Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-04307/USCOURTS-cand-3_09-cv-04307-2/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1640 Truth in Lending

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BEATA KUREK and CHRISTIAN

KUREK,

Plaintiff(s),

v.

COUNTRYWIDE HOME LOANS,

INC., et al.,

Defendant(s).

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No. C 09-4307 BZ

ORDER DENYING IN PART

DEFENDANTS’ MOTIONS TO

DISMISS

Before the Court are two motions to dismiss plaintiffs’

second amended complaint, one filed by defendants BAC Home

Loans Servicing, LP (formerly Countrywide), Mortgage

Electronic Registration Systems, Inc. (“MERS”), and Recontrust

Company, N.A. (collectively “the Countrywide defendants”) and

one filed by defendant Anna Wodkowska. Doc. Nos. 44, 46. For

the following reasons, the motions are DENIED IN PART AND

GRANTED IN PART.

Dismissal pursuant to Rule 12(b)(6) is appropriate if the

plaintiff is unable to articulate “enough facts to state a

claim to relief that is plausible on its face,” such that a

right to relief is raised “above the speculative level.” Bell

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1 To the extent Saldate v. Wilshire Credit Corp., 686

F.Supp.2d 1051 (E.D. Cal. 2010) holds differently, that case

relied on cases requiring tender where procedural

irregularities were alleged and did not analyze this issue

presumably because the motion to require tender was unopposed. 

In any event, that ruling is not binding on this Court and does

not appear to have been followed on this point.

2 Contrary to the Countrywide defendants’ position

raised at oral argument, Rosal v. First Federal Bank of Calif., 671 F.Supp.2d 1111 (N.D. Cal. 2009) does not stand for the

proposition a plaintiff must tender even when attacking the

validity of an underlying debt. That case relied upon cases

which require tender when the plaintiff alleges a procedural

irregularity, but does not speak to situations where a

plaintiff properly alleges that a loan was fraudulently

2

Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570, (2007). When

evaluating a motion to dismiss, the court accepts the facts as

stated by the nonmoving party and draws all reasonable

inferences in its favor. See Everest & Jennings, Inc. v. Am.

Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir. 1994). The

Court may also rely on documents which are alleged in the

complaint and are properly the subject of judicial notice. 

See U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). All

facts as alleged in the complaint must be accepted as true. 

The Countrywide defendants first move to dismiss the

entire complaint because plaintiffs did not allege proper

tender, citing no controlling authority that tender is

required at this stage. The cases cited by the Countrywide

defendants require tender where a plaintiff alleges some

procedural irregularity in a foreclosure proceeding.1

 The

bulk of the cases cited in the reply did not address whether

tender is required where a plaintiff alleges a substantive

irregularity as plaintiffs have done here by alleging their

signatures were forged on the underlying loan documents.2

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consummated. Id. at 54. Edejer v. DHI Mortgage Co., 2009 U.S.

Dist. Lexis 52900 (N.D. Cal. 2009) is similarly distinguishable

as the pro se plaintiff in that case neither alleged that the

underlying note was forged nor opposed the motion to dismiss. 

3 The Third Cause of Action seeks relief “BASED ON

FRAUDULENT MISREPRESENTATION/CONCEALMENT AGAINST DEFENDANTS

WODKOWSKA AND AMERITECH AND NEGLIGENT

3

“A tender may not be required where it would be inequitable to

do so . . . . Also, if the action attacks the validity of the

underlying debt, a tender is not required since it would

constitute an affirmative of the debt.” Onofrio v. Rice, 55

Cal. App. 4th, 413, 424 (1997) quoting 4 Miller & Starr, Cal.

Real Estate (2d ed. 1989) Deeds of Trust & Mortgages, § 9:154,

p. 508-512. Here, plaintiffs contest the validity of the

underlying debt and tender is therefore not required. 

In any event, “a trial judge ha[s] the discretion to

condition rescission on tender by the borrower of the property

of the property he has received from the lender.” Yamamoto v.

Bank of New York, 329 F.3d 1167, 1171 (9th Cir. 2003). 

(internal citations omitted). The judge’s discretion is

dependent upon “the equities present in a particular case, as

well as consideration of the legislative policy.” Id.

(internal citations omitted). Because of the seriousness of

the fraud and forgery allegations present here, to dismiss the

claim for failure to allege tender at this moment would be

premature. 

The Countrywide defendants next move to dismiss the third

cause of action because it “fails to specify which defendants

are responsible for which alleged wrongful acts and thus fails

to state a cause of action against moving parties.”3

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28 MISREPRESENTATION/CONCEALMENT AGAINST DEFENDANTS MERS, CHL, AND

DOES 1-30." Second Amended Complaint p. 13. 

4

Plaintiffs respond by stating that the third claim is not

directed at any of the moving parties, a statement that is

contradicted by the text of the complaint. To the extent that

the Countrywide defendants’ motion is unopposed, the third

cause of action is DISMISSED as to defendants MERS and BAC

Home Loans Servicing, LP. 

Both motions to dismiss argue that the TILA claims fail

because plaintiffs cannot credibly allege that the subject

loan was for primarily personal, family or household purposes. 

However, the complaint states that “most of the funds obtained

through the refinancing of the Subject Property were used to

help them survive and pay for their living, family and

household expenses.” Compl. ¶. 15. A challenge to the

factual validity of that statement is properly made by a 

summary judgment motion, not a 12(b)(6) motion.

All defendants move to dismiss the TILA damage and

rescission claims because they were not filed within the

applicable statute of limitations. Plaintiffs admitted as

much, but argue that the claims should be subject to equitable

tolling. “The limitations period in [TILA] runs from the date

of consummation of the transaction but the doctrine of

equitable tolling may, in the appropriate circumstances,

suspend the limitations period until the borrower discovers or

had reasonable opportunity to discover the fraud or

nondisclosures that form the basis for the TILA action.” King

v. State of Calif., 784 F.2d 910, 915 (9th Cir. 1986). I find

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that the complaint adequately states grounds for equitably

tolling the statute of limitations of the damage claim. See

Galindo v. Financo Financial, Inc., 2008 WL 4452344, 4

(N.D.Cal.,2008) (finding equitable tolling appropriate where

the borrower was unable to read and relied on the oral

representations of the lender). Here the complaint alleges

that plaintiffs were never given any of the required TILA

disclosures, and that the borrower plaintiffs did not speak

much English and relied on the representations of Wodkowska. 

Plaintiffs allege that they did not know of the lack of TILA

disclosures until April of 2009, five months before filing

suit in this case. 

Wodkowska argues that the operative date for determining

when the statute runs is at the consummation of the financing. 

That is correct; however, the running of that date is subject

to equitable tolling. Wodkowska also argues that the

plaintiffs did not exercise due diligence in uncovering any

potential TILA violations. This argument has some merit, but

is not ultimately persuasive. Based on the complaint, the

plaintiffs knew that they had not received their loan

documents well in advance of filing this suit. The complaint

states that Wodkowska “repeatedly refused” to provide the

documents. Compl. ¶ 17. Thus, plaintiffs had notice of a

TILA violation much earlier than April 2009. However, it was

not until the plaintiffs actually received their loan

documents that they became aware of the depth of the

misrepresentations and lack of disclosures that give rise to

their current TILA claims. Any contention that Wodkowska’s

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conduct was sufficient to put plaintiffs in a position where

they should have discovered the fraud earlier, is best dealt

with on summary judgment. 

Though the complaint is sparse with regards to specific

dates, I find that the allegations that the loan was never

authorized or consummated by the plaintiffs set this case

apart from other cases where the plaintiffs knowingly entered

into lending contracts. The motions to dismiss the fourth

cause of action are DENIED. 

Defendants also move to dismiss the fifth cause of

action, for rescission under TILA. The right of rescission

may last up to three years depending on when or if a lender

delivers a statement containing the requisite TILA

disclosures. Hefferman v. Bitton, 882 F.2d 379, 383 (9th

Cir.1989). However, the right of rescission is completely

extinguished after three years from the date of the loan's

consummation. 15 U.S.C. § 1635(f); Beach v. Ocwen Federal

Bank, 523 U.S. 410, 417-18 (1998). Equitable tolling does not

apply to an action for rescission under TILA. See Mays v.

U.S. Bank Nat. Ass., 2010 WL 318537, 4 (E.D.Cal. 2010) and

cases cited therein. Here, plaintiffs sent a notice of

rescission to defendants within the three year period, and

commenced suit within one year of giving notice. Compl., Ex.

G. The TILA rescission claim is therefore timely. Miguel v.

Country Funding Corp., 309 F.3d 1161, 1165 (9th Cir. 2002)

(explaining that plaintiffs have one year to file suit “once

cancellation has been wrongly refused”). The motions to

dismiss the fifth cause of action are DENIED. 

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IT IS ORDERED that the third cause of action is DISMISSED

as to defendants MERS and BAC Home Loans Servicing, LP. The

motions to dismiss the remaining causes of action are DENIED. 

Defendants SHALL file answers by August 10, 2010. 

Dated: July 26, 2010

 Bernard Zimmerman 

 United States Magistrate Judge

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