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Capron v. Jpmorgan Chase Bank

United States District Court, Ninth Circuit

July 10, 2013

TARA CAPRON, Plaintiff,


JANIS L. SAMMARTINO, District Judge.

Presently before the court is Defendant JPMorgan Chase Bank's ("Defendant, " or "JPMorgan") Motion to Dismiss Plaintiff's Complaint. (Mot. to Dismiss, ECF No. 3). Also before the Court are Plaintiff Tara Capron's ("Plaintiff") response in opposition, (Resp. in Opp'n, ECF No. 7), and Defendant's reply in support, (Reply in Supp., ECF No. 8). The motion hearing that was set for February 21, 2013 was vacated and the matter taken under submission on the papers pursuant to Civil Local Rule 7.1(d)(1). Having considered the parties' arguments and the law, the Court GRANTS Defendant's motion to dismiss.


This action arises out of a residential loan that Plaintiff obtained from JPMorgan in the amount of $407, 000 in November 2006. ( See Request for Judicial Notice ("RJN"), Exs. 1 & 2, ECF No. 3-2). The loan was secured by a deed of trust on real property located at 300 West Beech Street, #1710 in San Diego, California. ( Id. ) Plaintiff defaulted on the loan and subsequently reached an agreement with JPMorgan to discharge her entire debt with the proceeds obtained from a short sale of the property. Plaintiff's claims are based on attempts by a third party to collect Plaintiff's past due payments prior to the short sale and on JPMorgan's reporting of the short sale to various credit reporting agencies.[1]

Plaintiff, proceeding pro se, commenced this action by filing a complaint in San Diego County Superior Court on August 16, 2012, asserting eight causes of action: (1) Libel; (2) Violation of California Civil Code section 1785.25; (3) Fraud; (4) Breach of Contract; (5) Tortious Interference with Business/Contract Relations; (6) Violation of the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639(f); (7) Violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692; and (8) Violation of the Rosenthal Fair Debt Collections Practice Act, California Civil Code section 1788. (Notice of Removal, Ex. 1, ¶ 6, ECF No. 1).[2] On December 26, 2012, Defendant removed the suit to federal court on the basis of federal question jurisdiction. (Notice of Removal, EFC No. 1). On January 2, 2012, Defendant filed the motion to dismiss that is currently before the Court. (Mot. to Dismiss, ECF No. 3).


Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted, " generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require detailed factual allegations, '... it [does] demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). "Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570); see also Fed.R.Civ.P. 12(b)(6). A claim is facially plausible when the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts "merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept as true "legal conclusions" contained in the complaint. Id. This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 679 (citation omitted) "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Id. Moreover, "for a complaint to be dismissed because the allegations give rise to an affirmative defense[, ] the defense clearly must appear on the face of the pleading." McCalden v. Ca. Library Ass'n, 955 F.2d 1214, 1219 (9th Cir. 1990) (internal quotations omitted), superseded by rule on other grounds as stated in Harmston v. City & Cnty. of San Francisco, 627 F.3d 127 (9th Cir. 2010).

Relevant here, the Court has a duty to liberally construe a pro se's pleadings. See Karim-Panahi v. L.A. Police Dep't, 839 F.2d 621, 623 (9th Cir. 1988). "Pro se complaints are to be construed liberally and may be dismissed for failure to state a claim only where it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Barret v. Belleque, 544 F.3d 1060, 1061-62 (9th Cir. 2008) (citation and internal quotation marks omitted). However, the court's liberal interpretation of a pro se complaint may not supply essential elements of the claim that were not pled. Ivey v. Bd. of Regents of Univ. Alaska, 673 F.2d 266, 268 (9th Cir. 1982).

If a court grants a motion to dismiss, it should also grant leave to amend "unless [it] determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'" DeSoto v. Yellow Freight Sys., Inc. 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would be futile, the Court may deny leave to amend. See id.; Schreiber Distrib. Co., 806 F.2d at 1401.


1. HOEPA Claim

Under HOEPA, a borrower may rescind a loan or recover damages if the lender fails to disclose certain terms at closing. 15 U.S.C. § 1639(f). Here, Plaintiff seeks to do both. JPMorgan moves to dismiss Plaintiff's HOEPA claim on the ground that it is barred by the statute of limitations.

A borrower's right to rescind her loan under HOEPA expires three days after the transaction. 15 U.S.C. § 1635(a). The right can be extended up to three years, however, if the creditor fails to provide certain material disclosure and two copies of the consumer's notice of right to cancel. § 1635(f). If extended, the right to rescind is completely extinguished at the end of the three year period. See Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998); see also Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002); Consumer Solutions REO, LLC v. Hillery, 658 F.Supp.2d 1002, 1008 (N.D. Cal. 2009) (holding that the same statute of limitations for TILA claims applies to HOEPA claims). In other words, "equitable tolling does not apply" to recission ...

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