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Federal National Mortgage Association v. Canyon Willow Owners Association

United States District Court, D. Nevada

August 1, 2017

FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiffs,
v.
CANYON WILLOW OWNERS ASSOCIATION, et al., Defendants.

          ORDER

         Presently before the court is defendant Canyon Willow Owners Association's (the “HOA”) motion to dismiss plaintiff Federal National Mortgage Association's (“Fannie Mae”) amended complaint. (ECF No. 38). Fannie Mae filed a response (ECF No. 42), and the HOA filed a reply (ECF No. 52).

         I. Introduction

         This action involves the parties' property interests in the real estate at 3085 Casey Drive, Unit 201, Las Vegas, Nevada 89120. (ECF No. 35). Essentially, Fannie Mae challenges the defendants' conduct surrounding the February 2, 2013, foreclosure sale and seeks to preserve its pre-sale interest in the property.[1] (Id.).

         Fannie Mae alleges the following causes of action against the HOA: (1) declaratory relief under the Fifth and Fourteenth Amendments' due process clauses; (2) wrongful foreclosure; and (3) violation of Nevada Revised Statute (“NRS”) § 116.1113, et seq. (Id.).

         II. Legal Standard

         The 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). Although rule 8 does not require detailed factual allegations, it does require more than labels and conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Furthermore, a formulaic recitation of the elements of a cause of action will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009) (citation omitted). Rule 8 does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Id. at 678-79.

         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.” Id. 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. When a complaint pleads facts that are merely consistent with a defendant's liability, and shows only a mere possibility of entitlement, the complaint does not meet the requirements to show plausibility of entitlement to relief. Id.

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering a motion to dismiss. Id. First, the court must accept as true all of the allegations contained in a complaint. However, this requirement is inapplicable to legal conclusions. Id. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. 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. 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 held:

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.

Id.

         III. Discussion

         As an initial matter, Fannie Mae has submitted evidence that the HOA and it have completed mediation with the Nevada Real Estate Division, pursuant to NRS 38.330.[2] (ECF No. 25-3). Thus, no exhaustion analysis is necessary here.

         A. ...


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