N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
DAVID M ERR ITT, pro se ; SALM A M ERR ITT, Plaintiffs - Appe lla nts,
v. C OUNTR

YW IDE FINANC IAL C ORPOR ATION, a

De la ware c orporation; e t a l., De fe nda

nts - Appe lle e s. No. 09-17678 D.C . No. 5:09-c v-01179-JW
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Northe rn Distric t of C a lifornia Jam e s W are , Distric t

Judge , Pre siding Argue d an d Subm itte d Nove m be r 9, 2012 Sa n Fran c isc o , C a lifornia B e fore : KLEINFELD a

nd B ER ZON, C irc uit Judge s, a

nd SM ITH, Distric t Judge
. ** 

# FIL ED
JUL 16 2014 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3. ** The Honora

ble W illia m E. Sm ith, Distric t Judge for the U.S. Distric t C ourt for the Distric t of R hode Isla nd, sitting by

de signa t ion.Pla intiffs a ppe a l from

the distric t c ourt’ s dism issa l with pre judic e of the ir pro se c om

pla int. W e a ffirm

in pa rt, va c a te in pa

rt, a nd re m and for furthe r proc e e dings. 1 1. As to de fe nda

nts’ a lle ge d nondisc losure s in M arc h 2006, we a ffirm the dism issa l of pla intiffs’ Truth in Le nding Ac t (“ TILA” ) da m a ge s c la im

a s tim e ba rre d. The TILA sta

tute of lim ita

tions runs from whe n “ the borrowe r disc ove rs or ha d re a sona

ble opportunity to disc ove r the fra ud or nondisc losure s tha

t form the ba sis of the TILA a c t ion.” K ing v . C a lifornia , 784 F.2d 910, 915 (9th C ir. 1986). Taking a s true pla intiffs’ a lle gation tha t the y re c e ive d bla

nk disc losure form s in M arc h 2006, “ n othing pre ve nte d [the m ] from c o m p aring” those bla

nk form s with

“ TILA’ s sta

tutory and re gula

tory re quire m e nts,” and the re by disc o ve ring the fa ilure to disc lose
. Hubbard v . Fide lity Fe d. Bank

, 91 F.3d 75, 79 (9th C ir. 1996);
se e a lso C

e rv ante s v . C ountryw ideHomeLoans, Inc
. , 656 F.3d 1034, 1045 (9th C ir. 2011). 2. The distric t c ourt did not se pa ra t e ly c o nside r pla i ntiffs’ othe r TILA dam a ge s c la im s, whic h

are pre dic a te d on se pa

ra te TILA viola

tions a lle ge d to ha

ve
oc c urre d in Fe b rua

ry 2009 —

nam e l y , tha

t C ountry wide fa ile d

to re s pond to pla i ntiffs’ re sc i ssion notic e
— and so we re tim e ly

file d. W e re i nsta

te pla intiffs’

1 W e a ddre ss pla intiffs’ re sc ission c la im unde r the Truth in Le nding Ac t a s we ll a s the ir c la im s unde r Se c tion 8 of the R e a l Esta

te Se ttle m e nt Pra c t ic e s Ac t in a se pa ra te opinion issue d c onc urre ntly with this me m orandum

disposition.TILA da

m a ge s c la im s on this the ory of lia bility and re m and to the distric t c ourt for furthe r proc e e dings. 3. W e va c ate the dism issa l of pla intiffs’ c l a im unde r Se c tion 6 of the

R e a l Esta te Se ttle m e nt Pra c t ic e s Ac t (“ R ESPA” ), 12 U.S.C . § 2605, a nd re m and to the distric t c o urt for furthe r proc e e dings, inc luding, a t the a ppropria te sta ge , re vie w of the p la intiffs’ le tte rs to de t e rm ine whic h, if a ny , we re qua lifie d writte n re q ue sts unde r the sta

nda rds ne wly e sta b lishe d in Me drano v

. Flagstar Bank , 704 F.3d 661, 666 (9th C i r 2012). Pla intiffs’ le tte rs a re not in there c o rd be fore this c ourt, so we
are una ble to a pply the Me drano fra m e work in the first insta nc e . 4. W e a ffirm the dism issa l of pla intiffs’ R ESPA Se c tion 9 c l a im . The re is no
re m a ining via

ble de fe nda

nt for this c la im , a s pla intiffs ha ve se ttle d with the

“ se lle r.” Se e 12 U.S.C
. § 2608(b). 5. W e va c ate the distric t c ourt’ s dism issa l with pre judic e of the M e rritts’ Se c tion 1981 c la im

and re m and to the distric t c ourt with instruc tions tha t the pla i ntiffs be grante d le a

ve to a m e n d the c om

pla int a s to tha

t c la im . “ Unle ss it is
a bsolute ly c le ar that no a

m e ndm e nt c an c ure the de fe c t . . . a pro se litiga

n t is
e ntitle d to notic e of the c om pla i nt’ s de fic i e nc ie s and a n opportunity to a

m e nd prior to dism issa l of the a c tion.” Luc as v . De p’t of C orr. , 66 F.3d 245, 248 (9th C ir. 1995) (pe r c uriam ). He re , a lthough the pla intiffs file d m

ultiple c om

pla ints, the y did so be fore any

distric t c ourt ruling on the ir c om pla i nt. The first tim e the distric tc ourt e va luate d the pla intiffs’ c om pla int wa s in the c onte x t of gra nting de fe nda

nts’
m otion to dism

iss with pre

judic e . W hile the c ourt m

ust a c c e pt a

pla intiff’ s we ll-ple a de d fa c ts a s true a t the
m otion to dism

iss sta g e , Ashc roft v . Iqbal , 556 U.S. 662, 681 (2009) (“ It is the
c onc lusory

nature of re sponde nt’ s a lle gations, ra the r tha n the ir e xtrava ga

ntly fanc iful na

ture , tha t dise ntitle s the m

to the pre sum

ption of truth.” ), and the c ourt
m ust c o nstrue the ple a dings of a pro se pla intiff libe ra lly , Este llev . Gamble , 429 U.S. 97, 106 (1976), the

pla intiffs in this c a se sta

te tha t c e rta in ple a de d fa c ts a

re

“ hy pothe tic a l.” The c ourt ne e d not a c c e pt a s true fa c ts tha t the ple a de r doe s not
e ve n c l a im to be true . The pla intiffs do not ide ntify whic h fa c ts a

re supporte d by
re a s ona ble inform a t ion a

nd be lie f and whic h fa c ts a re hy pothe tic a l, so the c ourt
c annot know whic h fa c ts to a c c e pt a s true for purpose s of e va luat ing the m otion to dism iss. The re fore , the c om pla int in its curre nt form

doe s not support a

pla usible
c la im for re lie f. W e c annot sa

y tha t a m e ndm e nt would be futile , howe ve r, a s the e xisting
c om pla i nt m ay

c onta in suffic ie nt a lle gations tha t a re supporte d by re a sona

ble inform a t ion a

nd be lie f to sta

te a c la im for re l ie f unde r Se c tion 1981. The proble m is tha t, a s c urre ntly

dra fte d, the distric t c ourt c annot know whic h fa c ts a re re a l a nd whic h a re im a gine d. The re fore , we re m and the c a se with instruc tions for the distric t c o urt to provide t

he pla intiffs “ spe c ific notic e of the c om pla int’ sde fic ie nc ie s a nd a n opportunity

to a m e n d.” Luc as , 66 F.3d a

t 249. In its notic e , the distric t c o urt ne e d not provide a pa ra gra ph-by -para gra

ph a na ly sis, but ra

the r should
e m pha siz e tha

t the am e nde d c om

pla int should c onta in only a “ s hort a

nd pla in sta te m e nt of the c la im

showing tha

t the ple a de r is e ntitle d to re l ie f,” Fe d. R . C iv. P 8(a )(2), whic h inc lude s fa c ts ba se d on a t le a st inform a tion a

nd be lie f. P e rington W hole sale , Inc . v . Burge r K

ing C orp. , 631 F.2d 1369, 1372 (10th C ir. 1979) (“ [Ple a ding on ‘ inform a t ion a nd be lie f’ in a

ppropria te c irc um sta

nc e s fits we ll with the s pirit of therule s.” ). The c om pla int m a y inc lude a lle gations tha

t are “ not ba se d on the firstha

nd knowle dge of the pe rson m a king the a lle gation . . . but tha t pe rson
ne ve rthe le ss, in good faith, be lie ve s the a lle gation to betrue . ” Pirraglia v . N ov e ll, Inc
. , 339 F.3d 1182, 1189 (10th C ir. 2003) (inte rna l c i tation a n d quota tion m arks
om i tte d). It should be

e m p h a siz e d tha

t R ule 11 sa n c tions m ay

be ava ila ble , if, a t the s um m ary judgm e nt sta ge , it turns out tha t a ny of the pla intiffs’ surviving

“ hy pothe tic a l” a l le gations a

re ba se l e ss. Se e Zaldiv ar v . C ity of Los Ange le

s , 780 F.2d 823, 831 (9th C ir. 1986). W ith the se instruc tions, thepla i ntiffs m ay file an
a m e nde d c o m

pla int; it will re

m a in to be se e n whe the r tha t c om pla int sta te s a c la im
. 6. B oth pa

rtie s m ove d this c ourt to ta ke judic ia l notic e of num e rous doc um e nts. W e de ny a l l of the m otions for judic ia l notic e (Dkt. # 78, 86, 109, 114). “ It is ra

re ly a ppropria t e for an a ppe lla t e c o urt to ta

ke judic ia l notic e of fa c tsthat

we re not be fore the distric t c ourt.” Flic k v . Libe r ty

Mut. Fire

Ins. C o. , 205 F.3d 386, 392 n.7 (9th C ir. 2000). Judge Kle infe ld disse nts for the re a sons sta te d in his disse

nt to thepublishe d opinion in this c a se . AFFIR M ED IN PAR T, VAC ATED IN PAR T, AND R EM ANDED.