Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-02681/USCOURTS-caed-2_09-cv-02681-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1692 Fair Debt Collection Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

OSKANA KOPCHUK,

Civ. No. S-09-2681 FCD/GGH

Plaintiff,

v. MEMORANDUM AND ORDER

COUNTRYWIDE FINANCIAL

CORPORATION, MORTGAGE

ELECTRONIC REGISTRATION

SYSTEM, RECONTRUST COMPANY;

and DOES 1-50,

Defendants.

____________________________/

----oo0oo----

This matter is before the court on the motion of defendants

Countrywide Financial Corporation (“Countrywide”), Recontrust

Company, N.A. (“Recontrust”), and Mortgage Electronic

Registration System (“MERS”) to dismiss plaintiff Oksana

Kopchuk’s (“plaintiff”) first amended complaint pursuant to

Federal Rule of Civil Procedure (“FRCP”) 12(b)(6). (Docket No.

12). Plaintiff opposes the motion. For the reasons set forth

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1 Because oral argument will not be of material

assistance, the court orders these matters submitted on the

briefs. E.D. Cal. L.R. 230(g).

2 The court notes that although plaintiff is represented

by different counsel, her first amended complaint is virtually

identical to the first amended complaint filed in Lanin v. Wells

Fargo Bank, N.A., et al., Civ. S-09-2461 FCD/DAD which this court

dismissed in its entirety on similar grounds less than one month

ago. 

2

below,1 defendants’ motions are GRANTED. 

BACKGROUND

Plaintiff brings this action against defendants Countrywide,

Recontrust, and MERS. (Pl.’s First Am. Compl. (“Compl.”), filed

Sept. 10, 2009, ¶¶ 2-4.) Plaintiff’s claims are based upon a

residential home loan transaction and the subsequent impending

foreclosure of plaintiff’s home. (Id. ¶¶ 7, 28.) Plaintiff, who

is not fluent in English, bases several claims on defendants’

failure to provide plaintiff with copies of documents in her

native Slavic language. (Id. ¶ 9, 36.) Additionally, plaintiff

alleges that defendant Countrywide acted as a “predatory lender”

by misrepresenting the terms of plaintiff’s loan and by failing

to provide plaintiff with accurate disclosures.2

 (Id. ¶¶ 13-15.) 

All defendants have moved to dismiss the action for failing to

state any claims upon which relief could be granted. Fed. R.

Civ. P. 12(b)(6).

STANDARD

Under Federal Rule of Civil Procedure 8(a), a pleading must

contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” See Ashcroft v. Iqbal, 129

S. Ct. 1937, 1949 (2009). Under notice pleading in federal

court, the complaint must “give the defendant fair notice of what

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the claim is and the grounds upon which it rests.” Bell Atlantic

v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations

omitted). “This simplified notice pleading standard relies on

liberal discovery rules and summary judgment motions to define

disputed facts and issues and to dispose of unmeritorious

claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the

complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319,

322 (1972). The court is bound to give the plaintiff the benefit

of every reasonable inference to be drawn from the “well-pleaded”

allegations of the complaint. Retail Clerks Int’l Ass’n v.

Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not

allege “‘specific facts’ beyond those necessary to state his

claim and the grounds showing entitlement to relief.” Twombly,

550 U.S. at 570. “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Iqbal, 129 S. Ct. at 1949. 

Nevertheless, the court “need not assume the truth of legal

conclusions cast in the form of factual allegations.” United

States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th

Cir. 1986). While Rule 8(a) does not require detailed factual

allegations, “it demands more than an unadorned, the defendantunlawfully-harmed-me accusation.” Iqbal, 129 S. Ct. at 1949. A

pleading is insufficient if it offers mere “labels and

conclusions” or “a formulaic recitation of the elements of a

cause of action.” Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at

1950 (“Threadbare recitals of the elements of a cause of action,

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supported by mere conclusory statements, do not suffice.”). 

Moreover, it is inappropriate to assume that the plaintiff “can

prove facts which it has not alleged or that the defendants have

violated the . . . laws in ways that have not been alleged.” 

Associated Gen. Contractors of Cal., Inc. v. Cal. State Council

of Carpenters, 459 U.S. 519, 526 (1983). 

Ultimately, the court may not dismiss a complaint in which

the plaintiff has alleged “enough facts to state a claim to

relief that is plausible on its face.” Iqbal, 129 S. Ct. at 1949

(citing Twombly, 550 U.S. at 570). Only where a plaintiff has

failed to “nudge [his or her] claims across the line from

conceivable to plausible,” is the complaint properly dismissed. 

Id. at 1952. While the plausibility requirement is not akin to a

probability requirement, it demands more than “a sheer

possibility that a defendant has acted unlawfully.” Id. at 1949. 

This plausibility inquiry is “a context-specific task that

requires the reviewing court to draw on its judicial experience

and common sense.” Id. at 1950.

ANALYSIS

A. Defendants’ Exhibits

In ruling upon a motion to dismiss, the court may consider

matters which may be judicially noticed pursuant to Federal Rule

of Evidence 201. See Mir v. Little Co. of Mary Hospital, 844

F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers

Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D.

Cal. 1998). Rule 201 permits a court to take judicial notice of

an adjudicative fact “not subject to reasonable dispute” because

the fact is either “(1) generally known within the territorial

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jurisdiction of the trial court or (2) capable of accurate and

ready determination by resort to sources whose accuracy cannot

reasonably be questioned.” Fed. R. Evid. 201(b). The court can

take judicial notice of matters of public record, such as

pleadings in another action and records and reports of

administrative bodies. See Emrich v. Touche Ross & Co., 846 F.2d

1190, 1198 (9th Cir. 1988). 

“Even if a document is not attached to a complaint, it may

be incorporated by reference into a complaint if the plaintiff

refers extensively to the document or the document forms the

basis of the plaintiff’s claim.” United States v. Ritchie, 342

F.3d 903, 908 (9th Cir. 2003). “The defendant may offer such a

document, and the district court may treat such a document as

part of the complaint, and thus may assume that its contents are

true for purposes of a motion to dismiss under Rule 12(b)(6).” 

Id. The policy concern underlying the rule is to prevent

plaintiffs “from surviving a Rule 12(b)(6) motion by deliberately

omitting references to documents upon which their claims are

based.” Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998). 

Plaintiff’s complaint alleges several causes of action that

are premised on defendants’ failure to provide the disclosures

and number of copies of the Notice of Right to Cancel as required

by TILA. (Compl. ¶ 39.) Defendants’ Exhibits D, E, and F are a

copy of a Notice of Right to Cancel, a TILA Disclosure Statement,

and a document entitled “Itemization of Amount Financed,”

respectively. All three documents bare plaintiff’s signature and

plaintiff does not contest their accuracy. Accordingly, as these

documents form the basis of certain causes of action, the court

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considers them and assumes that the contents are true for the

purpose of this motion to dismiss. Ritchie, 342 F.3d at 908. 

B. Violation of 15 U.S.C. § 1639(H) and HOEPA

Plaintiff’s ninth and thirteenth causes of action are based

on violations of 15 U.S.C. § 1639, the Home Ownership and Equity

Protection Act (“HOEPA”), which is an amendment to the Truth in

Lending Act. (Compl. ¶¶ 85, 123.) Defendants argue that

plaintiff fails to state a claim for relief under HOEPA because

the loan at issue was used to purchase her primary residence, and

therefore, it is not subject to the additional requirements of

HOEPA.

HOEPA mandates additional disclosures to the borrower for

mortgages which meet certain requirements. 15 U.S.C. § 1639. 

Explicitly exempted from the provisions of HOEPA are “residential

mortgage transactions.” 15 U.S.C. § 1602(aa)(1). Residential

mortgage transactions are, in turn, defined as “a transaction in

which a mortgage, deed of trust, purchase money security interest

arising under an installment sales contract, or equivalent

consensual security interest is created or retained against the

consumer’s dwelling to finance the acquisition or initial

construction of such dwelling.” 15 U.S.C. § 1602(w). 

Plaintiff’s loan meets the definition of a residential mortgage

transaction. She alleges in her complaint that she used the

money which she borrowed from Countrywide to acquire the home in

question and that home is her dwelling. (Compl. ¶¶ 1, 7, 110.) 

Therefore, plaintiff cannot state a claim for relief under HOEPA

because the loan transaction is not of the type that triggers the

additional requirements of Section 1639.

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3 Plaintiff is seeking both rescission and damages for

the alleged TILA violations. (Compl. ¶ 117.) The remedy of

rescission is not available for residential mortgage

transactions. See 15 U.S.C. § 1635(e). As discussed above,

plaintiff’s loan meets the definition of a residential mortgage

transaction and, therefore, plaintiff’s only remedy under TILA is

one for damages. 

7

Accordingly, defendants’ motion to dismiss plaintiff’s ninth

and thirteenth claims for relief is GRANTED without leave to

amend. 

C. TILA

Plaintiff’s twelfth claim for relief is for a violation of

TILA against defendant Countrywide.3 Plaintiff asserts that

Countrywide underdisclosed the finance charge and annual

percentage rate (“APR”) of plaintiff’s loan by failing to include

a $957 charge in the disclosures made to plaintiff at the time of

the loan. (Compl. ¶ 111.) Plaintiff also claims that defendant

failed to provide two copies of the notice of the right to

rescind, and that defendant did not properly disclose the amount

financed, the finance charge, and the total of payments as

required by TILA. (Id. at ¶¶ 111-13.) 

Defendant moves to dismiss on the ground that plaintiff’s

TILA claim is barred by the statute of limitations. Plaintiff

did not respond to defendants’ argument her opposition to the

motions. However, based on plaintiff’s statement in her

complaint asserting she did not discover the alleged TILA

disclosure violations until on or about April 15, 2009, the court

will construe plaintiff’s pleading as alleging that the statute

of limitations should be equitably tolled. (Compl. ¶ 111.)

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TILA violations include the failure to provide the required

disclosures mandated by 15 U.S.C. § 1631, and the failure to

clearly and conspicuously disclose information relating to the

“annual percentage rate” and the “finance charge” pursuant to 15

U.S.C. § 1632. To recover damages arising from alleged TILA

violations, a plaintiff must file an action to recover damages

“within one year from the date of the occurrence of the

violation.” 15 U.S.C. § 1640(e). However, in certain

circumstances, equitable tolling of civil damages claims brought

under TILA is appropriate. See King v. State of California, 784

F.2d 910, 915 (9th Cir. 1986). The doctrine of equitable tolling

may be appropriate when the imposition of the statute of

limitations would be unjust or would frustrate TILA’s purpose “to

assure a meaningful disclosure of credit terms so that the

consumer will be able to . . . avoid the uninformed use of

credit.” Id. (quoting 15 U.S.C. § 1601(a)). District courts,

therefore, have the discretion to evaluate specific claims of

equitable tolling and adjust the limitations period accordingly

when the borrower may not have had a reasonable opportunity to

discover the fraud or nondisclosures that give rise to the TILA

action. Id.

In this case, plaintiff alleges she consummated the loan on

or about April 10, 2007. (Compl. ¶ 73.) The Deed of Trust is

dated that same day. (Defs.’ Ex. A. to RJN, filed Dec. 17,

2009.) Accordingly, as plaintiff did not bring the instant

action until April 23, 2009, more than one year has passed since

the alleged TILA violations. 

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4 While the court makes its determination based on the

statute of limitations, the court grants plaintiff leave to amend

to provide more facts as to why the allegedly incorrect

disclosures were not discovered until April 2009. Additionally,

the court notes that much of plaintiff’s twelfth claim for relief

fails to meet the pleading requirements under FRCP 8. Plaintiff

claims that the disclosures she was provided inaccurately stated

the amount financed, the finance charge, the annual percentage

9

To the extent that plaintiff seeks application of equitable

tolling on the basis that she did not discover the disclosure

errors until April 2009, plaintiff’s claim fails. Plaintiff

pleads no facts to explain why she could not otherwise have

discovered the TILA violations at the consummation of her loan. 

“Such factual underpinnings are all the more important . . .

since the vast majority of [plaintiff’s] alleged violations under

TILA are violations that are self-apparent at the consummation of

the transaction.” Cervantes v. Countrywide Home Loans, Inc.,

2009 U.S. Dist. LEXIS 87997, at ** 13-14 (D. Ariz. 2009) (holding

that equitable tolling was not appropriate when the plaintiffs

simply alleged that the defendants “fraudulently misrepresented

and concealed the true facts related to the items subject to

disclosure”). Moreover, here plaintiff herself, in alleging that

any assignees of the loan are also liable for the TILA

violations, states that the alleged violations “were apparent on

the face of the disclosure statement.” (Compl. ¶ 115 (quotations

omitted).) Without more factual information regarding why the

alleged disclosure violations were not, and could not have been,

reasonably discovered until 2009, the court cannot equitably toll

the statute of limitations in this case.

As such, Countrywide’s motion to dismiss plaintiff’s claim

for violations of TILA is GRANTED.4

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rate, and the total of payments. However, the complaint is devoid

of any factual underpinnings for these assertions; in particular,

how the disclosures, which were provided to plaintiff at the time

of closing, were inaccurate. (See Defs.’ Ex. E and F to RJN.)

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D. RESPA

Plaintiff’s sixteenth claim is for violation of the Real

Estate Settlement Procedures Act (“RESPA”) against defendant

Countrywide. 12 U.S.C. 2601 et. seq. Countrywide has moved to

dismiss this claim on the basis that plaintiff has failed to

plead any facts which could constitute a RESPA violation. 

Plaintiff has failed to state a cause of action under RESPA. 

Plaintiff’s sixteenth cause of action lists a litany of charges

including several violations of California law. (Compl. ¶¶ 147-

54.) Plaintiff’s only allegations that could constitute a

possible violation of RESPA are in paragraph 140 of the

complaint:

Defendant Country[wide] violated RESPA with respect to

Plaintiff’s loan transaction by: (a) giving or

accepting kickbacks or other things of value in

violation of 12 U.S.C. § 2607(a) and 24 C.F.R. §

3500.14(b); and (b) giving a portion, split, or

percentage of charges made or received for the

rendering of a real estate settlement service in

connection with a transaction involving a federally

related mortgage loan other than for services actually

performed, in violation of 12 U.S.C. § 2607(b) and 24

C.F.R. § 3500.14(c).

(Compl. ¶ 140.) Plaintiff’s allegations are barren of factual

support. Plaintiff fails to state how Countrywide has given or

accepted kickbacks or split fees. Accordingly, Countrywide’s

motion to dismiss plaintiff’s RESPA claim is GRANTED.

E. Quiet Title

Plaintiff’s first claim for relief is an action to quiet

title against all defendants. (Compl. ¶ 30.) Plaintiff seeks a

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judicial declaration that the property is vested in her alone,

and that none of the defendants have any estate or interest in

the property. (Id. at ¶ 35.) Defendants contend that plaintiff

cannot state a claim against a lender to quiet title unless the

plaintiff’s debt has been paid.

In order to proceed on a claim to quiet title against a

lender, the property owner must first discharge his or her debt.

See Aguilar v. Bocci, 39 Cal. App. 3d 475, 477-78 (1974) (stating

that the plaintiff could not clear his title without first

satisfying his debt). “The cloud upon [a plaintiff’s] title

persists until the debt is paid.” Id. citing Burns v. Hiatt, 149

Cal. 617, 620 (1906). Plaintiff does not allege that the debt

has been repaid to defendants. While plaintiff contends for

myriad reasons that she should not be forced to pay her debt to

defendants based on defendants’ actions at the time of

plaintiff’s purchase of her home, the requirement to state a

claim to quiet title is clear: plaintiff must have repaid the

debt to seek to quiet title. Id.

Accordingly, defendants’ motion to dismiss plaintiff’s quiet

title claim is GRANTED without leave to amend.

F. California Civil Code § 1632

Plaintiff’s second claim for relief is based on a violation

of California Civil Code § 1632. (Compl. ¶¶ 36-37.) Section

1632 provides that when certain types of contracts are negotiated

in certain languages other than English, the offeree must be

provided with a translated copy of the contract before the

contract is executed. Cal. Civ. Code § 1632(b) (West 2009).

Defendants contend that plaintiff cannot state a cause of action

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under § 1632 because plaintiff does not speak one of the

languages covered by the statute. 

Section 1632(b) provides that “[a]ny person engaged in a

trade or business who negotiates primarily in Spanish, Chinese,

Tagalog, Vietnamese, or Korean . . . shall deliver to the other

party to the contract or agreement and prior to the execution

thereof, a translation of the contract or agreement in the

language in which the contract or agreement was negotiated. . .

.” Cal. Civ. Code § 1632(b) (West 2009). Section 1632 was

originally enacted in 1976 and applied only to the Spanish

language. 1974 Cal. Stat. ch. 1446. In 2003, the California

Legislature passed Assembly Bill 309, which added the Chinese,

Tagalog, Vietnamese, and Korean languages to the statute. 2003

Cal. Stat. ch. 330. The statute has been amended as recently as

2008. 2008 Cal. Stat. ch. 278. 

Plaintiff admits that the Slavic language which she speaks

is not included as a covered language under Section 1632. 

(Compl. ¶ 38.) However, plaintiff argues that this court should

extend the statute to the Slavic language based on the overall

purpose of Section 1632. (Id. at ¶¶ 38-40). Plaintiff has not

provided any authority for this proposition, but contends that

the Slavic language should be covered based on the large increase

in Slavic speakers in California since the statute was originally

enacted in 1976. (Compl. ¶ 40.) 

Plaintiff’s argument fails. When the statute was originally

enacted in 1976, it only protected Spanish speakers. 1974 Cal.

Stat. ch. 1446. It was not until 2003, and based upon

information in the most recent census, that the legislature chose

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to amend the statute to include additional languages. 2003 Cal.

Stat. ch. 330. The legislature has amended the statute as

recently as 2008, but chose not to include the Slavic language as

a protected language under the statute. 2008 Cal. Stat. ch. 278.

The question of which languages are to be covered is a question

for the legislature, not this court. Because plaintiff has

failed to allege that she negotiated any contract in a language

which is protected by the statute, plaintiff’s claim under

Section 1632 must be dismissed.

Defendants’ motion to dismiss this claim is accordingly

GRANTED without leave to amend.

G. Rescission Based on Fraud and Fraud

Plaintiff’s third and fourteenth claims for relief are based

on the alleged fraud of defendant Countrywide. Plaintiff alleges

that “[d]efendant Country[wide] fraudulently, intentionally, and

knowingly induced the Plaintiff to enter into the subject

mortgage transaction by misrepresenting and/or failing to provide

material information.” (Compl. ¶ 128.)

Under California law, the elements of common law fraud are

“misrepresentation, knowledge of its falsity, intent to defraud,

justifiable reliance, and resulting damages.” Gil v. Bank of

Am., Nat’l Ass’n, 138 Cal. App. 4th 1371, 1381 (2006). A court

may dismiss a claim grounded in fraud when its allegations fail

to satisfy Rule 9(b)’s heightened pleading requirements. Vess v.

Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). 

Therefore, plaintiff “must state with particularity the

circumstances constituting fraud.” Fed. R. Civ. P. 9(b). In

other words, the plaintiff must include “the who, what, when,

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where, and how” of the fraud. Id. at 1106 (citations omitted). 

“The plaintiff must set forth what is false or misleading about a

statement, and why it is false.” Decker v. Glenfed, Inc., 42

F.3d 1541, 1548 (9th Cir. 1994). The purpose of Rule 9(b) is to

ensure that defendants accused of the conduct specified have

adequate notice of what they are alleged to have done, so that

they may defend against the accusations. Concha v. London, 62

F.3d 1493, 1502 (9th Cir. 1995). “Without such specificity,

defendants in these cases would be put to an unfair advantage,

since at the early stages of the proceedings they could do no

more than generally deny any wrongdoing.” Id. (citing Semegen v.

Weidner, 780 F.2d 727, 731 (9th Cir. 1985)). 

Furthermore, “Rule 9(b) does not allow a complaint to merely

lump multiple defendants together but require[s] plaintiffs to

differentiate their allegations when suing more than one

defendant . . . and inform each defendant separately of the

allegations surrounding his alleged participation in the fraud.” 

Swartz v. KPMG LLP, 476 F.3d 756, 765-66 (9th Cir. 2007). When

asserting a fraud claim against a corporation, “the plaintiff’s

burden . . . is even greater. . . . The plaintiff must ‘allege

the names of the persons who made the allegedly fraudulent

representations, their authority to speak, to whom they spoke,

what they said or wrote, and when it was said or written.’” 

Lazar v. Superior Court, 12 Cal. 4th 631, 645 (1996) (quoting

Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal. App. 4th 153,

157 (1991)); see also Edejer, 2009 U.S. Dist. LEXIS 52900 at *36 

(dismissing the fraud claim where the plaintiff did not allege

any misrepresentation or false statements made by the defendants;

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did not allege the names of the persons who made the allegedly

fraudulent representations and their authority to speak; and did

not allege with sufficient particularity or clarity what was

false or misleading about the statements); Mohammad Akhavein v.

Argent Mortgage Co., 2009 U.S. Dist. LEXIS 61796, at *10 (N.D.

Cal. July 17, 2009); Spencer v. DHI Mortgage Co., 2009 U.S. Dist.

LEXIS 55191, at *18 (E.D. Cal. June 30, 2009) (dismissing the

plaintiff’s fraud claim without leave to amend because it failed

to satisfy Rule 9(b)’s “‘who, what, when, where and how’

requirements” and was so deficient as to “suggest no potential

improvement from an attempt to amend”). 

In the present case, plaintiff has failed to meet the

heightened pleading requirement of Rule 9(b). Specifically,

plaintiff has alleged fraud against Countrywide, which is a

corporation, but has failed to allege who actually made the

supposedly false representations or their ability to speak for

the corporation. See Lazar v. Superior Court, 12 Cal. 4th 631,

645 (1996); Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal.

App. 4th 153, 157 (1991). For instance, plaintiff alleges that

Countrywide “intentionally failed to disclose [facts] as of April

10, 2007, and thereafter continued to keep this material

information from Plaintiff” and that Countrywide “fraudulently,

intentionally, and knowingly induced the Plaintiff to enter into

the subject mortgage transaction.” (Compl. ¶¶ 52, 128.) These

allegations fail to allege which individuals purportedly failed

to make such disclosures. 

Therefore, the court must GRANT Countrywide’s motion to

dismiss plaintiff’s claims for rescission based on fraud and

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fraud.

H. RFDCPA and FDCPA Violations

Plaintiff’s fourth claim for relief alleges violations of

California’s Rosenthal Fair Debt Collection Practices Act

(“RFDCPA”), the Federal Fair Debt Collection Practices Act

(“FDCPA”), and RESPA against all defendants. (Compl. ¶ 57.) 

Defendants move to dismiss this claim because plaintiff has

failed to allege any facts which could constitute a violation of

these statutes.

Plaintiff has failed to allege any facts which could

constitute unfair debt collection. In plaintiff’s opposition to

the motion she contends that defendants violated California and

federal debt collection laws by threatening to sell her property.

(Pl.’s Opp., 14:10-11.) This claim is predicated upon

defendants’ alleged violations of the RDFCPA, FDCPA, and RESPA. 

(Compl. ¶ 57.) These allegations are simply conclusions of law

which need not be accepted as true by this court. See United

States ex. rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th

Cir. 1986). The only allegation which plaintiff makes which

could be construed as a debt practice is defendants’ threatened

foreclosure of plaintiff’s home. (Compl. ¶ 59.) However,

“foreclosing on [a] property pursuant to a deed of trust is not

the collection of a debt within the meaning of the FDCPA.” 

Izenberg v. ETS Services, LLC, 589 F. Supp. 1193, 1199 (C.D. Cal.

2008) (quoting Ines v. Countrywide Home Loans, 2008 WL 4791863,

at *2 (S.D. Cal. Nov. 3, 2008)). Nor does foreclosure meet the

requirements of a debt collection within the meaning of the

RDFCPA. Id. 

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As such, defendants’ motion to dismiss plaintiff’s claims

for unfair debt collection is GRANTED.

I. Unfair Business Practices

Plaintiff’s fifth claim asserts that all defendants violated

Section 17200 of the California Business & Professions Code by

engaging in unlawful, unfair, and fraudulent business practices. 

(Compl. ¶ 62.) Plaintiff predicates this claim on defendants’

alleged violations of California Civil Code § 1632, RFDCPA,

FDCPA, and RESPA. (Compl. ¶ 107.) 

The Unfair Competition Law (“UCL”), California Business and

Professions Code §§ 17200, et seq., forbids acts of unfair

competition, which includes “any unlawful, unfair or fraudulent

business act or practice.” Cal. Bus. & Prof. Code § 17200. “The

UCL is broad in scope, embracing anything that can properly be

called a business practice and that at the same time is forbidden

by law.” People ex rel. Gallegos v. Pacific Lumber Co., 158 Cal.

App. 4th 950, 959 (2008) (internal citations omitted). 

Because plaintiff’s UCL claim is predicated upon defendants’

alleged violations of Section 1632, RESPA, FDCPA, and RFDCPA, for

the reasons set forth above, as to these claims, plaintiff’s

allegations regarding her UCL claim similarly fail to state a

basis for relief. 

Accordingly, defendants’ motion to dismiss plaintiff’s UCL

claim is GRANTED.

J. Breach of Fiduciary Duty

Plaintiff’s sixth claim for relief, against all defendants,

alleges defendants breached their fiduciary duties by allegedly

failing to provide her with all disclosures required by law. 

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(Compl. ¶¶ 68-69.) Defendants move to dismiss this claim on the

basis that a lending institution does not owe a fiduciary duty to

a borrower. 

In order to sustain a claim for breach of a fiduciary duty,

“a plaintiff must demonstrate the existence of a fiduciary

relationship, breach of that duty and damages.” Serrano v. Sec.

Nat’l Mortg. Co., 2009 U.S. Dist. LEXIS 71725 (S.D. Cal. Aug. 14,

2009) (citing Shopoff & Cavallo LLP v. Hyon, 167 Cal. App. 4th

1489, 85 Cal. Rptr.3d 268, 285 (Cal. Ct. App. 2008). “Absent

special circumstances, a loan transaction is at arms-length and

there is no fiduciary relationship between the borrower and

lender.” Rangel v. DHI Mortgage Co., Ltd., 2009 U.S. Dist. LEXIS

65674, at *8 (E.D. Cal. July 20, 2009); see also e.g. Tasaranta

v. Homecomings Fin., 2009 U.S. Dist. LEXIS 87372, at *15 (S.D.

Cal. Sept. 21, 2009); Brittain v. IndyMac Bank, FSB, 2009 U.S.

Dist. LEXIS 84863, at * 14 (N.D. Cal. Sept. 16, 2009);

Dinsmore-Thomas v. Ameriprise Fin., Inc., 2009 U.S. Dist. LEXIS

68882, at *29 (C.D. Cal. Aug. 3, 2009); Fox & Carskadon Financial

Corp. v. San Francisco Fed. Sav. & Loan Assn. 52 Cal. App. 3d

484, 488, 489 (1st Dist. 1975); Bradler v. Craig, 274 Cal. App.

2d 466, 473, 476 (2d Dist. 1969).

Plaintiff’s claim for breach of fiduciary duty must fail

because plaintiff has not alleged any facts which could create a

special circumstance where the defendants, as lenders, owed a

fiduciary duty to plaintiff. Plaintiff only alleges that

“defendants, and each of them as the lender, trustee, mortgage

broker, had[] a fiduciary duty to Plaintiff to advise her. . . .” 

(Compl. ¶ 68.) Under California law, this is not the type of

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transaction which creates a fiduciary duty. See, e.g., Rangel,

2009 U.S. Dist. LEXIS 65674, at *8. 

Defendants’ motion to dismiss this claim is therefore

GRANTED.

K. Breach of Contract

Plaintiff’s seventh claim for relief is for breach of

contract against defendant Countrywide. (Compl. ¶ 74.) 

Plaintiff alleges that defendant had a duty to provide a copy of

the contract in the Slavic language and that “[t]his failure to

disclose, was and is a breach of contract by defendant.” Id. To

the extent that plaintiff’s breach of contract claim is based on

a violation of California Civil Code § 1632 for failure to

provide a Slavic language translation of the contract, her claim

for breach of contract fails. The court, as noted above, finds

that Countrywide had no such duty to provide a copy of the

contract in the Slavic language. Therefore, a failure to do so

cannot be the basis of a claim for breach of contract.

Accordingly, Countrywide’s motion to dismiss this claim is

GRANTED.

L. Breach of Implied Covenant of Good Faith and Fair Dealing

Plaintiff’s eighth claim for relief asserts that Countrywide

breached the implied covenant of good faith and fair dealing. 

Plaintiff specifically alleges that defendants collectively

breached the implied covenant of good faith when they: (1) failed

to comply with California Civil Code § 1632, requiring defendant

to provide a copy of the contract in plaintiff’s Slavic language;

and (2) failed to comply with 15 U.S.C. § 1639(h). (Compl. ¶¶

79-80.) To the extent this court has concluded that Countrywide

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5 Plaintiff’s complaint couches the claim as one for

“unlawful” foreclosure. The court construes this as a claim

“wrongful” foreclosure. 

20

owed plaintiff no duty under Section 1632 and plaintiff cannot

properly plead a claim under section 1639(h), plaintiff’s claim

for breach of the implied covenant of good faith and fair dealing

must also be dismissed. Defendants’ motion is GRANTED as to this

claim. 

M. Wrongful Foreclosure

Plaintiff’s eleventh claim for relief is a claim for

wrongful foreclosure against all defendants.5 The basis of

plaintiff’s allegation is that Countrywide has never provided the

actual promissory note but only a copy. (Compl. ¶ 94.)

Defendants move to dismiss this claim on the ground it is not

necessary to produce the original promissory note before

proceeding with a non-judicial foreclosure. 

California Civil Code §§ 2924 through 29241 govern nonjudicial foreclosures pursuant to a deed of trust. Non-judicial

foreclosure may be initiated by a “trustee, mortgagee, or

beneficiary, or any of their authorized agents.” Cal. Civ. Code

§ 2924(a)(1). Plaintiff contends that even when the deed of

trust designates a party as a trustee or beneficiary and the

party complies with the remaining requirements of Sections 2924

through 29241, this is not sufficient to demonstrate that a party

has the power to foreclose, because the party must also provide

the original promissory note. Plaintiff bases his argument, in

part, on the requirements of the California Commercial Code. 

(Compl. ¶ 100-01.) 

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As noted above, California’s non-judicial foreclosure

process is governed by a statutory framework that is distinct

from the commercial code, California Civil Code §§ 2924-29241. 

The California Civil Code has no requirement that a party

demonstrate actual possession of the promissory note. See

Champlaie v. BAC Home Loans Servicing, LP, 2009 WL 3429622, at

*12 (E.D. Cal. Oct. 22, 2009) (Karlton, J.) (reviewing several

district court opinions and concluding that “so far as this court

is aware, the district courts have unanimously concluded that in

a non-judicial foreclosure, a party need not demonstrate actual

possession of the underlying note”). Because plaintiff’s sole

allegation supporting the claim for wrongful foreclosure is that

the defendants failed to produce the promissory note, plaintiff’s

claim fails as a matter of law. Defendants’ motion to dismiss

plaintiff’s eleventh claim for relief for wrongful foreclosure is

GRANTED.

N. Civil Conspiracy to Commit Fraud

Plaintiff’s fifteenth cause of action is for civil

conspiracy to commit fraud against defendant Countrywide. 

Countrywide moves to dismiss on the ground that plaintiff has

failed to allege any facts which could constitute a conspiracy. 

The court agrees. One of the hallmarks of any conspiracy claim

is an agreement between two or more people. Plaintiff’s

conspiracy claim is directed solely at a single defendant, namely

Countrywide. Additionally, plaintiff’s accusations are

conclusory and totally lacking of factual support. Plaintiff

alleges that “[t]hrough their unlawful conduct constituting a

civil conspiracy to defraud a vulnerable and immigrant homeowner,

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defendant Country[wide] acted in a malicious, willful, wanton,

and oppressive fashion, in reckless disregard of plaintiffs

rights.” (Compl. ¶ 134.) This allegation fails to state a

single fact from which this court could conclude that the

defendants’ actions could possibly constitute a conspiracy to

commit fraud.

Accordingly, Countrywide’s motion to dismiss plaintiff’s

fifteenth claim for relief for civil conspiracy to commit fraud

is GRANTED.

O. Declaratory and Injunctive Relief

Plaintiff’s tenth cause of action for declaratory and 

injunctive relief is based upon plaintiff’s first nine causes of

action which this court has dismissed. As such, plaintiff’s

tenth claim for declaratory and injunctive relief must also be

dismissed.

P. Leave to Amend

Plaintiff has requested leave to amend her complaint. 

“Valid reasons for denying leave to amend include undue delay,

bad faith, prejudice, and futility.” Cal. Architectural Building

Prods. v. Franciscan Ceramics, 818 F.2d 1466, 1472 (9th Cir.

1988). While leave to amend should be freely given pursuant to

Federal Rule of Civil Procedure 15, the court is not required to

allow futile amendments. Klamath-Lake Pharm. Ass’n v. Klamath

Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983). Here,

amendment of the complaint with respect to plaintiff’s first,

second, ninth, and thirteenth claims for relief would be futile

under the governing law described above, and plaintiff does not

describe any other facts which could plausibly give rise to such

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claims against defendants. Iqbal, 129 S. Ct. at 1949. 

Therefore, the court denies plaintiff leave to amend with respect

to these claims for relief. 

However, as to plaintiff’s remaining claims, the court

cannot find, at this juncture, that plaintiff could not allege

any set of facts which would support such claims for relief, and

thus, leave to amend those claims must be granted. Fed. R. Civ.

P. 15.

CONCLUSION

For the foregoing reasons, defendants’ motion to dismiss is

GRANTED. Plaintiff’s first, second, ninth, and thirteenth claims

are dismissed without leave to amend. As to all other claims,

plaintiff is granted fifteen (15) days from the date of this

order to file a second amended complaint in accordance with this

order. Defendants are granted thirty (30) days from the date of

service of plaintiff’s second amended complaint to file a

response thereto.

IT IS SO ORDERED. 

DATED: March 15, 2010.

 

FRANK C. DAMRELL, JR.

UNITED STATES DISTRICT JUDGE

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