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Osiris Henderson v. Carrington Mortgage Services

October 9, 2012

OSIRIS HENDERSON, PLAINTIFF,
v.
CARRINGTON MORTGAGE SERVICES, STATE CLAIMS; DENYING LLC; DEUTSCHE BANK NATIONAL DEFENDANTS' MOTION FOR RULE TRUST COMPANY; ATLANTIC & 11 SANCTIONS*FN1 PACIFIC FORECLOSURE SERVICES, LLC, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. Senior United States District Judge

) ORDER DISMISSING PLAINTIFF'S ) FEDERAL CLAIMS AND REMANDING

Defendants move for dismissal of Plaintiff's Verified First Amended Complaint ("FAC"), under Federal Rule of Civil Procedure ("Rule") 12(b)(6). Defendants argue dismissal is required because the FAC does not state viable claims. Plaintiff opposes the motion.

Defendants also filed a separate motion in which they seek Rule 11 sanctions, arguing that the same arguments on which their dismissal motion is based entitles them to sanctions. However, "failure to state a claim . . . is not dispositive of the issue of sanctions[,] . . . Rule 11 sanctions shall be assessed if the paper filed . . . is frivolous, legally unreasonable, or without factual foundation[.]" Zaldivar v. City of Los Angeles, 780 F.2d 823, 830-31 (9th Cir. 1986). Defendants' arguments do not address this standard; therefore, this motion is denied.

I. RULE 12(b)(6) STANDARD

Decision on the Rule 12(b)(6) dismissal motion requires determination of "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1054 (9th Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (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, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

When determining the sufficiency of a claim, "[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party[; however, this tenet does not apply to] . . . legal conclusions . . . cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (citation and internal quotation marks omitted). "Therefore, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Id. (citation and internal quotation marks omitted); see also Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555) ("A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'").

II. FEDERAL CLAIMS

Plaintiff's FAC contains both federal and state claims. Plaintiff commenced the instant lawsuit in state court on February 24, 2012; that case was removed to federal court, and Plaintiff subsequently filed his FAC in response to Defendants' motion to dismiss Plaintiff's original complaint. Since Plaintiff's state claims and issues appear to predominate over Plaintiff's federal claims, the portion of the motion challenging the sufficiency of Plaintiff's federal claims will be addressed first. Plaintiff alleges federal claims under the following federal Acts: Truth in Lending Act ("TILA"), Fair Debt Collection Practices Act ("FDCPA"), and Federal Judgment Act.

A. TILA Claims

Defendants seek dismissal of Plaintiff's TILA rescission and damages claims without leave to amend, arguing that "Plaintiff's TILA claims are time barred[, and] . . . Plaintiff is not entitled to the tolling of the statute [of limitations]." (Mot. to Dismiss Pl.'s FAC ("MTD.") 15:5-8.) Plaintiff responds that his TILA claims were "brought within the one year statute of limitations for damages and the three year statute of limitations for rescission." (MTD Opp'n 12:17-23.)

1. Rescission Claim

A borrower's right to rescind a loan transaction under TILA "expire[s] three years after the date of the consummation of the transaction[.]" 15 U.S.C. § 1635(f). "Unlike TILA's one year period for civil damages claims, the three year period for TILA rescission claims is an 'absolute' statute of repose that cannot be tolled." Falcocchia v. Saxon Mortg., Inc., 709 F. Supp. 2d 860, 867. (E.D. Cal. 2010); see also McOmie-Gray v. Bank of Am. Home Loans, 667 F.3d 1325, 1329 (9th Cir. 2012) ("Because § 1635(f) is a statute of repose, it extinguished [the plaintiff's] right to rescission . . . three years after the consummation of the loan."). Plaintiff avers in the verified FAC that his loan was consummated "on or about April 19, 2005." (FAC ¶ 25.) Since Plaintiff did not commence the instant lawsuit in state court until February 24, 2012, Plaintiff's right to rescission under TILA is extinguished and his TILA rescission claim is dismissed with prejudice.

2. Damages Claim

Defendants argue Plaintiff's TILA damages claim is time barred and that Plaintiff is not entitled to equitable tolling since "Plaintiff did not allege any facts demonstrating that he could not have discovered the alleged TILA ...


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