Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01314/USCOURTS-azd-2_09-cv-01314-3/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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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Holly Martenson, 

Plaintiff, 

vs.

RG Financing, et al., 

Defendants. 

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No. CV-09-01314-PHX-NVW

ORDER

[NOT FOR PUBLICATION]

Before the Court is JL Financing and RG Financing’s Motion for Partial Summary

Judgment on Counts 1, 2, 4, 6, 8 and 10 of Plaintiff’s Second Amended Complaint and

Plaintiff’s Motion for Leave to File Third Amended Complaint and Supplemental

Complaint (Docs. 73, 90). Plaintiff’s motion to amend is unopposed and therefore will be

granted.

I. Legal Standard for Summary Judgment

Summary judgment is proper if the evidence shows there is no genuine issue as to

any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.

Civ. P. 56(c). On summary judgment, the nonmoving party’s evidence is presumed true,

and all inferences from the evidence are drawn in the light most favorable to the

nonmoving party. Eisenberg v. Ins. Co. of North America, 815 F.2d 1285, 1289 (9th Cir.

1987). 

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II. Background

On November 29, 2006, Martenson refinanced her home loan through a mortgage

broker, Buy American Real Estate, by executing a Deed of Trust and Note for which JL

Financing is the beneficiary and lender. RG Financing is the loan servicer for

Martenson’s loan. In May 2007, Martenson fell behind on her loan payments, and on

June 8, 2009, the property subject to the Deed of Trust was sold at a trustee’s sale to JL

Financing. The factual and procedural history of this case is described in previous Orders

(Docs. 56, 97).

III. Analysis

JL Financing and RG Financing move for partial summary judgment on Counts 1,

2, 4, 6, 8, and 10 of the Second Amended Complaint. Martenson has withdrawn Count 1

(Truth in Lending Act) and Count 10 (Quiet Title) of the Second Amended Complaint in

her proposed Third Amended Complaint. 

Count 2 of the Second Amended Complaint (Count 1 of the Third Amended

Complaint) alleges that JL Financing violated the Real Estate Settlement Procedures Act

(“RESPA”) by making or authorizing payment of “loan discount fees” to third parties that

were actually referral fees or kickbacks unrelated to services actually performed. See 12

U.S.C. § 2607(a), (b). The one-year limitations period for RESPA claims for illegal

kickbacks and unearned fees expired November 29, 2007, and Martenson’s response to

the motion for partial summary judgment does not provide any evidence to support

equitable tolling of the limitations period. See 12 U.S.C. §§ 2607, 2614. 

Count 4 of the Second Amended Complaint (Count 3 of the Third Amended

Complaint) is titled “Unconscionability” against Buy American, JL Financing, and RG

Financing. It alleges that “Defendants” made this loan to Martenson without regard to

her ability to repay, took advantage of her by processing a loan knowing it could not get

the terms she expected, and did not explain the closing documents to her. It does not

allege any wrongdoing by JL Financing or RG Financing specifically. Count 6 of the

Second Amended Complaint (Count 5 of the Third Amended Complaint), titled

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“Predatory Lending,” alleges that “RG Financing and JL Financing engaged in a course

of conduct which included breach of contractual duties owed plaintiff under the Deed of

Trust and dishonoring of loan modification/payment agreements.” Count 8 of the Second

Amended Complaint (Count 7 of the Third Amended Complaint) alleges breach of the

covenant of good faith and fair dealing against JL Financing and RG Financing. In

defense of these counts against summary judgment, Martenson contends that she “was a

terribly unsophisticated borrower,” she relied extensively on Buy American in the loan

transaction, the loan terms were one-sided, she was unaware of the volatile nature of the

loan payments that would be due as her interest rate adjusted, “Defendants hardly

facilitated plaintiff’s payments on the loan,” and Defendants accepted payments from

Martenson (after she was in default) without informing her they would postpone the sale

of her home only a few days. Martenson does not dispute, however, that during the loan

transaction she did not deal with JL Financing or RG Financing, only Buy American. She

does not dispute that she made several loan payments to RG Financing. She does not

dispute that she defaulted on her loan before the interest rate adjusted. Martenson has

provided no evidence that supports finding JL Financing or RG Financing liable for

unconscionability, predatory lending, or breach of the covenant of good faith and fair

dealing.

Therefore, presuming Martenson’s evidence is true and drawing all inferences in

her favor, the evidence shows there is no genuine issue as to any material fact, and JL

Financing and RG Financing are entitled to judgment as a matter of law on Counts 1, 2, 4,

6, 8, and 10 of the Second Amended Complaint. 

IT IS ORDERED that Plaintiff’s Motion for Leave to File Third Amended

Complaint and Supplemental Complaint (Doc. 90) is granted.

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IT IS FURTHER ORDERED that JL Financing and RG Financing’s Motion for

Partial Summary Judgment on Counts 1, 2, 4, 6, 8 and 10 of Plaintiff’s Second Amended

Complaint (Doc. 73) is granted.

DATED this 21st day of September, 2010.

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