Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-02523/USCOURTS-casd-3_15-cv-02523-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1444 Notice of Removal- Foreclosure

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

Nora Masoud,

Plaintiff,

v.

J.P. Morgan Chase Bank, N.A., et al.,

Defendants.

Civil No.: 15-CV-2523-L-JMA

ORDER (1) GRANTING IN PART

DEFENDANTS' MOTION TO 

DISMISS FIRST AMEDED 

COMPLAINT; (2) REMANDING 

ACTON TO STATE COURT; AND 

(3) DENYING PLAINTIFF'S 

MOTION FOR A TEMPORARY 

RESTRAINING ORDER AND FOR 

ORDER TO SHOW CAUSE RE

PRELIMINARY INJUNCTION

Pending before the Court in this mortgage foreclosure action are Defendants' 

motion to dismiss the first amended complaint and Plaintiff's motion for a temporary 

restraining order ("TRO") to ejoin foreclosure. Both motions are fully briefed. For the 

reasons which follow, Defendants' motion to dismiss is granted. Plaintiff's federal causes 

of action are dismissed with prejudice. Her state law causes of action are remanded to 

the State Court. Plaintiff's motion for a TRO is denied without prejudice.

/ / / / /

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I. Background

On October 17, 2000, Plaintiff purchased a home at 4541 Cather Avenue in the 

University City neighborhood of San Diego (the "Property”) for $330,000. On July 11,

2005, she refinanced with a loan from Washington Mutual Bank (“WaMu”). Her 

promissory note in the amount of $372,000 was secured by a deed of trust. (Defs' Ex. 

1.)

1

 The deed of trust identified Plaintiff as the borrower, WaMu as the lender, and 

California Reconveyance Company as the trustee.

Subsequently, WaMu was seized by the Federal Deposit Insurance Corporation 

("FDIC"). On September 25, 2008, FDIC sold WaMu with all of its assets to Chase 

under the terms of a purchase and assumption agreement. (Defs' Ex. 2.) On October 10, 

2008, Plaintiff received a letter from Chase, notifying her of the purchase and assumption 

agreement and informing her that Chase was now servicing her account. (Id. Ex. 

On September 7, 2011, two instruments were recorded: (1) an assignment of the 

deed of trust that assigned all beneficial interest in Plaintiff’s loan to Chase; and (2) a 

notice of default and election to sell indicating that Plaintiff’s loan was $30,666.68 in 

arrears. On October 22, 2014, a substitution of trustee was recorded that named ALAW 

as the new trustee under the deed of trust. On July 15, 2015, a second substitution of 

 

1 As a general rule, in ruling on a motion under Rule 12(b)(6), a court may not 

consider any material beyond the pleadings, or the motion must be treated as a motion for 

summary judgment and the parties provided an opportunity to present all pertinent 

material. Fed. R. Civ. Proc. 12(d); United States v. Corinthian Colleges, 655 F.3d 984, 

998-99 (9th Cir. 2011). The court may, however, consider materials that are submitted 

with and attached to the complaint as well as "unattached evidence on which the 

complaint necessarily relies if: (1) the complaint refers to the document; (2) the document 

is central to the plaintiff's claim; and (3) no party questions the authenticity of the 

document." Corinthian Colleges, 655 F.3d at 999 (internal quotation marks and citation 

omitted). Furthermore, material properly subject to judicial notice may be considered

without converting the motion into one for summary judgment. Barron v. Reich, 13 F.3d 

1370, 1377 (9th Cir. 1994). Accordingly, the Court considers recorded documents 

relating to Plaintiff's Property as well as other documents referenced in the first amended 

complaint.

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trustee was recorded that named Quality Loan Service as the new trustee under the deed 

of trust. On July 21, 2015, a notice of trustee’s sale was recorded. It stated that the total 

amount of Plaintiff’s unpaid obligation was $456,723.51.

On October 21, 2015, Plaintiff filed a complaint in State court alleging violation of 

the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq. (“RESPA”), 

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

of the Home Ownership and Equity Protection Act, 15 U.S.C. §§ 1602 et seq.

("HOEPA"). She also alleged claims for accounting, declaratory relief, slander of title,

quiet title, intentional misrepresentation, negligent misrepresentation, rescission, and 

violation of Unfair Business Practices Act, Cal. Bus. & Profs. Code §§ 17200 et seq.

under California Law. On October 27, 2015, the State Court issued a TRO enjoining the 

foreclosure sale, and set a preliminary injunction hearing for November 15, 2015. 

Before the hearding, Defendants removed the action to this Court. Defendants 

then moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). Their motion was

granted to the extent that Plaintiff's federal claims for RESPA, TILA and HOEPA 

violations were dismissed with leave to amend, as they appeared on the face of the 

complaint to be barred by the statute of limitations. Her state law claims were dismissed 

without prejudice for lack of subject matter jurisdiction. After Plaintiff filed her first 

amended complaint, which alleges the same causes of action, Defendants again moved to 

dismiss.

After the motion to dismiss was fully briefed, on November 9, 2017, Defendants 

recorded a new Notice of Sale (Pl.'s TRO Ex. 1), scheduling the foreclosure of the 

Property for December 8, 2017. On December 6, 2017, Plaintiff filed the instant TRO 

motion,

2 which Defenants opposed.

/ / / / /

 

2 By waiting for over three weeks after the Notice of Sale before filing her motion, 

Plaintiff created the emergency on which she now bases her request for emergency relief. 

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II. Discussion

A motion under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. 

Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted where the complaint

lacks a cognizable legal theory. Shroyer v. New Cingular Wireless Serv., Inc., 622 F.3d

1035, 1041(9th Cir. 2010) (internal quotation marks and citation omitted). Alternatively, 

a complaint may be dismissed where it presents a cognizable legal theory, yet fails to 

plead essential facts under that theory. Robertson v. Dean Witter Reynolds, Inc., 749 

F.2d 530, 534 (9th Cir. 1984). 

In reviewing a Rule 12(b)(6) motion, the Court must assume the truth of all factual 

allegations and construe them most favorably to the nonmoving party. Huynh v. Chase 

Manhattan Bank, 465 F.3d 992, 997, 999 n.3 (9th Cir. 2006). However, legal

conclusions need not be taken as true merely because they are couched as factual 

allegations. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Similarly,

"conclusory allegations of law and unwarranted inferences are not sufficient to defeat a 

motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).

A. RESPA Violations

1. Section 2607—Prohibition Against Kickbacks and Unearned Fees

In her sixth cause of action, Plaintiff alleges that “Defendants violated RESPA 

because the payments between Defendants were misleading and designed to create a 

windfall without Plaintiff's knowledge. These actions were deceptive, fraudulent, and 

self-serving. Defendnats failed to comply with Section 2605 by not disclosing in writing 

to Plaintiff the various transfers of interest ... [and] kickbacks that were paid to various 

parties at the inception of the Loan, relating to the securitization of Loan.” (First Am. 

Compl. ("FAC") at 25-26.) 

Any action alleging a § 2607 violation, must be brought within one year from the 

date of the occurrence of the violation. 12 U.S.C. § 2614. Accordingly, the facts giving 

rise to this claim occurred in 2005, when Plaintiff refinanced the Property. Because 

Plaitniff previously argued delayed discovery, she received leave to amend this claim to 

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allege she did not discover the facts underlying the alleged § 2607 violation until 2015. 

However, neither the first amended complaint nor the opposition to Defendants' motion 

to dismiss addresses this issue. 

The sixth cause of action, to the extent it claims a § 2607 violation, is barred by the 

statute of limitations. Accordingly, Defendants' motion to dismiss is granted in this 

regard. See Huynh, 465 F.3d at 997. As Plaintiff had previously been granted leave to 

amend, and it does not appear that Plaitniff can provide any additional basis for the 

delayed discovery, further leave to amend is denied.

2. Section 2605—Qualified Written Requests

Plaintiff also alleges Defendants failed to comply with RESPA when they did not 

respond to her "qualified written request" ("QWR")3starting October 17, 2010 (FAC Ex. 

13 ("QWR sent to you 10/17/10 was ignored") & at 11, 26.) RESPA sets a time frame 

for mortgage servicers to respond to QWRs from borrowers requesting information 

relating to a loan. 12 U.S.C. § 2605 (e)(1)(A). Any action alleging a § 2605 violation 

must be brought within three years of the occurrence of the violation. 12 U.S.C. § 2614. 

The facts giving rise to this claim occurred in 2010, and therefore initially 

appeared on the face of the complaint to be time barred. Plaitniff was granted leave to 

amend these allegations. 

In her amended complaint and opposition to Defendants' motion, Plaintiff contends 

that she did not learn of Defenants' deception regarding the sale of her loan until she 

requested an audit report (Opp'n at 23 & FAC Ex. 13), and that she did not learn of issues 

regarding the amount due on her loan until the July 21, 2015, Notice of Sale, which 

revealed that the amount owing to avoid foreclosure was $456,723.51. (Opp'n at 23 & 

Defs' Ex. 7). Plaintiff's December 31, 2010 QWR, attached to the amended complaint, 

 

3 The Court expresses no opinion whether any of Plaintiff's correspondence 

constitutes a valid QWR under § 2605.

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contradicts this contention. The issues which Plaintiff raised in her subsequent QWRs 

were raised in Plaintiff's exhaustive QWR dated December 31, 2010, inlcuding 

accounting of her loan payments, identity of the holder in due course of her promissory 

note, and other information about the sale of her loan. (FAC Ex. 13.) The December 31, 

2010 QWR demonstrates that Plaintiff knew in 2010 which information she was seeking, 

and the lack of adequate response put her on notice of the RESPA violation. 

Accordingly, the three-year statute of limitations expired well before October 2015, when 

Plaitniff filed her initial complaint in State Court. 

The sixth cause of action for RESPA violations is barred by the statute of 

limitations. Defendants' motion to dismiss is therefore granted in this regard. See Huynh, 

465 F.3d at 997. As Plaintiff had previously been granted leave to amend, and it does not 

appear that she could allege additional facts, a second leave to amend is denied.

B. TILA and HOEPA Violations

In her fifth cause of action Plaintiff alleges that Defendants violated TILA and 

HOEPA when they failed to make “accurate material disclosures . . . (including loan fees 

not disclosed to the consumer and fees obtained at the inception of the loan with regard to 

the securitization of the loan) . . . to fully inform home buyers of the pros and cons of 

adjustable rate mortgages in a language . . . that they can understand . . . ; and advise 

them to compare similar loan products with other lenders.” (FAC at 22-23.) These 

disclosures relate to the origination of Plaintiff’s refinance loan in 2005. Plaintiff also 

alleges that she rescinded the loan on March 20, 2015. (Id. at 24.)

Claims under TILA have a three-year statute of limitations for rescission actions, 

and a one-year statute of limitations for damages actions. See 15 U.S.C. §§1635(f), 

1640(e); King v. California, 784 F.2d 910, 913 (9th Cir. 1986). Claims under HOEPA 

involving mortgages may be brought “before the end of the 3-year period beginning on 

the date of the occurrence of the violation.” 15 U.S.C. § 1640(e). 

Defendants maintain that the TILA and HOEPA claims are time barred. In her 

opposition to Defendants' initial motion to dismiss, Plaintiff argued for tolling based on 

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delayed discovery. She was granted leave to amend with additional facts in support of 

this contention.

Plaintiff contends she made a valid rescission under TILA when she sent 

Defendants a notice of rescission on March 20, 2015. (FAC at 23-24.) Rescission was 

untimely because, "[e]ven if a lender never makes the required disclosures, the 'right of 

rescission shall expire three years after the date of consummation of the transaction or 

upon the sale of the property, whichever comes first.'" Jesinoski v. Countrywide Home

Loans, Inc., __ U.S. __; 135 S.Ct. 790, 792 (2015) (quoting 15 U.S.C. § 1635(f)) 

(emphasis in original). 

Plaintiff claims that the statute of limitations never accrued because the loan was 

not consummated, as she did not sign the loan documents.4 (FAC at 23.) This new 

assertion is contradicted by the initial complaint. (See Compl. at 3-4, alleging Plaintiff 

signed the promissory note and the deed of trust.) Consistent with her initial allegation, 

the loan documents show Plaitniff's signature. (Defs' Ex. 1 (Note and Deed of Trust).) 

Plaintiff does not dispute that the loan was funded, and she alleges she made loan 

payments under the Note. (See, e.g., FAC at 7 ("Plaintiff's payments were current" in 

2009).) 

For purposes of rescission under TILA, consummation “means the time that a 

consumer becomes contractually obligated on a credit transaction.” Jackson v. Grant, 

890 F.2d 118, 120 (9th Cir. 1989) (quoting Regulation Z, 12 C.F.R § 226.2(a)(13)). 

When a consumer becomes contractually obligated is determined by state contract law. 

Id. The only element under California law, which Plaintiff potentially quetions with 

respect to her refinance is the identity of the parties. Under California Civil Code § 1550, 

 

4 However, elsewhere in the amended complaint she alleged, "While Plaintif

remembers signing some loan documents, she did not recognize the signatures on the 

Note and Deed of Trust she obtained in October 2011, as being actual documents signed 

for the origination of the subject loan." (FAC at 5.) 

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the parties to the contract must be identifiable. See also id. at 121. Plaintiff admitted in 

the initial complaint that the parties were identifiable. (Compl. at 3-4, alleging that she 

signed the loan documents and that WaMu was identified as the lender.) 

Plaintiff's contention that the loan was not consummated is contradicted by 

recorded documents and her own allegations, and is therefore not plausible so as to 

withstand a motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Based

on the record before the Court, the loan was consummated in 2005. Plaintiff's notice of 

rescission was therefore untimely.

With respect to non-disclosure, Plaintiff contends that "[i]n 2014, [she] received a 

letter from Chase re adjustable rate mortgages that was supposedly part of the original 

loan documents, but Plaintiff had never seen this document before." (FAC at 23, citing 

Ex. 32.) The exhibit she offers in support of this allegation is an escrow instruction 

regarding the interest rate on her note. (FAC Ex. 32), which was ultimately superseded 

by the terms of the Note she signed. (Cf. Defs' Ex. 1 (Note and Adjustable Rate Rider).) 

Plaintiff also alleges she did not discover until "late 2011 and 2014" that 

Defendants failed to make many other requisite disclosures, including disclosing the "true 

lender" and that her loan was securitized. In support, she cites, among other documents, 

the The LuminaQ Documentary Investigation headed "Title Commentary and Analysis," 

dated November 18, 2011, which analyzes the title to Plaitniff's Property and was 

prepared for Plaintiff. (FAC at 23-24 & Ex. 7.) The document highlights the information 

Plaintiff claims was not disclosed at the time of her refinance. It therefore put her on 

notice, at the latest in November 2011, that the information had previously not been 

disclosed. Accordingly, the statutes of limitations for the non-disclosure claim expired 

long before the filing of this action. 

For the foregoing reasons, the running of the statutes of limitations for the TILA 

and HOEPA claims is apparent on the face of the complaint. Defendants’ motion is 

granted with respect to the fifth cause of action. As Plaintiff had previously been granted 

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leave to amend, and it does not appear that she could allege additional facts, a second 

leave to amend is denied.

C. State Law Claims

All federal claims in this action have been dismissed without leave to amend. The 

only basis for subject matter jurisdition alleged in this action is fedral question under 28 

U.S.C. § 1331. (Doc. no. 1, Defs' notice of removal.) Plaintiff does not allege any 

grounds for federal subject matter jurisdiction. Accordingly, this action is remanded to 

State court pursuant to 28 U.S.C. § 1447(c). 

For the foregoing reasons, IT IS ORDERED as follows:

1. Defendants’ motion to dismiss is granted with respect to the fifth and sixth 

causes of action. 

2. This action is remanded to the Superior Court of the State of California, 

County of San Diego, Central Division.

3. Plaintiff's motion for temporary restraining order and for order to show 

cause re: perliminary injunction is denied witout prejudice to asserting it in State Court.

IT IS SO ORDERED.

Dated: December 8, 2017

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