Clay v. Countrywide Home Loans, Inc. et al, No. 2:2009cv02040 - Document 37 (D. Nev. 2011)
Court Description: ORDER Granting 29 Motion for Summary Judgment. The Clerk is directed to close this case. Signed by Chief Judge Roger L. Hunt on 4/21/11. (Copies have been distributed pursuant to the NEF - MMM)
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Clay v. Countrywide Home Loans, Inc. et al Doc. 37 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 8 DISTRICT OF NEVADA *** 9 10 11 12 13 14 15 DANIELLE CLAY, an individual, ) ) Plaintiff, ) ) vs. ) ) COUNTRYWIDE HOME LOANS, INC., a ) New York Corporation; RECONTRUST ) COMPANY, a Nevada Corporation, ) ) Defendants. ) _______________________________________) Case No.: 2:09-cv-02040-RLH-RJJ ORDER (Motion for Summary Judgment–#29) 16 17 Before the Court is Defendant Countrywide Home Loans, Inc.’s Motion for 18 Summary Judgment (#29, filed Nov. 1, 2010). The Court has also considered Plaintiff Danielle 19 Clay’s Opposition (#33, filed Dec. 6, 2010), and Countrywide’s Reply (#36, filed Jan. 10, 2011). 20 21 BACKGROUND This dispute arises from a mortgage loan transaction between Clay and 22 Countrywide. In February 2007, Clay purchased a new construction home located at 6457 Lovett 23 Canyon Street in Las Vegas, Nevada. Clay financed the $345,141.00 purchase price by executing 24 a promissory note and a home equity line of credit for $276,112.00 and 69,028.00 respectively, 25 both in favor of Countrywide. Clay secured these loans with first and second deeds of trust on her 26 new home, both also in favor of Countrywide. AO 72 (Rev. 8/82) 1 Dockets.Justia.com 1 In December 2007, Countrywide informed Clay that Clark County had reassessed 2 her property and increased her property taxes. Because of this increase, Countrywide claimed, 3 there was an escrow shortage in Clay’s account from March 2007 to December 2007. Therefore, 4 Clay’s monthly payment would increase to both cover the new taxes and the resulting escrow 5 shortfall. Clay made these increased payments for a time, but in November 2008, Clay defaulted 6 on her mortgage and has not made any payments since. After Clay defaulted, Countrywide 7 recorded a Notice of Default and Election to Sell on March 20, 2009. Clay then filed suit in the 8 Eighth Judicial District of the State of Nevada alleging (1) unfair lending practices, (2) fraudulent 9 misrepresentation, (3) promissory estoppel, (4) wrongful foreclosure/declaratory relief, (5) recision 10 of contract, and (6) intentional and/or negligent infliction of emotional distress. (Dkt. 1, Compl.) 11 Countrywide subsequently removed the case to this Court, after which the Court dismissed all 12 claims save the fraud and promissory estoppel claims. (Dkt. #21, Hr’g Mins.) Countrywide has 13 now filed a motion for summary judgment on Clay’s remaining claims. For the reasons discussed 14 below, the Court grants Countrywide’s motion. 15 16 17 DISCUSSION I. Legal Standard The purpose of summary judgment is to avoid unnecessary trials when there is no 18 dispute as to the facts before the court. Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 19 1468, 1471 (9th Cir.1994). Summary judgment is appropriate when the pleadings, the discovery 20 and disclosure materials on file, and any affidavits “show there is no genuine issue as to any 21 material fact and that the movant is entitled to judgment as a matter of law.” Celotex Corp. v. 22 Catrett, 477 U.S. 317, 330 (1986). An issue is “genuine” if there is a sufficient evidentiary basis 23 on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if 24 it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 25 477 U.S. 242, 248–49 (1986). Where reasonable minds could differ on the material facts at issue, 26 however, summary judgment is not appropriate. Warren v. City of Carlsbad, 58 F.3d 439, 441 AO 72 (Rev. 8/82) 2 1 (9th Cir. 1995), cert. denied, 516 U.S. 1171 (1996). “The amount of evidence necessary to raise a 2 genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties' differing 3 versions of the truth at trial.’” Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) 4 (quoting First Nat'l Bank v. Cities Service Co., 391 U.S. 253, 288–89 (1968)). In evaluating a 5 summary judgment motion, a court views all facts and draws all inferences in the light most 6 favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 7 1100, 1103 (9th Cir. 1986). The moving party bears the burden of showing that there are no genuine issues of 8 9 material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). “In order to carry 10 its burden of production, the moving party must either produce evidence negating an essential 11 element of the nonmoving party’s claim or defense or show that the nonmoving party does not 12 have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” 13 Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). Once the 14 moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting the motion to 15 “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. 16 The nonmoving party “may not rely on denials in the pleadings but must produce specific 17 evidence, through affidavits or admissible discovery material, to show that the dispute exists,” 18 Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply 19 show that there is some metaphysical doubt as to the material facts.” Bank of America v. Orr, 285 20 F.3d 764, 783 (9th Cir. 2002) (internal citations omitted). “The mere existence of a scintilla of 21 evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252. The Court would also like to take this opportunity to remind Clay’s counsel that 22 23 when in federal court, the Federal Rules of Civil Procedure apply absent rare circumstances, not 24 the Nevada Rules of Civil Procedure. 25 / 26 / AO 72 (Rev. 8/82) 3 1 2 3 II. Analysis A. Fraud In order to succeed on a claim for fraud, Clay must prove each of the following: (1) 4 a false representation by Countrywide, (2) Countrywide’s knowledge or belief that the 5 representation was false, or that Countrywide had an insufficient basis for making the 6 representation, (3) Countrywide’s intent to induce Clay to act or refrain from acting in reliance on 7 the misrepresentation, (4) Clay’s justifiable reliance on the misrepresentation, and (5) damages 8 resulting from that reliance. Bulbman, Inc. v. Nevada Bell, 825 P.2d 588, 592 (Nev. 1992). Clay, 9 however, has failed to demonstrate any of these elements, most importantly a false representation. 10 In her complaint, Clay contends that Countrywide misrepresented her monthly 11 payments. Additionally, in her response to the motion, Clay contends that Countrywide 12 misrepresented the shortfall in her escrow account. Neither contention is accurate. Countrywide 13 dispels Clays contentions by presenting the Tax Notice that Clay signed before closing on her loan. 14 (Dkt. #29, Mot. Ex. B.) The Tax Notice explains that Countrywide is not liable for increases in 15 property tax and that Clay’s taxes would likely “take a big jump” when her property was 16 reassessed. (Id.) Further, Clay checked the box saying that she wished to only impound taxes 17 based on the unimproved assessment (the assessment made before a house was built on the 18 property), which states “I realize that my taxes may increase substantially during the second year, 19 which would make my monthly payments increase accordingly.” (Id.) Clay cannot legitimately 20 claim that Countrywide did not warn her that her payments might increase after having signed this 21 document. See Circuit City Stores, Inc. v. Ahmed, 283 F.3d 1198, 1200 (9th Cir. 2002) (“general 22 rule is that one who signs a contact is bound by its provisions and cannot complain of unfamiliarity 23 with the language of the instrument.”) (internal quotation omitted). 24 Although Clay’s claim that Countrywide misrepresented the amount of the shortfall 25 in her escrow account makes its first appearance in her response to the motion, the Court will 26 quickly address it. Clay claims that she does not understand why there was a shortfall in her AO 72 (Rev. 8/82) 4 1 escrow account based on taxes. Countrywide, however, adequately explains the escrow shortfall 2 by providing an accounting of Clay’s escrow account. (Dkt. #36, Reply Ex. E, Loan History.) 3 This accounting demonstrates that Clay did not pay her taxes as she claimed, but that her lender 4 did. (Id.) Clay only deposited $356.18 at the time of closing for taxes. Since her original 5 payments only covered insurance and the interest on her principal balance, this created a shortfall 6 in her escrow account as Countrywide paid her taxes. Before this deficiency occurred, 7 Countrywide even provided Clay an estimate showing that this shortfall was likely to occur. (Dkt. 8 #29, Mot. Ex. C, Escrow Acct. Review.) Because Countrywide neither misrepresented the escrow 9 shortfall nor misrepresented Clay’s eventual payments and tax liability, Clay’s claim for fraudulent 10 misrepresentation fails as a matter of law. 11 B. 12 Promissory Estoppel To prove promissory estoppel Clay must show: “(1) the party to be estopped 13 must be apprised of the true facts; (2) he must intend that his conduct shall be acted upon, or must 14 so act that the party asserting estoppel has the right to believe it was so intended; (3) the party 15 asserting the estoppel must be ignorant of the true state of facts; (4) [she] must have relied to [her] 16 detriment on the conduct of the party to be estopped.” Pink v. Busch, 100 Nev. 684, 689, 691 P.2d 17 456, 459 (1984). Here, Clay claims that Countrywide represented that she would have a lesser 18 payment than she eventually owed. As shown above, this is inaccurate. The uncontroverted 19 evidence shows that Countrywide made no such promise. Countrywide specifically informed Clay 20 that her “monthly payments may increase substantially” because of tax increases and any resulting 21 escrow shortfall. Therefore, Clay has not met her burden to set forth specific facts showing a 22 genuine issue for trial and so the Court grants summary judgment on Clay’s remaining claims. 23 / 24 / 25 / 26 / AO 72 (Rev. 8/82) 5 1 CONCLUSION 2 Accordingly, and for good cause appearing, 3 IT IS HEREBY ORDERED that Countrywide’s Motion for Summary Judgment 4 5 (#29) is GRANTED. The Clerk of the Court is directed to close this case. Dated: April 21, 2011. 6 ____________________________________ ROGER L. HUNT Chief United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AO 72 (Rev. 8/82) 6
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