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Footbridge Ltd. Trust v. Countrywide Home Loans, Inc.

Footbridge Ltd. Trust v. Countrywide Home Loans, Inc.

United States District Court for the Southern District of New York

September 28, 2010, Decided; September 28, 2010, Filed

09 Civ. 4050 (PKC)

Opinion

MEMORANDUM AND ORDER

P. KEVIN CASTEL, District Judge:

Plaintiffs Footbridge Limited Trust and OHP Opportunity  [*3] Limited Trust (the "Funds") assert claims for violations of section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (the "Exchange Act") and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5, and a state-law claim for common-law fraud. The claims arise out of plaintiffs' purchase of mortgage-backed securities ("MBS") from Countrywide through two public offerings (the "Securitizations"). Defendants move to strike certain portions of the Second Amended Complaint (the "SAC"). Defendants also move to dismiss the SAC under Rules 9(b) and 12(b)(6), Fed. R. Civ. P. For the reasons stated below, defendants' motion to strike is granted in part and denied in part and the motion to dismiss (Docket No. 37) is granted.

BACKGROUND

I. Factual History

The facts below are taken from the SAC. Non-conclusory factual allegations are taken as true for purposes of this motion. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50, 173 L. Ed. 2d 868 (2009).

1. The Parties

Plaintiff Footbridge Limited Trust ("Footbridge") is a Bermuda Trust with a principal place of business in Connecticut. (SAC ¶ 9.) Plaintiff OHP Opportunity Limited Trust ("OHP") is a Bermuda Trust with a principal place of business in Connecticut. (Id. ¶ 10.) Plaintiffs  [*4] are investment funds managed by Old Hill Partners, Inc. ("Old Hill"), a Delaware corporation whose principal place of business is not alleged. (Id. ¶ 11.) Old Hill acts as an investment manager for Footbridge and OHP and makes investment decisions on their behalf. (Id.)

Defendant Countrywide Financial Corporation ("CFC") is a Delaware corporation with its principal place of business in California. (Id. ¶ 12.) "CFC, itself or through its subsidiaries, writes, sells, and services single-family home mortgages, home equity loans, commercial mortgages, and subprime mortgages. It also buys and sells mortgages, offers asset management and brokerage services, and provides insurance products." (Id.)

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2010 U.S. Dist. LEXIS 102134 *; 2010 WL 3790810

FOOTBRIDGE LIMITED TRUST AND OHP OPPORTUNITY LIMITED TRUST, Plaintiffs, -against- COUNTRYWIDE HOME LOANS, INC., COUNTRYWIDE HOME LOANS SERVICING LP, COUNTRYWIDE SECURITIES CORP., CWABS, INC., CWABS ASSET-BACKED CERTIFICATES TRUST 2006-SPS1, CWABS ASSET-BACKED CERTIFICATES TRUST 2006-SPS2, ANGELO R. MOZILO, DAVID SAMBOL, BANK OF AMERICA CORP. AND BAC HOME LOANS SERVICING, LP, Defendants.

Subsequent History: Related proceeding at Footbridge Ltd. Trust v. Countrywide Fin. Corp., 2011 U.S. Dist. LEXIS 27067 (S.D.N.Y., Mar. 15, 2011)

Prior History: Footbridge Ltd. Trust v. Countrywide Home Loans, Inc., 2009 U.S. Dist. LEXIS 112644 (S.D.N.Y., Nov. 20, 2009)

CORE TERMS

Securitizations, alleges, loans, mortgage loan, underwriting, documents, borrowers, offering, scienter, guidelines, plaintiffs', origination, misrepresentations, mortgage, default, fails, particularity, properties, Certificates, delinquent, omissions, investors, alleged facts, representations, misstatements, fraudulent, defendants', flexible, motion to dismiss, loan application

Civil Procedure, Defenses, Demurrers & Objections, Motions to Strike, General Overview, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Securities Law, Postoffering & Secondary Distributions, Securities Exchange Act of 1934 Actions, Heightened Pleading Requirements, Heightened Pleading Requirements, Fraud Claims, Elements of Proof, Scienter, Pleading & Practice, Motion Practice, Implied Private Rights of Action, Deceptive & Manipulative Devices, Motive & Opportunity, Causation, Civil Liability Considerations, Securities Litigation Reform & Standards, Group Pleading Doctrine, Materiality, Puffery, Secondary Liability, Controlling Persons, Elements of Proof, Torts, Fraud & Misrepresentation, Actual Fraud, Elements