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Guidi v. Quality Loan Service Corp.

United States District Court, D. Nevada

July 31, 2018




         This dispute arises from the attempted foreclosure on property at 9301 Baltinglass Street in Las Vegas, Nevada. Plaintiff Richey Guidi sues defendants Quality Loan Service Corporation (QLS) and McCarthy & Holthus, LLP (M&H) based on this attempted foreclosure, bringing claims for injunctive relief to stop the alleged wrongful foreclosure, [1] quiet title and declaratory relief, slander of title, fraudulent inducement, fraudulent concealment, intentional infliction of emotional distress (IIED), violations of the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), rescission, and adverse possession.

         The defendants move to dismiss all the claims, primarily arguing that Guidi has not alleged facts plausibly showing legally cognizable claims. In particular, they argue that the deed of trust upon which the foreclosure is based is a valid instrument and the borrower is in default, so the claims based on the foreclosure must fail. They also argue that the attempted foreclosure is not extreme and outrageous behavior, and that they are not proper defendants for the TILA, RESPA, and adverse possession claims.

         Guidi's complaint and his arguments in opposition to the motion to dismiss are difficult to decipher. He appears to argue that the deed of trust on the property is void, and thus all attempts to foreclose on the property are illegal. Because he believes the deed of trust is void, he argues that he has adversely possessed the property. He also contends that the loan terms were exploitative and thus violated TILA and RESPA.

         The parties are familiar with the facts of the case and I will not repeat them here except where necessary to rule on the motion.[2] I grant the defendants' motion. The deed of trust is not void, and Guidi has not pleaded sufficient facts to plausibly allege any of his claims based on that instrument. Nor has he alleged sufficiently outrageous and extreme conduct to sustain his IIED claim. Finally, Guidi has not alleged the defendants are the proper defendants under TILA, RESPA, or the adverse possession claim.

         I. ANALYSIS

         In 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 assume the truth of legal conclusions merely because they are cast in the form of factual allegations. 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, 556 (2007). Such allegations must amount to “more than labels and conclusions, [or] a formulaic recitation of the elements of a cause of action.” Id. at 555.

         A. Wrongful Foreclosure

         In Nevada, to establish a claim for wrongful foreclosure, the borrower must “establish that at the time the power of sale was exercised or the foreclosure occurred, no breach of condition or failure of performance existed on the mortgagor's or trustor's part which would have authorized the foreclosure or exercise of the power of sale.” Collins v. Union Fed. Sav. & Loan Ass'n, 662 P.2d 610, 623 (Nev. 1983). The “material issue of fact in a wrongful foreclosure claim is whether the trustor was in default when the power of sale was exercised.” Id. A plaintiff's claim will fail unless he shows that he was not in default on his loan obligations when the foreclosure proceedings were initiated. Larson v. Homecomings Fin., LLC, 680 F.Supp.2d 1230, 1237 (D. Nev. 2009).

         The defendants argue that Guidi makes no allegation that the borrower on the underlying loan, Guidi's mother Priscilla Bardes, is not in default. Guidi does not allege the loan is not in default. In fact, he states he had been making payments on the loan but stopped in October 2013. ECF No. 1 at 7. Guidi instead contends that the deed of trust securing the loan is void and so the defendants do not have standing to foreclose.[3] He argues Bardes violated a “Second Home Rider” on the deed of trust by conveying an interest in the property to him and allowing him to possess the property. According to Guidi, this violation voided the deed of trust.

         Even if Bardes violated the deed, Guidi has not plausibly alleged this breach would void the deed. Guidi has not made any other allegations showing the defendants do not have standing to foreclose, and has not plausibly alleged that Bardes was not in default on her loan obligations. Therefore, I dismiss this claim. Because Guidi acknowledges that the loan was in default, I dismiss this claim with prejudice.

         B. Other Claims Based on the Deed of Trust

         Guidi's claims for fraud in the concealment, fraud in the inducement, slander of title, quiet title, declaratory relief, and injunctive relief are all based on his argument that the deed of trust is void. Guidi has not plausibly alleged facts showing this to be the case. Nor can he bring these claims under any factual scenario, as he is not the borrower on the loan at issue nor listed on the deed of trust. Thus, I dismiss these claims with prejudice.

         C. Intentional Infliction of ...

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