MEMORANDUM AND ORDER RE: MOTIONS TO DISMISS
Plaintiffs Mike Matracia and Heidi K. Matracia bring this action against defendants JP Morgan Chase Bank, NA ("JP Morgan"), Chase Home Finance, LLC ("Chase"), First American Loanstar Trustee Services, LLC ("Loanstar"), First American Title Insurance Company ("FATCO"), and Comerica Bank California ("Comerica"), arising from defendants' allegedly wrongful conduct related to a residential loan. Loanstar and FATCO, jointly, and JP Morgan, for itself and as successor in interest to Chase, now move to dismiss the Second Amended Complaint ("SAC") for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docket Nos. 76, 79).
I. Factual and Procedural Background
In December of 2007, plaintiffs obtained a loan from JP Morgan, secured by their residence at 1659 Bunting Way in Lincoln, California. (SAC ¶¶ 1, 22, Ex. B.) Plaintiffs have defaulted on their loan and notices of default and trustee's sale have been filed, although it does not appear that a foreclosure sale has yet occurred. (Id. ¶¶ 18, 22, Exs. C, G.)
On January 21, 2011, plaintiffs filed the instant action. The court granted defendants' motion to dismiss the Complaint on May 12, 2011, (Docket No. 27), and plaintiffs then filed an amended complaint, (Docket No. 39). The court granted defendants' motions to dismiss the First Amended Complaint ("FAC") on July 29, 2011, giving plaintiffs leave to amend. (Docket No. 69.) On August 18, 2011, plaintiffs filed their SAC, which alleges claims against JP Morgan and Comerica under (1) the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617, and (2) the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667f, and against all defendants under (3) the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681x, as well as claims for (4) fraudulent misrepresentation, (5) civil conspiracy, (6) civil violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, (7) usury and fraud, (8) wrongful foreclosure, and (9) breach of security instrument.
Plaintiffs voluntarily dismissed their claims against Comerica without prejudice on October 11, 2011. (Docket No. 81.)
On a motion to dismiss, 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). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, ---, 129 S. Ct. 1937, 1949 (2009) (quoting 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," and "[w]here 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 556-57).
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. California, 784 F.2d 910, 913 (9th Cir. 1986))).
As the court pointed out in its July 29, 2011, Order, the loan was consummated in December of 2007, (see SAC ¶ 22, Ex. B), and this action was commenced in January of 2011. Accordingly, the three-year statute of limitations has run and the court will, again, dismiss the TILA rescission claim.
The statute of limitations for a TILA damages claim expires one year after the occurrence of a violation. 15 U.S.C. § 1640(e). The "limitations period in [§] 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 reproduced the cursory allegations contained in the FAC that they did not have a reasonable opportunity to discover the TILA violations until May of 2010. (SAC ¶ 54.) The SAC contains the same defect as did the FAC in that it does not allege that plaintiffs were somehow unable to compare the allegedly improper disclosures in the loan documents with the required disclosures under TILA, nor does it explain why plaintiffs could not have learned of the alleged violations within the statutory period. See Von Brincken v. Mortgageclose.Com, Inc., No. 2:10-CV-2153, 2011 WL 2621010, at *3 (E.D. Cal. June 30, 2011). Accordingly, the court will dismiss the TILA damages claim.
Plaintiffs also allege that defendants violated RESPA, 12 U.S.C. § 2607, because defendants "accepted charges for the rendering of real estate services which were in fact charges for other than services actually performed." (SAC ¶ 49.) As this court explained in its earlier Order, "[t]he primary ill that § 2607 is designed to remedy is the potential for unnecessarily high settlement charges . . . caused by kickbacks, fee-splitting, and other practices that suppress price competition for settlement services. This ill occurs, if at all, when the plaintiff pays for the [tainted] service, typically at the closing." (Docket No. 69 at 5 (quoting Jensen v. Quality Loan Serv. Corp., 702 F. Supp. 2d 1183, 1195 (E.D. Cal. 2010) (second alteration in original)) (internal quotation marks omitted).) A claim under § 2607 may be brought within one year "from the date of the occurrence of the violation." 12 U.S.C. § 2614. "Barring extenuating circumstances, the date of the occurrence of the ...