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Uribe v. Countrywide Financial Corp.

January 26, 2009

JAMES URIBE, ET AL., PLAINTIFFS,
v.
COUNTRYWIDE FINANCIAL CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: M. James Lorenz United States District Court Judge

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS and GRANTING LEAVE TO FILE AN AMENDED COMPLAINT [doc. #6]

Defendants Countrywide Financial Corporation, Bank of America, N.A., and Deutsche Bank-Harborview 04-11 ("defendants") move to dismiss the above-captioned case under Federal Rule of Civil Procedure 12(b)(6). The Court notes that under the Civil Local Rules, plaintiff's response was due on or before January 12, 2009. See CIV. L.R. 7.1(e)(2). To date, plaintiffs neither filed a response nor sought additional time in which to file a response to defendants' motion. On January 21, 2009, defendants filed a notice that plaintiffs had not filed any response to defendants' motion and request that their motion be granted based on plaintiffs' non-opposition.

When an opposing party does not file papers in the manner required by Civil Local Rule 7.1(e.2), the Court may deem the failure to "constitute a consent to the granting of a motion or other request for ruling by the court." CIV. L.R. 7.1(f.3.c). Notwithstanding plaintiffs' failure to file an opposition, the Court will review the motion on the merits to determine whether any legal issue exists that would preclude the granting of defendants' motion to dismiss.

DISCUSSION

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings. De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). A complaint may not be dismissed for failure to state a claim under Rule 12(b)(6), "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In ruling on a motion pursuant to Rule 12(b)(6), a court must construe the pleadings in the light most favorable to the plaintiff, and further, must accept as true all material allegations in the complaint, as well as any reasonable inferences to be drawn therefrom. See Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir. 2003). But a complaint may be dismissed for failure to state a claim under Rule 12(b)(6) where the factual allegations do not raise the "right to relief above the speculative level." Bell Atlantic v. Twombly, 127 S.Ct. 1955, 1965 (2007)

Plaintiffs defaulted on a home mortgage loan obtained from defendant Countrywide and on an equity line of credit from Bank of America. As a result, defendants foreclosed on the property which was sold at auction. Plaintiffs allege the following causes of action: slander of title; to quiet title; fraud; negligent infliction of emotional distress; Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq.; Truth In Lending Act ("TILA") 15 U.S.C. § 1601 et seq.; the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2614; and for cancellation based on fraud and impossibility of performance. Plaintiffs seek injunctive relief in addition to damages.

1. RICO and Fraud

Defendants first argue that plaintiffs' fraud and RICO causes of action must be dismissed because they have not been pleaded with the particularity required by Federal Rule of Civil Procedure 9(b). The Court agrees.

"Rule 9(b)'s particularity requirement applies to state-law causes of action." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2003). To comply with rule 9(b), "the circumstances constituting fraud . . . shall be stated with particularity." "A pleading is sufficient under rule 9(b) if it identifies the circumstances constituting fraud so that a defendant can prepare an adequate answer from the allegations." Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th Cir. 1989). In this regard, it is sufficient to plead items such as the time, place and nature of the alleged fraudulent activities. Id.

Generally, Rule 9(b) requires a plaintiff to attribute particular fraudulent statements or acts to individual defendants. Id. However, in this case, no individual defendants are named.

[T]he rule may be relaxed as to matters within the opposing party's knowledge. For example, in cases of corporate fraud, plaintiffs will not have personal knowledge of all the underlying facts. . . . Instances of corporate fraud may also make it difficult to attribute particular fraudulent conduct to each defendant as an individual. To overcome such difficulties in cases of corporate fraud, the allegations should include the misrepresentations themselves with particularity and, where possible, the roles of the individual defendants in the misrepresentations.

Plaintiffs have failed to sufficiently identify the individuals making the statements or failing to make disclosures by alleging, where possible, the role of the individuals in the misrepresentations or non-disclosures.

Plaintiffs do not specify under which of the four sections of 18 U.S.C. § 1962 it is proceeding, although subsection (c) appears to be what plaintiffs are aiming at. "To state a claim under § 1962(c), a plaintiff must allege '(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.'" Odom v. Microsoft Corp., 486 F.3d 541, 547 (9th Cir. 2007), quoting Sedima , S.P.R.L. v. Imprex Co., 473 U.S. 479, 496 (1985). Plaintiffs do not come close to sufficiently alleging all of the elements. Racketeering activity is defined in 18 U.S.C. § 1961(1) as any in the long list of crimes. Plaintiffs rely on wire and mail fraud. (Compl. at 10, 11.)

The elements of wire fraud are: "(1) the formation of a scheme or artifice to defraud; (2) use of the United States wires or causing a use of the United States wires in furtherance of the scheme; and (3) specific intent to deceive or defraud." Id. at 554 (internal quotation marks and citations omitted). Rule 9(b)' s requirement of particularity applies to the factual circumstances of the fraud. Id. This requires allegations regarding the time, place and specific content of the allegedly false representations as well as the identities of the parties to the misrepresentation. Id. at 553 (internal quotation marks and citations omitted). Plaintiffs' allegations lack the requisite specificity regarding times, places and the parties to ...


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