Opinion
No. 2:13-cv-2178 DAD
03-26-2015
AMOS G. SNELL, Plaintiff, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, et al., Defendants.
ORDER
This matter came before the court on December 19, 2014, for hearing of defendants' motion for judgment on the pleadings. (Dkt. No. 28.) Attorney Jonathan Fink appeared telephonically on behalf of the defendants and attorney Megan Daily appeared telephonically on behalf of the plaintiff. For the reasons set forth below, defendants' motion will be granted.
The parties have consented to Magistrate Judge jurisdiction over this action pursuant to 28 U.S.C. § 636(c)(1). (Dkt. No. 18.)
BACKGROUND
According to the allegations of the complaint, on June 14, 2005, plaintiff obtained a loan and recorded a Deed of Trust against the real property located at 2808 Olivewood Lane in Vallejo, California ("Subject Property"). (Compl. (Dkt. No. 1) at 2-3.) WMC Mortgage Corp. ("WMC") was the original lender and Mortgage Electronic Registration Systems, Inc., ("MERS"), was named "as Nominee for Lenders." (Id. at 3.) WMC, however, ceased doing business in 2007. (Id.)
Page number citations such as this one are to the page numbers reflected on the court's CM/ECF system and not to page numbers assigned by the parties.
On April 9, 2008, Quality Loan Service Corporation, ("Quality Loan"), "as an agent for the beneficiary," recorded a Notice of Default in the Solano County Recorder's Office, "signaling the commencement of the foreclosure process." (Id.) On May 12, 2008, an Assignment of Deed of Trust was recorded in the Solano County Recorder's Office, purporting to "convey the beneficial interest in Plaintiff's Deed of Trust to Deutsche Bank, as Trustee for GSAMP Trust 2005-WMCI." (Id.)
On May 21, 2008, Deutsche Bank recorded a Substitution of Trustee naming Quality Loan as Trustee. (Id. at 4.) Thereafter, notices of Trustee's Sale were recorded in the Solano County Recorder's Office on October 31, 2008, January 1, 2010, March 16, 2011, November 16, 2011, and February 15, 2012. (Id.)
On March 29, 2012, a second Assignment of Deed of Trust was recorded in the Solano County Recorder's Office. (Id.) In that document, Deutsche Bank, "as Trustee under the Pooling and Servicing Agreement dated as of September 1, 2005, GSAMP," transferred the beneficial interest in plaintiff's property to Deutsche Bank "as of September 1, 2005." (Id.) On October 24, 2012, the Subject Property was sold and a "Trustee's Deed Upon Sale was recorded in the Solano County Recorder's office," conveying title in the Subject Property to Deutsche Bank. (Id. at 5.) On April 11, 2013, Ocwen Loan Servicing ("Ocwen Loan"), executed a Grant Deed, "purporting to grant Plaintiff's property from Deutsche Bank to Next Generation Capital, LLC." (Id.)
Plaintiff filed the complaint in this action on October 18, 2013, pursuant to federal question jurisdiction, alleging violations of state and federal laws against defendants MERS, Quality Loan, Ocwen Loan and Deutsche Bank. On November 12, 2013, defendants Ocwen Loan, MERS and Deutsche Bank filed an answer. (Dkt. No. 6.) On November 13, 2013, defendant Quality Loan filed a motion to dismiss. (Dkt. No. 7.)
On January 29, 2014, the previously assigned District Judge granted defendant Quality Loan's motion to dismiss. (Dkt. No. 17.) On February 3, 2014, the previously assigned District Judge reassigned this matter to the undersigned pursuant to the parties' consent. (Dkt. No. 18.) On November 10, 2014, defendants Ocwen Loan, MERS and Deutsche Bank ("defendants"), filed a motion for judgment on the pleadings. (Dkt. No. 28.) Plaintiff filed an opposition to the motion on December 5, 2014. (Dkt. No. 31.) Defendants filed a reply in support of the motion for judgment on the pleadings on December 12, 2014. (Dkt. No. 35.)
Pursuant to that order plaintiff was granted leave to file an amended complaint within 30 days. (Dkt. No. 17 at 20.) Plaintiff, however, did not elect to file an amended complaint and defendant Quality Loan was accordingly dismissed from this action. (Id.)
STANDARDS
Rule 12(c) of the Federal Rules of Civil Procedure provides that: "After the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." In reviewing a motion brought under Rule 12(c), the court "must accept all factual allegations in the complaint as true and construe them in the light most favorable to the nonmoving party." Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009).
The same legal standard applicable to a Rule 12(b)(6) motion applies to a Rule 12(c) motion. Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). Accordingly, "„[a] judgment on the pleadings is properly granted when, taking all the allegations in the non-moving party's pleadings as true, the moving party is entitled to judgment as a matter of law.'" Marshall Naify Revocable Trust v. U.S., 672 F.3d 620, 623 (9th Cir. 2012) (quoting Fajardo v. Cnty. of L.A., 179 F.3d 698, 699 (9th Cir. 1999)). See also Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009) ("Judgment on the pleadings is properly granted when there is no issue of material fact in dispute, and the moving party is entitled to judgment as a matter of law."). The allegations of the nonmoving party must be accepted as true, while any allegations made by the moving party that have been denied or contradicted are assumed to be false. MacDonald v. Grace Church Seattle, 457 F.3d 1079, 1081 (9th Cir. 2006). The facts are viewed in the light most favorable to the non-moving party and all reasonable inferences are drawn in favor of that party. Living Designs, Inc. v. E.I. DuPont de Nemours & Co., 431 F.3d 353, 360 (9th Cir. 2005).
ANALYSIS
Plaintiff's complaint alleges three causes of action pursuant to federal law: (1) violation of the Fair Debt Collection Practices Act ("FDCPA"); (2) a RICO claim; and (3) violation of the Truth In Lending Act ("TILA). See Snell v. Deutsche Bank Nat. Trust Co., No. 2:13-cv-2178 MCE DAD, 2014 WL 325147, at *3 (E.D. Cal. Jan. 29, 2014) ("Plaintiff alleges three claims based on federal law; the remaining five claims are based on state law.").
I. Fair Debt Collection Practices Act
Plaintiff's complaint alleges that the defendants "are debt collectors within the meaning of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692." (Compl. (Dkt. No. 1) at 23.) In this regard, plaintiff alleges that the defendants "regularly collect[] or attempt[] to collect . . . debts owed . . . or due to another," and "hold themselves out to have interests in Plaintiff's Loan and Deed of Trust . . . ." (Id.) Defendants seek judgment on the pleadings based, in part, on the assertion that "[n]othing in the complaint suggest that these Defendants are 'debt collectors' within the meaning of the" FDCPA. (Defs.' Mot. JOTP (Dkt. No. 28) at 31.)
The FDCPA, 15 U.S.C. § 1692, et seq., regulates conduct between consumers and "debt collectors." See Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 576 (2010); Rowe v. Education Credit Mgmt. Corp., 559 F.3d 1028, 1031 (9th Cir. 2009). In this regard, "in order for a plaintiff to recover under the FDCPA, there are three threshold requirements: (1) the plaintiff must be a 'consumer'; (2) the defendant must be a 'debt collector'; and (3) the defendant must have committed some act or omission in violation of the FDCPA." Robinson v. Managed Accounts Receivables Corp., 654 F. Supp.2d 1051, 1057 (C.D. Cal. 2009). Under the FDCPA, a debt collector is one who "uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6).
"Although the Ninth Circuit has not addressed whether foreclosure proceedings constitute debt collection within the ambit of the FDCPA, courts in this Circuit have regularly held that nonjudicial foreclosure is not debt collection." Rockridge Trust v. Wells Fargo, N.A., 985 F. Supp.2d 1110, 1136 (N.D. Cal. 2013). See also Aguirre v. Cal-Western Reconveyance Corp., No. CV 11-6911 (AGRx), 2012 WL 273753, at *7 (C.D. Cal. Jan. 30, 2012) ("law is well-settled that creditors, mortgagors, and mortgage servicing companies are not debt collectors and are statutorily exempt from liability under the FDCPA"); Lal v. American Home Servicing, Inc., 680 F. Supp.2d 1218, 1224 (E.D. Cal. 2010) ("The law is well settled that FDCPA's definition of debt collector does not include the consumer's creditors, a mortgage servicing company, or any assignee of the debt."); Mansour v. Cal-Western Reconveyance Corp., 618 F. Supp.2d 1178, 1182 (D. Ariz. 2009) ("The Court finds the legislative history and the legal authority discussed above to be persuasive, and therefore finds that none of the Defendants (an assignee, a servicing company, and a fiduciary) is a 'debt collector' as defined in the FDCPA. The Court further finds that the non-judicial foreclosure proceeding at issue is not an attempt to collect a 'debt' for FDCPA purposes.").
Moreover, plaintiff's complaint fails to allege any facts from which the court could infer that any defendants' principal purpose is debt collection. See Schlegel v. Wells Fargo Bank, NA, 720 F.3d 1204, 1209 (9th Cir. 2013) ("The complaint fails to provide any factual basis from which we could plausibly infer that the principal purpose of Wells Fargo's business is debt collection. Rather, the complaint's factual matter, viewed in the light most favorable to the Schlegels, establishes only that debt collection is some part of Wells Fargo's business, which is insufficient to state a claim under the FDCPA."); Fiorilli v. Wells Fargo Bank, N.A., No. C-14-0557 (DMR), 2014 WL 5454396, at *2 (N.D. Cal. Oct. 27, 2014) ("This conclusory assertion is insufficient because Plaintiff must plead the 'factual content' necessary to support a reasonable inference that Defendant is a 'debt collector.'"); O'Connor v. Wells Fargo, N.A., No. C-14-0211 DMR, 2014 WL 4802994, at *3 (N.D. Cal. Sept. 26, 2014) ("According to the allegations in the complaint and judicially noticeable facts, Plaintiff took out a mortgage loan from Wells Fargo's predecessor, and Wells Fargo attempted to collect funds related to that loan. These facts do not make Wells Fargo a debt collector for purposes of the FDCPA. The complaint fails to allege facts that Wells Fargo's principal purpose is the collection of debts or that Wells Fargo collected these debts for another.").
In his opposition to the pending motion, plaintiff relies on the decision in Williams v. Wells Fargo Bank, N.A., No. C10-5880 BHS, 2012 WL 72727, (W.D. Was. Jan. 10, 2012), which held that the defendant bank could be a debt collector under the FDCPA and refused to adopt a "per se holding" that the act of foreclosure was "not 'debt collection' under the FDCPA." (Id. at *5.) "The problem with Plaintiff's reliance on Williams is that it is an unpublished out of district case directly contradicted by the Ninth Circuit's more recent published opinion on matters analogous to those presented here." O'Connor v. Wells Fargo, N.A., No. C-14-0211 DMR, 2014 WL 4802994, at *4 (N.D. Cal. Sept. 26, 2014) (citing Schlegel v. Wells Fargo Bank, NA, 720 F.3d 1204 (9th Cir. 2013)).
Accordingly, for the reasons stated above, defendants' motion for judgment on the pleadings will be granted as to this claim.
II. RICO
Plaintiff alleges that the defendants "conspired together to violate 18 U.S.C. § 1962(d)," by sending "fraudulent affidavits, assignments and pleadings to the clerks of court, judges, attorneys, and defendants in foreclosure cases." (Compl. (Dkt. No. 1) at 27, 29.)
To state a cognizable RICO claim, a plaintiff must allege: (1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering activity (known as "predicate acts"), (5) causing injury to plaintiff's business or property. Sanford v. Memberworks, Inc., 625 F.3d 550, 557 (9th Cir. 2010); Walter v. Drayson, 538 F.3d 1244, 1247 (9th Cir. 2008); Grimmett v. Brown, 75 F.3d 506, 510 (9th Cir. 1996). The alleged enterprise must exist "separate and apart from that inherent in the perpetration of the alleged [activity]." Chang v. Chen, 80 F.3d 1293, 1300-01 (9th Cir. 1996). See also Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir. 1984) ("If Union Bank is the enterprise, it cannot also be the RICO defendant."). A "pattern of racketeering activity" means at least two criminal acts enumerated by statute. 18 U.S.C. § 1961(1), (5) (including, among many others, mail fraud, wire fraud, and financial institution fraud). These so-called "predicate acts" under RICO must be alleged with specificity in compliance with Rule 9(b) of the Federal Rules of Civil Procedure. Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1400-01 (9th Cir. 2004). See also Lancaster Community Hospital v. Antelope Valley Hospital Dist., 940 F.2d 397, 405 (9th Cir. 1991) (holding with respect to the predicate act of mail fraud that a plaintiff must allege with "particularity the time, place, and manner of each act of fraud, plus the role of each defendant in each scheme"); Alan Neuman Productions, Inc. v. Albright, 862 F .2d 1388, 1392-93 (9th Cir. 1988).
Circumstances that must be stated with particularity pursuant to Rule 9(b) include the "time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Sanford v. Memberworks, Inc., 625 F.3d 550, 558 (9th Cir. 2010) (quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004)). See also Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007); Miscellaneous Serv. Workers, Drivers & Helpers v. Philco-Ford Corp., 661 F.2d 776, 782 (9th Cir. 1981) (affirming the district court's dismissal of the plaintiffs' deceit and misrepresentation claims where plaintiffs failed to allege with sufficient particularity the content of the false representations and identities of the parties to the misrepresentations). "In the context of a fraud suit involving multiple defendants, a plaintiff must, at a minimum, 'identif[y] the role of [each] defendant[ ] in the alleged fraudulent scheme.'" Swartz, 476 F.3d at 765 (quoting Moore v. Kayport Package Express, 885 F.2d 531, 541 (9th Cir. 1989)).
As noted by the previously assigned District Judge in granting Quality Loan's motion to dismiss:
Here, Plaintiff's Complaint contains general allegations of mail fraud, but fails to satisfy the heightened pleading requirement of Rule 9(b) . . . . For example, vague statements such as "Defendants were aware of the misrepresentations and profited from them" do not meet Rule 9(b)'s heightened standard. To survive a motion to dismiss, Plaintiff must allege facts . . . such as the times, dates, places, benefits received, the identity of the person making the misrepresentation, and other details of the alleged fraudulent activity.Snell v. Deutsche Bank Nat. Trust Co., No. 2:13-cv-2178 MCE DAD, 2014 WL 325147, at *10 (E.D. Cal. Jan. 29, 2014).
Accordingly, defendants' motion for judgment on the pleadings will also be granted as to plaintiff's RICO claim.
III. Truth In Lending Act
Plaintiff alleges that the defendants "violated TILA by failing to provide Plaintiff with accurate material disclosures required under TILA," and thus failing to "fully inform" plaintiff of the "pros and cons of adjustable rate mortgages . . . ." (Compl. (Dkt. No. 1) at 20-21.)
However, individual actions for damages under TILA must be filed within one year of the date of occurrence of the alleged violation. 15 U.S.C § 1640(e). The one-year limitations period begins to run when the plaintiff executes his or her loan documents, "because they could have discovered the alleged disclosure violations and discrepancies at that time." Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1045 (9th Cir. 2011). See also Meyer v. Ameriquest Mortg. Co., 342 F.3d 899, 902 (9th Cir. 2003) ("The failure to make the required disclosures occurred, if at all, at the time the loan documents were signed. The Meyers were in full possession of all information relevant to the discovery of a TILA violation and a § 1640(a) damages claim on the day the loan papers were signed."). Here, the complaint alleges that plaintiff is the "Trustor/Borrower" on the Deed of Trust "recorded on June 14, 2005," which is over eight years prior to the commencement of this civil action. Moreover, plaintiff makes no attempt to argue, let alone establish, the applicability of equitable tolling under the facts of his case.
Plaintiff's complaint does assert, without elaboration or explanation, that "[a]ny and all statute[s] of limitations relating to disclosures and notices required pursuant to 15 U.S.C. § 1601, et seq. were tolled due to Defendants' failure to effectively provide the required disclosures and notices . . . ." (Compl. (Dkt. No. 1) at 22.) However, "[t]hat plaintiff[] allege[s] defendants failed to make the necessary TILA disclosures is not a sufficient basis for equitable tolling because a contrary rule would render the one-year statute of limitations meaningless, as it would be tolled wherever there were improper disclosures." Pedersen v. Greenpoint Mortg. Funding, Inc., 900 F.Supp.2d 1071, 1079 (E.D. Cal. 2012). See also Vargas v. JP Morgan Chase Bank, N.A., No. 5:14-cv-0859-ODW(JCGx), 2014 WL 3435628, at *4 (C.D. Cal. July 11, 2014) ("However, this allegation does little more than restate the alleged failure to disclose. Not receiving a copy of the assignment is the very heart of the underlying TILA claim. Vargas must provide facts independent of the disclosure violation to show equitable tolling.").
In his complaint plaintiff also alleges he has "the right to rescind the loan on the Subject Property" and that the defendants "deny that right." (Compl. (Dkt. No. 1) at 22.) However, a borrower's right to rescind a loan transaction under TILA expires "three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first . . . ." 15 U.S.C. § 1635(f). "Unlike TILA's one year period for civil damages claims, the three year period for TILA rescission claims is an 'absolute' statute of repose that cannot be tolled." Falcocchia v. Saxon Mortg., Inc., 709 F.Supp.2d 860, 867 (E.D. Cal. 2010) (citing Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002)). According to allegations of plaintiff's complaint, the purchase of the Subject Property occurred over eight years prior to the filing of this action.
In addition, in his TILA claim plaintiff's complaint asserts that the defendants violated 15 U.S.C § 1641(g), which requires that when an entity purchases or is assigned the beneficial interest in a loan on a property, it must notify the borrower in writing within 30 days of when the loan is transferred. In his complaint, however, plaintiff fails to identify a single date associated with this claim and instead merely asserts, in a vague and conclusory manner, that the "[d]efendants similarly violated 15 U.S.C. § 1641(g) . . . ." (Compl. (Dkt. No. 1) at 21.)
The complaint also asserts that 15 U.S.C. § 1641(g) entitles plaintiff to "actual or statutory damage . . . ." (Compl. (Dkt. No. 1) at 21.) "To receive actual damages for a TILA claim, the plaintiff must establish detrimental reliance on the § 1641(g) disclosure." Vargas v. JP Morgan Chase Bank, N.A., 30 F.Supp.3d 945, 950 (C.D. Cal. 2014) (citing In re Smith, 289 F.3d 1155, 1157 (9th Cir. 2002)). In his complaint, however, plaintiff does not allege detrimental reliance.
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Finally, plaintiff's complaint alleges that the last assignment of the "beneficial interest" in the loan on the Subject Property occurred on March 29, 2012. (Compl. (Dkt. No. 1) at 4.) Accordingly, the one-year statute of limitations set forth under §1640(e) expired on March 29, 2013. This action was not commenced until October 18, 2013, almost seven months after the statute of limitations had expired. As noted above, plaintiff has made no attempt to argue the applicability of equitable tolling.
Accordingly, for the reasons stated above, defendants' motion for judgment on the pleadings will also be granted as to plaintiff's TILA claim.
LEAVE TO AMEND
For the reasons explained above, as to the claims found in the complaint over which this court would have federal question jurisdiction, defendants' motion for judgment on the pleadings will be granted and plaintiff's complaint dismissed for failure to state a claim upon which relief may be granted. The undersigned has carefully considered whether plaintiff may amend his complaint to state a claim based upon federal law for which relief can be granted. "Valid reasons for denying leave to amend include undue delay, bad faith, prejudice, and futility." California Architectural Bldg. Prod. v. Franciscan Ceramics, 818 F.2d 1466, 1472 (9th Cir. 1988). See also Klamath-Lake Pharm. Ass'n v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983) (holding that while leave to amend shall be freely given, the court does not have to allow futile amendments).
Here, in light of the nature of plaintiff's allegations and arguments, the nature of the defects addressed above, the fact that plaintiff did not attempt to amend his complaint when several of these same defects were addressed by the previously assigned District Judge with respect to another named defendant despite being granted leave to file an amended complaint and the legal principles set forth above, the undersigned finds that granting further leave to amend would be futile in this case. See Chaset v. Fleer/Skybox Int'l, 300 F.3d 1083, 1088 (9th Cir. 2002) (there is no need to prolong the litigation by permitting further amendment where the "basic flaw" in the underlying facts as alleged cannot be cured by amendment); Lipton v. Pathogenesis Corp., 284 F.3d 1027, 1039 (9th Cir. 2002) ("Because any amendment would be futile, there was no need to prolong the litigation by permitting further amendment.").
SUPPLEMENTAL JURISDICTION
As noted above, in addition to the federal causes of action addressed above, plaintiff's complaint asserts state law causes of action. 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). The court's discretion to decline jurisdiction over state law claims is informed by the values of judicial economy, fairness, convenience, and comity. Acri v. Varian Associates, Inc., 114 F.3d 999, 1001 (9th Cir. 1997) (en banc). In addition, "[t]he Supreme Court has stated, and [the Ninth Circuit] ha[s] often repeated, that 'in the usual case in which all federal-law claims are eliminated before trial, the balance of factors . . . will point toward declining to exercise jurisdiction over the remaining state-law claims.'" Acri, 114 F.3d at 1001 (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7 (1988)). See also Satey v. JP Morgan Chase & Co., 521 F.3d 1087, 1091 (9th Cir. 2008) (recognizing this principle but noting that dismissal of the remaining state law claims is not mandatory).
Of course, "primary responsibility for developing and applying state law rests with the state courts." Curiel v. Barclays Capital Real Estate Inc., Civ. No. S-09-3074 FCD KJM, 2010 WL 729499, at *1 (E.D. Cal. Mar. 2, 2010). Here, consideration of judicial economy, fairness, convenience, and comity all point toward declining to exercise supplemental jurisdiction. Therefore, the court will decline to exercise supplemental jurisdiction over the complaint's state law claims.
CONCLUSION
Accordingly, IT IS HEREBY ORDERED that:
1. Defendants' November 10, 2014 motion for judgment on the pleadings (Dkt. No. 28) is granted;
2. Plaintiff's federal claims are dismissed without leave to amend;
3. The court declines to exercise supplemental jurisdiction over any state law claims and this action is dismissed without prejudice to plaintiff re-filing in state court a complaint alleging any state law claims he wishes to pursue; and
4. This action is closed. Dated: March 26, 2015
/s/_________
DALE A. DROZD
UNITED STATES MAGISTRATE JUDGE
DAD:6
Ddad1\orders.consent\snell2178.jotp.ord.docx