-CWH Ball v. Wells Fargo & Company, et al., No. 2:2011cv00533 - Document 25 (D. Nev. 2011)
Court Description: ORDER Granting 5 Motion to Dismiss. Granting 6 Motion to Dismiss and Expunge Lis Pendens. Granting nunc pro tunc 13 Motion to Extend Time to File Reply. Denying 17 Request for Judicial Notice. Granting 18 Motion to Strike 17 Request for Judicial Notice. Amended Complaint deadline: 11/2/2011. Signed by Judge Kent J. Dawson on 10/19/2011. (Copies have been distributed pursuant to the NEF - SLR)
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-CWH Ball v. Wells Fargo & Company, et al. Doc. 25 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 10 BRETT J. BALL, 11 Plaintiff, 12 v. 13 Case No. 2:11-CV-00533-KJD-CWH WELLS FARGO & COMPANY, et al., 14 ORDER Defendants. 15 16 Before the Court is the Motion to Dismiss (#5) filed by MTC Financial, Inc. (“MTC”) and the 17 Motion to Dismiss and to Expunge Lis Pendens (#6) filed by Wells Fargo Bank N.A. (“Wells 18 Fargo”) and Mortgage Electronic Registration Systems (“MERS”). Plaintiff filed oppositions to 19 these Motions (## 9, 10) and the moving parties filed replies (## 13, 15). Plaintiff also filed a 20 Request for Judicial Notice (#17). MTC filed a Motion to Strike the Request for Judicial Notice 21 (#18). The Court rules on these Motions together herein. 22 I. Request for Judicial Notice and Motion to Strike 23 As an initial matter, the Court considers whether Plaintiff’s Request for Judicial Notice (#17) 24 is valid or should be stricken. The Request for Judicial Notice contains numerous documents 25 including legislation, bills, briefs from other cases, and judicial opinions. Plaintiff purports to 26 provide “highlights” from these documents in his Request. Defendant MTC filed a Motion to Strike Dockets.Justia.com 1 (#18), arguing that the Request for Judicial Notice constituted an impermissible supplemental 2 response to the Motions to Dismiss. Plaintiff did not oppose MTC’s Motion to Strike. The Request 3 for Judicial Notice constitutes an unauthorized supplemental pleading, and Plaintiff has failed to 4 oppose the Motion to Strike. Accordingly, Defendant MTC’s Motion to Strike is granted and 5 Plaintiff’s Request for Judicial Notice is denied. 6 II. Background 7 On November 30, 2001, Plaintiff purchased real property at 10316 Sweet Fennel Drive, Las 8 Vegas, NV 89135 (the “Property”). This purchase was financed with a $275,000 loan secured by a 9 Deed of Trust.1 In July, 2003 Plaintiff refinanced the first loan by obtaining a loan from Capitol 10 Commerce Mortgage Co. (“Capitol”) for $280,000, secured by a Deed of Trust. On this Deed of 11 Trust, Plaintiff is listed as borrower, Capitol is lender and trustee, and MERS is the beneficiary as 12 nominee for the lender. On July 1, 2010 MERS as nominee for Capitol, executed an Assignment of 13 Deed of Trust, transferring all beneficial interest in that Deed of Trust to Wells Fargo. 14 Plaintiff obtained a second loan for $171,000 secured by the Property. U.S. Bank N.A. was 15 the lender on the second loan. In 2006, Plaintiff obtained a third loan for $296,000, also secured by 16 the Property. Bank of America, N.A. was the lender for the third loan. The total encumbrance on the 17 property is currently $747,000. 18 On July 12, 2010, a Notice of Breach and Default and Election to Sell was filed indicating 19 that Plaintiff had failed to pay his mortgage. Plaintiff waived his right to mediation. On February 9, 20 2011 the trustee recorded a Notice of Trustee’s Sale for March 4, 2011. On March 1, 2011 Plaintiff 21 filed an action in Clark County District Court. The action was removed to federal court on April 8, 22 2011. 23 24 25 26 1 The Court takes judicial notice of documents that are not subject to reasonable dispute and are in the public record, pursuant to Fed. R. Evid. 201. Consideration of these documents is appropriate at the motion to dismiss stage. See Branch v. Tunnell, 14 F3d 449, 454 (9th Cir. 1994). 2 1 Plaintiff’s complaint asserts claims for relief for wrongful foreclosure, civil conspiracy, and 2 quiet title. 3 III. Analysis 4 A. Legal Standard for Motion to Dismiss 5 The Federal Rules of Civil Procedure and federal pleading standards apply in a Federal Court. 6 See Fed. R. Civ. P. 81(c)(1). In considering a motion to dismiss for failure to state a claim under 7 FRCP 12(b)(6), “all well-pleaded allegations of material fact are taken as true and construed in a 8 light most favorable to the non-moving party.” Wyler Summit Partnership v. Turner Broadcasting 9 System, Inc., 135 F.3d 658, 661 (9th Cir.1998). Consequently, there is a strong presumption against 10 dismissing an action for failure to state a claim. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 11 249 (9th Cir.1997) (citation omitted). “To survive a motion to dismiss, a complaint must contain 12 sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” 13 Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 14 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff has pleaded 15 facts which allow “the court to draw the reasonable inference that the defendant is liable for the 16 misconduct alleged.” Id. The Iqbal evaluation illustrates a two prong analysis. First, the Court 17 identifies “the allegations in the complaint that are not entitled to the assumption of truth,” that is, 18 those allegations which are legal conclusions, bare assertions, or merely conclusory. Id. at 1949–51. 19 Second, the Court considers the factual allegations “to determine if they plausibly suggest an 20 entitlement to relief.” Id. at 1951. If the allegations state plausible claims for relief, such claims 21 survive the motion to dismiss. Id. at 1950. 22 B. Wrongful Foreclosure 23 Nevada recognizes the tort of wrongful foreclosure only where a homeowner alleges a lender 24 wrongfully exercised the power of sale and foreclosed upon his or her property when the homeowner 25 was not in default on the mortgage loan. See Collins v. Union Federal Sav. & Loan Ass'n, 99 Nev. 26 284, 662 P.2d 610, 623 (Nev.1983) (reversing summary judgment where there was a dispute of fact 3 1 about whether nonpayment was appropriate). Proper foreclosure procedures must be followed or the 2 sale will be invalid. See Rose v. First Fed. Sav. and Loan, 105 Nev. 454, 777 P.2d 1318 (1989) 3 (trustee’s sale invalid where notice requirements not satisfied). 4 Plaintiff’s complaint does not contain facts supporting a claim for wrongful foreclosure. As 5 an initial matter, the foreclosure had not occurred when Plaintiff filed his Complaint.2 A claim for 6 wrongful foreclosure prior to sale is not actionable. See Haley v. Elegen Home Lending, LP, 2010 7 WL 1006664, *2 (D.Nev. 2010) (citing Id.) Even if the Complaint had been filed after the sale, 8 Plaintiff does not aver that he was current on his mortgage. The moving defendants have submitted 9 judicially noticeable documents showing that Plaintiff is in default. (#7, Exhs. 8,9). Plaintiff argues 10 that these judicially noticeable documents fail to supply sufficient proof of a default. ( #10 Opp. at 11 9:9-11.) However, at the pleading stage, Plaintiff is obligated to plead facts showing that he is 12 entitled to relief. Iqbal, 129 S.Ct. at 1951. Plaintiff has not pled facts showing that he is not in 13 default, which is a prerequisite to a claim for wrongful foreclosure in Nevada. Collins, 662 P.2d at 14 623. 15 Plaintiff’s complaint avers that no beneficiary can claim default since only secondary market 16 investors are owed payments on the note. (Compl. ¶ 27). This type of speculative pleading is 17 insufficient under the standards of Iqbal. Plaintiff’s assertion that securitization of the loan somehow 18 relieves him of an obligation to pay is unrecognized in law. See, e.g., Chavez v. California 19 Reconveyance Co., 2010 WL 2545006, 2 (D.Nev. 2010) (rejecting identical argument because “NRS 20 107.080 does not forbid the securitization of a loan.”). Plaintiff’s remaining arguments for relief, 21 including that he is the intended beneficiary of federal bank bailouts, the inapplicability of the 22 National Bank Act, and breach of agreement to which he was not a party, are unsupported by 23 controlling authority. Accordingly, Plaintiff’s claim for wrongful foreclosure fails. 24 25 2 26 Plaintiff has provided documentation of a foreclosure sale on March 4, 2011. Defendant failed to supplement his complaint in compliance with Fed. R. Civ. P 15(d) . 4 1 2 C. Civil Conspiracy To state a claim for conspiracy, Plaintiff must demonstrate a combination of two or more 3 persons who, by some concerted action, intend to accomplish an unlawful objective for the purpose 4 of harming another, and that damage has resulted from said act or acts. See Hilton Hotels Corp. v. 5 Butch Lewis Prods., Inc., 862 P.2d 1207, 1210 (Nev. 1993). A plaintiff pleading conspiracy must 6 plead “enough facts to raise a reasonable expectation that discovery will reveal evidence” of the 7 existence of a conspiracy. Twombly 550 U.S. at 556. To properly plead a claim for civil 8 conspiracy, a plaintiff must set forth facts showing: (1) the commission of an underlying tort; and (2) 9 an agreement between the defendants to commit that tort. GES, Inc. v. Corbitt, 117 Nev. 265, 21 10 P.3d 11, 15 (Nev.2001). Further, the cause of action must be pled with particular specificity as to 11 “the manner in which a defendant joined in the conspiracy and how he participated in it.” Arroyo v. 12 Wheat, 591 F.Supp. 141, 144 (D.Nev.1984). 13 Here, Plaintiff’s allegations are entirely based on the wrongful foreclosure claim which has 14 been dismissed, supra. Plaintiff also has failed to plead with the requisite particularity how each 15 defendant joined and participated in the alleged conspiracy. (Compl. ¶ 69.) Plaintiff’s claim of civil 16 conspiracy lacks an underlying tort, is insufficiently particular, and fails to state a claim. 17 Accordingly, the civil conspiracy claim is dismissed. 18 D. Quiet Title 19 Under Nevada law, a quiet title action may be brought by someone who claims an adverse 20 interest in property. N.R.S. 40.010. “In a quiet title action, the burden of proof rests with the plaintiff 21 to prove good title in himself.” Breliant v. Preferred Equities Corp., 918 P.2d 314, 318 (Nev. 1996). 22 Specifically, when an adverse claim exists, the party seeking to have another party’s right to property 23 extinguished, must overcome the “presumption in favor of the record titleholder.” Id. (citing Biasa v. 24 Leavitt, 101 Nev. 86, 692 P.2d 1301, 1304 (Nev.1985). Courts of this District have held that an 25 action for quiet title “should be dismissed where plaintiff’s claim is not based on a cognizable legal 26 5 1 theory.” Manderville v. Litton Loan Servicing, 2011 WL 2149105, at *3 (D.Nev. May 31, 2011) 2 (internal quotation marks omitted). 3 Plaintiff claims that the quiet title action “would go a long way toward determining the real 4 parties in interest and who has standing to do what.” (#10 Opp. at 21:4-5). However, Plaintiff has 5 not provided any evidence that he has discharged the debt owed on the three mortgages encumbering 6 the Property and, accordingly, cannot quiet title. See Fuleihan v. Wells Fargo, 2010 WL 3724186 at 7 *5 (D.Nev. 2010) (a borrower cannot quiet title to a property without discharging any debt owed). 8 Further, Plaintiff’s basis for claiming title to the property is that securitization somehow altered his 9 obligation to pay his mortgage. This argument is incorrect. Chavez, 2010 WL 2545006 at 2. 10 Accordingly, the quiet title claim fails. 11 E. Expungement of Lis Pendens 12 NRS § 14.010 allows a Notice of Pendency or a Lis Pendens to be filed for an action pending 13 in the United States District Court for the District of Nevada when there is “a notice of an action 14 affecting real property, which is pending,” in any such court. NRS § 14.010(2). Since all defendants 15 have been dismissed, there is no pending action. Accordingly, expungement of the lis pendens is 16 appropriate. 17 F. Leave to Amend 18 If the Court grants a motion to dismiss a complaint, it must then decide whether to grant leave 19 to amend. Courts should “freely give” leave to amend when there is no “undue delay, bad faith[,] 20 dilatory motive on the part of the movant ... undue prejudice to the opposing party by virtue of ... the 21 amendment, [or] futility of the amendment....” Fed.R.Civ.P. 15(a); Foman v. Davis, 371 U.S. 178, 22 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Generally, leave to amend is only denied when it is clear 23 that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight 24 Sys., Inc., 957 F.2d 655, 658 (9th Cir.1992). 25 26 The Court has doubts that the defects in Plaintiff’s Complaint can be cured by amendment. However, considering the generous standards of the Federal Rules, the Court will not preclude 6 1 amendment of the Complaint. If Plaintiff decides to file an amended Complaint, it must comply in 2 every respect with the Federal Rules of Civil Procedure. Any amended Complaint should be filed on 3 or before Wednesday, November 2, 2011. Failure to file in accordance with this Order will result in 4 dismissal without leave to amend. 5 IV. Conclusion 6 7 8 IT IS HEREBY ORDERED THAT the Motion to Dismiss (#5) filed by MTC Financial, Inc. is GRANTED. IT IS FURTHER ORDERED THAT the Motion to Dismiss and to Expunge Lis Pendens 9 (#6) filed by Wells Fargo Bank N.A. and Mortgage Electronic Registration Systems is GRANTED. 10 IT IS FURTHER ORDERED THAT Plaintiff’s Request for Judicial Notice (#17) is 11 12 13 14 15 DENIED. IT IS FURTHER ORDERED THAT MTC’s Motion to Strike the Request for Judicial Notice (#18) is GRANTED. IT IS FURTHER ORDERED THAT Wells Fargo’s Emergency Motion to Extend Time to File Reply (#13) is GRANTED nunc pro tunc. 16 IT IS FURTHER ORDERED THAT Plaintiff may file an amended complaint that 17 complies in every respect with the Federal Rules of Civil Procedure by November 2, 2011. Failure to 18 do so will result in dismissal of the action without further leave to amend. 19 DATED this 19th day of October 2011. 20 21 22 23 _____________________________ Kent J. Dawson United States District Judge 24 25 26 7
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