United States District Court, D. Nevada
ORDER (ECF NOS. 17, 22, 43)
MIRANDA M. DU UNITED STATES DISTRICT JUDGE.
action is in part an attempt by Leo Kramer
(“Kramer”) and Audrey Kramer (collectively
“Plaintiffs”) to prevent a non-judicial
foreclosure of their property. (See generally ECF
No. 1.) Before the Court, and among other motions, are two
motions to dismiss Plaintiffs' complaint (“the
Complaint”), pursuant to Fed. Civ. P.
(“Rule”) 12(b)(6), by Defendants JPMorgan Chase
Bank, N.A. (“Chase”) and Mortgage Electronic
Registration Systems, Inc. (MERS). (ECF Nos. 17, 22.)
Plaintiffs filed responses to Chase's motion to dismiss
(“Chase's Motion”) (ECF Nos. 28, 31), and
Chase replied (ECF No. 38).
before the Court is Plaintiffs' motion to strike
MERS's motion to dismiss (“MERS's
Motion”). (ECF No. 43.) The Court has reviewed
MERS's response (ECF No. 45) and Plaintiffs' reply
(ECF No. 50).
reasons discussed below, Plaintiffs' motion to strike
(ECF No. 43) is denied, and both motions to dismiss (ECF Nos.
17, 22) are granted.
following facts are derived from the Complaint and exhibits
attached thereto, or are established by documents found in
the public records (ECF Nos. 1, 17-6, 17-7, 17-8, 17-9,
17-11, 17-12, 17-13, 17-14):
2005, Plaintiffs obtained a loan from Paul Financial, LLC
(“Paul Financial”) to purchase property located
at 1740 Autumn Glen Street in Fernley Nevada (the
“Property” or “Collateral Property”).
(ECF No. 1 at 7, 52.) The loan was secured by a deed of trust
(“First DOT”) naming Paul Financial as the lender
and MERS as beneficiary. (See ECF No. 1 at 51-53.)
In May 2008, MERS substituted Executive Trustee Services, LLC
(“ETS”) as the trustee under the First DOT. (ECF
No. 1 at 88-90.) Acting as the substituted trustee, ETS
reconveyed the Property. (Id. at 89.) Accordingly, the
First DOT ceased to encumber the Property.
1, 2008, Plaintiffs used the Property as collateral to obtain
a $176, 000 revolving line of credit (the “Loan”)
from Defendant Washington Mutual Bank, F.A.
(“WaMu”). (ECF No. 1 at 6-8.) The deed of trust
on the Property securing the WaMu Loan (“Second
DOT”) was publicly recorded. (Id. at 77.) In
September 2008, the Federal Deposit Insurance Corporation
(“FDIC”) assumed receivership of WaMu and sold
WaMu's assets and liabilities to Chase pursuant to a
Purchase and Assumption Agreement (“the
PAA”). The PAA details that as part of
Chase's acquisition, Chase obtained the rights and
liabilities of WaMu, as lender and beneficiary, arising under
all of the loan assets of WaMu, which would include the
Second DOT. In November 2013, Chase substituted Defendant
National Default Servicing Corporation (“NDSC”)
as trustee under the Second DOT. (ECF No. 1 at 9, 92.)
filed three bankruptcy petitions: Case No. 10-43951, filed as
a Chapter 11 petition in April 2010, but converted to a
Chapter 7 filing; Case No. 11-49493 filed as a Chapter
13 petition in September 2011; and Case No. 14-42866, filed
as a Chapter 13 petition in July 2014.,  (ECF Nos. 17-6,
17-7, 17-8, 17-11, 17-12; see also ECF No. 1 at 10,
96-100, 102.) In schedules filed in Nos. 10-43951 and
14-42866, Kramer acknowledged the Loan was secured and that
Chase held a security interest in the Collateral
Property. (ECF No. 17-7 at 4; ECF No. 17-12 at 4, 9;
ECF No. 1 at 97.)
filed a proof of claim regarding the Loan in both No.
14-42866 and No. 11-49493, before the latter's dismissal.
(ECF No. 17-9; ECF No. 17-13; see also ECF No.
17-8.) To the proof of claims Chase attached a copy of the
WaMu Mortgage Plus Agreement and Disclosure relating to the
Loan (the “Note”), and the Second DOT.
(See ECF No. 17-9 at 4-23; ECF No. 17-13 at 9-31.)
In No. 14-42866, Kramer proposed a Chapter 13 plan wherein
Chase was recognized as a Class 3 creditor, and Kramer was to
surrender his interest in the Collateral Property upon plan
confirmation. (ECF No. 17-14 at 3.) Kramer received
discharges in both No. 10-43951 and No. 14-42866, on June 16,
2011, and January 9, 2017, respectively. (ECF No. 17-6 at 2,
13; ECF No. 1 at 11, 102.) At no point in the bankruptcy
proceedings did Kramer assert claims against any of the
Defendants herein. Nor did Kramer seek to have the lien
evidenced in the Second DOT stripped from the Property to
render the Loan “unsecured.”
October 2017, NDSC recorded a Notice of Default and Election
to Sell Under the Deed of Trust. (ECF No. 1 at 11, 105.) In
January 2018, Plaintiff initiated this action. The Complaint
alleges fifteen (15) causes of action against “all
Defendants, ” challenging the impending foreclosure
(see generally ECF No. 1) and requesting damages
(id. at 12). The Complaint does not allege that the
Loan has been paid or that Plaintiffs are not in payment
default under the terms of the Loan.
moves for dismissal, contending, inter alia,
Plaintiffs are judicially estopped from asserting claims in
this Court against Chase and the various Defendants.
(See ECF No. 17.) MERS argues it is entitled to
dismissal because MERS had “no interest in transactions
that allegedly give rise to Plaintiffs' claims.”
(ECF No. 22 at 3.) The Court finds that dismissal with
prejudice is warranted as to all Defendants, on all of
Plaintiffs' claims, as amendment would be
PLAINTIFFS' MOTION TO STRIKE MERS'S MOTION TO
motion to strike is premised on their contention that MERS
failed to serve its Motion in time for Plaintiffs to respond
(see ECF No. 43 at 2), and that therefore
Plaintiffs' right to due process was undermined
(id. at 5; ECF No. 50 at 2). The Court disagrees.
January 23, 2018, this Court ordered MERS to respond to the
Complaint within twenty days after Plaintiffs posted their
required security. (ECF No. 13.) Plaintiffs made their cash
deposit on February 21, 2018. (ECF No. 15.) MERS filed its
Motion on March 12, 2018, within the twenty-day deadline.
(Compare ECF No. 22 with ECF No. 13
and ECF No. 15.) MERS's Motion includes a
certification that MERS's Motion was served on Plaintiffs
by mail at the address Plaintiffs provided in the Complaint.