Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00125/USCOURTS-casd-3_10-cv-00125-0/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 15:1601 Truth in Lending

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 1

 The other Defendants have not been served in the matter and are not parties to the motion

to dismiss.

- 1 - 10cv125

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JOSEPH DURLAND,

Plaintiff,

CASE NO. 10 CV 125 JLS (CAB)

ORDER: (1) GRANTING

DEFENDANT’S REQUEST FOR

JUDICIAL NOTICE; (2)

GRANTING PLAINTIFF’S

REQUEST FOR JUDICIAL

NOTICE; (3) GRANTING

DEFENDANT’S MOTION TO

DISMISS

(Doc. No. 5.)

vs.

FIELDSTONE MORTGAGE COMPANY;

LITTON LOAN SERVICING LP; et al.,

Defendant.

Presently before the Court is Defendant Litton Loan Servicing LP’s1

 (“Defendant Litton”)

motion to dismiss Plaintiff Joseph Durland’s complaint. (Doc. No. 4.) Also before the Court is

Plaintiff’s opposition and Defendant Litton’s reply. (Doc. Nos. 6, 7.) For the reasons stated below,

the Court HEREBY GRANTS Defendant Litton and Plaintiff’s requests for judicial notice and

GRANTS Defendant Litton’s motion to dismiss. 

BACKGROUND

This action arises out of an alleged note, loan and security interest obtained by Plaintiff

Joseph Durland from Fieldstone Mortgage Company, loan # 1510987922 (the “loan”). (Doc. No.

1 (“Compl.”), ¶¶ 4, 12.) The loan was obtained on or about October 6, 2006 to refinance real

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 1 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 - 10cv125

property owned by Plaintiff in Valley Center, CA (the “subject property”). (Id. ¶¶ 1, 12.) Plaintiff

commenced this action by filing a complaint in this Court on January 15, 2010, asserting twelve

causes of action: (1) Violation of Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §

2605; (2) Violation of Truth-in-Lending Act (“TILA”), 15 U.S.C. § 1601; (3) Violation of Fair

Debt Collection Practice Act (“FDCPA”), 15 U.S.C. § 1692; (4) Violation of Rosenthal Fair Debt

Collections Practice Act, Cal. Civ. Code § 1788; (5) Violation of Cal. Civ. Code § 2924; (6)

Violation of Cal. Civ. Code § 2923.6; (7) Unfair Competition under Cal. Bus. & Prof. Code §

17200; (8) Negligent Misrepresentation; (9) Fraud; (10) Rescission; (11) Quasi-Contract; and (12)

Determination of Validity of Lien. (Doc. No. 1.) 

On March 23, 2010, Defendant Litton Loan Servicing LP, the only Defendant served in the

action, filed a motion to dismiss. (Doc. No. 5; see also Doc. No. 4.) On April 22, 2010, Plaintiff

filed a response in opposition to the motion. (Doc. No. 6.) Defendant Litton filed a reply on April

29, 2010. (Doc. No. 7.) The hearing on the motion set for May 6, 2010 was thereafter vacated and

the matter was taken under submission without oral argument.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that

the complaint “fail[s] to state a claim upon which relief can be granted,” generally referred to as a

motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and

sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a “short and plain

statement of the claim showing that the pleader is entitled to relief.” Although Rule 8 “does not

require ‘detailed factual allegations,’ . . . it [does] demand[] more than an unadorned, thedefendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, – US — , 129 S. Ct. 1937, 1949

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “a

plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] 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 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a

complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal,

129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 557).

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 2 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 - 10cv125

“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.’” Id. (quoting Twombly,

550 U.S. at 570); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts

pled “allow[] the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). That is not to say that the claim must

be probable, but there must be “more than a sheer possibility that a defendant has acted

unlawfully.” Id. Facts “‘merely consistent with’ a defendant’s liability” fall short of a plausible

entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). Further, the Court need not accept

as true “legal conclusions” contained in the complaint. Id. This review requires context-specific

analysis involving the Court’s “judicial experience and common sense.” Id. at 1950 (citation

omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere

possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is

entitled to relief.’” Id. 

Where a motion to dismiss is granted, “leave to amend should be granted ‘unless the court

determines that the allegation of other facts consistent with the challenged pleading could not

possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir.

1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.

1986)). In other words, where leave to amend would be futile, the Court may deny leave to

amend. See Desoto, 957 F.2d at 658; Schreiber, 806 F.2d at 1401.

DISCUSSION

I. Requests for Judicial Notice

As a threshold matter, Defendant Litton requests that the Court take judicial notice of the

following documents: the Deed of Trust which encumbers the subject property at issue, the

Notice of Default and Election to Sell under that Deed of Trust, the Notice of Trustee’s Sale, and

the two alleged Qualified Written Requests sent to Defendant Litton and Defendant Litton’s

response to the first QWR. (See Doc No. 4-1, Def. Request for Judicial Notice (“Def. RJN”).) 

“A district court ruling on a motion to dismiss may consider documents whose contents

are alleged in a complaint and whose authenticity no party questions, but which are not

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 3 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 - 10cv125

physically attached to the plaintiff’s pleading.” Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th

Cir. 1998) (quotation omitted). Also, “a district court ruling on a motion to dismiss may

consider a document the authenticity of which is not contested, and upon which the plaintiff’s

complaint necessarily relies.” Id. at 706. The complaint in this matter either references or

necessarily relies upon each of the documents for which Defendant seeks judicial notice. The

authenticity of the documents has not been challenged and Plaintiff does not oppose the request

for judicial notice. Accordingly, the Court HEREBY GRANTS Defendant Litton’s request for

judicial notice. 

Further, Plaintiff requests judicial notice of two documents submitted in support of its

opposition, the Notice of Right to Cancel and an October 2006 calendar. (See Doc No. 6-1, Pl.

Request for Judicial Notice (“Pl. RJN”).) For the same reasons as above, the Court HEREBY

GRANTS Plaintiff’s request for judicial notice. 

II. Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605

Plaintiff’s first cause of action is for violation of RESPA, 12 U.S.C. § 2605, and is

alleged against Defendant Litton only. The basis for Plaintiff’s RESPA claim is that Defendant

Litton failed to adequately respond to Plaintiff’s Qualified Written Requests (“QWR”) for

information regarding the loan and for an opportunity to work out the loan. (See Compl. ¶¶ 36-

44.) Plaintiff asserts that he sent a QWR to Defendant Litton on October 16, 2008 and January

6, 2009 and that Defendant Litton failed to “fully respond” and provide the requested

information within 60 days as required by RESPA, 12 U.S.C. § 2605. (Id. ¶¶ 37, 39, 40, 42.) 

The Court GRANTS Defendant Litton’s motion to dismiss this cause of action.

Plaintiff conclusively alleges that both purported QWRs satisfy “the statutory

requirements of a QWR under 12 U.S.C. § 2605(e)(1)(B) and 12 C.F.R. 3500.21(e)(2)(i).” 

(Compl. ¶¶ 38, 41.) This conclusory allegation does not establish that the alleged QWRs are

indeed QWRs pursuant to 12 U.S.C. § 2605(e)(1)(B). As such, the Complaint on its face does

not allow the Court to find that Plaintiff’s claim for relief is plausible. Iqbal, 129 S. Ct. at 1949;

see also Lincoln v. GMAC Mortgage, LLC, 2009 WL 5184412, at *2 (C.D. Cal. 2009). However,

the Court has taken judicial notice of the two QWRs sent to Defendant Litton. (See Def. RJN,

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 4 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 - 10cv125

Exs. 4, 5.) These documents make up for the alleged deficiencies in Plaintiff’s complaint and do

plausibly support a finding that the purported QWRs “include[], or otherwise enable[] the

servicer to identify, the name and account of the borrower.” 12 U.S.C. § 2605(e)(1)(B)(i). 

Further, the judicially noticed documents plausibly illustrate that the alleged QWRs “include[] a

statement of the reasons for the belief of the borrower . . . that the account is in error or provides

sufficient detail to the servicer regarding other information sought by the borrower.” Id. §

2605(e)(1)(B)(ii). Thus, the Court will not grant Defendant’s motion to dismiss based on

inadequate factual support that the alleged QWRs are in fact QWRs under the statute.

That said, to allege a claim under RESPA, Plaintiff must allege that Defendant’s failure

to adequately respond to the QWR(s) resulted in “actual damages to the borrower” and “any

additional damages . . . in the case of a pattern or practice of noncompliance with the

requirements” of § 2605. See 12 U.S.C. § 2605(f)(1). Here, Plaintiff alleges in his complaint:

As a proximate result of the negligent conduct of Defendants and their failures as alleged

herein, Plaintiff sustained damages, including monetary loss, medical expenses,

emotional distress, loss of employment, loss of credit, loss of opportunities, and other

damages to be determined at trial. As a proximate result of Defendants’ breach of duty

and all other actions as alleged herein, Plaintiff has suffered severe emotional distress,

mental anguish, harm, humiliation, embarassment, and mental and physical pain and

anguish, all in the amount to be established at trial. Plaintiff seeks to recover all possible

damages Plaintiff is entitled to recover pursuant to RESPA, including statutory and

punitive damages if possible.

(Compl. ¶ 44.)

To state a claim under RESPA, many courts have read § 2605 to require a showing of

pecuniary damages. See Copeland v. Lehman Bros. Bank, FSB, 2010 WL 2817179, at *3 (S.D.

Cal. July 15, 2010); see also Molina v. Wash. Mut. Bank, 2010 WL 431439, at *7 (S.D. Cal. Jan.

29, 2010). “This pleading requirement has the effect of limiting the cause of action to

circumstances in which plaintiff can show that a failure to respond or give notice has caused

them actual harm.” Copeland, 2010 WL 2817179, at *3 (quoting Shepherd v. Am. Home Mortg.

Servs., Inc., 2009 WL 4505925, at *3 (E.D. Cal. Nov. 20, 2009)). The Court finds that Plaintiff

has not sufficiently alleged actual or statutory damages. Specifically, Plaintiff’s allegations

consist only of conclusory allegations; Plaintiff fails to allege specific facts sufficient to support

how Defendant Litton’s alleged failure to respond to Plaintiff’s QWRs resulted in pecuniary

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 5 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 In its opposition, Defendant argues that Plaintiff’s claim for failure to respond to his QWRs

should be dismissed with prejudice because the QWRs were adequately responsive to Plaintiff’s

request for information regarding the servicing of the loans. (Opp. to MTD at 6.) The Court declines

to make such a factual determination at this stage in the litigation.

3

 Though the claim is against all Defendants named in the action, for purposes of this motion,

the Court addresses only the claim as it applies to Defendant Litton. 

- 6 - 10cv125

damages. Cf. Copeland, 2010 WL 2817179, at *4. As such, the Court finds that Plaintiff’s

claim for actual damages pursuant to RESPA is not sufficiently pled.

Similarly, the Court finds that Plaintiff has insufficiently pled his RESPA claim for

statutory damages. Specifically, Plaintiff has not plausibly pled a pattern or practice of

noncompliance with RESPA as required by 12 U.S.C. § 2605(f)(1)(b). Cf. Copeland, 2010 WL

2817179, at *4; see also Lal v. Am. Home Mortg. Servicing, 680 F. Supp. 2d 1218, 1223 (E.D.

Cal. 2010). 

For those reasons, the Court GRANTS Defendant Litton’s motion to dismiss Plaintiff’s

first cause of action for failing to adequately respond to Qualified Written Requests.2 

III. Rescission and Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq.

Plaintiff’s second cause of action is for violation of TILA, 15 U.S.C § 1601 and

Plaintiff’s tenth cause of action is for rescission, apparently under TILA. Plaintiff claims that he

is entitled to rescission pursuant to 15 U.S.C. § 1635(a) and Regulation Z, 12 C.F.R. § 226.23(b). 

(Compl. ¶¶ 47, 48.) The basis for Plaintiff’s claim is that Defendant Litton3

 failed to provide

Plaintiff with two copies of the notice of right to cancel. (Id. ¶ 48.) Plaintiff also claims that

Defendant Litton violated TILA and related regulations by failing to make adequate disclosures

at loan origination. (Id. ¶ 50, 51.) 

The Court finds that Plaintiff’s TILA claim is time-barred. TILA provides a one-year

statute of limitations period. 15 U.S.C. § 1640(e). The limitations periods commence on the date

the loan transaction is consummated unless equitable tolling applies. King v. California, 784

F.2d 910, 915 (9th Cir. 1986). Under certain circumstances, equitable tolling of the limitations

period 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.” Id. 

For claims of rescission under TILA, the borrower’s right to rescind expires three days

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 6 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7 - 10cv125

after the transaction. 15 U.S.C. § 1635(a); 12 C.F.R. § 226.23(a)(3). However, that right can be

extended up to three years if the creditor fails to provide certain material disclosures and two

copies of the consumer’s Notice of Right to Cancel. 15 U.S.C. § 1635(f); 12 C.F.R. §

226.23(a)(3). However, the right to rescind is completely extinguished at the end of the three

year period. See Beach v. Ocwen Bank, 523 U.S. 410, 412 (1998); see also Miguel v.

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

In this case, Plaintiff’s loan was consummated on October 31, 2006. (Def. RJN, Ex. A.) 

Plaintiff did not file suit until January 15, 2010, well outside both the one-year and three-year

limitations period. Furthermore, the Court finds that Plaintiff has not adequately alleged that

equitable tolling may be warranted. “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. Pacific Bell, 202 F.3d 1170, 1178 (9th Cir. 2000). Plaintiff’s conclusory

allegation that “Defendants have fraudulently concealed facts upon which the existence of

Plaintiffs’ claims is based, and as such, the statute of limitations is equitably tolled as to this

Cause of Action” is insufficient. (Compl. ¶ 46.) Plaintiff fails to allege the inability to discover

facts through reasonable dilligence or extraordinary circumstances beyond his control. See

Huynh v. Chase Manhattan Bank, 465 F.3d 992, 1004 (9th Cir. 2006). As such, the Court finds

that Plaintiff’s TILA claim is time-barred and that equitable tolling is not sufficiently alleged. 

Moreover, to the extent Plaintiff claims he is entitled to rescission because the Notice of

Right to Cancel failed to provide three business days in which Plaintiff may rescind the

transaction pursuant to 12 C.F.R. § 226.23(a)(3), the Court disagrees. Even assuming arguendo

that the disclosure requirements applied to Defendant Litton, a loan servicer, the Notice of Right

to Cancel complied with the requirements of TILA. The Notice of Right to Cancel states the

transaction date as Thursday, October 26, 2006 with a rescission date no later than Monday,

October 30, 2006. (See Pl. RJN, Exs. 1, 2). Plaintiff asserts that this Notice was deficient

because it only allowed for two business days to rescind, Friday, October 27, 2009 and Monday,

October 30, 2009. (See Opp. to MTD at 7.) This argument fails, however, because Plaintiff fails

to include Saturday, October 28, 2006 as the third business day. “For purposes of rescission

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 7 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

 Section 1692d prohibits a debt collector from “engag[ing] in any conduct . . . to harass,

oppress or abuse any person in connection with the collection of a debt.” 15 U.S.C. § 1692d.

5

 Section 1692e provides: “A debt collector may not use false, deceptive, or misleading

representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. 

6

 The federal FDCPA claim would establish federal question jurisdiction as well, though this

was not pled in the complaint as a basis for federal question jurisdiction. (See Compl. ¶ 9.) 

- 8 - 10cv125

under §§ 226.15 and 226.23 . . . the term [business day] means all calendar days except Sunday

and the legal public holidays specific in 5 U.S.C. 6103(a). . .” 12 C.F.R. § 226.2(a)(6). 

For those reasons, the Court GRANTS Defendant Litton’s motion to dismiss Plaintiff’s

TILA cause of action and claim for rescission. 

IV. Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692

Plaintiff’s third cause of action for violation of the FDCPA is against Defendant Litton

only. The FDCPA prohibits abusive debt collection practices. Plaintiff alleges that Defendant

Litton violated 15 U.S.C. §§ 1692d4 and 1692e5 by taking pictures of the subject property,

assuring that the property would be maintained, and twice attempting to change the locks on the

home. (See Compl. ¶¶ 58-63.) The Court finds that it must dismiss this cause of action. 

Plaintiff does not allege that Defendant Litton is a debt collector under the statute. Moreover,

the activities alleged appear to comprise foreclosure activity. However, foreclosure is not debt

collection within the meaning of the FDCPA and therefore to the extent the allegations in the

complaint comprise foreclosure, they are exempt. See Tina v. Countrywide Home Loans, Inc.,

2008 WL 4790906, at *6 (S.D. Cal. Oct. 30, 2008) (quoting Hulse v. Ocwen Fed. Bank, FSB,

195 F. Supp. 2d 1188, 1204 (D.Or. 2002)); see also Putkuri v. Recontrust Co., 2009 WL 32567,

at *2 (S.D. Cal. 2009); Izenberg v. ETS Servs., LLC, 589 F. Supp. 2d 1193, 1199 (C.D. Cal.

2009). For that reason, the Court GRANTS Defendant’s motion to dismiss Plaintiff’s third

cause of action for violation of the FDCPA.

V. State Law Claims

The remaining causes of action alleged in the complaint are state law causes of action. 

Plaintiff asserts federal question jurisdiction pursuant to 28 U.S.C. § 1331 by virtue of the TILA

and RESPA claims.6

 (See Compl. ¶ 9.) The complaint asserts no basis for diversity jurisdiction. 

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 8 of 9
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 9 - 10cv125

As such, all state law claims are before this Court pursuant to supplemental jurisdiction. See 28

U.S.C. § 1367(a). “The 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.” Acri v. Varian Assoc., Inc., 114 F.3d 999, 1000 n.2 (9th Cir. 1997) (citing 28

U.S.C. § 1367(c)); see also Copeland, 2010 WL 2817179, at *6. Given that the Court has

already dismissed all federal causes of action giving rise to this Court’s original jurisdiction, the

Court declines to exercise supplemental jurisdiction over the remaining state law claims and

therefore DISMISSES the fourth, fifth, sixth, seventh, eighth, ninth, eleventh and twelfth causes

of action. 

CONCLUSION

For those reasons, the Court HEREBY GRANTS Defendant Litton’s motion to dismiss

in its entirety. The action is DISMISSED WITHOUT PREJUDICE. If Plaintiff wishes to do

so, he may file a First Amended Complaint curing the above deficiencies within 20 days of this

Order being electronically docketed. 

IT IS SO ORDERED.

DATED: September 3, 2010

Honorable Janis L. Sammartino

United States District Judge

Case 3:10-cv-00125-JLS-CAB Document 10 Filed 09/03/10 Page 9 of 9