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Angel R. Mcgowan, Et. Al v. World Savings

December 10, 2012


The opinion of the court was delivered by: Carolyn K. Delaney United States Magistrate Judge


This action arises from a residential mortgage loan obtained by plaintiffs and originated by defendant in September 2007 for property located in Vacaville, CA. Dkts. 16, 11 at 6, 23. Plaintiffs proceed pro se in this action, which was referred to the undersigned by E.D. Cal. L.R. 302(c)(21), pursuant to 28 U.S.C. § 636(b)(1). Pending before the court is defendant Wells Fargo Bank, N.A.'s ("Wells Fargo") motion to dismiss. Dkt. 10. The motion was originally noticed for hearing on November 7, 2012 and subsequently reset by the court for hearing on November 28, 2012. Dkts. 10, 15. Plaintiff filed a timely opposition to the motion on November 5, 2012 . Dkt. 16.

At hearing, plaintiff Angel McGowan appeared before the court on behalf of both plaintiffs*fn1 and Kenneth Franklin appeared telephonically for defendant. Upon review of the documents in support of and in opposition to the motion, upon hearing the arguments of plaintiff and counsel, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:


On September 26, 2007, plaintiffs refinanced their existing home loan and entered into an adjustable rate mortgage loan agreement ("the Note") with World Savings Bank, FSB ("World Savings") for a loan in the amount of $330,000.00. Dkt. 1 at 21, 49. Subsequently, World Savings changed its name to Wachovia Mortgage, FSB and then to Wells Fargo Bank Southwest, N.A. before merging with Wells Fargo Bank, N.A. in November, 2009. Dkt. 10 at 9. Plaintiffs defaulted on the loan in August 2011, leading to the foreclosure of the property and a sale by trustee in November 2011. Dkt. 10 at 9.*fn2

The complaint alleges violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., and the California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq., along with claims of breach of contract and of the covenant of good faith and fair dealing. See Dkt. 1 at 20-21. Specifically, plaintiffs allege that Wells Fargo failed to disclose the actual interest rate on the Note, such that plaintiffs were unaware that they would not be building equity in their property during the time they held the loan. See Dkt. 1 at 20. Plaintiffs further allege that because of the "extremely onerous prepayment penalty" imposed by the terms of the Note, they were not able to rid themselves of the loan once they could no longer afford the payments. Id at 39.

Plaintiffs initiated this suit in the Superior Court of Solano County on July 10, 2012. Dkt. 1 at 20. Wells Fargo removed the action to federal court on September 17, 2012 pursuant to federal question and diversity jurisdiction. See 28 U.S.C. §§ 1441(b), 1331, 1332; Dkt. 1. The instant motion followed.


In considering a motion to dismiss for failure to state a claim upon which relief can be granted, the court must accept as true all of the factual allegations contained in the complaint, Erickson v. Pardus, 551 U.S. 89, 94 (2007), and construe the pleading in the light most favorable to the plaintiff, see Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).

In order to avoid dismissal for failure to state a claim a complaint must contain more than "bare assertion[s]," "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). In other words, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Furthermore, a claim upon which the court can grant relief has facial plausibility. Twombly, 550 U.S. at 570. "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. In ruling on a motion to dismiss pursuant to Rule 12(b), the court "may generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice." Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899 (9th Cir. 2007).

TILA Claims

Claims brought under TILA are subject to a one year statute of limitations period.

15 U.S.C. ยง 1640(e). The time limit begins from the date on which the plaintiff had the opportunity to discover the violation. Meyer v. Ameriquest Mort. Co., 342 F.3d 899, 902 (9th Cir. 2003) (plaintiff had opportunity to discovery TILA violation when loan was originated or when plaintiff possessed all loan documents). The loan at issue here was originated on September 26, 2007 and the instant litigation was commenced in state court on July 10, 2012. Dkt. 1 at 20. Plaintiffs do not allege that Wells Fargo failed to provide them with any of the required loan documentation, such as disclosures or the terms of repayment, at the time they signed the Note. Rather, they point to all of the documentation they received from Wells Fargo, characterize it as "misleading" and "confusing," and claim that such documentation violated TILA on its face. See Dkt. 16 at 11, 12, 17 (emphasis added). By plaintiffs' own admission, they were immediately aware of the alleged violation when the loan was originated - as they possessed all the required documentation at that time - and had until September 26, 2008 to ...

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