Malifrando v. Real Time Resolutions, Inc.

          ORDER AND FINDINGS AND RECOMMENDATIONS

          GREGORY G. HOLLOWS UNITED STATES MAGISTRATE JUDGE

         INTRODUCTION

         Plaintiff, proceeding in this action pro se and has paid the filing fee. This proceeding was referred to this court by Local Rule 302(21), pursuant to 28 U.S.C. § 636(b)(1).

         Presently before the court is defendant Real Time Resolutions, Inc.’s (“Real Time”) amended motion to dismiss, filed March 7, 3016.^[1] (ECF No. 9.) Plaintiff has filed an opposition, to which Real Time has filed a reply.^[2] Also before the court is plaintiff’s motion to amend the complaint, filed May 19, 2016, and re-noticed on July 11, 2016. (ECF Nos. 13, 16.) Real Time has not filed a response. Having reviewed these filings, the court now issues the following order and findings and recommendations.

         FACTUAL AND PROCEDURAL BACKGROUND

         According to the complaint, filed February 4, 2016, plaintiff on October 11, 2004, obtained a mortgage loan in the amount of $67, 000 from Long Beach Mortgage Company^[3](“Long Beach”), which was secured by real property located at 842 Georgia Street, Vallejo, California.^[4] (ECF No. 1 at 5, ¶¶ 3, 17.) The complaint alleges that defendant Long Beach made false statements on plaintiff’s loan application, including fraudulently overstating plaintiff’s income on the loan application, falsely listing his employer as MEGALYNX, a company he never worked for, falsely stating plaintiff had an account with Bank of America, and falsely stating that plaintiff owned other real estate worth $834, 000. According to the complaint, Long Beach also forged plaintiff’s signature on the loan application. The complaint further alleges that Long Beach inflated the value of the subject property without conducting a proper audit. (ECF No. 1 at 4-5.) Defendant Real Time serviced the loan subsequent to servicer GMAC, and plaintiff eventually could not pay the loan and fell into default, and then was forced to file for bankruptcy protection. (Id. at 5-6.) Plaintiff alleges that around April 14, 2015 he sent a Qualified Written Request (“QWR”) to Real Time but that Real Time failed to respond in a satisfactory manner. (Id. at 6-7.)

         Claims against Real Time are for violations of the Real Estate Settlement Procedures Act (“RESPA”) and Fair Trade Commission (“FTC”) Act. The complaint contains additional claims against Long Beach for fraud, misrepresentation, and violation of the FTC Act.^[5] The complaint appears to allege diversity jurisdiction, and seeks injunctive relief to prevent foreclosure on the subject property, an order modifying the terms of the loan to an affordable amount that reflects plaintiff’s true income, damages for emotional distress, punitive damages, and attorneys’ fees and costs.

         DISCUSSION

         I. REAL TIME’S MOTION TO DISMISS

         A. Rule 12(b)(6) - Failure to State a Claim

         A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the pleadings set forth in the complaint. Vega v. JPMorgan Chase Bank, N.A., 654 F.Supp.2d 1104, 1109 (E.D. Cal. 2009). Under the “notice pleading” standard of the Federal Rules of Civil Procedure, a plaintiff’s complaint must provide, in part, a “short and plain statement” of plaintiff’s claims showing entitlement to relief. Fed.R.Civ.P. 8(a)(2); see also Paulsen v. CNF, Inc., 559 F.3d 1061, 1071 (9th Cir. 2009). “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) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.

         In considering a motion to dismiss for failure to state a claim, the court accepts all of the facts alleged in the complaint as true and construes them in the light most favorable to the plaintiff. Corrie v. Caterpillar, Inc., 503 F.3d 974, 977 (9th Cir. 2007). The court is “not, however, required to accept as true conclusory allegations that are contradicted by documents referred to in the complaint, and [the court does] not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Paulsen, 559 F.3d at 1071. The court must construe a pro se pleading liberally to determine if it states a claim and, prior to dismissal, tell a plaintiff of deficiencies in his complaint and give plaintiff an opportunity to cure them if it appears at all possible that the plaintiff can correct the defect. See Lopez v. Smith, 203 F.3d 1122, 1130-31 (9th Cir. 2000) (en banc); accord Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990) (stating that “pro se pleadings are liberally construed, particularly where civil rights claims are involved”); see also Hebbe v. Pliler, 627 F.3d 338, 342 & n.7 (9th Cir. 2010) (stating that courts continue to construe pro se filings liberally even when evaluating them under the standard announced in Iqbal).

         In ruling on a motion to dismiss filed pursuant to Rule 12(b)(6), 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) (citation and quotation marks omitted). Although the court may not consider a memorandum in opposition to a defendant’s motion to dismiss to determine the propriety of a Rule 12(b)(6) motion, see Schneider v. Cal. Dep’t of Corrections, 151 F.3d 1194, 1197 n.1 (9th Cir. 1998), it may consider allegations raised in opposition papers in deciding whether to grant leave to amend, see, e.g., Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir. 2003).

         B. RESPA

         The Real Estate Settlement Procedures Act (“RESPA”) imposes certain disclosure obligations on loan servicers who transfer or assume the servicing of a federally-related mortgage loan. 12 U.S.C. § 2605(b). A borrower may obtain such information by submitting a qualified written request or “QWR, ” which is statutorily defined as:

a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that-(i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and (ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

12 U.S.C. § 2605(e)(1)(B); see also 24 C.F.R. § 1024.31(definition of QWR in part “provides sufficient detail to the servicer regarding information relating to the servicing of the mortgage loan sought by the borrower”).

         Section 2605(e)(1) requires the servicer to provide information relating to the servicing of the loan upon a qualified written request (“QWR”) by the borrower. If a mortgage loan servicer receives a QWR from a borrower, the servicer shall provide a written response acknowledging receipt within five days, 12 U.S.C. § 2605(e)(1); 12 C.F.R. § 1024.36(c), and respond to the inquiry not later than thirty days. 12 U.S.C. § 2605(e)(2); 12 C.F.R. § 1024.36(d). Requests for information about loan origination and transfer of the loan do not trigger the protections afforded the borrower under § 2605. See MorEquity, Inc. v. Naeem, 118 F.Supp.2d 885, 901 (N.D.Ill.2000).

         Plaintiff asserts that he made a QWR to Real Time on April 14, 2015, and that Real Time “failed to respond in a proper and timely way.” (Compl. ¶ 55, ECF No. 1 at 16.) Specifically, plaintiff alleges that he requested “pertinent documents pertaining to the Loan and requesting documentation detailing updated assignments of ownership or necessary proof of Real Time’s custodial servicing obligations to GMAC.” (Compl. ¶ 53, ECF No. 1 at 15.) According to the complaint, not only did Real Time fail to respond to this request for information, but “also failed to provide evidence of documentation, detailing updated assignments of ownership or necessary proof of their custodial servicing obligations to GMAC per RESPA and FDCPA guidelines surrounding mortgage debt validation.” The complaint also claims that Real Time failed to provide “proof of purchase, affidavit of ...