862 F. Supp. 2d 1111
W.D. Wash.2012Background
- Plaintiffs Evan and Inese Westcott bought a Bellevue condo secured by a Wells Fargo loan for $644,000, with a deed of trust recorded December 27, 2006.
- The Initial Interest Note and loan documents were signed at closing, which Plaintiffs allege concealed or misrepresented terms.
- Plaintiffs’ complaint, filed January 23, 2012 in King County Superior Court, asserts eleven claims including TILA, RESPA, predatory lending, contract-based claims, and rescission.
- Wells Fargo removed and moved to dismiss under Rule 12(b)(6), arguing failure to state a claim and time-barred claims.
- The court analyzes each claim for plausibility, applying Iqbal and Twombly standards, and considers the deed of trust and Initial Interest Note as authentic, court-record documents.
- The court grants dismissal with leave to amend on some claims and dismisses others without leave to amend, ultimately concluding that several claims are time-barred or inadequately pled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the TILA damages claim is time-barred | Westcott argues tolling should apply due to late discovery | Wells Fargo asserts no valid basis for tolling | TILA claim time-barred; no equitable tolling applied |
| Whether the RESPA claim is time-barred | Westcott contends tolling due to discovery | Wells Fargo argues RESPA timely only within exposing periods | RESPA claim untimely and dismissed without leave to amend |
| Whether the fraud claim is adequately pled and preempted | Westcott pleads multiple misrepresentations and concealment | Wells Fargo argues pleading deficiencies under Rule 9(b) and no preemption bar shown | Fraud claim dismissed for failure to plead with particularity; preemption not reached on this basis |
| Whether the breach of implied covenant and unconscionability claims survive | Westcott seeks relief for pre-contract conduct and unconscionability | Wells Fargo argues not a standalone contract claim and argues unconscionability not shown | Breach of implied covenant dismissed with leave to amend; unconscionability claim dismissed as contract defense, with leave to amend |
Key Cases Cited
- Stiley v. Block, 130 Wash.2d 486 (Wash. 1996) (fraud elements and Rule 9(b) pleading requirements)
- Meyer v. Ameriquest Mortg. Co., 342 F.3d 899 (9th Cir. 2003) (disclosures at closing trigger the statute of limitations)
- Kramarevcky v. Dept. of Soc. & Health Services, 122 Wash.2d 738 (Wash. 1993) (detrimental reliance and equitable remedies principles cited)
- Badgett v. Sec. State Bank, 116 Wash.2d 563 (Wash. 1991) (duty of good faith and fair dealing governs contract performance)
- Cornerstone Equip. Leasing, Inc. v. MacLeod, 159 Wash. App. 899 (Wash. App. 2011) (claims relying on oral representations conflicting with written terms are barred)
- Mashburn v. Wells Fargo Bank, 2011 WL 2940363 (WD. Wash. 2011) (cited for context on contractual rescission timing (WL not official reporter; omitted))
- Zuver v. Airtouch Communications, Inc., 153 Wash.2d 293 (Wash. 2004) (procedural unconscionability and bargaining power considerations)
- McKee v. AT&T Corp., 164 Wash.2d 372 (Wash. 2008) (unconscionability as contract defense; not standalone claim)