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Hill v. Wells Fargo Bank, N.A.

United States District Court, D. Nevada

October 21, 2019

MICHAEL HILL, Plaintiff,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

          ORDER

          MIRANDA M. DU CHIEF UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         This case arises out of an alleged failure to modify a home loan. Plaintiff Michael Hill sued Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and U.S. Bank National Association (“U.S. Bank”) after they foreclosed on his home despite alleged promises not to foreclose after Plaintiff repeatedly explained to Defendants' representatives over the phone that his house was essentially uninhabitable because it was constructed of ‘toxic Chinese drywall' and included a faulty heating and cooling system. (ECF No. 48 (“FAC”).) Before the Court is Defendants' motion to dismiss Plaintiff's FAC for failure to state a claim as to three of Plaintiff's four asserted claims (the “Motion”).[1] (ECF No 57.) Because Plaintiff's claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel fail as a matter of law-and as further explained below-the Court will grant the Motion.

         II. BACKGROUND

         A. Allegations in the FAC

         Plaintiff purchased the property located at 3432 Big Stomp Court, Las Vegas, Nevada, 89129 (the “Home”). (ECF No. 48 at 2.) To do so, he obtained a mortgage from the Concord Mortgage Company for $191, 760.00 (“Loan”). (Id.) The beneficial interest in the Loan was assigned to Defendant U.S. Bank. (Id. at 2-3.) Defendant Wells Fargo purchased the servicing rights to the Loan. (Id. at 3.) Plaintiff noticed a chemical odor circulating throughout the Home after he purchased it, which adversely impacted his health. (Id.) Between 2006 and 2010, the Home's builder and Plaintiff discovered issues with the Home's forced air units, and that it contained “hazardous-to-health Chinese Drywall, as well as otherwise defective and toxic drywall.” (Id.)

         Beginning on February 16, 2010, Plaintiff communicated with Wells Fargo about the issues with the Home-he told a Wells Fargo representative that they were forced to leave their Home because its toxic environment was harming their health. (Id.) Plaintiff “pleaded with Wells Fargo that, while he could afford his mortgage payments and he could afford alternative accommodations, he could not afford them both simultaneously.” (Id.) Over the next several years, he spoke with different Wells Fargo representatives who made him explain his story each time he called. (Id. at 4.) At one point, [2] a Wells Fargo representative told Plaintiff Wells Fargo would not foreclose on his Home, take any adverse action against him, or require him to submit more financial information to Wells Fargo. (Id.) In 2013, Wells Fargo representatives pressured Plaintiff to say he still lived in the Home on a “Request for Mortgage Assistance Form, ” even though he had moved out. (Id.) Wells Fargo called Plaintiff on the phone even though he asked that all communications with him be in writing. (Id.) Wells Fargo also “used Mr. Hill's refusal to perjure himself on the Request for Mortgage Assistance Form as an excuse to not undergo Nevada required mediation.” (Id.)

         “Despite its repeated assurances that it would not initiate any adverse action until after [Plaintiff's] home was repaired, Wells Fargo foreclosed on the Home on January 5, 2017.” (Id.) Plaintiff asserts claims for: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violation of NRS § 107.540; and (4) promissory estoppel. (Id. at 4-10.)

         B. Procedural History

         Plaintiff initially filed this case in state court. (ECF No. 1-1.) Defendants removed it to this Court. (ECF No. 1.) Plaintiff's Complaint included claims for: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of fiduciary duty against Wells Fargo; (4) violation of Nevada Foreclosure Mediation Rules; (5) violation of NRS § 107.540; (6) negligence, negligent hiring, retention, and supervision; (7) economic duress; and (8) declaratory relief. (ECF No. 1-1 at 6-14.) Defendants moved to dismiss the Complaint, and filed a corresponding request for judicial notice.[3] (ECF Nos. 5, 6.) The Court held a hearing on that motion, where the Court granted in part and denied in part Defendants' motion to dismiss, and granted the request for judicial notice. (ECF No. 45.)

         Per the Court's order at that hearing, Defendants submitted (ECF No. 54), and the Court accepted (ECF No. 56), a proposed order granting Defendants' motion to dismiss and request for judicial notice. The Court specifically dismissed most of Plaintiff's claims asserted in the Complaint with prejudice. (Id. at 2.) However, the Court granted Plaintiff leave to amend his claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of NRS § 107.540. (Id.) Plaintiff's FAC followed (ECF No. 48), where, as noted, Plaintiff alleges violation of those three claims and a claim for promissory estoppel (id.). In their Motion, Defendants move to dismiss Plaintiff's claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel, but not for violation of NRS § 107.540. (ECF No. 57.)

         After Defendants filed the Motion, the parties filed a joint request for a settlement conference. (ECF Nos. 60, 69.) The Court eventually granted that request. (ECF No. 71.) The settlement conference occurred on July 10, 2019, but did not result in settlement. (ECF No. 79.)

         III. LEGAL STANDARD

         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 pled 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 Atlantic 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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