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Welsh v. One West Bank FSB

United States District Court, D. Nevada

May 2, 2019

LINDA WELSH, Plaintiff
v.
ONE WEST BANK FSB and OCWEN LOAN SERVICING LLC, Defendants

          ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS [ECF NOS. 39 AND 40]

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE

         Plaintiff Linda Welsh executed a note and deed of trust on property located at 1461 Morning Crescent Street in Henderson, Nevada. A trustee's foreclosure sale occurred, followed by a homeowners' association (HOA) foreclosure sale. The purchaser at the HOA foreclosure sale eventually evicted Welsh from the property. Welsh sues defendants One West Bank FSB and Ocwen Loan Servicing LLC for equitable estoppel and violation of the Fair Credit Reporting Act (FCRA) for events arising out of the two foreclosures.[1]

         One West and Ocwen move to dismiss, arguing that Welsh fails to allege facts showing that either defendant is liable for the alleged misrepresentations of their predecessor to support her equitable estoppel claim. The defendants also argue that Welsh fails to allege sufficient facts to state a FCRA claim, and even if she does she fails to allege a concrete injury and thus lacks standing.

         The parties are familiar with the facts of this case, so I do not recite them here except where necessary. Because Welsh has failed to allege sufficient facts to support her claims, I grant the defendants' motions and dismiss Welsh's claims with prejudice.

         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. 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. Equitable Estoppel

         “Equitable estoppel functions to prevent the assertion of legal rights that in equity and good conscience should not be available due to a party's conduct.” In re Harrison Living Tr., 112 P.3d 1058, 1061-62 (Nev. 2005) (quotation omitted). The four elements of equitable estoppel are:

(1) the party to be estopped must be apprised of the true facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting estoppel has the right to believe it was so intended; (3) the party asserting the estoppel must be ignorant of the true state of facts; and (4) he must have relied to his detriment on the conduct of the party to be estopped.

Id. at 1062 (quotation omitted). The reliance must be justifiable. Pellegrini v. State, 34 P.3d 519, 531 (Nev. 2001) (en banc).

         1. Welsh's equitable estoppel claim against One West

         Welsh asserts a claim for equitable estoppel based on One West's acknowledgements that a loan modification had been executed, that Welsh was making payments under that loan modification, and that One West attempted to rescind the 2008 foreclosure sale and place the property back in her name. ECF No. 38 at 6. Welsh claims that her reliance on these representations is based on One West's “verbal communication[s], ” acceptance of her loan modification payments, and its representations in state court. Id. Also, Welsh alleges that she “was told” (the amended complaint does not specify by whom) that the lawsuit in state court was to rescind the sale and place the property back in her name to honor the loan modification. Id.

         One West argues that Welsh is attempting to hold it liable for the alleged misrepresentations of its predecessor, IndyMac, based on One West's attempts to honor the rescission of the 2008 foreclosure after it was assigned Welsh's loan. Welsh responds that while IndyMac originally held the loan, it was transferred to One West, who represented throughout the state-court lawsuit that the action was to rescind the foreclosure. Welsh maintains that she relied to her detriment on One West's representations in the state-court action, as evidenced by her eventual eviction and the fact that several of her claims expired as a result of the lengthy litigation.

         Despite her new allegations, Welsh fails to adequately allege her equitable estoppel claim. At the time of the loan modification, IndyMac was her lender, not One West, and IndyMac conducted the 2008 foreclosure. See ECF No. 10 at 37-38, 48-50. IndyMac assigned the deed of trust to One West after the 2008 foreclosure, the loan modification, and the attempted rescission in 2010. Id. at 59. As assignee, One West's subsequent acknowledgements during the state-court action that a loan modification had been executed, that Welsh made payments under that loan modification, and that IndyMac's 2008 foreclosure should not have occurred do not render One West liable for the alleged misconduct of its assignor. Welsh has not alleged that ...


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