850 F. Supp. 2d 1057
E.D. Cal.2012Background
- Plaintiffs allege 15 claims arising from Altmann's home loan and foreclosure, naming PNC Bank, N.A. and Rushmore as defendants.
- National City Mortgage originated the loan; National City allegedly failed to fund, insure, and convert to a take-out loan.
- Rushmore acquired the loan in Oct. 2010 amid delays in a short sale and appraisal disputes.
- Short sale was delayed; a later appraisal reduced the sale price, with Rushmore demanding a higher price than pre-approved.
- Plaintiffs sought general, special, punitive damages and attorney fees; defendants moved to dismiss under Rule 12(b)(6) and to strike punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraud claims timeliness | Altmann alleged ongoing misrepresentations in origination. | Fraud claims time-barred by 338(d) with origination in 2007. | Fraud claims time-barred; limitations defense valid. |
| RFDCPA viability | Defendants engaged in debt collection and foreclosure activity. | Foreclosure and lending activities are not debt collection under RFDCPA. | RFDCPA claims dismissed; no debt-collector status shown. |
| Negligence/duty of care between lender and borrower | Lenders owed duty to borrower for care and disclosures. | No fiduciary or special duty in ordinary mortgage transaction. | Negligence claim dismissed; no duty owed in arms-length loan. |
| RESPA private right of action | Defendants violated RESPA disclosure and QWR response requirements. | No viable QWR alleged; no private right of action for disclosures. | RESPA claim dismissed; no private right of action established. |
| TILA and rescission limitations | Equitable tolling could save TILA claims; rescission possible. | TILA damages claims time-barred; rescission period expired; no tolling recognized. | TILA claims time-barred; equitable tolling not allowed; rescission period expired. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard; not mere labels)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard; pleading must state claim with enough facts)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (fraud pleading requirements; particularity under Rule 9(b))
- Jablon v. Dean Witter & Co., 614 F.2d 677 (9th Cir. 1980) (limitations defense can be raised on 12(b)(6))
- Conrad v. Bank of America, 45 Cal.App.4th 133 (Cal. App. 1996) (elements of fraud; must plead factual basis)
- Cel-Tech Comms., Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (UCL borrowing of violations of other laws)
- Garfinkle v. Superior Court, 21 Cal.3d 816 (Cal. 1978) (state action in due process context; private parties generally not state actors)
- Karlsen v. American Sav. & Loan Assn., 15 Cal.App.3d 112 (Cal. App. 1971) (forbearance/for sale under the statute of frauds)
- Secrest v. Security Nat. Mortg. Loan Trust 2002-2, 167 Cal.App.4th 544 (Cal. App. 2008) (forbearance/for sale under statute of frauds)