Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-01789/USCOURTS-cand-3_10-cv-01789-0/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 28:1332 Diversity-Account Receivable

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United States District Court 

For the Northern District of California 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

ANNIE JACOB, TRUSTEE OF THE 

RESTATEMENT OF THE ANNIE JACOB 

SEPARATE PROPERTY TRUST, 

Plaintiff, 

v. 

AURORA LOAN SERVICES, CRAIG 

WILDRICK, and DOES 1-100, 

Defendants. 

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Case No. 10-1789 SC 

ORDER GRANTING MOTION TO 

DISMISS

I. INTRODUCTION

 Now before the Court is a Motion to Dismiss filed by 

Defendants Aurora Loan Services LLC ("Aurora") and Craig Wildrick 

("Wildrick"), Aurora's Chief Operating Officer (collectively, 

"Defendants"). Docket No. 5 ("Motion"). Plaintiff Annie Jacob, 

Trustee of the Restatement of the Annie Jacob Separate Property 

Trust ("Plaintiff") filed an untimely Opposition. Docket No. 6. 

Defendants filed a Reply, which includes a request for the Court to 

strike Plaintiff's Opposition. Docket No. 8. Although the Court 

DENIES the request to strike, the Court GRANTS Defendants' Motion 

to Dismiss. 

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II. BACKGROUND

 This action concerns alleged illegal business practices 

relating to a residential mortgage loan. Docket No. 1 ("Notice of 

Removal") Ex. A ("Compl.") ¶ 13. On August 3, 2005, Annie Jacob 

"executed a stack of loan documents for a Pay Option Arm Loan." 

Id. ¶ 21. The loan for $1,355,000 was secured by a Deed of Trust, 

dated August 3, 2005, which was recorded on August 17, 2005. 

Request for Judicial Notice ("RJN") Ex. A ("2005 Deed of Trust").1

 

In this 2005 Deed of Trust, Annie Jacob granted and conveyed to the 

trustee, with power of sale, the property located at 1135 

Tournament Drive, Hillsborough, California 94010 ("the Hillsborough 

Property"). Id. at 3. On August 24, 2006, Annie Jacob transferred 

the Hillsborough Property to Annie Jacob, Trustee of the 2006 

Restatement of the Annie Jacob Separate Property Trust. RJN Ex. E 

("Trust Transfer Deed"). 

On March 17, 2009, Quality Loan Services Corp, as agent for 

the beneficiary, issued a Notice of Default and Election to Sell 

Under Deed of Trust. RJN Ex. B ("Notice of Default"). On January 

26, 2010, Plaintiff was sent a Notice of Trustee's Sale. RJN Ex. C 

 

1

 Defendants request the Court to take judicial notice of various 

documents, including two Deeds of Trust, a Notice of Default, a 

Notice of Trustee's Sale, and a Trust Transfer Deed, each of which 

was recorded in the San Mateo County Recorder's Office. RJN Exs. 

A-E. Docket Nos. 5-1, 5-2. The Court may take judicial notice of 

facts not subject to reasonable dispute. Fed. R. Evid. 201. 

Courts may take judicial notice of matters of public record. Hotel 

Emps. & Rest. Emps. Local 2 v. Vista Inn Mgmt. Co., 393 F. Supp. 2d 

972, 978 (N.D. Cal. 2005). The Court may consider these public 

documents without converting the Motion to Dismiss into a motion 

for summary judgment. See Lee v. City of Los Angeles, 250 F.3d 

668, 688-89 (9th Cir. 2001). Therefore, the Court GRANTS the RJN, 

and takes judicial notice of these public documents. The Court 

also takes judicial notice of the fact that, in 2005, Fannie Mae 

increased the single-family mortgage loan limit to $359,650. RJN 

Ex. F ("Fannie Mae News Release"). 

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("Notice of Trustee's Sale"). The sale was due to occur on 

February 26, 2010. Id.

 On February 23, 2010, Plaintiff filed a Complaint in the 

Superior Court of California for the County of San Mateo. See

Compl. Plaintiff accuses Defendants of illegal conduct associated 

with her loan, and she asserts thirteen causes of action against 

Defendants: (1) Violation of the Home Ownership Equity Protection 

Act ("HOEPA"); (2) Violation of the Real Estate Settlement 

Procedures Act ("RESPA"); (3) Violation of the Federal Truth in 

Lending Act ("TILA"); (4) Fraudulent Misrepresentation; (5) Breach 

of Fiduciary Duty; (6) Unjust Enrichment; (7) Civil Conspiracy; (8) 

Violation of the Racketeer Influenced and Corrupt Organizations Act 

(RICO); (9) Quiet Title; (10) Violation of the California Business 

and Professions Code Section 17200; (11) Usury; ((12) Predatory 

Lending; and (13) Intentional Infliction of Emotional Distress. 

Compl. ¶¶ 48-114. In her Prayer for Relief, Plaintiff requests the 

Court to deed the Hillsborough Property to her, to enjoin 

Defendants from attempting to foreclose on the property, and she 

also seeks $15,000,000 in punitive damages. Id. ¶ 115. 

 On April 26, 2010, Defendants removed Plaintiff's suit to this 

Court. Although a defendant has thirty days from service of a 

complaint to remove a case to federal court, see 28 U.S.C. § 

1446(b), Defendants state they have not been served. Notice of 

Removal ¶ 11. As such, the Notice of Removal is not untimely. 

Defendants contend this action could have been filed originally in 

federal court on both diversity and federal question grounds. Id.

¶¶ 4-5. Defendants now move to dismiss Plaintiff's Complaint. 

Mot. at 2. 

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III. LEGAL STANDARD

 A motion to dismiss under Federal Rule of Civil Procedure 

12(b)(6) "tests the legal sufficiency of a claim." Navarro v. 

Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal can be based 

on the lack of a cognizable legal theory or the absence of 

sufficient facts alleged under a cognizable legal theory. 

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 

1990). Allegations of material fact are taken as true and 

construed in the light most favorable to the nonmoving party. 

Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 

1996). "[T]he tenet that a court must accept as true all of the 

allegations contained in a complaint is inapplicable to legal 

conclusions. Threadbare recitals of the elements of a cause of 

action, supported by mere conclusory statements, do not suffice." 

Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. 

Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007)). "When there are 

well-pleaded factual allegations, a court should assume their 

veracity and then determine whether they plausibly give rise to an 

entitlement to relief." Iqbal, 129 S.Ct. at 1950. A motion to 

dismiss should be granted if the plaintiff fails to proffer "enough 

facts to . . . nudge[] their claims across the line from 

conceivable to plausible." Twombly, 127 U.S. 1974. 

IV. DISCUSSION

A. Untimely Filed Opposition

 The Court begins by noting that Plaintiff's Opposition brief 

was filed late. While it should have been filed not less than 

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twenty-one days before the scheduled hearing date, see Civ. L.R. 7-

3(a), the brief was filed on June 1, 2010, only ten days before the 

scheduled hearing. According to Plaintiff's attorney, the brief 

was late due to a calendaring error in his office. Bonner Decl. ¶ 

5.2

 Although the Court does not condone the conduct of Plaintiff's 

attorney, in the interest of fairness to Plaintiff, the Court will 

consider the arguments contained in the Opposition brief. 

Therefore the Court DENIES Defendants' request for the Court to 

strike Plaintiff's Opposition. 

B. Statute of Limitations

Having reviewed the pleadings and arguments, the Court finds 

that many of Plaintiff's causes of action are time-barred. 

1. Federal Claims 

Plaintiff's first three causes of action allege violations of 

HOEPA, TILA, and RESPA. Compl. ¶¶ 48-65. The statute of 

limitations is one year for damages under TILA, and three years for 

rescission under TILA. 15 U.S.C. §§ 1635(f), 1640(e). HOEPA, 

which is a part of TILA, shares its one-year statute of 

limitations. 15 U.S.C. § 1640(e). RESPA has a one-year statute of 

limitations for violations of 12 U.S.C. §§ 2607 and 2608, and a 

three-year statute of limitations for violations of 12 U.S.C. § 

2605. 12 U.S.C. § 2614. 

Here, the loan was entered into on August 3, 2005. 2005 Deed 

of Trust at 1. Plaintiff's Complaint was filed four-and-a-half 

years later on February 23, 2010. See Compl. Therefore, 

Plaintiff's HOEPA, TILA, and RESPA claims would appear to be time-

 

2

 A. Cabral Bonner, attorney for Plaintiff, filed a declaration in 

opposition to Defendants' Motion. Docket No. 7. 

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barred. Plaintiff responds that the statute of limitations should 

be tolled on equitable grounds. Opp'n at 2-3. "Equitable tolling 

may be applied if, despite all due diligence, a plaintiff is unable 

to obtain vital information bearing on the existence of his claim." 

Santa Maria v. Pacific Bell, 202 F.3d 1170, 1178 (9th Cir. 2000). 

Equitable tolling "focuses on excusable delay by the Plaintiff." 

Id. The plaintiff bears the burden of establishing that she 

pursued her rights diligently and that some extraordinary 

circumstance stood in her way. Pace v. DiGuglielmo, 544 U.S. 408, 

418 (2005). 

Here, in defense of her contention that equitable tolling 

applies, Plaintiff points to paragraphs 32 to 34 of her Complaint, 

where she alleges that Defendants failed to make disclosures 

required by TILA and RESPA, and that Defendants failed to provide 

her with a HUD-1 Settlement Statement. See Compl. ¶¶ 32-34; Opp'n 

at 2-3. The Court finds that Plaintiff cannot rely on the same 

factual allegations to show that Defendants violated federal 

statutes and to toll the limitations periods that apply to those 

statutes. Otherwise, equitable tolling would apply in every case 

where a plaintiff alleges violations of TILA, HOEPA, and RESPA, and 

the statutes of limitations would be meaningless. 

The alleged facts of this case are not so extraordinary as to 

warrant equitable tolling. "[A]s a general rule the limitations 

period starts at the consummation of the transaction." King v. 

State of California, 784 F.2d 910, 915 (9th Cir. 1986). The Court 

sees no reason to depart from the general rule. Plaintiff's 

transaction was consummated on August 3, 2005. See 2005 Deed of 

Trust at 1. This loan is not the first adjustable-rate loan that 

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Plaintiff had taken out using the Hillsborough Property as 

security. See 2003 Deed of Trust. Given her prior experience with 

loan documents of this type, Plaintiff should have been able to 

discover the alleged deficiencies in Defendants' disclosures during 

the applicable limitations periods. Instead, her Complaint was not 

filed until February 23, 2010, three days before the scheduled 

foreclosure sale of the Hillsborough property. Plaintiff has had 

an opportunity to explain why equitable tolling applies, and the 

Court is not persuaded. Hence, the Court DISMISSES her TILA, HOEPA 

and RESPA claims WITHOUT LEAVE TO AMEND. 

Plaintiff’s eighth cause of action asserts a RICO claim 

against Defendants. Compl. ¶¶ 88-93. The statute of limitations 

for civil RICO claims is four years. Agency Holding Corp. v. 

Malley-Duff & Associates, Inc., 483 U.S. 143, 156 (1987). Here, 

Plaintiff signed her loan documents on August 3, 2005, more than 

four years before she filed this lawsuit. See 2005 Deed of Trust; 

Compl. Having established no basis for equitable tolling, the 

Court DISMISSES Plaintiff's civil RICO cause of action WITHOUT 

LEAVE TO AMEND. 

2. Fraudulent Concealment and Breach of Fiduciary Duty 

Plaintiff's fourth cause of action alleges Defendants 

concealed and misrepresented material information, Compl. ¶¶ 66-72, 

and Plaintiff's fifth cause of action alleges Defendants breached 

their fiduciary duties by "fraudulently inducing Plaintiff to enter 

into mortgage transactions." Compl. ¶¶ 73-77. The statute of 

limitations for an action grounded in fraud is three years. Cal. 

Civ. Code § 338(d). In response, Plaintiff provides no persuasive 

basis for tolling the limitations period, and Plaintiff appears to 

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be quoting paragraphs from a complaint filed in a different 

lawsuit. See Opp'n at 4 (referring to allegations against 

"DEFENDANT REDWOOD MORTGAGE CORP."). The Court DISMISSES 

Plaintiff's fraud-based claims WITHOUT LEAVE TO AMEND. 

3. Business and Professions Code Section 17200 

Plaintiff's tenth cause of action alleges a violation of 

California's Business and Professions Code Section 17200. Compl. 

¶¶ 100-01. "Any action to enforce any cause of action pursuant to 

this chapter shall be commenced within four years after the cause 

of action accrued." Cal. Bus. & Prof. Code § 17208. Plaintiff 

filed her Complaint more than four years after she entered into the 

loan at issue. In her Opposition, Plaintiff does not challenge 

Defendants' contention that this claim is time-barred. See Opp'n 

at 5-6. The Court DISMISSES Plaintiff's tenth cause of action 

WITHOUT LEAVE TO AMEND. 

4. Intentional Infliction of Emotional Distress

Plaintiff's thirteenth claim is for intentional infliction of 

emotional distress. Compl. ¶¶ 111-14. The statute of limitations 

for this claim is two years. Cal. Code Civ. Proc. § 335.1. 

Plaintiff does not challenge Defendants' contention that this claim 

is time-barred. See Opp'n at 6. The Court DISMISSES Plaintiff's 

thirteenth cause of action WITHOUT LEAVE TO AMEND. 

C. Unjust Enrichment

Plaintiff's sixth cause of action is "Unjust Enrichment." 

Comp. ¶¶ 78-82. To state a claim for unjust enrichment, Plaintiff 

must plead the "receipt of a benefit and the unjust retention of 

the benefit at the expense of another." Lectrodryer v. Seoulbank, 

77 Cal. App. 4th 723, 726 (Ct. App. 2000). Plaintiff alleges that 

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Defendants were unjustly enriched by charging fees unrelated to the 

settlement of her loans, and by "charging a higher interest rate, 

fees, rebates, kickbacks, profits, and gains and YSP fee unrelated 

to the settlements [sic] services provided at closing." Compl. ¶¶ 

79-80. Plaintiff does not explain these vague allegations in any 

detail, nor does she explain how they apply to Aurora or Wildrick, 

who played no part in the closing of Plaintiff's loan. These 

allegations do not give rise to a plausible claim for unjust 

enrichment. The Court therefore DISMISSES Plaintiff's sixth cause 

of action for unjust enrichment WITH LEAVE TO AMEND. 

D. Civil Conspiracy

Plaintiff's seventh cause of action is "Civil Conspiracy." 

Compl. ¶¶ 83-87. A conspiracy is not an independent cause of 

action, but "a legal doctrine that imposes liability on persons 

who, although not actually committing a tort themselves, share with 

the immediate tortfeasors a common plan or design in its 

perpetration." Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 

7 Cal. 4th 503, 510-11 (1994). Liability for civil conspiracy 

generally requires three elements: (1) formation of a conspiracy 

(an agreement to commit wrongful acts); (2) operation of a 

conspiracy (commission of the wrongful acts); and (3) damage 

resulting from operation of a conspiracy. Id. at 511. A civil 

conspiracy is activated by the commission of an underlying wrongful 

act. Id.

Here, Plaintiff alleges that "[i]n connection with the 

application for and consummation of the mortgage loans" and "in 

connection with the trustee sale," Defendants agreed "to engage in 

actions and a course of conduct designed to further an illegal act 

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or accomplish a legal act by unlawful means." Compl. ¶ 84. 

Plaintiff alleges Defendants engaged in a "conspiracy to defraud 

for the common purposes of accruing economic gains for themselves 

at the expense of and detriment to the Plaintiff." Id. ¶ 85. 

These allegations are mere legal conclusions, and therefore the 

Court does not assume their truth. See Ashcroft v. Iqbal, 129 

S.Ct. at 1949. Plaintiff's allegations suggest the underlying 

wrongful act is fraud, but the Court has already dismissed 

Plaintiff's fraud claim as time-barred. The Court DISMISSES 

Plaintiff's civil conspiracy claim WITH LEAVE TO AMEND. 

E. Quiet Title

Plaintiff's ninth cause of action seeks to quiet title to the 

Hillsborough property in her favor. Compl. ¶¶ 94-99. In 

California, an action to quiet title may be brought "to establish 

title against adverse claims to real or personal property or any 

interest therein." Cal. Code Civ. Proc. § 760.020. In an action 

to quiet title, the plaintiff must at least allege an ability to 

tender the amount due. See, e.g., Garcia v. Wachovia Mortg. Corp., 

676 F. Supp. 2d 895, 914 (C.D. Cal. 2009) (citing Arnolds Mgmt. 

Corp. v. Eischen, 158 Cal. App. 3d 575, 578, (Ct. App. 1984)). 

Plaintiff's Complaint contains no such allegation. Accordingly, 

the Court DISMISSES Plaintiff's ninth cause of action WITH LEAVE TO 

AMEND. 

F. Usury

Plaintiff's eleventh cause of action alleges a violation of 

California's usury laws. Compl. ¶¶ 102-07. To state a claim for 

usury, a plaintiff must allege that the interest rate exceeded the 

statutory maximum. Ghirardo v. Antonioli, 8 Cal. 4th 791, 798 

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(1994). The California Constitution caps interest rates on secured 

loans at ten percent per year, or five percent over the amount 

charged by the Federal Reserve, whichever is greater. Cal. Const. 

art. XV, § 1(2). 

Plaintiff alleges that the interest charged was greater than 

permitted by state law. Compl. ¶ 104. However, on the second page 

of Plaintiff's Adjustable Rate Rider, it states that her interest 

rate can never exceed 9.95 percent. 2005 Deed of Trust. In her 

Opposition, Plaintiff does not respond to Defendants' point that 

her interest rate could not exceed the maximum permitted by the 

California Constitution, but instead she repeats her allegation 

that she was charged interest greater than what is permitted under 

state law. Opp'n at 8. Having failed to respond to what is 

clearly stated in her loan documents, the Court DISMISSES her usury 

claim WITHOUT LEAVE TO AMEND. 

G. Predatory Lending

Plaintiff accuses Defendants of predatory lending practices 

in violation of Sections 4970-4979 of California's Financial Code. 

Compl. ¶¶ 108-110. However, those code sections only apply to 

"covered loans," which are loans where "the original principal 

balance does not exceed the most current conforming loan limit for 

a single-family first mortgage loan established by the Federal 

National Mortgage Association." Cal. Fin. Code § 4970(b). In 

2005, the conforming loan limit was $359,650. See Fannie Mae News 

Release. Here, Plaintiff's loan was for $1,355,000. See 2005 Deed 

of Trust. Therefore Plaintiff's loan is not a covered loan, and 

Plaintiff's Opposition contains no discussion of her predatory 

lending claim. The Court DISMISSES Plaintiff's twelfth cause of 

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action WITHOUT LEAVE TO AMEND. 

IV. CONCLUSION

 For the reasons stated above, the Court DISMISSES Plaintiff’s 

first, second, third, fourth, fifth, eighth, tenth, eleventh, 

twelfth, and thirteenth causes of action WITH PREJUDICE. The Court 

DISMISSES Plaintiff's sixth, seventh, and ninth causes of action 

WITHOUT PREJUDICE. If Plaintiff chooses to file an amended 

complaint, it shall be filed within twenty (20) days of this Order. 

Failure to do so will result in dismissal of the case in its 

entirety. 

IT IS SO ORDERED. 

Dated: July 2, 2010 

UNITED STATES DISTRICT JUDGE

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