-GWF Nieto et al v. Litton Loan Servicing, No. 2:2010cv00223 - Document 22 (D. Nev. 2011)
Court Description: ORDER Denying without prejudice 20 Defendant's Motion for Summary Judgment and 21 Motion for Entry of Order on Motion for Summary Judgment. Signed by Judge Gloria M. Navarro on 7/5/11. (Copies have been distributed pursuant to the NEF - EDS)
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-GWF Nieto et al v. Litton Loan Servicing Doc. 22 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 CARLOS NIETO, et al. 4 Plaintiffs, 5 vs. 6 LITTON LOAN SERVICING, LP 7 Defendant. 8 ) ) ) ) ) ) ) ) ) Case No.: 2:10-cv-00223-GMN-GWF ORDER 9 Pending before the Court is Defendant’s Motion for Summary Judgment (ECF No. 20), 10 11 which was filed on April 20, 2011. Plaintiffs, who are represented by counsel, have failed to 12 file a Response. Consequently, Defendant filed a Motion for Entry of Order on Motion for 13 Summary Judgment (ECF No. 21) on June 1, 2011. For the reasons that follow, both of 14 Defendant’s Motions will be DENIED without prejudice. 15 I. 16 BACKGROUND On or about June 29, 2004, Plaintiffs jointly purchased a second home located at 5500 17 Fire Island Dr., Las Vegas, NV 89120 (the “Property”) for $456,750. (Ex. C, Mot. to Dismiss, 18 ECF No. 7.) The deed of trust identifies the lender as New Century Mortgage Corp. (“New 19 Century”) and the trustee as Fidelity National Title (“Fidelity”). (Id.) Plaintiffs admit default, 20 (see Compl. ¶ 4), but allege that they are currently in modification negotiations with the loan 21 servicer, (id. ¶ 5). Defendant, the loan servicer, has not yet agreed to modify the loan, (id. ¶ 7), 22 and Plaintiffs fear an impending foreclosure, (id. ¶ 8), despite assurances from Defendant that 23 there will be no foreclosure, (id. ¶ 9). 24 Plaintiffs sued Defendant in the Clark County District Court on January 29, 2010 on five 25 causes of action: (1) Promissory Estoppel; (2) Wrongful Foreclosure/Quiet Title; (3) “Tortious” Page 1 of 6 Dockets.Justia.com 1 Misrepresentation; (4) Preliminary and Permanent Injunctive Relief; and (5) Violation of 2 Chapter 598D of the Nevada Revised Statutes (“NRS”). Defendant removed and filed a 3 Motion to Dismiss or, in the alternative, for Summary Judgment (ECF No. 7). 4 The Court granted the Motion in part and denied it in part. (See ECF No. 18.) It granted 5 the Motion as to Plaintiffs’ causes of action based on Promissory Estoppel, “Tortious” 6 Misrepresentation, and violations of Chapter 598D of the Nevada Revised Statutes, but denied 7 the Motion as to Plaintiff’s Wrongful Foreclosure/Quiet Title and Preliminary and Permanent 8 Injunctive Relief claims, determining that the party that had recorded the notices of default and 9 trustee sale--National Default Servicing Company, which is not a defendant in this action--may 10 not have been authorized to do so. However, the Court explained: 11 To obtain summary judgment on this claim, Defendant need only provide evidence showing either that it did not cause the foreclosure at all, or if it did, that it has the interest in the underlying loan and caused [Deutsche Bank National Trust Company and National Default Servicing Company] to record these documents, or that the beneficiary or trustee, if not Defendant, caused Defendant to cause the recordings. 12 13 14 15 16 (Order 9:13-17, ECF No. 18.) 17 II. 18 MOTION FOR SUMMARY JUDGMENT STANDARD The Federal Rules of Civil Procedure provide for summary adjudication if “the movant 19 shows there is no genuine dispute as to any material fact and the movant is entitled to a 20 judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those that may affect the 21 outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute 22 as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a 23 verdict for the nonmoving party. See id. “Summary judgment is inappropriate if reasonable 24 jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the 25 nonmoving party=s favor.” Diaz v. Eagle Produce Ltd. Partnership, 521 F.3d 1201, 1207 (9th Page 2 of 6 1 Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 (9th Cir. 1999)). A 2 principal purpose of summary judgment is “to isolate and dispose of factually unsupported 3 claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). 4 In determining summary judgment, a court applies a burden-shifting analysis. “When 5 the party moving for summary judgment would bear the burden of proof at trial, it must come 6 forward with evidence which would entitle it to a directed verdict if the evidence went 7 uncontroverted at trial. In such a case, the moving party has the initial burden of establishing 8 the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. 9 Brokerage Co. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations 10 omitted). In contrast, when the nonmoving party bears the burden of proving the claim or 11 defense, the moving party can meet its burden in two ways: (1) by presenting evidence to 12 negate an essential element of the nonmoving party=s case; or (2) by demonstrating that the 13 nonmoving party failed to make a showing sufficient to establish an element essential to that 14 party’s case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 15 U.S. at 323–24. If the moving party fails to meet its initial burden, summary judgment must be 16 denied and the court need not consider the nonmoving party’s evidence. See Adickes v. S.H. 17 Kress & Co., 398 U.S. 144, 159–60 (1970). 18 If the moving party satisfies its initial burden, the burden then shifts to the opposing 19 party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. 20 Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, 21 the opposing party need not establish a material issue of fact conclusively in its favor. It is 22 sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the 23 parties’ differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors 24 Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid 25 summary judgment by relying solely on conclusory allegations that are unsupported by factual Page 3 of 6 1 data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go 2 beyond the assertions and allegations of the pleadings and set forth specific facts by producing 3 competent evidence that shows a genuine issue for trial. See Celotex Corp., 477 U.S. at 324. 4 At summary judgment, a court’s function is not to weigh the evidence and determine the 5 truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. 6 The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn 7 in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is 8 not significantly probative, summary judgment may be granted. See id. at 249–50. 9 III. DISCUSSION 10 Defendant has failed to meet its burden of showing that no questions of material fact 11 exist and that it is entitled to judgment as a matter of law. Although Defendant successfully 12 demonstrates that the September 9, 2009 Notice of Trustee’s Sale was properly filed because it 13 was entered by National Default Servicing Company (see Ex. F, Mot. Summ. J., ECF No. 20), 14 which had been properly substituted as trustee, (see Ex. E, Mot. Summ. J., ECF No. 20), by 15 Deutsche Bank National Trust Company, which, in turn, had been properly substituted as the 16 beneficiary of the Deed of Trust, (see Ex. E, Mot. Summ. J., ECF No. 20), Defendant has failed 17 to show that the June 4, 2009 Notice of Default was properly entered. 18 “[I]n Nevada, it is a statutory defect in foreclosure for an entity that is not yet the 19 beneficiary, trustee, or an agent of one of these, to record the [Notice of Default].” Kartman v. 20 Ocwen Loan Servicing, LLC, No. 2:09-cv-02404-GMN-PAL, 2010 WL 3522268, at *4 (D. 21 Nev. Sept. 01, 2010). However, a party may be able to prevail on summary judgment by 22 showing that it was acting at the direction of the beneficiary or the trustee at the time it filed the 23 Notice of Default. See Kartman, 2010 WL 3522268, at *5. 24 25 Here, National Default Servicing Company filed the Notice of Default on June 4, 2009, (see Ex. D, Mot. Summ. J., ECF No. 20), which was three months prior to when it officially Page 4 of 6 1 became a trustee under the Deed of Trust. Nevertheless, Defendant argues that the Notice of 2 Default was filed properly because National Default Servicing Company was at the time acting 3 as the agent of Defendant, which, in turn, was acting as the agent of the beneficiary. (Mot. 4 Summ. J. 6:4-9, ECF No. 20.) Defendant would have prevailed on this Motion for Summary 5 Judgment if it had adduced evidence that this was actually the case; however, it did not and its 6 Motion must therefore be denied. 7 Although Defendant’s litigation manager, Christopher Spradling, does aver in a sworn 8 affidavit that National Default Servicing Company was serving as Defendant’s agent at the time 9 it filed the Notice of Default, (see Ex. C ¶ 9, Mot. Summ. J., ECF No. 20), Defendant fails to 10 demonstrate that Defendant was serving as an agent of the beneficiary or trustee at that time. 11 The only evidence Defendant produces in support of its contention that Defendant was acting 12 as the agent of the beneficiary are Mr. Spradling’s statement that “[Defendant] commenced 13 servicing of the Plaintiff’s loan on or about November 11, 2004, and has serviced the Plaintiff’s 14 loan on an uninterrupted basis ever since,” (see Ex. C ¶ 7, Mot. Summ. J., ECF No. 20), and 15 Defendant’s 2004 letter to Plaintiffs indicating that it was assuming the responsibility of 16 servicing Plaintiffs’ home loan, (see Ex. 1 to Ex. C, Mot. Summ. J., ECF No. 20). Neither of 17 these pieces of evidence, without more, is sufficient to demonstrate that Defendant was the 18 agent of the beneficiary or trustee at the time it instructed National Default Servicing Company 19 to file the Notice of Default. First of all, neither document demonstrates that either the trustee 20 or the beneficiary appointed Defendant to service the loan; therefore, it is unclear whether 21 Defendant was even authorized to service the loan. Second, even assuming Defendant was 22 authorized to service the loan, neither piece of evidence demonstrates that, for the purposes of 23 this particular loan servicing, one of Defendant’s powers as the servicer of the loan was the 24 ability to instruct another entity to file a Notice of Default. Thus, a question of material fact 25 remains as to whether Defendant was acting as the agent of the beneficiary and/or trustee at the Page 5 of 6 1 2 time it directed National Default Servicing Company to file the Notice of Default. Accordingly, summary judgment cannot be entered in favor of Defendant, even though 3 Plaintiffs have failed to respond, see Henry v. Gill Industries, Inc., 983 F.2d 943 (9th Cir. 1993) 4 (“A local rule that requires the entry of summary judgment simply because no papers opposing 5 the motion are filed or served, and without regard to whether genuine issues of material fact 6 exist, would be inconsistent with Rule 56, hence impermissible under Rule 83.”). Both of 7 Defendant’s Motions will consequently be DISMISSED without prejudice. 8 CONCLUSION 9 IT IS HEREBY ORDERED that Defendant’s Motion for Summary Judgment (ECF 10 No. 20) and Motion for Entry of Order on Motion for Summary Judgment (ECF No. 21) are 11 DENIED without prejudice. 12 DATED this 5th day of July, 2011. 13 14 15 ________________________________ Gloria M. Navarro United States District Judge 16 17 18 19 20 21 22 23 24 25 Page 6 of 6
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