Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-02384/USCOURTS-azd-2_09-cv-02384-0/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 15:1601 Truth in Lending

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 All other Defendants were previously dismissed from this case. (Dkt. ## 9, 14.)

WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Jeannie T. Jones, 

Plaintiff, 

vs.

First National Bank of Arizona; Bank of

America; Title Pro LLC; Unknown Actor

1-3; Black and White Corporation 1-3, et

al., 

Defendants. 

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No. CV-09-2384-PHX-GMS

ORDER

Pending before the Court is Defendant Bank of America’s Motion to Dismiss1

 (Dkt.

# 8) and Plaintiff Jeannie T. Jones’s Motion for Leave to Amend (Dkt. # 12). For the

following reasons, the Court grants the Motion to Dismiss without prejudice and denies the

Motion for Leave to Amend without prejudice.

BACKGROUND

The initial Complaint alleges that Plaintiff had an ownership interest in a piece of real

property in Scottsdale, Arizona. In September 2005, Plaintiff apparently entered into a

lending agreement with Defendants, at which time Defendants allegedly concealed material

information relating to the agreement. The initial Complaint alleged five claims. The first

three claims seem to allege a federal constitutional violations based on purported denials of

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due process. The fourth claim may be construed as a conspiracy to commit lending fraud,

and the fifth claim alleges only that Defendants were “state actors.” The initial Complaint

also lists, without explanation, several federal statutes, including 42 U.S.C. §§ 1981, 1983,

1985, 1988. Additionally, the Complaint alludes to “Federal Truth in Lending”

requirements, although the initial Complaint does not explicitly delineate a claim based on

the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601, et seq.

The Amended Complaint alleges essentially the same facts as the initial Complaint.

The Amended Complaint again raises five federal claims. Like the initial Complaint, the first

three counts of the Amended Complaint discuss violations of the Constitution; the fourth

claim may be construed as a TILA claim; and the fifth claim contends that Defendants acted

under color of state law. The Amended Complaint also adds two state law claims based on

various Arizona mortgage and anti-deficiency statutes.

DISCUSSION

I. The Court Grants the Motion to Dismiss

To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil

Procedure 12(b)(6), a complaint must contain more than “labels and conclusions” or a

“formulaic recitation of the elements of a cause of action[;]” it must contain factual

allegations sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 555 (2007). While “a complaint need not contain detailed factual

allegations . . . it must plead ‘enough facts to state a claim to relief that is plausible on its

face.’” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1022 (9th Cir. 2008) (quoting

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.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly,

550 U.S. at 556). The plausibility standard “asks for more than a sheer possibility that a

defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent

with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of

entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 555) (internal citations omitted).

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Similarly, legal conclusions couched as factual allegations are not given a presumption of

truthfulness, and “conclusory allegations of law and unwarranted inferences are not sufficient

to defeat a motion to dismiss.” Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). 

Furthermore, “[a]lthough [the Court] construe[s] pleadings liberally in their favor, pro

se litigants are bound by the rules of procedure.” Ghazali v. Moran, 46 F.3d 52, 54 (citing

King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1986)). Even “a liberal interpretation of a . . .

complaint may not supply [the] essential elements of [a] claim that were not initially pled.”

Bruns v. Nat’l Credit Union Admin., 122 F.3d 1251, 1257 (9th Cir. 1997) (internal quotations

omitted).

A. Plaintiff Fails To State Claims Based on the Constitution or 42 U.S.C. §

1983.

Plaintiff raises several claims based on the Constitution, and the Court construes those

claims as being based on 42 U.S.C. § 1983. Plaintiff fails to state a claim because she has

not plausibly alleged that Defendant acted under color of state law in depriving her of her

constitutional rights. To state a claim under 42 U.S.C. § 1983, a plaintiff must allege the

violation of a right secured by the Constitution and laws of the United States, and must show

that the alleged deprivation was committed by a person acting under color of state law. West

v. Atkins, 487 U.S. 42, 48 (1988); see also United States v. Morrison, 529 U.S. 598, 621

(2000) (noting the “time-honored principle that the Fourteenth Amendment, by its very

terms, prohibits only state action” and explaining that the amendment “erects no shield

against merely private conduct”) (internal quotations omitted). While both the initial

Complaint and the Amended Complaint broadly assert that Defendant acted under color of

state law, the question of whether actions were committed under color of state law is a

question of law for the Court and may be decided at the motion-to-dismiss stage. Goldstein

v. Chestnut Ridge Volunteer Fire Co., 218 F.3d 337, 344 n. 7 (4th Cir. 2000). Bank of

America is a private entity, and Plaintiff has pled no facts supporting its legal conclusion that

Bank of America acted under color of state law. Furthermore, Plaintiff fails to allege facts

of a plausible violation of the Constitution or other relevant federal laws, as is required to

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 The Amended Complaint also mentions 42 U.S.C. § 407, which governs the

assignment of social security benefits. To the extent Plaintiff attempts to raise a claim based

on this statute, whether in combination with 42 U.S.C. § 1983 or otherwise, she fails to

explain the basis for such a claim.

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assert a Section 1983 claim. Accordingly, the Court dismisses any claim based on 42 U.S.C.

§ 1983.2

 

B. Plaintiff Has Not Stated a Claim Based on 42 U.S.C. §§ 1981, 1985, or 1988.

Without providing any factual support, Plaintiff mentions 42 U.S.C. §§ 1981, 1985,

and 1988 in her Complaint. None of these claims survives dismissal.

42 U.S.C. § 1981 “guarantees ‘all persons’ the right to ‘make and enforce contracts.’”

Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1122 (9th Cir. 2008) (citing 42

U.S.C. § 1981(a)). Section 1981 protects against only certain types of discrimination, such

as classifications based on a person’s race or citizenship. See Sagana v. Tenorio, 384 F.3d

731, 738–39 (9th Cir. 2004). Plaintiff has not alleged discrimination based on these or any

similar categories, and it is not otherwise apparent what, if any, Section 1981 claim she

raises.

Plaintiff also fails to raise a Section 1985 claim. To establish a conspiracy claim

under 42 U.S.C. § 1985(3), a plaintiff must allege: 

(1) a conspiracy; (2) for the purpose of depriving, either directly or indirectly,

any person or class of persons of the equal protection of the laws, or of equal

privileges and immunities under the laws; and (3) an act in furtherance of this

conspiracy; (4) whereby a person is either injured in his person or property or

deprived of any right or privilege of a citizen of the United States. 

Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1536 (9th Cir. 1992) (internal quotations

omitted). Further, the plaintiff must prove that the deprivation of a protected right was

motivated by some racial, or otherwise class-based, invidious discriminatory animus. Id.

Plaintiff has not alleged plausible facts supporting these elements, nor is it apparent from

Plaintiff’s pleadings how a § 1985 claim would lie. 

42 U.S.C. § 1988 has two relevant parts. Subsection (a) provides that in civil rights

cases where federal law is “deficient in the provisions necessary to furnish suitable remedies

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and punish offenses against the law,” state law applies if it is not otherwise inconsistent with

federal law. 42 U.S.C. § 1988(a); see Felder v. Casey, 487 U.S. 131, 139 (1988) (“[I]n

federal-court litigation[] where . . . the federal civil rights laws fail to provide certain rules

of decision thought essential to the orderly adjudication of rights, courts are occasionally

called upon to borrow state law.”) (citing § 1988). Subsection (b) provides that “[i]n any

action . . . to enforce a provision of section[] . . . 1983, . . . the court, in its discretion, may

allow the prevailing party . . . a reasonable attorney’s fee[.]” 42 U.S.C. § 1988(b). Plaintiff

has alleged no facts and given no explanation indicating why the application of state law is

necessary to furnish an appropriate civil rights remedy. And because Plaintiff has not alleged

a Section 1983 claim, Plaintiff has no claim under Section 1988 for attorney’s fees.

C. Plaintiff Fails To State a TILA Claim.

Both the original Complaint and the Amended Complaint assert a TILA claim, but

neither includes sufficient plausible facts to survive dismissal. The Complaint states only

that “Plaintiff did in fact learn that funds had been disbursed in amounts not reflected in

Federal Truth in Lending Disclosure Statement promoted by Defendants” and that

“Defendants acted to violate Plaintiff[’s] right to Due Process by providing misleading

information in the process of Lending.” (Dkt. # 1 at 2, 3.) Upon review of the Amended

Complaint, it appears that the only statement relevant to a TILA claim is the following,

“Defendant . . . did insert[] itself in ways that denied Plaintiff the ability to challenge critical

factors following newly discovered evidence under Truth in Lending Act, denied due process

lending document; fraudulent conveyance of real proper[ty] at heart is actual[.]” These

statements lack sufficient factual detail to raise plausible claims under Iqbal, 129 S. Ct. at

1949, and Twombly, 550 U.S. at 556. Plaintiff’s Response likewise provides no clarification

of what type of TILA claim she wishes to raise, what type of misleading information was

given, what disbursement of funds occurred, or what newly-discovered evidence supports

a TILA claim. 

In addition to the lack of factual detail, the TILA claim likely fails on statute-oflimitations grounds. The statute of limitations for a TILA damage claim requires that a

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Plaintiff bring an action “within one year from the date of the occurrence of the violation.”

15 U.S.C. § 1640(e). “[T]he limitations period . . . runs from the date of consummation of

the transaction.” King v. California, 784 F.2d 910, 915 (9th Cir. 1986), cert denied, 484 U.S.

802 (1987). The Complaint alleges that “[o]n September 1, 2005, Defendants induced

Plaintiff to accept a binding of real property.” (Dkt. # 1 at 2.) Assuming this statement refers

to the loan transaction, Plaintiff would have had to bring her claim one year later—by August

31, 2006. See 15 U.S.C. § 1640(e). Plaintiff, however, filed this case on November 13,

2009—more than three years after the limitations period had expired.

To the extent Plaintiff may argue that her claim was timely due to equitable tolling

based on Defendants’ fraudulent concealment facts supporting a cause of action, Plaintiff

would have to meet the particularity pleading requirements of Federal Rule of Civil

Procedure 9(b). See Wasco Prods., Inc. v. Southwall Tech., Inc., 435 F.3d 989, 991–92 (9th

Cir. 2006) (requiring a plaintiff to meet Rule 9(b) pleading standards where plaintiff’s tolling

argument sounds in fraud); Guerrero v. Gates, 442 F.3d 697, 707 (9th Cir. 2006) (affirming

dismissal on statute of limitations grounds because plaintiff “failed to plead with

particularity” any facts supporting tolling). Federal Rule Civil Procedure 9(b) requires that

a plaintiff “state with particularity the circumstances constituting fraud or mistake.” Fed. R.

Civ. P. 9(b). Under this rule, a plaintiff “must state the time, place, and specific content of

the false representations as well as the identities of the parties to the misrepresentation.”

Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986); see

also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (“Averments of

fraud must be accompanied by the who, what, when, where, and how of the misconduct

charged.”) “The plaintiff must set forth what is false or misleading about a statement, and

why it is false.” Vess, 317 F.3d at 1106 (internal quotations omitted). In addition to these

requirements, a plaintiff must allege that he or she acted with due diligence to ascertain the

truth. FEC v. Williams, 104 F.3d 237, 241 (9th Cir. 1996) (holding that under the doctrine

of fraudulent concealment, a plaintiff must establish “due diligence by the plaintiff until

discovery” of the concealment of operative facts); Collins v. Nationalpoint Loan Servs., 2009

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3

 Although the Court does not address any state law claims, a cursory reading of both

the Complaint and the Amended Complaint indicates that, to the extent Plaintiff intends to

raise state law claims, those claims may also suffer from insufficient pleading requirements

under Twombly and Iqbal.

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WL 3213979 at *3 (S.D. Cal. Sept. 29, 2009) (rejecting tolling argument and dismissing

TILA claim because the plaintiff did not allege facts supporting due diligence).

II. The Court Declines To Exercise Pendant Jurisdiction.

When a district court “dismisses [federal claims] leaving only state claims for

resolution, the court should decline jurisdiction over the state claims and dismiss them

without prejudice.” Les Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 509 (9th

Cir. 1989). Only in the “unusual” case should federal courts retain jurisdiction over the state

law claims. Gini v. Las Vegas Metro. Police Dept., 40 F.3d 1041, 1046 (9th Cir. 1994). In

this determination, courts consider “economy, convenience, fairness, and comity.”

Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988). The Court has determined that

the Complaint fails to state a cognizable federal claim. To the extent the Complaint may be

construed to raise any state law claims, therefore, those claims are dismissed without

prejudice. Economy, convenience, and fairness all favor dismissal of any state law claims,

as this case is early in the proceedings and the parties offer no reason why federal jurisdiction

is necessary to a fair resolution of this case.3

III. The Court Denies the Motion for Leave to Amend Without Prejudice.

The Court need not grant a motion to amend if amendment would be futile.

Gabrielson v. Montgomery Ward & Co., 785 F.2d 762, 766 (9th Cir. 1986). A motion for

leave to amend is futile if it can be defeated on a motion for summary judgment. 785 F.2d

at 766. “However, a proposed amendment is futile only if no set of facts can be proved under

the amendment to the pleadings that would constitute a valid and sufficient claim or

defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). Here, the

proposed Amended Complaint adds no facts that make any of its federal claims plausible.

To the contrary, the Amended Complaint includes legal conclusions, lacks factual detail, and

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4

 To the extent the Amended Complaint alleges state law claims, the Court need not

consider those claims because the Court has declined pendent jurisdiction over any such

claims.

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fails to isolate cognizable or discernible legal authority supporting any of Plaintiff’s claims.

Accordingly, the Court denies the Motion for Leave to Amend Without Prejudice.4

Although the Court finds that the proposed Amended Complaint is insufficient, denial

of leave to amend is without prejudice, and Plaintiff may again seek leave to amend in

accordance with the Federal and Local Rules of Civil Procedure. Should Plaintiff again seek

to amend, she must state what rights she believes were violated, the name of the person,

persons, or entities who committed each violation, exactly what that individual did or failed

to do, how the action or inaction of that person is connected to the violation of Plaintiff’s

rights, and what specific injury Plaintiff suffered because of the other person’s conduct. See

Rizzo v. Goode, 423 U.S. 362, 371–72, 377 (1976). Each claim of an alleged violation must

be set forth in a separate count. The proposed complaint must also state why the federal

court has jurisdiction over Plaintiff’s claims. Any amended complaint filed by Plaintiff must

conform to the requirements of Rule 8(a) and (d)(1) of the Federal Rules of Civil Procedure,

as well as the pleading standards set forth in Iqbal, 129 S. Ct. at 1949, and Twombly, 550

U.S. at 556. 

IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss (Dkt. # 8) is

GRANTED WITHOUT PREJUDICE.

/ / /

/ / /

/ / /

/ / /

/ / /

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IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to Amend (Dkt.

# 12) is DENIED WITHOUT PREJUDICE.

IT IS FURTHER ORDERED that this action is dismissed without prejudice. The

Clerk of the Court is directed to terminate this action.

DATED this 17th day of June, 2010.

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