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Casault v. Federal National Mortgage Association

United States District Court, C.D. California

February 20, 2014

CASAULT
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION, ET AL

CIVIL MINUTES - GENERAL PROCEEDINGS (IN CHAMBERS): ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS ALL PLAINTIFFS' CAUSES OF ACTION WITH PREJUDICE

DAVID O. CARTER, District Judge.

Before the Court are two motions to dismiss (Dkts. 144 and 145) Plaintiffs' Third Amended Complaint (Dkt. 138). The Court finds this matter appropriate for decision without oral argument. Fed.R.Civ.P. 78; Local Rule 7-15. Defendants seek to dismiss Plaintiffs' causes of action for (1) Fraud; (2) Violation of Cal. Bus. & Prof. Code § 17200, et seq.; and (3) Violation of Cal. Civ. Code § 1788, et seq. After considering the moving papers, Oppositions, and Replies, the Court GRANTS the Motions to Dismiss all three of Plaintiffs' causes of action against all Defendants, WITH PREJUDICE.

I. Background

Plaintiff filed a Third Amended Complaint ("TAC") against Servicer Defendants, on behalf of themselves, as well as seeking to represent other similarly situated individuals, for claims that concern the mortgage loan modification and foreclosure process.[1] On December 10, 2012, Plaintiffs filed their TAC (Dkt. 131), which they later modified on December 21, 2012 (Dkt. 138). The TAC brings three causes of action for (1) Fraud; (2) Violation of Cal. Bus. & Prof. Code § 17200, et seq. ; and (3) Violation of Cal. Civ. Code § 1788, et seq. The TAC is factually similar to Plaintiff's SAC, and previous familiarity with the SAC and this Court's earlier ruling will be assumed.

On January 25, 2013, Defendants filed their Motions to Dismiss Plaintiff's TAC pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim. On February 22, 2013, Plaintiffs filed Oppositions (Dkts. 148 and 149) to the Defendants Motions to Dismiss. On March 15, 2013, Defendants filed Replies (Dkts. 154 and 155) to Plaintiff's Oppositions.

The Court will address both Motions in this Order, and will provide further factual information as necessary.

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal , 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555 (citing Papasan v. Allain , 478 U.S. 265, 286 (1986)). On a motion to dismiss, this court accepts as true a plaintiff's well-pled factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept as true legal conclusions couched as factual allegations. Iqbal , 556 U.S. at 678.

In evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents of the complaint and material properly submitted with the complaint. Clegg v. Cult Awareness Network , 18 F.3d 752, 754 (9th Cir. 1994); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc. , 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). Under the incorporation by reference doctrine, the court may also consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading." Branch v. Tunnell , 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by 307 F.3d 1119, 1121 (9th Cir. 2002).

Dismissal without leave to amend is appropriate only when the court is satisfied that the deficiencies in the complaint could not possibly be cured by amendment. Jackson v. Carey , 353 F.3d 750, 758 (9th Cir. 2003); Lopez v. Smith , 203 F.3d 1122, 1127 (9th Cir. 2000) (holding that dismissal with leave to amend should be granted even if no request to amend was made). Rule 15(a)(2) of the Federal Rules of Civil Procedure states that leave to amend should be freely given "when justice so requires." This policy is applied with "extreme liberality." Morongo Band of Mission Indians v. Rose , 893 F.2d 1074, 1079 (9th Cir. 1990). However, "repeated failure to cure deficiencies by amendments previously allowed" provides a legitimate basis for the District Court, in its discretion, to deny a plaintiff permission to further amend the plaintiff's Complaint. Foman v. Davis , 371 U.S. 178, 182 (1962).

Federal Rule of Civil Procedure 9(b) states that an allegation of "fraud or mistake must state with particularity the circumstances constituting fraud." Fed.R.Civ.P. 9(b). The "circumstances" required by Rule 9(b) are the "who, what, when, where, and how" of the fraudulent activity. Vess v. Ciba-Geigy Corp. USA , 317 F.3d 1097, 1106 (9th Cir. 2003); Neubronner v. Milken , 6 F.3d 666, 672 (9th Cir.1993) ("[Rule 9(b) requires] the times, dates, places, benefits received, and other details of the alleged fraudulent activity."). In addition, the allegation "must set forth what is false or misleading about a statement, and why it is false." Vess , 317 F.3d at 1106 (quoting In re Glenfed, Inc. Secs. Litig. , 42 F.3d 1541, 1548 (9th Cir.1994)). Rule 9(b)'s heightened pleading standard applies not only to federal claims, but also to state law claims brought in federal court. Id. at 1103. This heightened pleading standard ensures that "allegations of fraud are 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 have done anything wrong." Semegen v. Weidner , 780 F.2d 727, 731 (9th Cir.1985).

However, "intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b); see also Neubronner , 6 F.3d at 672 (explaining that Rule 9(b)'s heightened pleading standard may be relaxed when the allegations of fraud relate to matters particularly within the opposing party's knowledge, such that a plaintiff cannot be expected to have personal knowledge).

III. ...


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