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Uribe v. Countrywide Financial

July 7, 2009


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


Defendants Countrywide Financial Corporation, Countrywide Home Loans, Inc., Bank of America, N.A., Mortgage Electronic Registration Systems, Inc. and Deutsche Bank-Harborview 04-11 (collectively "defendants") filed a motion to dismiss the first amended complaint ("FAC") and a motion to expunge lis pendens or alternatively to require plaintiffs to post a bond. The motions have been fully brief and are considered without oral argument under Civil Local Rule 7.1(d)(1).


This action was removed from the California Superior Court, County of San Diego on October 27, 2008. Thereafter, defendants moved to dismiss the case under Federal Rule of Civil Procedure 12(b)(6). Under the Civil Local Rules, plaintiffs were required to respond to defendants motion by a certain date but plaintiffs neither filed a response nor sought additional time in which to file a response to defendants' motion. In its Order granting defendants' motion to dismiss, the Court noted that "[w]hen 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 reviewed the motion on the merits to determine whether any legal issue existed that would preclude the granting of defendants' motion to dismiss.

The Court dismissed plaintiffs' claims as follows: the RICO and fraud causes of action were dismissed without prejudice for failure to meet Rule 9(b)'s particularity requirement; the TILA and RESPA claims were barred by the applicable statutes of limitation; the negligent infliction of emotional distress claim was dismissed with prejudice because plaintiffs did not and could not allege an independent duty imposed by law, assumed by defendants, or created by a special relationship between the parties that proximately caused plaintiffs' emotional distress; the quiet title claim was dismissed without prejudice because plaintiffs did not allege tender or offer of tender of the amounts admittedly borrowed; slander of title claim was dismissed with prejudice because defendants' conduct was privileged; the cancellation of plaintiffs' trust deeds and notes claims were dismissed with prejudice because the property had been foreclosed.

Notwithstanding plaintiffs' failure to respond to the motion to dismiss or to request leave to amend, the Court permitted the filing of a FAC.

Plaintiffs filed a massive 318-page, 62-count FAC.*fn1 The FAC alleged claims under RICO, 18 U.S.C. §§ 1961, 1962(a), (b), (c), (d), 1964(a), (b) and (c); the "Ku Klux Klan Act of 1871", 42 U.S.C. § 1981 et seq.; the Equal Credit Opportunity Act of 1974 ("ECOA"), 15 U.S.C. § 1691; the Fair Housing Act of 1968 ("FHA"), 42 U.S.C. § §3601; Declaratory Judgment Act of 1940, 28 U.S.C. §§ 2201-2202; common-law fraud; constructive fraud; promissory fraud; and conspiracy to commit fraud; breach of fiduciary duty; breach of implied covenant of good faith and fair dealing; negligence; Consumer Legal Remedies Act ("CLRA"); and California Business & Professions Codes 17200 and 17500.

Defendants move for dismissal of the FAC under Federal Rule of Civil Procedure 12(b)(6).


1. Legal Standard

a. Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6)

"The focus of any Rule 12(b)(6) dismissal... is the complaint." Schneider v. California Dept. of Corrections, 151 F.3d 1194, 1197 n.1 (9th Cir. 1998). A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. Novarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). "A district court should grant a motion to dismiss if plaintiffs have not pled 'enough facts to state a claim to relief that is plausible on its face.'" Williams ex rel. Tabiu v. Gerber Products, 523 F.3d 934, 938 (9th Cir. 2008)(quoting Bell Atlantic Corp. v. Twombley, 127 S.Ct. 1955, 1974 (2007)). "'Factual allegations must be enough to raise a right to relief above the speculative level.'" Id. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombley, 127 S.Ct. at 1964-1965. Dismissal of a claim under Rule 12(b)(6) is appropriate only where "it appears beyond 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). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory or where the complaint presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson v. Dean Witter Reynolds,, 749 F.2d 530, 534 (9th Cir. 1984).

In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe all inferences from them in the light most favorable to the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). But legal conclusions need not be taken as true merely because they are cast in the form of factual allegations. Ileto v. Glock, Inc., 349 F.3d 1191, 1200 (9th Cir. 2003). Finally, in determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond the complaint for additional facts, e.g., facts presented in plaintiff's memorandum in opposition to a defendant's motion to dismiss or other submissions. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998); see also 2 MOORE'S EDERAL PRACTICE, § 12.34[2] (Matthew Bender 3d ed.) ("The court may not... take into account additional facts asserted in a memorandum opposing the motion to dismiss, because such memoranda do not constitute pleadings under Rule 7(a)."). But in addition to the facts alleged in the complaint, the Court may consider documents attached to the complaint, documents relied upon but not attached to the complaint when authenticity is not contested, and matters of which the court takes judicial notice. Parrino, 146 F.3d at 705-706.

b. Federal Rule of Civil Procedure 8

When plaintiffs were given leave to file an amended complaint that corrected the deficiencies the Court had previously discussed, they filed a behemoth pleading that fails to comply with Rule 8. Rule 8 sets forth general rules of notice pleading in the Federal Courts. See Swierkiewicz v. Sorema, 534 U.S. 506 (2002). Complaints are required to set forth (1) the grounds upon which the court's jurisdiction rests, (2) a short and plain statement of the claim showing entitlement to relief; and (3) a demand for the relief plaintiff seeks. Rule 8 requires "sufficient allegations to put defendants fairly on notice of the claims against them." McKeever v. Block, 932 F.2d 795, 798 (9th Cir. 1991). When a plaintiff's ...

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