-VPC Barlow v. BNC Mortgage, Inc. et al, No. 3:2011cv00304 - Document 23 (D. Nev. 2011)
Court Description: ORDER granting 11 Motion to Dismiss defendant Stanley S. Silva. Signed by Judge Larry R. Hicks on 08/25/11. Party terminated. (Copies have been distributed pursuant to the NEF - LG)
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-VPC Barlow v. BNC Mortgage, Inc. et al Doc. 23 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 *** ) ) ) ) ) ) ) ) ) ) ) 9 WILLIAM C. BARLOW, 10 Plaintiff, 11 v. 12 BNC MORTGAGE, INC; et al., 13 Defendants. 3:11-CV-0304-LRH-VPC ORDER 14 Before the court is defendant Stanley S. Silva’s (“Silva”) motion to dismiss. Doc. #11.1 15 16 Plaintiff William C. Barlow (“Barlow”) filed an opposition (Doc. #16) to which Silva replied 17 (Doc. #18). 18 I. 19 Facts and Procedural History On May 11, 2006, Barlow purchased real property through a mortgage and note executed by 20 defendant BNC Mortgage. Barlow defaulted on his mortgage and defendants initiated foreclosure 21 proceedings. 22 Subsequently, on February 25, 2011, Barlow filed a complaint against defendants alleging 23 nine causes of action: (1) debt collection violations; (2) Nevada Unfair and Deceptive Trade 24 Practices Act, NRS 598.0923; (3) Nevada Unfair Lending Practices Act, NRS 598D.100; 25 26 1 Refers to the court’s docketing number. Dockets.Justia.com 1 (4) breach of the covenant of good faith and fair dealing; (5) NRS 107.080; (6) quiet title; (7) fraud; 2 (8) slander of title; and (9) abuse of process. Doc. #1, Exhibit A. Thereafter, Silva filed the present 3 motion to dismiss. Doc. #11. 4 II. 5 Legal Standard Defendant Silva seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) for 6 failure to state a claim upon which relief can be granted. To survive a motion to dismiss for failure 7 to state a claim, a complaint must satisfy the Federal Rule of Civil Procedure 8(a)(2) notice 8 pleading standard. See Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 9 2008). That is, a complaint must contain “a short and plain statement of the claim showing that the 10 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The Rule 8(a)(2) pleading standard does not 11 require detailed factual allegations; however, a pleading that offers “‘labels and conclusions’ or ‘a 12 formulaic recitation of the elements of a cause of action’” will not suffice. Ashcroft v. Iqbal, 129 S. 13 Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 14 Furthermore, Rule 8(a)(2) requires a complaint to “contain sufficient factual matter, 15 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. at 1949 (quoting 16 Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual content allows 17 the court to draw the reasonable inference, based on the court’s judicial experience and common 18 sense, that the defendant is liable for the misconduct alleged. See id. at 1949-50. “The plausibility 19 standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 20 defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a 21 defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to 22 relief.” Id. at 1949 (internal quotation marks and citation omitted). 23 In reviewing a motion to dismiss, the court accepts the facts alleged in the complaint as 24 true. Id. However, “bare assertions . . . amount[ing] to nothing more than a formulaic recitation of 25 the elements of a . . . claim . . . are not entitled to an assumption of truth.” Moss v. U.S. Secret 26 2 1 Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S. Ct. at 1951) (brackets in original) 2 (internal quotation marks omitted). The court discounts these allegations because “they do nothing 3 more than state a legal conclusion—even if that conclusion is cast in the form of a factual 4 allegation.” Id. (citing Iqbal, 129 S. Ct. at 1951.) “In sum, for a complaint to survive a motion to 5 dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be 6 plausibly suggestive of a claim entitling the plaintiff to relief.” Id. 7 III. Discussion 8 A. Debt Collection Violations 9 Pursuant to NRS § 649, it is a violation of state law to violate any provision of the federal 10 Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. NRS § 649.370. Here, 11 Barlow alleges that defendants violated the FDCPA by initiating a non-judicial foreclosure without 12 following the proper procedures for attempting to collect a debt. 13 It is well established that non-judicial foreclosures are not an attempt to collect a debt under 14 the Fair Debt Collection Practice Act and similar state statutes. See e.g., Hulse v. Ocwen Fed. Bank 15 FSB, 195 F. Supp. 2d 1188 (D. Or. 2002); Charov v. Perry, 2010 U.S. Dist. LEXIS 65798 (D. Nev. 16 2010) (holding that recording a notice of default is not an attempt to collect a debt because the 17 borrower already consented to allow the foreclosure trustee to record the notice upon default). 18 Therefore, the court finds that Barlow fails to state a claim against Silva for violation of the 19 FDCPA, and thereby NRS § 649. 20 B. Nevada Unfair and Deceptive Trade Practices Act 21 Pursuant to NRS 598.0923 it is a deceptive trade practice to conduct business in the State of 22 Nevada without all required state, county or city licenses. NRS 598.0923(1). Barlow alleges that 23 defendants violated the statute by recording the underlying notice of default without having a state 24 business license. 25 26 Initially, the court notes that the allegations against Silva are conclusory allegations that 3 1 offer nothing more than a formulaic recitation of the elements of a violation. As such, they are 2 insufficient to state a claim upon which relief can be granted. See Moss, 572 F.3d 969. Further, 3 Silva did not need to be licensed to record the notice of default because a trustee, and by 4 implication Silva, as agent for the trustee, is not a debt collector attempting to collect a debt by 5 initiating non-judicial foreclosure proceedings. See Hulse, 195 F. Supp. 2d 1188. Therefore, the 6 court finds that Barlow fails to state a claim upon which relief can be granted. 7 C. Nevada Unfair Lending Practices Act 8 NRS 598D.100 prohibits lenders from making loans “without determining, using 9 commercially reasonable means or mechanisms, that the borrower has the ability to repay the home 10 loan.” NRS 598D.100(1)(b). However, this suitability language was added in mid-2007 when the 11 statute was amended. Although Barlow alleges that defendants violated the present version of the 12 statute, his loan originated in 2006, prior to the current amendment. Therefore, Barlow’s loan 13 cannot have violated the current statutory language requiring a determination that a borrower has 14 the ability to repay the loan. 15 Additionally, Barlow’s unfair lending practices claim is barred by the applicable statute of 16 limitations. The statute of limitations on an unfair lending practices claim under NRS 598D is two 17 (2) years. See NRS § 11.190(3)(a). Barlow purchased the property in 2006, and did not file the 18 present action until 2011, over three years after the statute of limitations had expired. Accordingly, 19 the court shall grant moving defendants’ motions as to this issue. 20 D. Breach of Good Faith and Fair Dealing 21 Under Nevada law, “[e]very contract imposes upon each party a duty of good faith 22 and fair dealing in its performance and execution.” A.C. Shaw Constr. v. Washoe County, 784 23 P.2d 9, 9 (Nev. 1989) (quoting Restatement (Second) of Contracts § 205). To establish a claim for 24 breach of the implied covenant of good faith and fair dealing, a plaintiff must show that: (1) the 25 plaintiff and defendant were parties to a contract; (2) the defendant owed a duty of good faith and 26 4 1 fair dealing to the plaintiff; (3) the defendant breached his duty by performing in a manner 2 unfaithful to the purpose of the contract; and (4) the plaintiff’s justified expectations were denied. 3 See Perry v. Jordan, 134 P.3d 698, 702 (Nev. 2006) (citing Hilton Hotels Corp. v. Butch Lewis 4 Prod. Inc., 808 P.2d 919, 922-23 (Nev. 1991). 5 6 Here, there is no contract between Barlow and Silva. Thus, Barlow fails to state a claim against Silva for breach of the covenants of good faith and fair dealing. 7 E. NRS 107.080 8 In his complaint, Barlow alleges that defendants improperly foreclosed on his property 9 10 11 because the promissory note was severed from the deed of trust and none of the defendants hold the original mortgage note. See Doc. #1, Exhibit A. Nevada law does not require the production of the original note before one of the statutorily 12 enumerated parties initiates a non-judicial foreclosure. Weingarter v. Chase Home Finance, LLC, 13 702 F. Supp. 2d 1276, 1280 (D. Nev. 2010). Therefore, Barlow fails to allege a claim upon which 14 relief can be granted. 15 F. Quiet Title 16 Under Nevada law, a quiet title action may be brought by someone who claims an adverse 17 interest in property. NRS § 40.010. Here, Silva, as the individual who recorded the notice of 18 default, does not claim any interest in the property adverse to Barlow. Therefore, Barlow has no 19 grounds to quiet title against Silva. 20 G. Fraud 21 “In alleging fraud or mistake, a party must state with particularity the circumstances 22 constituting fraud or mistake.” FED . R. CIV . P. 9(b). In order to meet the heightened pleading 23 requirements a plaintiff must specify the time, place, and content of the misrepresentation as well 24 as the names of the parties involved. See Yourish v. Cal. Amplifier, 191 F.3d 983, 993 n.10 (9th 25 Cir. 1999); see also, Parnes v. Gateway 2000, 122 F.3d 539, 549-50 (8th Cir. 1997) (requiring a 26 5 1 plaintiff to allege the requisite who, what, where, when, and how of the misrepresentation). 2 Here, Barlow fails to allege anything more than defendants defrauded him during the loan 3 process. There are no allegations that Silva failed to provide information or what information was 4 not provided by Silva. Further, Barlow fails to specifically allege the requisite “time, place, and 5 specific content of the false representation as well as the identities of the parties to the 6 misrepresentations.” Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004). Therefore, 7 the court finds that Barlow’s allegations are insufficient to support his claim for fraud. 8 H. Slander of Title 9 A claim for slander of title “involves false and malicious communications, disparaging to 10 one’s title in land, and causing special damages.” Executive Mgmt., Ltd. v. Ticor Title Co., 963 P.2d 11 465, 478 (Nev. 1998). 12 Here, the recorded notice of default and notice of trustee’s sale are not false and malicious 13 communications disparaging Barlow’s title. First, Barlow concedes that he was in default on his 14 loan. Thus the notice of default, although allegedly recorded before the substituted trustee was 15 authorized to do so, does not make a false statement about his title to the property. Second, it is not 16 false that the property was to be sold at a trustee’s sale. Therefore, the court finds that Barlow has 17 failed to state a claim for slander of title. 18 I. Abuse of Process 19 To establish a claim for abuse of process a party must show that an opposing party (1) had 20 an ulterior purpose for bringing a legal action other than resolving a legal dispute, and (2) used the 21 legal process in a way that is not proper in the regular conduct of the proceeding. Las Vegas Fetish 22 and Fantasy Halloween Ball, Inc. v. Ahern Rentals, 182 P.3d 764, 767 (Nev. 2008); Georgiou 23 Studio, Inc. v. Boulevard Invest, LLC, 663 F. Supp. 2d 973, 982 (D. Nev. 2009). 24 Here, the court finds that Barlow has failed to allege any facts demonstrating that 25 defendants had an ulterior motive in initiating non-judicial foreclosure proceedings other than the 26 6 1 resolution of his default on the mortgage note. Further, the process at issue in this action is a non- 2 judicial foreclosure which is not the characteristic legal action contemplated by an abuse of process 3 claim. See e.g., Smith v. Wachovia Mortgage Corp., 2009 WL 1948829, *5 (N.D. Cal. 2009). 4 Therefore, the court finds that Barlow has failed to state a claim for abuse of process. Accordingly, 5 the court shall grant Silva’s motion to dismiss.2 6 7 8 9 10 IT IS THEREFORE ORDERED that defendant’s motion to dismiss (Doc. #11) is GRANTED. Defendant Stanley S. Silva is DISMISSED as a defendant in this action. IT IS SO ORDERED. DATED this 25th day of August, 2011. 11 __________________________________ LARRY R. HICKS UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2 The court, in granting Silva’s motion to dismiss, notes that Barlow did not request leave to amend his complaint. However, even if he did request leave to amend, the court would deny the request because he has failed to make any showing that amendment in this particular case would not be futile or that he could overcome the identified pleading defects. 7
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