Morris v. American Reliable Insurance Company
2:14-cv-01998
D. Nev.Nov 25, 2015Background
- This case concerns a dispute over force-placed insurance (FPI) and related mortgage servicing conduct between plaintiff Morris and Green Tree (with ARIC later terminated).
- Plaintiff’s Second Amended Complaint asserts multiple contract, fraud, RESPA, and RICO-based claims arising from Green Tree’s handling of insurance and escrow during the mortgage loan tenure.
- The court previously granted in part and denied in part Green Tree’s first motion to dismiss and dismissed several claims with prejudice or without prejudice, setting limits on amendment.
- On July 22, 2015, Morris filed the SAC detailing ten claims, including multiple contract theories, conspiracy to defraud, RESPA provisions, and RICO/racketeering theories.
- Green Tree then moved to dismiss, arguing failure to state a claim under Rule 12(b)(6).
- The court’s ruling narrows which claims survive, striking new allegations not previously pleaded and allowing certain contract claims to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the first breach of contract claim survives with narrow scope | Morris asserts breach by misapplication of payments to principal. | Green Tree argues lack of independent basis beyond prior dismissal. | Survives, limited to alleged failure to apply payments to principal; new additions struck. |
| Whether the second breach of contract claim survives | Morris asserts a separate contract breach. | Green Tree disputes material breach allegations. | Survives as a valid contract claim notwithstanding pre-existing duties. |
| Whether the breach of the implied covenant and intentional misrepresentation survive | Morris pleads implied covenant breach and misrepresentation. | Green Tree seeks dismissal of newly pleaded allegations. | Both survive with new allegations struck; only preexisting pleadings tolerated. |
| Whether RESPA claims (2605-g, 2605-e, 2607(a)) survive | Morris contends RESPA violations via escrow payments, responses, and kickbacks. | Green Tree contends no viable RESPA basis; post-settlement timing issues. | 2605(g), 2605(e), and 2607(a) claims dismissed with prejudice; RESPA claim overall dismissed. |
| Whether RICO, racketeering, and racketeering conspiracy claims survive | Morris relies on kickback and related acts to support predicate acts. | Green Tree argues theories are insufficiently pleaded. | Dismissed with prejudice; all RICO/racketeering claims dismissed. |
Key Cases Cited
- Twombly, Bell Atl. Corp. v.‑, 550 U.S. 544 (U.S. 2007) (no trigger for liability without plausible claims; beyond mere conclusory statements)
- Iqbal, Ashcroft v.‑, 556 U.S. 662 (U.S. 2009) (plausibility required; factual content must support inference of liability)
- Hensel v., 896 F.2d 1542 (9th Cir. 1990) (consideration of materials outside pleadings on 12(b)(6) motions precedents)
- Branch v. Tunnell, 14 F.3d 449 (9th Cir. 1994) (unattached documents may be considered if referenced in complaint)
- Mack v. S. Bay Beer Distrib., 798 F.2d 1279 (9th Cir. 1986) (public records may be judicially noticed on motion to dismiss)
- DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655 (9th Cir. 1992) (freely giving leave to amend when justice requires; factors for denial include prejudice)