The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS
In this mortgage foreclosure action Defendant Aurora Loan Services LLC filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff filed an opposition and Defendant replied. For the reasons which follow, the motion is GRANTED IN PART AND DENIED IN PART.
Factual Allegations and Procedural Background
According to the complaint, on or about June 21, 2007 Plaintiff refinanced his primary residence located at 11877 Via Granero in El Cajon, California ("Property"). Although Plaintiff was promised a 4.75 percent interest rate with a monthly payment of $2,999, he was informed at the closing that his monthly payment could be reduced to $2,161. Left out of the discussion of good news was that the loan with the lower monthly payment had an adjustable interest rate of more than 8.5 percent and a negative amortization feature, that the lower monthly payment did not cover all of the principal due, and that making that payment would result in the principal balance increasing over time. Based on the terms of the loan, in three an a half years of monthly payments, the principal owing would increase to 115 percent of the original loan amount and the monthly payment would automatically reset to fully amortize the principal and interest, amounting to more than $5,200 per month. To induce him to sign loan papers with the foregoing terms, Plaintiff was also presented with a grossly inaccurate disclosure under the Truth in Lending Act ("TILA"), which, among other things, understated the finance charge and total of loan payments by more than one million dollars each. Shortly after the signing, Defendant acquired the loan and became its servicer. Plaintiff eventually defaulted, Defendant acquired the Property at a non-judicial foreclosure and currently holds title to it.
On May 23, 2011 Plaintiff filed a complaint in this Court against Defendant for TILA disclosure violations pursuant to 15 U.S.C. Sections 1601 et seq., violation of the California Business and Professions Code Section 17200 et seq. ("Unfair Competition Law" or "UCL"), unconscionability and for aiding and abetting fraud. The Court has subject matter jurisdiction over the TILA claim pursuant to 28 U.S.C. Section 1331 and over the remaining state law claims pursuant to 28 U.S.C. Section 1367. Defendant filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).
A Rule 12(b)(6) motion tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted where the complaint lacks a cognizable legal theory. Shroyer v. New Cingular Wireless Serv., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (internal quotation marks and citation omitted); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law"). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson v. Dean Witter Reynolds, Inc.,749 F.2d 530, 534 (9th Cir. 1984); see also Shroyer, 622 F.3d at 1041.
In this regard, "to survive a motion to dismiss, a complaint must contain sufficient factual matter to state a facially plausible claim to relief." Shroyer, 622 F.3d at 1041, citing Ashcroft v. Iqbal, 556 U.S. 662, __, 129 S. Ct. 1937, 1949 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949, citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). "Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950.
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 couched as factual allegations. Twombly, 550 U.S. at 555. 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).
Defendant initially maintains that this action should be dismissed because Plaintiff failed to allege tender of the amount owed on his loan. Plaintiff counters he is not seeking to rescind his refinance loan and is therefore not required to allege tender. (Opp'n at 10-11, citing 15 U.S.C. § 1635(b).)
However, whether pursuant to his TILA claim or any of his state law claims, Plaintiff's complaint seeks, among other things, to set aside the non-judicial foreclosure. (Compl. at 28). To the extent Plaintiff requests such relief, he is required to allege tender. "A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust." Karlsen v. Am. Sav. & Loan Ass'n., 15 Cal. App. 3d 112, 117 (1971); see also Miller & Starr Cal. Real Estate § 10:212 (3d ed. 2011).
Because Plaintiff has failed to do so, he cannot state a claim to set aside the foreclosure sale. In this regard, Defendant's motion to dismiss is GRANTED. Failure to allege tender, however, has no effect on some of Plaintiff's other requests for relief, such as damages and attorneys' fees and costs.
To the extent Defendant's motion is granted, Plaintiff requests leave to amend. Defendant argues leave should be denied because in his opposition Plaintiff presented no additional ...