Thrivent Financial for Lutherans et al v. Countrywide Financial Corporation et al

REPLY in support of MOTION to Dismiss Plaintiffs' Amended Complaint 175

C.D. Cal.May 4, 2012

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COUNTRYWIDE DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT CASE NO. 11-CV-07154-MRP Brian E. Pastuszenski (pro hac vice) bpastuszenski@goodwinprocter.com Inez Friedman-Boyce (pro hac vice) ifriedmanboyce@goodwinprocter.com Brian C. Devine (SBN 222240) bdevine@goodwinprocter.com Caroline H. Bullerjahn (pro hac vice) cbullerjahn@goodwinprocter.com GOODWIN PROCTER LLP Exchange Place Boston, MA 02109-2802 Tel.: 617-570-1000 Fax: 617-570-1231 Attorneys for Defendants Countrywide Financial Corporation, Countrywide Home Loans, Inc., Countrywide Home Loans Servicing LP, Countrywide Capital Markets, LLC, Countrywide Securities Corporation, CWALT, Inc., CWABS, Inc., CWHEQ, Inc., and CWMBS, Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA IN re COUNTRYWIDE FINANCIAL CORP. MORTGAGE-BACKED SECURITIES LITIGATION Case No. 11-ML-02265-MRP (MANx) COUNTRYWIDE DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT Date/Time: May 17, 2012 / 11:00 a.m. Courtroom: 12 Judge: Hon. Mariana R. Pfaelzer THRIVENT FINANCIAL FOR LUTHERANS, et al., Plaintiffs, v. COUNTRYWIDE FINANCIAL CORPORATION, et al., Defendants. Case No. 11-CV-07154-MRP (MANx) Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 1 of 8 Page ID #:8801 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 COUNTRYWIDE DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT CASE NO. 11-CV-07154-MRP ARGUMENT In its February 17, 2012 order, this Court dismissed as inadequately pled the following claims in this case without prejudice: (1) fraudulent misrepresentation, reckless misrepresentation, and fraudulent inducement claims that concern title transfer allegations; (2) aiding and abetting fraud claims against all Defendants; and (3) negligent misrepresentation claims against all Defendants. See Order re: Motions to Dismiss, dated February 17, 2012, Docket No. 170 (“Dismissal Order”), at 9-12. Plaintiffs’ decision not to amend these deficient claims (see Amended Complaint (“AC”) at 1 n.1) warrants that they now be dismissed with prejudice. See Pratts v. Sujan, 176 F.3d 484, 1999 WL 274662, at *1 (9th Cir. Apr. 23, 1999) (unpublished); London v. Coopers & Lybrand, 644 F.2d 811, 814 (9th Cir. 1981); accord Dietz v. Beneficial Loan & Thrift Co., 2011 WL 6739504, at *3 (D. Minn. Dec. 22, 2011). Plaintiffs do not dispute this, merely incorporating by reference “all of [the] arguments set forth in [their] opposition to Defendants’ initial motions to dismiss”- arguments that this Court has already considered and rejected in its Dismissal Order. See Opp. at 1; Dismissal Order at 9-10 (title transfer claims), 10-11 (aiding and abetting claims), and 11-12 (negligent misrepresentation claims).1 Having failed even to attempt to cure the deficiencies this Court identified in its Dismissal Order, Plaintiffs implicitly have conceded that these claims should be dismissed now with prejudice. See In re Century Aluminum Co. Sec. Litig., 2011 WL 830174, at *6, *8 (N.D. Cal. Mar. 3, 2011) (dismissing plaintiffs’ Section 11 claim with prejudice when “[p]laintiffs were given the opportunity to, but failed to explain in their TAC how they intended to trace their shares to the Secondary Offering” and “spen[t] the vast majority of their Opposition explaining why th[e] Court’s Order” requiring 1 Plaintiffs also state that they “reserve[] all appellate rights with respect to these claims, including the right to argue that the [Dismissal] Order was decided incorrectly.” Opp. at 1-2. Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 2 of 8 Page ID #:8802 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 COUNTRYWIDE DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT CASE NO. 11-CV-07154-MRP such allegations was wrong rather than “providing the Court with facts explaining how they will trace their purchases”); O. Thronas, Inc. v. Blake, 2010 WL 3185118, at *6, *9 (D. Haw. Aug. 10, 2010) (dismissing plaintiffs’ RICO claim with prejudice when “[p]laintiffs [] failed to cure the deficiencies in their complaint” and “raise[d] essentially the same arguments in their opposition to Defendants’ newest motion to dismiss”). CONCLUSION For all the reasons set forth above, the Countrywide Defendants respectfully request that the Court dismiss with prejudice Plaintiffs’ fraudulent misrepresentation, reckless misrepresentation, and fraudulent inducement claims based on title transfer allegations, as well as Plaintiffs’ negligent misrepresentation and aiding and abetting claims. Dated: May 4, 2012 GOODWIN PROCTER LLP /s/ Brian E. Pastuszenski___________________ Brian E. Pastuszenski (pro hac vice) Inez H. Friedman-Boyce (pro hac vice) Brian C. Devine (State Bar No. 222240) Caroline H. Bullerjahn (pro hac vice) Counsel for the Countrywide Defendants Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 3 of 8 Page ID #:8803 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE CASE NO. 11-CV-07154-MRP Brian E. Pastuszenski (pro hac vice) bpastuszenski@goodwinprocter.com Inez H. Friedman-Boyce (pro hac vice) ifriedmanboyce@goodwinprocter.com Brian C. Devine (SBN# 222240) bdevine@goodwinprocter.com Caroline H. Bullerjahn (pro hac vice) cbullerjahn@goodwinprocter.com GOODWIN PROCTER LLP 53 State Street Boston, MA 02109 Tel.: 617-570-1000 Fax: 617-523-1231 Attorneys for Defendants: Countrywide Financial Corporation, Countrywide Home Loans, Inc., Countrywide Home Loans Servicing LP, Countrywide Capital Markets, LLC, Countrywide Securities Corp., CWALT, Inc., CWABS, Inc., CWHEQ, Inc., and CWMBS, Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA IN re COUNTRYWIDE FINANCIAL CORP. MORTGAGE-BACKED SECURITIES LITIGATION Case No. 11-ML-02265-MRP (MANx) PROOF OF SERVICE Date: May 17, 2012 Time: 11:00 a.m. Courtroom: 12 Judge: Hon. Mariana R. Pfaelzer THRIVENT FINANCIAL FOR LUTHERANS, et al., Plaintiffs, v. COUNTRYWIDE FINANCIAL CORPORATION, et al., Defendants. Case No. 11-07154-MRP (MANx) Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 4 of 8 Page ID #:8804 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 PROOF OF SERVICE CASE NO. 11-CV-07154-MRP PROOF OF SERVICE I, Mayrav Herman, declare: I am employed in San Francisco County California. I am over the age of 18 and not a party to the within action. My business address is Three Embarcadero Center, San Francisco, CA 94111. On May 4, 2012, I served the following document on the persons listed on the service list as follows: COUNTRYWIDE DEFENDANTS’ REPLY MEMORANDUM IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT (MAIL) I placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this firm’s practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I am a resident or employed in the county where the mailing occurred. The envelope or package was placed in the mail at San Francisco, California. (OVERNIGHT DELIVERY) I deposited in a box or other facility regularly maintained by Federal Express , an express service carrier, or delivered to a courier or driver authorized by said express service carrier to receive documents, a true copy of the foregoing document in sealed envelopes or packages designated by the express service carrier, addressed as stated above, with fees for overnight delivery paid or provided for. (MESSENGER SERVICE) I served the documents by placing them in an envelope or package addressed to the persons at the addresses listed and provided them to a professional messenger service for service. A separate Personal Proof of Service provided by the professional messenger service will be filed under separate cover. (FACSIMILE) Based on an agreement of the parties to accept service by fax transmission, I faxed the documents to the persons at the fax numbers listed. No error was reported by the fax machine that I used. A copy of the record of the fax transmission, which I printed out, is attached. (E-MAIL or ELECTRONIC TRANSMISSION) Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the documents to be sent to the persons at the e-mail addresses listed. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 5 of 8 Page ID #:8805 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 PROOF OF SERVICE CASE NO. 11-CV-07154-MRP (CM/ECF Electronic Filing) I caused the above document(s) to be transmitted to the office(s) of the addressee(s) listed above by electronic mail at the e-mail address(es) set forth above pursuant to Fed.R.Civ.P.5(d)(1). “A Notice of Electronic Filing (NEF) is generated automatically by the ECF system upon completion of an electronic filing. The NEF, when e-mailed to the e-mail address of record in the case, shall constitute the proof of service as required by Fed.R.Civ.P.5(d)(1). A copy of the NEF shall be attached to any document served in the traditional manner upon any party appearing pro se.” I declare under penalty of perjury that I am employed in the office of a member of the bar of this Court at whose direction this service was made and that the foregoing is true and correct. Executed on May 4, 2012, at San Francisco, California. Mayrav Herman (Type or print name) (Signature) Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 6 of 8 Page ID #:8806 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 PROOF OF SERVICE CASE NO. 11-CV-07154-MRP SERVICE LIST Blair A. Nicholas Timothy A. DeLange Brett M. Middleton Joseph William Goodman Bernstein Litowitz Berger & Grossmann LLP 12481 High Bluff Drive Suite 300 San Diego, CA 92130 Telephone: 858-793-0070 Facsimile: 858-793-0323 blairn@blbglaw.com timothyd@blbglaw.com brettm@blbglaw.com joseph.goodman@blbglaw.com Bruce D. Bernstein David L. Wales Gerald H. Silk Jai K. Chandrasekhar Lauren A. McMillen Bernstein Litowitz Berger & Grossmann LLP 1285 Avenue of the Americas 38th Floor New York, NY 10019 Telephone: 212554-1400 Facsimile: 212-554-1444 bruce@blbglaw.com dwales@blbglaw.com jerry@blbglaw.com jai@blbglaw.com lauren@blbglaw.com Attorneys for Plaintiffs Thrivent Financial For Lutherans; Thrivent Life Insurance Company; Thrivent Limited Maturity Bond Portfolio; Thrivent Financial For Lutherans Foundation; Thrivent Mutual Funds; and Thrivent Variable Annuity Portfolio Funds Matthew W. Close O’Melveny and Myers LLP 400 South Hope Street, 18th Floor Los Angeles, CA 90071 Telephone: 212-430-6000 Facsimile: 213-430-6407 mclose@omm.com Bradley J. Butwin William J. Sushon Jonathan Rosenberg O’Melveny & Myers 7 Times Square Attorneys for Defendant Bank of America Corporation; NB Holdings Corporation; and Bank of America, N.A., as successor by July 1, 2011 de jure merger to BAC Home Loans Servicing, LP (named herein as BAC Home Loans Servicing, LP) Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 7 of 8 Page ID #:8807 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PROOF OF SERVICE CASE NO. 11-CV-07154-MRP New York, NY 10036 Telephone: 212-326-2000 Facsimile: 212-326-2061 bbutwin@omm.com wsushon@omm.com jrosenberg@omm.com A. Matthew Ashley Allison L. Libeu Irell & Manella LLP 840 Newport Center Drive Suite 400 Newport Beach, CA 92660 Telephone: 949-760-0991 Facsimile: 949-760-5200 mashley@irell.com alibeu@irell.com David Siegel Mytili Gowri Bala Irell & Manella LLP 1800 Avenue of the Stars Suite 900 Los Angeles, CA 90067 Telephone: 310-277-1010 Facsimile: 310-203-7199 dsiegel@irell.com mbala@irell.com Attorneys for Defendant Angelo Mozilo Frank M. Scaduto Michael D. Torpey Orrick Herrington & Sutcliffe LLP The Orrick Building 405 Howard Street San Francisco, CA 94105 Telephone: 415-773-5700 Facsimile: 415-773-5759 fscaduto@orrick.com mtorpey@orrick.com Michael C. Tu Orrick Herrington & Sutcliffe LLP 777 South Figueroa Street Suite 3200 Los Angeles, CA 90017 Telephone: 213-629-2020 Facsimile: 213-612-2499 mtu@orrick.com Attorneys for Defendant David A. Sambol Case 2:11-cv-07154-MRP-MAN Document 187 Filed 05/04/12 Page 8 of 8 Page ID #:8808