Moses Urieta v. Capital Benefit, INC.
2:22-cv-07877
C.D. Cal.May 12, 2023Background
- Plaintiff Moises Urieta obtained a loan secured by real property at 801 Cambria Ave., Santa Maria; Capital Benefit, Inc. is the asserted beneficiary/servicer.
- Urieta alleges Capital Benefit misled him about a loan modification, which impeded his ability to “correct his loan” and led to foreclosure.
- Urieta asserted 17 causes of action (state and federal), including violations of TILA and RESPA, and sought rescission and damages.
- Capital Benefit moved to dismiss under Rule 12(b)(6); the parties submitted exhibits, and the Court treated the loan application and loan modification application as incorporated by reference.
- The loan application expressly designated the loan as for “Investment” purposes; Urieta conceded the loan was for an investment/business purpose.
- The Court dismissed the TILA and RESPA claims with prejudice (finding those statutes inapplicable to business loans), declined supplemental jurisdiction over remaining state-law claims, and dismissed them without prejudice; leave to amend was denied as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TILA and RESPA apply to the Loan | Urieta asserted statutory claims under TILA and RESPA based on alleged loan-modification misrepresentations | Capital Benefit argued the Loan was obtained for business/investment purposes, so TILA and RESPA do not apply | Court held loan was for business purposes (as conceded and shown on loan app); TILA and RESPA claims dismissed with prejudice |
| Whether documents attached to motion may be considered | Urieta did not dispute authenticity of the loan application and modification application | Capital Benefit relied on those documents to show the loan’s purpose | Court treated those two documents as incorporated by reference and considered them on the motion to dismiss |
| Whether leave to amend should be granted | Urieta sought to proceed on statutory and state claims (opposition acknowledged business-loan issue) | Capital Benefit argued dismissal should be with prejudice as amendment would be futile on TILA/RESPA | Court denied leave to amend for TILA/RESPA (futile) |
| Whether the court should retain supplemental jurisdiction over state claims | Urieta sought relief on various state-law causes of action | Capital Benefit argued dismissal of federal claims moots original jurisdiction | Court declined to exercise supplemental jurisdiction after dismissing federal claims and dismissed remaining claims without prejudice |
Key Cases Cited
- Gilliam v. Levine, 955 F.3d 1117 (9th Cir. 2020) (defines consumer-credit transaction requirement under TILA and RESPA applicability)
- Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401 (9th Cir. 2011) (loan for business purpose excludes TILA/RESPA protections)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must allege factual content to state plausible claim)
- Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) (on accepting well-pleaded allegations and matters subject to judicial notice on dismissal)
- United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966) (standards for supplemental jurisdiction)