Khan v. GMAC Mortgage, LLC, et al, No. 2:2010cv00900 - Document 16 (E.D. Cal. 2010)

Court Description: ORDER granting in part and denying in part 9 Motion to Dismiss and denying 10 Motion to Strike signed by Judge Garland E. Burrell, Jr on 6/29/10. (Kaminski, H)

Download PDF

Khan v. GMAC Mortgage, LLC, et al Doc. 16 1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE EASTERN DISTRICT OF CALIFORNIA 6 7 TAZIM KHAN and JAIBUL NISHA, Plaintiff, 8 v. 9 10 11 12 13 14 15 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) GMAC MORTGAGE, LLC; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GMAC MORTGAGE, LLC F/K/A GMAC MORTGAGE CORP., A LIMITED LIABILITY COMPANY; EXECUTIVE TRUSTEE SERVICES, LLC dba ETS SERVICES, LLC AND; DOES 1 through 10, inclusive, Defendants. ________________________________ 2:10-cv-00900-GEB-JFM ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS AND DENYING DEFENDANTS’ MOTION TO STRIKE 16 Defendants 17 GMAC Mortgage, LLC; Mortgage Electronic 18 Registration Systems, Inc.; and Executive Trustee Services, LLC dba ETS 19 Services, LLC (“Defendants”) move for dismissal of Plaintiffs’ complaint 20 under Federal Rule of Civil Procedure 12(b)(6), arguing Plaintiffs 21 failed to allege sufficient facts to state viable claims. Defendants 22 also move to strike Plaintiffs’ punitive damages claim and request for 23 attorneys’ fees under Federal Rule of Civil Procedure 12(f). For the 24 reasons stated below, Defendants’ motion to dismiss is GRANTED AND 25 DENIED IN PART and their motion to strike is DENIED. Plaintiffs did not file an Opposition or Notice of Opposition 26 27 in response to either motion as required by Local Rule 230(c). 28 1 Dockets.Justia.com 1 Plaintiffs are cautioned that failing to comply with the Local Rules can 2 subject them to sanctions. L.R. 110. 3 I. LEGAL STANDARD 4 A Rule 12(b)(6) dismissal motion tests the legal sufficiency 5 of the claims alleged in the complaint. Novarro v. Black, 250 F.3d 729, 6 732 (9th Cir. 2001). 7 statement of the claim showing that the pleader is entitled to relief 8 9 . . . .” A pleading must contain “a short and plain Fed. R. Civ. P. 8(a)(2). The complaint must “give the defendant fair notice of what the [plaintiff’s] claim is and the grounds 10 upon which relief rests . . . .” 11 U.S. 544, 555 (2007). Bell Atlantic Corp. v. Twombly, 550 12 Dismissal of a claim under Rule 12(b)(6) is appropriate only 13 where the complaint either 1) lacks a cognizable legal theory, or 2) 14 lacks factual allegations sufficient to support a cognizable legal 15 theory. Balistreri v. Pacific Police Dept., 901 F.2d 696, 699 (9th Cir. 16 1988). To avoid dismissal, the plaintiff must allege “only enough facts 17 to state a claim to relief that is plausible on its face.” 18 U.S. at 547. Twombly, 550 19 In deciding a Rule 12(b)(6) motion, the material allegations 20 of the complaint are accepted as true and all reasonable inferences are 21 drawn in favor of the plaintiff. 22 956 (9th Cir. 2009). 23 conclusions are entitled to a presumption of truth. 24 Iqbal, 129 S. Ct. 1937, 1949-50 (2009); Twombly, 550 U.S. at 555. See al-Kidd v. Ashcroft, 580 F.3d 949, However, neither conclusory statements nor legal See Ashcroft v. 25 If a Rule 12(b)(6) motion is granted, the “district court 26 should grant leave to amend even if no request to amend the pleadings is 27 made, unless it determines that the pleading could not possibly be cured 28 2 1 by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 2 (9th Cir. 2000)(quoting Doe v. U.S., 58 F.3d 484, 497 (9th Cir. 1995)). 3 Defendants’ motions include a request that the Court take 4 judicial notice of three documents recorded with the Sacramento County 5 Recorder: a Grant Deed recorded on March 14, 2008; a Deed of Trust 6 recorded on March 14, 2008; and a Notice of Default and Election to Sell 7 recorded on November 24, 2009. (Defs.’ Req. for Judicial Notice (“RJN”) 8 Exs. 1-3.) 9 “As a general rule, a district court may not consider any 10 material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” 11 v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (quotations 12 and citation omitted). 13 subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th 14 Cir. 15 “generally known within the territorial jurisdiction of the trial court” 16 or “capable of accurate and ready determination by resort to sources 17 whose accuracy cannot reasonably be questioned.” 2007). 18 A matter Lee However, a court may consider matters properly may be judicially noticed if it is either Fed. R. Evid. 201(b). Since the three identified documents are publically recorded, 19 they 20 noticed. 21 790, 792 (1992)(taking judicial notice of documents in a county’s public 22 record, including deeds of trust). 23 these documents be judicially noticed is granted. 24 are capable of accurate determination and may be judicially See W. Fed. Sav. & Loan Ass’n v. Heflin Corp., 797 F. Supp. Therefore, Defendants’ request that III. BACKGROUND 25 On or about March 7, 2008, Plaintiffs obtained a purchase 26 money loan from Defendant GMAC Mortgage, LLC (“GMAC”), which was secured 27 by their home, located at 9820 Spring View Way, Elk Grove, California. 28 (Compl. ¶¶ 1, 7, RJN, Ex. 1.) 3 1 The relevant Deed of Trust identifies Defendant Executive 2 Trustee Services, LLC (“ETS”) as the trustee and Defendant Mortgage 3 Electronic Registration Systems, Inc. (“MERS”) as a nominee for the 4 lender and the lender’s successors and assigns. (RJN, Ex. 1.) 5 Plaintiffs’ claims stem from their allegations that Defendants 6 did not explain the loan’s interest rate or its volatility, charged 7 improper 8 foreclosure proceedings on their home. (Compl. ¶¶ 10, 11, 17.) fees for the loan’s 9 and improperly initiated IV. DISCUSSION 10 Plaintiffs’ complaint alleges eleven claims against Defendants 11 under federal and state law. 12 1. 13 placement, Motion to Dismiss A. Truth in Lending Act Claims 14 Defendants argue Plaintiffs’ damage and rescission claims 15 alleged under the Truth in Lending Act (“TILA”) should be dismissed 16 without leave to amend. Specifically, Defendants contend Plaintiffs’ 17 TILA damages claim is barred by the applicable one-year statute of 18 limitations, and the loan at issue is a “purchase money loan,” which is 19 exempt from TILA’s rescission relief. (Def.’s Mot. to Dismiss (“Mot.”) 20 3:14-15, 3:21-22.) Defendants further argue Plaintiffs did not allege 21 their ability to tender or reinstate the subject loan transactions, 22 which Defendants’ contend is necessary to state a TILA rescission claim. 23 (Mot. 4:3-4.) 24 (i) 25 An action under TILA for actual or statutory damages must be 26 brought “within one year from the date of the occurrence of the 27 violation.” 15 28 limitations period TILA Damages Claim U.S.C. § starts 1640(e). [to run] 4 “[A]s at a the general rule[, consummation of this] the 1 transaction.” 2 “Consummation” is defined under the statute as “the time that a consumer 3 becomes contractually obligated on a credit transaction.” Grimes v. New 4 Century Mortgage Corp., 340 F.3d 1007, 1009 (9th Cir. 2003)(quoting 12 5 C.F.R. § 226.2(a)(13)). 6 King v. California, 784 F.2d 910, 915 (9th Cir. 1986). Plaintiffs became “contractually obligated on a credit 7 transaction” in March of 2008, when they executed the “Fixed Note.” 8 (Compl. ¶ 7.) Therefore, the statute of limitations for bringing their 9 TILA damages claim expired in March of 2009. Since Plaintiffs have not 10 provided a basis for concluding that equitable tolling applies to this 11 claim, Plaintiffs’ TILA damages claim is dismissed with prejudice. 12 (ii) TILA Rescission Claim 13 “Residential mortgage transactions” are exempt from the right 14 to rescission under TILA, and are defined as “a transaction in which a 15 mortgage... is created or retained against the consumer’s dwelling to 16 finance the acquisition or initial construction of the dwelling.” 15 17 U.S.C. §§ 1635(e)(1), 1602(w). 18 Based upon Plaintiffs’ allegations and the applicable Grant 19 Deed, it is evident the loan at issue was a purchase money loan for 20 their residence. (Compl. 1, 7; RJN, Ex. 1.) See Garavito v. GE Money 21 Bank, No. 08-cv-2215-H, 2010 WL 744284 (S.D. Cal. March 2, 2010)(holding 22 relevant 23 plaintiff’s loan was a purchase money loan, which is exempt from TILA’s 24 rescission provision). Therefore, Plaintiff’s TILA rescission claim is 25 dismissed with prejudice. 26 B. grant rate note and deed of trust demonstrated Real Estate Settlement Procedures Act 27 28 deed, Defendants seek dismissal of Plaintiffs’ second claim in which Plaintiffs allege “violation of 26 5 U.S.C. § 2605," arguing this 1 statutory section does not exist, therefore, “it is unclear the statute 2 to which [Plaintiffs’] refer in their second cause of action.” (Mot. 3 5:3-5.) Defendants also argue to the extent Plaintiffs intended to 4 state Real 5 Plaintiffs’ allegations are ambiguous, a section 2607 claim is time- 6 barred, and section 2605(b) does not apply because Plaintiffs do not 7 allege any Defendant is a loan “servicer.” (Mot. 5:18-19, 5:20-21, 6:5- 8 10.) a Estate Settlement Procedures Act (“RESPA”) claim, 9 Section 2605(b) of RESPA requires “servicers” of certain loans 10 to “notify the borrower in writing of any assignment, sale or transfer 11 of 12 2605(b)(1). 13 as “the person responsible for servicing a loan (including the person 14 who makes or holds a loan if such person also services the loan.)” 12 15 U.S.C. § 2605(i)(2). 16 17 18 19 20 21 22 23 the servicing of the loan to any other person.” 12 U.S.C. § Excluding certain specific entities, “servicer” is defined Plaintiffs allege in support of their second claim for a “Violation of 26 U.S.C. § 2605": Defendants... are such that they fall within the requirements of the Real Estate Settlement Procedures Act (RESPA). [¶] Defendants... placed loans for the purpose of unlawfully increasing or otherwise obtaining yield spread fees and sums in excess of what would have been lawfully earned. [¶] Defendants “MERS” and DOE 1... as “Servicers” as that term is used with the RESPA Act... violated the requirements of 26 U.S.C. § 2605(B) in that the servicing contract or duties have under [sic] were transferred or hypothecated without the required notice. 24 25 (Compl. ¶¶ 27-29.) 26 Although 26 U.S.C. § 2605 is a nonexistent statute, 12 U.S.C. 27 § 2605 is a section of RESPA, and Plaintiffs allege in this claim that 28 Defendants are covered by RESPA. Plaintiffs further allege Defendant 6 1 MERS and DOE 1, are “servicers” as defined under RESPA, and transferred 2 the loan without providing the required disclosures to Plaintiffs. 3 (Compl. ¶ 29.) Therefore, Defendants’ motion to dismiss this section 4 2605 RESPA claim against Defendant MERS is denied. However, since 5 Plaintiffs do not allege any other named Defendant is a loan “servicer,” 6 Defendants’ motion is granted as to Defendants GMAC and ETS. 7 C. Home Ownership & Equity Protection Act 8 Defendants seek dismissal of Plaintiffs' Home Ownership and 9 Equity Protection Act (“HOEPA”) claim arguing the subject loan is a 10 purchase money loan which is excluded from HOEPA’s coverage, and the 11 claim is barred by the applicable statute of limitations. (Mot. 12 12, 7:15-16.) 7:11- 13 “Residential mortgage transactions,” as defined under the 14 Truth in Lending Act, are expressly exempted from HOEPA. 15 U.S.C. 15 1602(aa)(1); see Gomez v. Wachovia Mortgage Corp., No. CV-09-02111 SBA, 16 2010 WL 291817, *4 (N.D. Cal. Jan. 19, 2010)(citing Llaban v. Carrington 17 Mortgage Services, LLC, No. 3:09-cv-01667-H-POR, 2009 WL 2870154 (S.D. 18 Cal. Sept. 3, 2009)). The subject loan is a “residential mortgage 19 transaction.” 20 HOEPA claim is granted, and this claim is dismissed with prejudice. 21 D. Therefore, Defendants’ motion to dismiss Plaintiffs’ Fair Debt Collection Practices Act 22 Defendants seek dismissal of Plaintiffs’ Fair Debt Collection 23 Practices Act (“FDCPA”) claim, arguing in relevant part, Plaintiffs’ 24 allegations are vague and conclusory, and Defendants are not “debt 25 collectors” as defined by the act. (Mot. 8:18-19, 9:4-5.) 26 “To be liable for a violation of the FDCPA... the defendant 27 must-as a threshold requirement-be a ‘debt collector’ within the meaning 28 of the [Act].” Angulo v. Countrywide Home Loans, Inc., No. 1:09-cv-8777 1 AWI-SMS, 2009 WL 3427179, at *5 (E.D. Cal. Oct. 26, 2009)(quoting 2 Putkkuri v. Reconstruct Co., 2009 WL 32567, at *7 (S.D. Cal. Jan.5, 3 2009)). 4 collects or attempts to collect, directly or indirectly, debts owed [to] 5 ... another.” 15 U.S.C. § 1692a(6). “Debt collector” does not include 6 persons who collect debt “to the extent such activity... (ii) concerns 7 a debt which was originated by such person; or (iii) concerns a debt 8 which was not in default at the time it was obtained by such person...” 9 15 U.S.C. § 1692a(6)(F). “FDCPA’s definition of debt collector ‘does not 10 include the consumer’s creditors, a mortgage servicing company, or any 11 assignee of the debt, so long as the debt was not in default at the time 12 it was assigned.’” Larkin v. Select Portfolio Servicing, Inc., No. 1:09- 13 cv-01280-OWW-DLB, 2009 WL 3416137, at *3 (E.D. Cal. Oct. 21, 2009) 14 (quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 15 1985)). 16 The FDCPA defines “debt collector” as a person “who regularly Plaintiffs allege in support of their FDCPA claim that 17 “Defendants... [MERS and ETS]... are ‘debt collectors’... as that term 18 is used in the United States Code.” (Compl. ¶ 39.) However, this 19 allegation is conclusory. See Angulo, 2009 WL 3427179, at *5. Moreover, 20 the applicable Deed of Trust and other allegations in the Complaint 21 indicate otherwise. For example, the Deed of Trust identifies Defendant 22 GMAC as the original lender, Defendant ETS as the trustee, and Defendant 23 MERS as the lender’s nominee. (RJN, Ex. 1; see also Compl. ¶¶ 3, 13.) 24 Plaintiffs also allege Defendant GMAC transferred the loan to Defendant 25 MERS. (Compl. ¶ 12.) Therefore, Plaintiffs allegations are insufficient 26 to support their claim that Defendants are “debt collectors,” and this 27 claim is dismissed. 28 8 1 E. Breach of Fiduciary Duty 2 Defendants seek dismissal of Plaintiffs’ breach of fiduciary 3 duty claim, arguing Plaintiffs do not allege the necessary existence of 4 a fiduciary relationship with Defendants. (Mot. 10:11-13.) 5 In California, to state a claim for breach of fiduciary duty, 6 a plaintiff must allege: (1) the existence of a fiduciary relationship; 7 (2) the breach of that relationship; and (3) damage proximately caused 8 thereby. 9 Roberts v. Lomanto, 112 Cal. App. 4th 1553, 1562 (2003). As a general rule, “a loan transaction is [an] at arms-length 10 [transaction] 11 borrower and lender.” 12 4th 453, 466 (2006). Courts have similarly held that loan servicers 13 typically do not have a fiduciary relationship with borrowers. See 14 Linder v. Aurora Loan Servicing, LLC, No. 2:09-cv-03490-JAM-KJM, 2010 WL 15 1525399, at *5 (E.D. Cal. April 15, 2010); and Moreno v. Citibank, N.A., 16 No. C-09-5339 CW, 2010 WL 103822, at *3 (N.D. Cal. March 19, 2010). 17 18 and there is no fiduciary relationship between the Oaks Mgmt. Corp. v. Superior Court, 145 Cal. App. Plaintiffs allege the following conclusory allegations in support of their fiduciary duty claim, 19 22 Defendants... created, accepted and acted in a fiduciary relationship of great trust and acted for and were the processors of property for the benefit of Plaintiff.[¶] Defendants... further placed themselves in a position of great trust by virtue of the expertise represented by and through their employees. 23 (Compl. ¶¶ 44-45.) These allegations are insufficient to show the 24 existence of a fiduciary relationship between Plaintiffs and Defendants. 25 Therefore, Plaintiffs’ breach of fiduciary duty claim is dismissed. 26 /// 27 /// 28 /// 20 21 9 1 F. Breach of Covenant of Good Faith & Fair Dealing 2 Defendants seek dismissal of Plaintiffs’ breach of the 3 covenant of good faith and fair dealing claim, arguing Plaintiffs have 4 not alleged the existence of a contract with any Defendant, and tort 5 damages are not available outside of an insurance context. (Mot. 10:21- 6 22, 11:19-22.) 7 “There is an implied covenant of good faith and fair dealing 8 in every contract that neither party will do anything which will injure 9 the right of the other to receive the benefits of the agreement.” 10 Comunale v. Traders & General Ins. Co., 50 Cal.2d 654, 658 (1958). The 11 implied covenant “rests upon the existence of some specific contractual 12 obligation. 13 covenants or promises of the contract, not to protect some general 14 public policy interest not directly tied to the contract’s purpose.” 15 Racine Laramie, Ltd. v. Dept. of Parks & Recreation, 11 Cal.App.4th 16 1026, 1031 (1992). [It] is read into contracts in order to protect the express 17 Since the implied covenant is based in contract, compensation 18 for its breach is almost always limited to contractual remedies. Foley 19 v. Interactive Data Corp., 47 Cal.3d 654, 684 (1988). 20 only available when "the parties are in a ‘special relationship’ with 21 ‘fiduciary characteristics.’” 22 307 F.3d 944, 955 (9th Cir. 2002)(applying California law)(citing Mitsui 23 Mfrs. Bank v. Superior Court, 212 Cal. App. 3d 726, 730 (1989)). 24 Tort remedies are Pension Trust Fund v. Federal Ins. Co., Here, Plaintiffs do not allege the existence of a contract or 25 a special relationship between the parties. 26 breach of the implied covenant of good faith and fair dealing claim is 27 dismissed. 28 /// 10 Therefore, Plaintiffs' 1 G. Injunctive Relief 2 Defendants also seek dismissal of Plaintiffs’ seventh and 3 eight causes of action for injunctive relief, arguing injunctive relief 4 is a remedy, not a substantive claim. (Mot. 12:9-14.) Plaintiffs seek in 5 their seventh claim an order “that Plaintiffs are not required to make 6 any further payments on the Fixed Rate Note,” and that enjoins “any 7 further collection activity on the Note....” (Compl. ¶ 66.) Plaintiffs’ 8 seek in their eighth claim an order enjoining the impending foreclosure 9 and sale of Plaintiffs’ home. (Compl. ¶¶ 73-75.) 10 Under both federal and state law, an injunction is a remedy, 11 not a claim in and of itself. See Curtis v. Option One Mortg. Corp., No. 12 109-cv-1608 AWI SMS, 2010 WL 13 2010)(citing Washington Toxics Coalition v. Environmental Protection 14 Agency, 413 F.3d 1024, 1034 (9th Cir. 2005) and Shamsian v. Atlantic 15 Richfield Co., 107 Cal.App.4th 967, 985 (2003)). Therefore, Plaintiffs’ 16 purported “causes of action” for injunctive relief are dismissed. 17 H. 599816, at *13 (E.D. Cal. Feb. 18, Declaratory Relief 18 Defendants seek dismissal of Plaintiffs’ declaratory relief 19 claim, arguing no actual case or controversy exists that entitles 20 Plaintiffs to declaratory relief, and the claim is “derivative of their 21 other causes of action,” which do not state valid claims. (Mot. 13:14- 22 18.) 23 “Declaratory relief is appropriate (1) when the judgment will 24 serve a useful purpose in clarifying and settling the legal relations in 25 issue, and (2) when it will terminate and afford relief from the 26 uncertainty, insecurity, and controversy giving rise to the proceeding.” 27 Guerra v. Sutton, 783 F.2d 1371, 1376 (9th Cir. 1986). “[T]he existence 28 of another adequate remedy does not preclude a declaratory judgment that 11 1 is otherwise appropriate,” however, “the availability of other adequate 2 remedies may make declaratory relief inappropriate.” 3 federal court may decline to address a claim for declaratory relief” 4 where the substantive claims “would resolve the issues raised by the 5 declaratory judgment action....” Fimbres v. Chapel Mortg. Corp., No. 09- 6 cv-0886-IEG, 2009 WL 416332, at *5 (S.D. Cal. Nov. 20, 2009)(internal 7 quotations and citations omitted)); see also StreamCast Networks, Inc. 8 v. IBIS LLC, No. 9 May 2, 2006). Further, “a CV 05-04239 MMM, 2006 WL 5720345, at *3-4 (C.D. Cal. 10 Here, Plaintiffs seek a declaratory judgment concerning “the 11 [parties’] ownership rights and the validity of the commencement of the 12 foreclosure process,” and “the rights and duties of the parties herein.” 13 (Compl. ¶¶ 79, 81.) Since Plaintiffs’ allegations do not suggest a 14 declaratory will 15 requested 16 Plaintiffs’ declaratory relief claim is granted. 17 I. judgment in their other entitle them claims, to any relief Defendants’ motion beyond to that dismiss Fraud 18 Defendants seek dismissal of Plaintiffs’ tenth and eleventh 19 “causes of action,” which both allege a fraud claim, arguing Plaintiffs’ 20 allegations do not satisfy the heightened pleading standard set forth in 21 Federal Rule of Civil Procedure 9(b)(“Rule 9(b)”). (Mot. 15:3-4, 15:14- 22 15.) 23 Under California law, the elements of a fraud claim are: (1) 24 misrepresentation (including, false representation, concealment, or 25 nondisclosure); (2) knowledge of falsity; (3) intent to induce reliance; 26 (4) 27 Permanente Medical Group, Inc., 15 Cal.4th 951, 974 (1997). justifiable reliance; and (5) 28 12 resulting damage. Engalla v. 1 A claim for fraud in federal court must satisfy Rule 9(b)’s 2 heightened pleading requirements. 3 F.3d 1097, 1103 (9th Cir. 2003). 4 fraud 5 circumstances constituting fraud or mistake.” The required specificity 6 includes content 7 representations 8 misrepresentations.” 9 2007)(quoting Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. or mistake, the a “time, as party as This rule provides that “[i]n alleging must place, well See Vess v. Ciba-Geigy Corp., 317 and the state with specific identities of particularity the of the parties the false to the Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 10 2004)). 11 allegations of fraud, the complaint must inform each defendant of his 12 alleged 13 Industries Group, No. 2:10-335-WBS GGH, 2010 WL 1956707, at *8 (E.D. 14 Cal. May 13, 2010)(internal quotations and citations omitted). 15 16 17 Further, “[w]here multiple defendants are asked to respond to participation Plaintiffs’ in the tenth fraud.” fraud Lane claim v. Vitek includes Real the Estate following allegations: 21 Defendants [GMAC and ETS]... made a representation to Plaintiffs that [MERS] had the rights and standing of a beneficiary or [sic] Mortgage under California law. [¶] This statement was made on the Mortgage and presented to Plaintiffs at the office of the Title Company in [Sacramento County]. [¶] When [Defendants]... made the representation that [MERS] was the Mortgagee under the Mortgage, they both knew that the statement was false when made. 22 (Compl. ¶¶ 89-91.) Plaintiffs further allege the representation was made 23 “to have Plaintiffs rely on [it],” and Plaintiffs “did actually rely on 24 [it].” (Id., ¶ 92.) 18 19 20 25 26 27 28 Plaintiff’s eleventh fraud claim includes the allegations: Defendant [MERS] caused to be executed a ‘Notice of Mortgagee’s Intent to Foreclose’ which stated that the payments were due to [MERS] as lender. [¶] This 13 following 1 representation was order to induce Plaintiffs did rely [and] the implied representation.... 2 3 implied by these defendants in reliance by Plaintiffs. [¶] on these representations....[¶] representation... was a false 4 (Compl. ¶¶ 97-99.) 5 Plaintiffs’ fraud allegations are conclusory and do not 6 provide the specificity required by Rule 9(b). Many of Plaintiffs’ 7 allegations do not differentiate between Defendants. Further, the 8 allegations do not provide sufficient detail concerning the time, date, 9 and place of the alleged misrepresentations or the identity of who made 10 them. Therefore, Plaintiffs’ tenth and eleventh fraud claims are 11 dismissed. 12 2. Motion to Strike 13 Defendants seek an order under Federal Rule of Civil Procedure 14 12(f) striking Plaintiffs’ punitive damages claim and request for 15 attorneys’ fees, arguing this relief “is not recoverable as a matter of 16 law.” (Def.s’ Mot. to Strike, 4:2-6, 5:10.) Defendants rely solely upon 17 California cases, which discuss the state pleading standards, as support 18 for their motion. 19 The Federal Rules of Civil Procedure govern the sufficiency of 20 a pleading in federal actions, even as to state law claims. See Clark v. 21 Allstate Ins. Co., 106 F.Supp.2d 1016, 1018 (S.D. Cal. 2000)(citing 22 Hanna v. Plumer, 380 U.S. 460, 471 (1965)). 23 24 25 26 27 Since the Supreme Court’s decision in Hanna v. Plumer, it no longer can be doubted that the rules regarding the standard of specificity to be applied to federal pleadings... [and] the special requirements for pleading certain matters... are all governed by the federal rules and not by the practice of the courts in the state in which the federal court happens to be sitting. 28 14 1 5 Wright & Miller, Federal Practice and Procedure, § 1204 (3rd ed. 2004). 2 Since Defendants have not shown their Motion to Strike should 3 be granted, it is denied. 4 IV. CONCLUSION 5 For the stated reasons, Defendants’ motion to dismiss is 6 granted in part and denied in part. Defendants’ motion to strike is 7 denied. Plaintiffs are granted leave to amend any claim that has not 8 been dismissed with prejudice. Any amended pleading shall be filed 9 within ten (10) days of the date on which this order is filed. 10 Dated: June 29, 2010 11 12 13 GARLAND E. BURRELL, JR. United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.