FILED
NOT FOR PUBLICATION
APR 18 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ADELE M. SCHNEIDEREIT and No. 13-56074
JEFFREY SCHNEIDEREIT,
D.C. No. 2:12-cv-08253-PSG-E
Plaintiffs - Appellants,
v. MEMORANDUM*
SAN LUIS CAPITAL, INC.; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
Submitted October 20, 2015**
Pasadena, California
Before: RAWLINSON and NGUYEN, Circuit Judges and BOULWARE,***
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Richard F. Boulware, District Judge for the U.S.
District Court for the District of Nevada, sitting by designation.
Plaintiffs Jeffrey and Adele Schneidereit appeal the dismissal of their action
under Rule 12(b)(6) of the Federal Rules of Civil Procedure. We have jurisdiction
under 28 U.S.C. § 1291. Reviewing de novo, Dougherty v. City of Covina, 654
F.3d 892, 897 (9th Cir. 2011), we affirm.1
1. The district court properly found that Plaintiffs’ fraud claims are barred
by the statute of limitations. The Second Amended Complaint (SAC) alleges a
violation of the Uniform Fraudulent Transfer Act, and claims for fraud,
cancellation of instruments, and breach of fiduciary duty, all of which are subject
to a three-year statutes of limitation. See Cal. Civ. Proc. Code § 338(d). The SAC
also alleges claims under the Unfair Competition Law and Elder Abuse Act, which
are subject to four-year statutes of limitation. Cal. Bus. & Prof. Code § 17208;
Cal. Welf. & Inst. Code § 15657.7. Plaintiffs filed suit on September 25, 2012,
almost six years after the alleged fraudulent conduct occurred. The district court
properly found that Plaintiffs have failed to show that they were not negligent in
failing to discover the fraud within the statutory period. See Cal. Civ. Code §
338(d); Denholm v. Houghton Mifflin Co., 912 F.2d 357, 362 (9th Cir. 1990); Fox
v. Ethicon Endo-Surgery, Inc. 35 Cal. 4th 797, 803, 808 (2005). Plaintiffs’ own
1
Appellees’ request for judicial notice is DENIED because the materials
appended thereto “are not relevant to the resolution of this appeal.” Santa Monica
Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 n.2 (9th Cir. 2006).
2
factual allegations suggest that a reasonable person would have been put on inquiry
notice. For example, prior to signing the loan documents, Plaintiffs’ request to
review the paperwork was denied, and they were not given copies of the
documents after signing. Further, Plaintiffs received a letter in November of 2006
indicating that Chase had purchased and would be servicing their loans, which
directly contradicted the representation by San Luis Defendants that their loan
would be held by a small, local bank. Yet, Plaintiffs took no action to investigate
possible fraud in the origination of their loans within the statutory period.
2. The district court also properly found that Plaintiffs’ claims under the
Real Estate Settlement Procedures Act (RESPA) are barred. Plaintiffs allege a
violation of 12 U.S.C. § 2607, which is barred by a one-year statute of limitations.
12 U.S.C. § 2614. Their claim of a violation of 12 U.S.C. § 2605 also fails because
they did not send a qualified written request (QWR) regarding the servicing of
their loans that was related to payments. 12 U.S.C. § 2605(e)(3). Plaintiffs’ letter
to Chase in August of 2012 related to the circumstances surrounding the loan
origination rather than loan payments, and thus does not qualify as a QWR. See
Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 667 (9th Cir. 2012).
3. Plaintiffs’ quiet title claim and claim for injunctive relief also fail
because they did not make a tender offer of payment, and have not alleged
3
sufficient facts to plead an exception to the tender rule. Abdallah v. United Sav.
Bank, 51 Cal. Rptr. 2d 286, 292 (1996). Plaintiffs have failed to allege a challenge
to the underlying debt because their fraud allegations are time-barred. See Lona v.
Citibank, N.A., 134 Cal. Rptr. 3d 622, 640-1 (2011). And, as the district court
determined, requiring tender was not inequitable in light of the facts alleged. See
Onofrio v. Rice, 64 Cal. Rptr. 2d 74, 80 (1997).
4. Finally, Plaintiffs failed to state any claim against Quality Loan.
Plaintiffs allege that Quality Loan recorded a notice of default against their
property, but Quality Loan is immune from tort liability for the mailing,
publication, and delivery of such notices. Cal. Civ. Code § 2924(d).
AFFIRMED.
4
FILED
APR 18 2016
Schneidereit v. San Luis Capital, Inc., No. 13-56074 MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
BOULWARE, District Judge, concurring in part and dissenting in part:
1. I agree with the respective statutes of limitations articulated by the
majority pertaining to the Plaintiffs’ causes of action. However, I would not find
that Plaintiffs’ claims are time-barred. While the majority finds that Plaintiffs’
factual allegations in their Second Amended Complaint (the “Complaint”) suggest
that a reasonable person would have been put on inquiry notice, I respectfully
disagree.
I do find that Plaintiffs have shown they were not negligent in failing to
discover the alleged fraud within the statutory period because they were not on
inquiry notice of such fraud. Denholm v. Houghton Mifflin Co., 912 F.2d 357, 362
(9th Cir. 1990) (a plaintiff bringing a fraud claim after the expiration of the
limitations period must establish “facts showing that he was not negligent in failing
to make the discovery sooner and that he had no actual or presumptive knowledge
of facts sufficient to put him on inquiry”) (internal quotation marks omitted);
Norgart v. Upjohn Co., 981 P.2d 79, 88 (Cal. 1999) (under the discovery rule, a
cause of action accrues when a plaintiff “has reason at least to suspect a factual
basis for its elements,” meaning that he has “notice or information of
circumstances to put a reasonable person on inquiry”) (emphasis in original)
(internal quotation marks omitted).
I do not attribute to Plaintiffs the level of sophistication I believe the
majority does in finding they were on inquiry notice of potential fraud by the
bank’s actions. That Plaintiffs were pre-approved for a loan by Mid-State Bank &
Trust, or that they desired to obtain a loan with a small, traditional bank, does not
establish, in my opinion, that they had the experience or expertise to discern the
possibility of concealed bank fraud from a few banking practices which seemed
odd or irregular. I am unpersuaded that having previously bought a home, without
more, renders an individual knowledgeable of a bank’s duties and obligations in
connection with providing a home loan, such that these individuals should have
detected—or even inquired into the possibility of—fraudulent banking practices.
In fact, California courts have routinely recognized the need to protect ordinary
residential home buyers, recognizing their relative lack of sophistication and
experience in comparison to those engaged in commercial real estate. See, e.g.,
Richman v. Hartley, 169 Cal. Rptr. 3d 475, 481 (Cal. Ct. App. 2014) (“The courts
have recognized the Legislature’s interest in protecting unsophisticated residential
home purchasers”); Smith v. Rickard, Cal. App. 3d 1354, 1361 (Cal. Ct. App.
1988) (noting that section 2079 et seq. of the California Civil Code “distinguishes
2
between residential and commercial properties in order to protect unsophisticated
buyers and owners of residential property from those with greater knowledge and
bargaining power”); Easton v. Strassburger, 152 Cal. App. 3d 90, 102 n.8 (Cal. Ct.
App. 1984) (distinguishing between the residential home buyer and a purchaser of
commercial real estate, who “is likely to be more experienced and sophisticated in
his dealings”).
I do not agree that a reasonable person, who does not have substantial
experience obtaining or processing loans, could discern whether the particular
banking practices at issue in this case were in fact so irregular that the person
should then investigate whether this irregularity reflected or concealed some
hidden fraud. For example, I am unpersuaded that the bank’s refusal to provide
Plaintiffs with copies of loan documents prior to closing or after signing would
have alerted a reasonable person to the possibility of fraud. It is not clear to me
that this practice would be irregular in all or most circumstances, or that one should
suspect, based on this practice, that the bank was engaged in fraud. Moreover, I do
not find that the letter Plaintiffs later received from Chase informing them that it
would be servicing their loans, contrary to Plaintiffs’ belief that their loans would
be held by a small, local bank, would lead a reasonable person to suspect
3
fraudulent activity. I find these facts insufficient to trigger a more diligent inquiry
into bank fraud.
Consequently, I would similarly find that Plaintiffs were not obligated to
investigate whether or not Pacific Trust was actually located at the address it
purportedly shared with San Luis when Plaintiffs went to the location to sign the
paperwork. Furthermore, unlike in Denholm, the Schneidereits alleged
concealment in their Complaint, thereby providing an explanation for why they
were not on inquiry notice.
Therefore, I would find that through the facts pled in their Complaint,
Plaintiffs have “affirmatively excuse[d] [their] failure to discover the fraud” within
the limitations period, such that their claims are not time-barred by the respective
statutes of limitations. Denholm, 912 F.2d at 362.
2. Second, I would find that the district court improperly dismissed
Plaintiffs’ quiet title and injunctive relief claims. Plaintiffs have alleged sufficient
facts to establish either of two exceptions to the tender rule.
First, requiring tender would be inequitable where, as here, Plaintiffs
challenge the validity of the underlying loan. Onofrio v. Rice, 64 Cal. Rptr. 2d 74,
80 (Cal. Ct. App. 1997) (tender may not be required “where it would be inequitable
to do so” or where “the action attacks the validity of the underlying debt”) (internal
4
quotation marks omitted); see also Fonteno v. Wells Fargo Bank, N.A., 176 Cal.
Rptr. 3d 676, 688-89 (Cal. Ct. App. 2014) (discussing circumstances under which
it would be inequitable to require tender); Lona v. Citibank, N.A., 134 Cal. Rptr.
3d 622, 640-41 (Cal. Ct. App. 2011) (reviewing exceptions to the tender
requirement).
Second, Plaintiffs’ argument that the underlying loan is void due to the
forged signatures on the promissory notes establishes another exception to the
tender rule. Glaski v. Bank of Am., Nat'l Ass'n, 160 Cal. Rptr. 3d 449, 466 (Cal.
Ct. App. 2013) (“Tender is not required where the foreclosure sale is void, rather
than voidable, such as when a plaintiff proves that the entity lacked the authority to
foreclose on the property.”).
For the reasons stated, I respectfully dissent.
5