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Donald S. Hackett, Jr. and Jennie Hackett v. Onewest Bank Fsb; Mtc Financial

December 3, 2012


The opinion of the court was delivered by: Miranda M. Duunited States District Judge

ORDER (Def. MTC's Motion to Dismiss Claims 1, 2, and 4; Def. OneWest's Motion to Dismiss -- dkt. nos. 6, 10).


Before the Court is Defendant MTC Financial Inc. dba Trustee Corps' ("MTC") Motion to Dismiss Complaint as to the First, Second, and Fourth Claims against MTC. (Dkt. no. 6.) Also before the Court is Defendant OneWest Bank's ("OneWest") Motion to Dismiss the Complaint against OneWest. (Dkt. no. 10.) For the reasons discussed below, MTC's motion is granted in part and denied in part and OneWest's motion is denied.


This case arises from an alleged wrongful foreclosure. Plaintiffs' Complaint alleges the following facts:

In December 2006, Plaintiffs executed a Note secured by a Deed of Trust ("DOT") in favor of IndyMac Bank, FSB ("Lender") for the purchase of real property at 3825 Bowers Hollow Avenue, North Las Vegas, Nevada 89085 ("Property").*fn1 The recorded DOT identified IndyMac Bank FSB as the lender, Commerce Title Insurance Company ("Commerce") as the Trustee, and MERS as the beneficiary. On July 15, 2009, OneWest and MTC recorded a document purporting to replace Commerce with MTC as the substituted trustee. On December 22, 2010, MTC recorded a Notice of Default and Election to Sell under Deed of Trust. On January 18, 2011, MERS recorded an Assignment of the Deed of Trust assigning all interests in the DOT to OneWest. On August 30, 2011, OneWest recorded a Substitution of Trustee naming MTC as trustee under the DOT. On January 26, 2012, MTC recorded the Notice of Trustee's Sale and on March 20, 2012, a Trustee's Deed Upon Sale was recorded in favor of Maverick Valley Properties, LLC ("Maverick"). On April 12, 2012, Maverick instituted eviction proceedings against Plaintiffs.

Plaintiffs allege that OneWest was not a beneficiary under the DOT, MTC was not a legally appointed substituted trustee, and therefore, neither OneWest nor MTC had the power of sale. As neither had the power of sale, the Trustee's Sale was void and Maverick never gained any interest in the Property. Furthermore, Plaintiffs allege that they were not in default or failed in performance under the Note or Deed of Trust and therefore any foreclosure was unwarranted and wrongful.

Plaintiffs filed the instant action in the Eighth Judicial District for the State of Nevada asserting four claims: (1) wrongful foreclosure against OneWest and MTC, (2) cancel corrective trustee's deed upon sale against OneWest and MTC, (3) quiet title against Maverick, and (4) deceptive trade practices against MTC. MTC removed the case to this Court pursuant to diversity jurisdiction. Defendants OneWest and MTC move to dismiss the complaint for failure to state a claim.


A. Legal Standard

A court may dismiss a plaintiff's complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986). "Factual allegations must be enough to rise above the speculative level." Id. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Id. at 570.

In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, a district court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 679. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 678. Second, a district court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has "alleged but not shown that the pleader is entitled to relief." Id. at 679 (internal quotation marks omitted). When the claims in a complaint have not crossed the line from conceivable to plausible, plaintiff's complaint must be dismissed. Twombly, 550 U.S. at 570. A complaint must contain either direct or inferential allegations concerning "all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1989) (emphasis in original)). The Court also notes the well-established rule that pro se complaints are subject to "less stringent standards than formal pleadings drafted by lawyers" and should be "liberally construed." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citation omitted).

B. Analysis

MTC and OneWest move for dismissal based on failure to state a claim. MTC argues that any claim against MTC is barred by the "agent's immunity rule." Alternatively, MTC argues it has substantially complied with Nevada foreclosure statutes and that MTC had a Nevada business license during the period in question. MTC and OneWest both argue that Plaintiffs' claims fail ...

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