MEMORANDUM AND ORDER
MORRISON C. ENGLAND, Jr., District Judge.
Through this action Kelli Hayward ("Plaintiff") seeks redress from Bank of America, N.A. ("Defendant") due to its alleged unlawful actions in connection with her mortgage loan. Plaintiff's First Amended Complaint ("FAC") asserts ten causes of action under both federal and California state laws. FAC, ECF No. 7, at 10-16. Now before the Court is Defendant's Motion to Dismiss and/or Strike ("Defendant's Motion"), brought pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f),
For the reasons set forth below, Defendant's Motion is DENIED.
In January 2009, Plaintiff and her husband secured a $251,000 loan to purchase the home located at 14636 Cloverdale Road, Anderson, California ("Subject Property"). FAC ¶¶ 1, 5, 17. Plaintiff's husband died later that year, but she continued to live in the home until September 2013, when it was completely destroyed by the Clover Wildfire. FAC ¶¶ 1, 21.
On November 1, 2013, Plaintiff's home insurance company issued a check made payable to both Plaintiff and Defendant in the amount of $464,401.30 (the "Insurance Check") for the losses associated with the destruction of the Subject Property. FAC ¶¶ 23-24; FAC, ECF No. 7-1, Ex. C. Defendant subsequently provided Plaintiff a payoff statement indicating that Plaintiff owed $280,903.03 on the Subject Property's loan as of November 15, 2013 ("2013 Payoff Statement").
Furthermore, Plaintiff alleges that despite her repeated explanations that her loan was paid by the Insurance Check, Defendant relentlessly pursued payment via collection calls and letters. FAC ¶ 4. Plaintiff claims that Defendant ignored her demands that the residual insurance money be returned, as well as her requests to discontinue the collection calls. FAC ¶ 4. Plaintiff alleges that she has received in excess of 1,000 such calls to two different cellular telephone numbers. FAC ¶ 33. Plaintiff further alleges that Defendant assessed additional fees on the loan for inspecting and appraising the Subject Property over the past three years, despite the fact that the house was never rebuilt. FAC ¶ 3.
Defendant provided a second payoff statement on November 16, 2016 ("2016 Payoff Statement"), indicating that Plaintiff owed $332,216.67 on her loan as a result of additional fees and accrued interest. FAC, Ex. D. The 2016 Payoff Statement also indicated that the loan is in foreclosure, and Plaintiff claims that Defendant has initiated foreclosure proceedings on the Subject Property. FAC ¶ 4, Ex. D. Plaintiff provides that she felt frustrated, angry, and helpless as a result of Defendant's actions, and that the unrelenting, repetitious calls disrupted her daily activities and the peaceful enjoyment of her personal life. FAC ¶ 48.
Plaintiff filed her original Complaint on December 29, 2016, bringing six causes of action. Compl., ECF No. 1. She filed her FAC on March 13, 2017, bringing four additional causes of action, to include an IIED claim and requests for punitive damages. FAC at 14-16. Defendant filed its Motion on April 3, 2017, moving to dismiss Plaintiff's IIED claim and to strike references to punitive damages in the FAC.
A. Motion to Dismiss
On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party.
Furthermore, "Rule 8(a)(2) . . . requires a showing, rather than a blanket assertion, of entitlement to relief."
A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Leave to amend should be "freely given" where there is no "undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment . . . ."
B. Motion to Strike
The Court may strike "from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "[T]he function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial. . . ."
A. Motion to Dismiss the IIED Claim
Defendant moves to dismiss Plaintiff's IIED claim on the grounds that: (1) Plaintiff relies solely on conclusory allegations to support her claim; and (2) even taking Plaintiff's allegations as true, Defendant's actions were not sufficiently extreme or outrageous to support an IIED claim. Def.'s Mot. at 2:3-8, 7:17-21, 11:9-13.
To prevail on a claim for IIED, Plaintiff must show: (1) extreme and outrageous conduct by the Defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) resulting severe or extreme emotional distress by the Plaintiff; and (3) actual and proximate causation of the emotional distress by the Defendant's outrageous conduct.
Plaintiff provides sufficient facts to support her IIIED claim. Plaintiff asserts that Defendant relentlessly harassed her with collection calls, and that her multiple requests for the calls to cease went unheeded. FAC ¶ 3. Plaintiff alleges that she received in excess of 1,000 collection calls in the three years subsequent to the Insurance Check being deposited with Defendant. FAC ¶¶ 16, 30, 33. Plaintiff claims that these calls were harassing and repetitive, which frustrated her to such an extent that she began to ignore her phone calls, causing her to miss communications from friends and family. FAC ¶¶ 31, 38. She alleges that she felt frustrated, angry, and helpless because of Defendant's calls, and that her daily activities and peaceful enjoyment of her personal life was impacted as a result. FAC ¶ 48. These factual allegations suffice to meet the general pleading standards of Rule 8(a)(2) and raise Plaintiff's IIED claim well beyond the speculative level.
Defendant's second contention is that its alleged conduct did not rise to the requisite level of outrageousness to support an IIED claim. Def.'s Mot. at 12:22-26. The Court again disagrees. Taking Plaintiff's allegations as true, she provides that after losing her home in a catastrophic wildfire, she gave $464,401.30 in home insurance proceeds to Defendant to pay off a loan that did not exceed $280,903.03. FAC ¶¶ 24-25. Defendant, in turn, allegedly kept nearly all of these proceeds, failed to credit any money to Plaintiff's loan, inflated the principal owed on her loan by over $51,000, initiated aggressive collection actions against Plaintiff, and put her loan in foreclosure. FAC ¶¶ 3-4, 28, 33, Ex. D. These alleged actions, considered as a whole, suggest a level of outrageousness that this Court has rarely seen in similar situations.
Defendant nonetheless relies on several cases to support the argument that its actions were not extreme or outrageous. Def.'s Mot. at 13:23-24, 13:27-28. This reliance is misplaced, however, as the cited cases involve instances where debts were legitimately owed.
The Court finds that Plaintiff's allegations of extreme and/or outrageous conduct suffice for pleading purposes. Thus, Defendant's motion to dismiss Plaintiff's IIED claim is DENIED.
B. Motion to Strike the Request for Punitive Damages
Defendant additionally moves to strike Plaintiff's request for punitive damages pursuant to Rule 12(f). Def.'s Mot. at 2:9-27. Rule 12(f), however, is the improper vehicle by which to attack damages allegations.
Defendant's contentions against the request for punitive damages are based largely on the same grounds as those made against the IIED claim: that Plaintiff improperly relies upon unsupported conclusory allegations. Def.'s Mot. at 15:5-8. The Court once more disagrees. Under California law, "where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant." Cal. Civil Code § 3294(a). Malice is defined as "despicable conduct" done with a "willful and conscious disregard of the rights or safety of others," and oppression is defined as "despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights."
As discussed above, Plaintiff has pled sufficient facts to show that Defendant's actions, if true, may have been extreme or outrageous for the purposes of an IIED claim. Courts in this district have found that a valid state law claim for IIED can form the basis for recovery of punitive damages.
The Court finds that Plaintiff's factual allegations in the FAC suffice to show that Defendant's actions may have constituted oppression, malice, or fraud within the meaning of § 3294 such that punitive damages may be warranted. Therefore, Defendant's motion to dismiss Plaintiff's claims for punitive damages is DENIED.
For the reasons set forth above, Defendant's Motion to Dismiss and/or Strike, (ECF No. 10), is DENIED.
IT IS SO ORDERED.