Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-06310/USCOURTS-cand-3_18-cv-06310-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1331 Fed. Question

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

 BRIGETTE TAYLOR,

 Plaintiff,

 v.

BOSCO CREDIT, LLC, et al.,

 Defendants.

Case No. 18-cv-06310-JSC

ORDER RE: MOTION TO DISMISS

Re: Dkt. No. 55

Plaintiff Brigette Taylor brings this action challenging the wrongful foreclosure of her 

home. Defendants Bosco Credit, LLC and Franklin Credit moved to dismiss the action for failure 

to state a claim upon which relief can be granted.1 The Court previously held that Plaintiff’s 

claims were inadequately pled and dismissed them with leave to amend. Following amendment of 

the complaint, Defendants again moved to dismiss. (Dk. No. 55.) Having reviewed the parties’ 

briefing and having had the benefit of oral argument on June 13, 2019, the Court GRANTS the 

motion to dismiss the TILA claim without leave to amend. As the case was removed on federal 

question grounds, and the sole remaining federal claim has been dismissed, the Court will not 

address the state law claims unless and until Defendants establish that there is diversity 

jurisdiction.

//

//

//

 

1 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 

636(c). (Dkt. Nos. 8, 12, & 16). 

Case 3:18-cv-06310-JSC Document 68 Filed 06/27/19 Page 1 of 6
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

BACKGROUND

A. Second Amended Complaint Allegations

2

Plaintiff was the owner of real property at 2448 Covelite Way, Antioch, CA 94531 (“the 

Property”). (Second Amended Complaint (“SAC”) at ¶ 7.) Plaintiff purchased the Property in 

December 2005. (Id. at ¶ 8.) To secure the purchase, Plaintiff obtained a first lien loan from 

World Savings in the amount of $567,000 (“First Lien Loan”). (Id.) A year later Plaintiff 

obtained a second lien loan from Cal State 9 Credit Union in the amount of $150,000 (“Second 

Lien Loan”). (Id.)

On or around June 30, 2008, Bosco Credit LLC became the beneficiary of the Second Lien 

Loan. (Id. at ¶ 9.) Around the same time, Plaintiff was notified that Franklin Credit Management 

Corporation was taking over the management of her Second Lien Loan. (Id.) Plaintiff thereafter 

received monthly statements from Franklin from approximately June 2008 to April 2010. (Id. at ¶ 

10.) In April 2010, however, Plaintiff stopped receiving any communications from Franklin, 

including the monthly statements. (Id.) Her last statement indicated that her principal balance 

was $150,859.51 and the total amount of past due payments was $35,595.84. (Id.)

In September 2011, Plaintiff received a Home Affordable Modification Agreement through 

Wells Fargo Bank on the First Lien Loan. (Id. at ¶ 11.) The HAMP modification stated that 

Plaintiff’s First Lien Loan had been permanently modified and that after three years of payment 

under the modification, Wells Fargo would forgive $266,581.31 of the principal balance owed to 

it. (Id.) Franklin “was also a participant in the HAMP Program” and “[u]nder the HAMP Second 

Lien Modification Program (2MP) which Franklin was a participant in, after Plaintiff accepted the 

modification offer on the First Lien, Franklin was required to either (1) offer to modify the Second 

Line or (2) extinguish the Second Lien.” (Id.) Because Plaintiff received no further statements or 

correspondence from Franklin following her modification with Wells Fargo she believed that 

Franklin “had extinguished the Second Lien as required under HAMP.” (Id.)

On June 1, 2014, Plaintiff received a notice from Wells Fargo stating that because of her 

good standing and in accordance with the terms of the modification, $266,581.31 of her principal 

 

2 Although Plaintiff captions this as her First Amended Complaint, it is her Second Amended 

Complaint as Plaintiff previously amended her complaint when the case was proceeding in state 

court. Compare Dkt. No. 1-1 with Dkt. No. 25.

Case 3:18-cv-06310-JSC Document 68 Filed 06/27/19 Page 2 of 6
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

balance on the First Lien Loan had been forgiven. (Id. at ¶ 12.) Plaintiff’s principal balance on 

this First Lien Loan was therefore $390,000 as of June 1, 2014. (Id.) 

A little over a year later, in August 2015, Plaintiff received a Notice of Default saying that 

Plaintiff’s Second Lien Loan was approximately $110,000 in arrears. (Id. at ¶ 13.) Nearly six 

months later, on March 1, 2016, a Notice of Trustee’s Sale was recorded stating that Plaintiff 

owed $270,000 on the Second Lien Loan. (Id. at ¶ 14.) The following month, another Notice of 

Trustee’s Sale was recorded stating that Plaintiff owed $272,000 on the Second Lien Loan. (Id. at 

¶ 15.) In January 2018, Defendants recorded another Notice of Trustee’s Sale stating that Plaintiff 

owed $276,028.71 on the Second Lien Loan. (Id. at ¶ 16.) On January 31, 2018, the day the 

Trustee’s Sale was to take place, Bosco “purported to take title of Plaintiff’s property by paying 

$145,209.00 despite the fact that the property was worth at least $600,000 at this time.” (Id. at ¶ 

16.) A Trustee’s Deed Upon Sale was thereafter recorded with the Contra Costa County Recorder 

purporting to transfer title of the Property to Bosco. (Id. at ¶ 17.)

B. Procedural Background

Plaintiff filed this action in the Contra Costa Superior Court on March 27, 2018. She 

initially pled claims only as to Bosco/Franklin, but then on September 13, 2018, Plaintiff filed her 

First Amended Complaint (“FAC”) adding a claim as to Wells Fargo. (Dkt. No. 1-1.) The FAC 

pled six claims for relief. The first five as to Bosco/Franklin were for: (1) violation of the Real 

Estate Settlement Procedures Act (“RESPA”), 12 C.F.R. § 1026.41; (2) breach of contract; (3) 

negligence; (4) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200; and (5) 

cancellation of instrument. Her sixth claim, for declaratory relief, was brought only against Wells 

Fargo. Wells Fargo removed the action to this Court following service asserting federal question 

jurisdiction based on Plaintiff’s RESPA claim. (Dkt. No. 1.) Defendants thereafter separately 

moved to dismiss. All claims were dismissed with leave to amend. (Dkt. No. 23.)

Plaintiff filed her SAC on January 3, 2019. (Dkt. No. 25.) The SAC pleads five claims for 

relief: (1) violation of the Truth in Lending Act (“TILA”), 12 C.F.R. § 1026.7 as to Franklin; (2) 

breach of contract as to Franklin and Bosco; (3) unfair business practices in violation of Cal. Bus. 

& Prof. Code § 17200 as to Franklin and Bosco; (4) cancellation of instrument as to Franklin and 

Bosco, and (5) declaratory relief as to Wells Fargo and Bosco. Defendants again separately moved 

Case 3:18-cv-06310-JSC Document 68 Filed 06/27/19 Page 3 of 6
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

to dismiss. (Dkt. Nos. 55 & 57.) While the motions were pending, Plaintiff voluntarily dismissed 

her claim against Wells Fargo. (Dkt. No. 61.) 

DISCUSSION

Defendants Franklin and Bosco (hereafter “Defendants”) jointly move to dismiss 

Plaintiff’s claims for failure to state a claim upon which relief can be granted. In addition, 

Defendants move to dismiss Plaintiff’s TILA claim and her breach of contract claim as timebarred by the statute of limitations. 

A. TILA Claim

Plaintiff alleges that Franklin violated the TILA periodic statements requirement. See 12 

C.F.R. § 1026.7. In particular, Plaintiff contends that Franklin failed to provide her with periodic 

billing statements regarding the Second Lien Loan from April 2010 to January 2018 (the date of 

sale of the Property to Bosco). (SAC at ¶ 20.) Franklin moves to dismiss on the grounds that 

Plaintiff’s TILA claim is barred by the statute of limitations. Generally, an action for damages 

under TILA must be brought within one year of the alleged violation. 15 U.S.C. § 1640(e); King 

v. State of Cal., 784 F.2d 910, 913 (9th Cir. 1986). 

Franklin contends that the statute of limitations on Plaintiff’s TILA claim began to run in 

2010, when Plaintiff alleges she stopped receiving periodic statements. Plaintiff’s TILA claim is 

therefore barred as Plaintiff did not file her original action until nearly eight years later. See 

Conder v. Home Sav. Of Am., 680 F. Supp. 2d 1168, 1173-1174 (C.D. Cal. 2010) (dismissing 

TILA claim because it was not brought within one year of the alleged TILA violation). 

Plaintiff does not disagree with this analysis, but instead maintains that her claim is not 

time-barred under the continuing harm doctrine. Under Plaintiff’s theory, because Defendants’ 

unlawful conduct continued from April 2010 through Franklin’s foreclosure on her home in 

January 2018, and her complaint was filed in March of 2018, her claim was filed within the oneyear statute of limitations. In a related argument, she contends that every month Franklin did not 

provide a billing statement the statute began to run again; thus, argues Plaintiff, the statute last 

started to run in January 2018 when her home was foreclosed upon.

The fundamental flaw in Plaintiff’s theory is that it assumes Franklin had an obligation to 

provide her with periodic statements through January 2018. It did not. Plaintiff concedes that in 

Case 3:18-cv-06310-JSC Document 68 Filed 06/27/19 Page 4 of 6
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

August 2015 she received a Notice of Default from Franklin and that in March 2016 Defendants 

recorded a Notice of Trustees’ Sale. (SAC at ¶¶ 13,14.) The Notice of Default, or at least Notice 

of Trustee’s Sale, terminated Franklin’s duty to provide Plaintiff with periodic statements. Under 

12 C.F.R. 1026.5(b)(2)(i), “A periodic statement need not be sent for an account ... if delinquency 

collection proceedings have been instituted ....” Thus, as delinquency collection proceedings 

began at the latest in March 2016, and therefore Franklin no longer owed Plaintiff periodic 

statements after that date, the statute of limitations for Plaintiff’s 12 C.F.R. 1026.7 TILA claim

began to run at the latest from this date. The face of the complaint and matters of which the Court 

may take judicial notice therefore shows the TILA claim is time barred.

To the extent Plaintiff contends that the harm continued after the March 2016 Notice of 

Trustee’s Sale because Franklin continued to not provide the previously-required periodic 

statements, the Ninth Circuit has squarely rejected such argument in the TILA context. See King, 

784 F.2d at 914. While King involved a TILA disclosure that the lender was required to make at 

the time of consummation of the loan, its analysis applies equally to all TILA disclosures. The 

last time Franklin was required to make a TILA disclosure was—at the latest—March 2016. The 

continuing violation doctrine does not extend the statute of limitations beyond one year from that 

date because to do so would expose Franklin to a “prolonged and unforeseeable liability that 

Congress did not intend.” Id. 

As Plaintiff filed suit in March 2018, her claim is barred by the one-year statute of 

limitations in 15 U.S.C. § 1640(e). Plaintiff’s TILA claim is therefore dismissed. The dismissal 

shall be without leave to amend. Plaintiff does not claim equitable tolling, and with good reason. 

Assuming as true her allegation that the absence of billing statements led her to believe that her 

second mortgage had been forgiven in its entirety, just as part of her first mortgage was forgiven, 

she was on notice that Franklin did not agree her loan was forgiven when she received the Notice 

of Default in August 2015. Thus, as a matter of law she was on notice of her claim at the latest on 

that date—well more than a year before she filed this lawsuit. The TILA claim thus fails as a 

matter of law.

B. Jurisdiction 

Former defendant Wells Fargo removed this action from state court based on federal 

Case 3:18-cv-06310-JSC Document 68 Filed 06/27/19 Page 5 of 6
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

question jurisdiction. (Dkt. No. 1 at 2-3.) Plaintiff’s amended complaint filed after this action 

was removed also recites that subject matter jurisdiction is based on the presence of a federal 

question. (Dkt. No. 25 at 2.) The only federal question in the operative complaint is the TILA 

claim which this Order dismisses with prejudice. When a case is in federal court on federal 

question jurisdiction, and the federal claims are dismissed before trial, the trial court should 

decline to exercise supplemental jurisdiction and dismiss or remand as appropriate the remaining 

state law claims. United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966); see also 

Mitchell v. OneWest Bank, FSB, 2011 WL 13196483 *2 (N.D. Cal. Feb. 22, 2011) (declining to 

exercise supplemental jurisdiction over state law claims after dismissing federal claim in action 

challenging foreclosure). The Court therefore intends to remand the state law claims unless 

Defendants can show that there is diversity subject matter jurisdiction. The Court cautions that 

Bosco LLC is a citizen for jurisdiction purposes of every state in which its members are a citizen. 

See Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). 

Accordingly, on or before July 5, 2019, Defendants shall make a submission showing 

cause as to why this Court should not remand the remaining state law claims. If Plaintiff wishes to 

challenge Defendants’ assertion of diversity jurisdiction, she shall do so by July 12, 2019. If the 

Court’s diversity jurisdiction is not established by that date, the Court will remand the state law 

claims.

CONCLUSION

For the reasons stated above, Defendants’ motion to dismiss is GRANTED as to the TILA 

claim without leave to amend. The motion to dismiss the state law claims is held in abeyance 

pending the jurisdictional showing.

IT IS SO ORDERED.

Dated: June 27, 2019

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

Case 3:18-cv-06310-JSC Document 68 Filed 06/27/19 Page 6 of 6