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Penrose v. Quality Loan Service, Corp.

United States District Court, D. Nevada

March 25, 2019

QUALITY LOAN SERVICE CORP., et al., Defendants.



         I. SUMMARY

         Pro se Plaintiff Herbert S. Penrose brings this action to prevent nonjudicial foreclosure of residential property located at 3275 Lymbery Street, Reno, NV, 89509 (“Property”). (See, e.g., ECF No. 1 at 3.) Defendants U.S. Bank National Association, as Trustee for Harborview Mortgage Loan Trust 2005-8, Mortgage Loan Pass-Through Certificates, Series 2005-8 (“U.S. Bank”), Nationstar Mortgage, LLC dba Mr. Cooper (“Nationstar”); and Mortgage Electronic Registration Systems, Inc. (“MERS”) (collectively, “MTD Defendants”) move to: dismiss Plaintiff's complaint (“Complaint”); to have Plaintiff declared a vexatious litigant; and to expunge Plaintiff's filing of a notice of lis pendens against a property not at issue in the Complaint (“Motion”). (See generally ECF No. 8.) Plaintiff's response was due on March 11, 2019. (See Id. (docket).) To date, Plaintiff has not responded to the Motion. For the reasons stated below, the Court grants the Motion. Defendants' motion to stay (ECF No. 10) is denied as moot.


         The facts of this case are taken from documents in the public record, unless otherwise indicated:[1] In May 2005, non-party Randall G. Sotka obtained a loan from First Magnus Financial Corporation (“Lender”) in the amount of $180, 000 (“Loan”) to finance the purchase of the Property. (ECF No. 8-1.) The Loan was secured by a deed of trust (“DOT”) recorded against the Property. (Id.) The DOT named MERS as the beneficiary and nominee for Lender and Lender's successors and assigns. (Id. at 2.) Inter alia, the DOT provides:

20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under this Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note.

(Id. at 12-13.)

         On August 31, 2005, Sotka recorded a quitclaim deed from Randall G. Sotka to Randall G. Sotka, as Trustee of Randall G. Sotka Revocable Living Trust and from the latter to MASTER RE, LLC. (ECF Nos. 8-2, 8-3.) In July 2007, Sotka sold the Property to Plaintiff and recorded an affirmation agreement (“Agreement”) and affirmation deed of trust in favor of Plaintiff. (ECF Nos. 8-4, 8-5[2].) Under the Agreement, Plaintiff accepted the obligation to perform all the terms of Sotke's original note (“Note”) and DOT. (ECF No. 8-4 at 3.) The Agreement provided that Sotke remained liable on the Note and DOT, despite the sale to Plaintiff. (Id.) The Agreement further provided that Plaintiff would pay damages to Sotke if Plaintiff failed to meet what amounts to Sotke's responsibilities under the Note and the failures resulted in a notice of default being recorded against the Property. (Id. at 3-4.)

         MERS assigned the DOT to U.S. Bank in December 2012. (ECF No. 8-6.)

         Due to default on the Note, a Notice of Breach and of Election to Cause Sale of Real Property under Deed of Trust was file against the Property on May 17, 2018. (ECF No. 8-7.) On October 9, 2018, a notice of trustee's sale was recorded, indicating the Property would be sold at auction at 11:00 AM on November 1, 2018. (ECF No. 8-9.)

         Plaintiff filed this case on January 17, 2019, asserting the following claims: (1) lack of standing/wrongful foreclosure; 2) fraud in the concealment; 3) fraud in the inducement; 4) intentional infliction of emotional distress; 5) slander of title; 6) quiet title; 7) declaratory relief; 8) violations of TILA and HOEPA; 9) violations of RESPA; and 10) rescission. (ECF No. 1 at 13-33.) Plaintiff also filed a notice of lis pendens, but with respect to a property located at 495 Isbell Road, Reno, Nevada 89509-not at issue in the Complaint. (ECF No. 2 at 2.)

         MTD Defendants filed the Motion on February 25, 2019. (ECF No. 8.) Plaintiff has not responded to the Motion. MTD Defendants subsequently filed a motion to stay discovery until this Court rules on the Motion. (ECF No. 10.)


         A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pleaded complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to ...

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