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Wieck v. Cit Bank, N.A.

United States District Court, D. Hawaii, Seattle

November 2, 2018

JULIA WIECK, on behalf of herself and all others similarly situated, Plaintiff,


          J. Michael Seabright Chief United States District Judge.


         On March 30, 2018, this court issued a comprehensive decision (“the March 30th Order”) that granted in part and denied in part several motions to dismiss the First Amended Complaint (“FAC”) in this putative class action, which arises out of lender-placed (or “forced-placed”) hurricane insurance on reverse mortgages. See ECF No. 96; Wieck v. CIT Grp., Inc., 308 F.Supp.3d 1093 (D.

         Haw. 2018). The March 30th Order determined that some of Plaintiff Julia Wieck's (“Plaintiff” or “Wieck”) claims - certain non-preempted breach of contract, and unfair or deceptive trade practices allegations - survived the motions to dismiss, but the Order dismissed other claims. The court granted Plaintiff leave to file a Second Amended Complaint (“SAC”) solely to attempt to rectify pleading deficiencies with the claims that were dismissed without prejudice as explained in the March 30th Order. Accordingly, Plaintiff filed a SAC on May 11, 2018, ECF No. 104, and Defendants now move to dismiss the repleaded claims. ECF Nos. 123, 124 & 125. Based on the following, the Motions are GRANTED in part and DENIED in part.


         Because the March 30th Order comprehensively set forth the factual and legal background (at least as to Wieck's claims[1]), the instant Order does not repeat that background, and the court presumes a detailed familiarity with that prior Order. This Order picks up where the March 30th Order left off, and only discusses new allegations in the SAC as necessary to address the present Motions. The court otherwise relies on the March 30th Order for the background and context for the Motions. See Wieck, 308 F.Supp.3d at 1098-1104.

Similar to the FAC, the SAC alleges the following Counts:
• Count One (Breach of Contract) against Defendants Financial Freedom and CIT Bank, N.A. (collectively sometimes referred to as “CIT”).
• Count Two (Breach of Implied Covenant of Good Faith and Fair Dealing) against Financial Freedom.
• Count Three (Violations of Hawaii Revised Statute (“HRS”) § 480-2) against Financial Freedom.
• Count Four (Violations of HRS § 480-2) against Defendants Certain Underwriters of Lloyd's, London (“Lloyd's”); Great Lakes Reinsurance (UK), PLC (“Great Lakes”); Seattle Specialty Insurance Services, Inc. (“Seattle Specialty”); and National General Lender Services, Inc., (“National General”).[2]
• Count Five (Tortious Interference with a Business Relationship) against Lloyd's, Great Lakes, Seattle Specialty, and National General, (construed as a claim for tortious interference with contract under Hawaii law).
• Count Six (Violations of the Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c)) against all Defendants.
• Count Seven (Violation of RICO, 18 U.S.C. § 1962(d) (conspiracy)) against all Defendants.

See ECF No. 104. Unlike the FAC, the SAC no longer alleges a violation of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601 et seq., against Financial Freedom and CIT (a claim that the March 30th Order dismissed without prejudice).

         CIT's Motion to Dismiss challenges aspects of Counts One, Two, Three, Six and Seven. ECF No. 123. Seattle Specialty and National General's Motion to Dismiss challenges the addition of National General as a Defendant, and Counts Five, Six, and Seven. ECF No. 124. Similarly, Lloyd's and Great Lakes challenge aspects of the SAC's additional allegations in Count Four, as well as Counts Five, Six, and Seven. ECF No. 125. Plaintiff filed an omnibus Opposition on August 3, 2018. ECF No. 145. Replies were filed on August 17, 2018. ECF Nos. 147, 148 & 150. The court heard the Motions on September 10, 2018. ECF No. 156.


         Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss for “failure to state a claim upon which relief can be granted[.]” A Rule 12(b)(6) dismissal is proper when there is either a “‘lack of a cognizable legal theory or the absence of sufficient facts alleged.'” UMG Recordings, Inc. v. Shelter Capital Partners, LLC, 718 F.3d 1006, 1014 (9th Cir. 2013) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)).

         Although a plaintiff need not identify the legal theories that are the basis of a pleading, see Johnson v. City of Shelby, Mississippi, 135 S.Ct. 346, 346 (2014) (per curiam), a plaintiff must nonetheless allege “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This tenet - that the court must accept as true all of the allegations contained in the complaint - “is inapplicable to legal conclusions.” Id. Accordingly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555); see also Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) (“[A]llegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.”).

         Rather, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). In other words, “the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. Factual allegations that only permit the court to infer “the mere possibility of misconduct” do not show that the pleader is entitled to relief as required by Rule 8. Iqbal, 556 U.S. at 679.


         A. CIT's ...

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