Fed. Nat'l Mortg. Ass'n v. Aldridge
| Decision Date | 26 January 2016 |
| Docket Number | Case No. 2:15-CV-2366 JCM (GWF) |
| Parties | FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff(s), v. ERNEST C. ALDRIDGE, et al., Defendant(s). |
| Court | U.S. District Court — District of Nevada |
Presently before the court is plaintiff Federal National Mortgage Association's ("plaintiff") ("Fannie Mae") motion for a preliminary injunction (doc. # 18); defendant Clarence Willis filed a response (doc. #24), and plaintiff filed a reply. (Doc. #27). The court held a hearing on Junary 26, 2016, and granted plaintiff's motion for preliminary injunction.
Plaintiff owns the following nine real properties: 230 Flint Street, Fernley, Nevada 89408 (assessor's parcel No.: 020-323-06) ("Flint property"); 330 Garden Lane, Fernley Nevada 89408 (assessor's parcel No.: 020-729-15) ("Garden property"); 5373 Homeria Street, Las Vegas, Nevada 89113 (assessor's parcel No.: 163-28-720-01) ("Homeria property"); 7240 Mountain Moss Drive, Las Vegas, Nevada 89147 (assessor's parcel No.: 163-15-710-093) ("Mountain Moss property"); 7116 Cornflower Drive, Las Vegas, Nevada 89128(assessor's parcel No.: 138-27-515-029) ("Cornflower property"); 5320 Hombly Avenue, Las Vegas, Nevada 89146 (assessor's parcel No.: 163-01-511-026) ("Hombly property"); 2523 Palma Vista Avenue, Las Vegas, Nevada 89121 (assessor's parcel No.: 162-12-310-045) ("Palma Vista property"); 4912 Canadian Drive, Las Vegas, Nevada 89130 (assessor's parcel No.: 125-36-814-012) ("Canadian property"); and 5654 Thunder Spirit Street, Las Vegas, Nevada 89148 (assessor's parcel No.: 163-30-816-006) ("Thunder Spirit property") (collectively, "subject properties"). (Doc. #17)
Plaintiff alleges that over the course of several months, the defendants have engaged in a conspiracy to defraud plaintiff of its interest in these nine Nevada properties. Defendants, without any legal right or authorization by plaintiff, prepared, executed and recorded deeds purporting to transfer title from plaintiff to the defendants.
It appears that the defendants executed all nine schemes using substantially similar patterns. Fannie Mae acquired its ownership interest in a subject property pursuant to a Trustee's Deed Upon Sale recorded in the official records for the appropriate county. Then, defendant Ernest C. Aldridge would record and subsequently re-record a quitclaim deed. For each property, plaintiff Fannie Mae would purportedly deed the property to defendant Aldridge for the amount of $10.00. Defendant Clarence Moses Willis would then sign the quitclaim deed as purported authorized agent for Fannie Mae. The quitclaim deeds would list plaintiff's mailing address as 4912 Canadian Drive, Las Vegas, Nevada 89130.
Plaintiff asserts that Clarence Moses Willis is not, nor as ever been, an employee of plaintiff Fannie Mae and is not an agent or authorized representative of plaintiff in any capacity. Furthermore, 4912 Canadian Drive, Las Vegas, Nevada 89130 is not plaintiff's mailing address. Plaintiff also claims that it never authorized defendant Aldridge to prepare, execute or record any quitclaim deed, nor did plaintiff authorize defendant Willis to prepare, execute or record any quitclaim deed on its behalf.
Four of the properties, as detailed fully in plaintiff's motion for TRO and preliminary injunction, have had a Grant, Bargain, Sale Deed recorded in the records of Clark or Lyons County. (Doc. #17). "Pastor Ernest C. Aldridge and his successor, a corporate sole," has purportedly deeded each of these properties to one of defendants Geri L. McKinnion, Creative Solutions 4 U, or Clarence Moses Willis for $10.00.
On January 13, 2016, this court granted plaintiff's ex parte motion for a TRO, set a briefing schedule for the parties to file responses for the preliminary injunction motion, and set a hearing date. (Doc. #19). Defendant Willis was the only defendant to respond. (Doc. #24). The otherdefendants have not responded to the motion for preliminary injunction nor did they appear in court for the preliminary injunction hearing.
In response to the motion for preliminary injunction, defendant Willis made no substantive arguments pertaining to the motion for preliminary injunction. (Doc. #24). He did, however, provide various documents including a certificate of business asserting that he was conducting business under the fictitious name of "Federal National Mortgage Association," and a purported copy of a Nevada State Business License issued to "Federal National Mortgage Association" under the address 4912 Canadian Drive, Las Vegas, NV 89130, Defendant Willis's personal address. (Id.)
Plaintiff's reply argues that the attached exhibits in defendant's response are clear proof that defendant sought out and obtained various purported licenses in order to falsely operate under its name, which is prohibited by the statute that governs plaintiff. 12 U.S.C. § 1723(a)(e). Plaintiff never authorized defendant to use its name.
It is well established that a plaintiff seeking a preliminary injunction or temporary restraining order must demonstrate each of the following: (1) a likelihood of success on the merits; (2) that he is likely to suffer irreparable harm in the absence of relief; (3) that the balance of equities tips in his favor; and (4) that an injunction is in the public interest. Winter v. N.R.D.C., 555 U.S. 7, 20 (2008). The test is conjunctive, meaning the party seeking the injunction must satisfy each element.
Post-Winter, the Ninth Circuit has maintained its serious question and sliding scale test. See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011). "Under this approach, the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another." Id. at 1131. "Serious questions going to the merits and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest." Id. at 1135 (quotations omitted).
Additionally, pursuant to Local Rule 7-2, an opposing party must file points and authorities in response to a motion and failure to file a timely response constitutes the party's consent to the granting of the motion. See LR IB 7-2(d); United States v. Warren, 601 F.2d 471, 474 (9th Cir. 1979).
Plaintiff argues that it is likely to succeed on the merits of its claims for declaratory relief, quiet title, fraud, conspiracy to defraud, slander of title, unjust enrichment, fraudulent conveyance, unauthorized impersonation, and trespass. (Doc. #17). However, for the purposes of this order, the court will focus its likelihood of success on the merits analysis on only those claims central and immediately relevant to the injunction preventing the unauthorized use of plaintiff's name and conveyance against the real properties in question. Because the court finds that plaintiff is likely to succeed on its claims for unauthorized impersonation, declaratory relief, quiet title, fraud, and conspiracy to defraud, the court need not address whether plaintiff is likely to succeed on the merits of its remaining claims.
Defendant Willis' unauthorized use of the name Federal National Mortgage Association, and the use of the name in Aldridge Quitclaim Deeds, is a violation of federal law. 12 U.S.C. § 1723(a)(e) states that "[n]o individual, partnership, or corporation, except the bodies corporate named in section 1717(a)(2) of this title, shall hereafter use the words "Federal National Mortgage Association". . . or any combination of such words, as the name of part thereof under which the individual, association, partnership, or corporation shall do business." 12 U.S.C. § 1723(a)(e). An injunction is authorized for violating this statute. Id.
Plaintiff asserts it never authorized defendant to use its name, and there is no evidence to suggest the contrary. Indeed, the documents included in defendant's response make it clear that Willis intentionally sought out and obtained licenses in order to operate under the name Federal National Mortgage Association. (Doc. #25). Even if the licenses were properly issued, they would be void ab initio under the Supremacy Clause. Val del Sol Inc. v. Whiting, 732 F.3d 1006, 1022(9th Cir. 2013). Plaintiff therefore has a high likelihood of success on the merits, and Defendant Willis is enjoined from use of or operation under the name "Federal National Mortgage Association."
Plaintiff argues that it is likely to succeed on its cause of action for declaratory relief because it has superior claim to the title of the subject properties. 12 U.S.C. § 1723(a)(e) states that "[n]o individual, partnership, or corporation, except the bodies corporate named in section 1717(a)(2) of this title, shall hereafter use the words "Federal National Mortgage Association". . . or any combination of such words, as the name of part thereof under which the individual, association, partnership, or corporation shall do business." 12 U.S.C. § 1723(a)(e). An injunction is authorized for violating this statute. Id.
Declaratory relief is available when: (1) a justiciable controversy exists; (2) the controversy is between parties with adverse interests; (3) the party seeking declaratory relief has a legally protectable interest; and (4) the issue involved in the controversy is ripe for judicial determination. Doe v. Bryan, 102 Nev. 523, 525, 728 P.2d 443, 444 (1986) (citing Kress v. Corey, 65 Nev. 1, 26, 189 P.2d 352, 364 (1948)); see also Douglas v. Don King Productions, Inc., 736 F.Supp 223, 225 (1990). Declaratory relief is also appropriate to clarify parties' rights to property where allegations of fraudulent conveyances exist. See, e.g., Federal Home Loan Mortg. ...
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