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Mike Matracia and Heidi K. Matracia v. Jp Morgan Chase Bank

May 11, 2011

MIKE MATRACIA AND HEIDI K. MATRACIA, PLAINTIFFS,
v.
JP MORGAN CHASE BANK, NA; FIRST AMERICAN LOANSTAR TRUSTEE SERVICES, LLC; FIRST AMERICAN TITLE COMPANY; PLACER TITLE COMPANY; COMERICA BANK CALIFORNIA; DOES 1 THROUGH 10, DEFENDANTS.



MEMORANDUM AND ORDER RE: MOTIONS TO DISMISS AND TO STRIKE

Plaintiffs Mike Matracia and Heidi K. Matracia bring this action against defendants JP Morgan Chase Bank, NA ("JP Morgan"), First American Loanstar Trustee Services, LLC ("Loanstar"), First American Title Company ("FATC"), Placer Title Company ("Placer Title"), and Comerica Bank California, arising from defendants' allegedly wrongful conduct related to a residential loan. Defendants Loanstar and FATC have filed a joint motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docket No. 9.) Defendant Placer Title has filed a motion to strike, which the court construes as a motion to dismiss, for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). (Docket No. 8.)

I. Factual and Procedural Background

In December of 2007, plaintiffs obtained a loan from JP Morgan, secured by their residence at 1659 Bunting Way of Lincoln, California. (Compl. ¶¶ 1, 37, Ex. A (Docket No. 1).) Plaintiffs have defaulted on their loan and notices of default and trustee's sale have been filed, although a foreclosure sale has not yet occurred. (Id. ¶¶ 15-17, 29, 39-42, 137, Exs. B, F.)

On January 21, 2011, plaintiffs filed their Complaint, alleging claims under (1) Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639, (2) Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617, (3) Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667f, and (4) Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681x, as well as claims for (5) fraudulent misrepresentation, (6) breach of fiduciary duties, (7) unjust enrichment, (8) civil conspiracy, (9) civil violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, (10) quiet title, (11) usury and fraud, (12) wrongful foreclosure, and (13) breach of security agreement.*fn1

II. Discussion

To survive a motion to dismiss, a plaintiff must plead "only 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). This "plausibility standard," however, "asks for more than a sheer possibility that a defendant has acted unlawfully," Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S. Ct. 1937, 1949 (2009), and where a complaint pleads facts that are "'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557). In deciding whether a plaintiff has stated a claim, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972).

A. TILA, HOEPA, and RESPA Claims A borrower's right to rescind a transaction under TILA expires three years after the consummation of the transaction.

15 U.S.C. § 1635(f). "[Section] 1635(f) completely extinguishes the right of rescission at the end of the 3-year period," which cannot be tolled. Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998); see also Miguel v. Country Funding Corp., 309 F.3d 1161,

1164 (9th Cir. 2002) ("[S]section 1635(f) represents an 'absolute limitation on rescission actions' which bars any claims filed more than three years after the consummation of the transaction." (quoting King v. State of Cal., 784 F.2d 910, 913 (9th Cir. 1986)).

Here, the loan was consummated in December of 2007, (see Compl. ¶ 37, Ex. A), and this action was commenced in January of 2011. Accordingly, the three-year statute of limitations has run and the court will dismiss the TILA rescission claim.

The statute of limitations for a TILA damages claim is one year from the occurrence of a violation. 15 U.S.C. § 1640(e). The "limitations period in [s]section 1640(e) runs from the date of consummation of the transaction" King, 784 F.2d at 915. "[T]he doctrine of equitable tolling may, in the appropriate circumstances, 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." Id. While the applicability of the equitable tolling doctrine often depends on matters outside the pleadings, Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1206 (9th Cir. 1995), dismissal may be appropriate when a plaintiff fails to allege facts suggesting that he did not have a reasonable opportunity to discover the violation. See Meyer v. Ameriquest Mortg. Co., 342 F.3d 899, 902-03 (9th Cir. 2003); Hubbard v. Fidelity Fed. Bank, 91 F.3d 75, 79 (9th Cir. 1996).

Here, plaintiffs have not alleged facts suggesting that they did not have a reasonable opportunity to discover the TILA violations. Accordingly, the court will dismiss the TILA damages claim. HOEPA, which is an amendment to TILA, is also subject to the TILA's statute of limitations, and that claim must be dismissed as well. See Hamilton v. Bank of Blue Valley, 746 F. Supp. 2d 1160, 1179 (E.D. Cal. 2010) (O'Neill, J.).

As to plaintiffs' RESPA claim, depending on which specific provision of the statute is asserted, a RESPA claim must be made within one to three years after the RESPA violation. 12 U.S.C. § 2614. "The RESPA statute of limitations generally begins to run no later than the date of actual disclosure of actions constituting an alleged violation. Typically, in cases involving loan documents, the statute begins to run when the documents are signed unless evidence is presented to override this assumption." Metcalf v. Drexel Lending Grp., No. 08-CV-00731, 2008 WL 4748134, at *3 (S.D. Cal. Oct. 29, 2008) (citation omitted).

Here, more than three years have passed since the signing of the loan documents, and plaintiffs have not alleged any facts to support tolling. Thus, plaintiffs' RESPA claim is time-barred and the court ...


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