Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-02369/USCOURTS-caed-2_09-cv-02369-2/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 15:1601 Truth in Lending

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JPMorgan asserts that it has been “erroneously sued as 1

JPMorgan Chase FKA Washington Mutual bank.” (Not. of Mot. to Dismiss

2:3-4.)

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ROBERTA YUHRE, )

)

Plaintiff, ) 2:09-cv-02369-GEB-JFM

)

v. ) ORDER DISMISSING PLAINTIFF’S

) FEDERAL CLAIMS AND DECLINING

JP MORGAN CHASE BANK FKA ) TO EXERCISE SUPPLEMENTAL

WASHINGTON MUTUAL, AMERICAN ) JURISDICTION OVER PLAINTIFF’S

MORTGAGE NETWORK, INC,; MORTGAGE ) STATE LAW CLAIMS

ELECTRONIC REGISTRATION SYSTEMS, )

INC.; KEVIN R. COOPER DBA FUNDING; )

KEVIN R. COOPER and NORMAN J. )

SCHRIEVER, )

)

Defendants. )

)

JPMorgan Chase Bank, N.A. (“JPMorgan”) and Mortgage

Electronic Registration Systems, Inc. (“MERS”) filed a motion under

Federal Rule of Civil Procedure 12(b)(6) to dismiss Plaintiff’s first

amended complaint. (Docket No. 17.) American Mortgage Network, Inc. 1

(“Amnet”) also filed a dismissal motion under Federal Rule of Civil

Procedure 12(b)(6) and a motion to strike certain portions of

Plaintiff’s complaint under Federal Rule of Civil Procedure 12(f). 

(Docket Nos. 22, 23.) Plaintiff only opposes JPMorgan and MERS’

dismissal motion. For the reasons stated below, Plaintiff’s federal

claims are dismissed with prejudice and the court, under 28 U.S.C. §

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1367(c)(3), declines to continue exercising supplemental jurisdiction

over Plaintiff’s remaining state law claims.

I. LEGAL STANDARD

A Rule 12(b)(6) motion “challenges a complaint’s compliance

with . . . pleading requirements.” Champlaie v. BAC Home Loans

Servicing, LP, No. S-09-1316 LKK/DAD, 2009 WL 3429622, at *1 (E.D.

Cal. Oct. 22, 2009). A pleading must contain “a short and plain

statement of the claim showing that the pleader is entitled to relief

. . . .” Fed. R. Civ. P. 8(a)(2). The complaint must “give the

defendant fair notice of what the [plaintiff’s] claim is and the

grounds upon which relief rests . . . .” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 555 (2007). Further, “[a] pleading that offers

labels and conclusions or a formulaic recitation of the elements of a

cause of action will not do. Nor does a complaint suffice if it

tenders naked assertions devoid of further factual enhancement.” 

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

To avoid dismissal, the plaintiff must allege “only enough

facts to state a claim to relief that is plausible on its face.” 

Twombly, 550 U.S. at 547. “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct

alleged.” Iqbal, 129 S. Ct. at 1949. Plausibility, however, requires

more than “a sheer possibility that a defendant has acted unlawfully.” 

Id. “When a complaint pleads facts that are merely consistent with a

defendant’s liability, it stops short of the line between possibility

and plausibility of entitlement to relief.” Id. (quotations and

citation omitted).

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In evaluating a dismissal motion under Rule 12(b)(6), the

court “accept[s] as true all facts alleged in the complaint, and

draw[s] all reasonable inferences in favor of the plaintiff.” Al-Kidd

v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). However, neither

conclusory statements nor legal conclusions are entitled to a

presumption of truth. See Iqbal, 129 S. Ct. at 1949-50.

Both Plaintiff and Defendants request that the court

consider certain documents outside of the pleadings. Specifically,

JPMorgan and MERS request that the court take judicial notice of a

deed of trust recorded July 31, 2006 with the Sacramento County

Recorder’s Office. (JPMorgan and MERS’ Request for Judicial Notice

(“RJN”) Ex. 1.) Amnet also requests that the court consider the same

deed of trust as well as an Interest Only Adjustable Rate Note dated

July 26, 2006 and signed by Plaintiff, a Truth-in-Lending Disclosure

Statement dated July 26, 2006 and signed by Plaintiff and a Notice of

Right to Cancel dated July 26, 2006 and signed by Plaintiff. (Amnet

RJN Ex. A-D.) Plaintiff does not oppose the consideration of these

documents and submits her own request that the court take judicial

notice of a law review article entitled “The Great Collapse: How

Securitization Caused the Subprime Meltdown” and a copy of a mortgage

loan statement dated April 13, 2009. (Pla.’s RJN Ex. 1-2.)

“As a general rule, a district court may not consider any

material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” 

Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)

(quotations and citation omitted). There are, however, two exceptions

to this general rule. Id. First, the “incorporation by reference”

doctrine permits a district court “to take into account documents

‘whose contents are alleged in a complaint and whose authenticity no

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party questions, but which are not physically attached to the

plaintiff’s pleading.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.

2005) (quotations and citations omitted). This doctrine is also

applicable “to situations in which the plaintiff’s claim depends on

the contents of a document, the defendant attaches the document to its

motion to dismiss, and the parties do not dispute the authenticity of

the document, even though the plaintiff does not explicitly allege the

contents of that document in the complaint.” Id. (quotations and

citations omitted). Therefore, a document is “incorporated by

reference” into a complaint only if: “(1) the complaint refers to the

document; (2) the document is central to plaintiff’s claim; and (3) no

party questions the authenticity of the document.” Delaney v. Aurora

Loan Servicing, Inc., No. C 09-3131 VRW, 2009 WL 5062339, at *2 (N.D.

Cal. Dec. 23, 2009) (citing Branch v. Tunnell, 14 F.3d 449, 453-454

(9th Cir. 1994)).

The second exception allows consideration of facts which may

be judicially noticed. See Mack v. S. Bay Beer Distribs., Inc., 789

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 (1991)

(stating that “[o]n a motion to dismiss . . . a court may take

judicial notice of facts outside the pleadings.”). A fact may be

judicially noticed if it is either “generally known within the

territorial jurisdiction of the trial court” or “capable of accurate

and ready determination by resort to sources whose accuracy cannot

reasonably be questioned.” Fed. R. Evid. 201(b). 

Since the deed of trust is a publically recorded document,

it may be judicially noticed and Defendants’ request that it be

considered is granted. See W. Fed. Sav. & Loan Ass’n v. Heflin Corp.,

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797 F. Supp. 790, 792 (1992) (taking judicial notice of documents in a

county’s public record, including deeds of trust). 

Amnet argues the other documents it has submitted may be

considered since they are referred to in Plaintiff’s first amended

complaint or form the basis of Plaintiff’s claims. Plaintiff’s first

amended complaint makes multiple references to the “Promissory Note”

executed on July 26, 2006 between Plaintiff and Amnet as well as the

“TILA disclosure” and “Notice of Right to Cancel.” (First Amended

Compl. (“FAC”) ¶¶ 30, 32, 42, 44, 59, 61.) Further, these documents

and their contents, are central to Plaintiff’s claims and she does not

dispute the authenticity of the documents Amnet submitted. Therefore,

Amnet’s request for judicial notice of these documents is granted. 

Plaintiff’s request for judicial notice, however, is denied

since neither the article nor mortgage loan statement are facts

subject to judicial notice nor incorporated into the complaint by

reference.

II. BACKGROUND 

Plaintiff alleges that in April 2006, defendant Norman

Schriever, a loan officer for defendant Streamline Funding, approached

her and solicited her to refinance her property. (FAC ¶ 26.) 

Shriever allegedly represented that “he could get [Plaintiff] the

‘best deal’ and the ‘best interest rates’ available on the market.” 

(Id. ¶ 27.) Defendant Shriever also allegedly “advised Plaintiff that

if the loan ever became unaffordable, he would simply refinance it

into an affordable loan . . . .” (Id. ¶ 28.) 

On or about July 26, 2006, Plaintiff obtained a loan of

$242,000.00 from Amnet. (Id. ¶ 32; Amnet RJN A.) The terms of the

loan were memorialized in an Interest Only Adjustable Rate Note (the

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“Note”), which was secured by a deed of trust recorded against the

real property located at 9558 Big Timber Drive in Elk Grove,

California. (Id.) The deed of trust identifies Amnet as the lender,

First American Title Insurance Company as the trustee, and MERS as

beneficiary and the nominee for the lender and the lender’s successors

and assigns. (Amnet RJN B.) Plaintiff, however, alleges she was not

given a “a copy of any of the loan documents prior to [the] closing

[and] [a]t the closing, Plaintiff was only given a few minutes to sign

the documents.” (FAC ¶ 30.) Further, Plaintiff alleges she was not

allowed to review the loan documents and “was simply told to sign and

initial the documents provided by the notary.” (Id.) Plaintiff also

alleges that the “deed of trust must fail” since MERS “is not licensed

to be and/or act as a nominee or a beneficiary of any of the

Defendants . . . .” (Id. ¶ 33.)

Plaintiff filed her initial complaint in this federal court

on August 25, 2009, alleging nine claims under federal and California

law against six named defendants. JPMorgan and MERS filed a motion to

dismiss Plaintiff’s original complaint on September 29, 2009; Amnet

also filed a dismissal motion on October 9, 2009. Both dismissal

motions, however, were mooted when Plaintiff filed a first amended

complaint on October 23, 2009. This amended complaint is the subject

of Defendants’ pending dismissal motions.

III. DISCUSSION

A. Federal Claims

1. Truth in Lending Act Claims

Amnet argues that Plaintiff’s Truth in Lending Act (“TILA”)

claims should be dismissed. Specifically, Amnet contends that

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Plaintiff’s TILA damages claim and TILA rescission claims are both

barred by the applicable statute of limitations.

a. TILA Damages Claim

TILA “requires creditors to provide borrowers with clear and

accurate disclosures of terms dealing with things like finance

charges, annual percentage rates of interest, and the borrower’s

rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998) (citing

15 U.S.C. §§ 1631, 1632, 1635, 1638)). Failure to satisfy TILA’s

disclosure requirements subjects a lender to “statutory and actual

damages traceable to a lender’s failure to make the requisite

disclosures . . . .” Id. (citing 15 U.S.C. § 1640(e)). TILA,

however, imposes a one-year statute of limitations within which a

claim for damages “may be brought.” 15 U.S.C. § 1640(e). “[A]s a

general rule[,] [this] limitations period starts [to run] at the

consummation of the transaction.” King v. California, 784 F.2d 910,

915 (9th Cir. 1986). “Consummation” is defined under TILA as “the

time that a consumer becomes contractually obligated on a credit

transaction.” Grimes v. New Century Mortgage Corp., 340 F.3d 1007,

1009 (9th Cir. 2003) (quoting 12 C.F.R. § 226.2(a)(13)).

Here, Plaintiff became “contractually obligated on a credit

transaction” on July 26, 2006, when she executed the Note. (Amnet RJN

A; FAC ¶ 32.) The statute of limitations for bringing her TILA

damages claim, therefore, expired one-year later on July 26, 2007. 

Plaintiff, however, did not file her initial complaint in this action

until August 25, 2009, well outside of the limitations period. 

Therefore, Plaintiff’s TILA damages claim is barred by the one-year

statute of limitations. 

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Since Plaintiff has already amended her complaint once,

failed to indicate that the doctrine of equitable tolling applies and

has not opposed dismissal of this claim, Plaintiff’s TILA damages

claim is dismissed with prejudice. 

b. TILA Rescission Claim

“Under TILA, a borrower has three business days following

the consummation of a loan transaction to rescind the transaction.” 

Burch v. GMAC Mortgage, LLC, No. C-09-4214 MMC, 2010 WL 934088, at *1

(N.D. Cal. Mar. 15, 2010) (citing 15 U.S.C. § 1635(a)). “A borrower’s

right of rescission is extended to three years, however, if the lender

(1) fails to deliver to the borrower ‘all material disclosures,’ see

12 C.F.R. § 226.23(a)(3), or (2) fails to deliver to the borrower ‘two

copies of [a] notice of the right to rescind,’ see 12 C.F.R. §§

226.23(a)(3), 226.23(b)(1).” Id. The three-year limitations period

in section 1635(f) “represents an absolute limitation on rescission

actions [and] bars any claims filed more than three years after the

consummation of the transaction. Therefore, § 1635(f) is a statute of 

repose, depriving the courts of subject matter jurisdiction when a §

1635 claim is brought outside of the three-year limitation period.” 

Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002)

(quotations and citation omitted).

Plaintiff’s loan was “consummated” on July 26, 2006. (Amnet

RJN Ex. A.) Therefore, the three-year statue of limitations expired

on July 26, 2009. Plaintiff, however, did not file her initial

complaint in this action until August 25, 2009. Plaintiff does not

otherwise allege that she exercised her right to rescind within the

limitations period by “notif[ying] the creditor of the rescission by

mail, telegram or other means of written communication.” 12 C.F.R. §

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226.23(a)(2) (prescribing how a consumer may effectuate rescission);

see also Santos v. Countrywide Home Loans, No. 1:09-CV-00912-AWI-SM,

2009 WL 2500710, at *4 (E.D. Cal. Aug. 14, 2009) (noting that some

courts “in addressing TILA rescission claims have focused on timely

written notice as the key to exercising a consumer’s right to

rescission.”). Rather, Plaintiff alleges that she “gives notice of

rescission by and through [her] First Amended Complaint.” (FAC ¶ 60.) 

“Because [Plaintiff] did not attempt to rescind . . . within the

three-year limitation period, her right to rescind [has] expired” and

the court lacks subject matter jurisdiction over her claim. Miguel,

309 F.3d at 1164-65.

Since Plaintiff has already been provided with the

opportunity to amend her complaint and she has not opposed Amnet’s

motion, further amendment would be futile and Plaintiff’s TILA

rescission claim is dismissed with prejudice. See Gates v. Wachovia

Mortgage, FSB, No. 2:09-cv-02464 FCD/EFB, 2010 WL 902818, at *4 (E.D.

Cal. Feb. 19, 2010) (dismissing with prejudice TILA rescission claim

that was filed outside of three-year limitations period). 

2. Real Estate Settlement Procedures Act Claims

a. Claims Alleged Against Amnet

Ament argues that Plaintiff’s claim alleged under the Real

Estate Settlement Procedures Act (“RESPA”) should be dismissed since

“(i) the claim is barred by either the one or three year statute of

limitations (12 U.S.C. § 2614); (ii) [P]laintiff fails to plead facts

sufficient to constitute a claim for relief; and (iii) [P]laintiff

fails to plead the required elements.” (Amnet Mot. to Dismiss 2:14-

18.)

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Plaintiff’s allegation that “[Amnet] violated RESPA at the 2

time of the closing . . . by failing to correctly and accurately comply

with the disclosure requirements” is interpreted as alleging a violation

of section 2605(a).

10

Plaintiff’s first amended complaint alleges that Amnet

violated various requirements imposed by section 2605 and section 2607

of RESPA. Specifically, Plaintiff pleads while she “is not certain at

this time exactly which of Defendants was actually the servicer of

[her] Loan at any given time, [p]ursuant to 12 U.S.C. §§ 2605(b) and

2605(c), . . . [Amnet] . . . had a statutory obligation to notify

Plaintiff, within 15 days, of the assignment, sale or transfer of the

servicing rights to Plaintiff’s loan.” (FAC ¶ 86.) Further,

Plaintiff alleges that Amnet and JPMorgan failed to provide Plaintiff

notice of the assignment, sale, or transfer of servicing rights to

Plaintiff’s loan.” (Id.) Plaintiff also alleges Amnet “violated

RESPA at the time of the closing of the Loan . . . by failing to

correctly and accurately comply with the disclosure requirements of 12

U.S.C. § 2601 et seq. and Regulation X.” (Id. ¶ 87.) Lastly,

Plaintiff alleges that Amnet “further violated 12 U.S.C. § 2607 by

receiving ‘kickbacks’ or referral fees disproportional to the work

performed.” (Id. ¶ 89.) “As a result of . . . [Amnet’s alleged]

failure to comply with RESPA, Plaintiff [alleges she] has suffered and

continues to suffer damages and costs of suit.” (Id. ¶ 93.)

i. Claims Alleged Under Section 2605

Plaintiff alleges Amnet violated various provisions of

section 2605, including subsections (a), (b) and (c). Section 2

2605(f) imposes liability on loan servicers for actual and statutory

damages for any failure to make the specific disclosures required

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under section 2605. 12 U.S.C. § 2605(f). Specifically, section

2605(f) provides:

Whoever fails to comply with any provision of

[section 2605] shall be liable to the borrower for

each such failure to the following amounts . . . .

In the case of any action by an individual, an

amount equal to the sum of – (A) any actual damages

to the borrower as a result of the failure; and (B)

any additional damages, as the court may allow, in

the case of a pattern or practice of noncompliance

with the requirements of this section, in an amount

not to exceed $1,000.

12 U.S.C. § 2605(f)(1)(A),(B). 

Plaintiff does not allege Amnet engaged in a “pattern or

practice of noncompliance” and therefore has not stated a claim for

statutory damages. See Lal v. Am. Home Servicing, Inc., No. 2:09-cv01585 MCE-DAD, --- F. Supp. 2d ----, 2010 WL 225524, at *4 (E.D. Cal.

Jan. 19, 2010) (stating that “[t]o recover statutory damages,

Plaintiffs must plead some pattern or practice of noncompliance with

RESPA.”).

While section 2605(f)(1)(A) “does not explicitly make a

showing of damages part of the pleading standard, a number of courts

have read the statute as requiring a showing of pecuniary damages in

order to state a claim [for actual damages under section 2605 of

RESPA].” Pok v. Am. Home Mortgage Servicing, Inc., No. CIV 2:09-2385

WBS EFB, 2010 WL 476674, at *5 (E.D. Cal. Feb. 3, 2010) (quoting Allen

v. United Fin. Mortgage Corp., 2009 WL 2984170, at *5 (N.D. Cal. Sept.

15, 2009)). “[A]lleging a breach of RESPA duties alone does not state

a claim under RESPA. Plaintiff must, at a minimum, also allege that

the breach resulted in actual damages.” Id. (quoting and citing

Hutchinson v. Del. Sav. Bank FSB, 410 F. Supp. 2d 374, 383 (D.N.J.

2006)); see also Lal, 2010 WL 225524 at *4 (finding that a plaintiff

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alleging a RESPA claim under section 2605 must allege a loss related

to the RESPA violation); Allen, 660 F. Supp. 2d at 1097 (requiring

plaintiff to allege pecuniary loss to state a RESPA claim for actual

damages); Singh v. Washington Mut. Bank, No. C-09-2771 MMC, 2009 WL

2588885, at *5 (N.D. Cal. Aug. 19, 2009) (dismissing RESPA claim since

“plaintiffs have failed to allege they suffered any actual damages as

a result” of defendants’ alleged RESPA violation). This pleading

requirement, however, is interpreted liberally. Yulaeva v. Greenpoint

Mortgage Funding, Inc., No. CIV S-09-1504 LKK/KJM, 2009 WL 2880393, at

*15 (E.D. Cal. Sept. 3, 2009). Nonetheless, “the loss alleged must be

related to the RESPA violation itself.” Lal, 2010 WL 225524, at *4. 

Further, “simply having to file suit [does not suffice] as a harm

warranting actual damages. If such were the case, every RESPA suit

would inherently have a claim for damages built in.” Id.

Plaintiff merely alleges that as a result of Amnet’s alleged

RESPA violations, “[she] has suffered and continues to suffer damages

and costs of suit.” (FAC ¶ 93.) “Even under a liberal pleading

standard for harm, this level of generality fails.” Pok, 2010 WL

476674, at *5 (finding same allegation of harm insufficient to state a

section 2605 claim for actual damages); see also Lal, 2010 WL 225524,

at *4 (stating that “simply having to file suit [does not] suffice” to

state a section 2605 claim for actual damages).

Since Plaintiff has already amended her complaint once and

has presented no opposition to the dismissal of this claim,

Plaintiff’s section 2605 claims for actual and statutory damages

alleged against Amnet are dismissed with prejudice.

//

//

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ii. Claim Alleged Under Section 2607

Amnet argues that Plaintiff’s RESPA claim alleged under

section 2607 should also be dismissed because it is barred by the oneyear statute of limitations in section 2614. Section 2614 provides

that a claim for a violation of section 2607 “may be brought . . .

[within] 1 year . . . from the date of the occurrence of the violation

. . . .” 12 U.S.C. § 2614.

“The primarily ill that § 2607 is designed to remedy is the

potential for unnecessarily high settlement charges, . . . caused by

kickbacks, fee-splitting, and other practices that suppress price

competition for settlement services. This ill occurs, if at all, when

the plaintiff pays for the tainted service, typically at the closing.” 

Jensen v. Quality Loan Serv. Corp., No. 09-CV-01789 OWW-DLB, 2010 WL

1136005, at *10 (E.D. Cal. Mar. 22, 2010) (quoting Snow v. First Am.

Title Ins. Co., 332 F.3d 356, 359-60 (5th Cir. 2003)). Therefore,

“[b]arring extenuating circumstances, the date of the occurrence of

the violation is the date on which the loan closed.” Ayala v. World

Sav. Bank, FSB, 616 F. Supp. 2d 1007, 1020 (C.D. Cal. 2009) (quoting

Bloom v. Martin, 865 F. Supp. 1386-87 (N.D. Cal. 1994), aff’d by, 77

F.3d 318 (9th Cir. 1996)); see also Jensen, 2010 WL 1136005, at *10

(stating that “courts have considered the ‘occurrence of the

violation’ as the date the loan closed.”); Finley v. LaSalle Bank Nat.

Ass’n, No. C 09-2965 SI, 2009 WL 3401453, at *2 n.3 (N.D. Cal. Oct.

20, 2009) (noting that the one-year statute of limitations period for

a section 2607 claim began to run when plaintiff signed loan

documents). 

Plaintiff signed the Note for her mortgage loan on July 26,

2006 but did not file her initial complaint until August 25, 2009. 

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 Plaintiff also argues in her opposition that “it remains unclear 3

whether Defendant JPMorgan received ‘kickbacks’ or referral fees

disproportional to the work performed, which is prohibited under 12

U.S.C. § 2607(a).” (Opp’n 11:25-27.) However, Plaintiff’s first

amended complaint includes no such allegation against JPMorgan.

Further, Plaintiff has not indicated why any section 2607 claim is not

barred by the applicable one-year statute of limitations. 

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Therefore, Plaintiff’s section 2607 claim is time-barred. Since

Plaintiff has already amended her complaint once, has not indicated

that the doctrine of equitable tolling is applicable, and she has not

opposed dismissal of this claim, Plaintiff’s section 2607 RESPA claim

alleged against Amnet is dismissed with prejudice.

b. Claims Against JPMorgan

JPMorgan and MERS argue that Plaintiff’s RESPA claims

alleged against JPMorgan should be dismissed because JPMorgan has no

connection to Plaintiff’s loan; Plaintiff has not alleged any actual

damages; and the statute of limitations has expired for any violation

alleged under section 2605. Plaintiff responds she has properly

stated a claim for violations of section 2605(e)(2) and sections

2605(b) and (c).3

Plaintiff alleges JPMorgan violated various subsections of

section 2605, including (b), (c), and (e). However, again,

Plaintiff’s only allegation of actual damage resulting from JPMorgan’s

alleged RESPA violations is that she “has suffered and continues to

suffer damages and costs of suit.” (Id. ¶93.) For the reasons

discussed above in the decision on Plaintiff’s section 2605 claims

alleged against Amnet, Plaintiff’s allegation of actual harm is

insufficient to state a section 2605 claim against JPMorgan.

In their initial dismissal motion, JPMorgan and MERS

provided Plaintiff with notice that to state a claim under section

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2605, Plaintiff needed to plead actual damages. However, Plaintiff’s

first amended complaint includes the same deficient allegation stated

in her original complaint. Further, Plaintiff’s opposition to

JPMorgan and MERS’ dismissal motion does not address this challenge to

her complaint. Therefore, further amendment would be futile, and

Plaintiff’s section 2605 claims alleged against JPMorgan are dismissed

with prejudice.

B. Supplemental Jurisdiction Over Plaintiff’s State Law Claims

After the dismissal of Plaintiff’s TILA and RESPA claims,

only her state law claims remain pending. The court, therefore, may

sua sponte decide whether to continue exercising supplemental

jurisdiction. See Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001

n.3 (9th Cir. 1997) (en banc) (suggesting that a district court may,

but need not, sua sponte decide whether to continue exercising

supplemental jurisdiction under 28 U.S.C. § 1367(c)(3) once all

federal law claims have been dismissed). 

Under 28 U.S.C. § 1367(c)(3), a district court “may decline

to exercise supplemental jurisdiction over a [state law] claim” if

“the district court has dismissed all claims over which it has

original jurisdiction . . . .” The decision to decline supplemental

jurisdiction under 28 U.S.C. § 1367(c)(3) should be informed by the

values of economy, convenience, fairness and comity as delineated by

the Supreme Court in United Mine Workers of Am. v. Gibbs, 383 U.S.

715, 726 (1996). Acri, 114 F.3d at 1001. Since state courts have

the primary responsibility for developing and applying state law, the

Gibbs values do not favor retaining jurisdiction in this case. See

Acri, 114 F.3d at 1001 (stating that “in the usual case in which all

federal-law claims are eliminated before trial, the balance of factors

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will point towards declining to exercise jurisdiction over the

remaining state-law claims” (quotations and citation omitted)); Curiel

v. Barclays Capital Real Estate Inc., No. S-09-3074 FCD/KJM, 2010 WL

729499, at *1 (E.D. Cal. Mar. 2, 2010) (stating “primary

responsibility for developing and applying state law rests with the

state courts” and declining to exercise supplemental jurisdiction

after dismissal of the federal claims); Anderson v. Countrywide Fin.,

No. 2:08-cv-01220-GEB-GGH, 2009 WL 3368444, at *5 (E.D. Cal. Oct. 19,

2009) (finding that “the Gibbs values do not favor continued exercise

of supplemental jurisdiction” once all federal claims have been

resolved). Therefore, the court declines to continue exercising

supplemental jurisdiction over Plaintiff’s remaining state law claims

and they are dismissed without prejudice under 28 U.S.C. § 1367(c)(3). 

Accordingly, this case shall be closed.

Dated: April 6, 2010

 

GARLAND E. BURRELL, JR.

United States District Judge

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