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Herrera v. Nationstar Mortgage, LLC

United States District Court, D. Nevada

March 22, 2017

GERARDO HERRERA, et al., Plaintiffs,
v.
NATIONSTAR MORTGAGE, LLC, et al., Defendants.

          ORDER

          GLORIA M. NAVARRO, CHIEF JUDGE.

         Pending before the Court is the Motion to Dismiss, (ECF No. 30), filed by Defendant Nationstar Mortgage, LLC (“Nationstar”) and joined by Defendant Quality Loan Service, Corp. (“Quality Loan”) (collectively “Defendants”). Plaintiffs Gerardo Herrera and Estate of Genny Herrera (collectively “Plaintiffs”) filed a Response, (ECF No. 33), [1] and Defendants did not file a Reply. For the reasons set forth herein, Defendants' Motion to Dismiss is GRANTED in part and DENIED in part.

         I. BACKGROUND

         This case concerns a dispute over a loan agreement and the potential foreclosure of the real property located at 586 Jackson Drive, Henderson, NV 89014 (“the Property”). Plaintiffs first acquired the Property in February 2005. (Compl. ¶ 12, ECF No. 1). To secure payment for the Property, Plaintiffs executed a Promissory Note (the “Note”) and Deed of Trust (“Deed of Trust”) (collectively “the loan agreement”). (Id. ¶ 14). Thereafter, Plaintiffs allegedly “experienced a major reduction in income, ” which Plaintiffs claim made it difficult to make monthly payments on the loan agreement. (Id. ¶¶ 15, 16). As a result, Plaintiffs applied for the Home Affordable Modification Program (“HAMP”), expecting that a loan modification would provide relief from a pending foreclosure. (Id. ¶ 17). After submitting financial statements and hardship letters, Plaintiffs allegedly were told that the application “was still in review and no documents were being requested.” (Id. ¶ 20). On August 30, 2015, Plaintiffs received notice from Quality Loan that the loan agreement was in default. (Id. ¶ 21). After following up with Nationstar, Plaintiffs allegedly were informed that the property faced foreclosure. (Id.).

         On May 9, 2016, Plaintiffs filed a Complaint and Application for Temporary Restraining Order, alleging over a dozen claims against Defendants. On August 12, 2016, Nationstar filed the instant Motion, seeking dismissal on Plaintiffs' claims with prejudice.

         II. LEGAL STANDARD

         Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as a factual allegation are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         “Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). “However, material which is properly submitted as part of the complaint may be considered.” Id. 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). On a motion to dismiss, a court may also take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(d).

         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 prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962).

         III. DISCUSSION

         a. General Deficiencies in the Complaint

         As a preliminary matter, Quality Loan correctly notes that the Complaint fails to provide adequate notice as to which specific allegations pertain to which defendants. (See Joinder to Mot. to Dismiss 3:16-17, ECF No. 32). As stated above, a pleading must give “fair notice of a legally cognizable claim and the grounds on which it rests.” Twombly, 550 U.S. at 555; see also Fed. R. Civ. P. 8(a). The purpose of this requirement is not only to provide defendants with a fair opportunity to respond to allegations, but also to ensure the effective use of the Court's resources. See McHenry v. Renne, 84 F.3d 1172, 1179-80 (9th Cir. 1996) (finding dismissal appropriate under Federal Rule of Civil Procedure 8 because “[p]rolix, confusing complaints . . . impose unfair burdens on litigants and judges.”).

         Here, the Complaint's factual background implies that the majority of claims apply to Nationstar; however, the Complaint does not actually differentiate between Defendants. Rather, each claim (and many of the facts) reference only a collective “Defendants” without detailing how each individual Defendant is implicated. (See Compl.). Moreover, the facts in the Complaint are predominantly vague statements and largely amount to mere legal conclusions. Adding to the confusion, the Complaint also includes two separate sections of claims, which are divided by Plaintiff's “Application for Temporary and Permanent Injunction.” (Id. ¶¶ 27-100).[2] The Court therefore finds that the Complaint falls short of the pleading requirements and should be dismissed with leave to amend. In the interest of efficiency, however, the Court will still address Defendants' remaining challenges to the individual claims.

         b. Breach of Contract

         To establish a breach of contract claim, a plaintiff must show that: (1) there was a valid contract; (2) the defendant breached the terms of the contract; and (3) the plaintiff suffered damages as a result of the breach. See Brown v. ...


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