United States District Court, D. Nevada
M. Navarro, Chief Judge
before the Court is the Motion to Dismiss, (ECF No. 7), filed
by Defendants Randolph Peterson and Teri Peterson
(“Defendants”). Plaintiff Hawkins Marital Trust
(“Plaintiff”) filed a Response, (ECF No. 8), and
Defendants filed a Reply, (ECF No. 15). For the following
reasons, the Motion to Dismiss is GRANTED.
instant dispute arises from two deeds of trust
(“DOTs”) on Lot 37 and Lot 38 (collectively
“the Parcels”) located within the Las Vegas Motor
Coach Owners Association (“HOA”) in Clark County,
Nevada. (Pet. For Removal, Ex. A (“Compl.”)
¶ 4, ECF No. 1-1). American Underwriters Life Insurance
Company (“American Underwriters”) received the
DOTs from Defendants, and they were recorded against the
Parcels on November 16, 2007, and January 11, 2008.
(Id.). Eventually, Plaintiff became the successor to
American Underwriters as the beneficiary under the DOTs.
DOTs secured American Underwriters's loan to Defendants
in the amount of $111, 930.00 for each parcel. (Id.
¶ 5). On January 14, 2010, and February 25, 2010, the
HOA recorded a lien for delinquent assessments on the Parcels
in the amounts of $1, 889.92 and $1, 335.80. (Id.
¶¶ 6-7). A notice of breach and election to sell
pursuant to the lien for delinquent assessments was recorded
against Lot 37 on September 9, 2011, and against Lot 38 on
September 1, 2011. (Id. ¶¶ 8-9). On
January 31, 2012, a notice of foreclosure was recorded on Lot
37 and Lot 38. (Id. ¶¶ 10-11). Foreclosure
sales for the Parcels were conducted on February 24, 2012.
(Id. ¶ 12). At the foreclosure sale, Plaintiff
bid $25, 447.70 on Lot 37 and $25, 504.01 on Lot 38.
26, 2012, the HOA filed suit against American Underwriters to
quiet title and to wipe out American Underwriter's DOTs
on the Parcels pursuant to the foreclosure sales.
(Id. at ¶ 13); see Las Vegas Motor Coach
Owners Ass'n, Inc. v. American Underwriters Life
Insurance Co., No. A-12-664235-C, 2013 WL 3868804 (Nev.
Dist. Ct., June 06, 2013) (the “Prior Action”).
Notably, Defendants and Plaintiff were not named as parties.
(Mot. to Dismiss 3:6, ECF No. 7); (see Compl., Ex. C
at 21, ECF No. 1-1). On June 6, 2013, the court granted
summary judgment in the Prior Action where the court found in
favor of American Underwriters by holding that the
foreclosure sales did not wipe out the DOTs on the Parcels.
(Compl. ¶ 14, ECF No. 1-1).
September 19, 2013, the HOA filed an appeal with the Nevada
Supreme Court. (Id. at ¶ 15). On September 18,
2014, the Nevada Supreme Court ruled in a different case that
super priority lien foreclosures wipe out first trust deeds
like the ones held by American Underwriters. See SFR
Investments Pool 1 v. U.S. Bank, 334 P.3d 408 (Nev.
2014) (“SFR”). As a result of the
decision in SFR, the Nevada Court of Appeals
reversed and remanded the Prior Action. (See Compl.
¶ 17, ECF No. 1-1); see Las Vegas Motor Coach Owners
Ass'n, Inc. v. Am. Underwriters Life Ins. Co., No.
63651, 2015 WL 5554318 (Nev. App. Sept. 16, 2015). On May 31,
2016, the state court granted the parties' stipulation to
quiet title to the Parcels in favor of the HOA. (Id.
at ¶ 18); (see Compl., Ex. C at 21-30, ECF No.
1-1). As a result of the order granting the stipulation from
the remanded Prior Action, Plaintiff recovered $9, 000.00 on
Lot 37 and $9, 000.00 on Lot 38. (Compl. at ¶ 19).
instant case, Plaintiff claims that Defendants were obligated
to pay back $119, 300.00 plus interest under the deed of
trust on Lot 37. (Id. at ¶ 21). Plaintiff
further alleges that Defendants began paying for both Lot 37
and Lot 38, but defaulted under the deed of trust by not
keeping American Underwriters in a first secured position.
(Id. at ¶ 22-23). Plaintiff claims that the
entire balance is due and payable in the amounts of
“$73, 304.02 in principal, $16, 013.39 in interest,
less $9, 000 received from the HOA after the foreclosure
sale” on Lot 37, and “$73, 802.02 in principal,
$15, 514.40 in interest, less $9, 000 received from the HOA
after the foreclosure sale” on Lot 38. (Id. at
¶¶ 22-23). The crux of Plaintiff's argument is
that “[D]efendants have breached the terms and
conditions of the deed of trust on both Lot 37 and Lot
38.” (Id. at ¶ 24).
filed the instant suit in state court against Defendants on
November 23, 2016, alleging the following causes of action:
(1) breach of contract and (2) breach of the implied duty of
good faith and fair dealing. (See Compl., ECF No.
1-1). Defendants filed a Petition for Removal on February 22,
2017. (See Pet. For Removal, ECF No. 1). In the
instant Motion, Defendants request that the Court dismiss all
of Plaintiff's claims with prejudice. (See
generally Mot. to Dismiss, ECF No. 7).
is appropriate under Rule 12(b)(6) where a pleader fails to
state a claim upon which relief can be granted. Fed.R.Civ.P.
12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). A pleading must give fair notice of a legally
cognizable claim and the grounds on which it rests, and
although a court must take all factual allegations as true,
legal conclusions couched as factual allegations are
insufficient. Twombly, 550 U.S. at 555. Accordingly,
Rule 12(b)(6) requires “more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Id. “To
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). “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. This standard “asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Court grants a motion to dismiss for failure to state a
claim, leave to amend should be granted unless it is clear
that the deficiencies of the complaint cannot be cured by
amendment. DeSoto v. Yellow Freight Sys.,
Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to
Rule 15(a), the court should “freely” give leave
to amend “when justice so requires, ” and in the
absence of a reason such as “undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the
amendment, futility of the amendment, etc.” Foman
v. Davis, 371 U.S. 178, 182 (1962).
their Motion to Dismiss, Defendants argue that
Plaintiff's Complaint is time-barred because Plaintiff
failed to apply for a deficiency judgment or file a civil
action within six months after the date of the foreclosure
sale pursuant to Nevada Revised Statute (“NRS”)
§ 40.455 and NRS § 40.4639. (See Mot. to
Dismiss 4:2-11, ECF No. 7); (see also Resp. 5:40-
Plaintiff argues that “this litigation was commenced
timely” under Nevada's discovery rule because
Plaintiff “reasonably believed that its trust ...