Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00205/USCOURTS-casd-3_10-cv-00205-1/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

JOSE WENDE,

Plaintiff,

v.

COUNTRYWIDE HOME LOANS, INC.,

et al.,

Defendants.

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Civil No. 10-cv-205-L(BLM)

ORDER:

(1) GRANTING MOTION TO

DISMISS SECOND AMENDED

COMPLAINT [DOC. 27], AND

(2) REMANDING REMAINING

CLAIMS TO STATE COURT FOR

ALL FURTHER PROCEEDINGS

On October 29, 2009, Plaintiff Jose Wende commenced this mortgage-foreclosure action

against Defendants Countrywide Home Loans, Inc., Countrywide Bank, N.A., Countrywide

Brokerage Arm, and BAC Home Loans Servicing, LP (“BAC Home Loans”) in the San Diego

Superior Court. Thereafter, Defendants removed the action to this Court. On April 1, 2011,

Plaintiff filed a Second Amended Complaint (“SAC”). Defendants now move to dismiss the

SAC. Plaintiff opposes.

The Court found this motion suitable for determination on the papers submitted and

without oral argument. See Civ. L.R. 7.1(d.1). (Doc. 35.) For the following reasons, the Court

GRANTS Defendant’s motion to dismiss as to all of Plaintiff’s federal claims, and REMANDS

the remaining state-law claims to the San Diego Superior Court for all further proceedings.

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I. BACKGROUND

Plaintiff owns real property located at 528 Bayona Loop in Chula Vista, California

(“Property”). (SAC ¶ 1 [Doc. 26].) On May 10, 2006, Plaintiff refinanced the Property and

obtained a loan with Countrywide Home Loans by signing a note and deed of trust. (Id. ¶ 17.) 

On June 19, 2006, Plaintiff borrowed more funds from Countrywide Bank, signing another note

and deed of trust. (Id. ¶ 17.) Both loans were secured by the Property. (Id. ¶ 18.) Subsequently,

Plaintiff fell behind on his payments and was unsuccessful in his attempt to modify the loans. 

(Id. ¶ 70–74.) Eventually, the loans were transferred to BAC Home Loans, and it commenced

foreclosure proceedings against the Property. (Id. ¶ 124.)

On October 29, 2009, Plaintiff filed a complaint in the San Diego Superior Court to resist

the foreclosure proceedings. On January 27, 2010, Defendants removed the action to this Court

based on federal-question jurisdiction under 28 U.S.C. § 1331. (Notice of Removal [Doc. 1].) 

Plaintiff subsequently filed his First Amended Complaint (“FAC”), asserting the

following thirteen causes of action: (1) violation of the Real Estate Settlement Procedures Act

(“RESPA”); (2) violation of the Truth-in-Lending Act (“TILA”); (3) violation of the Fair Debt

Collection Practice Act (“FDCPA”); (4) violation of the Rosenthal Fair Debt Collection

Practices Act; (5) violation of California Civil Code § 1632 et seq.; (6) violation of the Business

and Professions Code § 17200; (7) negligent misrepresentation; (8) fraud; (9) rescission; (10)

quasi contract; (11) determination of validity of lien; (12) conspiracy; and (13) aiding and

abetting. (Doc. 17.) Plaintiff requested damages, rescission, and other remedies.

On April 29, 2010, Defendants moved to dismiss the FAC. This Court granted the

motion with leave to amend. Thereafter, Plaintiff filed the SAC with the same thirteen causes of

action. Defendants now move to dismiss the SAC. (Doc. 27.) Plaintiff opposes. (Doc. 51.) 1

 When Plaintiff initially filed his opposition to this motion, it was stricken twice from the 1

docket due to his failure to follow the Court’s orders. (Docs. 29, 34.) Plaintiff did not file a

corrected opposition before Defendants filed their reply, but rather sought reconsideration after

the Court granted Defendants’ effectively unopposed motion to dismiss. Upon further

consideration, the Court reinstated the motion to dismiss and ordered Defendants to re-file his

opposition “exactly as it was filed on June 10, 2011.” However, Plaintiff, once again, failed to

comply with the Court’s order. (See Pl.’s Opp’n 1:8–9 (“Information has been deleted in order

to comply with the larger font requirement.”).)

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II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which relief can

be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal

sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court

must accept all allegations of material fact as true and construe them in light most favorable to

the nonmoving party. Cedars-Sanai Med. Ctr. v. Nat’l League of Postmasters of U.S., 497 F.3d

972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true. 

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not “necessarily

assume the truth of legal conclusions merely because they are cast in the form of factual

allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003)

(internal quotation marks omitted). In fact, the court does not need to accept any legal

conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, — , 129 S. Ct. 1937, 1949 (2009) 

“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.” Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the

allegations in the complaint “must be enough to raise a right to relief above the speculative

level.” Id. “To survive a motion to dismiss, a complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 129 S. Ct. at

1949 (citing Twombly, 550 U.S. at 570). “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.” Id. “The plausibility standard is not akin to a ‘probability

requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” 

Id. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory

or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749

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

Generally, courts may not consider material outside the complaint when ruling on a

motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19

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(9th Cir. 1990). However, documents specifically identified in the complaint whose authenticity

is not questioned by parties may also be considered. Fecht v. Price Co., 70 F.3d 1078, 1080 n.1

(9th Cir. 1995) (superceded by statutes on other grounds). Moreover, the court may consider the

full text of those documents, even when the complaint quotes only selected portions. Id. It may

also consider material properly subject to judicial notice without converting the motion into one

for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994).

 

III. DISCUSSION

A. Plaintiff’s TILA Claims Are Time Barred. 

“TILA protects consumers from fraud, deception, and abuse within the residential secured

lending marketplace by mandating that lenders disclose certain information to borrowers.” 

McOmie-Gray v. Bank of Am. Homes Loans, — F.3d — , 2012 WL 390167, at *2 (9th Cir.

2012). Under TILA, damage claims are subject to a one-year statute of limitations, 15 U.S.C. §

1640(e), and rescission claims are subject to a three-year statute of limitations, 15 U.S.C. §

1635(f). The statute of limitations begins to run at the time the loan documents were signed. 

Meyer v. Ameriquest Mortg. Co., 342 F.3d 899, 902 (9th Cir. 2003) (“The failure to make the

required disclosures occurred . . . at the time the loan documents were signed.”).

The doctrine of equitable tolling may “suspend the limitations period until the borrower

discovers or had reasonable opportunity to discover the fraud or nondisclosures that form the

basis of the TILA action.” King v. State of Cal., 784 F.2d 910, 915 (9th Cir. 1986). Equitable

tolling “applies in situations . . . ‘where the complainant has been induced or tricked by his

adversary’s misconduct into allowing the filing deadline to pass.’” Velazquez v. GMAC Mortg.

Corp., 605 F. Supp. 2d 1049, 1061 (C.D. Cal. 2008) (quoting O’Donnell v. Vencor, Inc., 465

F.3d 1063, 1068 (9th Cir. 2008)). A court may only grant a motion to dismiss based on the

running of the statute-of-limitations period “if the assertions of the complaint, read with the

required liberality, would not permit the plaintiff to prove that the statute was tolled.” Supermail

Cargo, Inc. v. United States, 68 F.3d 1204, 1206 (9th Cir. 1995).

Here, Plaintiff indicates that he consummated his loans in May and June 2006. (SAC ¶

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17.) However, he did not commence this action until October 2009, more than three years later. 

Thus, unless Plaintiff is entitled to equitable tolling, his TILA claims are time barred.

In his opposition, Plaintiff contends that equitable tolling applies because he is a native

Spanish speaker, but the loan documents were provided in English, which made it “more

difficult for Plaintiff to discover the TILA violations in English documents.” (Pl.’s Opp’n

9:21–24.) However, in the SAC, Plaintiff alleges that he “negotiated the terms of the LOANS in

Spanish; however the LOAN terms were provided to Plaintiff in English, and Plaintiff was

unaware that the terms verbally explained to Plaintiff were different than the terms in the LOAN

documents.” (SAC ¶ 54(a).) There are no allegations that the negotiation taking place in

Spanish was a barrier to Plaintiff in any way to discover any alleged TILA violations. Moreover,

no facts pled by Plaintiff indicates that he exercised his own due diligence or that Defendants

concealed any information that prevented discovery of this claim during the statutory period. 

See Santa Maria v. Pac. Bell, 202 F.3d 1170, 1178 (9th Cir. 2000) (“Equitable tolling may be

applied if, despite all due diligence, a plaintiff is unable to obtain vital information bearing on

the existence of his claim.”). Therefore, the allegations in the SAC do not justify applying the

doctrine of equitable tolling.

Accordingly, the Court DISMISSES WITH PREJUDICE Plaintiff’s TILA claims. 

B. Plaintiff’s RESPA Claim Is Not Sufficiently Pled.

“RESPA imposes certain disclosure obligations on loan servicers who transfer or assume

the servicing of a federally related mortgage loan.” Morris v. Bank of America, No. C 09-02849,

2011 WL 250325, at *4 (N.D. Cal. Jan. 26, 2011) (citing 12 U.S.C. § 2605(b)). Under RESPA,

a Qualified Written Response (“QWR”) is “written request from the borrower (or an agent of the

borrower) for information relating to the servicing of such loan.” 12 U.S.C. § 2605(e)(1)(A). 

“The term ‘servicing’ means receiving any scheduled periodic payments from a borrower

pursuant to the terms of any loan . . . and making the payments of principal 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.” 12 U.S.C. § 2603(i)(3). Among other things, a QWR must

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include a “statement of the reasons for the belief of the borrower, to the extent applicable, that

the account is in error or provide[] sufficient detail to the servicer regarding other information

sought by the borrower.” Id. § 2605(e)(1)(B)(ii). 

Here, Plaintiff alleges that his QWR satisfies the statutory requirements provided by

RESPA because it: (1) “was in writing and not a notice on a payment coupon”; (2) “referenced

the name and address of Plaintiff, along with both loan numbers”; (3) “requested information

with sufficient detail related to the servicing of the loan”; and (4) “referenced a dispute.” (SAC

¶ 44.) Plaintiff also adds that he made at least twenty-six broad requests for information related

to his loan. (SAC ¶ 46.) In their motion, Defendants challenge the legitimacy of the QWR,

arguing that Plaintiff fails to allege the basis for his belief that the account was in error in the

QWR and that the requests made do not pertain to the servicing of his loan. (Defs.’ Mot. 8:3–5.) 

Defendants are correct. 

The SAC does not contain any allegations regarding Plaintiff’s beliefs that the account is

in error. Consequently, it appears that Plaintiff sought “other information” related to servicing

his loans. However, nearly all of Plaintiff’s requests from the alleged QWR are unrelated to the

servicing of the loan, and Plaintiff does not direct the Court to any specific allegations to

conclude otherwise. Rather, the alleged QWR appears to contain largely requests relating to the

original loan transaction and its subsequent history. For example, the requested information

includes, among many others, “loan origination date,” “total amount borrowed,” “all estimated

and final settlement statements,” “whether a deficiency would be sought after a foreclosure,” “if

any debt is considered an acquisition debt,” and “intentions as to adverse actions and credit

reporting.” (SAC ¶ 46.) Plaintiff effectively demands anything that relates to his loan from its

inception through July 2009, and in some requests, beyond. Such requests lack sufficient detail

under RESPA and do not fall within its confines. See, e.g., Junod v. Dream House Mortg. Co.,

No. CV 11-7035, 2012 WL 94355, at *4 (C.D. Cal. Jan. 5, 2012) (dismissing RESPA claim

because plaintiff’s alleged QWR requests did not relate to loan servicing and because the

requests fell outside the scope of RESPA); Derusseau v. Bank of Am., N.A., No. 11 CV 1766,

2011 WL 5975821, at *4 (S.D. Cal. Nov. 29, 2011) (Anello, J.) (finding that a QWR that

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requests “anything” related to the loan is not covered by § 2605).

Moreover, § 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 her

inquiry. Junod, 2012 WL 94355, at *4 (citing 12 U.S.C. §§ 2605(e)(2)(A)–(C)). BAC Home

Loans does not have an obligation to provide Plaintiff with the extraordinary amount of

information that he requested. See Derusseau, 2011 WL 5975821, at *4. Therefore, even if

Plaintiff’s alleged QWR request was otherwise a proper QWR, his request exceeds the scope of

information Defendants were required to provide in response. Junod, 2012 WL 94355, at *4.

Accordingly, the Court DISMISSES WITH PREJUDICE Plaintiff’s RESPA claim.

C. BAC Home Loans Is Not a Debt Collector under FDCPA.

“The [FDCPA] prohibits debt collector[s] from making false or misleading

representations and from engaging in various abusive and unfair practices.” Heintz v. Jenkins,

514 U.S. 291, 292 (1995). To be liable for an FDCPA violation, a defendant must, as a

threshold matter, be a “debt collector” within the meaning of those acts. Id. at 294. 

Under the FDCPA, a debt collector is “any person who uses any instrumentality of

interstate commerce or the mails in any business the principal purpose of which is the collection

of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or

due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). This definition includes “any

creditor who, in the process of collecting his own debts, uses any name other than his own which

would indicate that a third person is collecting or attempting to collect such debts.” Id. §

1692a(6). The FDCPA does not, however, cover “the consumer’s creditors, a mortgage

servicing company, or any assignee of the debt, so long as the debt was not in default at the time

it was assigned.” Nool v. HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009)

(quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)); see also 15 U.S.C. §

1692a(4) (defining “creditor”). Consequently, a loan servicer is not a debt collector if it

acquired the loan before the borrower was in default. See Schlegel v. Wells Fargo Bank, N.A.,

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799 F. Supp. 2d 1100, 1103-04 (N.D. Cal. 2011).

Here, Defendants argue that BAC Home Loans is not a debt collector as defined in the

FDCPA, and that any debt-collection efforts by Defendants were made to collect on the debt that

Plaintiff owed to Defendants. (Defs.’ Mot. 11:7–9, 12:2–5.) Plaintiff responds by directing the

Court to allegations that show that he negotiated a loan modification with BAC Home Loans, but

that it was a ruse in order to collect on the outstanding debt. (Pl.’s Opp’n 11:22–12:2.) Despite

whatever belief Plaintiff has regarding BAC Home Loans’ intent during the loan-modification

negotiations, the alleged facts show that BAC Home Loans is a loan servicer that negotiated a

loan modification. In fact, though Plaintiff does not explicitly allege that BAC Home Loans is

the owner of the debt, he alleges later in the SAC that the loans were transferred to BAC Home

Loans (SAC ¶ 124), which would suggest it is indeed the owner of the debt, likely making BAC

Home Loans a creditor or assignee of the debt. See Nool, 653 F. Supp. 2d at 1053. Thus, the

allegations in the complaint do not show that BAC Home Loans is a debt collector. Plaintiff

simply fails to allege facts that lead to a reasonable inference that BAC Home Loans is anything

other than a loan servicer. See Iqbal, 129 S. Ct. at 1949.

Accordingly, the Court DISMISSES WITH PREJUDICE Plaintiff’s FDCPA claim.

D. Plaintiff’s Remaining State-Law Claims

Under 28 U.S.C. § 1367(c)(3), federal district courts have discretion to decline to exercise

supplemental jurisdiction over state-law claims when the court has dismissed all claims over

which it has original jurisdiction. This Court has dismissed with prejudice Plaintiff’s TILA,

RESPA, and FDCPA claims, all of the claims over which it has original jurisdiction. 

Consequently, the Court declines to exercise jurisdiction over the remaining state-law claims,

and remands the remainder of this action to state court.

//

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IV. CONCLUSION & ORDER

In light of the foregoing, the Court GRANTS Defendants’ motion to dismiss, and

DISMISSES WITH PREJUDICE Plaintiff’s TILA, RESPA, and FDCPA claims. See

Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011) (“[A] district

court may dismiss without leave where . . . amendment would be futile.”). (Doc. 27.) The Court

REMANDS the remaining state-law claims to the San Diego Superior Court for all further

proceedings. The Clerk of the Court shall mail a certified copy of this order to state court.

IT IS SO ORDERED.

DATED: February 27, 2012

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. BARBARA L. MAJOR

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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