Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-03474/USCOURTS-cand-3_08-cv-03474-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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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

JOHN R. SUTHERLAND,

Plaintiff,

 v.

DIVERSIFIED CAPITAL INC, ET AL.,

Defendants. /

No. C 08-03474 CRB

ORDER GRANTING MOTION TO

DISMISS

Defendant Countrywide Home Loans, Inc.’s unopposed motion to dismiss for failure

to state a claim is GRANTED for the reasons set forth in the July 24, 2008 order denying

Plaintiff’s motion for a temporary restraining order. As to Countrywide, Plaintiff’s claims

fail because: (1) California Financial Code § 4973(f)(1) applies only to “covered loans,” and

Plaintiff’s loan exceeded “the most current conforming loan limit for a single-family first

mortgage loan established by the Federal National Mortgage Association in the case of a

mortgage or deed of trust,” California Financial Code § 4970(b); (2) Plaintiff’s loan satisfied

the disclosure requirements of the Truth in Lending Act by disclosing the fact that the

interest rate could change, the frequency of interest rate and payment changes, and how the

interest rate and payment would be determined, see 12 C.F.R. §§ 226.19(b)(2)(i), (2)(iii),

(2)(vi); (3) a cause of action for breach of the implied covenant of good faith and fair dealing

cannot lie where, as here, the defendant did what it was expressly given the right to do, see

Case 3:08-cv-03474-CRB Document 16 Filed 08/19/08 Page 1 of 2
United States District Court

For the Northern District of California

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G:\CRBALL\2008\3474\MTD Order.wpd 2

Carma Developers, Inc. v. Marathon Development California, Inc., 2 Cal. 4th 342, 374

(1992); and (4) Plaintiff’s claims for declaratory and injunctive relief are merely derivative of

his other claims.

The hearing scheduled for September 5, 2008 is VACATED.

IT IS SO ORDERED.

Dated: August 19, 2008 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:08-cv-03474-CRB Document 16 Filed 08/19/08 Page 2 of 2