Anthony Marino v. Countrywide Financial Corporation
8:14-cv-00046
C.D. Cal.Jul 7, 2014Background
- Plaintiff Anthony Marino obtained a first and second mortgage from Countrywide in April 2006 and paid loan fees; he defaulted on the second mortgage in October 2008 and has received repeated collection communications since then.
- Marino alleges Countrywide engaged in undisclosed, unsound lending practices beginning in 2003 that contributed to widespread defaults, regional price declines, and an increased risk of deficiency judgments for second-mortgage holders.
- Marino filed a First Amended Complaint (Dec. 5, 2013) asserting (1) declaratory/injunctive relief to bar or indemnify him against any deficiency judgment on his second mortgage, and (2) a California Unfair Competition Law (UCL) claim seeking restitution and injunctive relief on behalf of a class.
- Defendants removed the action and moved to dismiss, arguing lack of standing/ripeness for injunctive/declaratory relief, statute of limitations, failure to plead essential UCL elements (duty to disclose, reliance, causation), lack of specificity, and that Bank of America is not liable for Countrywide’s conduct.
- The court dismissed plaintiff’s declaratory/injunctive claim and the injunctive portion of the UCL claim as not ripe for Article III purposes, held the restitution portion of the UCL claim time-barred and failing on the merits (no duty to disclose, no causation), and dismissed with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing / ripeness for declaratory and injunctive relief | Marino contends the risk of a future deficiency judgment and threatened foreclosure create a present controversy justifying declaratory/injunctive relief. | Defendants argue no actual judicial foreclosure or deficiency judgment exists and the alleged injury is contingent, so relief is not ripe and Marino lacks Article III standing. | Court: No Article III standing; declaratory/injunctive claims not ripe — dismissed. |
| UCL statute of limitations (restitution claim) | Marino invokes the discovery rule, asserting he only discovered Countrywide’s conduct in 2013 and thus timely filed within four years of discovery. | Defendants contend fees were paid in 2006, public information and Marino’s default/collection notices in 2008 put him on inquiry notice, so the claim is time-barred. | Court: UCL restitution claim accrued no later than 2008; discovery rule does not save it — dismissed with prejudice. |
| UCL merits: duty to disclose, materiality, and reliance | Marino alleges Countrywide withheld material facts about its lending practices that foreseeably increased deficiency risk, causing him to pay fees he otherwise would not have paid. | Defendants argue lenders owe no duty to borrowers regarding loan affordability or generalized market effects; no duty means no UCL fraudulent-concealment claim; also no causal nexus between alleged concealment and plaintiff’s economic injury. | Court: Even if ripe and timely, Marino fails to plead a duty to disclose, reliance, or causation — UCL claim fails and is dismissed with prejudice. |
| Ability to amend | Marino implicitly seeks leave to amend to cure pleading defects. | Defendants maintain the defects are fundamental (e.g., no duty to disclose) and amendment would be futile. | Court: Finds amendment futile for the UCL claim as to duty to disclose and dismisses with prejudice. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires injury in fact, causation, and redressability)
- Texas v. United States, 523 U.S. 296 (1998) (claims not ripe when they rest on contingent future events)
- Addington v. U.S. Airline Pilots Ass’n, 606 F.3d 1174 (9th Cir. 2010) (impending injury standard for preventive relief)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility standard)
- Bank of Am. Corp. v. Superior Court, 198 Cal. App. 4th 862 (2011) (no duty to disclose alleged internal fraud to borrowers; need nexus between concealment and economic harm)
- Perlas v. GMAC Mortgage, LLC, 187 Cal. App. 4th 429 (2010) (commercial lender has no duty to borrower when deciding loan affordability)
- Nymark v. Heart Fed. Sav. & Loan Ass’n, 231 Cal. App. 3d 1089 (1991) (lender entitled to pursue its own economic interests; no duty to insure success of investment)
- Fox v. Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797 (2005) (discovery rule delays accrual until plaintiff has inquiry notice of fraud)
- Tosco Corp. v. Communities for a Better Environment, 236 F.3d 495 (9th Cir. 2001) (plaintiff bears burden to prove subject matter jurisdiction on Rule 12(b)(1) challenge)