United States District Court, D. Nevada
C. JONES UNITED STATES DISTRICT JUDGE.
a foreclosure case involving a single property. Pending
before the Court is Defendant MTC Financial Inc. dba Trustee
Corps' (hereinafter "Trustee Corps") Motion to
Dismiss. (Mot. Dismiss, ECF No. 11.) For the reasons given
herein, the Court grants the motion.
FACTS AND PROCEDURAL BACKGROUND
January 2008, Plaintiff Rigovaldo Garcia-Pena
("Plaintiff) purchased real property at 872 Tanager
Street #26, Incline Village, NV 89451 (the
"Property"), giving the lender a promissory note
for $171, 000 secured by a deed of trust ("DOT").
(Deed of Trust, ECF No, 1-1 at 27.) The lender on the DOT was
Countrywide Bank, FSB, and the trustee was ReconTrust
Company, The Mortgage Electronic Registration System, Inc,
("MERS") was named as the beneficiary under the DOT
and was granted authority to act "as a nominee for
Lender and Lender's successors and assigns." (This
same stock language has been used by MERS in countless deeds
of trust over the years and has been analyzed by this Court
instrument recorded on September 1, 2010, MERS assigned its
beneficial interest in the DOT to BAC Home Loans Servicing,
LP fka Countrywide Home Loans Servicing, LP
("BAC"), (Assignment, ECF No. 1-1 at 48.) Then by
an instrument recorded on November 11, 2014, Bank of America,
NA. ("BANA"), as successor by merger to BAC,
assigned the DOT and promissory note to Green Tree Servicing,
LLC ("Green Tree"). (Assignment, ECF No. 1-1 at
56.) On January 5, 2015, a substitution of trustee was
recorded under which Trustee Corps was substituted as trustee
under the DOT. (Substitution, ECF No. 12-5.) On August 4,
2015, Defendant Ditech Financial, LLC ("Ditech")
merged with Green Tree and Ditech became the surviving
entity. (Compl. ¶ 48, ECF No. 1-1 at 12.) Ditech is the
current record holder of the DOT and the note.
December 13, 2016, Trustee Corps recorded a notice of default
("NOD") and election to sell the Property, due to
Plaintiffs failure to make his mortgage payments, (Notice of
Default, ECF No. 12-6.) On April 18, 2017, Trustee Corps
recorded a notice of trustee's sale ("NOS").
(Notice of Sale, ECF No. 12-7.) Plaintiff then filed this
case in the Second Judicial District Court of the State of
Nevada, Washoe County, on May 10, The complaint includes six
causes of action against both defendants: (1) violation of
the Fair Debt Collection Practices Act ("FDCPA"),
15 U.S.C. §§ 1692 et seq.; (2)
cancellation of instruments; (3) wrongful foreclosure; (4)
slander of title; (5) breach of executory accord; (6)
Corps now moves the Court to dismiss the claims alleged
against it under Federal Rule of Civil Procedure 12(b)(6).
Rule of Civil Procedure 8(a)(2) requires only "a short
and plain statement of the claim showing that the pleader is
entitled to relief in order to "give the defendant fair
notice of what the . . . claim is and the grounds upon which
it rests." Conley v. Gibson, 355 U.S. 41, 47
(1957). Federal Rule of Civil Procedure 12(b)(6) mandates
that a court dismiss a cause of action that fails to state a
claim upon which relief can be granted. A motion to dismiss
under Rule 12(b)(6) tests the complaint's sufficiency,
See N. 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).
formulaic recitation of a cause of action with conclusory
allegations is not sufficient; a plaintiff must plead facts
pertaining to his own case making a violation
"plausible, " not just "possible."
Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009)
(citing Twombly, 550 U.S. at 556) ("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.").
That is, under the modern interpretation of Rule 8(a), a
plaintiff must not only specify or imply a cognizable cause
of action (Conley review), but also must allege the
facts of his case so that the court can determine whether the
plaintiff has any basis for relief under the cause of action
he has specified or implied, assuming the facts are as he
alleges (Twombly-Iqbal review).
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) (citation
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). Moreover,
under Federal Rule of Evidence 201, a court may take judicial
notice of' matters of public record." Mack v. S.
Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir.
1986). Otherwise, if the district court considers materials
outside of the pleadings, the motion to dismiss is converted
into a motion for summary judgment. See Arpin v, Santa
Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir.
crux of Plaintiff s position in filing this lawsuit is that
Green Tree-Ditech's predecessor-in-interest-never
actually obtained a beneficial interest in the DOT, and. thus
did not have legal authority to substitute Trustee Corps in
the place of ReconTrust Company, According to Plaintiff,
Ditech is not the current beneficiary under the note and DOT,
and Trustee Corps is not the current trustee. Therefore,
Ditech's attempt to foreclose on the Property is
wrongful, as is Trustee Corps' recordation of the NOD and
NOS. Plaintiffs arguments center on the acquisition of
Countrywide Financial by BANA in 2008. However, the arguments
fail as a matter of law.
first alleges that the lender Countrywide Bank, FSB no longer
held the note at the time of the merger, because the DOT had
previously been "table-funded by a [Special Purpose
Entity] through the securitization process." (Compl.
¶ 23.) "This argument has been rejected, in this
district, because the securitization of a loan does not in
fact alter or affect the legal beneficiary's standing to
enforce the deed of trust." Reyes v. GMAC Mortg.
LLC, No. 2; 11- cv-100, 2011 WL 1322775, at *2 (D. Nev.
Apr. 5, 2011) (Mahan, J.) (collecting cases). Rather, the
securitization or Plaintiffs loan "merely create[d] a
separate contract, ...