The opinion of the court was delivered by: Lucy H. Koh United States District Judge
United States District Court For the Northern District of California
ORDER GRANTING DEFENDANT‟S MOTION TO DISMISS AND DENYING DEFENDANT‟S MOTION TO STRIKE
Originally filed in the Superior Court of California on July 15, 2010, Defendant CitiMortgage, Inc. removed the instant action to the United States District Court for the Northern District of California on August 12, 2010. Dkt. No. 1. On August 19, 2010, CitiMortgage moved 20 to dismiss Plaintiff Margoth Mendoza‟s complaint and moved to strike portions of Mendoza‟s 21 complaint. Dkt. Nos. 5 ("Mot. to Dismiss"), 6 ("Mot. to Strike"). CitiMortgage originally noticed 22 these motions before Judge Trumbull. After the instant case was reassigned to the undersigned 23 judge on October 7, 2010, CitiMortgage renoticed its motions. Dkt. Nos. 13, 14. In violation of Civil Local Rule 7-3, Mendoza has neither opposed nor filed a statement of non-opposition to CitiMortgage‟s motions. Pursuant to Civil Local Rule 7-1(b), the Court deems CitiMortgage‟s 26 motions suitable for disposition without oral argument. After considering CitiMortgage‟s 27 submissions and the relevant legal authorities, the Court hereby GRANTS CitiMortgage‟s motion to dismiss, with leave to amend in part and with prejudice in part, and DENIES CitiMortgage‟s 2 motion to strike as moot. 3
Mendoza‟s complaint alleges that CitiMortgage and other unnamed Defendants (collectively "Defendants") engaged in fraudulent real estate loan practices in order to increase 7 their loan origination volume. See Dkt. No. 1, Ex. A ("Compl."). According to Mendoza, Defendants purposefully relaxed their underwriting guidelines and sold a risky loan product to Mendoza because they could resell Mendoza‟s mortgage on the secondary market. Id. ¶¶ 12-19.
Mendoza further claims that Defendants failed to clearly and conspicuously disclose certain key provisions related to Mendoza‟s mortgage and provided undisclosed financial incentives to the United States District Court For the Northern District of California
agents and loan officers selling their products. Id. ¶ 13. In addition to these allegations, Mendoza 13 also claims that Defendants‟ loans were structurally unfair, that Defendants did not meaningfully 14 consider whether Mendoza could afford the loans sold to her, and that Defendants incentivized 15 brokers to sell risky loan products. Id. ¶¶ 22-35.
Based on these allegations, Mendoza asserts six claims for relief: (1) violation of the California Unfair Competition Law ("UCL"), CAL. BUS. & PROF. CODE § 17200 et seq.; (2)
violation of the Real Estate Settlement Procedures Act of 1974 ("RESPA"), 12 U.S.C. § 2601; (3) 19 violation of the Truth in Lending Act ("TILA"), 12 C.F.R. § 226; (4) fraud; (5) fraud in the 20 inducement; and (6) unfair business practices. Id. ¶¶ 37-61. Mendoza seeks injunctive relief, 21 damages, rescission, and reasonable attorneys‟ fees.
After CitiMortgage renoticed its motions before this Court, the Court set the motions for a hearing to be held on January 27, 2011. Dkt. No. 15. Under Civil Local Rule 7-3, Mendoza had 25 until January 6, 2011 to file either an opposition to CitiMortgage's motions or a statement of non-26 opposition. When Mendoza failed to do either, CitiMortgage requested that this Court grant its 27 unopposed motions. Dkt. Nos. 16, 17. On January 21, 2011, the Court vacated the January 27, 28 2011 hearing and stated that it would issue a written order. Dkt. No. 18.
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. See Ileto v. Glock Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). "To survive a motion to dismiss, a 4 complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is 5 plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 127 S. Ct. 1955, 167 L. Ed. 2d 29 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows 8 the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." 9 Caviness v. Horizon Cmty. Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1949) (internal quotation marks omitted). When the facts alleged do not nudge a plaintiff's claim "across the line from conceivable to plausible," the court should dismiss the United States District Court For the Northern District of California complaint. See Twombly, 550 U.S. at 570, 127 S. Ct. 1955. "Determining whether a complaint 13 states a plausible claim for relief" is "a context-specific task that requires the reviewing court to 14 draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950 (citation omitted).
Claims sounding in fraud are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). A plaintiff alleging fraud "must state with particularity the 17 circumstances constituting fraud." FED. R. CIV. P. 9(b). To satisfy this standard, the allegations 18 must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they 20 have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985).
Accordingly, claims sounding in fraud must allege "an account of the time, place, and specific 22 content of the false representations as well as the identities of the parties to the misrepresentations."
Even if a complaint fails to state a claim on which relief can be granted, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it 26 determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc) (citations and ...