Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01257/USCOURTS-casd-3_09-cv-01257-0/pdf.json

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

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 Although HLS argues federal questions are presented within the context of Plaintiff’s breach

of contract claim, the court construes the Complaint as reciting separate federal law claims.

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TIMOTHY J. WELLMAN,

Plaintiff,

CASE NO. 09 CV 1257 JM (NLS)

ORDER:

1) GRANTING IN PART AND

DENYING IN PART

DEFENDANT’S MOTION TO

DISMISS; and

2) REMANDING TO STATE

COURT

Doc. No. 4

v.

FIRST FRANKLIN HOME LOAN

SERVICES,

Defendant.

On April 28, 2009, Plaintiff Timothy J. Wellman (“Plaintiff”), appearing pro se, filed a breach

of contract action in state court, raising claims arising out of a mortgage transaction. (Doc. No. 1,

Exh. 1, “Compl.”) Defendant Home Loan Services (“HLS”), erroneously sued as First Franklin Home

Loan Services, removed the action to federal court based on federal question jurisdiction. (Doc. No.

1.) Although Plaintiff’s form complaint noted causes of action for breach of contract and violations

of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., it also referred to violations of the

Home Ownership and Equity Protection Act (“HOEPA”), 15 U.S.C. § 1602 et seq., the Real Estate

Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605 et seq., the Home Mortgage Disclosure Act

(“HMDA”), 12 U.S.C. § 2801, and the “Consumer Protection Act.”1

 (Compl. at 2.) Attached to the

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2

 It appears the Audit reviewed only the loan for $1,320,000 and not the second loan.

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Complaint is a “Mortgage Loan Audit & Loan Review” allegedly performed by Real Estate Attorney

Support Services. (Compl., “Audit.”) 

Pending before the court is HLS’s Motion to Dismiss Plaintiff’s Complaint for failure to state

a claim pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6). (Doc. No. 4, “Mot.”)

Defendant’s motion was accompanied by a Request for Judicial Notice. (Doc. No. 5, “RJN.”) To

date, Plaintiff has filed no opposition nor a statement of non-opposition as required by Civil Local

Rule 7.1. When an opposing party does not file papers in the manner required by Civ.L.R. 7.1(d)(2),

the court may deem the failure to “constitute a consent to the granting of a motion or other request for

ruling by the court.” Civ.L.R. 7.1(f)(3)(c). Notwithstanding Plaintiff’s failure to respond, the court

reviews the motion on the merits to ensure dismissal is appropriate. Pursuant to Civ.L.R. 7.1(d), this

matters was taken under submission by the court without oral argument on July 24, 2009.

For the reasons set forth below, the court GRANTS Defendants’ motion to dismiss.

I. BACKGROUND

On November 9, 2006, Plaintiff purchased his primary residence at 2041 Zlatibor Ranch Road,

Escondido, California (the “Property”) with a loans of $1,320,000 and $300,000 from lender First

Franklin.2 (Audit at 1, 5, 9; RJN, Exh. 1.) The loans were secured by two deeds of trust on the

Property, which were recorded on November 14, 2006. (RJN, Exhs. 1-2.)

Plaintiff’s Complaint itself alleges only that, “[b]ased on a professional forensic loan audit &

review, at a min., the defendant has violated the Truth-in-Lending Act. The APR and Finance Charge

were deceptively and fraudulently disclosed to the plaintiff.” (Compl. at 2.) The Audit alleges

improper or lacking TILA disclosures regarding nonrefundable fees, the terms and mechanism for rate

changes for adjustable rate mortgages, the annual percentage rate and finance charges applicable to

Plaintiff’s loan, and the total amount payable over the life of the loan. (Audit at 3, 7-8.) The Audit

did not test RESPA compliance and concludes HOEPA’s provisions do not apply to the loan. (Audit

at 12-13.) Nevertheless, the Audit opines the violations “include but are not limited to, the Truth in

Lending Act, Consumer Protection Act, Real Estate Settlement Procedures Act, the Home Ownership

and Equity Protection Act, and the Home Mortgage Disclosure Act.” (Audit at 1.) Plaintiff seeks

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 Because the Audit, and thus Plaintiff’s Complaint, address only the $1,320,000 loan, the court

need not consider the second Deed of Trust (RJN, Exh. 2) in ruling on the instant motion.

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damages of $1,600,000 plus interest and attorney’s fees (despite the fact he is unrepresented).

(Compl. at 2.)

II. DISCUSSION

 A. Legal Standards 

A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of the pleadings. De

La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). In evaluating the motion, the court must construe

the pleadings in the light most favorable to the plaintiff, accepting as true all material allegations in

the complaint and any reasonable inferences drawn therefrom. See, e.g., Broam v. Bogan, 320 F.3d

1023, 1028 (9th Cir. 2003). While Rule 12(b)(6) dismissal is proper only in “extraordinary” cases,

the complaint’s “factual allegations must be enough to raise a right to relief above the speculative

level....” U.S. v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981); Bell Atlantic Corp. v. Twombly,

550 US 544, 555 (2007). The court should grant 12(b)(6) relief only if the complaint lacks either a

“cognizable legal theory” or facts sufficient to support a cognizable legal theory. Balistreri v. Pacifica

Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 

In testing the complaint’s legal adequacy, the court may consider material properly submitted

as part of the complaint or subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th

Cir. 2007). Under the “incorporation by reference” doctrine, the court may refer to documents “whose

contents are alleged in a complaint and whose authenticity no party questions, but which are not

physically attached to the [plaintiff’s] pleading.” Janas v. McCracken (In re Silicon Graphics Inc. Sec.

Litig.), 183 F.3d 970, 986 (9th Cir. 1999) (internal quotation marks omitted). Consideration of matters

of public record “does not convert a Rule 12(b)(6) motion to one for summary judgment.” Mack v.

South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on other grounds by

Astoria Fed. Sav. and Loan Ass’n v. Solimino, 501 U.S. 104, 111 (1991). To this end, the court

considers the first Deed of Trust, as sought by Defendants in their Request for Judicial Notice.3

 (RJN,

Exh. 1.)

//

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 The closest contender is California’s Tanner Consumer Protection Act, a “lemon law” which

protects consumers who buy or lease new automobiles. Cal. Civ. Code §§ 1793.2(d) and 1793.22.

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 B. Analysis

Plaintiff’s TILA claim for damages and his RESPA claim are barred by one-year statutes of

limitations. 15 U.S.C. § 1640(e); 12 U.S.C. § 2614. Plaintiff fails to state a claim under HOEPA, as

“residential mortgage transactions,” such as Plaintiff’s purchase money mortgage, are expressly

excluded from coverage. 15 U.S.C. § 1639(a)(1). A “residential mortgage transaction” is defined in

turn by 15 U.S.C. § 1602(w) to include “a mortgage, deed of trust, ... or equivalent consensual security

interest...created...against the consumer’s dwelling to finance the acquisition...of such dwelling.”

Plaintiff fails to state a claim for violation of HMDA because this statute provides only for

administrative enforcement. 12 C.F.R. § 203.6. Finally, Plaintiff mentions the Consumer Protection

Act, but this court is unaware of any so-named federal or state statute which might govern the

transaction.4

 Defendant’s motion to dismiss these claims is granted.

With all federal causes of action dismissed from the case, the court lacks subject matter

jurisdiction over Plaintiff’s remaining state law claim for breach of contract. Plaintiff’s breach of

contract claim is therefore remanded to state court. 28 U.S.C. § 1447(c) (“If at any time before final

judgment it appears that the district court lacks subject matter jurisdiction, the case shall be

remanded.”). Defendant’s motion to dismiss this claim is denied.

III. CONCLUSION

For the reasons set forth above, Defendant’s motion to dismiss is GRANTED IN PART and

DENIED IN PART. Accordingly, Plaintiff’s claims under TILA, HOEPA, RESPA, HMDA, and the

“Consumer Protection Act” are DISMISSED with prejudice and Plaintiff’s breach of contract claim

is REMANDED to state court. The Clerk of Court is instructed to close the case file.

DATED: August 4, 2009

 Hon. Jeffrey T. Miller

 United States District Judge

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