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Daniel Kulberg v. Washington Mutual Bank

April 14, 2011


The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge




On June 7, 2010, Plaintiff Daniel Kullberg*fn1 filed this lawsuit against the defendants. On September 20, 2010, Defendant J.P. Morgan Chase filed a motion to dismiss, a motion for a more definite statement, and a motion to strike portions of the complaint. Plaintiff opposes the motions.

The Court decides the matter on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the following reasons, the Court GRANTS Defendant's motion to dismiss (Doc. 20), and GRANTS Defendant's motion to strike (Doc. 19).


On May 23, 2003, Plaintiff obtained a $1,070,000.00 mortgage loan from Defendant to refinance the mortgage of real property in Coronado, California ("Property"). (Compl. ¶ 13 [Doc. 1].) He also secured a second mortgage loan that same day in the amount of $200,000.00 from the Dorothy Laing Living Trust. (Id. ¶ 15.) On or about February 14, 2006, Plaintiff secured a third loan with First Regional Bank for $250,000.00. (Id. ¶ 16.)

In late 2008, Plaintiff began having difficulty making payments on his mortgage. (See Compl., Ex. 7, at 1--2.) On April 6, 2009, Plaintiff was served with a "Notice of Default and Election to Sell Under Deed of Trust" reflecting a default for December 2008 and subsequent payments. (Id.)

On April 22, 2010, Plaintiff filed a civil action in the San Diego County Superior Court asserting eleven causes of action against the defendants, including: (1) breach of contract; (2) declaratory relief; (3) fraud based on deceit and misrepresentation; (4) breach of the covenant of good faith and fair dealing; (5) reformation of unconscionable contract; (6) unfair and unlawful business practice; (7) quiet title; (8) rescission based on fraud; (9) accounting; (10) violation of California Civil Code § 2923.5; and (11) violation of the Truth in Lending Act ("TILA").

On June 7, 2010, Defendants removed the case to this Court. On September 20, 2010, Defendants moved to dismiss and strike. Plaintiff opposes both motions.


A. Legal Standard

The court must dismiss a cause of action for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the complaint's sufficiency. See N. Star Int'l v. Ariz. Corp. Comm'n., 720 F.2d 578, 581 (9th Cir. 1983). All material allegations in the complaint, "even if doubtful in fact," are assumed to be true. Id. The court must assume the truth of all factual allegations and must "construe them in light most favorable to the nonmoving party." Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir. 2002); see also Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir. 1996).

As the Supreme Court has explained, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). Instead, the allegations in the complaint "must be enough to raise a right to relief above the speculative level." Id. at 1964-65. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984).

Generally, courts may not consider material outside the complaint when ruling on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). However, courts may consider documents specifically identified in the complaint whose authenticity is not questioned by parties. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superceded by statutes on other grounds). Moreover, courts may consider the full text of those documents, even when the complaint quotes only selected portions. Id. The court may also consider material properly subject to judicial notice without converting the motion into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

B. Plaintiff's TILA Claims Are Time Barred.

TILA damage claims are subject to a one-year statute of limitations. 15 U.S.C. § 1640(e). TILA rescission claims are subject to a three-year statute of limitations. 15 U.S.C. § 1635(f). Under TILA, the statute of limitations begins to run at the time the loan documents were signed. Meyer v. Ameriquest Mortg. Co., 342 F.3d 899, 902 (9th Cir. 2003) ("The failure to make the required disclosures occurred . . . at the time the loan documents were signed.").

However, the doctrine of equitable tolling may "suspend the limitations period until the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA action." King v. State of Cal., 784 F.2d 910, 915 (9th Cir. 1986). Equitable tolling "applies in situations . . . 'where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass.'" Velazquez v. GMAC Mortg. Corp., 605 F. Supp.2d 1049, 1061 (C.D. Cal. 2008) (quoting O'Donnell v. Vencor, Inc., 465 F.3d 1063, 1068 (9th Cir. 2008)).

Here, Plaintiff indicates in the complaint that the loan was consummated in May 2003. (Compl. ¶ 13.) However, this lawsuit was first filed in April 2010, more than seven years later. (Id. at ¶ 74.) Therefore, unless Plaintiff is entitled to equitable tolling, his TILA claims are time barred.

In his opposition, Plaintiff contends that equitable tolling should apply to his TILA damage claim, but fails to explain why. (Pl.'s Opp'n 12:8--10 [Doc. 21].) In fact, Plaintiff implicitly concedes that his allegations in the complaint are insufficient to support his equitable-tolling argument. (Id. ("[I]f given leave to amend, Plaintiff will allege facts showing why his damage claims are not time barred by virtue of ...

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