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Simmons v. Countrywide Home Loans

June 28, 2010

CRAIG SIMMONS AND CASSANDRA SIMMONS, AS INDIVIDUALS, PLAINTIFFS,
v.
COUNTRYWIDE HOME LOANS, INC., A CORPORATION, AN UNKNOWN ENTITY, AND DOES 1 THROUGH 20, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: John A. Houston United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT [DOC. # 17] AND DENYING DEFENDANT'S MOTION TO STRIKE [DOC. # 18]

INTRODUCTION

Now before the Court are the motions to dismiss and to strike filed by defendant Countrywide Home Loans, Inc. ("defendant" or "Countrywide"). The motions have been fully briefed by the parties. After a careful consideration of the pleadings and relevant exhibits submitted, and for the reasons set forth below, this Court GRANTS IN PART and DENIES IN PART defendant's motion to dismiss and DENIES defendant's motion to strike.

BACKGROUND

Plaintiffs Craig Simmons and Cassandra Simmons ("plaintiffs") filed their initial complaint before the San Diego County Superior Court on April 24, 2009. The complaint was subsequently removed to this Court on June 8, 2009. On June 15, 2009, defendant filed a motion to dismiss plaintiffs' initial complaint which was subsequently denied as moot after plaintiffs filed their first amended complaint ("FAC") on July 17, 2009. See Docs. # 12, 15. Plaintiffs' FAC is the operative pleading here.

Plaintiffs allege in their FAC that they purchased their home by taking out a secured loan and executing a deed of trust in May of 2006. FAC ¶¶ 12, 14. Plaintiffs further allege that on a date unknown, Countrywide began acting as an agent for the beneficiary of the loan and became the servicer of the loan. FAC ¶ 17. On April 17, 2009, Countrywide and Fannie Mae entered into a Servicer Participation Agreement ("Agreement") for the Home Affordable Modification Program ("HAMP"), a government program established pursuant to the Emergency Economic Stabilization Act of 2008,*fn1 that is designed to promote loan modification and other foreclosure prevention services. See FAC, Exhs. 1. Servicers obligations are set forth in the Agreement as well as in the Guidelines established by the Department of the Treasury. See FAC, Exhs. 1-3.

Plaintiffs allege that when they attempted to secure a modification of their loan, Countrywide would not provide them with a modification. FAC ¶ 20. Plaintiffs also allege that, after they apparently stopped making payments, Countrywide began harassing them in an attempt to collect payments on the loan. FAC ¶ 21. Plaintiffs assert five claims for relief: (1) breach of written contract; (2) declaratory relief; (3) violation of California's Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), Cal. Civ. Code §1788, et seq.; (4) invasion of privacy; and (5) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200.

Defendant filed the instant motions on August 3, 2009. Plaintiffs filed an opposition on September 17, 2009 and defendant filed a reply brief on September 22, 2009.*fn2 This Court subsequently took defendant's motions under submission without oral argument. See Doc. # 23; CivLR 7.1(d.1).

DISCUSSION

Defendant moves to dismiss each claim for relief asserted in plaintiffs' FAC for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. In addition, defendant moves to strike certain portions of plaintiffs' FAC pursuant to Rule 12(f) of the Federal Rules of Civil Procedure.

1. Legal Standards

a. Motion to Dismiss

A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law."). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534. While a plaintiff need not give "detailed factual allegations," he must plead sufficient facts that, if true, "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 547). A claim is facially plausible when the factual allegations permit "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In other words, "the nonconclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief. Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009). "Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S.Ct. at 1950.

b. Motion to Strike

Rule 12(f) of the Federal Rules of Civil Procedure grants a party the right to strike any "insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." "Immaterial" refers to a matter that has no bearing on the controversy before the court. Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993)(reversed on other grounds in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534-535). ...


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