The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Sterling Federal Bank, F.S.B. ("Sterling") filed a Second Amended Complaint against Credit Suisse First Boston Corporation, a/k/a Credit Suisse Securities (USA) LLC ("Credit Suisse"), Credit Suisse First Boston Mortgage Securities Corp. ("Credit Suisse Mortgage"), DLJ Mortgage Capital, Inc. ("DLJ"), Select Portfolio Servicing, Inc. ("Select"), and Bank of New York based on its purchase of security certificates issued by Credit Suisse Mortgage. Defendants Credit Suisse, Credit Suisse Mortgage, DLJ, and Select (hereinafter collectively referred to as the "Credit Suisse Defendants") move to dismiss  Counts I (negligent misrepresentation against Credit Suisse), II (false information negligently supplied against Credit Suisse), III (common law fraud against Credit Suisse), IV (breach of fiduciary duty against Credit Suisse), V (negligent misrepresentation against Credit Suisse Mortgage), VI (false information negligently supplied against Credit Suisse Mortgage), VII (common law fraud against Credit Suisse Mortgage), VIII (breach of contract against DLJ), IX (breach of fiduciary duty against Select), X-XII (breach of contract against Select), and XVI (civil conspiracy against all Defendants). Defendant Bank of New York moves to dismiss  Counts XIII-XIV (breach of contract), XV (breach of fiduciary duty), and XVI (civil conspiracy). For the following reasons, the Court grants in part and denies in part the Credit Suisse Defendants' motion to dismiss and grants in part and denies in part Bank of New York's motion to dismiss.
This case concerns the purchase by Plaintiff Sterling of securities that later declined in value because of problems with the mortgages that served as collateral for the securities. Plaintiff Sterling is a federal savings bank chartered under the laws of the United States, with its principal place of business in Sterling, Illinois. Credit Suisse is a Delaware corporation, with its principal place of business in New York, New York. Credit Suisse is a securities broker-dealer registered with, and licensed to do business in, the State of Illinois. Credit Suisse also is registered with the United States Securities and Exchange Commission ("SEC") and the National Association of Securities Dealers, Inc. ("NASD"). As such, Credit Suisse is subject both to the laws of the United States and the State of Illinois, and to the pertinent rules and regulations promulgated by the SEC. Credit Suisse Mortgage, DLJ, and Select are affiliates of Credit Suisse. Both Credit Suisse Mortgage and DLJ are Delaware corporations, each of which has its principal place of business in New York, New York. Select is a Utah Corporation, with its principal place of business in Salt Lake City, Utah. Bank of New York is a commercial bank chartered under the laws of New York and has its principal place of business in New York, New York.
On November 29, 2001, Credit Suisse Mortgage issued a series of Mortgage-Backed Pass-Through Certificates (the "Certificates"), titled Series 2001-28. The Certificates were collateralized by pools of sub-prime residential real estate mortgages, located in Illinois and elsewhere, which DLJ had purchased and later sold to Credit Suisse Mortgage.*fn2 On November 30, 2001, Credit Suisse purchased the Certificates from Credit Suisse Mortgage in order to sell individual bundles ("tranches") of the Certificates to purchasers on the open market. In order to facilitate the sale of the Certificates, Credit Suisse published a Prospectus and a Prospectus Supplement, on October 23, 2001, and November 29, 2001, respectively. Both of those documents were prepared and issued with the input, advice, and consent of DLJ, Credit Suisse Mortgage, Vesta Servicing, L.P. ("Vesta," a predecessor in interest to Select), and Bank One National Association as trustee ("Bank One," a predecessor in interest to Bank of New York).
The Prospectus Supplement provided that "[n]o mortgage loan [included in the pool collateralizing the Certificates] will be delinquent more than 30 days as of the cut-off date," which was defined in the Prospectus Supplement as November 1, 2001. It further provided that in the event of a breach of any representation or warranty relating to a mortgage loan that materially and adversely affects the interest of the certificateholders in that mortgage loan, the seller of that mortgage loan would be obligated to do one of the following: "(i) cure that breach; (ii) repurchase that mortgage loan * * *; or (iii) substitute a replacement mortgage loan for that mortgage loan within two years of the closing date." Additionally, it stated that credit support would be provided by over-collateralization of $2,286,915.00, which would be properly administered. Finally, the document provided that fraudulent mortgage loans would be put back to DLJ, that the mortgage loans would be properly serviced, and that insurance claims would be properly filed and pursued.
Credit Suisse Mortgage took additional steps in order to facilitate the sale of the Certificates. On October 23, 2001, it created a trust to hold the Certificates for the benefit of certificateholders, to be administered by Bank One as trustee. Credit Suisse Mortgage also acquired a level mortgage guaranty insurance policy for the benefit of the trust loan. On November 1, 2001, Credit Suisse Mortgage entered into a Pooling and Servicing Agreement (the "PSA") with, among others, DLJ, Vesta, and Bank One as trustee. In that agreement, DLJ warranted that, with respect to any mortgage loan covered by the PSA, (i) all payments due prior to the cut-off date (November 1, 2001) for such Mortgage Loan had been made as of the Closing Date (November 30, 2001); (ii) the Mortgage Loan was not delinquent in payment more than thirty days; and (iii) there were no material defaults under the terms of the Mortgage Loan. Additionally, the PSA stated that "[n]o fraud, error, omission, misrepresentation, negligence, or similar occurrence with respect to a Mortgage Loan has taken place on the part of Seller or the Mortgagor, or to the best of the Seller's knowledge, on the part of any other party involved in the origination of the Mortgage Loan." Upon discovery of any breach of a representation or warranty that materially and adversely affects the interests of any certificateholder, the PSA required the Seller (DLJ) to cure the breach. However, if the breach occurred prior to the second anniversary of the Closing Date, the Seller (DLJ) would have the option of either supplying a substitute mortgage loan for the loan that caused the breach or repurchasing the subject mortgage loan.
The instant lawsuit has arisen from Plaintiff's purchase of tranches of the Certificates, including the tranches identified as Security I-B-1, in December 2002 and January 2003.*fn3 After Plaintiff's purchase, Security I-B-1 suffered a series of rating downgrades from Moody's Rating Service, beginning in January 2005.*fn4 Plaintiff alleges that the rating downgrades were the fault of the Defendants. Specifically, Plaintiff contends that the Prospectus, Prospectus Supplement, and PSA contained information that several Defendants knew or should have known was materially false. Because Plaintiff relied heavily upon those documents in deciding whether to purchase the tranches, Plaintiff asserts that it was materially misled. Plaintiff also alleges that several of the Defendants failed to fulfill obligations required of them by those documents.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint, not the merits of the suit.See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). To survive a Rule 12(b)(6) motion to dismiss, the complaint first must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1969 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level," assuming that all of the allegations in the complaint are true. E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Bell Atlantic, 127 S.Ct. at 1965, 1973 n.14). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic, 127 S.Ct. at 1969. The Court accepts as true all of the well-pleaded facts alleged by the plaintiff and all reasonable inferences that can be drawn therefrom. See Barnes v. Briley, 420 F.3d 673, 677 (7th Cir. 2005).
Rule 9(b) of the Federal Rules of Civil Procedure creates exceptions to the federal regime of notice pleading and specifies that, for "all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed. R. Civ. P. 9(b); see also Borsellino v. Goldman Sachs Group, Inc., 477 F.3d 502, 507 (7th Cir. 2007). "Read together, Rule 9(b) and Rule 8 require that the complaint include the time, place and contents of the alleged fraud, but the complainant need not plead evidence." Amakua Development LLC v. Warner, 411 F. Supp. 2d 941, 947 (N.D. Ill. 2006) (citing Nissan Motor Acceptance Corp. v. Schaumburg Nissan, Inc., 1993 WL 360426, at *3 (N.D. Ill. Sept. 15, 1993)). In other words, the complaint must allege the "the who, what, when, where, and how: the first paragraph of a newspaper story." Borsellino, 477 F.3d at 507 (quoting DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990)). Plaintiff's fraud claims (Counts III and VII) will be viewed under that standard.
Finally, "before entangling itself in messy issues of conflict of laws a court ought to satisfy itself that there actually is a difference between the relevant laws of the different states." Barron v. Ford Motor Co., 965 F.2d 195, 197 (7th Cir. 1992). Recognizing the wisdom of the Seventh Circuit's advice, the Illinois Supreme Court has stressed that "[a] choice-of-law determination is required only when a difference in law will make a difference in the outcome." Townsend v. Sears Roebuck & Co., 227 Ill. 2d 147, 155 (2007) (quoting Barron, 965 F.2d at 197); see also Dow v. Abercrombie & Kent Int'l, Inc., 2000 WL 688949, at *1 n.1 (N.D. Ill. May 24, 2000). In this case, the parties appear to agree that the applicable legal standards are the same whether the Court applies Illinois law or New York law.
III. The Credit Suisse Defendants' Motion to Dismiss
A. Counts I & V: Negligent Misrepresentation against Credit Suisse and Credit Suisse Mortgage
Plaintiff alleges that Credit Suisse and Credit Suisse Mortgage committed negligent misrepresentation through the inclusion in the Prospectus Supplement of the statement "[n]o mortgage loan will be delinquent more than 30 days as of the cut-off date."*fn5 Plaintiff also contends that Credit Suisse and Credit Suisse Mortgage erred in failing to "sticker" (an industry term meaning "update") the documents available to and relied upon by the investing public to reflect negative information regarding Security I-B-1's underlying mortgage pool.
In order to state a claim for negligent misrepresentation under New York law, a plaintiff must demonstrate "(1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information." J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y.3d 144, 148 (2007). Where no actual privity exists, a plaintiff must prove "(1) an awareness by the maker of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the statement in furtherance of that purpose; and (3) some conduct by the maker of the statement linking it to the relying party and evincing its understanding of that reliance." Wey v. N.Y. Stock Exchange, 2007 WL 1238596, at *7 (N.Y. Sup. Ct. April 10, 2007) (quoting Parrot v. Coopers & Lybrand, LLP, 95 N.Y.2d 479, 484 (2000)).
Defendants Credit Suisse and Credit Suisse Mortgage argue that Plaintiff's negligent misrepresentation claims fail under New York law because the Second Amended Complaint contains no allegations of a special or privity-like relationship between Plaintiff and Defendants. Plaintiff, however, has made the necessary factual assertions to "plausibly suggest" that it is entitled to relief on its negligent misrepresentation claims under New York law. Plaintiff states that Defendants "should have known that third party purchasers would rely on the information in the Prospectus Supplement when purchasing the Certificates or any part thereof." [53 at ¶ 21.] In fact, Plaintiff explains that the Prospectus Supplement specifically instructed potential investors: "You should rely on the information contained in this document or to which we have referred you in this prospectus supplement. We have not authorized anyone to provide you with information that is different." Plaintiff also asserts that it "reasonably and justifiably" relied on the statements included in the Prospectus Supplement and that it would not have purchased the securities if it had been provided with accurate statements. Those assertions are sufficient because they suggest that: (1) Defendants Credit Suisse and Credit Suisse Mortgage knew that the Prospectus Supplement would be used for the particular purpose of making investment decisions regarding the Certificates; (2) Plaintiff, a known party as a member of the investing public, reasonably relied upon the false statement in deciding to purchase Security I-B-1; and (3) the Credit Suisse Defendants linked themselves to Plaintiff and other investors by including in the Prospectus Supplement an explicit instruction to investors that they should rely exclusively upon the information provided by Defendants when making investment decisions regarding the securities, which evinced an understanding that the information would be relied upon for that particular purpose.
Illinois law requires that a plaintiff claiming negligent misrepresentation plead and prove:
(1) a false statement of material fact, (2) carelessness or negligence in ascertaining the truth of the statement by the party making it, (3) an intention to induce the other party to act, (4) action by the other party in reliance on the truth of the statement, and (5) damage to the other party resulting from such reliance, (6) when the party making the statement is under a duty to communicate accurate information.
Quinn v. McGraw-Hill Companies, Inc., 168 F.3d 331, 335 (7th Cir. 1999). Illinois law does not require privity for claims of negligent misrepresentation, instead obliging a plaintiff to show that "the defendant knew the information would be used and relied upon and the potential liability was restricted to a comparatively small group." C.C. Indus., Inc. v. ING/Reliastar Life Ins. Co., 266 F. Supp. 2d 813 (N.D. Ill. 2003).
Defendants Credit Suisse and Credit Suisse Mortgage argue that Plaintiff's negligent misrepresentation claims fail under Illinois law, because the Second Amended Complaint does not assert that Sterling was a member of a "small group" that the Defendants knew of and intended to reach. In fact, the Second Amended Complaint does contain just such an assertion, although the relevant language is included under other claims. Under its claims for "false information negligently supplied for the guidance of others," Plaintiff alleges that "Sterling is one of a limited group of persons for whose benefit and guidance [Credit Suisse and Credit Suisse Mortgage] intended to supply the information contained in the prospectus and the Prospectus Supplement." That language is enough to satisfy the federal pleading requirements set forth in Bell Atlantic,as it gives fair notice of the facts upon which Plaintiff makes its negligent misrepresentation claim and brings Plaintiff's possibility of relief above a speculative level. See Bell Atlantic, 127 S.Ct. at 1964-65. Defendants' argument that the group to which Plaintiff refers cannot properly be considered a "small" group reaches beyond the scope of the sufficiency of the pleading to the merits of Plaintiff's claim and cannot be considered at this juncture.
Defendants also contend that Plaintiff's negligent misrepresentation claims fail, under either New York or Illinois law, because the Second Amended Complaint contains no factual allegations that would demonstrate actual reliance. However, a detailed examination of the complaint shows otherwise. As Plaintiff pointed out in its response, there are multiple instances within the Second Amended Complaint in which Plaintiff states that it "reasonably and justifiably relied on misrepresentations made by [the Credit Suisse Defendants], or the misrepresentations [the Credit Suisse Defendants] made by omission, in deciding to purchase Security I-B-1." Defendants further argue that any statements to that effect are insufficient without an explicit allegation that Plaintiff received and reviewed the Prospectus and Prospectus Supplement prior to its purchase of the securities. The Federal Rules of Civil Procedure, however, only require Plaintiff to provide "a short and plain statement," and at this stage the Court must take all of the allegations in Plaintiff's Second Amended Complaint as true. See Fed. R. Civ. P. 8(a)(2); Barnes, 420 F.3d at 677. Because Plaintiff alleged reliance, and because reading the Prospectus Supplement is an implicit prerequisite to reliance on any statement contained therein, Plaintiff has met its burden.
The Credit Suisse Defendants present two final arguments regarding Plaintiff's negligent misrepresentation claims: (i) the claims must fail because any reliance upon the Prospectus Supplement would be unreasonable, and (ii) the claims cannot rest upon Defendants' duty to update the Prospectus Supplement. Both of these arguments are premature, for they ask the Court to consider the merits of Plaintiff's negligent misrepresentation claims. The Court will not make any determination as to the reasonableness of Plaintiff's reliance at this point in the proceedings, nor will it address whether or not a specific factual allegation considered on its own could properly be the basis for the claims.*fn6 Moreover, Defendants' updating, or "stickering," argument does not go to the entire claim but only part of the claim. Plaintiff has adequately stated its claims for negligent misrepresentation against Credit Suisse and Credit Suisse Mortgage, which is all that is required to preclude dismissal. Accordingly, the Court denies Defendants' motion to dismiss as to Counts I and V of the Second Amended Complaint.
B. Counts II & VI: False Information Negligently Supplied for the Guidance of Others against Credit ...