United Guaranty Mortgage Indemnity Co. v. Countrywide Financial Corp.

ORDER Granting Motions to Dismiss the Amended Complaint

In this mortgage insurance case, an insurer (“United Guaranty”) sues two affiliated mortgage companies (collectively, “Countrywide”; separately, “Countrywide Financial” and “Countrywide Home”) and a mortgage securitization trustee (“BNY Trust”).

The original complaint asserted contract, tort, and statutory claims. Countrywide and BNY Trust moved to dismiss the original complaint. The claims for breach of contract and breach of implied covenant survived. The other claims were dismissed with leave to amend, primarily for failure to overcome the economic loss rule, which generally bars tort claims for contractual breaches.

United Guaranty then filed the Amended Complaint (“AC”). Now before the Court are motions to dismiss the tort and statutory claims reasserted in the AC. The motions are granted in their entirety.

I.

BACKGROUND

A. Procedural posture.

This insurance dispute has generated three court cases and several arbitrations. Two of the cases are pending before this Court.

United Guaranty filed the present case in this Court. The other case was filed by Countrywide in California state court; United Guaranty…