ORDER AND FINDINGS AND RECOMMENDATIONS
This case came before the court on September 17, 2010, for hearing on an amended motion to dismiss plaintiffs' complaint pursuant to Federal Rules of Civil Procedure 8,9 and 12(b)(6) filed on behalf of defendant Wachovia Mortgage, a division of Wells Fargo Bank, N.A., formerly known as Wachovia Mortgage, FSB, formerly known as World Savings Bank, FSB (hereinafter "Wachovia").*fn1 (Doc. No. 10.) Jeremy Shulman, Esq. appeared telephonically for defendant Wachovia. Plaintiffs did not file written opposition to the motion to dismiss nor did they appear at the hearing on the motion.*fn2 Upon consideration of all materials filed in connection with the motions, arguments at the hearing, and the entire file, the undersigned recommends that defendant Wachovia's motion to dismiss be granted and that this case be closed.
Plaintiffs originally filed their complaint on May 4, 2010, in the Sacramento County Superior Court. On July 14, 2010, defendant Wachovia removed the action pursuant to 28 U.S.C. § 1441(b) on the grounds that this court has original jurisdiction over the claims arising under the laws of the United States brought by plaintiffs in their complaint under 28 U.S.C. § 1331. See Notice of Removal (Doc. No. 1) at 1.*fn3
In their rambling thirty-four page verified complaint, which the court recognizes as essentially a copy of other complaints filed recently with this court by other litigants, the pro se plaintiffs allege as follows. They are the owners of the subject residential property located in Sacramento, California. (Compl. (Doc. No. 1) at 6, ¶ 4.)*fn4 On December 13, 2006, they obtained an adjustable rate mortgage loan in the amount of $262,500 from World Savings Bank, FSB., which later became defendant Wachovia. (Id. at ¶ 5.) The mortgage loan was secured by a deed of trust recorded on the subject property. (Id. at ¶ 11.) Although not specifically alleged in the complaint, it appears that plaintiffs defaulted on the mortgage and the subject property was foreclosed upon since plaintiffs seek to have "the foreclosure which was instituted" "declared illegal and void." (Id. at 37.)
According to plaintiffs, defendants induced them 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.)*fn5 Contrary to the documentation provided to plaintiffs, defendants were neither the source of funding nor the true lender in the mortgage loan transaction. (Id. at ¶ 13.) Due to 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): the Home Ownership Equity Protection Act (HOEPA), 15 U.S.C. § 1639, et seq.; the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605, et seq.; the Truth in Lending Act (TILA), 15 U.S.C. § 1601, et seq. ; the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1687(s)(2)(b);
Fraudulent Misrepresentation; Breach of Fiduciary Duty; Unjust Enrichment; Civil Conspiracy; the Racketeering Influenced and Corrupt Organization Act (RICO), 18 U.S.C. § 1961 et seq.; and for Quiet Title. (Compl. (Doc. No 1) at 27-36, ¶¶ 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) at 35-37.)
Defendant Wachovia seeks dismissal of plaintiffs' complaint pursuant to Federal Rules of Civil Procedure 8, 9 and 12(b)(6) on the grounds that plaintiffs have failed to provide a short and plain statement of their claims against each defendant and have failed to state any cognizable claim. Specifically, defendant Wachovia advances the following arguments. Plaintiffs' HOEPA claim, both with respect to damages and for rescission, is barred by the applicable statute of limitations and plaintiffs have not adequately alleged any statutory violation. 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 a statutory violation or that they have suffered any damage as a result thereof. Likewise, plaintiffs' TILA claim, with respect to damages and for rescission, is time-barred and fails because plaintiffs have not tendered the borrowed funds and have failed to allege a violation of any provision of the TILA. Plaintiffs' FCRA claim must be dismissed because there is no applicable private right of action under that statute 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 it is preempted by the Home Owners' Loan Act (HOLA), is time-barred and because defendants owe no duty to plaintiffs in this mortgage loan transaction. Plaintiffs' unjust enrichment claim fails for the same reasons that their breach of fiduciary duty claim must be dismissed. Plaintiffs' civil conspiracy claim is subject to dismissal because it is not an independent cause of action and because it is time-barred, preempted by HOLA and because 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. Plaintiffs' 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, defendant Wachovia argues that the complaint should be dismissed without leave to amend. (Doc. No. 10.)
As noted above, plaintiffs have filed no written opposition to the motion and did not appear at the hearing on defendant Wachovia's 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). /////
Although the Federal Rules of Civil Procedure adopt a flexible pleading policy, a complaint must give the defendant fair notice of the plaintiff's claims and must allege facts that state the elements of each claim plainly and succinctly. Fed. R. Civ. P. 8(a)(2); Jones v. Community Redev. Agency, 733 F.2d 646, 649 (9th Cir. 1984). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertions' devoid of 'further factual enhancements.'" Ashcroft v. Iqbal, ___U.S.___, ___,129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 555, 557. The plaintiff must allege with at least some degree of particularity overt acts which the defendants engaged in that support the plaintiff's claims. Jones, 733 F.2d at 649. A complaint must also contain "a short and plain statement of the grounds for the court's jurisdiction" and "a demand for the relief sought." Fed. R. Civ. P. 8(a)(1) & 8(a)(3).
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');">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)).
At the outset, defendant Wachovia has requested judicial notice of documents related to the matters at issue. (Docs. No. 11.) Specifically, defendant Wachovia requests that the court take judicial notice of: (A) an Adjustable Rate Mortgage Note in the amount of $262,500 related to the subject property, dated December 13, 2006 and signed by plaintiffs; (B) a Deed of Trust securing the subject property executed by plaintiffs dated December 13, 2006 and recorded in the Sacramento County Recorder's Office on December 19, 2006; (C) a Certificate of Corporate Existence dated April 21, 2006, Office of Thrift Supervision, Department of the Treasury; (D) a letter dated November 19, 2007, Office of Thrift Supervision, Department of the Treasury re Notice of Amendment of Charter and Bylaws for World Savings Bank, FSB; (E) Charter of Wachovia Mortgage, DFSB, dated December 31, 2007, reflecting that it is subject to HOLA and the Office of Thrift Supervision; (F) a Federal Deposit Insurance Corp (FDIC) Profile and History for Wachovia Mortgage, FSB, dated August 6, 2010 reflecting its active status and its primary regulator as the Office of Thrift Supervision; and (G) an Official Certification of the Comptroller of the Currency stating that, effective November 1, 2009, Wachovia Mortgage, FSB converted to Wells Fargo Bank Southwest, N.A. which then merged with and into Wells Fargo Bank, N.A. (Doc. No. 11, Exs. A - G.)
Defendant Wachovia's 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 defendant Wachovia 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 December 13, 2006, but did not file their complaint until May 4, 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 for damages is time-barred.
In addition, plaintiffs' complaint alleges no violation of HOEPA's provisions but instead merely rely upon conclusory allegations regarding disclosures. (Compl. at ¶ 58, 61.) Such allegations are clearly insufficient to state a cognizable claim under HOEPA.
Finally, despite the complaint's suggestion to the contrary, it is clear that the defendants "[h]ad no duty to disclose to plaintiff[s] that [t]he[y] did not have the ability to repay the loan. Cross v. Downey Savings & Loan Ass'n, No. CV 09-317 CAS (Ssx), 2009 WL 481482, at *5 (C.D. Cal. Feb 23, 2009) (citing Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal.
App.3d 1089, 1096 (1991)); Davidson v. Countrywide Home Loans, Inc, No. 09-CV-2694-IEG (JMA), 2010 WL 2925440, at *9 (S.D. Cal. July 23, 2010) ("[T]o the extent Plaintiff bases this claim on the contention that Countrywide gave Davidson a loan she could not afford, this claim would fail."); Camillo v. Washington Mutual Bank, F.A., No. 1:09-CV-1548 AWI SMS, 2009 WL 3614793, * 7 (E.D. Cal. Oct. 27, 2009) ("Thus, ...