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Marc and Roberta Galliani v. Citimortgage

January 4, 2013



This matter is before the court on defendant's motion to dismiss. Because oral argument will not be of material assistance, the court orders these matters submitted on the briefs. E.D. Cal. L.R. 230(g).

Defendant asserts three grounds for its motion. First, defendant seeks dismissal of plaintiffs' complaint in accordance with Federal Rule of Civil Procedure 12(b)(3).*fn1 Alternatively, defendant seeks an order transferring this case under 28 U.S.C. § 1404(a) to the Middle District of North Carolina. Finally, should the matter remain in this court, defendant seeks dismissal under Rule 12(b)(6), asserting plaintiffs have failed to state a claim for which relief can be granted. For the reasons set forth below, defendant's motion is granted in part and denied in part and this case is transferred to the Middle District of North Carolina.


Plaintiffs seek to enforce a claimed right to rescind a loan they obtained from defendant. In late October 2009, plaintiffs submitted an application to defendant to refinance their primary residence in Concord, North Carolina. (ECF 19 ¶ 6.) In April 2010, plaintiffs executed closing documents and paid the balance of their previous mortgage with another lender. (Id. ¶¶ 7, 8, 9.)

On October 24, 2011, plaintiffs received a letter from defendant informing them of information missing from the Notice of Right to Cancel form defendant initially had provided.*fn2 (ECF 21-3.) Defendant included a new, complete Notice of Right to Cancel form. Id. Having been in the process of trying to sell their house, plaintiffs subsequently responded seeking to cancel the mortgage. (ECF 19 ¶ 19.) A series of communications between the parties followed, centering around whether plaintiffs could tender the property as rescission or if they also needed to return the finance charges paid on the account. (Id. ¶¶ 22-28.) Plaintiffs now bring this action seeking to assert what they perceive to be their right under TILA to rescind the loan through tender of the property. (Id. ¶ 32.) Plaintiffs also assert claims under state law, including negligent misrepresentation, promissory and equitable estoppel and declaratory relief. (Id. ¶¶ 37, 46, 53, 57.)


A. Improper Venue

Defendant seeks to dismiss plaintiffs' complaint under Federal Rule of Civil Procedure 12(b)(3), arguing venue is improper in the Eastern District because a substantial portion of the events giving rise to plaintiffs' claims occurred outside this district. (ECF 21 at 5.*fn3 ) Specifically, defendant argues the events giving rise to plaintiffs' claims stem from a transaction that occurred in North Carolina and dealt with a property located in North Carolina. Id. Beyond plaintiffs' current residence within this district, defendant asserts there is nothing of legal or factual relevance to the case that occurred within this venue. Id.

The appropriate inquiry under Rule 12(b)(3) is not whether venue is more appropriate in a different judicial district, but rather whether venue is proper in the particular district in which plaintiffs filed the claim. Compare 28 U.S.C. § 1404(a) with FED.R.CIV.P. 12(b)(3). Venue is proper in "a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located." 28 U.S.C. § 1391(b)(1). "For all venue purposes . . . an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question." 28 U.S.C.A. § 1391(c)(2).

Plaintiffs correctly note that defendant does not dispute personal jurisdiction. See ECF 25 at 13 n.2; see also FED.R.CIV. P. 12(h). Accordingly, for venue purposes, defendant is considered to reside in the Eastern District. Under 28 U.S.C. § 1391 venue is, thus, proper. As a result, defendant's motion to dismiss the complaint for improper venue is DENIED.

B. Transfer of Venue

In the alternative, defendant seeks to transfer this action from the Eastern District of California to the Middle District of North Carolina. Defendant notes the subject property is located in Concord, North Carolina; the Subject Deed of Trust was recorded in Cabarrus County, North Carolina; and the subject loan transaction occurred in North Carolina, where plaintiffs resided throughout the entirety of the underlying events giving rise to plaintiffs' claims.

(ECF 21 at 5.) Defendant also points to the provision in the Deed of Trust expressly providing that North Carolina law shall govern. Id.

Plaintiffs maintain their choice of forum should not be disturbed. Plaintiffs also contend the proposed Middle District of North Carolina venue will burden plaintiffs more than the present venue will burden defendant. (ECF 25 at 14.) Plaintiffs also argue the court should give little weight to potential witnesses located in North Carolina because defendants fail to explain the relevance of these witnesses' proposed testimony or provide specific names of potential witnesses. (Id. at 15.) Finally, plaintiffs argue a lack of ...

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