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NOT FOR PUBLICATION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