LAUREL BEELER, United States Magistrate Judge.
On March 8, 2010, Plaintiff Fernando Briosos filed this action in California state court against Defendant Wells Fargo Bank, alleging violations of California law and the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., in connection with his refinance of two mortgage loans through Defendant. Complaint, Exh. A to Notice of Removal, ECF No. 1 at 5-11. Plaintiff alleges that Defendant made fraudulent statements and concealed information about his ability to afford the loans in order to induce Plaintiff to go through with the refinance. Additionally, Plaintiff alleges that at the closing of one of the loans, Defendant failed to provide him with completed disclosures of his notice and right to rescission, as required
With respect to Plaintiffs TILA rescission claim, the Court finds that Plaintiff timely exercised his right to rescission, but has failed to sufficiently allege facts supporting his ability to tender the proceeds of the loan as part of the rescission process.
As to Plaintiffs fraud claim, the Court finds that Plaintiff has failed to plead the elements of fraud with particularity, as required under Federal Rule of Civil Procedure 9(b).
With respect to Plaintiffs quiet title claim, the Court finds that Plaintiff has failed to comply with the statutory requirement that he assert such claim in a verified complaint.
Finally, because Plaintiffs TILA and fraud claims are deficient as alleged, Plaintiff has failed to allege an predicate violation necessary to sustain his unfair competition law claim under California Business & Professions Code § 17200.
The Court dismisses each of Plaintiffs claims without prejudice, and because it is possible that Plaintiff may cure the deficiencies in his claims, grants Plaintiff leave to amend. Further, because the Court finds that this matter is suitable for decision without oral argument, the Court vacates the hearing set for September 2, 2010. See Civil L.R. 7-1(b).
The relevant facts, taken from Plaintiffs Complaint and from Defendant's Request for Judicial Notice
Plaintiff, along with his partner, Steven Christensen, owned two properties in San Francisco: a condominium on Lombard Street, which is Plaintiff's primary residence, and a condominium on Delancey Street. Complaint ¶ 1, ECF No. 1 at 5. In October 2006, Mr. Christensen died. Complaint ¶ 9, ECF No. 1 at 7. As a result, Plaintiff contacted Defendant regarding removing Mr. Christensen's name from the mortgage loans on the properties.
Relying on Defendant's representation, on February 27, 2007,
Additionally, Plaintiff refinanced the loan on the Delancey Street property. On April 5, 2007, Plaintiff, in his individual capacity, executed a loan for $531,000 from Defendant. See Deed of Trust, Exh. C to Request for Judicial Notice, ECF No. 6-3. The loan was secured with a Deed of Trust on the Delancey Street property, which was recorded with the San Francisco County Recorder's Office on April 13, 2007. Id.
In March 2010, Plaintiff filed this lawsuit in San Francisco Superior Court, seeking to rescind the loans, obtain quiet title to the properties, and obtain damages for fraud and violation of California's unfair competition law. On June 28, 2010, Defendant removed the action to this Court, asserting that the Court has jurisdiction over the matter under 28 U.S.C. § 1331 based on Plaintiff's federal TILA claim. Notice of Removal, ECF No. 1 at 1. On July 6, 2010, Defendant filed the instant motion, seeking dismissal of each of Plaintiffs claims pursuant to Rule 12(b)(6), or, alternatively, a more definite statement pursuant to Federal Rule of Civil Procedure 12(e). Defendant's Motion, ECF No. 5. Because Plaintiffs claims as plead are not so vague or ambiguous to inhibit Defendant from preparing a response, the Court denies Defendant's motion for a more definite statement and addresses Defendant's motion pursuant to Rule 12(b)(6). See Fed. R. Civ. Pro. 12(e); Ingram v. Grant Union High School Dist., No. CIV S-08-2490, 2010 WL 3245169, at *9 (E.D.Cal. Aug. 16, 2010) (denying Rule 12(e) motion when allegations in support of claim not impermissibly vague or ambiguous).
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for "failure to state a claim
In its Motion, Defendant challenges each of Plaintiffs four claims. It argues that Plaintiffs TILA rescission claim is time-barred and that Plaintiff has failed to adequately plead the ability to tender the loan proceeds, which is a mandatory step in the rescission process under 15 U.S.C. § 1635(c). Defendant's Motion, ECF No. 5 at 14-17. Defendant challenges Plaintiffs fraud claim on the ground that Plaintiff has failed to plead the essential allegations of fraud with particularity, as required by Federal Rule of Civil Procedure 9(b), and because the allegations do not amount to an actionable fraud claim. Defendant's Motion, ECF No. 5 at 11-13. As to Plaintiffs quiet title claim, Defendant asserts that because Plaintiff has not tendered repayment of the outstanding amounts of the loans, he cannot seek to quiet title to the properties in his name. Id., ECF No. 5 at 13-14. Finally, Defendant contends that, having failed to plead a viable claim, Plaintiff lacks any underlying violation to sustain his unfair competition law claim under California Business & Professions Code § 17200. Id., ECF No. 5 at 17-19.
Because the Court's jurisdiction over this case hinges on the existence of a viable federal claim, the Court turns to Plaintiff's TILA claim first.
In his third cause of action, Plaintiff asserts a claim for rescission under TILA. Complaint ¶¶ 38-45, ECF No. 1 at 9-10. Specifically, Plaintiff alleges as follows:
Complaint ¶¶ 40-45, ECF No. 1 at 9-10.
"Under the Truth in Lending Act, [ ] 15 U.S.C. § 1601 et seq., when a loan made in a consumer credit transaction is secured by the borrower's principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately." Beach v. Ocwen Fed. Bank, 523 U.S. 410, 411, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998) (citing 15 U.S.C. § 1635).
15 U.S.C. § 1635(f).
Here, Plaintiff contends that Defendant did not provide him with "completed disclosures of his notice of right to cancel." Complaint ¶ 39. Plaintiff's claim is therefore governed by the three-year limitations period in § 1635(f). Defendant contends that because Plaintiff did not file this lawsuit asserting his TILA rescission claim until March 8, 2010—more than three years after the consummation of the loan on February 27, 2007—any claim for rescission is barred. Defendant's Motion, ECF No. 5 at 16. Plaintiff, however, maintains that § 1635(f) only requires that he exercise his right to rescind within the three-year period; it does not require that he file a rescission claim within that period. Because Plaintiff sent a rescission letter to Defendant on June 1, 2009, Plaintiff asserts that there is no issue regarding timeliness. While this issue falls within an unsettled area of law, based on the decisions that have addressed this issue, the Court agrees with Plaintiff.
As both parties recognize, there is a split of authority regarding whether § 1635(f) requires a borrower to file a rescission claim within three years after a transaction is consummated, or whether the borrower must only assert his right to rescission within that period. In support of its position, Defendant primarily relies on the Ninth Circuit's decision in Miguel v. Country Funding Corp., 309 F.3d 1161 (9th Cir.2002). In that case, the Ninth Circuit reviewed the Supreme Court's decision in Beach v. Ocwen Federal Bank, 523 U.S. 410, 118 S.Ct. 1408, 140 L.Ed.2d 566 (1998), and held that § 1635(f) "is a statute of repose, depriving the courts of subject matter jurisdiction when a § 1635 claim is brought outside the three-year limitation period." Miguel, 309 F.3d at 1164. Accordingly, the Ninth Circuit determined that "[b]ecause [the plaintiff] did not attempt to rescind against the proper [creditor] within the three-year limitation period, her right to rescind [under § 1635] expired." Id. at 1164-65.
Focusing on this language in Miguel, several district courts in this circuit have taken the same approach and dismissed TILA rescission claims filed more than three years after the underlying transaction occurred. See, e.g., Sam v. Am. Home Mortgage Servicing, No. CIV S-09-2177, 2010 WL 761228, at *2 (E.D.Cal. Mar. 3, 2010) (dismissing TILA rescission claim filed after statute of repose expired and finding notice of rescission sent within three-year period "irrelevant"); Gates v. Wachovia Mortgage, FSB, No. 2:09-CV-02464, 2010 WL 902818, at *4 (E.D.Cal. Feb. 19, 2010) ("Because plaintiff filed her Complaint over three years from the date of consummation, the court is without jurisdiction to consider her claim for rescission under TILA."); Falcocchia v. Saxon
However, there are district court decisions from this Circuit that have interpreted both the Supreme Court's Beach decision and the Ninth Circuit's Miguel decision to allow a plaintiff to assert a rescission claim outside the three-year period set forth in § 1635(f), provided the plaintiff exercised his right to rescind within that period. In Santos v. Countrywide Home Loans, No. 1:09-CV-00912, 2009 WL 2500710, at *4-5 (E.D.Cal. Aug. 14, 2009), the court held that a plaintiff who had timely given notice to a creditor of his intent to rescind the transaction prior to the end of the three-year limitations period could assert a rescission claim outside that period, but within the one-year limitations period borrowed from § 1640, which ran from the time the defendant failed to respond to the rescission demand. In reaching this decision, the Santos court analyzed the language in Beach which the Ninth Circuit relied on in Miguel, and noted that the Supreme Court's discussion focused on the right of rescission, not a claim for rescission:
Santos, 2009 WL 2500710, at *4 (footnote omitted). The Santos court also noted that Miguel did not address the issue whether a plaintiff who had timely given notice could file a rescission claim outside the three-year limitations period, and recognized—albeit in dicta—that 15 U.S.C. § 1640(e) provides the borrower one year from the refusal of cancellation to file suit. Id. at *5 (citing Miguel, 309 F.3d at 1165). Against this backdrop, the district court in Santos granted the plaintiffs leave to amend their complaint to allege facts regarding the written notice they provided to the creditor within the three-year period. Id. Santos is not alone in this approach. See Jozinovich v. JP Morgan Chase Bank, N.A., No. C 09-3326 TEH, 2010 WL 234895, at *5 (N.D.Cal. Jan. 14, 2010) (finding that plaintiffs rescission claim was timely when plaintiff mailed a rescission letter within the three-year limitations period, but dismissing the claim on other grounds); Pearce v. Bank of Am. Home Loans, No. C 09-3988 JF, 2010 WL 2348637, at *4-5 (N.D.Cal. June 8, 2010) (concluding that "both the language of [§ 1635] and Beach's interpretation of that language suggest strongly that the statute of repose applies to the right of rescission under TILA and not the filing of a lawsuit.").
While still the minority approach in this Circuit, this Court agrees with the reasoning set forth in the second line of cases. As the Santos decision highlighted, the Supreme Court's analysis of § 1635(f) in Beach focused on "whether § 1635(f) is a statute of limitation, that is, `whether [it] operates, with the lapse of time, to extinguish the right which is the foundation for the claim' or `merely to bar the remedy for its enforcement.'" Beach, 523 U.S. at 412, 118 S.Ct. 1408 (quoting Midstate Horticultural Co. v. Penn. R. Co., 320 U.S. 356, 358-59 & n. 4, 64 S.Ct. 128, 88 L.Ed. 96 (1943)) (emphasis added). Examining the plain language of § 1635(f), the Supreme Court determined that "[s]ection 1635(f). . . takes us beyond any question whether it limits more than the time for bringing a suit, by governing the life of the underlying right as well . . . . It talks not of a suit's commencement but of a right's duration, which it addresses in terms so straightforward as to render any limitation on the time for seeking a remedy superfluous." Id. at 417, 118 S.Ct. 1408. While the Miguel decision has been widely cited for the proposition that § 1635(f) bars TILA rescission claims brought outside the three-year limitation period, the Ninth Circuit held that the plaintiffs "right to rescind expired" because the plaintiff "did not attempt to rescind against the proper entity within the three-year limitation period." Miguel, 309 F.3d at 1164-65. The Ninth Circuit further recognized that § 1640(e) provides a borrower one year from the refusal of cancellation to file suit, but "[b]ecause cancellation was not effected during the three-year period, the additional year statute of limitations provided by § 1640 is irrelevant; it relates to the time for filing suit once cancellation has been wrongly refused." Id. at 1165 (citing 15 U.S.C. § 1640(f)).
Here, in contrast to Miguel, Plaintiff did attempt to rescind the loan within three years after the transaction was consummated by sending a letter to Defendant requesting rescission of the transaction on June 11, 2009. Thus, Plaintiff exercised his right to rescission before the right expired by operation of § 1635(f)'s three-year limitations period. The fact that Plaintiff did not seek to enforce the remedy for violation of the right until he filed this lawsuit on March 8, 2010, does not undermine the fact that he exercised his right to rescission within the prescribed limitations period. Moreover, Plaintiff
Defendant also urges the Court to dismiss Plaintiffs TILA claim because he failed to adequately allege facts demonstrating that he is able to tender the loan proceeds. Defendant's Motion, ECF No. 5 at 10-11. Section 1635(b) sets forth the protocol for return of money and property when a borrow exercises his right to rescind. Pursuant to § 1635(b), within 20 days of receiving notice of rescission, the creditor must return all money and property paid to the borrower and terminate the security interest in the property.
Relying on Yamamoto, numerous district courts in this circuit have dismissed TILA rescission claims at the motion to dismiss stage on the ground that the borrower failed to allege a present ability to
Here, Plaintiff has expressly alleged that he "has the ability to tender pursuant to TILA should the court find that his substantive right to rescind is valid." Complaint, ECF No. 1 at 10. Defendant, however, argues that despite this averment, the Complaint lacks "any clear allegation that Plaintiff has the ability to return $650,000.00, less certain finance charges and repayments made to date." Defendant's Motion, ECF No. 5 at 17. Rather, Defendant asserts that "both the [C]omplaint and the judicially noticeable Notice of Default on the Lombard Street property seem to indicate that [Plaintiff] is unable to make the monthly payments on the loan as he agreed to, much less pay it back in full." Defendant's Motion, ECF No. 5 at 17. Plaintiff counters that he has sufficiently alleged his ability to tender and that any argument to the Court regarding conditioning rescission on tender is premature at this stage. Plaintiff's Opposition, ECF No. 12 at 8.
The district court in Cook addressed the same issue. There, the defendant argued that the plaintiffs' TILA rescission claimed failed because the plaintiff had not alleged a "credible tender." Cook, 2010 WL 1289892, at *4. After thoroughly reviewing prior decisions analyzing the requirement that a plaintiff plead tender as part of a rescission claim, the Cook court concluded that the plaintiffs were required "to plead facts that would establish their ability to tender before it will reach the substance of their TILA claims." Id. at *5. It noted that the plaintiffs had merely pled a "willingness" or "preparedness" to tender, but had not pled facts that would establish their ability to tender. Id. The court therefore dismissed the plaintiffs' rescission claim with leave to amend to plead facts that would establish either their present ability to tender the loan proceeds or the expectation that they will be able to tender. Id. at *5.
The court in Valdez v. America's Wholesale Lender, No. C 09-2778 JF, 2009 WL 5114305, at *5 (N.D.Cal. Dec. 18, 2009), took a similar approach. The court first reviewed the two lines of authority applying Yamamoto. It reasoned that while the line of cases holding that a failure to allege the ability to tender was not fatal to a TILA rescission claim was more consistent with the liberal pleading requirements of Rule 8, the line of cases holding that TILA rescission claims are subject to dismissal if the borrower fails to allege a present ability to tender the loan proceeds recognized that Congress did not intend to reduce mortgage companies to unsecured creditors and that rescission is an empty remedy if a plaintiff is unable to pay back what
This case, however, presents a new twist on this recurring pleading issue. While Plaintiff has alleged an "ability to tender," Plaintiffs allegation is conclusory and there are no other facts in the Complaint demonstrating such an ability. The question thus becomes whether merely alleging the ability to tender—in a conclusory manner and without any other allegations in support—is sufficient to withstand a motion to dismiss a rescission claim.
Like the Cook and Valdez courts, this Court finds it is appropriate to exercise its discretion and modify the rescission protocol to condition rescission on Plaintiffs tender of the loan proceeds. Toward this end, Plaintiff must, at a minimum, allege facts supporting his representation that he has the ability to tender. His conclusory allegation that he has the ability to tender—without more—will not suffice. Instead, Plaintiff must set forth factual allegations demonstrating he has the resources (or may readily obtain them) to be in a position to tender the loan proceeds. Absent such factual allegations, there is nothing in the Complaint raising his right to rescission beyond the speculative level, making dismissal appropriate. See Bell Atl. Corp., 550 U.S. at 555, 127 S.Ct. 1955; Cook, 2010 WL 1289892, at *5; Valdez, 2009 WL 5114305, at *5 n. 3 (describing the type of facts that would satisfy plaintiff's pleading burden); Kariguddaiah v. Wells Fargo, No. C 09-5716 MHP, 2010 WL 2650492 (N.D.Cal. July 1, 2010) ("To survive a motion to dismiss, [the plaintiff] should have alleged facts indicating that he is in fact able to tender the amount he owes-an inference not plausible from the present complaint.").
Further, requiring Plaintiff to set forth facts at least suggesting he has the ability to tender the proceeds is especially important in the instant case because the sole basis for the Court's jurisdiction is rooted in Plaintiff's TILA claim. As the Valdez court aptly stated, "[i]t makes little sense to let the instant rescission claim proceed absent some indication that the claim will not simply be dismissed at the summary judgment stage after needless depletion of the parties' and the Court's resources." Valdez, 2009 WL 5114305 at *5. Accordingly, the Court will dismiss Plaintiff's TILA claim and grant leave to amend to plead allegations regarding his ability to tender.
Although Plaintiff's Complaint is devoid of allegations indicating that he is seeking damages under TILA, Plaintiff states in his Opposition that he "seeks to enforce rescission of the loan transaction under section 1635(f) and pursue statutory damages as provided in section 1640." Plaintiff's Opposition, ECF No. 12 at 6 (emphasis added).
Plaintiff's first state law cause of action is for fraud. Complaint ¶¶ 8-31, ECF No. 1 at 6-8. Defendant urges the Court to dismiss this claim because Plaintiff has failed to plead it with the requisite particularity and because he cannot establish certain elements of the claim.
"The elements of a cause of action for fraud in California are: `(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or `scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.'" Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir.2009) (quoting Engalla v. Permanente Med. Group, Inc., 15 Cal.4th 951, 974, 64 Cal.Rptr.2d 843, 938 P.2d 903 (1997)). Under Federal Rule of Civil Procedure 9(b), a party alleging fraud must satisfy a heightened pleading standard by stating with particularity the circumstances constituting fraud. Fed. R. Civ. P. 9(b). Specifically, "[a]verments of fraud must be accompanied by `the who, what, when, where, and how' of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997)). Further, "a plaintiff must set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set forth what is false or misleading about a statement, and why it is false." Id. (quoting Decker v. GlenFed, Inc. (In re GlenFed, Inc. Sec. Litig.), 42 F.3d 1541, 1548 (9th Cir.1994) (superseded by statute on other grounds)).
Defendant first challenges Plaintiffs fraud claim on the ground that Plaintiff has not pled it with the specificity required under Rule 9(b). In his Opposition, Plaintiff contends that he has met the heightened pleading requirement. Plaintiff identifies two statements that form the basis of his claim: (1) the statement that the terms of the subject loan would be affordable to him; and (2) a refinance was necessary to remove Mr. Christiansen's name from the loan. Plaintiffs Opposition, ECF No. 12 at 10-11.
As to the first representation, Plaintiff has alleged that one of Defendant's agents, Dennis Mahoney, told him that $1,5000 per week was sufficient income to afford the payments under the loans. See Complaint ¶ 19, ECF No. 1 at 7. Plaintiff also argues that he has alleged that Mr. Mahoney made the statement to him over the phone in January 2007, in San Francisco. Plaintiff's Opposition, ECF No. 12 at 10-11 (citing Complaint ¶¶ 11, 19). However, Plaintiff has failed to allege any facts indicating how the statement was false. See Sipe v. Countrywide Bank, No., 690 F.Supp.2d 1141, 1156-57 (E.D.Cal.2010).
As to the second representation that a refinance was necessary to remove Mr. Christiansen's name from the loan, Plaintiff fails to allege who made the statement.
Next, Defendant argues that, even if Plaintiff's fraud allegations are sufficient, Plaintiff has not alleged actionable misrepresentation or reasonable reliance. Defendant's Motion, ECF No. 5 at 12. Specifically, Defendant asserts that "[w]hether or not a borrower can `afford' a loan is a matter of opinion about future facts, not an actionable statement about past or existing fact." Id. However, whether a statement is a an opinion that cannot support a fraud claim, or an actionable misrepresentation of fact is a factual question not suitable for determination at the motion to dismiss stage. See Furla v. Jon Douglas Co., 65 Cal.App.4th 1069, 1081, 76 Cal.Rptr.2d 911 (1998). Similarly, Defendant's argument that Plaintiff cannot establish justifiable reliance because, in Defendant's view, Plaintiff "knew what he could pay better than anyone else, [Defendant] included . . [o]r if he did not, he certainly could have ascertained that fact with minimal effort" Defendant's Motion, ECF No. 5 at 12. Again, Defendant's arguments raises a factual challenge that goes beyond the scope of the allegations in the Complaint, and is therefore inappropriate at this stage. See Boeken v. Philip Morris Inc., 127 Cal.App.4th 1640, 1666, 26 Cal.Rptr.3d 638 (2005) ("Under California law . . . whether reliance was reasonable is a question of fact for the jury, and may be decided as a matter of law only if the facts permit reasonable minds to come to just one conclusion.")
In sum, the Court finds that Plaintiff has failed to plead his fraud claim with the particularity required under Rule 9(b). The Court will therefore dismiss the claim with leave to amend.
In his fourth cause of action, Plaintiff seeks to quiet title to the Lombard and Delancey Properties. Complaint, ECF No. 1 at 10. "The purpose of a quiet title action `is to finally settle and determine, as between the parties, all conflicting claims to the property in controversy, and to decree to each such interest or estate therein as he may be entitled to.'" Martinez v. America's Wholesale Lender, No. C 09-05630 WHA, 2010 WL 934617, at *5 (N.D.Cal. Mar. 15, 2010) (quoting Peterson v. Gibbs, 147 Cal. 1, 5, 81 P. 121 (1905)). Quiet title claims are governed by California Code of Civil Procedure § 761.020, which requires that five elements be set out in a "verified complaint": (1) a description of the property, both legal description and street address; (2) the title of the plaintiff, and the basis for that title; (3) the adverse claims to the plaintiffs title; (4) the date as of which the determination is sought; and (5) a prayer for the determination of the plaintiffs title against the adverse claims. Cal. Civ. Proc. Code § 760.020(a)-(e).
Here, Plaintiff failed to satisfy the threshold requirement that the claim be asserted in a verified complaint. For this reason, the claim is subject to dismiss without prejudice. See Reynoso v. Paul
Additionally, Defendant raises several other challenges to Plaintiff's quiet title claim. First, Defendant argues that, to the extent that the claim is premised on the fraudulent conduct Plaintiff has alleged as part of his first cause of action, because Plaintiffs fraud claim is defective, his quiet title claim necessarily fails, as well. Defendant's Motion, ECF No. 5 at 13-14. As indicated above, the Court finds that Plaintiff has failed to adequately plead his fraud claim. Thus, the Court agrees with Defendant that Plaintiffs fraud allegations cannot sustain his quiet title claim.
Further, Defendant argues that Plaintiff's quiet title claim is subject to dismissal because Plaintiff failed to allege tender or the promise of tender of the $650,000 he borrowed against the Lombard Property and $531,000 he borrowed against the Delancey Property. Id. at 14. Plaintiff counters that he has expressly alleged tender in paragraph 50 of his Complaint. Plaintiffs Opposition, ECF No. 12 at 11.
In California it is well-settled that "a mortgagor cannot quiet his title against the mortgagee without paying the debt secured." Shimpones v. Stickney, 219 Cal. 637, 649, 28 P.2d 673 (1934); see also Aguilar v. Bocci, 39 Cal.App.3d 475, 477, 114 Cal.Rptr. 91 (1974); Kelley v. Mortgage Electronic Registration, 642 F.Supp.2d 1048, 1057 (N.D.Cal.2009) ("Plaintiffs have not alleged . . . that they have satisfied their obligation under the Deed of Trust. As such, they have not stated a claim to quiet title.") Thus, to maintain a quiet title claim, a plaintiff "is required to allege tender of the proceeds of the loan at the pleading stage[.]" Velasquez v. Chase Home Finance, LLC, No. C 10-01641 SI, 2010 WL 3211905, at *4 (N.D.Cal. Aug. 14, 2010). Based on the Court's review of recent case law, it may be sufficient for a plaintiff to plead an ability to tender. See e.g., Kozhayev v. America's Wholesale Lender, No. CIV S-09-2841, 2010 WL 3036001, at *5 (E.D.Cal. Aug. 2, 2010) ("Here, plaintiffs' complaint does not allege that they have tendered, or are able to tender, the debt secured by the subject property."); Bonner v. Select Portfolio Servicing, Inc., No. C 10-609 CW, 2010 WL 2925172, at *8 (N.D.Cal. July 8, 2010); Juarez v. Fed. Home Loan Mortg. Corp., No. CV 10-2542, 2010 WL 3035956, at *5 (C.D.Cal. Aug. 2, 2010) ("Here, Plaintiff has failed to allege ability tender."). Because Plaintiff has failed assert his quiet title claim in a verified complaint, the Court does not have to reach the issue of whether Plaintiff must have actually tendered the debt or simply allege an ability to tender. However, because the Court is granting Plaintiff leave to amend with respect to his tender allegations, and Defendant will likely re-new its challenges to any amended complaint Plaintiff files, the Court advises both parties to be mindful of this issue when approaching their subsequent pleadings and motions. Moreover, Plaintiff's TILA rescission claim only mentions rescission and tender as to the Lombard property. See Complaint ¶¶ 38-35, ECF No. 1 at 9-10. Thus, Plaintiff has not even alleged tender as to the Delancey Street property.
In sum, because Plaintiff failed to assert his quiet title claim in a verified complaint, the Court dismisses the claim with leave to amend.
In his second cause of action, Plaintiff asserts a claim entitled "Unfair Business Practices." Complaint, ECF No. 1 at 9. Plaintiff alleges that Defendant: (1) "engaged in practices which are likely to deceive the average customer, including but not limited to: counseling [Plaintiff] that his only option for removing Mr. Christiansen's name from the loans was to refinance them;" (2) "engaged in unlawful conduct in
California Business & Professions Code § 17200, also known as California's "Unfair Competition Law," prohibits "any unlawful, unfair or fraudulent" business practices. Cal. Bus. & Prof. Code § 17200. "The `unlawful' practices prohibited by section 17200 are any practices forbidden by law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made." Saunders v. Superior Court, 27 Cal.App.4th 832, 838-39, 33 Cal.Rptr.2d 438 (1994). Thus, § 17200 "`borrows' violations of other laws and treats them as unlawful practices independently actionable under section 17200." Id. Thus, a defendant "cannot be liable under § 17200 for committing unlawful business practices without having violated another law." Ingels v. Westwood One Broadcasting, Servs., Inc., 129 Cal.App.4th 1050, 1060, 28 Cal.Rptr.3d 933 (2005).
Defendant moves to dismiss Plaintiff's § 17200 claim, arguing that because Plaintiff's Complaint fails to state a claim for any underlying violation, he cannot maintain his unfair competition law claim. Defendant's Motion, ECF No. 5 at 17. Defendant is correct. As discussed in detail above, Plaintiff has failed to sufficiently plead his TILA and fraud claims, subjecting those claims to dismissal. Because Plaintiff has failed to state claims for any underlying violation of state or federal law, he cannot proceed on his unfair competition law claim under § 17200. See Santos, 2009 WL 2500710, at *7. Furthermore, to the extent that Plaintiff seeks to base his claim on allegedly fraudulent or deceptive conduct by Defendant, Rule 9(b)'s heightened pleading requirements applies to allegations of fraud in support of a § 17200 claim. See Long v. Hewlett-Packard Co., No C 06-2816 JW, 2006 WL 4877691, at *3 (N.D.Cal. Dec. 21, 2006). Plaintiff has done nothing more than summarily allege that Defendant "engaged in practices which are like to deceive the average customer," and utilized fraudulent sales practices. These allegations are insufficient to satisfy Rule 9(b)'s particularity requirements and cannot sustain a claim under § 17200. Complaint ¶¶ 33, 35, ECF No. 1 at 9. The Court will therefore dismiss this claim without prejudice. If Plaintiff is able to cure the deficiencies in his other claims outlined above, he may reassert his § 17200 claim.
The Court
