Camacho-villa v. Great Western Home Loans

• Decision Date: 23 March 2011
• Docket Number: NO. 3:10-CV-210-ECR-VPC,3:10-CV-210-ECR-VPC
• Citation: Camacho-Villa v. Great Western Home Loans, NO. 3:10-CV-210-ECR-VPC (D. Nev. Mar 23, 2011)
• Parties: JOSE CAMACHO-VILLA and MICHELLE CAMACHO-VILLA, Plaintiffs, v. GREAT WESTERN HOME LOANS, a California Corporation; FIRST AMERICAN TITLE COMPANY; MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., a subsidiary of MERSCORP, INC., a Delaware corporation, [MERS], MTDS, INC., a California Corporation DBA MERIDIAN TRUST DEED SERVICE; MERIDIAN FORECLOSURE SERVICE, a California Corporation; INDYMAC MORTGAGE SERVICES, a division of ONEWEST BANK, FBS; and DOES and ROES 1-25 Individuals, Partnerships, or anyone claiming any interest to the property described in the action
• Court: U.S. District Court — District of Nevada

JOSE CAMACHO-VILLA and MICHELLE CAMACHO-VILLA, Plaintiffs,

v. GREAT WESTERN HOME LOANS, a California Corporation; FIRST AMERICAN TITLE COMPANY;MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., a subsidiary of MERSCORP, INC., a Delaware corporation, [MERS], MTDS, INC., a California Corporation DBA MERIDIAN TRUST DEED SERVICE;MERIDIAN FORECLOSURE SERVICE, a California Corporation; INDYMAC MORTGAGE SERVICES, a division of ONEWEST BANK, FBS; and DOES and ROES 1-25 Individuals, Partnerships, or anyone claiming any interest to the property described in the action

NO. 3:10-CV-210-ECR-VPC

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

RENO, NEVADA

Filed: March 23, 2011

Order

Plaintiffs are homeowners who allege that they are the victims of a predatory lending scheme perpetuated by Defendants. Plaintiffs assert causes of action for (i) injunctive relief; (ii) declaratory relief; (iii) violations of the Federal Fair Debt Collection Practice Act and the Nevada Fair Debt Collection law; (iv) unfair and deceptive trade practices; (v) unfair lending practices; (vi) violation of the covenant of good faith and fair dealing; (vii) wrongful foreclosure; (viii) quiet title; (ix) fraud through omission; (x) fraud in the inducement; (xi) conspiracy to commit fraud and conversion; (xii) civil conspiracy; (xiii) racketeering;and (xiv) unjust enrichment. Now pending are a Motion to Dismiss First Amended Complaint (#27) filed by Defendant Indymac Mortgage Services ("Indymac"); a Motion to Dismiss First Amended Complaint (#29) filed by Defendant Mortgage Electronic Registration System, Inc. ("MERS"); a Second Motion to Remand (#31) filed by Plaintiff Jose Camacho-Villa; and a Motion to Stay All Proceedings Pending Decision on Motion to Remand (#37) filed by Defendant MERS. The motions are ripe, and we now rule on them.

I. Factual Background

Plaintiffs allege that on or about December 14, 2006, Plaintiffs Jose Camacho-Villa and Michelle Camacho-Villa executed a note in the amount of $214,400 in favor of lender Great Western Home Loans (the "Mortgage Note") and a deed of trust (the "Deed of Trust") with respect to real property located at 7322 Warhol Drive, Sun Valley, Nevada 89433 (the "Property"). (Am. Compl. ¶ 3 (#26).) Plaintiffs contend that they made several attempts to modify their loan (the "Loan") through Indymac, believed to be the Loan servicer, but were not able to contact the holder of the note directly. (Id. at ¶34.) A notice of default with respect to the Loan was recorded on September 23, 2009 by Defendant Meridian Trust Deed Service. Id. On December 28, 2009, MTDS, Inc. recorded a Notice of Trustee's sale with respect to the Property.

II. Procedural Background

On March 8, 2010, Plaintiffs Jose Camacho-Villa and Michelle Camacho-Villa filed a "Complaint Quiet Title and Other EquitableRemedies" (#1 Ex. 1) in the Second Judicial District Court of the State of Nevada in and for the County of Washoe. On April 13, 2010, Defendants MERS and Indymac filed a Petition for Removal (#1) to the United States District Court for the District of Nevada. Also on April 13, 2010, Plaintiff Jose Camacho-Villa filed a Motion to Remand to State Court (#2). Defendant Indymac filed a Response (#7) to Motion to Remand to State Court (#2) and a Motion to Dismiss (#8) on April 30, 2010. Defendant MERS filed a Motion to Dismiss (#12) on May 3, 2010.

Pursuant to a June 3, 2010 Conditional Transfer Order (#20), the claims in this case related to the formation and/or operation of MERS were transferred by the United States District Panel on Multidistrict Litigation to the District of Arizona. The claims unrelated to the formation and/or operation of MERS were simultaneously remanded to this Court.

On July 12, 2010, the Court granted Plaintiffs leave to amend their complaint and denied Plaintiffs' Motion to Remand (#2), Defendant Indymac's Motion to Dismiss (#8) and Defendant MERS's Motion to Dismiss (#12) as moot.

Plaintiffs filed their amended complaint (#26) on July 19, 2010. Defendant Indymac filed a Motion to Dismiss First Amended Complaint (#27) on August 3, 2010. Defendant MERS filed a Motion to Dismiss First Amended Complaint (#29) on August 5, 2010. Plaintiff Jose Camacho-Villa filed a Second Motion to Remand (#31) on August 23, 2010. Defendant MERS filed a Motion to Stay All Proceedings Pending Decision on Motion to Remand (#37) on September 13, 2010.

III. Motion to Dismiss Standard

Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. Courts engage in a two-step analysis in ruling on a motion to dismiss. Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). First, courts accept only non-conclusory allegations as true. Iqbal, 129 S. Ct. at 1949. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Federal Rule of Civil Procedure 8 "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. Federal Rule of Civil Procedure 8 "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 1950. The Court must draw all reasonable inferences in favor of the plaintiff. See Mohamed v. Jeppesen Dataplan, Inc., 579 F.3d 943, 949 (9th Cir. 2009).

After accepting as true all non-conclusory allegations and drawing all reasonable inferences in favor of the plaintiff, the Court must then determine whether the complaint "states a plausible claim for relief." Iqbal, 129 S. Ct. at 1949. (citing Twombly, 550 U.S. at 555). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1949 (citing Twombly, 550 U.S. at 556). This plausibility standard "is not akin to a 'probability requirement, ' but it asksfor more than a sheer possibility that a defendant has acted unlawfully." Id. A complaint that "pleads facts that are 'merely consistent with' a defendant's liability...'stops short of the line between possibility and plausibility of 'entitlement to relief.'" Id. (citing Twombly, 550 U.S. at 557).

IV. Plaintiffs' Motion to Remand (#31) and Defendant MERS's Motion to Stay Proceedings (#37)

Pursuant to a June 3, 2010 Conditional Transfer Order (#20), the claims in this case related to the formation and/or operation of MERS were transferred by the United States District Panel on Multidistrict Litigation to the District of Arizona. The claims unrelated to the formation and/or operation of MERS were simultaneously remanded to this Court. Thus, we do not have jurisdiction over the entirety of this lawsuit, and cannot, at this time, remand it. Therefore, Plaintiffs' Motion to Remand (#31) will be denied. Plaintiffs may renew their motion to remand or file another motion to remand after the District of Arizona has completed pretrial proceedings and transferred any remaining MERS-related claims back to this court. As Plaintiffs' Motion to Remand (#31) will be denied, Defendant MERS's Motion to Stay Proceedings Pending Decision on Motion to Remand will therefore be denied as moot.

V. Defendant Indymac's Motion to Dismiss First Amended Complaint (#27)

Defendant Indymac filed a Motion to Dismiss (#27) Plaintiffs' First Amended Complaint (#22) pursuant to Federal Rule of CivilProcedure 12(b)(6) on August 3, 2010. Defendant Indymac alleges (i) that Plaintiffs' first cause of action, for injunctive relief, must be dismissed because it fails to state facts sufficient to constitute a cause of action against Indymac; (ii) that Plaintiffs' second cause of action, for declaratory relief, must be dismissed because it fails to state facts sufficient to constitute a cause of action against Indymac; (iii) that Plaintiffs' third cause of action, a claim for abusive debt collection practices, must be dismissed because Indymac is not a debt collector; (iv) that Plaintiffs' fourth cause of action, alleging unfair and deceptive trade practices, must be dismissed because Indymac is not a debt collector; (v) that Plaintiffs' fifth cause of action, for violation of unfair lending practices, must be dismissed because Indymac is not a lender; (vi) that Plaintiffs' sixth cause of action, alleging breach of the implied covenant of good faith and fair dealing, must be dismissed because Indymac is not a party to the Loan contract; (vii) that Plaintiffs' seventh cause of action for wrongful disclosure must be dismissed because Indymac did not record any documents on title with respect to the Property; (viii) that Plaintiffs' eighth cause of action for quiet title must be dismissed because Indymac did not cause a cloud on title to the Property; (ix) that Plaintiffs' ninth and tenth causes of action for fraud through omission and fraud in the inducement must be dismissed because they fail to state facts sufficient to sustain a cause of action against Indymac; and (x) that Plaintiffs' fourteenth cause of action unjust enrichment must be dismissed because it fails to state facts sufficient to constitute a cause of action against Indymac.

A. Plaintiffs' First Cause of Action Must be Dismissed Because It Fails to State Facts Sufficient to Constitute a Cause of Action for Injunctive Relief as to Defendant Indymac.

Plaintiffs' first cause of action seeks injunctive relief to enjoin Defendants from proceeding with a foreclosure sale with respect to the Property. (Am. Compl. ¶ 48 (#26).) This cause of action is based upon Plaintiffs' claim that the Notice of Default and Election to Sell Under Deed of Trust and the Notice of Trustee's Sale were improperly recorded on title to the subject property. Defendant Indymac contends that it had no involvement in the foreclosure of the Property, and so this cause of action must be dismissed.

Plaintiffs contend generally that "the continued...