Opinion
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
GARLAND E. BURRELL, Jr., Senior District Judge.
Defendant moves under Federal Rule of Civil Procedure ("Rule") 12(b)(6) for dismissal of Plaintiff's Complaint, which comprises allegations of predatory lending, intentional misrepresentation, negligent misrepresentation, negligence, cancellation, and declaratory relief. (Def.'s Mot. to Dismiss ("Def.'s Mot."), ECF No. 4.) Plaintiff opposes the motion.
Decision on the motion requires determining "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 (9th Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). When determining a claim's sufficiency under Rule 12(b)(6), "[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (internal quotation marks omitted). However, "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Id. (internal quotation marks omitted); see also Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555) ("A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.'").
Defendant argues that "all of Plaintiff's causes of action are time-barred by the applicable limitations period because they are based on allegations of fraud and other impropriety that purportedly occurred in connection with the origination of Plaintiff's loan on July 25, 2008." (Def.'s Mot. 3:8-10.) Defendant contends that "[e]ach of these causes of action is based on Plaintiff's central allegation that [Defendant] acted improperly during the origination of the loan, completion of the application materials, and negotiation of the loan terms, " and "[Plaintiff] closed his loan... on July 25, 2008." (Id. 4:21-23 (citing Complaint ¶¶ 3-6); id. 4:24.) Defendant argues that "Plaintiff filed his Complaint on October 30, 2012, well after the expiration of the statute[s] of limitations." (Id. 5:3-4.)
Plaintiff rejoins that "[t]his action is not time-barred because [P]laintiff properly pleaded late discovery." (Pl.'s Opp'n to Def.'s Mot. ("Pl.'s Opp'n") 10:21-22, ECF No. 8.) Plaintiff contends that he "pleads in paragraph 4 of the Complaint that the bank's agent owed both parties a fiduciary duty'" such that "[Plaintiff] was not under an affirmative duty to investigate the fiduciary's representation." (Id. 12:12-14, 12:16-18 (citing Hobart v. Hobart Estate Co., 26 Cal.2d 412 (1945)).) Plaintiff further argues that "paragraph 10 of the Complaint pleads that once [Plaintiff] discovered the fraud, he tried to rectify this wrong by diligently trying to engage [Defendant] in an effort to renegotiate his loan." (Id. 12:19-22.)
Defendant rejoins that "Plaintiff fails to set forth anything but conclusions that [Defendant] had an agency relationship with the unidentified broker." (Def.'s Reply 4:19-20, ECF No. 11.) Defendant also contends that "no facts showing reasonable diligence are pled." (Id. 4:9.)
"Under the delayed discovery rule, the limitations clock only begins to run... when the injured party discovers or should have discovered the facts supporting liability.'" Royal Thrift & Loan Co. v. Cnty. Escrow, Inc., 123 Cal.App.4th 24, 43 (2004) (quoting Davies v. Krasna, 14 Cal.3d 502, 512-13 (1975)). "[T]o rely on the [delayed] discovery rule..., [a] plaintiff whose... claim would be barred without the benefit of the... rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence." Fox v. Ethicon Endo-Surgery, Inc., 35 Cal.4th 797, 808 (2005) (quoting McKelvey v. Boeing N. Am., Inc., 74 Cal.App.4th 151 (1999), superseded by statute on other grounds by Cal. Code Civ. P. § 340.8(c)(2) (2003)) (third alteration in original) (emphasis added). "[A] plaintiff must allege more than conclusory allegations regarding an agency relationship when normally, as a matter of law, a broker is the agent of the borrower not the lender." Abels v. Bank of Am., N.A., No. 11-CV-208 YGR, 2012 WL 691790, at *7 (N.D. Cal. Mar. 2, 2012) (citing Montoya v. McLeod, 176 Cal.App.3d 57, 64 (1985)).
Here, Plaintiff makes the following allegations related to the purported fiduciary relationship and alleged delayed discovery in his Complaint: "[Defendant] engaged its own mortgage broker to assist [P]laintiff and [Defendant] toward securing a loan. Broker owed both parties a fiduciary duty of good faith akin to a triparte relationship in the insurer-insured context." (Compl. ¶ 4 (emphasis added).) "[Defendant]'s agent instead falsified application documents, including [P]laintiff's income and earning capacity, as well as the estimate of value of the property, all in an effort to facially pass muster toward securing a loan with [Defendant]. Plaintiff was unaware of and did not authorize this falsification...." (Id. ¶ 5 (emphasis added).)
Plaintiff has not "allege[d] more than conclusory allegations regarding an agency relationship... [between the] broker... [and] the lender." Abels, 2012 WL 691790, at *7. Further, Plaintiff's allegations do not "specifically plead facts to show (1) the time and manner of discovery [or] (2) the inability to have made earlier discovery despite reasonable diligence." Fox, 35 Cal.4th at 808. Therefore, Plaintiff fails to allege facts from which a reasonable inference can be drawn that Plaintiff's claims are subject to the delayed discovery rule.
For the stated reasons, Plaintiff's Complaint is dismissed. However, Plaintiff is granted fourteen (14) days from the date on which this order is filed to file an amended complaint addressing the deficiencies in the dismissed claims. Plaintiff is notified that failure to file an amended complaint within the prescribed time period could result in dismissal with prejudice under Federal Rule of Civil Procedure 41(b).