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Hunt v. MTC Financial, Inc.

United States District Court, District of Nevada

March 20, 2015





Before the Court is Defendant MTC Financial, Inc. dba Trustee Corps’ (“Trustee Corps”) Motion to Dismiss (“Motion”). (Dkt. no. 9.) For the reasons discussed below, the Motion is granted in part and denied in part.


Plaintiffs Malcolm and Suzy Hunt purchased real property located at 42 North A Street in Virginia City, Nevada. (Dkt. no. 10-1.)[1] The Deed of Trust, which named Washington Mutual Bank as the lender, was recorded on June 21, 2006. (Id.) A Corporate Assignment of the Deed of Trust was recorded on September 9, 2013, memorializing the assignment of the Deed of Trust from the Federal Deposit Insurance Corporation, as receiver of Washington Mutual Bank, to JP Morgan Chase Bank, N.A. (Dkt. no. 10-4.) On December 5, 2013, a Substitution of Trustee was recorded substituting Trustee Corps as foreclosure trustee to the beneficiary of the Deed of Trust. (Dkt. no. 10-5.)

Trustee Corps executed a Notice of Breach of Default and Election to Cause Sale of Real Property Under Deed of Trust (“Notice of Default”), which was recorded on April 3, 2014. (Dkt. no. 1-2 at 3; dkt. no. 10-6.) The Notice of Default stated that Plaintiffs failed to make payments that became due on June 1, 2010. Attached to the Notice of Default was an “Affidavit of Authority in Support of Notice of Default and Election to Sell [N.R.S. § 107.080]” (“the Affidavit”) sworn by Susanna M. Forehlich, Vice President of JPMorgan Chase Bank. (Dkt. no 10-6.) It is unclear to the Court whether a notice of sale under NRS § 107.080(4) was subsequently recorded and whether the property sold in a non-judicial foreclosure sale.

Plaintiffs filed the instant action on June 3, 2014, in the First Judicial District Court of the State of Nevada in and for the County of Storey. (Dkt. no 1-2.) Defendants removed this action on July 10, 2014. (Dkt. no. 1.)

Plaintiffs named JPMorgan Chase Bank and Trustee Corps as Defendants, and allege three claims for wrongful foreclosure and a fourth claim for fraud. Trustee Corps seek to dismissal of all four claims.


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 pleaded 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). The Rule 8 notice pleading standard requires Plaintiff to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (internal quotation marks and citation omitted). 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) (quoting Twombly, 550 U.S. at 555). “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. When determining the sufficiency of a claim, “[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party[; however, this tenet does not apply to] . . . legal conclusions . . . cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (citation and internal quotation marks omitted). 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 (internal quotation marks omitted).

In Iqbal, 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-pleaded factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Iqbal, 556 U.S. 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 a 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, the 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.” Id. at 562 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1989)).


A. Wrongful Foreclosure Claims

Plaintiffs bring three distinct statutory wrongful foreclosure claims alleging violations of NRS § 107.087 (first claim), NRS § 107.500 (second claim), and NRS § 107.510 (third claim). However, Plaintiffs’ response to the Motion only addresses the third claim. Plaintiffs are deemed to have consented to granting the Motion with respect to the first two claims. L.R. 7-2(d); see Abbott v. United Venture Capital, Inc., 718 F.Supp. 828, 831 (D. Nev. ...

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