United States District Court, E.D. California
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
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