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Sandy v. Bank of America Corp.

United States District Court, D. Nevada

December 16, 2014

BANK OF AMERICA CORP., et al., Defendant(s)

Bayardo Reno Sandy, Plaintiff, Pro se, Las Vegas, NV.

For Bank of New York Mellon, N.A., Mortgage Electronic Registration System, Inc., Select Portfolio Services, Inc., Defendants: Dana Jonathon Nitz, LEAD ATTORNEY, Christopher L. Benner, Wright Finlay & Zak LLP, Las Vegas, NV.

For Holders of Alternative Loan Trust 2007-HY2, Defendant: Dana Jonathon Nitz, LEAD ATTORNEY, Wright Finlay & Zak LLP, Las Vegas, NV.



Presently before the court is a motion to dismiss filed by defendants Mortgage Electronic Registration Systems, Inc. (" MERS"); Select Portfolio Services, Inc. (" SPS"); and the Bank of New York Mellon, f/k/a the Bank of New York (" BNY-Mellon"), as trustee, on behalf of the holders of the Alternative Loan Trust 2007-HY2 Mortgage Pass Through Certificates (" HALT") (hereinafter " defendants"). (Doc. # 15). Pro se plaintiff Bayardo Reno Sandy (hereinafter " plaintiff") filed a response, (doc. # 18), and defendants filed a reply, (doc. # 24).

Also before the court is defendants' request for judicial notice in support of their motion to dismiss. (Doc. # 16). Plaintiff filed an objection to defendants' request. (Doc. # 19).

Also before the court are plaintiff's motions for default judgment. (Docs. # 20, 21, 22).

I. Background

On August 11, 2006, plaintiff borrowed $241, 600 from defendant Countrywide Home Loans, Inc. (" Countrywide"), pursuant to a promissory note and deed of trust against his property. (Doc. # 1). Defendants are the lenders and their nominees and servicers. (Doc. # 1). BNY-Mellon is the trustee of the deed of trust pursuant to an assignment on October 8, 2010. (Doc. # 15). SPS is the servicer of BNY-Mellon. BNY-Mellon acts as trustee for HALT, the beneficiary of the loan agreement. (Doc. # 1). MERS is the nominee for Countrywide.

According to defendants, plaintiff failed to make certain payments required under the deed of trust, beginning after February 1, 2009. (Doc. # 15). On October 6, 2010, a notice of default and election to sell under the deed of trust was recorded. (Doc. # 15). This notice was then rescinded on February 10, 2011. (Doc. # 15). Defendants have not foreclosed on the property to date. (Doc. # 15). On July 7, 2014, plaintiff filed two lis pendens on the instant property. (Doc. # 15).

Also on July 7, 2014, plaintiff filed the instant action alleging that defendants conspired to force his property into foreclosure and to take possession by fraud and malice. (Doc. # 1). Plaintiff asserted claims for fraud, harassment, conspiracy, and quiet title, among others. (Doc. # 1).

II. Legal Standard

i. Judicial notice

Federal Rule of Evidence 201 provides for judicial notice of adjudicative facts. Under Rule 201(b)(2), the court may " judicially notice a fact that is not subject to reasonable dispute because it . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b)(2).

Rule 201(c)(2) states that the court " must take judicial notice if a party requests it and the court is supplied with the necessary information." Fed.R.Evid. 201(c)(2). Finally, Rule 201(d) provides that " [t]he court may take judicial notice at any stage of the proceeding." Fed.R.Evid. 201(d).

The court may take judicial notice of public records in ruling on a Rule 12(b)(6) motion. See United States v. Corinthian Colls., 655 F.3d 984, 998-99 (9th Cir. 2011); see also Intri-Plex Tech., Inv. v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007) (citations and quotation marks omitted) (" A court may take judicial notice of matters of public record without converting a motion to dismiss into a motion for summary judgment as long as the facts noticed are not subject to reasonable dispute.").

ii. Motion to dismiss

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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (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.

Second, the 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 it has not shown -- that the pleader is entitled to relief." Id. at 679 (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 relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.


iii. Rule 9(b)

Allegations of fraud are subject to a heightened pleading standard. See Fed.R.Civ.P. 9(b) (" [A] party must state with particularity the circumstances constituting fraud . . . ."). Rule 9(b) provides that " [m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b).

Federal Rule of Civil Procedure 9(b) operates " to give defendants notice of the particular misconduct which is alleged, " requiring plaintiffs to identify " the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations." Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir. 1993) (citations omitted).

iv. Default judgment

Obtaining a default judgment is a two-step process. Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First, " [w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed.R.Civ.P. 55(a). Federal Rule of Civil Procedure 55(b)(2) provides that " a court may enter a default judgment after the party ...

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