those federal claims brought pursuant to the Home Ownership Equity Protection Act (HOEPA), 15 U.S.C. § 1639, et seq.; the Truth in Lending Act (TILA), 15 U.S.C. § 1601, et seq.; the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605, et seq.; the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1687(s)(2)(b); and the Racketeering Influenced and Corrupt Organization Action (RICO), 18 U.S.C. § 1961 et seq. See Notice of Removal (Doc. No. 1) at 2.
In their rambling and conclusory thirty-four page verified complaint, the pro se plaintiffs allege as follows. They are the owners of the subject residential property located in Sacramento, California. (Compl. (Doc. No. 1-1) at 7, ¶ 4.) On June 9, 2005, they obtained a mortgage loan in the amount of $308,000 through defendant Countrywide Home Loans, doing business as America's Wholesale Lender (hereinafter Countrywide), secured by a First Deed of Trust on the subject property. (Id. at ¶ 5.)*fn2 Defendant Recon Trust Company was the Trustee for plaintiff's Deed of Trust. (Id. at ¶ 11.) Defendant Countrywide induced plaintiffs into the mortgage loan that "did not and could not meet normal underwriting standards for a residential mortgage." (Id. at ¶ 6.) The appraisal done in connection with the loan was inflated, along with other loan data, to justifying the closing of the transaction when, in fact, defendants knew plaintiffs could never repay the loan and despite defendants' assurances to the contrary. (Id. at ¶ 7.) Defendants sole purpose was to collect "fees, rebates, kickbacks and profits that were never disclosed to Plaintiff[s]." (Id. at ¶ 10.)*fn3 Contrary to the documentation provided to plaintiff, defendant Countrywide was neither the source of funding nor the true lender in the mortgage loan transaction. (Id. at ¶ 13.) By defendants' failure to record agreements and assignments in connection with the loan transaction and through the pooling of assets and securitization of the mortgage loans, there is now no holder of the note in due course with standing to enforce the loan though non-judicial foreclosure. (Id. at ¶¶ 14-29.) Defendants never advised plaintiffs of the details of the mortgage loan transaction, including required preliminary disclosures, and misled plaintiffs into accepting a sub-prime adjustable rate mortgage. (Id. at ¶¶ 30-39.) Defendants acted as creditors in defrauding plaintiffs by failing to properly credit payments made by them on the loan and miscalculating interest and fees, resulting in plaintiffs overpaying interest on the loan. (Id. at ¶¶ 41-49.)
Based on these allegations plaintiffs assert claims for relief under (or for): HOEPA, RESPA, FCRA, Fraudulent Misrepresentation, Breach of Fiduciary Duty, Unjust Enrichment, Civil Conspiracy, Civil RICO and Quiet Title. (Compl. (Doc. No 1-1) at 28-36, ¶¶ 54-119.) In terms of relief, plaintiffs essentially seek an order declaring that the mortgage loan transaction and subsequent foreclosure proceedings were illegal and are rendered void, that defendants lack any interest in the subject property, terminating all collection and foreclosure activities, restoring unencumbered title to plaintiffs and an award of damages, fees and costs. (Compl. (Doc. No 1-1) at 36-37.)
Defendants seek dismissal of plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on the grounds that they have failed to state any cognizable claim. Specifically, defendants advance the following arguments. Plaintiffs' HOEPA claim is barred by the applicable one-year statute of limitations. Plaintiffs' RESPA claim is also barred by the applicable one-year statute of limitations and, in any event, fails due to their failure to allege they have suffered any damage as a result of the alleged violation. Likewise, plaintiffs' TILA claim is both time-barred and fails because plaintiffs have not tendered the borrowed funds and have failed to allege a violation of TILA. Plaintiffs' FCRA claim must be dismissed because there is no applicable private right of action under that provision and, in any event, plaintiffs have failed to allege any violation of its provisions. The fraud claim is both time-barred and fails because plaintiffs have not alleged fraud with the particularity required under Federal Rule of Civil Procedure 9(b) and state law. Plaintiffs' breach of fiduciary duty claim must be dismissed because defendants owe no duty to plaintiff in this mortgage loan transaction and their unjust enrichment claim fails because it is not an independent cause of action and is not supported by the factual allegations of the complaint. Plaintiffs' conspiracy claim is subject to dismissal because it too is not an independent cause of action and plaintiffs have failed to adequately allege a predicate fraud. The civil RICO claim is insufficiently alleged and is unsupported by the factual allegations of the complaint. Plaintiff's quiet title claim must be dismissed because they have not stated a valid claim for rescission and have failed to allege satisfaction of the tender requirement. Finally, defendants argue that the complaint, which they characterize as a cookie cutter document that has been filed in other cases before this court and was submitted here merely to stall or avoid foreclosure, should be dismissed with prejudice. (Doc. No. 5.)
As noted above, plaintiffs have filed no written opposition to the motion and did not appear at the hearing on defendants' motion to dismiss.
LEGAL STANDARDS APPLICABLE TO DEFENDANTS' MOTION
The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Thus, a defendant's Rule 12(b)(6) motion challenges the court's ability to grant any relief on the plaintiff's claims, even if the plaintiff's allegations are true.
In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).
With regard to claims of fraud, "the circumstances constituting fraud . . . shall be stated with particularity." Fed. R. Civ. P. 9(b). "Rule 9(b) serves not only to give notice to defendants of the specific fraudulent conduct against which they must defend, but also 'to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to protect [defendants] from the harm that comes from being subject to fraud charges, and to prohibit plaintiffs from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.'" Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001) (quoting In re Stac Elec. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996)). Thus, pursuant to Rule 9(b), a plaintiff alleging fraud at a minimum must plead evidentiary facts such as the time, place, persons, statements and explanations of why allegedly misleading statements are misleading. In re GlenFed, Inc. Sec. Litig., 42 F. 3d 1541, 1547 n.7 (9th Cir. 1994); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003); Fecht v. Price Co., 70 F.3d 1078, 1082 (9th Cir. 1995). Likewise, "[u]nder California law, the 'indispensable elements of a fraud claim include a false representation, knowledge of its falsity, intent to defraud, justifiable reliance, and damages.'" Vess, 317 F.3d at 1105 (quoting Moore v. Brewster, 96 F.3d 1240, 1245 (9th Cir. 1996)).
For the reasons set forth below, the undersigned will recommend that defendants' motion to dismiss be granted and that this action be dismissed with prejudice.
At the outset, defendants have requested judicial notice of documents related to the matters at issue. (Docs. No. 6.) Specifically, defendants request that the court take judicial notice of: (1) an Adjustable Rate Note in the amount of $308,000 related to the subject property, dated June 9, 2005 and signed by plaintiffs; and (2) a Deed of Trust securing the subject property executed by plaintiffs and recorded in the Sacramento County Recorder's Office on June 15, 2005. (Doc. No. 6, Exs. A and B.) Defendants' requests for judicial notice will be granted pursuant to Federal Rule of Evidence 201. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001) (on a motion to dismiss, court may consider matters of public record); MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986) (on a motion to dismiss, the court may take judicial notice of matters of public record outside the pleadings).
In their complaint plaintiffs allege in conclusory fashion that defendants violated the provisions of HOEPA by failing to make required disclosures to plaintiffs in a conspicuous fashion, failing to disclose the right to rescind the transaction and extending credit to plaintiffs without regard to their ability to repay. (Compl. at ¶¶ 59, 61.)
As defendants correctly point out, the statute of limitations governing an action for damages under HOEPA calls for the filing of a complaint within one year of the date the violation occurred. 15 U.S.C. § 1640(e). This limitations period starts to run from "the date of consummation of the transaction." King v. California, 784 F.2d 910, 915 (9th Cir. 1986). See also Monaco v. Bear Stearns Residential Mortg. Corp., 554 F. Supp. 2d 1034, 1039 (C.D. Cal. 2008). Here, plaintiff's entered into the mortgage loan transaction on June 9, 2005, but did not file their complaint until June 9, 2010. Although this statute of limitations may be subject to equitable tolling under appropriate circumstances (King, 784 F.2d at 914-15), plaintiffs have made no showing justifying application of equitable tolling in this case. Accordingly, their HOEPA claim is time-barred.
In addition, HOEPA, an amendment to TILA, codified at 15 U.S.C. § 1639, creates "a special class of regulated loans that are made at higher interest rates or with excessive costs and fees." In re Community Bank of Northern Va., 418 F.3d 277, 304 (3d Cir. 2005). In order to be subject to the protections afforded by HOEPA, one of two factors has to be established. Either the annual percentage rate of the loan at consummation must exceed by more than 10 percent the applicable yield on treasury securities, or the total points and fees payable by the consumer at or before closing has to be greater than 8 percent of the total loan amount, or $400.00. 15 U.S.C. § 1602(aa)(1) & (3); see also 12 C.F.R. § 226.32(a)(1). Plaintiffs' complaint does not allege facts demonstrating that the mortgage they obtained qualified for protection under HOEPA. That failure alone subjects the claim to dismissal. See e.g., Marks v. Chicoine, No. C 06-06806 SI, 2007 WL 160992 at *8 (N.D. Cal.2007) (court dismissed claim for violation of HOEPA where plaintiff failed to allege facts that would support a conclusion that HOEPA applied to the loan at issue); see also Justice v. Countrywide Home Loans, Inc., No. 3:05-CV-008, ...