United States District Court, N.D. California
ORDER GRANTING IN PART, AND DENYING IN PART WITH
LEAVE TO AMEND, MOTIONS TO DISMISS RE: DKT. NOS. 11,
NATHANAEL M. COUSINS United States Magistrate Judge.
plaintiff Benito Flores sued various entities connected with
his 2005 home mortgage. Flores alleges defendants lack
standing to foreclose, intentional infliction of emotional
distress (IIED), quiet title, fraud in the concealment, fraud
in the inducement, slander of title, declaratory relief,
violations of the Truth in Lending Act (TILA) and Real Estate
Settlement Procedures Act (RESPA), and rescission. Dkt. No.
1-1. Defendants filed motions to dismiss. Dkt. Nos. 11, 27.
Flores did not rebut defendants' arguments for dismissal
in his opposition brief. Because the Court finds Flores lacks
standing to bring his claims, failed to state a claim, and
that his claims are time-barred, the Court DISMISSES
Flores' complaint in its entirety. However, with respect
to the claims for wrongful foreclosure and declaratory relief
only, the Court DISMISSES those claims WITH LEAVE TO AMEND.
All of Flores' other claims are DISMISSED WITH PREJUDICE.
November 17, 2005, Benito Flores and his wife Maria Flores,
as borrowers signed a deed of trust for a property on Langley
Canyon Road in Salinas, California. Dkt. No.
The promissory note on this transaction was for $583, 200.
Id. at 2. The lender on this transaction was
defendant GreenPoint Mortgage Funding, Inc., and the
beneficiary was defendant Mortgage Electronic Registration
System, Inc. (MERS). Id. The deed of trust was
assigned twice. First, on March 27, 2009 from MERS to
Greenpoint Mortgage Funding, Inc. Dkt. No. 12-2. Second, on
November 21, 2013, Greenpoint assigned the deed of trust to
HSBC Bank USA, National Association. Dkt. No. 12-3.
the second assignment, Flores' loan was
“securitized, ” and Flores contends it was not
properly transferred to the Series 2006-AF1 Trust. Dkt. No.
1-1 at 11. Flores alleges numerous vaguely stated violations
to the trust's Pooling and Servicing Agreement and in the
securitization process. Id. at 11-15.
October 30, 2015, Western Progressive, LCC, apparently as
agent for HSBC under the deed of trust, filed with the
Monterey County Recorder a Notice of Default and Election to
Sell Under Deed of Trust. Dkt. No. 3-2. The amount owed on
the mortgage at that time was $282, 659.21. Id. at
filed his complaint in Monterey County Superior Court on
October 31, 2016, and defendant HSBC removed the case to
federal court on January 5, 2017. Dkt. Nos. 1, 1-1.
Defendants HSBC and Greenpoint filed motions to dismiss
Flores' complaint. Dkt. Nos. 11, 27. All parties
consented to the jurisdiction of a magistrate judge under 28
U.S.C. § 636(c). Dkt. Nos. 8, 9, 10, 13, 19, 26.
motion to dismiss for failure to state a claim under Rule
12(b)(6) tests the legal sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
On a motion to dismiss, all allegations of material fact are
taken as true and construed in the light most favorable to
the non-movant. Cahill v. Liberty Mut. Ins. Co., 80
F.3d 336, 337-38 (9th Cir. 1996). The Court, however, need
not accept as true “allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences.” In re Gilead Scis. Secs. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008). Although a complaint
need not allege detailed factual allegations, it must contain
sufficient factual matter, accepted as true, to “state
a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). A claim is facially plausible when it “allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
Claims Arising From Origination.
alleges claims arising from the origination of his
loan for violations of (1) RESPA, (2) TILA, (3) rescission,
(4) fraud in the inducement, and (5) fraud in the
concealment. The first three claims are time-barred, and the
fraud claims are insufficiently pled.
Flores' claims under RESPA, TILA, and for rescission are
time-barred. “If a lender fails to disclose material
information required by TILA, a borrower has a right to
rescind within three years of consummation of the loan. . . .
In addition, a borrower has a right to monetary damages
within one year of consummation of the loan.” Das
v. WMC Mortg. Corp., 831 F.Supp.2d 1147, 1156 (N.D. Cal.
2011) (citing King v. California, 784 F.2d 910, 913
(9th Cir. 1986)). Flores' deed of trust was signed in
2005. Under either timeframe, Flores' claims are
irreparably time-barred. Also, Flores failed to allege any
facts creating the “appropriate circumstances”
under which the Court would equitably toll the statute of
limitations until Flores discovered the alleged TILA
violation. King, 784 F.2d at 915. As to the RESPA
claim, Flores appears to claims violations of 12 U.S.C.
§ 2607, which prohibits kickbacks and unearned fees.
Flores' sole statement in support of the RESPA claim is
that “[d]efendants violated RESPA because the payments
between the Defendants were misleading and designed to create
a windfall.” Dkt. No. 1-1 at 28. This vague allegation
falls short of stating a claim. In any event, this claim is
also time-barred, as the relevant statute of limitations for
RESPA violations is 1 year. 12 U.S.C. § 2614; Altman
v. PNC Mortg., 850 F.Supp.2d 1057, 1074 (E.D. Cal.
2012). The claim for rescission derives from the other
alleged legal violations in the complaint and also is subject
to a three-year statute of limitations. Dkt. No. 1-1 at
28-29; Miguel v. Country Funding Corp., 309 F.3d
1161, 1164 (9th Cir. 2002). Thus, the TILA, RESPA, and
rescission claims are DISMISSED WITH PREJUDICE.
as to Flores' fraud in the concealment and fraud in the
inducement claims, they fail to state a claim, and after two
opposition briefs and a hearing, Flores has not cured the
deficiencies in his complaint. The elements of fraud are:
“(a) a misrepresentation (false representation,
concealment, or nondisclosure); (b) scienter or knowledge of
its falsity; (c) intent to induce reliance; (d) justifiable
reliance; and (e) resulting damage.” Hinesley v.
Oakshade Town Ctr., 135 Cal.App.4th 289, 294 (2005)
(quoting Lazar v. Superior Court, 12 Cal.4th 631,
638 (1996)). Fraud in the inducement is a type of fraud,
occurring “when the promisor knows what he is signing
but his consent is induced by fraud, mutual assent is present
and a contract is formed, which, by reason of the fraud, is
voidable.” Hinesley, 135 Cal.App.4th at 294-95
(internal citations and quotation marks omitted). On the
other hand, in addition to the above elements, fraud in the
concealment requires defendant have been under a duty to
disclose the concealed fact to the plaintiff. Blickman
Turkus, LP v. MF Downtown Sunnyvale, LLC, 162
Cal.App.4th 858, 868 (2008) (internal citations omitted).
When pleading fraud in federal courts, “a party must
state with particularity the ...