Thursday, September 2, 2010

California judges dismisses unfair lending claims against IndyMac

Benjamin Franklin Butler drafted the
Enforcement Act of 1871.  Photo
courtesy of wikisource.

On Tuesday Judge Maxine Chesney dismissed a plethora of unfair lending claims against IndyMac Bank, FSB, One West Bank and an assortment of others stating that the allegation failed to meet the requirements for a well-pleaded complaint.

According to court papers, in December 2007, Delaine M. Hoffman executed a promissory note secured by property in Willits, CA.  On September 17, 2009 Quality Loan Service Corp served Ms. Hoffman with a notice that her property was in foreclosure.  Two months later Quality served her with a Notice of Trustee's sale.  Someone sold the property at a trustee's sale on January 12, 2010.  Ms. Hoffman claims that this action violated Section One and Two of the Enforcement Act of 1871, the Fair Debt Collection Practices Act, the Truth in Lending Act and failure to make appropriate mortgage disclosures.

The civil rights complaints were dismissed with prejudice and the others were dismissed without prejudice for failure to plead facts that violated the respective statutes.  The court raises an interesting twist to the "under color of state law" requirement in 42 U.S.C. 1983.  A private party can conspire with a state actor to deprive a person of constitutional rights as explained in Fonda v. Grey (9th Cir. 1983).  Since there is no state actor in this action there cannot be an Enforcement Act violation.

The case is Hoffman v. IndyMac Bank No. C 10-802 and the opinion is below the jump.

Here is the opinion:
Hoffman v. IndyMac MTD

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