Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-02385/USCOURTS-casd-3_09-cv-02385-0/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1601 Truth in Lending

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GRAHAM RAWAK-GERMAN,

Plaintiff,

CASE NO. 09cv2385 WQH

(WMC)

vs. ORDER

COUNTRYWIDE BANK, et al.,

Defendants.

HAYES, Judge:

The matters before the Court are the Motion to Strike filed by Defendants Bank of

America and Recontrust Company (Doc. # 5), the Motion to Dismiss filed by Defendants Bank

of America and Recontrust Company (Doc. # 6), and the Motion to Remand to State Court

filed by Plaintiff (Doc. # 7).

BACKGROUND

This action concerns Plaintiff’s mortgage. Plaintiff initiated this action by filing a

complaint in the Superior Court of the State of California for the County of San Diego on

September 17, 2009. (Doc. # 1 at 2). Defendants removed the case to this Court on October

26, 2009. Id. On November 2, 2009, Defendants Bank of America, successor in interest to

Countrywide Bank, and Recontrust Company filed their Motion to Strike (Doc. # 5) and their

Motion to Dismiss (Doc. # 6). On November 19, 2009, Plaintiff filed her Motion to Remand

to State Court (Doc. # 7).

The complaint alleges six state law claims and one federal claim against Defendants.

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(Doc. # 1 at 7). Plaintiff’s state law claims are: (1) declaratory relief that Plaintiff owns the

property; (2) reformation of the contract due to fraud; (3) quiet title; (4) unfair competition in

violation of California Business and Professions Code § 17200; (5) fraud in violation of

California Civil Code § 1572; and (6) injunctive relief preventing foreclosure on the home.

Plaintiff’s seventh claim, her sole federal claim, is for violation of the Truth In Lending Act

(“TILA”). 

ANALYSIS

I. Motion to Remand

Plaintiff contends that this Court should remand the entire case, including the federal

claim, to state court pursuant to 28 U.S.C. § 1441(c) because “state law predominates on this

matter.” (Doc. # 7-2 at 2-3). Plaintiff contends that this Court should abstain from exercising

jurisdiction pursuant to Burford v. Sun Oil Co., 319 U.S. 315 (1943), because federal

adjudication would interfere with state interests. (Doc. # 7 at 2). Plaintiff contends that this

Court should abstain under the Rooker-Feldman doctrine because a state judge issued a

temporary restraining order in the state court action prior to removal. (Doc. # 7-2 at 3).

Plaintiff contends that this Court should abstain under the Younger doctrine because it

interferes with an ongoing state court case. Id. at 4. Plaintiff contends that this court should

abstain pursuant to Colorado River Water Conservation District v. United States, 424 U.S. 800

(1976), because this case results in duplicative litigation in state and federal court. Id. at 5.

Finally, Plaintiff contends that this Court should defer to Plaintiff’s choice of forum. Id. at 5-6.

Defendants contend that several of Plaintiff’s state law claims are dependent on the

alleged violation of TILA and that, in any event, this Court has jurisdiction where the

complaint contains even a single federal claim. (Doc. # 11 at 6). Defendants contend that the

complaint contains no difficult questions of state law, so the Court should not remand even the

state law claims. Id. at 7. Defendants contend that a temporary restraining order is not an

adverse state court judgment requiring abstention under Rooker-Feldman doctrine. Id. at 6-7.

Defendants contend that there is no ongoing state court proceeding because the case was

removed to federal court, so the Younger doctrine is inapplicable, as is the Colorado River

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doctrine. Id. at 8. Finally, Defendants contend that Plaintiff’s forum arguments are a

misunderstanding of forum non conveniens, which is not at issue in this case. Id. at 8-9.

Defendants contend that Plaintiff cannot argue forum non conveniens because she filed her

action in San Diego County Court and is now in federal district court in San Diego. Id.

Plaintiff’s contention that the entire action, including the TILA claim, could be

remanded because state law claims predominate is not supported by 28 U.S.C. §1441(c). The

Court is not entitled to decline jurisdiction over Plaintiff’s TILA claim on the grounds that

there are more state law claims than federal law claims. None of the abstention doctrines

Plaintiff cited are applicable to this case. Plaintiff has not identified any difficult issues of state

law which would mitigate in favor of remanding her state law claims while retaining

jurisdiction over her TILA claim. A temporary restraining order is not a judgment that requires

abstention pursuant to Rooker-Feldman. When the case was removed, the state court

proceedings were terminated, so there is no reason to abstain pursuant to Younger or Colorado

River. Respecting a plaintiff’s choice of forum does not permit a court to remand a properly

removed action. Plaintiff’s Motion to Remand is denied.

II. Motion to Dismiss

A. Federal Claim

In her seventh cause of action for violation of TILA, Plaintiff alleges the Notice of

Right to Cancel disclosure was defective pursuant to 15 U.S.C. § 1635. (Doc. # 1, Ex. A at

14). Plaintiff alleges the Notice incorrectly states that Plaintiff had the right to cancel before

May 22, 2007, when in fact the correct date was May 25, 2007. Id. Plaintiff alleges

Defendants also failed to “disclose properly and accurately the number, amount, and due dates

or period of payments scheduled to repay the obligation” in violation of TILA. Id. Plaintiff

alleges Defendants engaged in a pattern or practice of mortgage lending without regard to the

borrower’s ability to pay. Id. at 14-15. Plaintiff alleges she is “willing and/or able to tender

the loan proceeds either by a refinance of the loan, if possible, or a sale of the home if

necessary.” Id. at 15. Plaintiff alleges she has a short sale offer of $625,000. Id. Plaintiff also

alleges she is entitled to damages. Id.

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In their Motion to Dismiss, Defendants contend that Plaintiff’s claim for damages is

barred by the statute of limitations. (Doc. # 6-1 at 20). As to Plaintiff’s recision allegations,

Defendants contend that Plaintiff has not sufficiently alleged tender. Id. Defendants further

contend that Plaintiff failed to allege that she sent a written communication rescinding the loan,

and therefore cannot state a claim for rescission. Id. at 21. Finally, as to Plaintiff’s allegations

about deficiencies in the Notice of Right to Cancel, Defendants contend that Plaintiff’s

allegations do not make sense because Plaintiff alleges the right to cancel expired on May 25,

2007, but also alleges her loan was not made until July 26, 2007. Id. at 21-22, Doc. # 1, Ex.

B.

Plaintiff contends that “[t]he statute of limitations on TILA damages has not tolled.”

(Doc. # 8 at 5-6). Plaintiff contends “this scheme to defraud Plaintiffs” would justify tolling

the statute of limitations. Id. at 6. Plaintiff contends that she is not required to tender because

Defendants has not yet “returned any money paid.” Id. Plaintiff contends that “in light of

Defendant’s silence on providing a review of the loan as required under RESPA and their

failure to communicate with Plaintiff prior to the issuance of Plaintiffs QWR letter, Plaintiff

had to conduct her own audit report on the mortgage. As such, it was not done by the bank

itself and there was an error as to the rescission dates.” Id.

Damages claims under TILA must be brought “within one year from the date of the

occurrence of the violation.” 15 U.S.C. § 1640(e). “[A]s a general rule the limitations period

starts at the consummation of the transaction.” King v. California, 784 F.2d 910, 915 (9th Cir.

1986). “The district courts, however, can evaluate specific claims of fraudulent concealment

and equitable tolling to determine if the general rule would be unjust or frustrate the purpose

of the [TILA] and adjust the limitations period accordingly.” Id. Generally, a litigant seeking

equitable tolling of a limitations period bears the burden of establishing entitlement to

equitable tolling. Pace v. DiGuglielmo, 544 U.S. 408 (2005). 

Plaintiff’s TILA damages claim was brought more than one year after the date of the

occurrence of the alleged violation, and is therefore time barred. Plaintiff did not allege any

facts supporting equitable tolling of the statute of limitations in the complaint. Plaintiff does

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not state any specific facts to support her claim that a “scheme to defraud” her requires tolling.

Plaintiff’s claim for damages under TILA is dismissed.

In order to state a claim for rescission under TILA, Plaintiff was required to “notify the

creditor of the rescission by mail, telegram, or other means of written communication” sent to

the “creditor’s designated place of business.” 12 C.F.R. 226.23. Plaintiff fails to plead that

she sent Defendants a written statement rescinding the loan. Plaintiff’s claim for rescission

under TILA is dismissed.

B. State Law Claims

The Notice of Removal alleges that federal question jurisdiction exists pursuant to 28

U.S.C. § 1331 by virtue of the TILA claim. (Doc. # 1 at 2-3). The Notice of Removal alleges

this court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.

Id. at 3. Neither party asserts that this Court has diversity jurisdiction over the state law claims

pursuant to 28 U.S.C. § 1332.

The federal supplemental jurisdiction statute provides: “[I]n any civil action of which

the district courts have original jurisdiction, the district courts shall have supplemental

jurisdiction over all other claims that are so related to claims in the action within such original

jurisdiction that they form part of the same case or controversy under Article III of the United

States Constitution.” 28 U.S.C. § 1367(a). A district court may decline to exercise

supplemental jurisdiction over a state law claim if:

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims over which the

district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original

jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for

declining jurisdiction.

28 U.S.C. § 1367(c). Because the Court has dismissed the only federal law claim, the Court

declines to exercise supplemental jurisdiction over the state law claims at this time pursuant

to 28 U.S.C. § 1367(c)(3). See Ove v. Gwinn, 264 F.3d 817, 826 (9th Cir. 2001) (“A court may

decline to exercise supplemental jurisdiction over related state-law claims once it has

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dismissed all claims over which it has original jurisdiction.”); San Pedro Hotel Co., Inc. v. City

of Los Angeles, 159 F.3d 470, 478 (9th Cir. 1998) (district courts not required to provide

explanation when declining jurisdiction pursuant to 28 U.S.C. § 1367(c)(3)).

III. Motion to Strike

The Court has dismissed the federal claim and declined to exercise jurisdiction over the

state law claims. The Motion to Strike is therefore denied as moot.

IV. Request to Seal Plaintiff’s Exhibit C

An unredacted copy of Plaintiff’s tax return was attached to Plaintiff’s complaint as

Exhibit C in violation of the Southern District of California’s Electronic Case Filing

Administrative Policies and Procedures § 1(h). Both parties have requested that the document

be removed from the docket. Plaintiff submitted a redacted copy as Docket # 8-1. The Clerk

of the Court shall strike Docket # 1, Exhibit C and replace it with Docket # 8-1.

CONCLUSION

IT IS HEREBY ORDERED that:

(1) The Motion to Remand (Doc. # 7) is DENIED.

(2) The Motion to Dismiss (Doc. # 6) is GRANTED. Plaintiff’s complaint is

dismissed without prejudice and with leave to file an amended complaint within

thirty days of the date of this order.

(3) The Motion to Strike (Doc. # 5) is DENIED AS MOOT.

(4) The Clerk of the Court shall strike the unredacted copy of Plaintiff’s tax return

attached to the complaint (Doc. # 1) as Exhibit C and replace it with the redacted

copy of Plaintiff’s tax return (Doc. # 8-1).

DATED: February 16, 2010

WILLIAM Q. HAYES

United States District Judge

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