United States District Court, D. Nevada
R. HICKS UNITED STATES DISTRICT JUDGE.
the court is Defendants Wilmington Trust
(“Wilmington”), Ocwen Loan Servicing, LLC
(“Ocwen”), and Caliber Home Loans, Inc.'s
(“Caliber) (together “Defendants”) motion
to dismiss. ECF No. 5. Benjamin Allen and Rachel Flower
(“Plaintiffs”) filed an opposition. ECF No. 10.
Defendants submitted a reply. ECF No. 14. Also before the
court is Defendants' Request for Judicial Notice (ECF No.
6) and Plaintiffs' Objections thereto (ECF No.9)
case involves the assignment of an interest in real property
occupied by Plaintiffs. See ECF No. 1 at Ex. 2. The
above-named Defendants are the current trustees of the
interest in the property. Plaintiffs allege that 10 unnamed
and unidentified individuals aided the Defendants in all or
part of their actions. Plaintiffs assert that the original
assignment and subsequent actions to foreclose on their
property were done fraudulently and with the intent to
unlawfully claim ownership of the subject real property.
November 8, 2007, Plaintiffs executed a promissory note
(“Note”) and deed of trust (“DOT”) in
favor of Countrywide Bank, F.S.B. (“CW”) in the
amount of $512, 000. ECF No. 6 at Ex. 2. The Note and DOT
were secured by Plaintiffs' property at 1072 War Bonnet
Way, Incline Village, Nevada (the “Property”).
Id. Mortgage Electronic Registration System, Inc.
(“MERS”) was the original-named beneficiary under
the DOT. ECF No. 6 at Ex. 1. The DOT named MERS as the
nominee of the trust, acting on behalf of the lender and the
lender's successors and assigns, as well as the
successors and assigns of MERS. Id. The DOT further
provided that while MERS held only legal title to the
interests, MERS retained the right to exercise any and all
interests including the right to foreclose and sell the
property and the right to take any action required of the
lender. ECF No. 6 at Ex. 2.
January 11, 2008, CW entered into a merger agreement with
Bank of America whereby Red Oak Merger Corp., a subsidiary of
Bank of America, would merge with CW. ECF No. 1 at Ex.
2. The merged companies formed Country Wide
Financial (“CWF”) and retained all of the
remaining assets of CW. Id. Plaintiffs assert that
the DOT did not transfer to CWF because it was
“table-funded” by a special purpose entity through a
securitization process. Id.
March 2014, MERS assigned the DOT to non-party Christiana
Trust as trustee for ARLP Trust 4 (the “First
Assignment”). ECF No. 6 at Ex. 3. MERS did so pursuant
to its authority as nominee for CW, its successors, and its
assigns. In April 2015, the DOT was then assigned by
Christiana Trust to Wilmington (the “Second
Assignment”). ECF No. 6 at Ex. 4. In June 2015, Western
Progressive - Nevada, Inc. was substituted as trustee under
the DOT by Wilmington. ECF No. 6 at Ex. 5. Plaintiffs
subsequently defaulted on the terms of the DOT. ECF No. 6 at
Ex. 6. As a result, on August 20, 2015, Wilmington recorded a
Notice of Default and Election to Sell Real
Property. Id. In April 2016, Wilmington
Trust assigned its interest in the DOT to U.S. Bank N.A., as
trustee for LSF9 Master Participation Trust. ECF No. 6 at Ex.
elected to mediate the foreclosure of the Property through
the Nevada Foreclosure Mediation Program
(“FMP”). See ECF No. 6 at Ex. 10. At the
FMP hearing on January 7, 2016, Defendants produced the
original bank-endorsed promissory note along with certified
copies of the original DOT and the subsequent assignments.
Id. After the parties were unable to reach an
agreement, the mediator found for Defendants. Id.
the FMP hearing, Plaintiffs filed a petition for judicial
review with the Second Judicial District Court (the
“state court”), challenging the mediator's
decision allowing the lender to foreclose on the Property.
Id. On September 30, 2016, the state court affirmed
the mediator's decision. Id.
then filed a motion for reconsideration of the order of
affirmance. See ECF No. 6 at Ex. 11. The state court
denied the motion, holding that the Plaintiffs failed to
demonstrate that the original decision was clearly erroneous
and failed to present any new issues or evidence not
previously considered by the state court. Id. The
office of the FMP then issued a certificate allowing the
foreclosure to proceed. ECF No. 6 at Ex. 12.
Bank N.A., as trustee, substituted Summit Real Estate
Services, Inc. as trustee of record for the DOT. ECF No. 6 at
Ex. 8. Summit Real Estate, Inc. then recorded a Notice of
Trustee's Sale on January 24, 2017, on behalf of Caliber,
which is serving as Wilmington's new loan servicer. ECF
No. 6 at Ex. 9. Plaintiffs have not appealed the order
denying reconsideration or the order of affirmance to the
Nevada Supreme Court. Instead, Plaintiffs filed this action
in state court on February 10, 2017. ECF No. 1 at Ex. 2. The
Defendants removed to this court on March 9, 2017. ECF No. 1.
seek dismissal of Plaintiff's complaint pursuant to
Fed.R.Civ.P. 12(b)(6) for failing to state a claim upon which
relief can be granted. See ECF No. 5. A court
reviewing a motion to dismiss under 12(b)(6) accepts the
facts alleged in the complaint as true. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). To survive a 12(b)(6)
motion, a complaint must contain “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). The Rule 8(a)(2)
pleading standard does not require detailed allegations,
however, a pleading must be more than mere
“‘labels and conclusions' or ‘a
formulaic recitation of the elements of a cause of
action.'” Iqbal, 556 U.S. at 678 (quoting
Bell Atlantic Corp. v. Towmbly, 550 U.S. 544, 555
(2007)). While the court does accept factual allegations as
true, “bare assertions. . . amount[ing] to nothing more
than a formulaic recitation of the elements of a . . . claim
. . . are not entitled to an assumption of truth.”
Moss v. Secret Serv., 572 F.3d 962, 969 (9th Cir.
2009) (quoting Iqbal, 556 U.S. at 679) (brackets in
original) (internal quotation marks omitted). The court
discounts these allegations because “they do nothing
more than state a legal conclusion-even if that conclusion is
cast in the form of a factual allegation.” Id.
“a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Iqbal, 556 U.S.
at 678 (quoting Twombly, 550 U.S. at 570). A claim
is facially plausible when the pleaded facts allow the court
to draw a reasonable inference, based on judicial experience
and common sense, that the defendant is liable for the
alleged conduct. See Id. at 678-69. The standard
asks for more than a mere possibility that a defendant has
acted unlawfully. Id. at 678. Where a complaint
pleads facts that are merely consistent with a theory of
liability, “it stops short of the line between
possibility and plausibility of entitlement to relief.”
Id. Therefore, “for a complaint to survive a