Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sunil K. Patel and Daksha S. Patel v. Home Savings of America

July 25, 2011


The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge


Sunil and Daksha Patel ("Plaintiffs") bring this action against Defendants Residential Funding Company, LLC ("RFC"), Aurora Loan Services ("Aurora"), and Mortgage Electronic Registration System, Inc. ("MERS") alleging claims under the Truth in Lending Act ("TILA"), California Business and Professions Code section 17200, and for declaratory relief. Presently before the Court is Defendant RFC's Motion to Dismiss Plaintiffs' Second Amended Complaint pursuant to Federal Rules of Civil Procedure 8 and 12(b)(6). [Doc. No. 23.] Plaintiffs filed an opposition to the motion, and Defendant RFC replied. [Doc. Nos.25, 27.] The Court took the matter under submission on the papers and without oral argument pursuant to Civil Local Rule 7.1.d.1. [Doc. No. 28.] For the reasons stated herein, RFC's motion to dismiss is GRANTED IN PART and DENIED IN PART.


On June 15, 2010, Plaintiffs filed the instant action in the Superior Court of the State of California, County of San Diego, alleging claims arising out of a mortgage transaction secured by real property located at 13660 Whitewood Canyon, Poway, California 92064. On September 3, 2010, RFC removed the action to federal court pursuant to 28 U.S.C. § 1441, et seq., based on federal question jurisdiction under 28 U.S.C. § 1331 for Plaintiffs' claims brought under TILA, 15 U.S.C. § 1601, et seq. [Doc. No. 1.] Plaintiffs thereafter sought leave to amend their Complaint, which the Court granted, and on January 10, 2011, Plaintiffs filed their First Amended Complaint.

On January 24, 2011, Aurora and MERS filed a motion to dismiss Plaintiffs' First Amended Complaint. [Doc. No. 13.] Aurora and MERS argued Plaintiffs' TILA damages claims should be dismissed because, inter alia, their claims for damages are time-barred. They argued Plaintiffs obtained their loan in May 2007, and the statute of limitation on their TILA damages claim expired in May 2008. They contend Plaintiffs' claims are thus time-barred because they filed this action on June 15, 2010. Aurora and MERS also argued Plaintiffs' claim for rescission under TILA should be dismissed because Plaintiffs failed to adequately allege an ability to tender. Plaintiffs responded that their claim for damages under TILA is not time-barred because it is also based upon Defendants' alleged failure to respond to their rescission notice, and that "violations of the rescission provisions themselves give rise to statutory and actual damages." (Pls.' Resp. Motn. To Dismiss FAC, p. 4.)

On March 7, 2011, the Court granted in part and denied in part Aurora and MERS's motion. The Court found Plaintiffs' TILA damages claim was not time-barred insofar as it was based on the failure to respond to their notice of rescission. The Court also required Plaintiffs to allege an ability to tender proceeds for any claim for rescission under TILA. The Court found Plaintiffs' second claim for violation of California Business and Professions Code section 17200 was adequately premised on the TILA claim, and concluded a valid controversy remained. The Court granted Plaintiffs' leave to amend their complaint.

Plaintiffs filed their Second Amended Complaint ("SAC") on March 15, 2011. [Doc. No. 19.] Plaintiffs' SAC alleges claims for (1) violations under TILA; (2) violations of California's Unfair Business Practices; (3) declaratory relief; (4) predatory lending; (5) fraud; and (6) negligent misrepresentation. Plaintiffs allege claims one through three against all defendants, and claims four through six against only Home Savings of America. [SAC, Doc. No. 19.] Defendants Aurora and MERS filed their answer on March 29, 2011. Plaintiffs subsequently voluntarily dismissed Home Savings of America from this action. [Doc. No. 29.] On April 1, 2011, Defendant RFC filed the pending motion to dismiss. [Doc. No. 23.]


A. Legal Standards

Under Federal Rule of Civil Procedure 8(a)(2), the plaintiff is only required to set forth a "short and plain statement of the claim showing that the pleader is entitled to relief," and "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "While 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. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp., 550 U.S. at 555 (internal quotation marks, brackets and citations omitted).

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).

In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint for additional facts. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998). A court may, however, consider items of which it can take judicial notice without converting the motion to dismiss into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). Judicial notice may be taken of facts "not subject to reasonable dispute" because they are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." FED. R. EVID. 201. Additionally, a court may take judicial notice of "'matters of public record' without converting a motion to dismiss into a motion for summary judgment.'" Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quoting MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)). RFC filed a Request for Judicial Notice concurrently with its motion to dismiss, requesting the Court take judicial notice of certain public documents related to the property. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.