Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-03059/USCOURTS-casd-3_12-cv-03059-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TARA CAPRON,

Plaintiff,

CASE NO. 12CV3059 JLS (RBB)

ORDER GRANTING

DEFENDANT’S MOTION TO

DISMISS PLAINTIFF’S

COMPLAINT

(ECF No. 3)

vs.

JPMORGAN CHASE BANK; AND

DOES 1-100, INCLUSIVE,

Defendants.

Presently before the court is Defendant JPMorgan Chase Bank’s (“Defendant,”

or “JPMorgan”) Motion to Dismiss Plaintiff’s Complaint. (Mot. to Dismiss, ECF No.

3). Also before the Court are Plaintiff Tara Capron’s (“Plaintiff”) response in

opposition, (Resp. in Opp’n, ECF No. 7), and Defendant’s reply in support, (Reply in

Supp., ECF No. 8). The motion hearing that was set for February 21, 2013 was vacated

and the matter taken under submission on the papers pursuant to Civil Local Rule

7.1(d)(1). Having considered the parties’ arguments and the law, the Court GRANTS

Defendant’s motion to dismiss.

BACKGROUND

This action arises out of a residential loan that Plaintiff obtained from

JPMorgan in the amount of $407,000 in November 2006. (See Request for Judicial

Notice (“RJN”), Exs. 1 & 2, ECF No. 3-2). The loan was secured by a deed of trust

on real property located at 300 West Beech Street, #1710 in San Diego, California. 

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(Id.) Plaintiff defaulted on the loan and subsequently reached an agreement with

JPMorgan to discharge her entire debt with the proceeds obtained from a short sale

of the property. Plaintiff’s claims are based on attempts by a third party to collect

Plaintiff’s past due payments prior to the short sale and on JPMorgan’s reporting of

the short sale to various credit reporting agencies.1

 

Plaintiff, proceeding pro se, commenced this action by filing a complaint in

San Diego County Superior Court on August 16, 2012, asserting eight causes of

action: (1) Libel; (2) Violation of California Civil Code section 1785.25; (3) Fraud;

(4) Breach of Contract; (5) Tortious Interference with Business/Contract Relations;

(6) Violation of the Home Ownership and Equity Protection Act (“HOEPA”), 15

U.S.C. § 1639(f); (7) Violation of the Fair Debt Collection Practices Act, 15 U.S.C.

§ 1692; and (8) Violation of the Rosenthal Fair Debt Collections Practice Act,

California Civil Code section 1788. (Notice of Removal, Ex. 1, ¶ 6, ECF No. 1).2

On December 26, 2012, Defendant removed the suit to federal court on the basis of

federal question jurisdiction. (Notice of Removal, EFC No. 1). On January 2, 2012,

Defendant filed the motion to dismiss that is currently before the Court. (Mot. to

Dismiss, ECF No. 3). 

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion

the defense that the complaint “fail[s] to state a claim upon which relief can be

1

 Defendant requests that the Court judicially notice the following documents: (1) the grant deed for the real property at issue, (RJN, Ex. 1, ECF No. 3-2); and, (2) the deed of trust that encumbers the property, (RJN, Ex. 2, ECF No. 3-2). In ruling on a motion to dismiss, a court may consider a document not physically attached to the plaintiff’s pleading if its contents are alleged in the complaint and its authenticity not disputed. Parrino v. FHP, Inc., 146 F.3d 699, 705–06 (9th Cir. 1998), superseded by statute on other grounds as stated in Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006). A court may also consider a document “upon which the plaintiff’s complaint necessarily relies.” Id. at 706. The complaint in this matter either references or necessarily relies upon each of the documents for which Defendant requests judicial notice. Plaintiff does not oppose the request, nor does she challenge the authenticity of the documents. Accordingly, the Court GRANTS Defendant’s

request for judicial notice. 

2

Pin cites to exhibits utilize the page numbers assigned by CM/ECF.

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granted,” generally referred to as a motion to dismiss. The Court evaluates whether

a complaint states a cognizable legal theory and sufficient facts in light of Federal

Rule of Civil Procedure 8(a), which requires a “short and plain statement of the

claim showing that the pleader is entitled to relief.” Although Rule 8 “does not

require ‘detailed factual allegations,’ . . . it [does] demand[] more than an unadorned,

the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other

words, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to

relief’ requires more than labels and conclusions, and a formulaic recitation of the

elements of cause of action will not do.” Twombly, 550 U.S. at 555 (citing Papasan

v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a complaint suffice if it tenders

‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678

(citing Twombly, 550 U.S. at 557). 

“To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. 

(quoting Twombly, 550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is

facially plausible when the facts pled “allow[] the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Id. (citing

Twombly, 550 U.S. at 556). That is not to say that the claim must be probable, but

there must be “more than a sheer possibility that a defendant has acted unlawfully.” 

Id. Facts “‘merely consistent with’ a defendant’s liability” fall short of a plausible

entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court

need not accept as true “legal conclusions” contained in the complaint. Id. This

review requires context-specific analysis involving the Court’s “judicial experience

and common sense.” Id. at 679 (citation omitted) “[W]here the well-pleaded facts

do not permit the court to infer more than the mere possibility of misconduct, the

complaint has alleged–but it has not ‘show[n]’–‘that the pleader is entitled to

relief.’” Id. Moreover, “for a complaint to be dismissed because the allegations give

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rise to an affirmative defense[,] the defense clearly must appear on the face of the

pleading.” McCalden v. Ca. Library Ass’n, 955 F.2d 1214, 1219 (9th Cir. 1990)

(internal quotations omitted), superseded by rule on other grounds as stated in

Harmston v. City & Cnty. of San Francisco, 627 F.3d 127 (9th Cir. 2010). 

Relevant here, the Court has a duty to liberally construe a pro se’s pleadings. 

See Karim-Panahi v. L.A. Police Dep’t, 839 F.2d 621, 623 (9th Cir. 1988). “Pro se

complaints are to be construed liberally and may be dismissed for failure to state a

claim only where it appears beyond doubt that the plaintiff can prove no set of facts

in support of his claim that would entitle him to relief.” Barret v. Belleque, 544 F.3d

1060, 1061-62 (9th Cir. 2008) (citation and internal quotation marks omitted). 

However, the court’s liberal interpretation of a pro se complaint may not supply

essential elements of the claim that were not pled. Ivey v. Bd. of Regents of Univ. 

Alaska, 673 F.2d 266, 268 (9th Cir. 1982). 

 If a court grants a motion to dismiss, it should also grant leave to amend

“‘unless [it] determines that the allegation of other facts consistent with the

challenged pleading could not possibly cure the deficiency.’” DeSoto v. Yellow

Freight Sys., Inc. 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co.

v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words,

where leave to amend would be futile, the Court may deny leave to amend. See id.;

Schreiber Distrib. Co., 806 F.2d at 1401. 

ANALYSIS

1. HOEPA Claim

Under HOEPA, a borrower may rescind a loan or recover damages if the

lender fails to disclose certain terms at closing. 15 U.S.C. § 1639(f). Here, Plaintiff

seeks to do both. JPMorgan moves to dismiss Plaintiff’s HOEPA claim on the

ground that it is barred by the statute of limitations. 

A borrower’s right to rescind her loan under HOEPA expires three days after

the transaction. 15 U.S.C. § 1635(a). The right can be extended up to three years,

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however, if the creditor fails to provide certain material disclosure and two copies of

the consumer’s notice of right to cancel. § 1635(f). If extended, the right to rescind

is completely extinguished at the end of the three year period. See Beach v. Ocwen

Fed. Bank, 523 U.S. 410, 412 (1998); see also Miguel v Country Funding Corp., 309

F.3d 1161, 1164 (9th Cir. 2002); Consumer Solutions REO, LLC v. Hillery, 658 F.

Supp. 2d 1002, 1008 (N.D. Cal. 2009) (holding that the same statute of limitations

for TILA claims applies to HOEPA claims). In other words, “equitable tolling does

not apply” to recission claims “even if the lender never made the required

disclosures.” Morfrin v Accredited Home Lenders, No. 09CV792-WQH-BLM, 2010

WL 391838, at *4 (S.D. Cal. Jan. 26, 2010) (citations omitted). 

A borrower alleging damages under HOEPA must bring his claim within one

year of the occurrence of the alleged violation. 15 U.S.C. § 1640(e); Consumer

Solutions REO, LLC, 658 F. Supp. 2d at 1008 (N.D. Cal. 2009). Under limited

circumstances, however, equitable tolling may apply to “suspend the limitations

period until the borrower discovers or ha[s] reasonable opportunity to discover the

fraud or non-disclosure that form the basis of the TILA action.” King v. California,

784 F.2d 910, 915 (9th Cir. 1986). A plaintiff who seeks equitable tolling must

establish that “despite all due diligence, he was unable to obtain vital information

bearing on the existence of the claim.” Santa Maria v. Pac. Bell, 202 F.3d 1170,

1178 (9th Cir. 2000) overruled on other grounds by Socop-Gonzalez v. INS, 272

F.3d 1176, 1194-96 (9th Cir. 2001) (en banc). 

Here, according to the deed of trust that secured the loan at issue, Plaintiff’s

loan transaction was completed on November 6, 2006. (RJN Ex. 2, at 24, ECF No.

3-2). Plaintiff did not file her lawsuit until August 16, 2012, at which time both the

one- and three-year limitation periods had lapsed by almost five years and three

years, respectively. (Notice of Removal, Ex. 1, ECF No. 1). Thus, Plaintiff’s

rescission claim is time-barred. Plaintiff’s damages claim is also time-barred, unless

equitable tolling applies. 

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At the pleading stage, a plaintiff seeking the benefit of equitable tolling must

allege facts sufficient to demonstrate that she could not have “discovered the alleged

violations by exercising reasonable diligence.” Copeland v. Lehman Bros. Bank,

No. 09CV1774-WQH-RBB, 2011 WL 9503, at *6 (S.D. Cal. Jan. 3, 2011). Plaintiff

does not plead any facts here that could plausibly establish equitable tolling, other

than alleging that Defendant made specific misrepresentations with regard to the

loan’s terms, including, but not limited to, the annual percentage rate. (Notice of

Removal, Ex. 1, ¶ 64, ECF No. 1). 

 Plaintiff fails to adequately plead equitable tolling because she does not offer

any facts suggesting that, despite due diligence, she was unable to obtain “vital

information bearing on the existence of [her] claim.” Santa Maria, 202 F.3d at

1178. Although Plaintiff alleges that Defendant made specific misrepresentations

about loan terms, Plaintiff does not explain why these actions prevented her from

suing for nearly six years after the loan transaction and nearly five years after the

statute of limitations had expired. Accordingly, equitable tolling does not apply here

and Plaintiff’s HOEPA claim for damages is also time-barred. 

3. FDCPA Claim

In her only other federal cause of action, Plaintiff alleges that Defendant

violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692. 

Plaintiff appears to contend that Defendant violated sections 1692(c) and 1692(d). 

Section 1692(c) prohibits a debt collector from communicating “with a consumer in

connection with any debt . . . at the consumer’s place of employment if the debt

collector knows or has reason to know that the consumer’s employer prohibits the

consumer from receiving such communication.” 15 U.S.C. § 1692(c)(a)(3). 

Section 1692(d) prohibits a debt collector from “engaging in any conduct . . . to

harass, oppress, or abuse any person in connection with the collection of a debt.” 15

U.S.C. § 1692(d). 

To state a claim under section 1692, the complaint must allege that the

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defendant is a “debt collector.” Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193,

1199 (C.D. Cal. 2008); see also Garcia v. Wachovia Mortg. Corp., 676 F. Supp. 2d

895, 911 (C.D. Cal. 2009). The FDCPA defines a “debt collector” as any person

who is engaged in a “business the principal purpose of which is the collection of any

debts or who regularly collects or attempts to collect any debt owed or asserted to be

owed . . . .” 15 U.S.C. § 1692(a). Creditors of the debt at issue are explicitly exempt

from the definition of “debt collector.” § 1692a(6)(F)(ii); Garcia, 676 F. Supp. 2d at

911. An allegation that the defendant is a “debt collector” must be more than a bare

legal conclusion and must be supported by facts demonstrating that the defendant is

either engaged in a business the principal purpose of which is to collect debts or

regularly collects or attempts to collect debt. Swain v. CACH, LLC, 699 F. Supp. 2d

1109, 1112-13 (N.D. Cal. 2009); see also Keshishian v. AFNI Inc., No. CV 12-4204

GAF (SSx), 2012 WL 5378819, at *2 (C.D. Cal. Nov. 1, 2012) (holding that “a

conclusory statement that a defendant is a debt collector is insufficient to survive

dismissal.”). 

Furthermore, to state a claim under section 1692(d), the plaintiff must also

sufficiently allege that Defendant was “attempting to collect on a debt.” Izenberg,

589 F. Supp. 2d at 1199. Defendants that are communicating with consumers

simply to provide information or to foreclose on a property are not “collecting on a

debt” for purposes of the FDCPA. Casault v. Federal Nat’l Mortg. Ass’n, No. CV

11-10520-DOC(RNBx), 2012 WL 6861701, at *9 (C.D. Cal. Nov. 26, 2012);

Durland v. Fieldstone Mortg. Co., No. 10CV125 JLS (CAB), 2011 WL 805924, at

*5 (S.D. Cal. Mar. 1, 2011) (citing Tina v. Countrywide Home Loans, Inc., No. 08

CV 1233 JM (NLS), 2008 WL 4790906, at *7 (S.D. Cal. Oct. 30, 2008)). A mere

conclusory allegation that a defendant was “collecting on a debt” will not survive a

motion to dismiss. Casault, 2012 WL 6861701 at *9. A complaint must instead

provide facts plausibly establishing that the defendant was attempting to collect on a

debt. Id.

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Here, Plaintiff alleges that Defendant engaged in a campaign of telephone

harassment at Plaintiff’s place of employment, “including but not limited to” phone

calls occurring on four different dates in October 2011. (Notice of Removal, Ex. 1,

¶ 66, EFC No. 1). Plaintiff further alleges that she notified Defendant verbally and

in writing that she could not receive collection calls at work and that Defendant

continued to call following the notice. (Id. at ¶¶ 67–68). Plaintiff also alleges that

Defendant caused a collection agency, Allied International Credit Corp. (“Allied”),

to engage in similar action against the plaintiff. (Id. at ¶ 69). Nonetheless, Plaintiff

fails to plead facts establishing that either JPMorgan or Allied are “debt collectors”

under the FDCPA; Plaintiff makes no allegations indicating that either Defendant or

Allied is principally engaged in the business of collecting debts or regularly collects

debts. Further, Plaintiff does not plead any facts plausibly establishing that the

purpose of the alleged phone calls was to collect on a debt. Therefore, Plaintiff’s

complaint fails to state a cognizable claim for violation of the FDCPA and must be

dismissed. 

4. State Law Claims

As the Court is dismissing Plaintiff’s federal claims, albeit with leave to

amend, the Court declines to exercise supplemental jurisdiction over the remaining

state law claims. See 28 U.S.C. § 1367(c)(3). Plaintiff’s state law claims are also

dismissed without prejudice. 

CONCLUSION

For the reasons explained above, the Court GRANTS Defendant’s motion to

dismiss. Plaintiff’s federal claims are DISMISSED WITHOUT PREJUDICE. 

Pursuant to 28 U.S.C. § 1367(c)(3), the Court declines to exercise supplemental

jurisdiction over Plaintiff’s remaining state law claims, and thus those claims are

also DISMISSED WITHOUT PREJUDICE. 

The Court will afford Plaintiff an opportunity to amend her complaint to state 

///

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a cognizable federal claim. Plaintiff may file an amended complaint addressing the

deficiencies noted by the Court within 21 days of the date that this Order is

electronically docketed. 

IT IS SO ORDERED.

DATED: July 10, 2013

Honorable Janis L. Sammartino

United States District Judge

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