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Viola Frison v. Wmc Mortgage Corporation

September 29, 2011


The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge


This case concerns Plaintiff Viola Frison who has defaulted on her mortgage, and the subsequent attempt by the lender to foreclose on Frison's real property that serves as security for that mortgage. After dismissal of the original complaint, Frison filed her First Amended Complaint (FAC). The FAC seeks for the loan to be forgiven, damages, costs, and attorney's fees. The FAC identifies eight causes of action against claims, including: (1) Violation of the Real Estate Settlement Practices Act (RESPA), 12 U.S.C. §§ 2605 et seq., against Defendant Saxon Mortgage Services ("Saxon"); (2) Violation of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601 et seq. against Defendants Deutsche Bank National Trust Company ("Deutsche Bank"), WMC Mortgage, LLC ("WMC") and Saxon; and various state claims for violation of Cal. Bus. & Prof. Code § 17200, fraud, and negligent misrepresentation.

The FAC also identifies remedies such as rescission and determination of the validity of the lien as causes of action. Quasi contract is also identified as a cause of action, although in fact it is a theory by which Frison seeks to hold Saxon liable for wrongdoing named in the other claims even if it is found to have no contract with Frison.

I. Legal Standard

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). In ruling on a motion to dismiss, the Court accepts all allegations of material fact in the complaint as true and construes them in the light most favorable to the non-moving party. Cedars-Sinai Medical Center v. National League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). While the scope of review on a motion to dismiss for failure to state a claim is ordinarily limited to the contents of the complaint as well as any "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss." Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). The court may treat such a document as "part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

Frison in her opposition to the motions to dismiss again cites the old standard set forth in Conley v. Gibson, 355 U.S. 41, 45--46 (1957), under which a Rule 12(b)(6) dismissal was appropriate only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." But as the Court has pointed out (see Docket no. 19 at 10:17--24), the Supreme Court expressly repudiated that standard in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), holding that a complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests" and its factual allegations must "raise the right to relief above a speculative level." Id. at 555. The complaint must contain enough factual allegations that, if accepted as true, would state a claim for relief that is "plausible on its face." Ashcroft v. Iqbal, 129 S.Ct. 1939, 1949 (2009).

II. Discussion

Defendants raise a number of arguments and defenses, but the Court need not reach them all, because it is clear the FAC must be dismissed. Much of the Court's reasoning here mirrors its reasoning in the order dismissing the original complaint, Docket no. 19, reported at Frison v. WMC Mortg. Corp., 2010 WL 3894980 (S.D.Cal., Sept. 30, 2010).

The FAC identifies federal question jurisdiction and supplemental jurisdiction as the two jurisdictional bases. The FAC points out the TILA and RESPA claims are federal claims, and argues that the Court should also exercise supplemental jurisdiction over the remaining state law claims.

A. TILA Claims and Statute of Limitations

The loan agreement was executed October 12, 2004, and Frison didn't file this action until August 10, 2009, nearly five years later. Frison was put on notice that the limitations period under TILA was at issue by the Court's order dismissing her original complaint. Defendants again argue that the TILA claim is time-barred. Frison does not dispute that, absent tolling, the limitations period has run. For TILA damages claims, the one-year limitations period may be suspended "until the borrower discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the basis of the TILA action." King, 784 F.2d at 915.

Frison's TILA claims are are based on alleged failure to provide disclosures at the time of the loan's origination (FAC, ¶¶ 54--62.) Frison specifically cites certain disclosures that must be made (id., ¶ 57), though the pleadings show she is claiming only for a few failures to disclose. (Id., ¶¶ 58--59.)

Under Fed. R. Civ. P. 12(b)(6), claims may be dismissed where the running of the statute of limitations is apparent on the face of the complaint. Cervantes v. Countrywide Home Loans, Inc., ___ F.3d ___, 2011 WL 3911031, slip op. at *8 (9th Cir. Sept. 7, 2011). If the running of the limitations period appears on the face of the complaint, the Court considers whether the complaint, construed with the required liberality, would support determination of tolling. Id. The standard for construction of pleadings is set forth in Twombly and Iqbal.

In Cervantes, for example, the panel first determined the running of the limitations period was "apparent on the face of the complaint because the plaintiffs obtained their loans in 2006, but commenced their action in 2009." 2011 WL 3911031, slip op. at *8. The panel then considered whether the ...

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