United States District Court, S.D. California
ORDER: (1) GRANTING DEFENDANT'S MOTION TO DISMISS
[ECF NO. 12]; (2) DISMISSING CASE WITH PREJUDICE; AND (3)
TERMINATING AS MOOT PENDING MOTION [ECF NO. 13]
CYNTHIA BASHANT UNITED STATES DISTRICT JUDGE
case arises from a residential loan transaction into which
Plaintiff Hilario Gonzales entered in 2006 for real property
located in Bonsall, California, secured by a deed of trust
(the “Deed of Trust”) dated June 26, 2006 and
recorded on July 6, 2006. (ECF No. 10, First Am. Compl.
(“FAC”) ¶¶ 1, 12, 14.) Plaintiff signed
the Note and Deed of Trust for the loan transaction on June
23, 2006, yet he alleges that “the loan was not
‘consummated' on June 23, 2006” “or at
all.” (Id. ¶¶ 18, 20-21.) Plaintiff
alleges that he was not provided with adequate notice of his
right to cancel that specified the number of days he had to
cancel after a valid consummation of his loan. (Id.
¶¶ 19, 46.) Plaintiff also alleges that the
disclosure statement he received
“under-disclosed” other information, including
finance charges and the annual percentage rate. (Id.
¶¶ 44-45.) Plaintiff claims that “he
rescinded his refinanced home loan under the Truth in Lending
Act for failure to give proper disclosures” on
September 13, 2016 and that his “rescission” was
lawful. (Id. ¶¶ 11, 29-30, 51, 69, Ex. 1.)
Bayview Loan Servicing, LLC (“Bayview”) began
servicing Plaintiff's loan in February 2015.
(Id. ¶ 25.) Plaintiff alleges that he notified
Bayview of “the previous TILA rescission” on
November 19, 2016. (Id. ¶ 35, Ex. 2.) Plaintiff
claims that Bayview and certain other third parties have
“fail[ed] to honor the Notice of Rescission.”
(Id. ¶ 54.) As with his original pleading (ECF
No. 1), Plaintiff purports to seek enforcement of the
“rescission” in the operative First Amended
Complaint, (ECF No. 10). Plaintiff seeks damages and
equitable relief. (FAC ¶¶ 31, 61-68, id.
at 17-18 (prayer for relief).)
has filed a renewed motion to dismiss the FAC on the ground
that Plaintiff lacks an underlying claim for rescission under
TILA based on TILA's three-year time limitation to
rescind. (ECF No. 12.) Plaintiff nominally opposes, but fails
to address the substance of Bayview's arguments. (ECF No.
15.) The Court finds Bayview's motion suitable for
determination on the basis of the current submissions. For
the reasons herein, the Court grants Bayview's motion to
dismiss and dismisses this action with prejudice because
Plaintiff's claims are time-barred as a matter of law.
survive a motion to dismiss under Rule 12(b)(6), “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 Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). The Court
“accept[s] factual allegations in the complaint as true
and construe[s] the pleadings in the light most favorable to
the nonmoving party.” Manzarek v. St. Paul Fire
& Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.
2008). On the other hand, the Court is “not bound to
accept as true a legal conclusion couched as a factual
allegation.” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555). Nor is the Court
“required to accept as true allegations that contradict
exhibits attached to the Complaint or matters properly
subject to judicial notice, or allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences.” Daniels-Hall v. Nat'l Educ.
Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). “In
sum, for a complaint to survive a motion to dismiss, the
non-conclusory factual content, and reasonable inferences
from that content, must be plausibly suggestive of a claim
entitling the plaintiff to relief.” Moss v. U.S.
Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009)
(quotation marks omitted).
lawsuit hinges on the failure of Plaintiff and his counsel to
comprehend the very clear contours of the federal Truth in
Lending Act's (“TILA”) right of rescission
for a loan. Plaintiff claims that “[a]t no time did (or
could) Plaintiff waive his right to rescind under the
[TILA][.]” (FAC ¶ 27.) The right of rescission
that TILA affords to a borrower, however, is subject
to an abundantly clear time limitation. A straightforward
application of this limitation disposes of Plaintiff's
claim for rescission enforcement. Plaintiff also raises a
TILA damages claim that is subject to a statute of
limitations that bars this claim as well.
TILA, a borrower has an unconditional right to rescind a
credit transaction within three days, “after which they
may rescind only if the lender failed to satisfy the
Act's disclosure requirements.” Jesinoski v.
Countrywide Home Loans, Inc., 135 S.Ct. 790,
792 (2015); 15 U.S.C. § 1635. “[T]his conditional
right to rescind does not last forever. Even if a lender
never makes the required disclosures, the ‘right of
rescission shall expire three years after the date of
consummation of the transaction or upon the sale of the
property, whichever comes first.'”
Jesinoski, 135 S.Ct. at 792 (quoting 15 U.S.C.
§ 1635(f)). The three-year time period is a statute of
repose not susceptible to equitable tolling. See
McOmie-Gray v. Bank of Am. Home Loans, 667 F.3d 1325,
1329-30 (9th Cir. 2012) (concluding “§ 1635(f) is
a statute of repose that represents an absolute three-year
bar on rescission actions”), abrogated on other
grounds as recognized by Hoang v. Bank of Am., N.A., 910
F.3d 1096 (9th Cir. 2018); Balam-Chuc v. Mukasey,
547 F.3d 1044, 1048-49 (9th Cir. 2008) (“Statutes of
repose are not subject to equitable tolling.”) (quoting
Munoz v. Ashcroft, 339 F.3d 950 (9th Cir. 2003));
In re Brewster, No. 5:13-CV-505-ODW, 2013 WL
4833707, at *2 (C.D. Cal. Sept. 9, 2013) (“Equitable
tolling does not apply to rescission claims under
TILA.”). Thus, regardless of the defendant's
alleged conduct or the plaintiff's purported inability to
discover a defendant's failure to make proper TILA
disclosures, the right of rescission ceases to exist after
three years from the loan's consummation.
seeks to avoid the three-year period by alleging that the
loan was never consummated under TILA because he was not
provided legally required disclosures. (FAC ¶¶ 22,
2473.) And his counsel reiterates this argument in opposition
to dismissal. (ECF No. 15 at 3.) The Court rejects this
TILA, consummation “means the time that a consumer
becomes contractually obligated on a credit
transaction.” Jackson v. Grant, 890 F.2d 118,
120 (9th Cir. 1989) (quoting Regulation Z, 12 C.F.R §
226.2(a)(13)). “A TILA . . . violation occurs at
the time the loan documents are signed.” Casas
v. Wells Fargo Bank N.A., No. 5:12-CV-01742-EJD, 2012 WL
5877641, at *4 (N.D. Cal. Nov. 20, 2012) (citing Meyer v.
Ameriquest Mortg. Co., 342 F.3d 899, 902 (9th Cir.
2003)) (emphasis added). Plaintiff concedes that he signed
his Note and Deed of Trust on June 23, 2006. (FAC ¶ 18.)
Although Plaintiff conspicuously fails to attach a copy of
the Note and Deed of Trust to his FAC, Bayview requests
judicial notice of both and provides copies of them to the
Court. (ECF No. 12-4; ECF No. 12-5 Ex A (Deed of Trust
followed by Note).) In the FAC, Plaintiff appears to challenge
the enforceability of the Note and Deed of Trust on the
ground that “[t]he address given was not that of the
‘creditor' or Lender listed as America's
Wholesale Lender on the Deed of Trust.” (FAC ¶
21.) Plaintiff fails to identify any state law requirement
that an address provided be correct for a contract to be
legally enforceable. Contrary to Plaintiff's unsupported
arguments and bare legal conclusions in the FAC that his loan
was never consummated, it is plain that his loan was
consummated on or around Thus, if the Court accepted this
argument, then Plaintiff's rescission claim would be
subject to dismissal because there would be nothing to
rescind. June 23, 2006.
straightforward application of TILA's time limitations,
Plaintiff had until June 26, 2006 to exercise his
unconditional right to rescind and until June 23, 2009 to
exercise his right to rescind due to alleged failures to
disclose. Plaintiff, however, readily concedes that he tried
to rescind the loan “under [TILA] for failure to give
proper disclosures” on September 13, 2016. (FAC
¶¶ 11, 29-30, 51, 69, Ex. 1.) Plaintiff's act
over seven years after the expiration of the TILA time period
means that Plaintiff's act was legally ineffective under
TILA and did not constitute a TILA rescission. Consequently,
Plaintiff has no right to enforce his act as a TILA
rescission, nor does Bayview or any third party need to
recognize Plaintiff's act as effecting a
rescission. Plaintiffs' bare assertions in his
opposition to dismissal that his act constituted a legally
effective rescission under TILA fail as a matter of law. (ECF
No. 15 at 5.)
also seeks damages under TILA for “a refund of all
interest, finance charges, and payments made on the rescinded
loan.” (FAC ¶ 31.) TILA “requires creditors
. . . to provide borrowers with clear and accurate
disclosures of [the] terms [of their loan, including] . . .
finance charges, annual percentage rates of interest, and the
borrower's rights.” Beach v. Ocwen Fed.
Bank, 523 U.S. 410, 412 (1998) (citing 15 U.S.C.
§§ 1631, 1632, 1635, 1638). If a lender fails to
satisfy TILA's disclosure requirements, it is liable for
“statutory and actual damages traceable to [its]
failure to make the requisite disclosures.”
Id. (citing 15 U.S.C. § 1640). “Any
request for damages under TILA . . . is subject to a one-year
statute of limitations (15 U.S.C. § 1640(e)).”
Casas, 2012 WL 5877641, at *4; see also Beriones
v. IMH Assets Corp., No. 19cv301-CAB-NLS, 2019 WL
1714467, at *3 (S.D. Cal. Apr. 16, 2019). Plaintiff's
loan transaction closed in 2006 and thus the statute of
limitations began to run in 2006 and expired in 2007. See
Kang v. Wells Fargo Bank, N.A., No. 18cv332-MMA (JMA),
2018 WL 1427081, at *8 (S.D. Cal. Mar. 22, 2018). Without
more, Plaintiff's TILA damages claim is time-barred.
appears to seek equitable tolling of the statute of
limitations by alleging that he “did not have, and
could not have had a reasonable opportunity to discover the
material breaches until very recently[.]” (FAC ¶
70.) “[T]he doctrine of equitable tolling may, in the
appropriate circumstances, suspend the limitations period
until the borrower discovers or had reasonable opportunity to
discover the fraud or nondisclosures that form the basis of
the TILA action.” King v. State of Cal., 784
F.2d 910, 915 (9th Cir. 1986). However, a plaintiff who fails
to allege any facts demonstrating that the alleged TILA
violations could not have ...