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Foley v. Wells Fargo Bank, N.A.

United States District Court, D. Nevada

January 10, 2012

JOHN FOLEY, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.


          ROBERT C. JONES United States District Judge

         This case arises out of the foreclosure of Plaintiff's mortgage. A trustee's sale has occurred. The Court previously granted a Temporary Restraining Order (“TRO”) against eviction but denied a preliminary injunction and Plaintiff's motion to reconsider, because the bankruptcy judge had ruled that the bank was entitled to proceed with foreclosure based on the original notice of default in light of Plaintiff's failure to comply with an adequate protection order that had stayed foreclosure temporarily. The issue was therefore precluded, and the Court had no appellate jurisdiction to review that order. Defendant has now moved for summary judgment. For the reasons given herein, the Court grants the motion as to all claims except that under 12 U.S.C. § 2605(e), which the Court dismisses with leave to amend. The Court expunges the lis pendens.


         On July 22, 2005, Plaintiff John Foley gave lender World Savings Bank, FSB (“WSB”) a $332, 800 purchase money mortgage against the property at 5690 Stillmeadow Dr., Reno, NV 89502 (the “Property”). (See Deed of Trust (“DOT”) 1-2, July 22, 2005, ECF No. 12-1, at 2). Golden West Savings Association Service Co. (“Golden West”) was the trustee, and Mortgage Electronic Registration Systems, Inc. (“MERS”) is listed nowhere on the DOT. (See Id. 2). On October 26, 2007, Golden West filed a Notice of Breach and Default and of Election to Cause Sale (the “NOD”). (See NOD 1-2, Oct. 26, 2007, ECF No. 12-1, at 22). The NOD indicated that the mortgage was being accelerated. (See Id. 1, fourth unnumbered paragraph (“[WSB] . . . does hereby declare all sums secured [by the DOT] immediately due and payable . . . .”)). Even assuming, therefore, that the issue is not precluded, the foreclosure appears to have been statutorily proper. See Nev. Rev. Stat. § 107.080(2)(c) (2007).

         Plaintiff and his wife petitioned for Chapter 13 bankruptcy in the Northern District of California on February 1, 2008, and a plan was confirmed on May 23, 2008. (See Compl. ¶ 13, Oct. 19, 2010, ECF No. 1-2). On September 2, 2008, Bankruptcy Judge Leslie Tchaikovsky granted in part Wachovia Mortgage, FSB's (“Wachovia”)[1] motion for relief from automatic stay, ordering that the stay would remain in place on three conditions: (1) on August 15, 2008, [2] the debtors would begin tendering regular monthly payments plus one-sixth of a payment each month to Wachovia; (2) the debtors would be completely current on the mortgage no later than close of business on February 27, 2009; and (3) the debtors would thereafter continue regular monthly payments. (See Adequate Protection Order 2, Sept. 2, 2008, ECF No. 12-1, at 25). On February 17, 2010, Judge Tchaikovsky terminated the automatic stay as to Wachovia, specifically indicating that it was “no longer restrained from completing its pending foreclosure initiated pursuant to the Notice of Default recorded on November 07, 2007 . . . .” (Order Terminating Automatic Stay 2, Feb. 17, 2010, ECF No. 12-1, at 30 (emphasis added)).[3]

         Cal-Western Reconveyance Corp. (“Cal-Western”), as Wachovia's power of attorney, substituted itself as trustee on October 29, 2008. (See Substitution of Trustee, Oct. 29, 2008, ECF No. 12-1, at 35). Cal-Western noticed a trustee's sale for May 10, 2010, (see Notice of Trustee's Sale, Apr. 12, 2010, ECF No. 12-1, at 37), which did not occur, and it noticed a second sale for September 7, 2010, (see Notice of Trustee's Sale, Aug. 9, 2010, ECF No. 12-1, at 40), on which date it sold the Property to Wachovia, (see Trustee's Deed Upon Sale, Sept. 7, 2010, ECF No. 12-1, at 43).

         On October 19, 2010, Plaintiff sued Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) as successor-in-interest to Wachovia in state court on seven causes of action: (1) wrongful foreclosure; (2) breach of contract; (3) breach of the covenant of good faith and fair dealing; (4) unjust enrichment; (5) slander of title; (6) breach of fiduciary duty; and (7) violations of 12 U.S.C. § 2605(e). Defendant removed on November 8, 2010. On December 29, 2010, the Justice Court of Reno Township granted Wells Fargo a Temporary Writ of Restitution, giving possession of the Property to Wells Fargo and ordering Plaintiff to vacate by 5:00 p.m. on January 28, 2011. (See Writ of Restitution, Dec. 29, 2010, ECF No. 12-1, at 55). Plaintiff asked the Court for a TRO against enforcement of the state court order, which the Court granted on January 20, 2011 and later extended by stipulation. The Court denied a preliminary injunction after a hearing on June 6, 2011 and denied Plaintiff's motion to reconsider. Defendant has now moved for summary judgment.


         A court must grant summary judgment when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those which may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See id. A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). In determining summary judgment, a court uses a burden-shifting scheme:

When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.

C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations and internal quotation marks omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party meets its initial burden, the burden then shifts to the opposing party to establish a genuine issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324.

         At the summary judgment stage, a court's function is not to weigh the evidence and determine the truth, but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See Id. at 249-50.

         III. ...

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