*fn8,The opinion of the court was delivered by: Reggie B. Walton United States District Judge,VERONICA FINDLAY, PLAINTIFF, v. CITIMORTGAGE, INC., ET AL., DEFENDANTS." />

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Veronica Findlay v. Citimortgage

September 26, 2011 *fn8

VERONICA FINDLAY, PLAINTIFF,
v.
CITIMORTGAGE, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Reggie B. Walton United States District Judge

MEMORANDUM OPINION

Veronica Findlay, the plaintiff in this civil action, seeks damages and declaratory relief under the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 (2006), the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 (2006), the District of Columbia Consumer Protection Procedures Act ("CPPA"), D.C. Code § 28-3901 (2007), and District of Columbia common law for harms allegedly incurred as a result of the defendants' "abusive mortgage refinancing practices." See Complaint ("Compl.") ¶¶ 3-8, 191-98. Currently before the Court is defendant CitiMortgage, Inc.'s motion to dismiss. After carefully considering the Complaint, the defendant's motion, and all memoranda of law relating to that motion,*fn1 the Court concludes for the following reasons that it must grant in part and deny in part the defendant's motion to dismiss.

I. BACKGROUND

The plaintiff purchased her home, located at 1330 T Street, S.E. in Washington D.C. (the "Property"), in 1988. Compl. ¶ 37. She refinanced her mortgage nineteen years later in January 2007, with the assistance of defendant Thomas Cardwell, a mortgage broker. Id. ¶¶ 42-43. Upon closing the loan, she obtained "an Indymac adjustable rate mortgage in the amount of $264,000," id. ¶ 43, and "a cash payment from the Indymac refinance transaction," which she used to make her monthly mortgage payments, id. ¶ 45.

In October 2007, the plaintiff again sought to refinance her mortgage with Mr. Cardwell's assistance, this time hoping to obtain a lower monthly payment and a fixed rate mortgage. Id. ¶ 46. The plaintiff alleges that Mr. Cardwell led her to believe that she would receive both a lower monthly payment and a fixed rate mortgage, and that, relying on these representations, the plaintiff agreed to refinance her mortgage loan on the terms promised by Mr. Cardwell. Id. With Mr. Cardwell and defendant Aapex Financial Group, Inc. ("Aapex") serving as the loan originators and CitiMortgage as the lender, the plaintiff closed on the loan on October 8, 2007 ("October 2007 loan"). Id. ¶¶ 47, 53. The October 2007 loan had a principal indebtedness of $323,000. Id. ¶ 54. The plaintiff received a cash payment for the refinancing of the Property in the amount of $35,616, and, once again, she used the payment to make her monthly mortgage payments. Id. ¶ 56.

The plaintiff makes several allegations of impropriety concerning the October 2007 loan which serve as the basis for this litigation. See id. ¶¶ 48-100. She first alleges that the terms of the October 2007 loan did not comport with Mr. Cardwell's representations. Id. ¶¶ 4-5, 54-55. Her monthly mortgage payments, for instance, did not decrease as Mr. Cardwell had allegedly promised, but increased from $1,880 to $2,061 per month, with the principal increasing as well from $264,000 to $323,000. Id. And instead of the fixed rate mortgage she desired, the October 2007 loan was a "complex mortgage product with a hybrid adjustable rate mortgage, known as an 'exploding' ARM." Id. ¶ 4. The Complaint asserts that this type of loan was "unsuitable" for the plaintiff, who is "a disabled senior on a fixed income." Id. Second, the plaintiff claims that the agent conducting the closing failed to, among other things, "ask [the plaintiff] for identification," id. ¶ 60, "administer an oath to [the plaintiff]," id. ¶ 61, or "notarize [the plaintiff's] signature in her presence," id. ¶ 62. Third, the plaintiff contends that she was charged unjustified fees-totaling over $20,000-in connection with the closing. Id. ¶ 67. Fourth, the plaintiff asserts that "CitiMortgage did not clearly and accurately disclose the [f]inance [c]harges" associated with the loan. Id. ¶ 74. She further claims that CitiMortgage failed to deliver the required loan documents at the closing, that the Truth in Lending disclosures that CitiMortgage did deliver were incorrect, and that she did not receive two copies of her Notice of the Right to Cancel as required by the TILA. Id. ¶¶ 87-94.

At some point in 2010, the plaintiff defaulted on her loan and was unable to obtain a loan modification from CitiMortgage. See id. ¶ 98; Def.'s Mem. at. 3. CitiMortgage thereafter initiated a foreclosure action against the plaintiff by sending her a Notice of Foreclosure on June 23, 2010. Compl. ¶ 99. In August 2010, the servicing of the plaintiff's October 2007 loan was transferred from CitiMortgage to Acqura Loan Services ("Acqura"). Id. ¶ 100. According to the Complaint, "the transfer did not affect the terms or condition of [the plaintiff's] loan documents other than the terms directly related to the servicing of her loan." Id. On October 4, 2010, the plaintiff sent a Notice of Rescission to CitiMortgage and Acqura, a copy of which is attached as Exhibit A to the Complaint. See id., Exhibit A (October 4, 2010 Loan Rescission Notice). The Notice claims a right to rescind the October 2007 loan based on CitiMortgage's purported failure to provide "material disclosures" required by the TILA. Id.

On October 6, 2010, the plaintiff instituted this action in the Superior Court of the District of Columbia. Her Complaint contains ten counts, seven of which are asserted against CitiMortgage. Those counts include Count II (for violations of the CPPA), Compl. ¶¶ 121-25; Count III (also for violations of the CPPA), id. ¶¶ 126-35; Count IV (for negligence), id. ¶¶ 136-44; Count VI (for violations of the TILA), id. ¶¶ 158-83; Count VIII (for violations of the RESPA), id. ¶¶ 191-98; Count IX (for civil conspiracy), id ¶¶ 199-204; and Count X (for joint venture), id. ¶¶ 205-11. The Plaintiff seeks actual damages, treble damages, attorneys' fees, reasonable costs, equitable relief, a declaratory judgment entitling her to rescind the mortgage pursuant to the TILA, and an equitable modification of her "right to tender." Id. at 29-30. She also requests punitive damages as part of her negligence claim. Id. ¶ 144.

CitiMortgage removed the case to this Court on December 9, 2010, and, on December 30, 2010, moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). In support of its motion, CitiMortgage asserts the following grounds for dismissal of the Complaint: (1) the plaintiff's TILA claim for damages is time-barred, Def.'s Mem. at 4-5; (2) the Complaint fails to state a claim for rescission under the TILA because the plaintiff fails to allege the ability to tender the amounts borrowed, id. at 5-8; (3) the plaintiff's RESPA claims are time-barred, id. at 8; (4) the plaintiff's CCPA claims fail as a matter of law, id. at 8-11; (5) the plaintiff's negligence claim fails as a matter of law, id. at 11-12; (6) the Complaint fails to state a claim for civil conspiracy; id. at 13-14; (7) the Complaint fails to state a claim for joint venture, id. at 14-15; and (8) the Complaint fails to demonstrate entitlement to an award of punitive damages, id. at 15-16. The plaintiff has responded in opposition to the defendant's motion, disputing each ground for dismissal asserted therein. See generally Pl.'s Opp'n.

II. STANDARD OF REVIEW

"A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether the complaint properly states a claim on which relief may be granted." Davis v. Billington, 775 F. Supp. 2d 23, 32 (D.D.C. 2011). For a complaint to survive a Rule 12(b)(6) motion, Federal Rule of Civil Procedure 8(a) requires only that it provide a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although "detailed factual allegations" are not required, a plaintiff must provide "more than an unadorned, the-defendant-unlawfully-harmed-me accusation," Ashcroft v. Iqbal, ____ U.S. ____, ____, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555--57 (2007)), in order to "give the defendant fair notice . . . of what the claim is and the grounds upon which it rests," Twombly, 550 U.S. at 555 (citation omitted). Nor may a plaintiff offer mere "labels and conclusions . . . [or] a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. Rather, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570).

A claim is facially plausible "'when the plaintiff pleads factual content that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged.'" Id. (quoting Twombly, 550 U.S. at 556). "A complaint alleging facts which are merely consistent with a defendant's liability . . . stops short of the line between possibility and plausibility of entitlement to relief." Id. (citing Twombly, 550 U.S. at 557) (internal quotation marks omitted).

In evaluating a Rule 12(b)(6) motion, the complaint must be liberally construed in the plaintiff's favor and all well-pleaded factual allegations must be accepted as true. Davis, 775 F. Supp. 2d at 32-33. But while the Court must accept well-pleaded factual allegations, any conclusory allegations are not entitled to an assumption of truth, and even those allegations pleaded with factual support need only be accepted insofar as "they plausibly give rise to an entitlement to relief." Iqbal, 129 S. Ct. at 1950.

III. LEGAL ANALYSIS

A. Count VI: TILA Claims

1. Statute of Limitations Challenge to Damages Under the TILA

Count VI of the Complaint seeks damages under the TILA for, among other things, the defendant's alleged failure to deliver "material disclosures" required by the TILA and for the defendant's delivery of "materially inaccurate" disclosure statements. Compl. ¶¶ 168-77. The defendant contends that the applicable statute of limitations for TILA damages claims is one year, which begins to run "from the date the transaction is consummated." Def.'s Mem. 4-5. Noting that the plaintiff's loan was consummated at the closing held on October 8, 2007, see Compl. ¶ 53, and that the plaintiff filed suit nearly three years later on October 6, 2010, the defendant maintains that her TILA damages claim is time-barred, Def.'s Mem. at 5. For the reasons that follow, the Court agrees.

Under §1640(e) of the TILA, claims for damages must be brought "within one year from the date of the occurrence of the violation."*fn2 15 U.S.C. § 1640(e). "In closed-end consumer credit transactions, such as the one in this case, the [TILA's] limitations period begins to run on the date of settlement." Johnson v. Long Beach Mortg. Loan Trust, 2001-4, 451 F. Supp. 2d 16, 39 (D.D.C. 2006) (citing Postow v. OBA Fed. Sav. & Loan Assoc., 627 F.2d 1370, 1380 (D.C. Cir. 1980)). Here, the settlement for the plaintiff's loan occurred, and the limitations period began to run, on October 8, 2007. See Compl. ¶ 53. Yet the ...

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