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Gale v. Citimortgage, Inc.

United States District Court, D. Nevada

August 20, 2014

ANDREA B. GALE, an individual, and as Trustee of Andrea Beryl Gale Revocable Living Trust, Plaintiff,


GLORIA M. NAVARRO, District Judge.

Pending before the Court is the Motion for Partial Summary Judgment (ECF No. 68) filed by Plaintiff Andrea B. Gale ("Plaintiff") on November 26, 2013. On December 13, 2013, Defendant CitiMortgage, Inc. ("CitiMortgage") filed its Response (ECF No. 72) and its Objection to Evidence (ECF No. 76) relied upon by Plaintiff in her motion. Defendant Nationstar Mortgage LLC ("Nationstar") and Indispensable Party Federal National Mortgage Association ("Fannie Mae") filed their Response (ECF No. 77) on December 20, 2013. Plaintiff filed an untimely Reply (ECF No. 82) on January 9, 2014.

Also before the Court is the Motion for Summary Judgment (ECF No. 85) filed by Nationstar and Fannie Mae on March 18, 2014. Plaintiff filed her Response (ECF No. 87) on April 14, 2014.

The final motion before the Court is the Motion to Dismiss (ECF No. 89) filed by CitiMortgage on May 29, 2014. Plaintiff filed a Response (ECF No. 91) on June 20, 2014, and CitiMortgage filed its Reply (ECF No. 93) on July 1, 2014.


On November 29, 2006, Plaintiff entered into a loan agreement with National Bank of Kansas City for a $216, 315 loan secured by a Deed of Trust on property located at 251 S. Green Valley Parkway #714, Henderson, Nevada 89012 (the "Property"). (Deed of Trust, Ex. 1 to Am. Complaint, ECF No. 1-4.) Plaintiff defaulted on her obligation under the Deed of Trust when she failed to make the monthly payment due on June 1, 2009. (2010 Notice of Default, Ex. 3 to Am. Complaint, ECF No. 1-4.) On November 1, 2009, CitiMortgage, who serviced the loan for the original lender, [1] entered into a Home Affordable Modification Trial Period Plan with Plaintiff whereby Plaintiff would make monthly payments of $838.75 for one year, and if Plaintiff successfully completed the plan, the parties would enter into a permanent Loan Modification Agreement ("LMA"). (Trial Period Plan, Ex. 2 to Am. Complaint, ECF No. 1-4.)

Plaintiff appears to have successfully made all her required payments under the Trial Period Plan because on October 22, 2010, Plaintiff entered into a LMA with CitiMortgage. (LMA, Ex. 1 to Pl.'s MPSJ, ECF No. 68.) Under the LMA, $47, 338.46 of the $245, 095.46 that remained outstanding on the loan was deferred and Plaintiff was obligated to begin making monthly payments of $840.66[2] beginning on December 1, 2010. ( Id. ) The LMA also "forever canceled" several terms in the Deed of Trust, including a term requiring that "[a]ll costs and expenses incurred by Lender in connection with this Agreement, including... attorney's fees, shall be paid by the Borrower." ( Id. ¶ 6.) Plaintiff, however, never made a single payment under the LMA. (Nationstar MSJ 4:8, ECF No. 77.)

In November of 2010, CitiMortgage transferred the servicing of the loan to Nationstar. (Pl.'s MPSJ 6:15-17, ECF No. 68); (Nationstar MSJ 2:21, ECF No. 77.) Following the transfer and Plaintiff's failure to make her first payment on December 1, 2010, Nationstar sent Plaintiff two letters, one dated January 7, 2011 and one dated January 15, 2011, erroneously stating that her loan was past due in the amount of $47, 829.40.[3] (Demand Letters, Ex. 2 to Pl.'s MPSJ, ECF No. 68.) However, Plaintiff also received monthly billing statements from Nationstar indicating that her amounts due each month were $852.37. (Billing Statements, Ex. 3 to Pl.'s MPSJ, ECF No. 68.) Plaintiff's first billing statement for her December 1, 2010 payment, which is dated November 22, 2010, shows an amount due of $852.37 and indicates a deferred principal amount of $47, 838.46. ( Id. ) After Plaintiff failed to make her December 1, 2010 payment, the billing statements she received in the following months also contained a charge of $2, 048.18 for "legal fees" in addition to her current monthly and past due payments. ( Id. )

The parties are in some dispute over the exact sequence and level of correspondence between them over the next few months. However, it is not disputed that from January to August Nationstar continued to send billing statements to Plaintiff indicating that $47, 838.46 of the loan's principal was deferred and that Plaintiff owed monthly payments of $852.37 while it simultaneously sent her conflicting demand letters indicating that her loan was past due in amounts that appeared to include the deferred principal. (Billing Statements, Ex. 3 to Pl.'s MPSJ, ECF No. 68); (Demand Letters, Ex. 2 to Pl.'s MPSJ, ECF No. 68.) Additionally, on multiple occasions throughout those months, Plaintiff spoke with agents of Nationstar concerning her loan and was informed that the demand letters were incorrect and that Plaintiff only owed $852.37 for each month's payment.[4] (Pl.'s MPSJ 7:5-7, ECF No. 68); (Nationstar MSJ 3:1-8, 3:21-4:3, ECF No. 77); (Servicing Records, Ex. 4 to Pl.'s MPSJ, ECF No. 68.) In fact, Plaintiff admits that after she received the initial demand letters stating an incorrect amount due, she "contacted Nationstar immediately and informed them that [the] payment amount was in error. Nationstar agreed... and stated that it would correct the problem." (Aff. of Pl. ¶ 6, Pl.'s MPSJ, ECF No. 68.) Despite these communications, however, Plaintiff continued to receive demand letters with the incorrect amount through August of 2011. (Demand Letters, Ex. 2 to Pl.'s MPSJ, ECF No. 68.) She also continued to refuse to pay any amount on the loan. (Nationstar MSJ 3:23-24, 4:8, ECF No. 77.)

Eventually, on July 8, 2011, Defendant Quality Loan Service Corporation ("Quality Loan"), as trustee for Nationstar entered a Notice of Breach and Default. (2011 Notice of Breach, ECF No. 85-6.) Later, on June 17, 2012, Quality Loan entered a Notice of Trustee's Sale. (Notice of Trustee's Sale, ECF No. 85-7.) Subsequently, the Property was sold to Fannie Mae at a trustee's sale on August 3, 2012. (Trustee's Deed upon Sale, ECF No. 85-8.)

Plaintiff initially filed this action in Nevada state court on October 18, 2012, requesting declaratory relief and money damages and seeking to enjoin Defendants from "causing further damage to Plaintiff's title, commencing statutorily defective foreclosures, or preventing her from receiving the benefits that were guaranteed to her under the terms of the LMA." ( Id. ¶ 85.) On December 4, 2012, Quality Loan[5] removed the action to this Court. (Notice of Removal, ECF No. 1.) After a hearing and several rounds of briefing, the Court ultimately denied Plaintiff's request for a preliminary injunction. (Order, ECF No. 45.) Following the Ninth Circuit's affirmance of the denial for a preliminary injunction on appeal (ECF No. 62), the parties filed the current pending motions.


A. Motion for Summary Judgment Standard

The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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 that 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. "Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor." Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). 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 applies a burden-shifting analysis. "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 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 satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. 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 Celotex Corp., 477 U.S. at 324.

At summary judgment, 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.

B. Motion to Dismiss Standard

Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See North 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) for failure 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).

"Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.... However, material which is properly submitted as part of the complaint may be considered on a motion to dismiss." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations 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 summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of Evidence 201, a court may take judicial notice of "matters of public record." Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district ...

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