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Mott v. The PNC Financial Services Group, Inc.

United States District Court, D. Nevada

March 23, 2018

RODNEY MOTT, Plaintiffs,
v.
THE PNC FINANCIAL SERVICES GROUP, INC., et al., Defendants.

          ORDER

         Presently before the court is defendant/cross-defendant Radian Services, LLC's (“Radian”) motion to dismiss. (ECF No. 44). Defendant/counter-claimant Trojan Capital Investments, LLC (“Trojan”) filed a response (ECF No. 51), to which the Radian replied (ECF No. 52).

         Also before the court is defendant/counter-defendant PNC Financial Services Group, Inc.'s (“PNC”) motion to dismiss. (ECF No. 70). Trojan filed a response (ECF No. 85), to which PNC replied (ECF No. 96).

         Also before the court is counter-defendant BSI Financial Services, Inc.'s (“BSI”) motion to dismiss. (ECF No. 71). Bank of America, N.A. (“BANA”) joined (ECF No. 74), Trojan filed a response (ECF No. 86), and BSI replied (ECF No. 92).

         Also before the court is counter-defendant Land Home Financial Services, Inc.'s (“Land Home”) motion to dismiss. (ECF No. 79). Trojan filed a response (ECF No. 94), to which Land Home replied (ECF No. 99).

         Also before the court is defendant/counter-defendant Select Portfolio Servicing, Inc.'s (“Select Portfolio”) motion to dismiss. (ECF No. 81). Trojan filed a response (ECF No. 97), to which Select Portfolio replied (ECF No. 104).

         Also before the court is plaintiff Rodney Mott's (“Mott”) motion for partial summary judgment. (ECF No. 84). Trojan and Trinity Financial Services, LLC (“Trinity”) filed a response (ECF No. 107), to which Mott replied (ECF No. 112).

         I. Facts

         The present case involves a dispute over real property located at 609 Verde Vista Place, Las Vegas, Nevada 89145 (the “property”).

         A deed of trust was recorded on the property on December 23, 2005 securing a note in the amount of $300, 000. (ECF No. 81).

         1. Fact relevant to the motions to dismiss

         On August 16, 2016, Mott filed a complaint alleging several causes of action against six named defendants including PNC, Select Portfolio, and Radian. (ECF No. 1). Mott's claims against PNC and Select Portfolio were later resolved through an acceptance of an offer of judgment. (ECF No. 37). Then on January 25, 2017, Mott voluntarily dismissed Radian. (ECF No. 44).

         On March 13, 2017, Trojan then filed a counterclaim alleging an interest in the subject deed of trust and property. (ECF No. 38). Trojan named twelve defendants in its counterclaim, including PNC, Select Portfolio, Radian, BSI, BANA, and Land Home. Id. BSI and Land Home were not named as defendants in Mott's first amended complaint. (ECF No. ___).

         According to the counterclaim, Trojan is the holder of the note and the beneficiary of the deed of trust. (ECF No. 38). The counterclaim asserts claims for quiet title and declaratory relief against PNC, Select Portfolio, Radian, BSI, and Land Home. Id. The counterclaim alleges that these parties may claim an interest in the property, the note, and the deed of trust adverse to Trojan. Id. PNC, Select Portfolio, BSI, and Land Home are believed by Trojan to have been servicers of the note and deed of trust for various brief periods beginning in October of 2010 and ending in 2014. (ECF No. 38). As to Radian, Trojan alleges that the note and deed of trust were mistakenly assigned to Radian and recorded in error. Id. Radian then immediately returned the note and deed of trust to the previous holder in recognition of the mistake. Id.

         Select Portfolio, BSI, PNC, BANA, and Land Home have all filed notices of disclaimer of interest in the property, the note, and deed of trust stating that each disclaim all right, title or interest to the property and requesting to be dismissed from the action. (ECF Nos. 45, 53, 57, 73, 80).

         In the instant motions, counter-defendants Radian, PNC, BSI, Land Home, and Select Portfolio all move to dismiss Trojan's counterclaim, as none of the counter-defendants claim an interest in the property. (ECF Nos. 44, 70, 71, 79, 81).

         2. Facts pertaining to the motion for partial summary judgment

         On December 16, 2005, Mott signed the note evidencing the loan with First Franklin, a division of National City Bank of Indiana (“First Franklin”). (EC F No. 84). Mott's payment obligations on the note were secured by the deed of trust, which was recorded on December 23, 2005. Id. Mott has not made payments on the note since November 1, 2008. (ECF No. 107). While Mott alleges his obligations under the note were forgiven in 2009, Trojan and Trinity claim they have no records or past communications from Mott's past lenders, trust deed beneficiaries, or loan servicers that the debt had ever been paid, compromised, canceled, eliminated, or excused. (ECF Nos. 84, 107).

         On October 3, 2007, an assignment of deed of trust was executed between MERS, as nominee for First Franklin, and Radian. (ECF No. 84). This document purportedly transferred both the note and deed of trust to Radian. Id. This assignment was not recorded until more than eight years later, on December 23, 2015. Id.

         Mott alleges that the note fails to demonstrate that Trinity or Trojan ever acquired an interest in the enforcement of its terms. (ECF No. 84). The note contains only an undated endorsement in which First Franklin paid the note to the order of First Franklin Financial Corporation (“First Franklin Financial”) and another endorsement indicating that First Franklin Financial paid the note to the order of Radian. Id. There is no subsequent endorsement from Radian to Trinity, nor an endorsement in blank converting the note into bearer paper. Id. Further, there is no allonge attached to the note indicating that Trinity acquired an interest in the note. Id.

         Trojan and Trinity allege that First Franklin Financial, by error or mistake, made the note transferrable to Radian by mistakenly inserting Radian in the blank endorsement, and also mistakenly assigned the corresponding deed of trust to Radian, which was then recorded in error. (ECF No. 107). They further allege that the note and deed of trust were never transferred and placed in Radian's possession or, if so, were immediately returned. Id. Nonetheless, the error was not corrected. Id. Trinity claims to have made several attempts to obtain an assignment of the deed of trust from Radian, but Radian did not respond. Id. Accordingly, Trinity executed the loss affidavit. Id.

         On December 23, 2015, the same day Frist Franklin's assignment to Radian was recorded, Don A. Madden, president of Trinity, recorded an affidavit regarding lost or misplaced assignment (the “loss affidavit”). (ECF No. 84). Madden affirmed that Trinity purchased the note and deed of trust, but that the original assignment from Radian to Trinity “has been lost, destroyed, or misplaced and cannot be located for the recording.” Id. at 7. The note and deed of trust was one of approximately 159 received by Trinity on March 13, 2015. (ECF No. 107).

         On August 12, 2015, as part of a purchase of over 75 loans by Trojan from Trinity, Trinity transferred the note and deed of trust. (ECF No. 107). On January 16, 2016, the assignment of the deed of trust to Trojan was recorded. Id. Mott alleges there is no indication that the note itself was also transferred, but Trinity alleges an ...


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