Mendez v. Wright, Findlay & Zak LLP
| Decision Date | 14 June 2017 |
| Docket Number | 2:16-cv-01077-RCJ-NJK |
| Parties | IRMA MENDEZ, Plaintiff, v. WRIGHT, FINDLAY AND ZAK LLP et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
This case arises from a residential foreclosure by the Fiesta Del Norte Homeowners Association (the "HOA") for failure to pay HOA fees. Pending before the Court are three motions to dismiss. (ECF Nos. 45, 58, 67.) For the reasons given herein, the motions are granted.
In 2005, Irma Mendez ("Plaintiff") purchased real property at 3416 Casa Alto Ave., North Las Vegas, Nevada, 89031 (the "Property") for $315,000, giving the lender a promissory note for $252,792 and a deed of trust against the Property securing the note. When Mendez became delinquent on her monthly assessment fees, non-party Alessi & Koenig ("Alessi") conducted a foreclosure sale to non-party Absolute Business Solutions, Inc. ("ABS"), on behalf of non-party Fiesta Del Norte Homeowners Association (the "HOA").
The HOA sale has given rise to three lawsuits now pending before this Court: Mendez v. Fiesta Del Norte Homeowners Ass'n, 2:15-cv-00314 (filed Feb. 23, 2015) ("the '314 Case"); Absolute Bus. Sols., Inc. v. Mortg. Elec. Registration Sys., Inc., 2:15-cv-01325 (filed July 13, 2015) ("the '1325 Case"); and the instant case, Mendez v. Wright, Findlay and Zak LLP, 2:15-cv-01077 (filed May 13, 2016) ("the '1077 Case"). The procedural background of these cases was detailed in the Court's August 3, 2016 Order deciding several motions in this case, (ECF No. 29), and need not be repeated here. In the August 3, 2016 Order, the Court dismissed Plaintiff's claims of fraud, violation of the Dodd-Frank Act, and violation of the Fair Debt Collection Practices Act, with leave to amend as to the fraud claim only. (ECF No. 29 at 11-12.) On September 1, 2016, the Court issued another order, stating that the August 3, 2016 Order "granted Plaintiff Irma Mendez leave to amend in part Motions to Dismiss (ECF #11 and 18 in case No. 2:16-cv-1077)," and ordering that Plaintiff's amended motions to dismiss be filed no later than September 19, 2016. (ECF No. 31 at 1.)
Subsequently, on September 9, 2016, the Clerk of the Court entered default against Defendant Bank of America, N.A. ("BOA"), due to its failure to timely file a responsive pleading or otherwise defend against Plaintiff's claims. (ECF No. 34.) Also on September 9, BOA filed a response to Plaintiff's request for entry of default, (ECF No. 35), as well as a motion to dismiss Plaintiff's claims of slander of title, negligence, and breach of implied contract, (ECF No. 36). BOA later filed a motion to set aside the entry of default, citing inadvertent error and excusable neglect as the reasons for its failure to answer the Complaint. (ECF No. 43.) Then, on September 23, 2016, Defendants Fannie Mae, Seterus, and Wright, Findlay and Zak ("WFZ") joined BOA's motion to dismiss, additionally requesting that the Court dismiss the slander of title, negligence, and breach of implied contract claims as pled against them. (ECF No. 45.)
On January 4, 2017, the Court entered an omnibus order to resolve all pending motions. (Order, ECF No. 57.) The Court granted the motion to set aside the entry of default against BOA,and then granted BOA's motion to dismiss the claims of slander of title, negligence, and breach of implied contract, without leave to amend. However, the Court deferred its ruling on the joinder to BOA's motion to dismiss, opting rather to give Plaintiff a full and fair opportunity to respond to the arguments for dismissal of Fannie Mae, Seterus, and WFZ. Lastly, the Court granted Plaintiff additional time to amend her Complaint in order to re-plead her previously dismissed fraud claim.
On January 10, 2017, Fannie Mae, Seterus, and WFZ filed another motion to dismiss Plaintiff's claims for declaratory judgment and for violations of the "Nevada Unfair Business Practices Act." (Mot. Dismiss, ECF No. 58.) On January 26, Plaintiff filed her First Amended Complaint ("FAC"). (Am. Compl., ECF No. 65.) On February 8, Fannie Mae, Seterus, and WFZ filed a motion to dismiss the claim of common law fraud from the FAC.
Therefore, now pending before the Court are three motions to dismiss, all filed by Fannie Mae, Seterus, and WFZ: the joinder to BOA's motion to dismiss the claims of slander of title, negligence, and breach of implied contract (ECF No. 45), the motion to dismiss the claims for declaratory judgment and for violations of the "Nevada Unfair Business Practices Act," (ECF No. 58), and the motion to dismiss the claim of fraud from the FAC (ECF No. 67).
Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47 (1957). 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. A motion to dismiss under Rule 12(b)(6) tests the complaint's sufficiency. See N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) forfailure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts pertaining to his own case making a violation "plausible," not just "possible." Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009) (citing Twombly, 550 U.S. at 556) ("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."). That is, under the modern interpretation of Rule 8(a), a plaintiff must not only specify or imply a cognizable cause of action (Conley review), but also must allege the facts of his case so that the court can determine whether the plaintiff has any basis for relief under the cause of action he has specified or implied, assuming the facts are as he alleges (Twombly-Iqbal review).
Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citation omitted). Similarly, "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss" without converting the motion to dismiss into a motion for summaryjudgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Moreover, under Federal Rule of Evidence 201, a court may take judicial notice of "matters of public record." Mack v. S. Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001).
To establish a slander of title claim in Nevada, the plaintiff must show the defendant made a false and malicious statement which disparaged the plaintiff's title in land causing special damages. Executive Mgmt., Ltd. v. Ticor Title Ins. Co., 963 P.2d 465, 478 (Nev. 1998). Recording a false document constitutes making a false statement. Summa Corp. v. Greenspun, 607 P.2d 569, 573 (Nev. 1980). A defendant makes a false statement maliciously if the defendant knew the statement was false or the defendant acted in reckless disregard of the statement's truth or falsity. Rowland v. Lepire, 662 P.2d 1332, 1335 (Nev. 1983). "Where a defendant has reasonable grounds for belief in his claim, he has not acted with malice." Id. Special damages may be established by impairment of the land's vendibility or expenses incurred in removing the cloud on the plaintiff's title caused by the false statement. Summa Corp., 655 P.2d at 515.
In her FAC, Plaintiff alleges that Fannie Mae, Seterus, and WFZ recorded, or caused to be recorded, two false and fraudulent documents: (1) a Corporate Assignment of Deed of Trust recorded November 13, 2014, whereby BOA transferred its interest in the Property to Fannie Mae (Assignment, ECF No. 1 at 72-73); and (2) a Substitution of Trustee recorded April 15, 2015, whereby First American Trustee Servicing Solutions, LLC was substituted as trustee under the DOT (Substitution, ECF No. 1 at 94-95).
Plaintiff argues that the November 2013 Assignment was false and fraudulent, because the recorded document stated that Seterus was the beneficiary of the DOT. (Am. Compl. ¶ 108, ECF No. 65.) Plaintiff is misreading the document. While the Assignment was prepared and recorded by Seterus, it plainly states that it is "the undersigned" that is transferring its beneficial interest in the DOT to Fannie Mae, the undersigned being BOA. Therefore, the Assignment simply does not make the false statement Plaintiff alleges...
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