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Stephen Chohrach, et al v. Bank of America

July 16, 2012


The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge


On April 16, 2012, Defendant C&M McGee, Inc. filed this motion for summary judgment. The matter was heard on June 1, 2012, before the Honorable Dennis L. Beck, United States Magistrate Judge.*fn1 Thomas Nickens appeared on behalf of Defendant C&M McGee, Inc. John Sargetis appeared on behalf of Plaintiffs Stephen Chohrach and Donna Chohrach ("Plaintiffs").


Plaintiffs filed this action in Stanislaus County Superior Court on September 21, 2010, against Defendants Bank of America, N.A., BAC Home Loans Servicing, Inc., and C&M McGee Inc. ("C&M"). On October 29, 2010, Defendants Bank of America, N.A. ("BofA"), and BAC Home Loans Servicing, Inc. ("BAC"), removed the action on the basis of federal question jurisdiction. The action concerns a $908,000 mortgage loan made by BofA to Plaintiffs in December 2006. Plaintiffs allege causes of action under the Real Estate Settlement Procedure Act ("REPSA"), the Truth In Lending Act ("TILA") and California law.

On April 11, 2012, C&M filed this motion for summary judgment. Plaintiffs opposed the motion on May 4, 2012. C&M did not file a reply.

The pre-trial and trial dates have been vacated.

On June 12, 2012, the Court granted the motion for summary judgment brought by BofA and BAC, and those entities have been dismissed from this action.


C&M is a mortgage broker existing under the laws of the State of California. Exh. F, attached to Motion. On November 8, 2006, Timothy Darcey, of C&M, submitted a Uniform Residential Loan Application to BofA on Plaintiffs' behalf. Deposition of Timothy Darcey ("Darcey Dep."), 46:10-14; Exh. G, attached to Motion. The application stated that the loan was a refinance in the amount of $908,000. The application further stated that the loan term was 360 months and the loan type was an "ARM," "5 YR I/O." Darcey Dep., 46:10-18; Exh. G.

The loan was approved and Plaintiffs executed the Adjustable Rate Note and Deed of Trust on December 2, 2006. Darcey Dep., 146:20-25; Deposition of Stephen Chohrach ("S. Chohrach Dep."), 58, 67; Exh J, K. The Adjustable Rate Note indicated that it was a 30 year loan in the amount of $908,000. The loan included a 5 year 6.5 percent fixed rate that began adjusting once every year in 2012. Plaintiffs are not required to repay principal for the first 10 years and there is no prepayment penalty. Exh. J. Plaintiffs received unsigned copies of the documents they signed. S. Chohrach Dep., 67:7-12.

Approximately a day or two after signing the closing documents, Mr. Chohrach went through the documents they received and discovered that the loan was not the 30 year fixed-rate loan that they believed they had obtained. S. Chohrach Dep., 96:20-97:25; Declaration of Donna Chohrach ("D. Chohrach Decl.,") ¶¶ 3-4. Mr. Chohrach saw the interest-only term and contacted Mr. Darcey. S. Chohrach Dep., 96:20-97:25; D. Chohrach Decl., ¶ 4. Until that time, Plaintiffs believed they had signed a 30 year fixed-rate loan. S. Chohrach Dep., 78:1-9.

On December 6, 2006, Plaintiffs executed a Notice of Right to Cancel for their loan within 3 days (December 9, 2006). Deposition of Donna Chohrach, 83-84; Exh. Q. Plaintiffs did not cancel the loan. D. Chohrach Decl., ¶ 7.

This action was filed on September 21, 2010.


Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.Celotex Corp. v. Catrett, 477 U.S. 317 (1986). "If the party moving for summary judgment meets its initial burden of identifying for the court those portions of the material on file that it believes demonstrates the absence of any genuine issues of material fact," the burden of production shifts and "the non moving party must set forth, by affidavit or as otherwise provided in Rule 56, 'specific facts showing that there is a genuine issue for trial.'" T.W. Electric Service, Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987)(quoting Fed.R.Civ.P. 56(e)). As to the specific facts offered by the nonmoving party, the court does not weigh conflicting evidence, but draws all inferences in the light most favorable to the nonmoving party. Id. at 630-31.

If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. Matsushita Elec. Indus. ...

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