United States District Court, S.D. California
WILLIAM Q. HAYES, District Judge.
The matter before the Court is the Motion to Dismiss Plaintiff's Complaint filed by all Defendants. (ECF No. 9).
On November 12, 2013, Plaintiff Scott Marquette initiated this action by filing a Complaint in this Court. (ECF No. 1). On March 3, 2014, Defendants Bank of America, N.A. ("Bank of America"), Federal Home Loan Mortgage Corporation S/A-3 day ARC-125949 ("Freddie Mac"), and Mortgage Electronic Registration Systems, Inc. ("MERS") filed the Motion to Dismiss Plaintiff's Complaint ("Motion to Dismiss"), accompanied by a Request for Judicial Notice. (ECF No. 9). On March 17, 2014, Plaintiff filed an opposition. (ECF No. 11). On March 24, 2014, Defendants filed a reply. (ECF No. 12).
II. Allegations of the Complaint
On May 24, 2007, Plaintiff entered into two loan transactions to refinance his principal residence located at 2625 Pirineos Way, #228, Carlsbad, California 92009, by signing two promissory notes payable to Mortgage Investors Group, the originating lender. The first promissory note in the amount of $324, 000.00 was secured by a first deed of trust against Plaintiff's residence (the "First Loan"). The second promissory note in the amount of $72, 000.00 was secured by a second deed of trust against Plaintiff's residence (the "Second Loan"). The funds from the transactions were used to pay off the existing mortgages secured by Plaintiff's residence.
On May 24, 2007, Plaintiff met with a notary public and a mortgage broker at the mortgage broker's office in Encinitas, California. The mortgage broker had Plaintiff sign numerous documents related to the loan transactions at issue. All documents signed by Plaintiff were taken by the mortgage broker, and the mortgage broker then handed Plaintiff another packet of documents and told Plaintiff that the packet contained copies of the documents that Plaintiff had just signed. However, the packet of documents handed to Plaintiff were not exact copies of the documents that Plaintiff had signed, and instead, contained three copies of a Notice of Right To Cancel for each loan with incorrect dates for the "date of the transaction" and blank lines for the date of expiration of the right to cancel.
Shortly after Plaintiff consummated the transactions, servicing for both the First Loan and Second Loan were transferred to Countrywide Home Loans, Inc., which later became known as Bank of America. In 2010, Bank of America identified Freddie Mac as the assignee/owner of the First Loan. Bank of America never identified the assignee/owner of the Second Loan.
On March 28, 2009, Plaintiff mailed a Rescission Notice pursuant to 15 U.S.C. § 1635 and a Qualified Written Request pursuant to 12 U.S.C. §2605 to Countrywide Home Loans, Inc. and Mortgage Investors Group. Bank of America has failed to respond to the Rescission Notice and Qualified Written Request in the manner required by law.
On March 11, 2010, to allow time for the parties to explore settlement options and negotiations, Plaintiff and Defendants entered into a written Tolling Agreement. On July 23, 2012, Plaintiff received notice from Bank of America that the Second Loan was forgiven "as a result of the Department of Justice and State Attorneys General global settlement with major mortgage services, including Bank of America, N.A." Id. ¶ 20. On October 8, 2013, Bank of America and Freddie Mac gave notice of termination of the Tolling Agreement as of November 13, 2013. Plaintiff filed the Complaint on November 12, 2013, prior to the expiration of the Tolling Agreement.
The Complaint asserts three causes of action: (1) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601, et seq., against Freddie Mac and MERS; (2) violation of the California Rosenthal Act, Cal Civ. Code §§ 1788, et seq., against Bank of America; and (3) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq, against Bank of America. The Complaint seeks damages, rescission of the First Loan pursuant to TILA, injunctive relief, declaratory relief, and attorney's fees.
III. Standard of Review
Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). "A pleading that states a claim for relief must contain... a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. P. Police Depot, 901 F.2d 696, 699 (9th Cir. 1990).
"[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 a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P. 8(a)). "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.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 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." Id. (citation omitted). "[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere ...