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Maria M. Rincon v. Sergio Adam Haros; Althea C. Raush; Great Western

November 21, 2011

MARIA M. RINCON,
PLAINTIFF,
v.
SERGIO ADAM HAROS; ALTHEA C. RAUSH; GREAT WESTERN MORTGAGE; PAUL FINANCIAL, LLC; M.A.D. INVESTMENTS GROUP; ROBERTO ANTONIO ARAIZA; INDYMAC FEDERAL BANK FSB; QUALITY LOAN SERVICE AS TRUSTEE; AND DOES 1 THROUGH 100,
DEFENDANTS.



The opinion of the court was delivered by: John A. HOUSTONUnited States District Judge

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [DOC. # 53]

INTRODUCTION

Pending before the Court is the motion to dismiss Maria M. Rincon's ("plaintiff") second amended complaint ("SAC") filed by defendant One West Bank, FSB as successor in interest to certain assets and liabilities of Indymac Bank, FSB ("defendant" or "One West Bank"). The motion has been fully briefed by the parties. After a thorough review of the parties' submissions, and for the reasons set forth below, this Court GRANTS defendant's motion to dismiss and dismisses plaintiff's claims against One West Bank.

BACKGROUND

1. Factual Background

The SAC alleges that plaintiff, a native of Mexico, applied for a refinancing loan through Alethea C. Raush ("Raush"), a licensed notary*fn1 who represented herself as a real estate agent, using application forms in English, which is not plaintiff's primary language. Raush submitted plaintiff's application through Sergio Adam Haros ("Haros"), an employee of Great Western Mortgage ("Great Western"). The application, attached as Exhibit A to plaintiff's SAC, indicates Haros received the information contained on the form through a face-to-face interview with plaintiff, Doc. # 50, Exh. A at 4, but plaintiff claims she never met or spoke with Haros and the information contained on the form was "fabricated."*fn2 Doc. # 50 ¶ 3. The loan was approved on March 21, 2006. Id. ¶ 6.

Plaintiff signed the formal closing documents with Raush acting as "Closing Agent Notary." Doc. # 50 ¶ 7. The loan documents were provided to plaintiff at that time, including a statement of final closing costs, in English, dated January 14, 2006, but plaintiff lost the documents during a hurricane. Id. Plaintiff received a Final Settlement Statement on March 29, 2006, which itemized the fees and costs paid by plaintiff. Doc. # 50 ¶ 8. The costs and fees totaled over $18,600, including a $12,796.88 fee labeled "Yield Spread Premium." Id.; see Doc. # 50, Exh. D. Plaintiff claims she was not informed that "accepting this [Yield Spread Premium] fee would affect the interest rate of the loan and the overall cost of borrowing these funds" nor was she informed that the loan was a "negative amortization loan." Doc. # 50 ¶ 7. The loan was issued through Paul Financial, LLC, ("Paul Financial"). See Doc. # 50, Exh. B.

After the loan was approved, plaintiff was introduced by Raush to Roberto Antonio Araiza ("Araiza"), the owner of M.A.D. Investments Group ("M.A.D."), whom plaintiff believed to be a real estate investor. Plaintiff then agreed to invest in a real estate development project through Araiza, ultimately investing $300,000 ($200,000 initially and $100,000 at a later date) with Araiza and M.A.D. Araiza gave plaintiff $1,900 per month for four months but, on the fifth month, paid her only $900. Doc. # 50 ¶ 12. Plaintiff then, a "few months later," requested funds for a trip to Mexico and received $4,000 from Araiza. Id. Plaintiff received no other monies in return on her investment with Araiza and M.A.D. Id.

A substitution of trustee, substituting Foundation Conveyancing, LLC with defendant Quality Loan Service Corporation, was executed on January 16, 2009 and recorded in the San Diego County Recorder's Office on March 2, 2009. Doc. # 36-5, Exh. B.*fn3 The beneficial interest in the deed of trust was assigned to Indymac Federal Bank, FSB on January 16, 2009 and recorded in the San Diego County Recorder's Office on March 19, 2009. Id., Exh. B. Plaintiff subsequently defaulted on the loan and a notice of default was recorded on January 16, 2009. Id., Exh. D. A notice of trustee's sale was recorded on April 20, 2009, setting a sale date for May 7, 2009. Id., Exh. E. Plaintiff claims that a copy of that notice was never mailed to her. Doc. # 50 ¶ 16. Plaintiff was "locked out of her property by the lender" on March 10, 2009, for "approximately 14 days," at which time her attorney succeeded in having the property "unlocked." Id.

2. Procedural History

On May 1, 2009, plaintiff filed her original complaint seeking declaratory and injunctive relief from foreclosure, along with actual and statutory damages, attorneys fees and costs of suit. See Doc. # 1. On July 23, 2009, plaintiff filed her FAC and, on March 11, 2011, plaintiff filed her SAC, the operative pleading here. See Doc. # 50. The SAC alleges (1) violations of the Home Ownership Equity Protection Act ("HOEPA"); (2) violations of the Truth in Lending Act ("TILA"); (3) violations of the Real Estate Settlement Procedures Act of 1974 ("RESPA"); (4) violations of 12 CFR 202.14; 24 CFR § 203, and 24 CFR § 3500; (5) violations of California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17500, et seq.; (6) violations of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq.; (7) fraud; (8) unlawful foreclosure; (9) declaratory relief; and (1) injunctive relief. See id.

On March 5, 2011, defendant filed the instant motion. On May 9, 2011, plaintiff filed an opposition to the motion and, on May 11, 2011, defendant filed a reply brief. This Court subsequently took the motion under submission without oral argument. See Civ LR 7.1(d.1).

DISCUSSION

Defendant moves to dismiss plaintiff's SAC pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. In the alternative, defendant moves for a more definite statement pursuant to Rule ...


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