Morris v. Green Tree Servicing, LLC
| Decision Date | 08 July 2015 |
| Docket Number | Case No.: 2:14-cv-01998-GMN-CWH |
| Parties | ROBERT MORRIS, Plaintiff, v. GREEN TREE SERVICING, LLC, a Delaware Limited Liability Company; AMERICAN RELIABLE INSURANCE COMPANY d/b/a ASSURANT, Defendants. |
| Court | U.S. District Court — District of Nevada |
Pending before the Court is the Motion to Dismiss (ECF No. 10) filed by Defendant American Reliable Insurance Company ("ARIC"). Plaintiff Robert Morris ("Plaintiff") filed a Response (ECF No. 15), and ARIC filed a Reply (ECF No. 21). Moreover, Defendant Green Tree Servicing, LLC ("Green Tree") filed a Joinder to ARIC's Motion to Dismiss (ECF No. 16) to which Plaintiff filed a Response (ECF No. 20) and Green Tree filed a Reply (ECF No. 22).1
This case arises out of the purchase of force-placed insurance ("FPI") by Defendant Green Tree from Defendant ARIC. Plaintiff purchased real property located at 2495 April Breeze Lane, Henderson, Nevada 89002 (the "Property"), which was financed through Countrywide Mortgage, Inc. (Am. Compl. ¶¶ 4-5). Subsequently, Bank of America became the servicer of the mortgage until November 1, 2011, when Green Tree became the servicer of the mortgage. (Id. ¶¶ 5-6).
Pursuant to the Deed of Trust, the servicer of the mortgage was responsible for the payment of insurance premiums through a mortgage escrow account.2 (Deed of Trust at 5-6, ECF No. 16-1). On November 17, 2011, Green Tree sent a letter to Plaintiff indicating that there was no homeowner's insurance on the Property and asked Plaintiff to provide proof of insurance or it would purchase FPI. (Am. Compl. ¶ 7; Ex. B-1 to ARIC's Mot. Dismiss, ECF No. 10-3). Plaintiff alleges that he made his monthly payments in full, including the monthly escrow deposit used for insurance premiums, every month from April 2005 through March 2012. (Am. Compl. ¶ 13). However, Plaintiff contacted Traveler's Insurance Co. (the insurance provider that Plaintiff selected when he purchased the Property), and learned that the policy had been cancelled in February 2011 for non-payment. (Id. ¶ 14). Plaintiff alleges that he was never contacted or notified that the premiums were not being paid, and until November 2011, Plaintiff had never been contacted or notified that his policy had lapsed. (Id. ¶ 15-16).
Green Tree sent a second letter to Plaintiff on December 17, 2011, requesting proof of insurance coverage. (Id. ¶ 20; Ex. B-2 to ARIC's Mot. Dismiss, ECF No. 10-4). Plaintiff alleges that proof of coverage was provided "the first week of January 2012." (Am. Compl. ¶ 20). Next, Green Tree sent a third letter to Plaintiff in January 2012, notifying Plaintiff that he owed $660 for FPI that was purchased by Green Tree from ARIC and covered the months of November and December 2011. (Id. ¶ 21). Plaintiff was informed by ARIC that Green Tree purchased FPI on January 5, 2012, and that ARIC had retroactively dated the policy to include coverage for the preceding two months. (Id. ¶ 37). Plaintiff alleges that he continued to makehis monthly mortgage payment on time "until he received a call from Defendant Green Tree who indicated Plaintiff's mortgage was delinquent (because the force-placed insurance had not been paid for) and that his monthly payments would not post to his account until he paid the $660 representing the alleged force-placed insurance." (Id. ¶ 24).
In August 2012, Plaintiff was sent a Notice of Default and Election to Sell, which Plaintiff alleges did not include any advisement as to Plaintiff's rights to mediation and did not comply with the Nevada Foreclosure Mediation Program. (Id. ¶ 29; see Ex. E to Green Tree's Mot. Dismiss, ECF No. 16-5). As a result, on September 12, 2012, Plaintiff sent Green Tree a check in the amount of $5640.01, along with an accord and satisfaction, which Plaintiff alleges "clearly stated that if Defendant Green Tree cashed or otherwise deposited the check that it would be voluntarily entering into the Accord and Satisfaction and would agree to seven (7) enumerated items in connection with the Accord and Satisfaction." (Id. ¶¶ 38-39).
In October 2012, Plaintiff contacted Green Tree and was informed that the check for $5640.01 had been applied to trial payments under a loan modification program. (Id. ¶ 40). Shortly thereafter, Plaintiff received documents from Green Tree purporting to modify the loan on the Property. (Id. ¶ 41). Further, on March 9, 2013, Plaintiff received a Notice of Trustee's sale that indicated that the Property would be sold at public auction on April 2, 2013. (Id. ¶ 43).
Plaintiff originally filed the instant action in state court on March 27, 2013. (See Pet. for Removal, ECF No. 1). Plaintiff subsequently filed his Amended Complaint, adding ARIC as an additional defendant. (See id.). ARIC removed the action to this Court on December 02, 2014. (See id.). Plaintiff's Amended Complaint asserts the following causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) intentional misrepresentation; (4) breach of fiduciary duty; (5) accord and satisfaction; (6) accounting of funds; (7) conversion; (8) civil conspiracy; (9) RICO; (10) racketeering; (11) racketeering conspiracy; (12) violation of the Truth in Lending Act, 15 U.S.C. § 1601 et seq.;(13) violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq.; (14) violation of the Nevada Deceptive Trade Practice Act, NRS 598.0903 et seq.; (15) violation of the Nevada Unfair Lending Practices Act, NRS 598D.010 et seq.; (16) wrongful foreclosure; (17) violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.; (18) violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.; (19) violation of NRS 107; (20) violation of NRS 645F; (21) statutory damages. (Am. Compl. ¶¶ 44-246).
Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as a factual allegation are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 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. This standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Id.
"Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). "However, material which is properly submitted as part of the complaint may be considered." Id. Similarly, "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached tothe 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 summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). On a motion to dismiss, a court may also take judicial notice of "matters of public record." Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed. R. Civ. P. 12(d).
If the court grants a motion to dismiss for failure to state a claim, leave to amend should be granted unless it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to Rule 15(a), the court should "freely" give leave to amend "when justice so requires," and in the absence of a reason such as "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962).
Collectively, Green Tree and ARIC assert that each cause of action pled by Plaintiff should be dismissed for failure to state a claim. Accordingly, the Court will analyze each cause of action in turn.
In his first cause of action, Plaintiff alleges that Green Tree breached the Deed of Trust by failing to pay homeowners' insurance premiums, failing to apply Plaintiff's mortgage payments to the principal balance of the Loan, and failing to acquire insurance equivalent to Plaintiff's prior homeowners' insurance. (Am. Compl. ¶¶ 51-53, ECF No. 6).
To state a claim for breach of contract in Nevada, the plaintiff must allege: (1) the existence of a valid agreement between the plaintiff and the defendant; (2) a breach by thedefendant; and (3) damages as a result of the breach. Calloway v. City of Reno, 993 P.2d 1259 (Nev. 2000). Although Green Tree does not dispute the existence of the Deed of Trust as a valid agreement between the parties, it maintains that it did not breach because "Plaintiff's First Amended Complaint never alleges he made a payment to Green Tree with the escrowed insurance payment included" and "Green Tree was clearly not involved in any lapse and thus is not responsible for any breach of contract." (Green Tree's Reply 3:18-24, ECF No. 22).
Pursuant to Section 2 of the Deed of Trust,...
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