RH Kids, LLC v. Nat'l Default Servicing Corp.

Decision Date09 February 2023
Docket Number2:22-CV-2135 JCM (VCF)
PartiesRH KIDS, LLC, Plaintiffs, v. NATIONAL DEFAULT SERVICING CORPORATION, et al., Defendants.
CourtU.S. District Court — District of Nevada

RH KIDS, LLC, Plaintiffs,
v.
NATIONAL DEFAULT SERVICING CORPORATION, et al., Defendants.

No. 2:22-CV-2135 JCM (VCF)

United States District Court, D. Nevada

February 9, 2023


ORDER

Presently before the court is plaintiff RH Kids LLC's motion to remand. (ECF No. 9). Defendant Bank of North America, N.A. filed a response (ECF No. 13), to which defendant replied (ECF No. 17).

Also before the court is defendant's emergency motion to expunge lis pendens (ECF No. 12). Plaintiff filed a response (ECF No. 16), to which defendant replied (ECF No. 18).

I. Background

This matter arises from a dispute regarding the scheduled foreclosure sale of real property located at 8151 Rock Meadows Drive in Las Vegas, Nevada (the “property”). (ECF No. 12). In 2007, a deed of trust was recorded against the property. (ECF No. 12). In February 2012, that deed of trust was assigned to defendant. (Id.).

Defendant is a servicer of loans for the Federal National Mortgage Association (“Fannie Mae”). Fannie Mae, which is itself managed by the Federal Housing Finance Agency (“FHFA”) has owned the loan secured by the deed of trust since its recordation in 2007. (ECF Nos. 12-7; 12-8).

1

Prior to that 2012 assignment to defendant, in March 2009, defendant's predecessor-in-interest recorded a notice of default on the deed of trust, followed by a notice of sale in July 2009. (ECF Nos. 12-18; 12-19). It later recorded a rescission of that notice of default on March 30, 2011. (ECF No. 12-20).

In May 2012, the homeowners association (“HOA”) governing the property recorded a notice of delinquent assessment lien, followed by notices of default and sale. (ECF No. 12-9). Plaintiff's predecessor-in-interest purchased the property at the noticed HOA foreclosure sale, and a series of deeds put it in plaintiff's possession. See (ECF Nos. 12-10; 12-11).

In 2016, plaintiff sued defendant in one of the countless lawsuits regarding the Nevada HOA superpriority lien statute alleging that the HOA foreclosure extinguished defendant's deed of trust. See (ECF No. 12-14). A Nevada state court held in June 2020 that the deed of trust was not extinguished by the HOA sale, and the property was subject to defendant's deed of trust. See (ECF no. 12-7). The Nevada Court of Appeals affirmed. See (ECF No. 12-8).

Following that litigation, plaintiff sent a letter purporting to request information on the deed of trust pursuant to NRS 107.200 et seq to a Plano, Texas address allegedly belonging to defendant. (ECF No. 1-1 at 61-63). The assignment of the deed of trust lists defendant's address as 13150 World Gate Drive, Herndon, Virginia 20170. Compare (id.) (the letter) with (ECF No. 12-5) (the assignment of the deed of trust).

On August 9, 2022, defendant caused a second notice of default to be recorded, and a later notice of sale schedule a foreclosure sale for January 4, 2023. See (ECF Nos. 12-6; 12-22). Defendant thereafter postponed the sale to February 10, 2023.

On December 6, 2022, plaintiff brought this suit in Nevada state court asserting claims against defendant for 1) quiet title, 2) declaratory judgment, 3) injunctive relief, and 4) wrongful foreclosure. (ECF No. 1-1). It also recorded a lis pendens against the property. See (id.). Defendant then timely removed this matter to this court. (ECF No. 1). Plaintiff now moves to remand the case to state court. (ECF No. 9). Defendant, on the other hand, has moved on an emergency basis to expunge the lis pendens prior to the scheduled February 10 sale. (ECF No. 12).

2

Following a minute order setting an expedited briefing schedule (ECF No. 15), this court now considers both motions.

II. Legal Standard

A. Motion to Remand

“‘Federal courts are courts of limited jurisdiction,' possessing ‘only that power authorized by Constitution and statute.'” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994)). Pursuant to 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a).

Because the court's jurisdiction is limited by the constitution and 28 U.S.C. §§ 1331, 1332, “[t]he threshold requirement for removal under 28 U.S.C. § 1441 is a finding that the complaint contains a cause of action that is within the original jurisdiction of the district court.” Ansley v. Ameriquest Mortg. Co., 340 F.3d 858, 861 (9th Cir. 2003) (quoting Toumajian v. Frailey, 135 F.3d 648, 653 (9th Cir. 1998)). Thus, “it is to be presumed that a cause lies outside the limited jurisdiction of the federal courts and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009).

Upon notice of removability, a defendant has thirty days to remove a case to federal court once he knows or should have known that the case was removable. Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006) (citing 28 U.S.C. § 1446(b)(2)). Defendants are not charged with notice of removability “until they've received a paper that gives them enough information to remove.” Id. at 1251.

Specifically, “the ‘thirty day time period [for removal] . . . starts to run from defendant's receipt of the initial pleading only when that pleading affirmatively reveals on its face' the facts necessary for federal court jurisdiction.” Id. at 1250 (quoting Harris v. Bankers Life & Casualty Co., 425 F.3d 689, 690-91 (9th Cir. 2005) (alterations in original)). “Otherwise...

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