Myrette-Crosley v. Ditech Home Loans

Background

Faye Myrette-Crosley’s first amended complaint asserted claims under the Federal Debt Collection Practices Act, the Truth in Lending Act, fraudulent concealment, and specific performance. The opinion addresses Ditech Home Loans’s bankruptcy proceedings and the court’s earlier dismissal of the specific-performance claim as time-barred.

Claims Dismissed Under the Bankruptcy Injunction

The court dismissed the claims under the Federal Debt Collection Practices Act, the Truth in Lending Act, and fraudulent concealment pursuant to the permanent injunction entered as part of Ditech’s confirmed bankruptcy plan. The court also relied on a later bankruptcy-court order enforcing the plan’s injunctive provisions, which expressly confirmed that these causes of action had to be dismissed.

Specific-Performance Claim

The remaining claim sought specific performance. The court had previously dismissed that claim as time-barred, and Ditech moved to dismiss on that ground. Myrette-Crosley did not oppose the motion.

Myrette-Crosley alleged that a prior lawsuit seeking equitable remedies paused the limitations period. The court explained that, under California law, equitable tolling based on a prior proceeding requires timely notice, lack of prejudice to the defendant, and reasonable and good-faith conduct by the plaintiff. The court found no indication that Ditech had any relationship to the prior case or had appeared in it. Myrette-Crosley also did not allege that Ditech knew about that case or explain how the earlier case gave Ditech notice of the specific-performance claim. The court therefore concluded that equitable tolling did not apply.

The court further held that specific performance is a remedy associated with breach of contract, rather than a standalone cause of action. Because Myrette-Crosley challenged the formation of the contract rather than alleging a breach, the court stated that rescission and restitution—not specific performance—would be the appropriate remedies. After considering Myrette-Crosley’s multiple opportunities to amend, the court dismissed the specific-performance claim against Ditech with prejudice.

Disposition

The court dismissed the case and entered judgment against Myrette-Crosley. The opinion’s stated dispositions were dismissal of the three claims under the bankruptcy injunction and dismissal with prejudice of the specific-performance claim for failure to state a claim.