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Stacey v. Nationstar Mortage, LLC

United States District Court, D. Nevada

June 5, 2019

DIANE M. STACEY, Plaintiff,
NATIONSTAR MORTGAGE, LLC, et al., Defendants.


          Gloria M. Navarro, United States District Judge

         Pending before the Court is the Motion to Dismiss, (ECF No. 5), filed by Defendants Nationstar Mortgage, LLC (“Nationstar”) and U.S. Bank National Association (“U.S. Bank”) (collectively “Defendants”). Plaintiff Diane M. Stacey (“Plaintiff) filed a Response, (ECF No. 9), and Defendants filed a Reply, (ECF No. 15). For the reasons discussed herein, Defendants' Motion to Dismiss is GRANTED.

         I. BACKGROUND

         This quiet title action arises from Nationstar's institution of foreclosure proceedings on real property located at 2297 Feathertree Ave., Henderson, Nevada 89052 (the “Property”). (Compl. ¶ 8, Ex. A to Pet. for Removal, ECF No. 1-1). Plaintiff purchased the Property in 2005 by way of a loan from Stonecreek Funding Corporation (“Stonecreek”). (Id. ¶ 9). Stonecreek later sold the loan to Countrywide Mortgage, an entity which non-party Bank of America (“BANA”) later purchased. (Id. ¶ 10).

         Due to financial distress, Plaintiff stopped making payments on her loan and contacted BANA to request a loan modification. (Id. ¶¶ 11-12). Over the next few years, BANA repeatedly refused any modification and allegedly changed its explanation for its refusal multiple times. (Id. ¶¶ 13-14). In 2013, Specialized Loan Servicing, LLC (“SLS”) became servicer of the loan in BANA's place. (Id. ¶ 15). Defendant Nationstar took over the loan servicing from SLS in 2014, after which Plaintiff initiated correspondence with Nationstar concerning her sought-after loan modification. (Id. ¶¶ 16-17). Plaintiff alleges that Nationstar, like BANA previously, consistently rebuffed Plaintiff's pleas for a modification and offered contradictory explanations for those rejections. (Id. ¶ 18).

         On December 19, 2017, Nationstar moved forward with foreclosure proceedings, recording a notice of default and election to sell. (Id. ¶ 20). Plaintiff subsequently filed a state-court petition to mediate the dispute pursuant to Nevada's Foreclosure Mediation Program (“FMP”). (See Pet. for Foreclosure Mediation, Stacey v. U.S. Bank Nat'l Ass'n, No. A-18-768548-FM (Nev. 8th Jud. Dist. Ct. Jan. 29, 2018), Ex. I to Defs.' Mot. to Dismiss (“MTD”), ECF No. 5-9).[1] Following an unsuccessful mediation, the state court ordered the issuance of an FMP Certificate, authorizing continuation of the foreclosure. (See FMP Certificate, Ex. N to MTD, ECF No. 5-14). In the wake of the court's order, Defendants proceeded with foreclosure by recording a notice of sale and setting a sale date for January 22, 2019. (Compl. ¶ 21).

         Plaintiff filed this action in state court on January 11, 2019, bringing claims arising from Defendants' alleged unwillingness to negotiate a loan modification and subsequent institution of foreclosure proceedings. Plaintiff asserts two causes of action for quiet title and breach of the implied covenant of good faith and fair dealing. (Id. ¶¶ 22-32). Shortly after Plaintiff filed her Complaint, Defendants removed this matter from state court and filed the instant Motion to Dismiss. (See Pet. for Removal, ECF No. 1); (MTD, ECF No. 5).


         Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         “Generally, a district court may not consider any material beyond the pleadings in a ruling on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). “However, material which is properly submitted as part of the complaint may be considered.” Id. Similarly, “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in a Ruling on a Rule 12(b)(6) motion to dismiss. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). On a motion to dismiss, a court may also take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(d).


         Defendants seek dismissal of Plaintiff's quiet title claim on the basis that it is barred by issue or claim preclusion. (MTD 6:8-10:19, ECF No. 5). Defendants also contend the quiet title claim fails as a matter of law in light of Plaintiff's concession that she defaulted on her loan. (Id. 10:24-12:21). Finally, Defendants argue that Plaintiff's bad-faith claim must be dismissed for Plaintiff's failure to allege a contract between the parties or other facts identifying wrongdoing on Defendants' part. (Id. 14:13-15:2).

         The Court first turns to Defendants' request for judicial notice, followed by discussion of issue preclusion.

         A. ...

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