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Mayoral v. WMC Mortgage

October 6, 2009

PEDRO MAYORAL, PLAINTIFF,
v.
WMC MORTGAGE, LLC., WELLS FARGO BANK, N.A., WELLS FARGO HOME MORTGAGE, INC, AMERICA'S SERVICING CO, ACCREDITED HOME LENDERS, INC., COUNTRYWIDE HOME LOANS, INC., COUNTRYWIDE FINANCIAL CORP., CITYWIDE MORTGAGE OF AMERICA CORP.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC,; AND DOES 1-5, DEFENDANTS.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiff Pedro Mayoral ("Mayoral") filed a five-count amended complaint against a dozen or so defendants.*fn1 Before the Court are two motions to dismiss the amended complaint. Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, Inc. and America's Servicing Company (collectively, "Wells Fargo") move to dismiss Count I. Citywide Mortgage of America, Corp. ("Citywide") moves to dismiss Counts III, IV and V. For the reasons set forth below, the Court denies the motion filed by Wells Fargo. The Court grants in part and denies in part the motion filed by Citywide.

I. Background

For purposes of this motion to dismiss, the Court takes as true the allegations in plaintiff's amended complaint. The Court also considers the documents plaintiff attached to his amended complaint. See Fed.R.Civ.P. 10(c).

Plaintiff Mayoral has twice, during the relevant time period, refinanced the mortgage on his home at 1726 N. Monticello in Chicago, Illinois. He has filed a number of claims arising out of the refinanced loans.

The first refinanced mortgage loan (the "December 2005 loan") closed on December 23, 2005, at which time Mayoral borrowed $155,000.00. The initial rate on the December 2005 loan was 8.275% for two years. The December 2005 loan carried an adjustable rate that could increase to 11.75% at the first adjustment and could rise to a maximum rate of 14.775% over the life of the loan.

The second loan (the "January 2007 loan") closed on January 25, 2007. With respect to the January 2007 loan, Mayoral borrowed $310,000.00. The proceeds of the loan were dispersed as follows: $156,025.85 to pay off the balance of the December 2005 loan; $134,543.22 in cash to Mayoral; $7,358.00 to Chase Auto; and $12,072.93 in other closing costs. The initial rate on the January 2007 loan was 8.375% for three years. The January 2007 loan carried an adjustable rate that could increase to 9.875% at the first change and could rise to a maximum rate of 15.375% over the life of the loan.

II. Standard on a Motion to Dismiss

The Court may dismiss a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss, the Court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor. McCullah v. Gadert, 344 F.3d 655, 657 (7th Cir. 2003). Under the notice-pleading requirements of the Federal Rules of Civil Procedure, a complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not provide detailed factual allegations, but mere conclusions and a "formulaic recitation of the elements of a cause of action" will not suffice. Bell Atlantic, 127 S.Ct. at 1964-1965. A complaint must include enough factual allegations to "raise a right to relief above a speculative level." Bell Atlantic, 127 S.Ct. at 1965. "After Bell Atlantic, it is no longer sufficient for a complaint 'to avoid foreclosing possible bases for relief; it must actually suggest that the plaintiff has a right to relief, by providing allegations that raise a right to relief above the speculative level.'" Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008) (quoting Equal Employment Opportunity Comm'n v. Concentra Health Services, Inc., 496 F.3d 773, 776 (7th Cir. 2007)).

III. Discussion

A. Mayoral's claims against Wells Fargo

In Count I, Mayoral seeks to rescind the December 2005 loan. The Truth in Lending Act ("TILA") allows the obligor in certain transactions to "rescind the transaction until midnight of the third business day following the consummation of the transaction . . ." 15 U.S.C. § 1635(a). That section also requires the creditor to "clearly and conspicuously disclose" to the borrower the borrower's rescission rights. Id. According to plaintiff's amended complaint, the December 2005 loan was originated by WMC Mortgage, LLC ("WMC"), which is no longer a party to this case. Wells Fargo is alleged to be an assignee. Mayoral seeks to rescind the December 2005 loan on the grounds that the rescission notice provided to Mayoral at the December 23, 2005 closing failed to "clearly and conspicuously disclose" plaintiff's right to rescind the transaction within three days, as is required by the Truth in Lending Act ("TILA"), 15 U.S.C. § 1635(a).

Specifically, plaintiff alleges that the Notice of Right to Cancel that he received (and which he attached to his amended complaint) did not list the last date on which he could cancel the transaction. Instead, the form was left blank. In the alternative, plaintiff alleges that after he sought to rescind the loan, WMC provided him a copy of the Notice of Right to Cancel that contained plaintiff's signature and that listed the deadline for rescinding the loan as December 28, 2005. Plaintiff alleges that such notice, had it been given to plaintiff (which plaintiff denies), would still not be clear and conspicuous because, according to plaintiff, the notice should have listed December 27 rather than December 28, 2005 as the deadline.

Wells moves to dismiss Count I. Wells attaches to its motion*fn2 to dismiss a copy of a Notice of Right to Cancel, which Wells says was signed by plaintiff at the December 23, 2005 closing (and, indeed, appears to contain Mayoral's signature) and which states that the last day to rescind the loan is December 28, 2005. Wells argues that Mayoral cannot state ...


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