Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-02155/USCOURTS-cand-3_10-cv-02155-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BEATA KUREK and CHRISTIAN

KUREK,

Plaintiff(s),

v.

AMERICA’S WHOLESALE LENDER,

et al.,

Defendant(s).

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No. C 10-2155 BZ

ORDER GRANTING IN PART

DEFENDANT’S MOTION TO

DISMISS 

Before the Court is defendant America’s Wholesale

Lender’s (“AWL”) motion to dismiss the complaint. For the

following reasons, the motion is DENIED IN PART and GRANTED IN

PART.

AWL first moves to dismiss the complaint because

plaintiffs failed to allege proper tender. Tender is not 

required to be proffered at this stage. The cases cited by 

the defendant require tender where a plaintiff alleges some

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1 To the extent Saldate v. Wilshire Credit Corp., 686

F.Supp.2d 1051 (E.D. Cal. 2010) holds differently, that case

relied on cases requiring tender where procedural

irregularities were alleged and did not analyze this issue

presumably because the motion to require tender was unopposed. 

In any event, that ruling is not binding on this Court and does

not appear to have been followed on this point.

2 Contrary to defendant’s position raised at oral

argument, Rosal v. First Federal Bank of Calif., 671 F.Supp.2d

1111 (N.D. Cal. 2009) does not stand for the proposition a

plaintiff must tender even when attacking the validity of an

underlying debt. That case relied upon cases which require

tender when the plaintiff alleges a procedural irregularity,

but does not speak to situations where a plaintiff properly

alleges that a loan was fraudulently consummated. Id. at 54. 

Edejer v. DHI Mortgage Co., 2009 U.S. Dist. Lexis 52900 (N.D.

Cal. 2009) is similarly distinguishable as the pro se plaintiff

in that case neither alleged that the underlying note was

forged nor opposed the motion to dismiss. 

2

procedural irregularity in a foreclosure proceeding.1 The

bulk of the cases cited by defendant did not address whether

tender is required where a plaintiff alleges a substantive

irregularity as plaintiffs have done here by alleging forgery

and fraud in the consummation of the underlying security.2 “A

tender may not be required where it would be inequitable to do

so . . . . Also, if the action attacks the validity of the

underlying debt, a tender is not required since it would

constitute an affirmative of the debt.” Onofrio v. Rice, 55

Cal. App. 4th, 413, 424 (1997) quoting 4 Miller & Starr, Cal.

Real Estate (2d ed. 1989) Deeds of Trust & Mortgages, § 9:154,

p. 508-512. Here, plaintiffs contest the validity of the

underlying debt and tender is therefore not required. 

Moreover, “a trial judge ha[s] the discretion to

condition rescission on tender by the borrower of the property

of the property he has received from the lender.” Yamamoto v.

Bank of New York, 329 F.3d 1167, 1171 (9th Cir. 2003). 

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(internal citations omitted). The judge’s discretion is

dependent upon “the equities present in a particular case, as

well as consideration of the legislative policy.” Id.

(internal citations omitted). Because of the seriousness of

the allegations present here, to dismiss the claim for failure

to allege tender at this moment would be premature.

Next, AWL moves to dismiss the TILA claims as untimely. 

Plaintiffs admit that the claims are untimely, but argue that

they should be subject to equitable tolling. “The limitations

period in [TILA] runs from the date of consummation of the

transaction but the doctrine of equitable tolling may, in the

appropriate circumstances, suspend the limitations period

until the borrower discovers or had reasonable opportunity to

discover the fraud or nondisclosures that form the basis for

the TILA action.” King v. State of Calif., 784 F.2d 910, 915

(9th Cir. 1986). 

The statute of limitations for damage claims under TILA

is one year. Here, the financing at issue was consummated on

March, 28, 2006. Compl. ¶ 2. Plaintiffs argue that the

statute should be tolled because of the allegedly inequitable

conduct of the loan agent, Anna Wodkowska. According to the

complaint, in June 2008, plaintiffs discovered that the

signatures on their loan documents were forged when AWL denied

their request for a copy of their loan file on the grounds

that Beata Kurek’s signature did not match the signature on

the loan documents. Compl. ¶ 11. Plaintiffs filed this suit

on May 19, 2010. Plaintiffs allege that they knew of the lack

of TILA disclosures by April of 2009, more than one year

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before filing suit in this case. Compl. ¶ 18; Opposition p.

8:2-5. Reading the complaint in the light most favorable to

the plaintiffs, the statute of limitations on the TILA damage

claim ran no later than April of 2010. 

At the hearing, plaintiffs argued for the first time that

the intervening Chapter 11 bankruptcy proceeding tolled the

statute of limitations. Plaintiffs argued that when they

entered bankruptcy the TILA damage claim could have been

timely filed, and the bankruptcy stayed even unfiled claims

for limitations purposes. Therefore, when the bankruptcy

terminated in May of 2010, the limitations period began to run

again and the claim was thereafter timely filed. Plaintiffs

provided no support for this proposition and did not properly

raise the argument in their opposition. The Court is unaware

of any authority for the contention that the filing of a

Chapter 11 bankruptcy proceeding tolls the statute of

limitations on unasserted causes of action. Therefore,

plaintiffs’ fourth cause of action is DISMISSED. 

AWL also moves to dismiss the fifth cause of action, for

rescission under TILA. The right of rescission may last up to

three years depending on when or if a lender delivers a

statement containing the requisite TILA disclosures. 

Hefferman v. Bitton, 882 F.2d 379, 383 (9th Cir. 1989). 

However, under TILA the right of rescission is completely

extinguished after three years from the date of the loan's

consummation. 15 U.S.C. § 1635(f); Beach v. Ocwen Federal

Bank, 523 U.S. 410, 417-18 (1998). Equitable tolling does not

apply to an action for rescission under TILA. See Mays v.

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3 To the extent that plaintiffs do not oppose AWL’s

motion to dismiss their “Declaratory/Injunctive Relief” cause

of action, that motion is GRANTED. It appears that plaintiffs

misnumbered the causes of action on the cover page of the

complaint and skipped from the “First” cause of action to the

“Third” in the text of the complaint. There is no

independently labeled “Seventh” cause of action for

Declaratory/Injunctive relief. 

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U.S. Bank Nat. Ass., 2010 WL 318537, 4 (E.D.Cal. 2010) and

cases cited therein. Here, plaintiffs executed a TILA

Rescission Notice on April 27, 2009, which is more than three

years after the consummation of the loan, a point which

plaintiff did not contest at the hearing. The fifth cause of

action is therefore DISMISSED.

AWL further moves to dismiss the sixth cause of action

which alleges a violation of California Business and

Professions Code § 17200. Defendant simply ignores the

factual allegations of unfair business practices contained in

paragraphs 68 through 71. The motion to dismiss the sixth

cause of action is DENIED.

IT IS ORDERED THAT AWL’s motion to dismiss plaintiffs’

FOURTH and FIFTH causes of action is GRANTED.3

 The motion to

dismiss the remaining causes of action is DENIED. Defendant

shall answer by August 9, 2010. 

Dated: July 26, 2010

 Bernard Zimmerman 

 United States Magistrate Judge

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