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Agha-Khan v. Wells Fargo Bank, N.A.

United States District Court, D. Nevada

August 30, 2017

SALMA AGHA-KHAN, MD., Plaintiff,
WELLS FARGO BANK, NA, et al. Defendants.

          ORDER ON MOTIONS (ECF NOS. 12, 16, 22, 35, 62, 69, 78, 89, 93, 100, 107, 111, 115)


         Plaintiff Salma Agha-Khan obtained a half-million-dollar mortgage to purchase a house in 2006. A few years later, she stopped making her payments so her lenders foreclosed and sold her house to someone else. Nearly six years after that foreclosure, Agha-Khan filed this lawsuit asserting 16 causes of action against 28 defendants (various people and companies who played some role in her loan, the foreclosure, or the sale). Agha-Khan does not dispute that she remains in default on her loan; instead, she claims that she can rescind her mortgage and acquire clear title to her house because the defendants made some procedural mistakes in her loan documents and during the foreclosure sale.

         Most of the defendants now move to dismiss and for summary judgment, arguing that Agha-Khan’s claims lack any factual or legal basis. The defendants are right, and I need look no further than the statutes of limitations to say so. The deadlines have passed to file the claims that Agha-Khan brings here. Even if they had not, there is no merit to any of them. I thus grant the defendants’ motions. And because there is no indication that Agha-Khan could cure the deficiencies in her complaint, I dismiss with prejudice all of her claims against these defendants.

         With the bulk of the defendants out of this case, only a few Wells Fargo-related defendants and two title insurance companies remain. Agha-Khan managed to obtain a default against the Wells Fargo defendants despite that they were never properly served (Agha-Khan served a bank teller rather than a proper agent). As to the title insurance companies, Agha Khan has a pending motion to enter default against them, which the companies oppose.

         Wells Fargo requests that I set aside the default, and because it was never properly served, I do. Finally, the title insurance companies have shown good cause for why no default should be entered against them, so I deny Agha-Khan’s motions for entry of default.

         I. BACKGROUND

         In early 2006, Agha-Khan purchased a house with a $521,000 mortgage.[1] The Deed of Trust named Mortgage Electronic Registration System, Inc. (“MERS”) as the beneficiary.[2] Later that year, MERS assigned the deed to GMAC Mortgage, LLC.[3]

         In 2009, Agha-Khan defaulted on her mortgage and a Notice of Default was recorded.[4] In February 2011, with Agha-Khan’s default still unpaid, GMAC recorded a notice of foreclosure sale.[5] In March 2011, the property was sold at public auction to GMAC by credit bid. GMAC then sold it to Jeffery Romig. Romig paid for the home by borrowing money from Navy Federal Credit Union, which recorded a Deed of Trust on the property. Well over five years after the foreclosure sale, in December of 2016, Agha-Khan filed this action. She alleges 16 claims for: (1) Wrongful foreclosure; (2) To Void or Cancel Trustee’s Deed of Sale; (3) Negligence; (4) Declaratory Relief; (5) Fraud in the Concealment; (6) Violation of 15 U.S.C. 1691, 1692; (7) Violation of 12 U.S.C. 2605; (8) Slander of Title; (9) Quiet Title; (10) Rescission; (11) Injunctive Relief; (12) Fraud; (13) Violation of NRS 645; (14) Defamation; (15) False Light; and (16) Punitive Damages.[6]

         II. ANALYSIS

         A. Motions to Dismiss[7]

         A properly pleaded complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.”[8] 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.”[9] “Factual allegations must be enough to rise above the speculative level.”[10] 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.”[11]

         B. All of Agha-Khan’s claims fail.

         A few of Agha-Khan’s claims fail because they are not proper causes of action: declaratory relief, injunctive relief, and punitive damages are not stand-alone claims, but forms of relief.[12] I thus dismiss these claims with prejudice.

         As to her remaining claims, Agha-Khan’s complaint is mostly made up of conclusory legal statements and elements of causes of action, which do not suffice. For example, Agha-Khan’s negligence theory is that the defendants “owed a duty” to not “defraud” her, and “owed a duty not to conduct illegal” sales.[13] Agha-Khan also fails to meaningfully oppose the defendants’ arguments about the various statutes of limitations that apply, which is another reason to rule against her. By failing to meaningfully oppose these arguments, Agha-Khan has consented to the dismissal of her claims under our local rules.[14]

         But even considering her claims on the merits, they fail.[15] Agha-Khan’s property-related claims are barred by the applicable statute of limitations. In Nevada, causes of action “founded upon title to real property” must be brought within five years of when the property changes hands.[16] The property changed hands here in early 2011 when Agha-Khan’s home was sold at public auction. Yet she waited until December 2016 to file this lawsuit, which means that all of her claims related to the title of her property are time-barred. This includes her claims for quiet title, wrongful foreclosure, rescission, slander of title, and her claim to void the deed of sale.[17]Agha-Khan’s property-related claims fail for another reason, too: she has not alleged that she “paid off [her] loan or . . . [was] not in default on that loan,” as required under Nevada law.[18]

         Her negligence claim is barred by Nevada’s two-year limitations period.[19] Agha-Khan alleges that the defendants mishandled her foreclosure, which happened in 2011.[20] Given she filed this action in 2016, she was years too late.

         As to Agha-Khan’s fraud-related claims, they are time-barred under Nevada’s four-year limitation period. Any action sounding in fraud must be commenced within four years of the alleged fraudulent act (or for some species of fraud, within two or three years).[21] The only exception is when a plaintiff offers specific facts indicating that she did not learn of the fraud until later.[22] Agha-Khan does not offer any specific facts to support her fraud-related claims,[23]much less facts suggesting that she did not learn of the fraud until sometime in the four years leading up to her filing this case. Given that she failed to file this action until more than five years after any alleged wrongdoing, her claims for fraud, defamation, false light, fraud in the concealment, and slander must fail.[24]

         Agha-Khan’s Truth in Lending Act (“TILA”) claim is also time-barred. A claim for TILA damages must be brought “within one year from the date of the occurrence of the violation.”[25]Given the alleged violations occurred sometime in 2006 when Agha-Khan signed her loan paperwork, this deadline is long past.

         Agha-Khan’s RESPA claim fails because she has no private right of action to assert,[26] and even if she did, it would be time-barred.[27] The RESPA limitations period began when Agha- Khan signed her loan documents (which, again, was in 2006).[28] All of Agha-Khan’s claims must therefore be dismissed.

         C. Leave to amend

         Agha-Khan has requested leave to file an amended complaint. Although leave to amend is to be “freely given when justice so requires,” I have discretion to deny leave where amendment would be futile or there appears to be bad faith, dilatory motive, or an intent to cause undue delay.[29] The Ninth Circuit “ha[s] held that a district court does not abuse its discretion in denying a motion to amend a complaint . . . when the movant present[s] no new ...

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