Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01550/USCOURTS-casd-3_10-cv-01550-1/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

STEFAN M. LEMPERLE,

Plaintiff,

CASE NO. 10cv1550-MMA(POR)

vs. ORDER RE: DEFENDANTS JP

MORGAN CHASE BANK, NA and

CALIFORNIA RECONVEYANCE

COMPANY’S MOTION TO DISMISS;

[Doc. No. 12]

REMANDING ACTION TO STATE

COURT 

WASHINGTON MUTUAL BANK, et al.,

Defendant.

This matter is before the Court on Defendants JPMorgan Chase Bank, N.A. and California

Reconveyance Company’s motion to dismiss Plaintiff Stefan M. Lemperle’s First Amended

Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) [Doc. No. 12]. Plaintiff filed an

opposition to the motion [Doc. No. 14]. The Court took the matter under submission on the papers

and without oral argument pursuant to Civil Local Rule 7.1.d.1 [Doc. No. 15]. For the following

reasons, Defendants’ motion is GRANTED IN PART and DENIED IN PART as moot, and the

Court REMANDS this action to state court for consideration of Plaintiff’s state law claims. 

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Case 3:10-cv-01550-MMA-BGS Document 16 Filed 01/20/11 Page 1 of 6
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BACKGROUND

On June 30, 2010, Plaintiff Stefan M. Lemperle filed the instant action in the Superior Court

of the State of California, County of San Diego, Case No. 37-2010-00095321-CU-OR-CTL, alleging

four claims arising out of a mortgage transaction secured by real property located at 5672 Dolphin

Place, La Jolla, California, 92037. On July 26, 2010, Defendants Chase and California

Reconveyance Company (“CRC”) removed the action to federal court pursuant to 28 U.S.C. § 1441,

et seq., properly alleging federal question jurisdiction pursuant to 28 U.S.C. § 1331 based on

Plaintiff’s claims brought under the Truth In Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., and

the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 1601, et seq. On August 2,

2010, Defendants filed a motion to dismiss Plaintiff’s complaint as to all causes of action without

leave to amend. The Court granted Defendants’ motion with respect to Plaintiff’s federal claims,

declined to adjudicate Plaintiff’s state law claims, and granted Plaintiff limited leave to amend his

federal RESPA claim. 

On October 22, 2010, Plaintiff filed his First Amended Complaint, which Defendants now

move to dismiss in its entirety. Defendants assert that Plaintiff has not cured his deficient RESPA

claim, and request that the Court dismiss the claim with prejudice. Defendants also argue that

Plaintiff fails to allege a plausible claim for relief under state law, and request that the Court dismiss

Plaintiff’s state law claims with prejudice.

DISCUSSION

1. Legal Standard

A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro v. Block,

250 F.3d 729, 732 (9th Cir. 2001). “While a complaint attacked by a Rule 12(b)(6) motion to

dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of

his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the

elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief

above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal

quotation marks, brackets and citations omitted). 

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In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all

factual allegations and must construe them in the light most favorable to the nonmoving party. 

Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions need not be

taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers,

812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

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).

In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the

complaint for additional facts, e.g., facts presented in plaintiff’s memorandum in opposition to a

defendant’s motion to dismiss or other submissions. United States v. Ritchie, 342 F.3d 903, 908 (9th

Cir. 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998); see also 2 Moore’s Federal

Practice, § 12.34[2] (Matthew Bender 3d ed.) (“The court may not . . . take into account additional

facts asserted in a memorandum opposing the motion to dismiss, because such memoranda do not

constitute pleadings under Rule 7(a).”). A court may, however, consider items of which it can take

judicial notice without converting the motion to dismiss into one for summary judgment. Barron v.

Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). Judicial notice may be taken of facts “not subject to

reasonable dispute” because they are either “(1) generally known within the territorial jurisdiction of

the trial court or (2) capable of accurate and ready determination by resort to sources whose

accuracy cannot reasonably be questioned.” Fed. R. Evid. 201. Additionally, a court may take

judicial notice of “‘matters of public record’ without converting a motion to dismiss into a motion

for summary judgment.’” Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quoting

MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)). 

Defendants filed a Request for Judicial Notice concurrently with their motion to dismiss. 

Plaintiff did not object to the request. Because the Court may take judicial notice of matters of

public record and documents that are integral to claims in the complaint which are not subject to

reasonable dispute, the Court considers the documents contained in the request in ruling on

Defendants’ motion to dismiss.

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1

 Under the incorporation by reference doctrine, courts may also consider 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.” In re Silicon Graphics Inc. Sec. Litig., 183 F.3d

970, 986 (9th Cir.1999) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) (alteration in

original)). Thus, in ruling on Defendants’ motion, the Court considers the letter attached to

Plaintiff’s opposition. 

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2. Analysis 

In dismissing Plaintiff’s original complaint, the Court ruled that Plaintiff’s conclusory

allegations did not allege sufficient facts to state a RESPA claim. RESPA requires a loan servicer to

respond to a QWR from a borrower or a borrower’s agent “for information relating to the servicing

of [the] loan.” See 12 U.S.C. § 2605(e)(1)(A). The statute defines servicing as “receiving any

scheduled periodic payments from a borrower pursuant to the terms of any loan, ... and making the

payments of principle and interest and such other payments with respect to the amounts received

from the borrower as may be required pursuant to the terms of the loan.” See 12 U.S.C. §

2605(i)(3). The Court previously determined that Plaintiff’s RESPA claim failed because his

allegations did not demonstrate that he sent a proper QWR to Chase. Specifically, the Court noted

that Plaintiff failed to include a copy of the QWR in the record, and there was no indication on the

face of his complaint that Plaintiff’s QWR included any of the information required by section

2605(e). 

In his First Amended Complaint, Plaintiff alleges that he served Chase with a QWR, and he

attaches a letter dated April 22, 2010 to his opposition.1

 However, Plaintiff’s First Amended

Complaint offers no factual basis for his claim, merely reciting the elements of the cause of action

and the general required content of a QWR. See First Amended Complaint ¶ 22. And although the

QWR attached to his opposition references servicing in passing and identifies Plaintiff’s name and

loan number, Plaintiff’s requests are not related to the servicing of the loan, but rather more

generally to the allegations of predatory schemes in the mortgage industry. For example, the first

paragraph of the letter states:

This request is made on behalf of our Client about the proper application of

payments from the debtors to interest, principal, escrow advances and expenses

(in that order of priority as provided for in the loan instruments); about your

use of suspense accounts in connection with your receipt of the debtors’

payments; about your use of legacy late charges; about your use of

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automatically triggered property inspections and broker price opinion charges

and fees based on pre-petition legacy accounting for pre-petition arrears; and

about legal fees and expenses that have been attached to this account in the

form of corporate advances.

See Plaintiff’s Opposition, “Attachment,” April 22, 2010 letter. Furthermore, a QWR must include a

statement of the reasons for the belief of the borrower that the account is in error. See 12 U.S.C. §

2605(e)(1)(B). The April 22, 2010 letter does not contain such information. Additionally, the Court

notes that section 2605 only requires loan servicers to respond to a proper QWR by correcting the

account discrepancy, explaining why the account is correct, or if the information is unavailable, by

providing contact information for someone who can assist the borrower with his inquiry. See 12

U.S.C. §§ 2605(e)(2)(A)–(C). Chase did not have an obligation to provide Plaintiff the

extraordinary amount of information requested in the April 22, 2010 letter. 

Accordingly, the Court finds that Plaintiff has not alleged sufficient facts to state a claim

under RESPA. See Consumer Solutions REO, LLC v. Hillery, 658 F. Supp. 2d 1002, 1014 (N.D.

Cal. 2009) (dismissing RESPA claim because the plaintiff’s letter “simply disputed the validity of

the loan and not its servicing”); see also Keen v. American Home Mortg. Servicing, Inc., 664 F.

Supp. 2d. 1086, 1096-97 (E.D. Cal. 2009). Defendants’ motion to dismiss is granted in part and

Plaintiff’s RESPA claim is dismissed with prejudice. 

Having determined that Plaintiff has not stated a claim under federal law, the only remaining

claims are his claims arising under state law. A district court may decline to exercise supplemental

jurisdiction in a case arising from a common nucleus of operative fact where, inter alia, it has

dismissed the federal claims. 28 U.S.C. § 1367(c)(3). In order to make this determination, courts

should consider factors such as “economy, convenience, fairness, and comity.” Acri v. Varian

Assocs., Inc., 114 F.3d 999, 1001 (9th Cir. 1997) (internal quotations and citations omitted). When

“federal-law claims are eliminated before trial, the balance of factors to be considered ... will point

toward declining to exercise jurisdiction over the remaining state-law claims.” Carnegie-Mellon

Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988), superseded by statute, 28 U.S.C. § 1447(c).

Here, it would be equally convenient for the parties to litigate the remaining claims in state

court, where this case originated. The Court concludes that principles of comity, convenience, and

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judicial economy weigh against retaining supplemental jurisdiction in this case and remand is

appropriate. Accordingly, to the extent Defendants seek dismissal of Plaintiff’s state law claims, the

Court denies their motion as moot and without prejudice to renewal in state court.

CONCLUSION

Based on the foregoing, Defendants’ motion to dismiss is GRANTED IN PART and

DENIED IN PART AS MOOT. The Court hereby REMANDS this matter to the Superior Court

of the State of California, County of San Diego.

IT IS SO ORDERED.

DATED: January 20, 2011

Hon. Michael M. Anello

United States District Judge

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