Boisvert v. Li
Filing
35
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITH LEAVE TO AMEND 22 . Plaintiff shall any amendment by 9/4/2013. Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 8/20/2013)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
NORTHERN DISTRICT OF CALIFORNIA
10
SAN FRANCISCO DIVISION
11
12 RENE BOISVERT,
Case No. 13-cv-01590 NC
13
ORDER GRANTING
DEFENDANT’S MOTION TO
DISMISS WITH LEAVE TO
AMEND
Plaintiff,
14
v.
15 WAI FUN LI,
Re: Dkt. No. 22
16
Defendant.
17
The issue before the Court is whether pro se plaintiff Rene Boisvert has stated any
18
19 claim for relief against defendant Wai Fun Li arising out of a 2006 loan agreement. For the
20 reasons set forth below, the Court finds that Boisvert has failed to state a claim, and
21 therefore GRANTS Li’s motion to dismiss the complaint under Federal Rule of Civil
22 Procedure 12(b)(6) with leave to amend.
I. BACKGROUND
23
24 A.
Boisvert’s Allegations
25
In analyzing claims under Federal Rule of Civil Procedure 12(b)(6), the Court
26 assumes that all material facts alleged in the complaint are true. Coal. For ICANN
27 Transparency, Inc. v. VeriSign, Inc., 611 F.3d 495, 501 (9th Cir. 2010). The complaint here
28 alleges that “[o]n or about July 18, 2006, Plaintiff and Defendant entered into a lender and
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
1 borrower agreement for a real estate loan with a principal balance of $100,000.” Dkt. No. 1
2 ¶ 16. Boisvert further alleges that the loan “was to be a one year loan,” with an interest rate
3 of 12% per annum, and it was “secured by the Plaintiff’s personal home.” Id. ¶¶ 17, 18, 21.
4 Boisvert alleges that Li did not provide him with disclosure documents, and that, “[i]n the
5 course and conduct of offering and making” the loan, Li failed to provide a number of
6 mandatory disclosures, included prohibited loan terms, extended credit based on a collateral
7 without regard to payment ability, and misrepresented that the loan constituted “open-end
8 credit.” Id. ¶¶ 20, 22-31. Boisvert asserts that Li’s conduct violated the Federal Trade
9 Commission Act (“FTCA”), 15 U.S.C. §§ 45(a) and 53(b), the Truth in Lending Act
10 (“TILA”), 15 U.S.C. § 1601 et seq., including the Home Ownership and Equity Protection
11 Act of 1994 (“HOEPA”), 15 U.S.C. § 1639, and TILA’s implementing Regulation Z, 12
12 C.F.R. § 226. See generally Dkt. No. 1.
Boisvert requests that the Court “[p]ermanently enjoin and restrain Defendant from
13
14 violating any provision of HOEPA, TILA, and Regulation Z, and, in connection with
15 offering or extending credit, Section 5(a) of the FTC Act”; “[f]ind the Defendant liable for
16 redress to Plaintiff”; “[a]ward such relief as the Court deems necessary to prevent unjust
17 enrichment and to redress Plaintiff [sic] injury resulting from Defendants’ violations . . .
18 including, but not limited to: deem the promissory note and deed of trust and note
19 amendments as unenforceable, refund of all monies paid, and/or disgorgement of ill-gotten
20 gains; and, . . . [a]ward Plaintiff its [sic] costs of bringing this action, as well as such other
21 additional equitable relief as the Court may determine to be just and proper.” Id. at 10.
22 B.
Procedural History
23
Boisvert filed his complaint on April 9, 2013. Dkt. No. 1. Li waived service of
24 summons, and filed a motion to dismiss the complaint on June 11, 2013. See Dkt. Nos. 14,
25 15, 19. That same day, Boisvert filed a request for entry of default against Li. Dkt. No. 14.
26 The clerk denied the request, and Boisvert moved for reconsideration. Dkt. Nos. 17, 19.
27 The Court affirmed the clerk’s declination of default because Li had filed a motion to
28 dismiss. Dkt. No. 20. The Court also noted that Li’s motion to dismiss was erroneously
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
2
1 filed in ECF as an “answer,” and ordered Li to refile it to correct this and other filing
1
2 defects identified by the Court. Dkt. Nos. 20 at 2; 22. Boisvert filed an opposition to the
3 motion, and a supplemental brief after Li filed her reply. Dkt. Nos. 27, 28, 31. The Court
4 held a hearing on the motion on August 14, 2013.
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
5
6 1331. See Dkt. No. 1 ¶ 1. The parties consented to the jurisdiction of a United States
7 Magistrate Judge under 28 U.S.C. § 636(c). Dkt. Nos. 8, 18.
8 C.
Judicial Notice
9
As a preliminary matter, the Court addresses Li’s request for judicial notice of certain
10 loan documents submitted in connection with the reply in support of her motion to dismiss.
11 Dkt. No. 29. As a general rule, a court may not look to matters beyond the complaint
12 without converting a motion to dismiss into one for summary judgment. Datel Holdings
13 Ltd. v. Microsoft Corp., 712 F. Supp. 2d 974, 983 (N.D. Cal. 2010) (citations omitted).
14 However, a court may take judicial notice of “material which is either submitted as part of
15 the complaint or necessarily relied upon by the complaint,” as well as “matters of public
16 record.” Id. Courts may “consider unattached evidence on which the complaint necessarily
17 relies if: (1) the complaint refers to the document; (2) the document is central to the
18 plaintiff’s claims; and (3) no party questions the authenticity of the document.” U.S. v.
19 Corinthian Colleges, 655 F.3d 984, 999 (9th Cir. 2011) (internal quotation marks and
20 citation omitted). Under Federal Rule of Evidence 201(b), a judicially noticed fact must be
21 one not subject to reasonable dispute in that it is either: (1) generally known within the
22 territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination
23 by resort to sources whose accuracy cannot reasonably be questioned.” See Datel, 712 F.
24 Supp. 2d at 983.
25 //
26
27
28
1
Boisvert’s argument that the Court should deny the motion to dismiss because Li has filed an
answer to the complaint, citing to Dkt. No. 22, is baseless. Dkt. No. 27 at 1-2. Dkt. No. 22 is Li’s
motion to dismiss, not an answer to the complaint.
Case No. 13-cv-01590 NC
3
ORDER ON MOTION TO DISMISS
1
Here, Li seeks judicial notice of the following documents: (1) an “AGREEMENT”
2 and subsequent “AMENDMENT” both signed by Boisvert on August 10, 2009; and (2)
3 “INSTALLMENT NOTE – INTEREST ONLY (Secured by Deed of Trust)” signed by
4 Boisvert, dated July 18, 2006. Dkt. Nos. 29 at 2; 29-1. Li asserts that judicial notice of
5 these documents is appropriate on the ground that Boisvert’s complaint necessarily relies on
6 them. Dkt. Nos. 28 at 5; 29 at 1-2. After Li made this request for judicial notice, Boisvert
7 filed a supplemental opposition which refers to a “falsified” exhibit filed by Li in support of
8 her pleadings. Dkt. No. 31 at 2. Li then filed a “letter brief,” explaining that Boisvert was
9 likely referring to a different exhibit filed in a state case between the same parties, and not
10 the exhibit subject to Li’s current request for judicial notice. Dkt. No. 32. At the hearing
11 on the motion to dismiss, Boisvert stated that he opposed the request for judicial notice
12 because it presented an incomplete picture, but he did not appear to question the
13 authenticity of the specific documents submitted by Li in connection with her request for
14 judicial notice.
15
On this record, it is not clear whether the parties agree that these documents are what
16 they appear to be. Moreover, Li has not submitted a declaration properly authenticating the
17 documents. Li’s counsel’s unsworn statement that he “is informed and believes that Exhibit
18 A is a true and correct copy of what the document(s) purport to be” is not sufficient. Dkt.
19 No. 29 at 1 n.2; Civ. L.R. 7-5; see Bank Melli Iran v. Pahlavi, 58 F.3d 1406, 1412 (9th Cir.
20 1995) (counsel’s declarations on information and belief are entitled to no weight because
21 declarant lacked personal knowledge). In any event, the Court does not need to rely on
22 these documents to rule on the present motion to dismiss. Accordingly, the Court DENIES
23 Li’s request for judicial notice without prejudice to making a proper request in the future.
24
25
II. STANDARD OF REVIEW
A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal
26 sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). On a
27 motion to dismiss, all allegations of material fact are taken as true and construed in the light
28 most favorable to the non-movant. Coal. For ICANN Transparency, Inc., 611 F.3d at 501.
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
4
1 The Court, however, need not accept as true “allegations that are merely conclusory,
2 unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig.,
3 536 F.3d 1049, 1055 (9th Cir. 2008). While a complaint need not allege detailed factual
4 allegations, it must contain sufficient factual matter, accepted as true, to “state a claim to
5 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
6 A claim is facially plausible when it “allows the court to draw the reasonable inference that
7 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
8 (2009).
9
III. DISCUSSION
10 A.
Boisvert Cannot State a Claim under the FTCA.
11
Li argues that any claims brought by Boisvert under the FTCA must be dismissed
12 because, as a private litigant, he does not have standing to bring an action under that Act.2
13 The Court agrees. It is well established in this circuit that private litigants may not sue for
14 violations of the FTCA which “rests initial remedial power solely in the Federal Trade
15 Commission.” Dreisbach v. Murphy, 658 F.2d 720, 730 (9th Cir. 1981) (citing Carlson v.
16 Coca-Cola Co., 483 F.2d 279 (9th Cir. 1973)); Reyes v. WMC Mortgage Corp., No. 11-cv17 01988 CW, 2012 WL 5338587, at *4 (N.D. Cal. Oct. 26, 2012) (“violations of unspecified
18 provisions of the Federal Trade Commission Act, 15 U.S.C. §§ 41–58, . . . do not provide a
19 private right of action.”). Accordingly, the Court dismisses Boisvert’s claims under the
20 FTCA without leave to amend.
21 B.
Boisvert’s TILA and HOEPA Claims Are Time-Barred.
22
Li moves to dismiss Boisvert’s claims brought under TILA and HOEPA on the basis
23 that they are barred by the one-year statute of limitations of 15 U.S.C. § 1640(e). Dkt. No.
24 22 at 6. In opposition, Boisvert contends that the applicable statute of limitations is 4 years
25 under California Civil Procedure Code § 337, and that the statute of limitations began
26
2
This argument was made for the first time in Li’s reply. Dkt. No. 28 at 7-8. Boisvert did not
27 address it in his supplemental opposition which was filed after the reply, and indicated at the
hearing that he had no further argument to make in opposition to the motion to dismiss his FTCA
28 claims.
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
5
1 running not at the time the loan was executed, but in February 2012, which is when
2 Boisvert purportedly made his last payment on the loan to Li. Dkt. No. 27 at 3-4. The
3 Court finds that, as currently alleged, Boisvert’s claims under TILA and HOEPA are time4 barred.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
1.
Boisvert’s TILA and HOEPA Damages Claims Are Dismissed with Leave
to Amend.
A damages claim for a TILA violation must be brought “within one year from the
date of the occurrence of the violation.” 15 U.S.C. § 1640(e). The statutory period
generally runs from the date the loan contract was executed. 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.”). Here, Boisvert alleges
that he entered into the loan agreement with Li in July 2006. Dkt. No. 1 ¶ 16. Thus, any
TILA damages claim expired in July 2007. Moreover, even if we accept for the purposes of
the argument that the loan “was modified by Defendant’s legal counsel on or about August
10, 2009,” as stated in Boisvert’s opposition, any TILA damages claim arising out of that
modification expired on August 10, 2010. Dkt. No. 27 at 2. Boisvert filed this case in April
2013, which is over 7 years after the execution of the loan, and over 3 years after the
alleged modification.
Additionally, because HOEPA is an amendment of TILA, it is governed by the same
statute of limitations. Consumer Solutions REO, LLC v. Hillery, 658 F. Supp. 2d 1002,
1008 (N.D. Cal. 2009). Any damages claims alleged by Boisvert under HOEPA must also
be dismissed as time-barred for the same reasons as his TILA damages claim.
It is also recognized, however, that “the 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 v. State of Cal., 784 F.2d 910, 915 (9th Cir. 1986). As the Ninth
Circuit has further explained, “’Equitable tolling’ focuses on whether there was excusable
delay by the plaintiff: If a reasonable plaintiff would not have known of the existence of a
28
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
6
1 possible claim within the limitations period, then equitable tolling will serve to extend the
2 statute of limitations for filing suit until the plaintiff can gather what information he needs. .
3 . . Equitable estoppel, on the other hand, focuses primarily on actions taken by the
4 defendant to prevent a plaintiff from filing suit, sometimes referred to as ‘fraudulent
5 concealment.’” Lukovsky v. City & Cnty. of San Francisco, 535 F.3d 1044, 1051 (9th Cir.
6 2008) (internal quotation marks and citations omitted). In other words, Boisvert must allege
7 facts demonstrating that he could not have discovered the alleged violations by exercising
8 reasonable diligence. Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 964
9 (N.D. Cal. 2010); see also Hubbard v. Fid. Fed. Bank, 91 F.3d 75, 79 (9th Cir. 1996)
10 (plaintiff was not entitled to equitable tolling on TILA claim where “nothing prevented
11 [plaintiff] from comparing the loan contract, [lender]’s initial disclosures, and TILA’s
12 statutory and regulatory requirements”). Moreover, a tolling of the statute of limitations
13 based on fraudulent concealment must be alleged with particularity, and cannot be based
14 simply on a restatement of the TILA claims. Robertson v. Bank of Am., NA, No. 10-cv15 3525 SBA, 2011 WL 1231003, at *3 (N.D. Cal. Apr. 1, 2011) (citations omitted).
16
Here, Boisvert’s complaint does not allege any facts demonstrating fraudulent
17 concealment or entitlement to equitable tolling. However, because the Ninth Circuit
18 generally disfavors resolving a motion to dismiss on equitable tolling grounds unless it is
19 clear that equitable tolling is inappropriate, any damages claims brought by Boisvert under
20 TILA and HOEPA are dismissed with leave to amend. See Rai v. GMAC Mortgage, No.
21 10-cv-04291 LHK, 2011 WL 337842, at *4 (N.D. Cal. Jan. 31, 2011) (citing Supermail
22 Cargo, Inc. v. United States, 68 F.3d 1204, 1206 (9th Cir. 1995)).
23
24
25
26
27
2.
Boisvert’s Claim for Rescission under TILA Is Dismissed without Leave
to Amend.
Boisvert’s complaint also includes a request for equitable relief including injunctive
relief, rescission, restitution, reformation, and disgorgement. See Dkt. No. 1 at 1, 4, 10.
Under TILA, a borrower generally may rescind a loan within three business days after it is
consummated. 15 U.S.C. § 1635(a). The right to rescission expires “three years after the
28
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
7
1 date of consummation of the transaction or upon the sale of the property, whichever occurs
2 first, notwithstanding the fact that the information and forms required under this section or
3 any other disclosures required under this part have not been delivered . . . .” 15 U.S.C. §
4 1635(f). Section 1635(f) is “a statute of repose, depriving the courts of subject matter
5 jurisdiction when a § 1635 claim is brought outside the three-year limitation period.”
6 Miguel v. Country Funding Corp., 309 F.3d 1161, 1164 (9th Cir. 2002); Beach v. Ocwen
7 Fed. Bank, 523 U.S. 410, 419 (1998) (TILA “permits no federal right to rescind,
8 defensively or otherwise, after the 3-year period of § 1635(f) has run.”). According to the
9 complaint here, Boisvert consummated the loan in July 2006. His right of rescission of that
10 transaction thus expired in July 2009. Boisvert did not file this case until April 2013, which
11 is also over 3 years after the alleged August 2009 modification. Therefore, to the extent
12 Boisvert is bringing a claim for rescission under TILA arising out of the July 2006 loan or
13 the August 2009 modification, any such claim is time-barred and must be dismissed without
14 leave to amend.
Finally, because the Court has concluded that Boisvert has failed to state any claim
15
16 for relief, he is not entitled to an injunction. Hamilton v. Bank of Blue Valley, 746 F. Supp.
17 2d 1160, 1182 (E.D. Cal. 2010) (“Injunctive relief is a remedy and not, in itself, a cause of
18 action, and a cause of action must exist before injunctive relief may be granted.”).
19 C.
Leave to Amend Is Granted.
20
If a court grants a motion to dismiss, leave to amend should be granted unless the
21 pleading could not possibly be cured by the allegation of other facts. Lopez v. Smith, 203
22 F.3d 1122, 1127 (9th Cir. 2000). At the hearing on the motion to dismiss, Boisvert
23 indicated that he would like to amend the complaint to allege fraud and additional violations
24 of TILA. The Court has already held that, absent equitable tolling, Boisvert’s damages
25 claims under TILA and HOEPA would be barred by the statute of limitations. The Court,
26 however, grants Boisvert leave to amend his complaint to allege facts demonstrating
27 fraudulent concealment or entitlement to equitable tolling.
28 //
Case No. 13-cv-01590 NC
ORDER ON MOTION TO DISMISS
8
1
Th Court no that, if Boisvert ch
he
otes
B
hooses to am
mend his co
omplaint to allege fraud, he
b
o
e-year limita
ations perio applicabl to a fraud claim und the
od
le
d
der
2 should be mindful of the three
nia
f
edure § 338
8(d). Newso v. Coun
om
ntrywide Ho Loans, Inc.,
ome
3 Californ Code of Civil Proce
S
N.D.
010); Cal. C Proc. C
Civ.
Code § 338( (the lim
(d)
mitations
4 714 F. Supp. 2d 1000, 1014 (N Cal. 20
o
laim does not begin to run “until the discove by the a
n
o
ery,
aggrieved p
party, of
5 period on a fraud cl
s
ng
d
e”).
ging
“must
6 the facts constitutin the fraud or mistake Moreover, in alleg fraud, a plaintiff “
th
arity the circ
cumstances constitutin fraud . . . .” Fed. R. Civ. P. 9(b
ng
b).
7 state wit particula
s
n
st
n
f
place, and s
specific con
ntent of
8 Claims sounding in fraud mus allege “an account of the time, p
e
ations as we as the ide
ell
entities of t parties t the misre
the
to
epresentatio
ons.”
9 the false representa
v
LP,
3d
4
2007) (intern quotatio marks an
rnal
on
nd
10 Swartz v. KPMG LL 476 F.3 756, 764 (9th Cir. 2
0
M
usory allega
ations of fra will no suffice. B
aud
ot
Bosse v. Cro
owell
11 citation omitted). Mere conclu
1
an,
977); Das v WMC Mo
v.
ortgage Cor 831
rp.,
12 Collier & Macmilla 565 F.2d 602, 611 (9th Cir. 19
2
1
13 F. Supp. 2d 1147, 1166 (N.D. Cal. 2011).
3
14
4
Fi
inally, Boisvert is adm
monished tha any amen
at
nded compl
laint must c
comply with
h
vil
olation of th rule coul result in a
hat
ld
15 Federal Rule of Civ Procedure 11(b) and that a vio
5
n
st
R
nction is app
propriate wh a plead
hen
ding is
16 sanction being imposed agains him. A Rule 11 san
6
seless and made withou a reasona and co
m
ut
able
ompetent inq
quiry. Tow
wnsend v. Ho
Holman
17 both bas
7
ing
9
358,
9th
90).
18 Consulti Corp., 929 F.2d 13 1362 (9 Cir. 199
8
IV. CONCLUS ION
C
19
9
20
0
Be
ecause Bois
svert fails to allege suf
o
fficient fact to state a claim, the C
ts
Court GRA
ANTS
tion
miss
ntirety. The claims un
nder FTCA and for rescission und
der
21 Li’s mot to dism in its en
1
re
SED
HOUT LEAV TO AM
VE
MEND. Boisvert has L
LEAVE TO
O
22 TILA ar DISMISS WITH
2
D
laint as described abov and mus file any a
ve,
st
amendment by Septem
mber 4,
23 AMEND his compl
3
f
es
mend his com
mplaint, the case will b dismissed with preju
e
be
udice.
24 2013. If he choose not to am
4
25
5
IT IS SO OR
T
RDERED.
26
6
Date: August 20, 2013
t
____
__________
__________
_____
Nath
hanael M. C
Cousins
Unit States M
ted
Magistrate J
Judge
27
7
28
8
Case No. 13-cv-0159 NC
90
ORDER ON MOTIO TO DISM
R
ON
MISS
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?