MEMORANDUM AND ORDER RE: MOTION TO DISMISS

WILLIAM B. SHUBB, District Judge.

Plaintiffs Silvia Burley and the California Valley Miwok Tribe ("Miwok Tribe") brought this action against defendants OneWest Bank, FSB ("OneWest"), Deutsche Bank National Trust Company ("Deutsche Bank"), and Meridian Foreclosure Service ("Meridian") to recover title over land and damages in connection with the alleged wrongful foreclosure and sale of the plaintiffs' real property. On August 26, 2014, this court issued an order ("Aug. 26, 2014 Order") dismissing plaintiffs' case for lack of subject matter jurisdiction and giving plaintiffs' twenty days to file an amended complaint.1 (Docket No. 17.) Plaintiffs filed their First Amended Complaint ("FAC") asserting claims under the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. §§ 1691, et seq., the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601, et seq., and several state law claims essentially repeated from their original Complaint. (Docket No. 18.)

I. Factual & Procedural History

Burley is the chairperson of the Miwok Tribe, which is a federally-recognized Indian tribe. (FAC ¶¶ 20-21.) On March 29, 2002, the Miwok Tribe purchased a parcel of land in Stockton, California. (Id. ¶ 14.) Shortly after doing so, the Miwok Tribe issued a resolution authorizing Burley to obtain a loan for the property and to take title to the property on behalf of the Miwok Tribe. (Id. ¶¶ 25, 28.) After receiving title, Burley allegedly refinanced the property on behalf of the Miwok Tribe in 2006 and 2007, and quitclaimed the property back to the Miwok Tribe in 2008. (Id. ¶¶ 19-24.) Financing was originally provided by IndyMac Bank ("IndyMac"). (Id. ¶ 22.) In March 2009, after IndyMac entered bankruptcy, OneWest purchased the assets of IndyMac from the Federal Deposit Insurance Corporation ("FDIC"), including the beneficial interest in plaintiffs' loan. (Id. ¶ 59)

Burley and the Miwok Tribe allege that they are waiting for funds owed to them by the Revenue Sharing Trust Fund.2 (Id. ¶ 46, 86.) In the meantime, plaintiffs fell behind on loan payments for the property. (See id. ¶ 57.) On February 19, 2010, OneWest recorded a Notice of Default and initiated foreclosure proceedings. (Id. ¶¶ 61, 88.) A Trustee's Deed Upon Sale recorded in San Joaquin County on November 6, 2013, reflects that Deutsche Bank purchased the property at a foreclosure sale for roughly one-third of the alleged amount of unpaid debt. (Id. ¶ 72.)

Plaintiffs allege that the terms of financing reflected in the Deed of Trust filed with the Official Records of San Joaquin County on April 30, 2007, are different from the terms that plaintiffs had originally agreed to during discussions with the defendants' representatives. (Id. ¶ 38, 45-46.) As a result, plaintiffs contend that OneWest listed an "excessive" amount on its Notice of Default, wrongfully foreclosed on the property, and initiated an unlawful detainer action against Burley. (Id. ¶¶ 61, 63, 75.) Defendants also allegedly discriminated against plaintiffs during their application for the loan, (id. ¶¶ 17, 77-79), and failed to comply with certain requirements of foreclosure over tribal land, (id. ¶ 63). Defendants now move to dismiss all claims in the FAC pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (Docket No. 22.)

II. Discussion

On a motion to dismiss under Rule 12(b)(6), the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See 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 plaintiff must plead "only enough facts to state a claim to relief that is plausible on its face." Bell Atl. 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 plaintiff pleads facts that are "merely consistent with a defendant's liability," it "stops short of the line between possibility and plausibility." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).

A. Equal Credit Opportunity Act Claim

It is well established that "[a] district court may dismiss a claim `[i]f the running of the statute is apparent on the face of the complaint.'" Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1045 (9th Cir. 2011) (quoting Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980)). "However, a district court may do so `only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled.'" Id.

The ECOA prohibits a creditor from discriminating against an applicant for credit "on the basis of race, color, religion, national origin, sex or marital status, or age," as well as use of "any public assistance program," or "because the applicant has in good faith exercised any right under this chapter." 15 U.S.C. § 1691(a). The ECOA defines "applicant" as "any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit." Id. § 1691a(b). Aggrieved applicants may bring an action for damages and equitable remedies against "[a]ny creditor who fails to comply with any requirement imposed" by the ECOA. Id. § 1691e.

However, § 1691e(f) requires an applicant to bring any claim within five years "after the date of the occurrence of the violation." Id. § 1691e(f). The same subsection provides an express exception to this limitation allowing for an applicant to bring an action "not later than one year after" the commencement of a proceeding or action by the Attorney General or any agency having responsibility for administrative enforcement under § 1691(c) against the creditor, if the Attorney General or agency itself commenced its action within five years of the occurrence of the violation. Id.

Here, plaintiffs' FAC alleges that defendants discriminated against the Miwok Tribe during its loan application and refinancing. (FAC ¶¶ 17, 77-79.) Plaintiffs specifically allege that IndyMac refused to allow the Miwok Tribe to use property that it owned in its own name as security for that loan. (See id. ¶ 79.) Instead, IndyMac allegedly insisted that Burley take title in her own name to any property used as security and that her name, not the Tribe's, be used on the loan origination and refinancing. (See id.)

Plaintiffs' allegations in their FAC, (FAC ¶¶ 14, 44), as well as the Deed of Trust dated April 20, 2007 that is attached to the FAC and lists "IndyMac Bank" as the lender and "Silvia Burley" as the borrower, (FAC Ex. B-7), clearly show that plaintiffs refinanced the property at issue in 2007. Because the discriminatory conduct giving rise to plaintiffs' ECOA claim allegedly occurred when plaintiffs sought financing through IndyMac, (see FAC ¶¶ 17, 79), the alleged discrimination could not have occurred later than April 20, 2007—the date Burley signed the Deed of Trust on the property.

It is therefore clear from the face of plaintiffs' FAC that the five-year statute of limitations has run on plaintiffs' ECOA claim. Under the normal five-year limitation period, plaintiffs' claim ran no later than April 20, 2012. See 15 U.S.C. § 1691e(f). Even assuming that some enforcement action was brought by the Attorney General or authorized agency within the meaning of § 1691e(f), which plaintiffs neither allege nor suggest occurred, plaintiffs would need to have commenced this action no later than April 20, 2013. Id.

Moreover, court finds no basis in plaintiffs' FAC that might plausibly support equitable tolling in this case. A court applies equitable tolling "in situations where, despite all due diligence, the party invoking equitable tolling is unable to obtain vital information bearing on the existence of the claim." Cervantes, 656 F.3d at 1045 (quoting Socop-Gonzalez v. I.N.S., 272 F.3d 1176, 1193 (9th Cir. 2001)). The plaintiffs have not alleged circumstances beyond their control that prevented them from discovering defendants' alleged acts of discrimination. In fact, because plaintiffs' base their claim of discrimination on the fact that defendants refused to let the Miwok Tribe use its own land as security for the loan, there is no question that plaintiffs were aware of the alleged facts constituting their claim when they applied for the loan in or before 2007.

Accordingly, because it is clear from plaintiffs' FAC and the April 20, 2007 Deed of Trust attached to it that the applicable statute of limitations for any ECOA claim based on alleged discrimination during plaintiffs' application for credit in 2007 ran well before plaintiffs filed this action, the court must grant defendants' motion to dismiss this claim. See Cervantes, 656 F.3d at 1045-46.

B. Truth In Lending Act Claim

Among the various obligations of creditors created by TILA is the requirement that "not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer." 15 U.S.C. § 1641(g)(1). Under TILA, any creditor who fails to comply with the requirement to give notice to a borrower of a mortgage loan sale under § 1641(g) "with respect to any person is liable to such person." Id. § 1640(a). TILA's liability provision contains a one-year statute of limitations accruing from the date of the violation. Id. § 1640(e).

Here, plaintiffs allege two transfers of their loan for which they received no notice as required by § 1641(g)(1): First, in March 2009, IndyMac allegedly transferred plaintiffs' loan to OneWest. (FAC ¶¶ 59, 168.) Second, in June 2010, the loan was allegedly transferred again to Deutsche Bank. (Id. ¶¶ 61, 168.) The 30-day window in which § 1641(g)(1) required the creditors to provide notice to plaintiffs of these transfers thus expired in April 2009 and July 2010, respectively.

The statute of limitations under § 1640(e) therefore ran on plaintiffs' first alleged violation in April 2010 and their second alleged violation in July 2011.

Similar to their ECOA claim, the FAC has no allegations suggesting that equitable tolling may save this claim. Plaintiffs' FAC shows that plaintiffs were informed of IndyMac's transfer of the loan to OneWest in February 19, 2010, when OneWest recorded a Notice of Default and initiated foreclosure proceedings against the property in question. (FAC ¶ 61.) Plaintiffs even attach the Notice of Default, which shows that it was filed on "Fri Feb 19 08:59:52 PST 2010" with the San Joaquin County Recorders and lists "OneWest Bank, FSB," along with contact information for OneWest's office in San Diego, as the sender. (See id. Ex. E-15.) Therefore, this is plainly not a case where "despite all due diligence, the party invoking equitable tolling is unable to obtain vital information bearing on the existence of the claim." Cervantes, 656 F.3d at 1045. Plaintiffs could have easily discovered that a loan transfer had taken place when the new creditor notified them of default and began to foreclose the secured property. Even if the statute of limitations was tolled until February 19, 2010, the time for plaintiffs to bring their TILA claim still ran in 2011.

Similarly, plaintiffs state in their FAC that "[o]n June 21, 2010, an Assignment of Deed of Trust was recorded in the Official Records of San Joaquin County . . . to grant the Deed of Trust to Deutsche Bank National Trust Company, as Trustee of the IndyMac INDA Mortgage Loan Trust 2007-AR3." (FAC ¶ 66.) Plaintiffs do not attach this Deed of Trust or documentation of its assignment to their FAC, but the court must still assume the truth of their allegation that an assignment of the Deed of Trust was "recorded in the Official Records of San Joaquin County" on June 21, 2010. (Id.); see Scheuer, 416 U.S. at 236. The FAC alleges no facts that might explain why plaintiffs, exercising due diligence as required by the equitable tolling standard, could not have learned of the assignment of the loan to Deutsche Bank at that time. See Cervantes, 656 F.3d at 1045 (declining to equitably toll a statute of limitations because "plaintiffs have not alleged circumstances beyond their control" that prevented them from understanding loan documents that were readily accessible to them). Therefore, the court concludes that the statute of limitations ran on plaintiffs' TILA claim for this alleged violation in 2011.

Accordingly, because the applicable statute of limitations for plaintiffs' TILA claim based on these two alleged violations ran before plaintiffs brought this action, the court must grant defendants' motion to dismiss this claim. See id. at 1045-46.

C. The Court Declines to Exercise Supplemental Jurisdiction Over Plaintiffs' State-Law Claims

Under 28 U.S.C. § 1367, a federal court may exercise supplemental jurisdiction over state-law claims that are sufficiently related to those claims over which they have original jurisdiction. 28 U.S.C. § 1367(a); United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966). However, a district court "may decline to exercise supplemental jurisdiction over a claim . . . 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). In fact, the Ninth Circuit has stated its preference that district courts do not exercise supplemental jurisdiction over a plaintiffs' state-law claims when the court has dismissed all of plaintiffs' federal-law claims before trial. See Acri, 114 F.3d at 1001.

Accordingly, because the court will dismiss all plaintiffs' federal-law claims for failure to state a claim upon which relief can be granted, the court declines to exercise supplemental jurisdiction over plaintiffs' remaining state-law claims pursuant to 28 U.S.C. § 1367(c)(3).

D. Leave to Amend

The decision to grant leave to amend the pleadings "is within the sound discretion of the district court." ABM Indus., Inc. v. Zurich Am. Ins. Co., 237 F.R.D. 225, 227 (N.D. Cal. 2006) (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185 (9th Cir. 1987)). In exercising its discretion, Rule 15 counsels that "the court should freely give leave [to amend] when justice so requires." Fed. R. Civ. P. 15(a)(2); see also Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) ("We have stressed Rule 15's policy of favoring amendments, and we have applied this policy with liberality."). But "leave need not be granted where the amendment of the complaint would cause the opposing party undue prejudice, is sought in bad faith, constitutes an exercise in futility, or creates undue delay." Ascon Properties, 866 F.2d at 1160.

The court dismissed plaintiffs' initial Complaint for want of federal question jurisdiction,3 and granted plaintiffs leave to amend. (See Aug. 26, 2014 Order at 9.) Plaintiffs responded by filing the instant FAC, which abandons the claim upon which they originally predicated federal jurisdiction and substitutes two, new, federal claims for violations of the ECOA and TILA. The court now dismisses these two federal claims for failure to state a claim upon which relief can be granted.

Having already given leave to amend once, the court has granted plaintiffs ample opportunity present their best federal claims to support jurisdiction in this court. However, because plaintiffs have raised their new federal claims under the ECOA and TILA for the first time in their FAC, the court will afford them one more opportunity to amend those claims and only those claims to state a claim upon which relief can be granted. Leave is not granted to add new or additional claims not included in the FAC.

IT IS THEREFORE ORDERED that OneWest Bank, FSB and Deutsche Bank National Trust Company's motion to dismiss, be, and the same hereby is, GRANTED.

Plaintiffs have twenty days to file a second amended Complaint, addressing the deficiencies in their claims for an ECOA violation and/or TILA violation, if they can do so consistent with this Order.