Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-03684/USCOURTS-cand-3_09-cv-03684-8/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 15:1601 Truth in Lending

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

WENCESLAO BOJORQUEZ,

Plaintiff,

 v.

MARTHA GUTIERREZ, et al.,

Defendant. /

No. C 09-03684 SI

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANTS’

MOTIONS TO DISMISS

Defendants’ motions to dismiss were scheduled for hearing on July 23, 2010. Pursuant to Civil

Local Rule 7-1(b), the Court found these matters appropriate for resolution without oral argument and

VACATED the hearing. Having considered the papers submitted, and for good cause shown, the Court

hereby rules as follows.

BACKGROUND

Plaintiff filed this case on August 12, 2009, naming numerous defendants and alleging fourteen

causes of action related to the purchase of real property in May 2005. Shortly thereafter, various

defendants filed motions to dismiss the complaint pursuant to Rule 12(b)(6). Before a hearing was held

on the motions, plaintiff voluntarily filed a First Amended Complaint (“FAC”) on December 16, 2009.

Defendants moved to dismiss the FAC for failure to state a claim and on the ground that some of

plaintiff’s claims were time-barred. In the order stemming from defendants’ motions to dismiss the

FAC, the Court found that some of plaintiff’s claims were indeed time-barred and that while plaintiff

stated a colorable basis for equitable tolling, the Court needed clarification on when plaintiff discovered

facts giving rise to his claims and how diligently he pursued the claims. See March 25, 2010 Order

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(Docket No. 61).

In the matter now before the Court, defendants Martha Gutierrez (“Ms. Gutierrez”), Marin 1

Real Estate, Inc. (“Marin 1”), and Ocwen Loan Servicing, LLC (“Ocwen”) bring separate motions to

dismiss plaintiff’s Second Amended Complaint (“SAC”). Ms. Gutierrez and Marin 1 move to dismiss

plaintiff’s Second, Third, Fourth, Fifth, Sixth, Seventh, Ninth, Tenth, and Eleventh Causes of Action

on the ground they are all are time-barred. Additionally, these defendants argue that plaintiff, once

becoming aware of the factual basis of his claims, did not pursue his claim diligently and is, therefore,

not entitled to equitable tolling of the statutes of limitations. Defendant Ocwen argues that plaintiff’s

Eighth Cause of Action for violation of the Fair Housing Act, 42 U.S.C. § 301, et seq., the only cause

of action against Ocwen, is time-barred and that plaintiff is not eligible for equitable tolling of the

statute of limitations. Ocwen also argues the claim should be dismissed pursuant to Rule 12(b)(6) for

failure to state a claim. 

This case arises out of events leading up to plaintiff’s purchase of a home in the spring of 2005,

and the eventual foreclosure and resale of that home in March 2008. Plaintiff alleges that he can neither

speak nor read English and is only marginally literate in Spanish, and alleges that all defendants are

aware of this fact. SAC ¶¶ 18, 19. Plaintiff dealt primarily with defendant Ms. Gutierrez, an agent of

defendant Marin 1 who often works with and allegedly targets Spanish-speaking clients. According to

plaintiff, all verbal negotiations regarding the loan and home sale transactions were in Spanish but all

of the documentation presented to him was in English. Id. ¶ 37, 40, 43. Plaintiff alleges that he

therefore relied on Ms. Gutierrez to translate the terms of any documentation related to the transaction.

Id. ¶¶ 25, 26, 28-40, 42, 43. 

Plaintiff alleges that Ocwen, along with other defendants not presently before the Court, was part

of a joint enterprise/conspiracy to sell subprime mortgage-loan products with only English

documentation to people of Hispanic nationalities with limited or no ability to speak English. The

purported goals of the enterprise were to maximize sales by concealing unfavorable terms in English;

to give incentives to conspirators’ loan brokers to sell the subprime products; and to insulate the

conspirators from losing money by promptly assigning and securitizing the loans. Id. ¶ 22. Plaintiff

alleges that Ms. Gutierrez never disclosed to him the existence of these other entities involved in the

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loan transaction. Id. ¶ 38. 

Plaintiff alleges that, on or about June 15, 2007, he received a statement from Ocwen demanding

a mortgage payment of $2420 rather than the $1591 monthly payment he had been paying for the two

previous years. SAC ¶ 71. Two months later, the demand rose to $2628/month. Id. Plaintiff states that

he did not know the reason for the increase because Ms. Gutierrez had concealed from him the correct

mortgage terms that provided for such an increase. Id. In July or August 2007, plaintiff purports to

have realized that Ms. Gutierrez had lied to him and to have stopped making mortgage payments. Id.

¶ 72. Some time after October 15, 2007, plaintiff received a notice of default. Id. ¶ 73. He states that

he cooperated with the foreclosure proceedings that took place between October 2007 and March 2008,

despite suffering health problems. Id. ¶ 78(a). 

Thereafter, plaintiff alleges that he contacted Legal Aid of Marin (“Legal Aid”) in April 2008

to seek legal assistance, and worked with Legal Aid attorneys for the following ten months or so until

he retained the attorney now representing him in this case in March or April 2009. Id. ¶ 78(b)-78(o).

Although the original complaint was filed on August 25, 2009, plaintiff was not able to obtain copies

of the original loan application and other documents until January 13, 2010, almost a month after he

filed the FAC previously dismissed in part by the Court. Id. ¶ 78(p).

Now before the Court is Ms. Gutierrez and Marin 1’s motion to dismiss the Second, Third,

Fourth, Fifth, Sixth, Seventh, Ninth, Tenth, and Eleventh Causes of Action, and Ocwen’s motion to

dismiss the Eighth Cause of Action.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it

fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss,

the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 570 (2007). This “facial plausibility” standard requires the plaintiff

to allege facts that add up to “more than a sheer possibility that a defendant has acted unlawfully.”

Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). While courts do not require “heightened fact pleading

of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative

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level.” Twombly, 550 U.S. at 544, 555. 

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court

must assume that the plaintiff’s allegations are true and must draw all reasonable inferences in the

plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the

court is not required to accept as true “allegations that are merely conclusory, unwarranted deductions

of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

If the Court dismisses the complaint, it must then decide whether to grant leave to amend. The

Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if no request

to amend the pleading was made, unless it determines that the pleading could not possibly be cured by

the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal

quotation marks omitted).

DISCUSSION

I. Motion to Dismiss by Ocwen

Plaintiff’s Eighth Cause of Action against Ocwen alleges a violation of the Fair Housing Act

(“FHA”). The FHA provides that “[i]t shall be unlawful for any person or other entity whose business

includes engaging in residential real estate-related transactions to discriminate against any person in

making available such a transaction, or in the terms or conditions of such a transaction, because of race,

color, religion, sex, handicap, familial status, or national origin.” 42 U.S.C. § 3605. Claims under the

FHA are evaluated using a Title VII discrimination analysis, and may be brought under a theory of

disparate treatment or disparate impact. Harris v. Itzhaki, 183 F.3d 1043, 1051 (9th Cir. 1999).

Plaintiff’s claim for disparate treatment requires him to allege: “(1) plaintiff’s rights are protected under

the FHA; and (2) as a result of the defendant’s discriminatory conduct, plaintiff has suffered a distinct

and palpable injury.” Id.

Plaintiff alleges that Ocwen was part of a lending and servicing conspiracy that “conspired to

discriminate against Mr. Bojorquez on the basis of his race and national origin in the terms, conditions,

and privileges of the sale and financing of the Property.” Id. ¶ 147. Essentially, plaintiff’s theory is that

Ocwen conspired with the other defendants to target Spanish-speaking borrowers of Hispanic

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nationalities and fraudulently induce them to enter into unfavorable loans. Id. ¶¶ 147-151. In

dismissing a prior version of this claim from the FAC, the Court held that plaintiff had failed to plead

any facts tending to show that Ocwen played any role in the other defendants’ use of English-language

documentation, or that Ocwen’s actions were motivated by a discriminatory animus. In the SAC,

plaintiff clarifies that his theory under the FHA is that Ocwen and the other defendants conspired to

target plaintiff and other similarly-situated borrowers by providing loan documentation and subsequent

collection communications in English until such time as the borrower defaulted on the loan, at which

time Ocwen finally began sending collection letters in Spanish. SAC ¶ 147. As explained in plaintiff’s

opposition brief, his theory is that, pursuant to the conspiracy, “Ocwen made representations to those

non-English-speaker borrowers, including plaintiff, in English when they did not want the borrowers

to fully understand their rights and in Spanish when it wanted those borrowers to fully understand” the

fact of default and impending foreclosure. Oppo. at 6. 

Ocwen argues that plaintiff’s Eighth Cause of Action for violation of the FHA should be

dismissed because it is insufficient to state a claim under the FHA and is time-barred. The Court

disagrees with Ocwen on both grounds. First, in the Court’s view, plaintiff’s amended allegations are

sufficient to state a claim. Plaintiff’s allegations establish that he is within a class of persons intended

to be protected by the FHA, and that defendant Ocwen, acting with its alleged coconspirators, targeted

him and caused him injury. 

Second, although plaintiff’s allegations regarding the timing of defendant’s actions are not

always clear, it appears that plaintiff’s claim is timely. The statute of limitations for an FHA claim

brought by a private party is two years. See 42 U.S.C. § 3613(a)(1)(A). The statute begins to run upon

“the occurrence or the termination of an alleged discriminatory housing practice.” Id. Where, as here,

an FHA plaintiff “challenges not just one incident of conduct violative of the Act, but an unlawful

practice that continues into the limitations period, the complaint is timely when it is filed within [the

statutory period, running from] the last asserted occurrence of that practice.” Garcia v. Brockway, 526

F.3d 456, 462 (9th Cir. 2008) (quoting Havens Realty Corp. v. Coleman, 455 U.S. 363, 380-81 (1982)

(footnote omitted)). Here, plaintiff’s claim is based on an alleged conspiracy that began in 2005 at the

time plaintiff began working with Ms. Gutierrez and continued at least until Ocwen began sending

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Socop-Gonzalez v. Immigration and Naturalization Service, 272 F.3d 1176, 1194 (9th Cir.

2000) overruled Santa Maria on the related but different proposition that it is not necessary for the Court

to inquire if a plaintiff could have reasonably filed a motion or complaint within the remaining time in

a limitations period.

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Spanish-language default notices. Plaintiff alleges that he stopped making payments on the loan in July

or August 2007 and received a notice of default in October 2007. SAC ¶¶ 72-73. Even assuming that

the alleged conspiracy terminated when plaintiff received the initial notice of default, plaintiff would

be required to file his action by October 2009. As plaintiff filed his original complaint on August 12,

2009, his FHA claim is not time-barred. Ocwen’s motion to dismiss is therefore DENIED in its

entirety.

II. Motion to Dismiss by Ms. Gutierrez and Marin 1

A. Second Cause of Action: RESPA

Plaintiff’s Second Cause of Action alleges that defendants Ms. Gutierrez and Marin 1 violated

the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607, by failing to disclose the fact

that plaintiff was paying substantial origination and other fees, by accepting a portion of the these fees

as kickbacks, and by not disclosing to Mr. Bojorquez that they had both received commissions on the

sale of the property. SAC ¶¶ 90, 92-94. The statute of limitations for this provision of RESPA is one

year, and starts to run on the date the loan closes. See 12 U.S.C. §2614; Garcia v. Wachovia Mortg.

Corp., 676 F. Supp. 2d 895, 907 (C.D. Cal. 2009) (citing Snow v. First Am. Title Ins. Comp., 332 F.3d

356, 359 (5th Cir. 2003)).

Plaintiff alleges that the purchase transaction for the home closed on May 20, 2005. SAC ¶ 58.

However, plaintiff did not file his complaint until August 12, 2009, more than four years later.

Plaintiff’s RESPA claim is therefore untimely and must be dismissed unless plaintiff can plead a basis

for tolling the statute of limitations. “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.” Santa Maria v.

Pac. Bell, 202 F.3d 1170, 1178 (9th Cir. 2000).1

 The doctrine of equitable tolling “focuses on a

plaintiff’s excusable ignorance and lack of prejudice to the defendant.” Leong v. Potter, 347 F.3d 1117,

1123 (9th Cir. 2003). After showing that his failure to discover the facts giving rise to his claim was

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due to “excusable ignorance,” a plaintiff must also show that he pursued his claim diligently. Id.

The Court has previously stated that plaintiff’s lack of English proficiency and limited literacy

skills, combined with defendants’ alleged efforts to conceal the loan terms from him by providing oral

Spanish translations that were inconsistent with the English-language loan documentation, present a

colorable basis for equitable tolling. The Court held, however, that plaintiff did not plead sufficient

facts to enable the Court to determine when he discovered the basis for his claims, much less that he was

diligent in attempting to discover their basis. 

In the SAC, plaintiff alleges that he became aware of the possible existence of his claims in July

or August 2007, when he realized as a result of sudden changes in his monthly payment amounts that

Ms. Gutierrez had misrepresented the terms of the loan. SAC ¶¶ 71-72. He then contends that after he

began to suspect that the details of the contract were different from what he had previously believed

them to be, he diligently pursued his claims by attempting to secure legal assistance from Legal Aid and

ultimately retaining the attorney now representing him. Plaintiff appears to assert that the start of the

applicable statutes of limitations should be tolled until January 2010, when, through his attorney, he

received copies of the loan documents and learned “what had actually transpired with respect to the

financing arranged by Ms. Gutierrez.” Id. ¶ 78(p). Under California law, however, the accrual of a

cause of action is not delayed until such time as the plaintiff becomes “aware, not only of his injuries,

but also of defendants’ specific wrongful conduct.” Soliman v. Philip Morris Co., 311 F.3d 966, 971

(9th Cir. 2002). Rather, a claim accrues when the plaintiff “at least suspects a factual basis, as opposed

to a legal theory, for its elements, even if he lacks knowledge thereof – when, simply put, he at least

suspects that someone has done something wrong to him.” Norgart v. Upjohn Co., 981 P.2d 79, 88

(Cal.1999) (quotation marks, citation, and alteration omitted). 

Although the accrual of plaintiffs’ claims may be delayed until July or August 2007, when he

allegedly discovered his injuries, there is no basis for tolling the start of the statute until plaintiff

received copies of the loan documents and uncovered all the details of the transactions at issue. Because

the one-year statute on plaintiff’s RESPA claim expired in July or August 2008, one year before plaintiff

filed this action, his RESPA claim must be DISMISSED without leave to amend.

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 The Court was able to locate one case, Hernandez v. Sutter West Capital, No. C 09-3658 CRB,

2010 WL 539133, at *3-4 (N.D. Cal. Feb. 8, 2010), in which the court found that § 340(a) was not

applicable to a claim brought under California Civil Code § 1632. In that case, however, punitive

damages were not being sought in connection with the claim, and the court reasoned that § 340(a),

which applies to actions “upon a statute for a penalty or forfeiture,” therefore did not apply. In the

present case, plaintiff does seek punitive damages in connection with his claim. The Court will

therefore follow the consensus among other courts and apply the limitations period set forth in § 340(a).

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B. Third Cause of Action: California Civil Code §1632

The Third Cause of Action alleges that defendants Ms. Gutierrez and Marin 1 violated the

Spanish Language Contract Act, California Civil Code §1632, by failing to provide plaintiff with

Spanish-language copies of the purchase contract, the first mortgage, the second mortgage, and the title

policy. SAC ¶¶ 103-04. Defendants assert that the relevant statute of limitations for this claim is four

years under California Civil Code § 1693. However, courts that have considered the issue have

generally held that the relevant statute of limitations is California Civil Procedure Code §340(a), which

requires filing within one year from the date of signing of a contract. See Orozco v. Dhi Mortg. Co., No.

09-1894, 2010 WL 2757285, at *6 (S.D. Cal. Jul. 13, 2010); Espinoza v. Recontrust Co., N.A., No.

09-1687, 2010 WL 1568551, at *10 (S.D. Cal. Apr. 19, 2010); Castaneda v. Saxon Mortg. Servs., 687

F. Supp. 2d 1191, 1200 (E.D. Cal. 2009).2

 Plaintiff states that the purchase agreement was signed on

or about April 3, 2005 but does not give the exact dates for the signing of the mortgages or the title

policy. SAC ¶ 13. It does, however, appear from the SAC that these documents were completed around

the same time in 2005. Id. ¶¶ 43-44. Even assuming that plaintiff is entitled to equitable tolling of the

start of the statute of limitations until he discovered his injuries in July or August 2007, his claim under

California Civil Code § 1632 is still untimely, and is therefore DISMISSED without leave to amend.

C. Fourth, Sixth, Seventh, And Eleventh Causes of Action

Plaintiff’s Fourth Cause of Action alleges that defendants engaged in constructive fraud by

failing to disclose terms of loans, purchase agreements, fees, and other important facts. Id. ¶ 109-111.

The Sixth Cause of Action, for fraud, alleges that defendants made false representations to plaintiff,

thereby inducing him to execute the documents for the purchase of the property and mortgages. Id.

¶ 128-130. The Seventh Cause of Action, for deceit, alleges that defendants deceived plaintiff by

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suppressing various facts related to the purchase of the property and the terms of the mortgage loans.

Id. ¶ 138. Finally, the Eleventh Cause of Action alleges a breach of defendants’ fiduciary duty to

plaintiff to protect him from unnecessary loss and to place his interests over their own. Id. ¶ 174, 175.

The statute of limitations for these causes of action is three years, and begins to run upon “the discovery,

by the aggrieved party, of the facts constituting the fraud or mistake.” Cal. Civ. Proc. Code § 338(d).

Plaintiff contends that by July or August 2007, he had realized “Gutierrez had lied to him,” at

which time the three-year period started to run. SAC ¶ 72. He filed the original complaint on August

12, 2009, well within the three-year limit that would afford him until July or August 2010. Plaintiff’s

Fourth, Sixth, Seventh, and Eleventh Causes of Action are not time-barred, and defendants’ motion to

dismiss these causes of action on statute of limitations grounds is therefore DENIED.

D. Fifth Cause of Action

Plaintiff’s Fifth Cause of Action seeks equitable rescission of the sale of the property, the

mortgage loans, and any and all fees and payments under those contracts on the basis of the alleged

fraud and deceit discussed above. Id. ¶ 117-122. The statute of limitations for equitable rescission of

a written contract under California law is four years and “[w]here the ground for rescission is fraud or

mistake, the time does not begin to run until the discovery by the aggrieved party of the facts

constituting the fraud or mistake.” Cal. Civ. Proc. Code § 337(3). As discussed above, plaintiff did not

discover he had allegedly been lied to until July or August 2007, marking the starting point of the fouryear limitations period. Plaintiff filed this action on August 12, 2009, which is within the four-year

limit. Plaintiff’s claim is not time-barred and defendants’ motion to dismiss this cause of action is

DENIED.

E. Ninth and Tenth Causes of Action

Plaintiff’s Ninth Cause of Action, for negligence, alleges that Ms. Gutierrez and Marin 1, along

with other defendants, had a duty to keep plaintiff properly informed of all terms of the purchasing and

financing of the property and breached this duty by arranging and executing the loan documents in such

a manner as to prevent plaintiff from knowing their terms. Id. ¶ 156, 157. The Tenth Cause of Action

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alleges that defendants engaged in negligence per se by violating a number of state and federal statutes.

Under California law, claims for negligence and negligence per se have a statute of limitations

of two years, which begins to run when a plaintiff suspects that he has been wronged. Cal. Civ. Proc.

Code § 335.1; Soliman, 311 F.3d at 971-72 (applying California law). As stated above, plaintiff

allegedly did not discover that he had suffered any damage until July or August of 2007 and filed his

original complaint on August 12, 2009. Construing the facts in plaintiff’s favor and assuming the

August date, it appears that plaintiff filed the original complaint within the two-year limit and his Ninth

and Tenth Causes of Action are therefore not time-barred. Defendants’ motion to dismiss these causes

of action is therefore DENIED.

CONCLUSION

For the foregoing reasons, and for good cause shown, the Court hereby GRANTS in part and

DENIES in part the motion to dismiss filed by defendants Ms. Gutierrez and Marin 1, and DENIES the

motion to dismiss filed by defendant Ocwen. (Docket Nos. 68, 76). 

IT IS SO ORDERED.

Dated: July 26, 2010 SUSAN ILLSTON

United States District Judge

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