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Kathleen Givant v. Vitek Real Estate Industries Group

November 15, 2012

KATHLEEN GIVANT,
PLAINTIFF,
v.
VITEK REAL ESTATE INDUSTRIES GROUP, INC. DBA VITEK MORTGAGE GROUP, A CALIFORNIA CORPORATION; ET AL., DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Defendants Vitek Real Estate Industries Group, Inc. ("Vitek") and Everhome Mortgage Company ("Everhome") have each filed a Motion to Dismiss Plaintiffs' Second Amended Complaint ("SAC") (ECF No. 53) pursuant to Fed. R. Civ. P. 12(b)(6).*fn1

For the reasons that follow, the Court GRANTS Defendants' Motions to dismiss Plaintiffs' third and fifth claims for relief without leave to amend and refuses to exercise supplemental jurisdiction over Plaintiffs' remaining state-law claims.*fn2

BACKGROUND*fn3

Plaintiff Kathleen Givant ("Givant") alleges that she was the owner of real property in The Sea Ranch,*fn4 California (the "Property"), which she owned free and clear and which was appraised for $1,180,000. (SAC ¶¶ 10, 11, 14.) In November 2007, Givant contacted an agent for Vitek, a home mortgage lender, seeking a loan to provide capital for a new business venture. (Id. ¶ 12.)

On November 6, 2007, Vitek's agent, Robert Turietta, prepared a Loan Document Worksheet indicating that Givant would be eligible for an Adjustable Rate Loan in the amount of $767,000. (Id. ¶ 13.) Givant alleges that she informed Turietta that her income was approximately $10,000 a month and that her expenses included a $3,600 a month mortgage payment. (Id. ¶ 15.)

However, throughout the loan application process, she was never told to provide documentation of her income and expenses or to fill out any loan application documents. (Id.)

On or about February 26, 2008, Givant obtained a thirty-year Adjustable Rate Mortgage from Vitek, secured by a Deed of Trust in the amount of $767,000 for the Subject Property.*fn5 (Id. ¶ 11. Givant contends that she was pressured to quickly close the deal without having the opportunity to thoroughly examine the agreement. (Id. ¶ 16.) She alleges that a number of terms were not disclosed to her, including the amount of the loan, the terms of the loan, and the information regarding her employment and salary listed in the loan document. (Id. ¶ 17.)

Although Givant contends that she never signed her loan application, she admits she signed the final loan documents, albeit under time pressure. (Id. ¶¶ 17-19, 33, 36.) Notably, the final loan agreement pages include, on each page, a handwritten signature of Kathleen Givant, or her handwritten initials, as well as the date, handwritten as February 26, 2008. (See SAC, Exhibit D (loan documents).) These pages include the information regarding Givant's income and expenses, as well as the terms of the loan. (Id.)

In April 2010, after falling behind on her payments, Givant defaulted on her loan. (Id. ¶ 20.)

In May 2010, she applied for a loan modification, through the Home Affordable Modification Program ("HAMP"), with Everhome by means of an authorized third party but claims Everhome never subsequently offered her a loan modification. (Id. ¶ 21.)

On December 13, 2010, Vitek recorded a Notice of Default on the Property. (Id. ¶ 22.) The Notice of Default stated that, as of December 12, 2010, Givant's loan was in default in the amount of $46,693.53. (Id.) In May 2011, Everhome allegedly advised Givant that the bank would consider payment in the sum of $40,000 to postpone the foreclosure sale. (Id. ¶ 24.) However, after she obtained the $40,000, the bank revoked its offer and demanded she pay approximately $90,000. (Id.) On April 13, 2011, Vitek recorded a Notice of Trustee's Sale. (Id. ¶ 23.)*fn6 Givant claims that she first became aware of the loan's deceptive terms after receiving this notice. (Id. ¶ 37.)

On August 30, 2011, Givant sent Everhome a "qualified written request" ("QWR") letter pursuant to the Real Estate Settlement Procedures Act ("RESPA") (12 U.S.C. §§ 2601, et seq.), but Everhome did not thereafter respond to her letter. (SAC ¶¶ 62-67.)

On November 3, 2011, Givant filed a complaint in California State Court alleging twelve causes of action. (Notice of Removal, ECF No. 1, Ex. 1, at 1.)

The action was thereafter removed to this Court on the basis of federal question jurisdiction over Givant's Truth-In-Lending Act ("TILA") (15 U.S.C. §§ 1601, et seq.) and RESPA causes of action and supplemental jurisdiction over her state law claims. (ECF No. 1, at 2.) Defendants subsequently filed Motions to Dismiss Plaintiff's First Amended Complaint (ECF Nos. 19 and 29), which the Court granted with leave to amend. (ECF No. 51.)

On August 6, 2012, Givant filed her SAC alleging two federal claims (under TILA and RESPA) and six state-law claims arising out of the loan origination transaction. (ECF No. 53.)

STANDARD FOR 12(b)(6) MOTION TO DISMISS

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-55 (2007) (internal citations and quotations omitted).

Though "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of ...


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