United States District Court, D. Nevada
JAMES C. MAHAN, District Judge.
Presently before the court is plaintiff Wells Fargo Bank, N.A.'s (hereinafter "plaintiff") motion to dismiss defendants' counterclaim. (Doc. # 10). Defendants ANC Vista, LLC, et al. (hereinafter "defendants") filed a response, (doc. # 13), to which plaintiff replied, (doc. # 14).
Defendants are the borrowers and guarantors of a $21, 000, 000 loan from plaintiff. (Doc. # 1). When defendants failed to repay the loan, plaintiff foreclosed on the real property securing the loan. (Doc. # 1). The foreclosure did not generate sufficient recovery to satisfy the entire balance of the loan and left a deficiency of approximately $5, 835, 000. (Doc. # 1).
Plaintiff then filed a complaint against defendants for a deficiency judgment, alleging breach of the loan documents and guaranty agreements based on defendants' failure to pay the amount due under the loan. (Doc. # 1). Defendants filed an answer and counterclaim for breach of the covenant of good faith and fair dealing. (Doc. # 8). Plaintiff then filed the instant motion. (Doc. # 10).
II. Legal Standard
A. Motion to dismiss
A court may dismiss a 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 Atl. 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." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (citation omitted).
"Factual allegations must be enough to rise above the speculative level." Twombly , 550 U.S. at 555. 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." Iqbal , 556 U.S. at 678 (citation omitted).
In Iqbal , the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the 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 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 678.
Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 678-79. A claim is facially plausible when the plaintiff's complaint alleges facts that allows 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. (internal quotations omitted). When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly , 550 U.S. at 570.
The Ninth Circuit addressed post- Iqbal pleading standards in Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court stated, "First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to ...