The opinion of the court was delivered by: Hayes, Judge
The matter before the Court is the Motion to Dismiss Portions of Plaintiffs' Complaint (Doc. #12) filed by Defendant Bear Stearns Residential Mortgage Corporation.
On September 28, 2007, Apolonio Palomares and Teresa Palomares ("Plaintiffs") filed a Complaint against Bear Stearns Residential Corporation ("Bear Stearns"), Fastlink Financial, Inc. ("Fastlink"), and Yazmin Esparza. (Doc. #1). The Complaint alleges the following causes of action: (1) violation of the Truth and Lending Act, (2) violation of the Real Estate and Settlement Procedures Act, (3) violation of California Civil Code sections 1920 and 1921, (4) violation of the Unfair Competition Act, (5) violation of the False Advertising Act, (6) Constructive Fraud, (7) Intentional Misrepresentation, (8) Concealment, (9) Negligent Misrepresentation, (10) Fraud on the Public, (11) Rescission/Cancellation, (12) Breach of Fiduciary Duty, (13) Negligence, (14) Breach of Implied Covenant of Good Faith and Fair Dealing, and (15) Intentional Infliction of Emotional Distress. Id.
The Complaint alleges that in April of 2007, Plaintiffs received a phone call from a woman by the name of Yazmin Esparza, who told Plaintiffs that she was a representative of a company by the name of Fastlink. Id. at ¶¶ 2, 28. The Complaint alleges that Esparza represented to Plaintiffs that Esparza and Fastlink could and would consolidate Plaintiffs' existing home loans, and obtain a mortgage with monthly payments of less than $2,700, which would include property taxes and hazard insurance, and would not have a prepayment penalty period of more than 12 months. Id. at ¶ 36. The Complaint alleges that Plaintiffs only speak, read, and write Spanish, that Esparza was aware that Plaintiffs only speak, read and write Spanish, and that Esparza made these representations in Spanish. Id. at ¶¶ 30-32.
The Complaint alleges that Esparza visited Plaintiffs' home several weeks after the initial phone call and offered to Plaintiffs, in writing, the following three alternative loan products from Fastlink: (1) a five-year fixed rate loan with interest-only monthly obligations of $2,700 that included property tax and hazard insurance ("first loan product"); (2) an "Option Adjustable Rate Mortgage" with monthly payment obligations of $3,366.73 ("second loan product"); and (3) a thirty-year fixed mortgage with monthly payments exceeding $4,000. Id. at ¶ 38.
The Complaint alleges that Plaintiffs told Esparza that they wanted the first loan product, and that Esparza promised Plaintiffs that she would obtain the first loan product for Plaintiffs. Id. at ¶¶ 39-40.
The Complaint alleges that in or about May of 2007, Esparza visited Plaintiffs' home with a set of loan documents. The Complaint alleges that the documents were really associated with the second loan product, despite Esparza's representation that the documents were associated with the first loan product. Id. at ¶ 46. The Complaint alleges that the loan documents also included a second mortgage note on Plaintiffs' home in the amount of $62,000, with an interest rate of 10.87%. Id. The Complaint alleges that Esparza instructed the Plaintiffs to sign the documents, which were written in English; that Plaintiffs asked Esparza to verify the set of loan documents as Fastlink's first loan product; that Esparza assured Plaintiffs, in Spanish, that the set of loan documents was Fastlink's first loan product; and that Plaintiffs could not understand the documents because they only read, write, and speak Spanish. Id. at ¶¶ 49-53. The Complaint alleges that Plaintiffs signed the documents associated with the second loan product. Id. at ¶ 59.
The Complaint alleges that the representations made to the Plaintiffs by Esparza that Plaintiffs would receive the first loan product were false; that "Defendants knew that these representations were false at the time they were made or made the false representations in reckless disregard of the truth;" that "Defendants intended that Plaintiffs rely on the misrepresentations;" and that "Plaintiffs reasonably relied on Defendants' misrepresentations because they thought Defendants were acting as their agent and in their best interests." Id. at ¶¶ 53-58, 132-35.
The Complaint alleges that Bear Stearns was the lender for the second loan product. Id. at ¶¶ 23, 68-70. The Complaint alleges that Fastlink and Esparza were acting as "agents" of Bear Stearns when they secured the second loan product for Plaintiffs. Id. at ¶¶ 22-23. The Complaint alleges that Esparza, Fastlink, and Bear Stearns formed a "civil conspiracy" that included a common plan to falsify the loan documents, obscure the terms of the loan applications and mislead Plaintiffs. Id. at ¶ 24. The Complaint alleges that "Defendants, and each of them, falsified Plaintiffs' loan information, and/or closed their eyes to the ability [of] Plaintiffs herein to repay [the] loan." Id. at ¶ 84. The Complaint alleges that Bear Stearns motivated Esparza and Fastlink to sell the second loan product by providing a $7,362.20 incentive that Fastlink and Esparza would not have received had they not secured the second loan product for Plaintiffs. Id. at ¶¶ 71-72.
The Complaint alleges that the total monthly obligation under the new loans is $4,279.01, and that the new loans do not include property taxes and hazard insurance. Id.
The Complaint alleges that "Defendants" acted with "conscious and outrageous disregard towards Plaintiffs" by misrepresenting the characteristics of the loans and placing Plaintiffs in loans that "Defendants" knew Plaintiffs could not afford. Compl. at ¶¶ 33, 43, 190.
On November 30, 2007, Bear Stearns filed the Motion to Dismiss Portions of Plaintiffs' Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. # 12). Bear Stearns moves to dismiss the claims against Bear Stearns for violation of California Civil Code sections 1920 and 1921, intentional misrepresentation, concealment, negligent misrepresentation, negligence, breach of the implied covenant of good faith and fair dealing and intentional infliction of emotional distress. Motion to Dismiss, p. 2-3.
On December 24, 2007, Plaintiffs filed Opposition to Defendants' Motion to Dismiss. (Doc. #21). Plaintiffs oppose dismissal of the causes of action for intentional misrepresentation and intentional infliction of emotional distress. Opposition, p. 2. Plaintiffs do not oppose dismissal of the causes of action for violation of California Civil Code sections 1920 and 1921, concealment, negligent ...