Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-03858/USCOURTS-cand-3_09-cv-03858-1/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1441 Petition for Removal- Property Damage

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOHN W. JONES and VIOLA B. JONES,

Plaintiffs,

 v.

PREMIER ONE FUNDING, INC.,

GREENPOINT MORTGAGE FUNDING, INC.,

DOES 1 THROUGH 50, INCLUSIVE,

Defendants.

 

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No. C-09-3858 SC

ORDER GRANTING

MOTIONS TO DISMISS 

I. INTRODUCTION

Plaintiffs John W. Jones and Viola B. Jones ("Plaintiffs")

brought this suit in Alameda Superior Court. See Notice of

Removal, Docket No. 1, Ex. 15 ("Third Am. Compl."). Defendant

Bank of America, N.A., ("Bank of America") removed the case to

this Court because of federal questions raised in Plaintiffs'

Third Amended Complaint. See Notice of Removal. On November 30,

2009, the Court dismissed Plaintiffs' claims against Bank of

America and GMAC Mortgage, LLC ("GMAC"), with leave to amend. 

Docket No. 23 ("Nov. 30, 2009 Order"). Plaintiffs filed a Fourth

Amended Complaint on December 17, 2009. Docket No. 26 ("Fourth

Am. Compl."). 

GMAC and Bank of America now move to dismiss the claims

brought against them in the Fourth Amended Complaint. Docket Nos.

Case 3:09-cv-03858-SC Document 43 Filed 03/10/10 Page 1 of 8
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1 Plaintiffs have apparently misfiled their Fourth Amended

Complaint because page three is missing. The alleged facts appear

to be the same as in Plaintiff's Third Amended Complaint. 

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27 ("GMAC MTD"), 28 ("Bank of America MTD"). Plaintiffs responded

to the motions, and GMAC and Bank of America filed replies. 

Docket No. 34 ("Pl.s' Resp."), 35 ("GMAC Reply"), 36 ("Bank of

America Reply"). For the reasons stated herein, the motions to

dismiss are GRANTED. 

II. BACKGROUND

A. Plaintiffs' Allegations

Plaintiffs were the owners of a single family home at 915

92nd Avenue, Oakland, California. Fourth Am. Compl. ¶ 4. In an

effort to reduce their mortgage payments, Plaintiffs entered into

a loan for $400,500 on or around January 23, 2007.1 Id. ¶¶ 9-10. 

Greenpoint Mortgage Funding, Inc. ("Greenpoint") was the lender. 

Id. After escrow closed, Plaintiffs realized Greenpoint had split

the loan into two parts for the alleged purposes of evading

California anti-deficiency laws, evading disclosure requirements

of the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. ("TILA"),

and for the alleged purpose of securing extra lender fees and

costs. Id. ¶¶ 9-11.

After the close of escrow, "Greenpoint assigned a portion of

the loan to GMAC Mortgage and/or GMAC also known as General Motors

Acceptance Corporation, hereinafter GMAC and or Bank of America." 

Id. ¶ 15. Plaintiffs allege that their claims against the

original creditors can also be asserted against GMAC and Bank of

America. Id. Plaintiffs received letters advising them that Bank

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of America now owns the obligations. Id. ¶ 2. GMAC and Bank of

America move to dismiss Plaintiffs' claims against them. GMAC MTD

at 1; Bank of America MTD at 1.

III. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure

12(b)(6) "tests the legal sufficiency of a claim." Navarro v.

Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal can be based

on the lack of a cognizable legal theory or the absence of

sufficient facts alleged under a cognizable legal theory. 

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.

1990). Allegations of material fact are taken as true and

construed in the light most favorable to the nonmoving party.

Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir.

1996). However, the court need not accept as true legal

conclusions couched as factual allegations. Ashcroft v. Iqbal,

129 S.Ct. 1937, 1949-50 (2009). "Threadbare recitals of the

elements of a cause of action, supported by mere conclusory

statements, do not suffice." Id. at 1949. With regard to wellpleaded factual allegations, the court should assume their truth,

but a motion to dismiss should be granted if the plaintiff fails

to proffer "enough facts to state a claim for relief that is

plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544,

547 (2007).

IV. DISCUSSION

Plaintiffs' Fourth Amended Complaint asserts two causes of

Case 3:09-cv-03858-SC Document 43 Filed 03/10/10 Page 3 of 8
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action against GMAC and Bank of America: (1) Breach of Statutory

Duties under TILA and the Home Ownership Equity Protection Act

("HOEPA"), 15 U.S.C. § 1639; and (2) "Declaratory Relief to Insure

Compliance with Statutory Duties in Foreclosure Mitigation and

Credit Availability Act against Loan Servicers." Fourth Am.

Compl. ¶¶ 24-38.

A. TILA and HOEPA

The Court previously dismissed Plaintiffs' TILA and HOEPA

claims against GMAC and Bank of America based on the one-year

statute of limitations for a damages claim. Nov. 30. 2009 Order

at 6-7. Plaintiffs now reassert their TILA and HOEPA claims

against all Defendants, relying on the three-year statute of

limitations that applies to the rescission remedy. Fourth Am.

Compl. ¶ 29. 

Plaintiffs allege that all Defendants breached their

statutory disclosure duties under TILA and HOEPA. Fourth Am.

Compl. ¶¶ 24-33. TILA seeks to protect credit consumers by

mandating "meaningful disclosure of credit terms." 15 U.S.C. 

§ 1601(a). 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). HOEPA, an amendment to TILA, provides that "[a] creditor

shall not engage in a pattern or practice of extending credit to

consumers under mortgages referred to in section 1602(aa) of this

title based on the consumers' collateral without regard to the

consumers' repayment ability, including the consumers' current and

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expected income, current obligations, and employment." 15 U.S.C.

§ 1639(h). TILA has been amended to extend liability to assignees

of the original creditor in certain situations. 15 U.S.C. 

§ 1641(a). However, a servicer of a consumer obligation "shall

not be treated as an assignee of such obligation . . . unless the

servicer is or was the owner of the obligation." Id. § 1641(f). 

Here, Plaintiffs' allegations relating to TILA and HOEPA

violations focus on what Greenpoint, the lender, was required to

do. Plaintiffs allege that Greenpoint failed to make adequate

disclosures, Fourth Am. Compl. ¶¶ 26-27, extended credit to

Plaintiffs without regard to their ability to repay, id. ¶ 28, and

sold all or part of the loan without advising Plaintiffs of the

identity of the new owner or assignee, id. ¶ 33. The allegations

against Bank of America and GMAC hinge on the assertion that

"[a]fter the close of escrow, Greenpoint assigned a portion of the

loan to . . . GMAC and or Bank of America." Id. ¶ 15.

According to Bank of America, it cannot be liable to

Plaintiffs under TILA or HOEPA because its "only role in this

transaction was that it purchased a servicer of the loan." Bank

of America MTD at 5. Bank of America states that it "does not own

the loans at issue. BAC Home Loan Servicing, LP, an affiliate of

Bank of America, though a separate entity, is merely the

subservicer of the loan." Id. at 6 (italics in original). 

According to GMAC, the Fourth Amended Complaint does not

adequately state facts to support that GMAC is an assignee of the

loans at issue. GMAC MTD at 3.

Plaintiffs respond to the motions to dismiss as follows:

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GMAC and Bank of America provide plaintiffs

statements each month. These statements fail to

specify whether the senders are the owners or

the servicers. We added these parties in an

effort to ferret out this information. . . .

Plaintiffs will accept the representation of

Bank of America and GMAC that they are merely

servicers. However, they believe that TILA now

requires that they supply the names of the

actual owners of the obligations . . .

Plaintiffs ask this Court to order Bank of

America and GMAC to supply plaintiffs counsel

the names and addresses and other identifying

information of the actual owners. Once this

information is supplied, plaintiffs will dismiss

these claims against GMAC and Bank of America,

without prejudice. 

Pl.s' Resp. at 2-3.

It appears, then, that Plaintiffs have sued Bank of America

and GMAC in an effort to discover who owns the loan or loans at

issue in this case. Plaintiffs did not have to add Bank of

America and GMAC as parties in order to "ferret out this

information." Both California's rules of civil procedure and the

federal rules permit Plaintiffs to obtain discovery from

nonparties. See Cal. Code Civ. P. § 2020.010; Fed. R. Civ. P. 45. 

Because a mere loan servicer usually cannot be treated as an

assignee, 15 U.S.C. § 1641(f), and because Plaintiffs accept the

representation of Bank of America and GMAC that they are mere loan

servicers, the Court DISMISSES the TILA and HOEPA claims with

respect to Bank of America and GMAC. The dismissal is WITH LEAVE

TO AMEND in the event that nonparty discovery reveals a basis for

asserting viable TILA and HOEPA claims against one or both of

these parties.

B. Declaratory Relief

In their third cause of action, Plaintiffs assert that

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"Public Law 111-22 titled Helping Families Save Their Homes Act of

2009 was enacted for the purpose of compelling loan servicers such

as GMAC and Bank of America to provide assistance to persons such

as plaintiffs." Fourth Am. Compl. ¶ 37. In their response to the

motions to dismiss, Plaintiffs assert that this law imposes a duty

on Bank of America and GMAC to "discuss and negotiate loan

modification with plaintiffs." Pl.s' Resp. at 3

 The Court has reviewed Public Law 111-22, section 201, which

has been codified as 15 U.S.C. § 1639a, and it does not require

loan servicers to engage in loan modification. The law protects

loan servicers who engage in modification activities from

liability. 15 U.S.C. § 1639a(b). As stated in the Congressional

findings, this law authorizes loan servicers "to modify mortgage

loans and engage in other loss mitigation activities," and it

establishes "a safe harbor to enable such servicers to exercise

these authorities." Pub. L. No. 111-22, § 201(a), 123 Stat. 1638

(2009). It does not compel servicers to provide modification

assistance to Plaintiffs. Accordingly, the Court DISMISSES

Plaintiff's third cause of action WITHOUT LEAVE TO AMEND.

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V. CONCLUSION

For the reasons stated above, Plaintiffs' second cause of

action is DISMISSED as to Bank of America and GMAC WITH LEAVE TO

AMEND in the event that nonparty discovery reveals a basis for

asserting a viable TILA or HOEPA claim against either party. 

Plaintiffs' third cause of action is DISMISSED as to all

Defendants WITHOUT LEAVE TO AMEND.

IT IS SO ORDERED.

March 10, 2010 ____________________________ UNITED STATES DISTRICT JUDGE

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