Das v. WMC Mortgage Corp.
2011 WL 5914038
N.D. Cal.2011Background
- This is an order granting AmNet’s motion to dismiss twenty-six? sixteen claims against AmNet; court takes judicial notice of deed of trust, notice of default, and notice of trustee sale; plaintiffs allege they are minorities and immigrants who were induced to take a $945,000 loan in 2006; loan allegedly lacked proper disclosures under TILA and RESPA and had predatory terms; plaintiffs allege AmNet and CIT authorized the loan and later substituted Old Republic as trustee; foreclosure proceedings were initiated in 2009; case has progressed through multiple dismissals and amendments with SAC filed November 29, 2010; the court previously dismissed related claims with prejudice and without prejudice; AmNet seeks dismissal under Rule 12(b)(6) for failure to plead with particularity, statute of limitations, and failure to state a claim; the court grants the motion and allows limited amendment only on a subset of claims; plaintiffs may amend within 21 days as to specific claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TILA rescission and damages claims are time-barred and inadequately pled | SAC alleged TILA violations and tolling under fraud; seeks rescission and damages | TILA rescission is time-barred; damages untimely; pleadings insufficient | TILA rescission and damages claims dismissed; damages untimely; no equitable tolling established |
| Whether CRMLA claim is sufficiently pleaded or timely | CRMLA claim alleged violation of Written Loan Brokerage Agreement | Not sufficiently pleaded or timely under statute | CRMLA claim dismissed with prejudice for lack of notice pleading and time bar |
| Whether Cal. Civ. Code § 1916.7 claims are timely or properly pled | Defendant failed to provide required disclosures under 1916.7; some claims timely | Many §1916.7 claims time-barred; lack of specificity | §1916.7 claims dismissed as time-barred; one §1916.7(b)(5) claim may be timely and can be amended |
| Whether ECOA claim is viable | Discrimination in credit terms based on immigrant status; failure to disclose scores | Plaintiffs did not allege they were rejected for a loan they qualified for | ECOA claim dismissed with prejudice |
| Whether UCL claim is viable | Unlawful, unfair and fraudulent practices; predatory lending | Lenders owe no duty in loan-approval process; misstatement claims lack specificity; damages unavailable under UCL | UCL claims dismissed; fraud prong must meet Rule 9(b); relief limited to injunctive relief and restitution; amended pleading required to specify prongs and defendants |
Key Cases Cited
- Brazil v. United States Dept. of Navy, 66 F.3d 193 (9th Cir. 1995) (minimum notice pleading standard under Twombly observed)
- Twombly, 550 U.S. 544 (S. Ct. 2007) (plausibility pleading standard)
- Iqbal, 556 U.S. 662 (S. Ct. 2009) (facial plausibility required for claims; not mere conclusory statements)
- King v. California, 784 F.2d 910 (9th Cir. 1986) (TILA rescission limitations; equitable tolling discussed)
- Beach v. Ocwen Fed. Bank, 523 U.S. 410 (S. Ct. 1998) (TILA rescission extinguished after 3 years; tolling not apply to rescission period)
- Santa Maria v. Pac. Bell, 202 F.3d 1170 (9th Cir. 2000) (equitable tolling requires diligence and inability to obtain vital information)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) heightened pleading for fraud requires particularity)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) pleading standard for fraud claims)
- Perlas v. GMAC Mortg., LLC, 187 Cal.App.4th 429 (Cal. Ct. App. 2010) (California appellate on lender duties in loan origination context; cited for lack of duty in unfair prong)