United States District Court, E.D. Washington
WILLIAM R. FAYANT and JULIE L. FAYANT, Plaintiffs,
U.S. BANK NATIONAL ASSOCIATION and WASHINGTON TRUST BANK, Defendants.
ORDER GRANTING DEFENDANTS' MOTIONS AND ORDER TO
SALVADOR MENDOZA, JR United States District Judge
the Court, without oral argument, are Defendants Washington
Trust Bank and U.S. Bank National Association's Motions
to Dismiss, ECF Nos. 13 and 16, respectively. Through these
motions, Defendants seek to have the Plaintiffs'
complaint dismissed for failure to state a claim upon which
relief can be granted. See generally ECF Nos. 13 and
16. Before Plaintiffs replied to Defendants' motions, the
Court notified all parties that, pursuant to Federal Rule of
Civil Procedure 12(d), it would treat the motions to dismiss
as summary judgment motions. ECF No. 25. However, for reasons
detailed below, the Court reviews the motions under the
motion to dismiss standard. Plaintiffs oppose Defendants'
motions. See ECF Nos. 28 and 29.
reviewed the pleadings and the file in this matter, the Court
is fully informed and GRANTS Defendants' motions. The
Plaintiffs fail to present a cognizable legal theory or to
allege sufficient facts to support a cognizable legal theory,
necessitating their complaint's dismissal. Further,
because, as detailed below, this and other courts have
repeatedly rejected nearly identical claims filed by
Plaintiffs' counsel, Jill Smith, the Court ORDERS Ms.
Smith to show cause why the Court should not impose sanctions
or recommend disciplinary proceedings against her and ORDERS
Defendants' counsel to file a statement concerning
and 2006, Plaintiffs and Spokane County, Washington residents
William Robert Fayant and Julie Lorraine Fayant obtained
loans from Cherry Creek Mortgage (“Cherry Creek”)
and Washington Trust Bank (“WTB”). ECF Nos. 14,
14-1, 14-2, 17, and 17-1. The Cherry Creek loan and relevant
documents concerning the loan were subsequently endorsed and
assigned to U.S. Bank National Association (“U.S.
Bank”). ECF Nos. 17 and 17-1. They used their home in
Liberty Lake, Washington as collateral for the loans. ECF
Nos. 14-2 and 17-1 (deeds of trust encumbering the subject
decade later, in a letter dated September 24, 2015,
Plaintiffs purported to rescind the subject loans. ECF No.
1-1. Four days later, Plaintiffs sent another letter to the
same parties purporting to void any security interest U.S.
Bank, Cherry Creek or WTB had in the Plaintiffs' home.
Id. Aside from noting the loan numbers, the letters
do not provide the date on which the loans were secured.
months later, on April 29, 2016, Plaintiffs filed their
complaint against U.S. Bank, Cherry Creek, and WTB. ECF No.
1. In it, Plaintiffs allege violations of the Truth in
Lending Act (“TILA” or “the Act”) and
seek injunctive relief. See generally ECF No. 1.
Specifically, Plaintiffs state that they mailed U.S. Bank,
Cherry Creek, and WTB the rescission notices in September
2015. Plaintiffs claim none of the three institutions
complied with their purported duties as allegedly set forth
in TILA. This, Plaintiffs allege, led to the cancellation and
voiding of the loan contracts and notes encumbering their
home by operation of law. Id. at 2-3. They also
claim that the loan in dispute was never consummated.
Id. at 3. Moreover, Plaintiffs allege that on
January 21, 2016, they “filed and had recorded with the
Spokane County [sic] an Affidavit of Rescission,
instrument # 6466789 of a loan transaction.”
Id. at 4. Plaintiffs state they attached it as
Exhibit C of the complaint, but no such exhibit is attached
to the complaint or present elsewhere in the record. As
relief to the asserted harm, Plaintiffs seek temporary,
permanent, and mandatory injunctions against U.S. Bank,
Cherry Creek, and WTB. Id. at 4-6.
two months after Plaintiffs filed their complaint, on June
21, 2016, the Court approved the parties' stipulated
motion to dismiss then Defendant Cherry Creek from this
lawsuit. ECF No. 10. Three days later, Defendant WTB filed
its Rule 12(b)(6) motion to dismiss the complaint. ECF No.
13. About a month later, Defendant U.S. Bank also filed a
Rule 12(b)(6) motion to dismiss the complaint. ECF No. 16.
the Court set a briefing schedule for the parties'
response and reply briefs-and also granted Plaintiffs'
request to file a surreply brief- addressing Defendants'
motions to dismiss. ECF Nos. 24, 25, and 39. Also, in an
abundance of caution, the Court alerted the parties that it
would consider the Defendants' motions to dismiss as
motions for summary judgment pursuant to Rule 12(d). ECF No.
25; see Rule 12(d) (“If, on a motion under
Rule 12(b)(6) or 12(c), matters outside the pleadings are
presented to and not excluded by the court, the motion must
be treated as one for summary judgment under Rule 56. All
parties must be given a reasonable opportunity to present all
the material that is pertinent to the motion.”)
MOTION TO DISMISS STANDARD
may be dismissed pursuant to Rule 12(b)(6) either for lack of
a cognizable legal theory or failure to allege sufficient
facts to support a cognizable legal theory. Taylor v.
Yee, 780 F.3d 928, 935 (9th Cir. 2015).
“Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). To survive a motion to dismiss under Rule 12(b)(6), a
complaint must allege “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is
plausible on its face 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. “Where
the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has
alleged-but has not ‘show[n]'-‘that the
pleader is entitled to relief.'” Id. at
679 (quoting Fed.R.Civ.P. 8(a)(2)).
Bank and WTB moved to dismiss the complaint pursuant to Rule
12(b)(6) claiming: (1) Plaintiffs' rescission argument is
factually unsupported; (2) the claims are time-barred, (3)
Plaintiffs have not offered to tender the borrowed funds as
TILA requires; and (4) res judicata and judicial estoppel
bars the claims. ECF No. 13 at 7-20; ECF No. 16 at 5-11.
noted above, the Court notified the parties that it would
treat the motions as summary judgment motions to provide the
parties adequate time to brief the issues, thus permitting
the Court to consider material beyond the complaint in
reaching a decision. ECF No. 25. However, in certain
circumstances, courts can consider documents outside the
pleadings without converting a 12(b)(6) motion into a Rule 56
motion for summary judgment. Particularly, where a complaint
incorporates documents by reference or attaches documents to
the complaint, or in matters of judicial notice, courts may
consider these materials without implicating Rule 12(d).
United States v. Ritchie, 342 F.3d 903, 908 (9th
Cir. 2003). This is also true where a “plaintiff refers
extensively to the document or the document forms the basis
of the plaintiff's claim.” Id. Upon review
of the parties' filings and the case file, this doctrine
applies to the ...