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Williams v. National Default Servicing Corp.

United States District Court, D. Nevada

January 11, 2017

RONALD WILLIAMS, JANN WILLIAMS, Plaintiffs,
v.
NATIONAL DEFAULT SERVICING CORP. et al., Defendants.

          ORDER

          GLORIA M. NAVARRO, CHIEF JUDGE.

         Pending before the Court are two Motions to Dismiss (ECF Nos. 12, 14), one filed by Defendants National Default Servicing Corporation (“NDSC”), Michael A Bosco, Wendy Van Luven, and Carmen Navejas (collectively, “NDSC Defendants”), and one filed by Duke Partners II, LLC (“Duke Partners”) (NDSC Defendants and Duke Partners collectively, “Defendants”). Also pending before the Court are many motions filed by pro se Plaintiffs Ronald and Jann Williams (“Plaintiffs”).[1] (See ECF Nos. 35, 39, 55, 56, 72).[2] Duke Partners has also filed a Motion for Sanctions (ECF No. 42) and Motion for Finding of Vexatious Litigants (ECF No. 60). All of these motions are fully briefed.[3]

         Also pending before the Court is Duke Partners' Emergency Ex Parte Motion for Temporary Restraining Order (“TRO”). (ECF No. 75).

         I. BACKGROUND

         This action arises out of the foreclosure sale of real property located at 258 Bonnie Claire Court, Henderson, Nevada 89074 (the “Property”). (Compl. ¶ 17, ECF No. 1). On October 25, 2005, Plaintiffs[4] obtained a loan in the amount of $332, 500.00 from Washington Mutual Bank, FA (“WMB”) that was secured by a Deed of Trust on the Property. (Deed of Trust, Ex. 2 to Duke Partners MTD, ECF No. 14-2).[5] The Deed of Trust named WMB as the beneficiary and California Reconveyance Company as the trustee. (Id.). On May 2, 2006, Plaintiffs obtained a Home Equity Line of Credit in the amount of $47, 344.75 from GE Money Bank, also secured by a Deed of Trust on the Property. (Second Deed of Trust, Ex. 3 to Duke Partners MTD, ECF No. 14-3).

         On October 22, 2009, California Reconveyance Company Recorded a Notice of Default and Election to Sell. (Ex. 5 to Duke Partners MTD, ECF No. 14-5). Plaintiffs participated in the Nevada Foreclosure Mediation Program and entered into an agreement to modify their loan, but Plaintiffs subsequently rescinded the agreement. (Ex. 6-7 to Duke Partners MTD, ECF No. 14-6-14-7). On January 15, 2010, Plaintiffs filed a Verified Petition for Judicial Review by the Eight Judicial District Court for Clark Count, Nevada (“Nevada State Court”), which upheld the Foreclosure Mediation and allowed the foreclosure to proceed. (Ex. 8-9 to Duke Partners MTD, ECF No. 14-8-14-9). Plaintiffs then filed a Petition for Writ of Mandamus with the Nevada Supreme Court, which was denied on May 7, 2010, on the procedural grounds that Plaintiffs should have filed an appeal, not a Petition for Writ of Mandamus. (Ex. 10-11 to Duke Partners MTD, ECF No. 14:10-14-11).

         On January 27, 2010, Plaintiffs filed a Complaint in this Court against JPMorgan Chase Bank, N.A. (“Chase”), among other defendants, alleging claims for violation of the Fair Debt Collection Practices Act under 15 U.S.C. § 1692a (the “FDCPA”), fraudulent misrepresentation and failure to disclose, and unjust enrichment. (See Williams v. JPMorgan Chase Bank, N.A., Case No. 2:10-cv-0118-PMP-PAL (D. Nev. 2010)). On April 5, 2010, the Court dismissed Plaintiffs' case for failure to state a claim, explaining that Plaintiffs' allegations failed to demonstrate that defendants were debt collectors under the FDCPA, and “it appears [on] the face of the Complaint that the [defendants] are simply pursuing recovery of monies under an express written contract.” (Order, Williams, Case No. 2:10-cv-0118-PMP-PAL (D. Nev. April 5, 2010), ECF No. 44). On November 2, 2011, this Order was affirmed by the Ninth Circuit. (See Memorandum of USCA, Ninth Circuit, Williams, Case No. 2:10-cv-0118-PMP-PAL (D. Nev. November 2, 2011), ECF No. 69).

         On September 26, 2012, a Substitution of Trustee was recorded on the Property, making NDSC the new Trustee. (Ex. 15 to Duke Partners MTD, ECF No. 14-15). On February 11, 2014, NDSC filed a Notice of Rescission of Notice of Default and Election to Sell. (Ex. 16 to Duke Partners MTD, ECF No. 14-16). On June 9, 2014, the Federal Deposit Insurance Corporation (“FDIC”) as Receiver for WMB recorded a Corporate Assignment of Deed of Trust on the Property, assigning the beneficiary interest in the Deed of Trust to Chase. (Ex. 17 to Duke Partners MTD, ECF No. 14-17). According to the Assignment, the transfer of beneficiary interest to Chase actually occurred on September 25, 2008. (Id.). On July 8, 2014, NDSC recorded a new Notice of Default and Election to Sell. (Ex. 18 to Duke Partners MTD, ECF No. 14-18).

         On March 18, 2015, after participating again in the Nevada Foreclosure Mediation Program, Plaintiffs filed another Verified Petition for Judicial Review in Nevada State Court of this second Foreclosure Mediation. (Ex. 20 to Duke Partners MTD, ECF No. 14-20). In their Petition, Plaintiffs asserted that Chase “is not the owner of [Plaintiffs'] mortgage note.” (Id. at 4:1). On October 23, 2015, the Nevada State Court denied Plaintiffs' Petition, instead finding that Chase “is the current beneficiary under the deed of trust securing the promissory note evidencing [Plaintiffs'] loan” and “has the authority to enforce the promissory note” on Plaintiffs' loan. (Order 4:9-14, Williams v. JPMorgan Chase Bank, Case No. A-15-715441-J (Nev. 8th Jud. Dist. Ct. Oct. 21, 2015); (see also Ex. 21 to Duke Partners MTD, ECF No. 14-21). The Nevada State Court also ordered that a “Foreclosure Mediation Program Certificate shall issue with respect to the [Plaintiffs'] property.” (Order 5:3-6). The Foreclosure Mediation Program Certificate was recorded on February 4, 2016. (Ex. 22 to Duke Partners MTD, ECF No. 14-22).

         On May 31, 2016, NDSC recorded a Notice of Trustee's Sale, providing notice to Plaintiffs that the Property would be sold on June 24, 2016. (Ex. 23 to Duke Partners MTD, ECF No. 14-23). On July 8, 2016, NDSC recorded a Trustee's Deed upon Sale conveying the Property to Duke Partners, the highest bidder at the June 24, 2006 foreclosure sale, for $219, 200.00. (Ex. 24 to Duke Partners MTD, ECF No. 14-24).

         On August 5, 2016, Plaintiffs filed the instant Complaint alleging the following three causes of action: (1) “False Representation concerning Title and Fraudulent Foreclosure”; (2) Quiet Title; and (3) Intentional Infliction of Emotional Distress. (Id. ¶¶ 18-31).

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure (“Rule”) 12(b)(6) 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).

         The Court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is plausible, not just possible. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 555) (emphasis added).

         “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). The Court need not accept as true those allegations that contradict facts properly subject to judicial notice. Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000).

         If the court grants a motion to dismiss for failure to state a claim, leave to amend should be granted unless it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to Rule 15(a), the court should “freely” give leave to amend “when justice so requires, ” and in the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue ...


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