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Anastacio Avila v. Countrywide Home Loans

March 29, 2011


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


Defendants Countrywide Home Loans, Inc. (Countrywide) and BAC Home Loans Servicing, LP (BAC) (together, Defendants)*fn1 move to dismiss the complaint in this action for 18 failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). See 19 Motion to Dismiss (MTD) (Dkt. No. 9). Plaintiff, proceeding pro se, submitted no opposition to 20 this Motion. The Court finds that this matter is suitable for decision without oral argument. Civil 21 Conference, set for March 31, 2011, are hereby VACATED. For the reasons set forth below, the 23 complaint is DISMISSED in part with prejudice and in part with leave to amend. 24

Plaintiff, proceeding pro se, filed a complaint and submitted an ex parte motion for a Temporary Restraining Order (TRO) on December 3, 2010, seeking to enjoin a non-judicial 27

Local Rule 7-1(b). Accordingly, the hearing on this Motion and the Case Management 22


foreclosure sale of his primary residence. See Compl. (Dkt. No. 1), TRO Mot. (Dkt. No. 3). Based 2 on the documents submitted by the Plaintiff, the Court denied Plaintiff's request for a TRO, finding 3 that Plaintiff had a low likelihood of success on the merits of all his asserted claims. See Order 4

Denying Request for TRO (Dkt. No. 8). Defendants now move to dismiss the complaint for failure 5 to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). See MTD 6

In the sparse facts alleged in the complaint, the Plaintiff states that he "entered into an

8 express contract with Defendants . . . consisting of a promissory note . . . and a lien document." 9

(Dkt. No. 9). 7

Although the complaint states that these documents are attached as exhibits A and B, only the note 10 appears to be attached to the complaint. See Compl. Ex. A-B ("Note"). The Note is dated August

27, 2007, and lists 2789 Illinois Street, East Palo Alto, California, 94303 as the property address ("Property"). Id. The Note states that the borrower will pay $365,000 in exchange for the loan he 13 has received from Lender Countrywide Bank. The Note also references a Security Instrument or 14

Deed of Trust, dated the same day as the Note, but it appears this is not attached to the complaint. 15

Avila" typed below it. In the TRO Motion, the Plaintiff refers to the Note as a refinance 17 transaction. TRO Mot. at ¶ 3. Other documents attached to the complaint are a Final Truth In 18

Disclosure," dated August 27, 2007; a Final Settlement Statement listing a settlement date of 20 December 17, 2010 ("Notice of Sale"). 22

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if

24 it fails to state a claim upon which relief can be granted. To survive a motion to dismiss, the 25 plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. 26

Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "facial plausibility" standard requires the 27 plaintiff to allege facts that add up to "more than a sheer possibility that a defendant has acted 28 unlawfully." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). In deciding whether the plaintiff has

Id. The Note is unsigned, although there is a signature line marked "Borrower" with "Anastacio P. 16

Lending Disclosure Statement, dated August 27, 2007; a notice titled "Interest-Only Feature 19

August 31, 2007; and a Notice of Trustee's Sale, undated, setting a non-judicial foreclosure sale for 21 stated a claim, the Court must assume the plaintiff's allegations are true and draw all reasonable 2 inferences in the plaintiff's favor. Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). 3


However, the court is not required to accept as true "allegations that are merely conclusory, 4 unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 5 F.3d 1049, 1055 (9th Cir. 2008). Leave to amend must be granted unless it is clear that the 6 complaint's deficiencies cannot be cured by amendment. Lucas v. Dep't. of Corrections, 66 F.3d 7

"[A] district court should grant leave to amend even if no request to amend the pleading 9 was made, unless it determines that the pleading could not possibly be cured by the allegation of 10 other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (quoting Doe v. United States, 58 "rule favoring liberality in amendments to

245, 248 (9th Cir. 1995). 8

F.3d 494, 497 (9th Cir. 1995)). In addition, the 12 pleadings is particularly important for the pro se litigant. Presumably unskilled in the law, the pro 13 se litigant is far more prone to making errors in pleading than the person who benefits from the 14 representation of counsel." Id., 203 F.3d at 1131. 15

Plaintiff is proceeding pro se. Therefore, the Court has construed the allegations in his

17 complaint liberally, in order to determine what claims are asserted. See Hebbe v. Pliler, No. 07-18

17265, 2010 U.S. App. LEXIS 24019 at *10 (9th Cir. Nov. 19, 2010). Plaintiff references eight 19 different categories of claims in his complaint. These include 1) violations of the Truth in Lending 20

Act (TILA), 15 U.S.C. § 1601 et seq. (separately codified as Regulation Z, 12 C.F.R. § 226.1 et 21 seq.; 2) violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605 et 22 seq.; 3) fraud by misstatements and by concealment, including fraud against U.S. taxpayers and 23 backers of mortgage-backed derivative securities; 4) breach of the covenant of good faith and fair 24 dealing; 5) breach of fiduciary duty; 6) negligence; 7) violations of California's Unfair 25

Competition law, California Business and Professions Code § 17200 et seq., based on unspecified 26 violations of other laws; and 8) intentional infliction of emotional distress. The Court will address 27 these claims in turn. 28


a. TILA Claims

Plaintiff has alleged or attempted to allege numerous violations of TILA and Regulation Z,

3 including failure to make timely disclosures three days before closing per 12 C.F.R. § 226.31(c)(1); 4 changing the terms of the loan without sufficient notice, in violation of 12 C.F.R. § 226.32(i); 5 failure to identify estimated costs in violation of 12 C.F.R. § 226.31(d)(2); failure to properly 6 compute the per-diem interest per 12 C.F.R. § 226.31(d)(3); and failure to provide, or provision of 7 an inaccurate, Notice of Right to Rescind in violation of 12 C.F.R. § 226.23. In the complaint, 8

Plaintiff provides little more than conclusory statements that these sections were violated. These 9 conclusory allegations are not enough to support Plaintiff's TILA claims. 10

Moreover, Plaintiff claims that he is entitled to both rescission of the loan as well as

11 damages based on these TILA violations. Howe ver, claims for rescission under TILA expire

"three years after the date of consummation of the transaction or upon the sale of the property, 13 whichever occurs first . . . ." 15 U.S.C. § 1635(f). The three-year period is not subject to equitable 14 tolling. See Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998) (holding that "§ 1635(f) 15 ...

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