Barna v. Wells Fargo Bank, NA et al, No. 2:2012cv00496 - Document 59 (D. Nev. 2013)
Court Description: ORDER Granting 7 Defendants' Motion to Dismiss. Plaintiff's Complaint is DISMISSED without prejudice, with leave to amend by 4/4/13. IT IS FURTHER ORDERED that 6 Defendants' Motion to Expunge Lis Pendens is DENIED with leave to re-file. IT IS FURTHER ORDERED that 22 Defendants' Motion for Hearing or Decision is DENIED as moot in light of this order. Signed by Judge Gloria M. Navarro on 3/20/13. (Copies have been distributed pursuant to the NEF - EDS)
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Barna v. Wells Fargo Bank, NA et al Doc. 59 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 VALEAN BARNA, 4 Plaintiff, 5 vs. 6 7 8 WELLS FARGO BANK, N.A.; and FEDERAL HOME LOAN MORTGAGE CORPORATION, Defendants. 9 ) ) ) ) ) ) ) ) ) ) ) Case No.: 2:12-cv-00496-GMN-GWF ORDER 10 Before the Court is the Motion to Dismiss, or in the Alternative, Motion for Summary 11 12 Judgment (ECF No. 7) filed by Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and 13 Federal Home Loan Mortgage Corporation (“FHLMC”) (collectively, “Defendants”). Also 14 pending before the Court are Defendants’ Motion to Expunge Lis Pendens (ECF No. 6) and 15 Defendants’ Motion for Hearing or Decision (ECF No. 22.) 16 I. BACKGROUND This case arises out of an alleged failure to consider an application to modify a home 17 18 loan. In May 2007, Plaintiff executed a Note secured by a Deed of Trust in favor of the lender, 19 Wells Fargo Bank, N.A., for the real property located at 2006 Santa Rita Drive, Las Vegas, 20 Nevada, 89104, APN#: 162-03-415-045 (“the Property”). (Compl. at ¶ 7, ECF No. 1; Deed of 21 Trust, Ex. A to Req. Judicial Notice (“RJN”), ECF No. 8.) In January 2011, MTC Financial 22 Inc., dba Trustee Corps1 recorded a notice of default against the Property naming Wells Fargo as 23 the beneficiary. (Compl. at ¶ 9; Notice of Default, Ex. 3 to RJN.) In or after June 2011, Plaintiff 24 25 1 MTC Financial Inc., dba Trustee Corps was originally named as a defendant but was voluntarily dismissed on October 29, 2012. (ECF No. 48.) Page 1 of 8 Dockets.Justia.com 1 requested a loan modification. (Id. at ¶¶ 10-13.) In October 2011, Trustee Corps filed a Notice 2 of Trustee Sale. (Id. at ¶ 12.) In November 2011, Wells Fargo denied the HAMP loan request 3 but represented that it would consider Plaintiff for a traditional loan. (Id. at ¶ 13.) 4 requested a postponement of the Trustee’s Sale, for which FHLMC “impermissibly withheld its 5 approval” but was later successfully postponed. (Id. at ¶¶ 14-15.) On November 16, 2011, 6 Plaintiff received a Notice of Trustee’s Sale setting the date for December 22, 2011, again 7 naming Wells Fargo as the beneficiary. (Id. at ¶ 16.) On December 14, 2011, Plaintiff learned 8 Wells Fargo had not reviewed Plaintiff’s file, despite representations by Wells Fargo that the 9 application was being reviewed. (Id. at ¶ 17.) On December 22, 2011, the Property was sold to 10 Plaintiff Lawrence Pasini.2 (Id. at ¶ 19.) 11 Plaintiff filed suit in the Eighth Judicial District Court, Clark County, Nevada on March 12 1, 2012. The case was removed to this Court on March 23, 2012. Plaintiff’s Complaint asserts 13 claims for (1) Breach of Contract, (2) Breach of Covenant of Good Faith and Fair Dealing, 14 (3) Negligence, (4) Violations of Chapter 107 of the Nevada Revised Statutes, and (5) Injunctive 15 Relief. Defendants seek to dismiss the complaint for failure to state a claim and to expunge the 16 associated lis pendens. Plaintiff opposed the motion and sought, in the alternative, leave to 17 amend. 18 II. LEGAL STANDARD Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action 19 20 that fails to state a claim upon which relief can be granted. See North Star Int’l v. Arizona Corp. 21 Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 22 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not 23 give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. 24 25 2 Lawrence Pasini was originally named as a defendant but was voluntarily dismissed on September 19, 2012. (ECF No. 46.) Page 2 of 8 1 See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint 2 is sufficient to state a claim, the Court will take all material allegations as true and construe them 3 in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th 4 Cir. 1986). 5 The Court, however, is not required to accept as true allegations that are merely 6 conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden 7 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action 8 with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation 9 is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 10 11 U.S. at 555) (emphasis added). “Generally, a district court may not consider any material beyond the pleadings in ruling 12 on a Rule 12(b)(6) motion . . . . However, material which is properly submitted as part of the 13 complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard 14 Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly, 15 “documents whose contents are alleged in a complaint and whose authenticity no party 16 questions, but which are not physically attached to the pleading, may be considered in ruling on 17 a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for 18 summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of 19 Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay 20 Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers 21 materials outside of the pleadings, the motion to dismiss is converted into a motion for summary 22 judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001). 23 If the court grants a motion to dismiss, it must then decide whether to grant leave to 24 amend. The court should “freely give” leave to amend when there is no “undue delay, bad 25 faith[,] dilatory motive on the part of the movant . . . undue prejudice to the opposing party by Page 3 of 8 1 virtue of . . . the amendment, [or] futility of the amendment . . . .” Fed. R. Civ. P. 15(a); Foman 2 v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear 3 that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow 4 Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Leave to amend may be denied if a court 5 determines that “allegation of other facts consistent with the challenged pleading could not 6 possibly cure the deficiency.” Abagninin v. AMVAC Chemical Corp., 545 F.3d 733, 742 (9th 7 Cir. 2008) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th 8 Cir. 1986)). 9 III. DISCUSSION 10 I. 11 In Nevada, a claim for breach of contract must allege (1) the existence of a valid contract; Breach of Contract 12 (2) that plaintiff performed or was excused from performance; (3) that the defendant breached 13 the terms of the contract; and (4) that the plaintiff was damaged as a result of the breach. See 14 Restatement (Second) of Contracts § 203 (2007); Calloway v. City of Reno, 993 P.2d 1259, 1263 15 (Nev. 2000) (“A breach of contract may be said to be a material failure of performance of a duty 16 arising under or imposed by agreement.”). To create an enforceable contract there must be an 17 “offer and acceptance, meeting of the minds, and consideration.” May v. Anderson, 119 P.3d 18 1254, 1257 (Nev. 2005). 19 Here, it is unclear in Plaintiff’s Complaint whether Plaintiff is alleging the existence of a 20 valid contract, and if so, what that contract is. In the Complaint, Plaintiff refers obliquely to 21 “the loan documents concerning the Subject Property” to which Defendants “allege that they are 22 a party” and that “they have a legally valid and binding contract.” (Compl., ¶ 24.) Plaintiff 23 alleges that Defendants “have failed to abide by the terms of the agreement to which they allege 24 they are a party.” (Id. at ¶ 25.) However, Plaintiff does not specify what the “agreement” was, 25 and does not provide any facts to support his allegations that Defendants have alleged the Page 4 of 8 1 existence of a legally valid and binding contract. Even so, Plaintiff himself must allege the 2 existence of a valid contract, and must also provide sufficient factual support to show that a 3 violation on the part of Defendants is plausible. Here, Plaintiff has not done so. Accordingly, 4 this cause of action must be dismissed. 5 B. 6 Plaintiff bases his claim for breach of the implied covenant of good faith and fair dealing 7 on an alleged breach of duty by Defendants when they failed to consider the loan modification, 8 denied postponement of the sale, and improperly foreclosed on the property. 9 Breach of the Implied Covenant of Good Faith and Fair Dealing To state a claim of breach of the covenant of good faith and fair dealing, Plaintiff must 10 allege: (1) Plaintiff and Defendants were parties to an agreement; (2) Defendants owed a duty of 11 good faith to the Plaintiff; (3) Defendants breached that duty by performing in a manner that was 12 unfaithful to the purpose of the contract; and (4) Plaintiff’s justified expectations were denied. 13 Perry v. Jordan, 900 P.2d 335, 338 (Nev. 1995). In Nevada, an implied covenant of good faith 14 and fair dealing exists in every contract, Consol. Generator–Nevada, Inc. v. Cummins Engine 15 Co., Inc., 971 P.2d 1251, 1256 (Nev. 1998), and a plaintiff may assert a claim for its breach if 16 the defendant “deliberately countervenes the intention and spirit of the contract,” Morris v. Bank 17 of Am. Nev., 886 P.2d 454, 457 (Nev. 1994) (internal quotation marks omitted). 18 Here, as in the first cause of action, Plaintiff alleges that Defendants “asserted that they 19 and Plaintiff were parties to a valid and existing contract” (Compl., ¶ 31), but does not explain 20 what that contract is, nor does Plaintiff allege the existence of such a contract himself. Plaintiff 21 does allege that Defendants breached their duty of good faith and fair dealing “[b]y refusing to 22 deal with Plaintiff’s modification application” and “wrongfully denying the postponement of the 23 foreclosure sale and improperly foreclosing on the property.” (Compl., ¶ 33.) However, 24 Plaintiff does not allege any facts to support the allegation that “refusing to deal” with the 25 modification application, “wrongfully denying” postponement of the sale, and “improperly Page 5 of 8 1 foreclosing” are actions in breach of any contract or agreement. Accordingly, this cause of 2 action must be dismissed. 3 C. 4 To bring a negligence claim in Nevada, a plaintiff must show that: (1) defendant owed a Negligence 5 duty of care to plaintiff; (2) defendant breached that duty; (3) defendant’s breach was the legal 6 cause of the plaintiff’s injuries; and (4) plaintiff was damaged. Scialabba v. Brandise Constr. 7 Co., Inc., 921 P.2d 928, 930 (Nev. 1996). Liability based on negligence does not exist without a 8 breach of a duty. Bradshaw v. Blystone Equip. Co. of Nev., 386 P.2d 396, 397 (Nev. 1963). Although Plaintiff’s Complaint includes a recitation of the elements of negligence, the 9 10 allegations in the Complaint fail to satisfy the pleading standard as stated in Iqbal and Twombly. 11 Contrary to this pleading standard, Plaintiff’s Complaint lacks the factual support needed to 12 plead a plausible negligence cause of action. Plaintiff first alleges that “Defendants Wells 13 Fargo, and Freddie Mac owed a duty to Plaintiff to perform their professional services in a 14 manner consistent with similarly situated professionals in their respective fields, and to perform 15 their duties with usual and reasonable care.” (Compl. ¶ 37.) This allegation fails to allege 16 sufficient facts that, when taken as true, establish that Defendants owed Plaintiff a duty of care. 17 Even if Plaintiff had adequately alleged the factual support to establish that Defendants owed a 18 duty of care, Plaintiff’s Complaint also fails to allege sufficient factual support to establish that 19 Defendants breached that duty. In fact, Plaintiff’s Complaint merely alleges that this “duty” was 20 breached when Defendants failed to “properly perform their functions in a competent and 21 workmanlike fashion.” (Id. at ¶ 38.) Such a conclusory statement fails to lift Plaintiff’s 22 allegations above the possible into the probable. Furthermore, this bare allegation fails to give 23 Defendants fair notice of this claim and the grounds on which it rests. For these reasons, this 24 cause of action must be dismissed. 25 /// Page 6 of 8 1 D. 2 Plaintiff alleges that Defendants “failed to properly notice the Trustee Sale and Notice of Violation of Chapter 107 of the Nevada Revised Statutes 3 Default pursuant to sections 107.080, 107.090, and NRS 107.095 of the Nevada Revised 4 Statutes,” but does not specify what requirement of these statutes Defendants have violated. 5 (Compl., ¶ 45.) The judicially noticeable documents recorded in Clark County and provided by 6 Defendants do not show a violation of section 107.080 on the part of Defendants. Plaintiff 7 provides no factual allegations to support the claim that Defendants are subject to section 8 107.090, and Plaintiff does not allege that any request was made to trigger Defendants’ 9 responsibilities under this section. Plaintiff does not allege the existence of any “guarantor or 10 surety of the debt” to whom a notice of default must be sent pursuant to section 107.095, and 11 does not allege facts to support any allegation that Defendants were subject to such a 12 requirement. For these reasons, and because Plaintiff fails to identify any specific facts or 13 portions of the statute to show a violation on the part of Defendants, this cause of action must be 14 dismissed. 15 E. Injunctive Relief 16 Plaintiff’s fifth cause of action is not recognized as a cause of action in Nevada. 17 Injunctive relief is a remedy, not a claim. Accordingly, this “cause of action” is dismissed. 18 IV. LEAVE TO AMEND Because the Court cannot find that amendment would be futile, the Court grants leave to 19 20 amend the complaint if the Plaintiff can remedy his complaint consistent with the deficiencies 21 identified by this Order. Failure to file an amended complaint by April 4, 2013, shall result in 22 dismissal of this action with prejudice. 23 V. 24 25 CONCLUSION IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss Plaintiff’s Complaint (#7) is GRANTED. Plaintiff’s Complaint is DISMISSED without prejudice. However, the Page 7 of 8 1 Court grants leave to file an amended complaint if Plaintiff can amend his complaint consistent 2 with the deficiencies identified in this Order. Failure to file an amended complaint by April 4, 3 2013, shall result in dismissal of this action with prejudice. 4 5 6 7 8 IT IS FURTHER ORDERED that Defendants’ Motion to Expunge Lis Pendens (#6) is DENIED with leave to re-file. IT IS FURTHER ORDERED that Defendants’ Motion for Hearing or Decision (#22) is DENIED as moot in light of this Order. DATED this 20th day of March, 2013. 9 10 11 ___________________________________ Gloria M. Navarro United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 8 of 8
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