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Nationstar Mortgage LLC v. Curti Ranch Two Maintenance Association, Inc.

United States District Court, D. Nevada

April 2, 2018

NATIONSTAR MORTGAGE LLC, Plaintiff,
v.
CURTI RANCH TWO MAINTENANCE ASSOCIATION, INC; SFR INVESTMENTS POOL 1, LLC, Defendants.

          ORDER

          LARRY R. HICKS UNITED STATES DISTRICT JUDGE

         Two motions come before the court in this nonjudicial-foreclosure-sale matter. First, defendant SFR Investments Pool 1, LLC (“SFR”) moves to demand security for costs under Nevada Revised Statute (“NRS”) § 18.130. ECF No. 8. Second, defendant Curti Ranch Two Maintenance Association, Inc. (“Curti Ranch”) moves to dismiss three claims in the complaint. ECF No. 6. Plaintiff Nationstar Mortgage LLC (“Nationstar”) opposed the motion to dismiss, and Curti Ranch filed a reply. ECF Nos. 11, 12. The court now denies SFR's demand of security for costs. The court also denies in part and grants in part Curti Ranch's motion to dismiss.

         I. BACKGROUND

         This matter arises from a nonjudicial foreclosure sale occurring in 2013 under NRS Chapter 116.[1] ECF No. 1. Curti Ranch (a homeowners' association) foreclosed on the at-issue property on September 19, 2013, based on delinquent homeowners' association fees. Id.

         Nationstar-the beneficiary of the first deed of trust on the property-brought suit four years later, challenging the constitutionality and the circumstances of the foreclosure sale. Id. It filed the complaint on November 30, 2017, alleging (1) a claim to quiet title on the property, (2) a claim for violations of NRS § 116.1113, (3) a claim for wrongful foreclosure, and (4) a claim for injunctive relief. Curti Ranch now moves to dismiss the first three claims based on the applicable statute of limitation. ECF No. 6.

         II. LEGAL STANDARD

         A party may seek the dismissal of a complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a legally cognizable cause of action. See Fed. R. Civ. P. 12(b)(6) (stating that a party may file a motion to dismiss for “failure to state a claim upon which relief can be granted[.]”). To survive a motion to dismiss for failure to state a claim, a complaint must satisfy the notice pleading standard of Federal Rule 8(a)(2). See Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008). Under Rule 8(a)(2), 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). Rule 8(a)(2) does not require detailed factual allegations; however, a pleading that offers only “‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action'” is insufficient and fails to meet this broad pleading standard. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         To sufficiently allege a claim under Rule 8(a)(2), viewed within the context of a Rule 12(b)(6) 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.'” Id. (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference, based on the court's judicial experience and common sense, that the defendant is liable for the alleged misconduct. See Id. at 678-679 (stating that “[t]he plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.”) (internal quotation marks and citations omitted). Further, in reviewing a motion to dismiss, the court accepts the factual allegations in the complaint as true. Id. However, bare assertions in a complaint amounting “to nothing more than a formulaic recitation of the elements of a . . . claim . . . are not entitled to an assumption of truth.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 556 U.S. at 698) (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. “In sum, for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Id.

         III. DISCUSSION

         The court must decide two motions: (1) SFR's demand of security for costs and (2) Curti Ranch's motion to dismiss. The court considers each motion in turn.

         A. Demand for Security for Costs

         The court first turns to SFR's demand for security for costs under NRS § 18.130. The Nevada statute states: “[w]hen a plaintiff in an action resides out of the State, or is a foreign corporation, security for costs and charges which may be awarded against such plaintiff may be required by the defendant, by the filing and service on plaintiff of a written demand therefor within the time limited for answering the complaint.” Nev. Rev. Stat. § 18.130(1). While such security is not required under the Federal Rules of Civil Procedure, “[i]t has been the policy of the United States District Court for the District of Nevada to enforce the requirements of NRS § 18.130 in diversity actions.” Hamar v. Hyatt Corp., 98 F.R.D. 305 (D. Nev. 1983).

         But “[w]hen suit is brought under a federal statute, state provisions requiring security for costs or expenses clearly are inapplicable.” 10 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2671 (3d ed.) Instead, the court may apply its own rules or state practice to require security for costs as a discretionary matter. Id. In doing so, the court may consider the policy of the underlying federal statute, the defendant's ability to recover costs from an out-of-state plaintiff if the defendant prevails, the plaintiff's solvency, and any other pertinent factors. Id.

         This matter centers on the constitutionality of Nevada's statutes governing nonjudicial foreclosure sales; plaintiff argues the statutes, as enforced in 2013, violate plaintiff's due process rights under the U.S. Constitution. ECF No. 1, ¶¶ 36-43; ECF No. 11 at 7 (describing the declaratory relief claim, which is based on constitutional challenges to the Nevada statutes, as the primary issue in this matter). Because this matter centers on a claim asserting a constitutional challenge, the court finds it would be contrary to public policy to require security for ...


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