MEMORANDUM AND ORDER RE: MOTION TO DISMISS

WILLIAM B. SHUBB, District Judge.

Plaintiffs Sunil Wadhwa and Lynn Lori Wadhwa brought this action against defendants Aurora Loan Services, LLC, a subsidiary of Aurora Bank, FSB ("Aurora"), Greenpoint Mortgage Funding, Inc. ("Greenpoint"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and Marin Conveyancing Corporation ("Marin"), arising out of defendants' allegedly wrongful conduct relating to a loan transaction and subsequent foreclosure on plaintiffs' home. On February 9, 2011, the court dismissed plaintiffs' Complaint (Docket No. 20); plaintiffs filed a First Amended Complaint ("FAC") on March 2, 2011. (Docket No. 23.) Presently before the court is Aurora, MERS, and Greenpoint's motion to dismiss plaintiffs' FAC for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

I. Factual and Procedural Background

On or about November 28, 2006, plaintiffs obtained a $734,900 loan from Greenpoint, secured by their property located at 3055 Orbetello Way in El Dorado Hills, California. (FAC ¶ 21, Ex. B.) A Notice of Default was recorded in El Dorado County on October 15, 2009. (Id. ¶ 24, Ex. C.) A Notice of Trustee's Sale was recorded on January 21, 2010. (Id. ¶ 26, Ex. E.) The property was sold to Aurora at a trustee's sale on October 18, 2010. (Id. ¶ 27, Ex. F.)

On December 17, 2010, plaintiffs filed the instant action. Plaintiffs' FAC alleges claims under the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639, Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617, Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601-1667f, Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681x, and Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, as well as state law claims for fraudulent misrepresentation, breach of fiduciary duties, unjust enrichment, civil conspiracy, quiet title, usury and fraud, wrongful foreclosure, and breach of security instrument.

II. Discussion

On a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972). "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.'" Ashcroft v. Iqbal, ___ U.S. ____, ____, 129 S.Ct. 1937, 1949 (2009) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This "plausibility standard," however, "asks for more than a sheer possibility that a defendant has acted unlawfully," and where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility." Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 556-57) (internal quotation mark omitted).

A. TILA, HOEPA, and RESPA Claims: Statutes of Limitations

As in the Complaint, the FAC includes several claims relating to the origination of plaintiffs' loan, including violations of TILA, HOEPA, and RESPA, that are barred by the applicable statutes of limitations. Plaintiffs allege that defendants violated TILA and HOEPA by failing to make the necessary disclosures upon origination of the loan. (See FAC ¶¶ 73-91, 97-101.)

A borrower's right to rescind a transaction under TILA expires three years after the closing date. 15 U.S.C. § 1635(f). "[Section] 1635(f) completely extinguishes the right of rescission at the end of the 3-year period," which cannot be tolled. Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998); see also Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002) ("[S]ection 1635(f) represents an absolute limitation on rescission actions' which bars any claims filed more than three years after the consummation of the transaction." (quoting King v. California, 784 F.2d 910, 913 (9th Cir. 1986))). Since more than three years have passed since the loan origination, plaintiffs' claim for rescission under TILA must be dismissed.

The statute of limitations for a TILA damages claim is one year from the occurrence of a violation. 15 U.S.C. § 1640(e). The "limitations period in [s]ection 1640(e) runs from the date of consummation of the transaction...." King, 784 F.2d at 915. HOEPA, which is an amendment to TILA, is also subject to the one-year statute of limitations, 15 U.S.C. § 1640(e). See Hamilton v. Bank of Blue Valley, 746 F.Supp.2d 1160, 1179 (E.D. Cal. 2010) ("HOEPA is an amendment of TILA, and therefore is governed by the same remedial scheme and statutes of limitations as TILA.") (internal quotation marks omitted). Here, the alleged failure to provide plaintiffs with adequate TILA and HOEPA disclosures occurred at the signing of the loan in November of 2006, and plaintiffs filed the Complaint in December of 2010.

"[T]he 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 of the TILA action." King, 784 F.2d at 915. While the applicability of the equitable tolling doctrine often depends on matters outside the pleadings, Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1206 (9th Cir. 1995), dismissal may be appropriate when a plaintiff fails to allege facts suggesting that he did not have a reasonable opportunity to discover the violation. See Meyer v. Ameriquest Mortg. Co., 342 F.3d 899, 902-03 (9th Cir. 2003); Hubbard v. Fidelity Fed. Bank, 91 F.3d 75, 79 (9th Cir. 1996).

Courts have held that equitable tolling is inappropriate when nothing prevented the plaintiff from comparing the disclosures made and the disclosures required under TILA. In Hubbard, the Ninth Circuit rejected an equitable tolling argument and explained that "nothing prevented [the plaintiff] from comparing the loan contract, [the creditor's] initial disclosures, and TILA's statutory and regulatory requirements." 91 F.3d at 79; see also Hughes v. Equity Plus Fin., No. 09cv2927, 2010 WL 2836828, at *7 (S.D. Cal. July 19, 2010) ("During the limitations period, nothing prevented Plaintiff from looking into whether [the creditor] made all of the required disclosures."); Curtis v. Option One Mortg. Corp., No. 109-cv-1608 AWI SMS, 2010 WL 599816, at *8 (E.D. Cal. Feb. 18, 2010) ("The only explanation that Plaintiff provides to invoke equitable tolling is that Plaintiff did not know about the TILA and did not discover the violations until the loan was reviewed by a loan expert. Plaintiff has not made any arguments concerning her own responsibilities to seek out the necessary disclosures.").

In other words, failure to disclose or an improper disclosure does not itself toll the statute of limitations. Garcia v. Wachovia Mortg. Corp., 676 F.Supp.2d 895, 906 (C.D. Cal. 2009). As the Garcia court explained, "a contrary rule would render the one-year statute of limitations meaningless, as it would be tolled whenever there were improper disclosures." Id.

Plaintiffs have offered no factual allegations to show that they were unable to compare the allegedly improper disclosures in the loan documents with the required disclosures under TILA and HOEPA. Plaintiffs allege that they first learned of defendants' failures to disclose in August of 2010 (FAC ¶¶ 91, 96, 101), and their opposition to the instant motion seeks equitable tolling on the ground that applying the statute of limitations would be "harsh and unfair." (Opp'n to Mot. to Dismiss at 4:16 (Docket No. 27).) However, plaintiffs fail to explain why they could not have learned of the violations within the statutory period or to describe any conduct of defendants' that prevented plaintiffs from discovering the alleged violations. See Garcia v. Brockway, 526 F.3d 456, 466 (9th Cir. 2008) (en banc) ("Fairness, without more, is not sufficient justification to invoke equitable tolling...."). Accordingly, the court will not toll the applicable statute of limitations.

Because over one year has run and equitable tolling does not apply, plaintiffs' TILA and HOEPA claims for damages will be dismissed.

As to plaintiffs' RESPA claim, plaintiffs allege that, "in connection with the mortgage loan to Plaintiffs, Defendants accepted charges for the rendering of real estate services which were in fact charges for other than services actually performed," (FAC ¶ 94), in violation of 12 U.S.C. § 2607. RESPA claims brought under § 2607 must be made within one year from the date of the occurrence of the violation. 12 U.S.C. § 2614.

"The RESPA statute of limitations generally begins to run no later than the date of actual disclosure of actions constituting an alleged violation. Typically, in cases involving loan documents, the statute begins to run when the documents are signed unless evidence is presented to override this assumption." Metcalf v. Drexel Lending Grp., No. 08-CV-00731, 2008 WL 4748134, at *3 (S.D. Cal. Oct. 29, 2008). The "primary ill" which § 2607 of RESPA seeks to remedy is "the potential for unnecessarily high settlement charges' caused by kickbacks, fee-splitting, and other practices that suppress price competition for settlement services. This ill occurs, if at all, when the plaintiff pays for the service, typically at the closing." Snow v. First Am. Title Ins. Co., 332 F.3d 356, 359-360 (5th Cir. 2003) (quoting 12 U.S.C. § 2601(a)). More than four years have passed since the signing of the loan documents. While plaintiffs allege that they did not discover the alleged violation until August of 2010 (FAC ¶ 96), they do not explain why they could not have discovered the alleged violation at the time the documents were signed, and the same logic that applied to TILA in Garcia v. Wachovia Mortgage Corporation applies here. 676 F.Supp.2d at 906 ("a contrary rule would render the one-year statute of limitations meaningless"). Thus, plaintiffs' RESPA cause of action is time-barred and the court will dismiss the claim.

While the court should freely give leave to amend when justice so requires, Fed.R.Civ.P. 15(a)(2), the court may deny leave to amend if the amendment would be futile or subject to dismissal. Gadda v. State Bar of Cal., 511 F.3d 933, 939 (9th Cir. 2007); Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991). Plaintiffs have had two opportunities to allege facts to support equitable tolling as well as an opportunity in their memorandum in opposition to the instant motion to argue that they could allege such facts if given the opportunity to amend, and yet have failed to provide any reason why the court should toll the applicable statutes of limitations. Accordingly, the court will dismiss plaintiffs' TILA, HOEPA, and RESPA claims without leave to amend.

B. FCRA Claim

Plaintiffs allege that defendants violated the FCRA by wrongfully reporting negative information about plaintiffs to one or more credit reporting agencies. (FAC ¶ 103.) As the court explained in its Order dismissing the Complaint, section 1681s-2(a) imposes duties on furnishers of information to credit reporting agencies to ensure that the information provided is accurate, but there is no private right of action for violations. 15 U.S.C. § 1681s-2(d); Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1059 (9th Cir. 2002). However, there is a private right of action for violations of § 1681s-2(b), which imposes a duty of reinvestigation on furnishers of information upon notice of a dispute regarding the information. 15 U.S.C. § 1681s-2(d); Nelson, 282 F.3d at 1059-60.

To succeed on such a claim, plaintiffs must allege that they had a dispute with a credit reporting agency regarding the accuracy of an account, that the credit reporting agency notified the furnisher of the information, and that the furnisher failed to take the remedial measures outlined in the statute. 15 U.S.C. § 1681s-2(b). Plaintiffs have failed to allege any of these facts despite having two opportunities to do so. Their memorandum in opposition to the motion to dismiss, rather than suggesting that such facts could be alleged in an amended complaint, simply misstated the applicable law. (See Opp'n to Mot. to Dismiss at 8:6-12.) The court will therefore dismiss plaintiffs' claim for a violation of the FCRA without leave to amend.

C. RICO Claim

To state a claim under RICO, a plaintiff must allege the existence of a RICO enterprise, the existence of a pattern of racketeering activity, a nexus between the defendant and either the pattern of racketeering activity or the RICO enterprise, and a resulting injury to the plaintiff. Occupational-Urgent Care Health Sys., Inc. v. Sutro & Co., 711 F.Supp. 1016, 1021 (E.D. Cal. 1989). To allege a pattern of racketeering activity, a plaintiff must allege two or more predicate acts. Sun Sav. & Loan Ass'n v. Dierdorff, 825 F.2d 187, 193 (9th Cir. 1987). When the alleged racketeering activity sounds in fraud, as here, the complaint must "state with particularity the circumstances constituting fraud or mistake." In re Countrywide Fin. Corp. Mortg. Mktg. & Sales Prac. Lit., 601 F.Supp.2d 1201, 1215 (S.D. Cal. 2009) (quoting Fed.R.Civ.P. 9(b)).

To satisfy Rule 9(b) in this context, the plaintiff must "state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation." Id. (internal quotation marks omitted). As in their Complaint, plaintiffs do not sufficiently plead the existence of a pattern of racketeering activity in the FAC, nor do they sufficiently plead the existence of an enterprise under 18 U.S.C. § 1961(4). The court made the pleading requirements of a RICO claim clear to plaintiffs in its Order dismissing the Complaint, (see Feb. 9, 2011, Order at 9:27-10:19 (Docket No. 20)), and yet plaintiffs failed to state a plausible claim to relief in their FAC. There is no indication that plaintiffs could state such a claim if given leave to amend again. The court will therefore dismiss plaintiffs' civil RICO claim without leave to amend.

D. State Law Claims

Under 28 U.S.C. § 1367(c)(3), a district court may decline to exercise supplemental jurisdiction over state law claims if "the district court has dismissed all claims over which it has original jurisdiction...." 28 U.S.C. § 1367(c)(3); see also Acri v. Varian Assocs., Inc., 114 F.3d 999, 1000 (9th Cir. 1997) ("[A] federal district court with power to hear state law claims has discretion to keep, or decline to keep, them under the conditions set out in § 1367(c)."). Factors for a court to consider in deciding whether to dismiss supplemental state claims include judicial economy, convenience, fairness, and comity. Imagineering, Inc. v. Kiewit P. Co., 976 F.2d 1303, 1309 (9th Cir. 1992), abrogated on other grounds by Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 2005) (en banc). "[I]n the usual case in which federal-law claims are eliminated before trial, the balance of factors... will point toward declining to exercise jurisdiction over the remaining state law claims." Reynolds v. Cnty. of San Diego, 84 F.3d 1162, 1171 (9th Cir. 1996) (alterations in original) (internal quotation marks omitted), overruled on other grounds by Acri, 114 F.3d at 1001.

Plaintiffs' case has been pending for just over four months. The court has not yet issued a Status (Pretrial Scheduling) Order, and the case has yet to proceed beyond the motion to dismiss stage. As none of the parties have posed any extraordinary or unusual circumstances suggesting that the court should retain jurisdiction over plaintiffs' state law claims in the absence of any federal claims, the court will decline to exercise supplemental jurisdiction under § 1367(c)(3) over plaintiffs' state law claims and will accordingly grant Aurora, MERS, and Greenpoint's motion to dismiss those claims.

IT IS THEREFORE ORDERED that defendants Aurora, MERS, and Greenpoint's motion to dismiss plaintiffs' First Amended Complaint be, and the same hereby is, GRANTED.

IT IS FURTHER ORDERED that the action against defendant Marin Conveyancing Corporation is dismissed without prejudice pursuant to Federal Rule of Civil Procedure 4(m).

If plaintiffs wish to amend their complaint to allege that this court has diversity jurisdiction over the state law claims against defendants Aurora, MERS, and/or Greenpoint, they may do so within twenty days from the date of this Order. Otherwise, no further leave to amend will be permitted.

If a defendant is not served within 120 days after the complaint is filed, the court-on motion or on its own after notice to the plaintiff-must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period.

Fed. R. Civ. P. 4(m). Defendant Marin Conveyancing Corporation ("Marin"), named in the Complaint and First Amended Complaint, has not appeared in this case, and more than 120 days have passed since the filing of the Complaint. At oral argument, plaintiffs' counsel stated that Marin had not been served, and agreed that the action against Marin should be dismissed without prejudice.