United States District Court, D. Nevada
ORDER GRANTING MOTIONS TO DISMISS, DENYING MOTION TO
STRIKE AS MOOT, DENYING MOTIONS FOR SUMMARY JUDGMENT, AND
DENYING MOTION FOR INJUNCTIVE RELIEF (ECF NOS. 11, 14, 19,
39, 41, 48, 67)
P. GORDON UNITED STATES DISTRICT JUDGE.
Editha Salvador owns property located at 4404 Grey Spencer
Drive in Las Vegas. She financed the purchase of the property
through an adjustable rate loan that was secured by a deed of
trust on the property. After she defaulted on her payments,
defendant Bank of New York Mellon (BONY) initiated
non-judicial foreclosure proceedings under the deed of trust.
In an effort to avoid foreclosure, Salvador filed this
lawsuit against BONY, who is the holder of the note and the
beneficiary of record under the deed of trust; Quality Loan
Servicing Corporation, the trustee under the deed of trust;
BONY's former loan servicer, Select Portfolio Servicing,
Inc.; Bank of America, to whom Salvador previously made loan
payments; and Bayview Loan Servicing, LLC, BONY's current
loan servicer. The defendants filed various motions to
dismiss the complaint. Salvador moves for summary judgment,
and to enjoin the foreclosure sale, currently set for April
the defendants' motions to dismiss because Salvador has
failed to allege a valid claim against any of these
defendants. I deny Salvador's motions for summary
judgment for the same reason and because (contrary to
Salvador's contention) the defendants timely responded to
her complaint. Even if they had not, I would set aside any
default. I Salvador's motion for injunctive relief
because she has not shown a likelihood of success on any
claim that would support enjoining the foreclosure sale.
purchased the property for $1, 074, 420 in September 2006.
ECF No. 1 at 52. She obtained a $752, 000 adjustable rate
note from Meridias Capital, Inc. to partially finance the
purchase, and she made a $322, 420 down payment. Id.
at 3, 8, 14. The loan was secured by a deed of trust
encumbering the property. ECF No. 11-2. The deed of trust
identified Salvador as the borrower, Meridias as the lender,
First American Title as the trustee, and Mortgage Electronic
Registration Systems, Inc. (MERS) as the beneficiary solely
as the nominee for the lender and its successors and assigns.
Id. at 2-3.
is no recorded assignment of the loan or deed of trust from
Meridias to Countrywide, but Salvador made mortgage payments
to Countrywide. ECF No. 1 at 4. The loan then passed to Bank
of America, but there is no recorded assignment of the loan
or deed of trust reflecting a transfer from Countrywide to
Bank of America. Id. Salvador made mortgage payments
to Bank of America and sought a loan modification, but was
March 2012, MERS assigned the deed of trust to BONY, as
trustee for the holders of the Alternative Loan Trust
2006-OA19, Mortgage Pass Through Certificates, Series 2006
OA19. Id. at 75. In December 2013, BONY substituted
the original trustee, First American Title, with defendant
Quality Loan Servicing Corporation. Id. at 77.
12, 2014, Quality recorded a notice of default and election
to sell. Id. at 81. In connection with that notice,
Quality recorded an affidavit of authority to exercise the
power of sale executed by defendant Select Portfolio
Servicing, Inc. Id. at 85-88. That affidavit
identified BONY, care of Select Portfolio, as the holder of
the note and beneficiary of record. Id. at 85-86.
Quality was identified as the loan servicer. Id. at
86. The affidavit also identified the only recorded
assignment of the deed of trust as the March 2012 transfer
from MERS to BONY. Id. at 87-88.
October 14, 2014, Salvador and Quality participated in a
mediation conference under Nevada's Foreclosure Mediation
Program (FMP). Id. at 91. The parties were unable to
reach a resolution, and the FMP issued a certificate allowing
BONY to proceed with the foreclosure process. Id. In
May 2015, Quality recorded a notice of a trustee's sale
set for June 10, 2015. Id. at 92. That sale did not
take place, and on September 3, 2015, Quality rescinded the
June 12 notice of default. Id. at 79.
recorded a new notice of default and election to sell in
April 2016. Id. at 95. That notice included another
affidavit of authority to exercise the power of sale
identifying BONY, care of Select Portfolio, as the note
holder and beneficiary of record, and Select Portfolio as the
loan servicer. Id. at 100. It identified the only
recorded assignment of the deed of trust as being the March
2012 assignment from MERS to BONY. Id. at 102.
Salvador elected to again proceed to mediation under the FMP
on May 9, 2016. ECF No. 74-1. The parties had an unsuccessful
mediation on August 22, 2016. ECF No. 74-2. The FMP indicated
it would issue a certificate of foreclosure on October 17,
2016. Id. However, the FMP did not actually issue
the certificate until February 28, 2018, which was recorded
on March 8, 2018. ECF No. 69-10. Quality issued a new notice
of sale on March 30, 2018, setting the sale for April 27. ECF
on these allegations, Salvador brought suit in this court
alleging that the defendants violated various federal and
state laws by placing her into a negative amortization loan
where her loan balance would increase even as she made timely
payments. She also alleges BONY cannot foreclose because it
cannot show it is the holder of the note and beneficiary of
record because there is no recorded assignment from Meridias
to Countrywide or from Countrywide to Bank of America, so the
transfer from Bank of America to BONY is invalid. Salvador
asserts the defendants are liable under 15 U.S.C. §
45(a); the Truth in Lending Act (TILA), 15 U.S.C. §
1601, et seq.; the Homeownership Equity Protection
Act (HOEPA), 15 U.S.C. § 1689; 15 U.S.C. § 1607;
and Nevada Revised Statutes § 598D.
previously moved for an injunction, which I denied because
she did not identify a potential impending foreclosure sale.
ECF Nos. 3, 4. The defendants then moved to dismiss on a
variety of grounds. Salvador filed two motions for summary
judgment. She also moves to enjoin the recently noticed
SALVADOR'S MOTIONS FOR SUMMARY JUDGMENT (ECF Nos. 39,
moves for summary judgment against Bank of America, BONY, and
Bayview, arguing that they failed to timely respond to the
complaint after being served. She also argues she did not
receive documents from these defendants after the court later
ordered the defendants to send them to her. Bank of America
responds that service was never properly completed on it
because Salvador never requested or obtained a summons, so
Bank of America was not served with a copy of the summons.
BONY and Bayview respond that they attempted personal service
on Salvador several times but were unable to contact her at
her home, so they mailed their motion to dismiss via first
class mail. They also note that Salvador is not prejudiced
because she obtained both a copy of their motion and Bank of
America's joinder to Select Portfolio's motion.
docket does not reflect that Salvador requested or obtained a
summons. See also ECF No. 7 (Salvador's
certificate of service showing she mailed the complaint, her
request for injunctive relief, and a notice of lis pendens,
but no mention of a summons). She thus has not properly
served Bank of America, BONY, or Bayview under Federal Rule
of Civil Procedure 4(c). Consequently, these defendants have
not defaulted by failing to respond within twenty-one days.
See Fed. R. Civ. P. 12(a)(1)(A)(i) (providing that
the defendant must serve an answer “within 21 days
after being served with the summons and complaint”).
Further, Salvador did not follow the proper procedure to
obtain a default judgment by first seeking entry of default
under Rule 55(a).
these defendants defaulted, I would set aside entry of
default. “The court may set aside an entry of default
for good cause . . . .” Fed.R.Civ.P. 55(c). When
determining whether good cause exists, the court considers
(1) “whether the defendant's culpable conduct led
to the default, ” (2) “whether the defendant has
a meritorious defense, ” and (3) “whether
reopening the default judgment would prejudice the
plaintiff.” TCI Grp. Life Ins. Plan v.
Knoebber, 244 F.3d 691, 696 (9th Cir. 2001),
overruled on other grounds, Egelhoff v. Egelhoff
ex. rel. Breiner, 532 U.S. 141 (2001). With regard to
the first factor, “a defendant's conduct is
culpable if he has received actual or constructive notice of
the filing of the action and intentionally failed to
answer.” Id. at 697 (emphasis and quotation
omitted). However, if the defendant offers a good faith
explanation for its neglectful failure to answer, and that
explanation negates any intent to take advantage of the
plaintiff, interfere with judicial decision-making, or
otherwise manipulate the legal process, such failure is not
“intentional.” Id. at 697-98. A
defendant's conduct is culpable “where there is no
explanation of the default inconsistent with a devious,
deliberate, willful, or bad faith failure to respond.”
Id. at 698.
BONY and Bayview filed a motion to dismiss on December 26,
2017. ECF No. 19. Bank of America filed a joinder to Select
Portfolio's motion to dismiss on January 2, 2018. ECF No.
22. Thus, within approximately a month and a half after
Salvador filed her complaint, the defendants responded
despite the improper service. There is no evidence the
defendants engaged in culpable conduct. The defendants have
offered meritorious defenses to Salvador's claims.
Finally, reopening would not prejudice Salvador. The
defendants promptly filed their motions and Salvador has had
an opportunity to respond to them. Further, as discussed
below, Salvador's claims are subject to dismissal, and
her motions are not supported by evidence showing she is
entitled to judgment as a matter of law on any of her claims.
See Fed. R. Civ. P. 56. I therefore deny
Salvador's motions for summary judgment.
MOTIONS TO DISMISS (ECF Nos. 11, 14, 19)
considering a motion to dismiss, “all well-pleaded
allegations of material fact are taken as true and construed
in a light most favorable to the non-moving party.”
Wyler Summit P'ship v. Turner Broad. Sys., Inc.,
135 F.3d 658, 661 (9th Cir. 1998). However, I do not
necessarily assume the truth of legal conclusions merely
because they are cast in the form of factual allegations in
the complaint. See Clegg v. Cult Awareness Network,
18 F.3d 752, 754-55 (9th Cir. 1994). A plaintiff must make
sufficient factual allegations to establish a plausible
entitlement to relief. Bell Atl. Corp. v. Twombly,
550 U.S. 544, ...