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Corona v. Marencik

United States District Court, D. Nevada

October 29, 2019

LOUISE B. MARENCIK, et al., Defendants.


          Gloria M. Navarro, United States District Court District Judge

         Pending before the Court is the Motion to Dismiss, (ECF No. 10), filed by Defendants Bayview Loan Servicing, LLC, Robert Hodapp, Zieve, Brodnax & Steele, LLP, and Shadd A. Wade, to which Defendants Blank Rome LLP, Louise B Marencik, and Bank of America, N.A. filed Joinders, (ECF Nos. 23, 30), (collectively “Defendants”). Plaintiffs Ruben and Ana Corona (“Plaintiffs”) did not file a response. For the reasons stated below, the Court GRANTS Defendants' Motion to Dismiss.

         I. BACKGROUND

         This case concerns a non-judicial foreclosure on Plaintiffs' real property located at 7312 Buttons Ridge Drive, Las Vegas, Nevada 89131 (the “Property”). (Compl. at 1, ECF No. 1). Plaintiffs purchased the Property through a loan of $799, 999.00 from Southstar Funding LLC and Star Mortgage. (Id. at 5). Plaintiffs allege that, after taking out the loan, Defendants did not properly register the loan documents. (Id. at 5-7, 9). That improper loan registration caused Plaintiffs to make payments on a “fake loan.” (Id. at 3). Upon Plaintiffs' apparent failure to meet payment obligations on that fake loan, Defendants commenced a foreclosure lawsuit in a state court. (Id. at 6, 13). According to Plaintiffs, the improper registration of loan documents meant that the foreclosure proceedings in the state court occurred without proper authority, without verification of a debt, and without the proper parties to enforce the loan. (Id. at 3-4, 12).

         Plaintiffs accordingly filed their Complaint with the Court on February 26, 2019, alleging the following causes of action: (1) breach of contract; (2) scheme to defraud in violation of “the Truth in Lending Act, Regulation Z, 12 CFR § 226.23”; (3) detrimental reliance; (4) unlawful deception; (5) civil violation of the Racketeer Influenced and Corrupt Organization Act; (6) wrongful foreclosure; (7) slander of title; (8) violation of the Consumer Protection Act, also referred to by Plaintiffs as the Nevada Deceptive Trade Practices Act (NRS 598); (9) slander of credit; and (10) intentional infliction of emotional distress. (Id. at 5-11). Shortly afterward, Plaintiffs filed a Motion for Temporary Restraining Order and Permanent Injunction, (ECF Nos. 3, 4); and Defendants filed their Response, (ECF No. 9), and a Motion to Dismiss, (ECF No. 10). On April 25, 2019, the Court denied Plaintiffs' Motion for Temporary Restraining Order and Permanent Injunction. (Order, ECF No. 27).


         Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the Court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

         The Court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555).

         A court may also dismiss a complaint pursuant to Federal Rule of Civil Procedure 41(b) for failure to comply with Federal Rule of Civil Procedure 8(a). Hearns v. San Bernardino Police Dept., 530 F.3d 1124, 1129 (9th Cir. 2008). Rule 8(a)(2) requires that a plaintiff's complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” “Prolix, confusing complaints” should be dismissed because “they impose unfair burdens on litigants and judges.” McHenry v. Renne, 84 F.3d 1172, 1179 (9th Cir. 1996). Mindful of the fact that the Supreme Court has “instructed the federal courts to liberally construe the ‘inartful pleading' of pro se litigants, ” Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987), the Court will view Plaintiff's pleadings with the appropriate degree of leniency.

         “Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion . . . . However, material which is properly submitted as part of the complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). 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 ruling on a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers materials outside of the pleadings, the motion to dismiss becomes a motion for summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001).

         If the court grants a motion to dismiss, it must then decide whether to grant leave to amend. The court should “freely give” leave to amend when there is no “undue delay, bad faith[, ] dilatory motive on the part of the movant . . . undue prejudice to the opposing party by virtue of . . . the amendment, [or] futility of the amendment . . . .” Fed.R.Civ.P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).


         Defendants assert the following grounds for dismissal of Plaintiffs' Complaint: (1) failure to join a necessary party; (2) inadequate factual allegations to support the claims; and (3) improper service of process pursuant to Federal Rule of Civil Procedure 4. (Mot. Dismiss 1:24- 9); (Joinder 2:3-5, ECF No. 23). The Court addresses each ground in turn below.

         A. Failure to Join a Necessary Party

         Defendants argue that the Complaint fails to name the necessary party of Bank of New York Mellon (“BONYM”). BONYM, according to Defendants, is the entity that both owned Plaintiffs' loan prior to the Property's foreclosure and purchased the Property during the foreclosure sale. (See Assignment of Deed of Trust, Ex. F to Defs.' Resp., ECF No. 9-6); (Notice of Trustee's Sale, Ex. I to Defs.' Resp., ECF No. 9-9); (Trustee's Deed Upon Sale, Ex. J to Defs.' Resp., ECF No. 9-10).[1]

         As the Court stated in its Order on Plaintiffs' Motion for Temporary Restraining Order, Plaintiffs' omission of BONYM as a party to this action is fatal to the current Complaint because, were Plaintiffs to be successful in their claims here, BONYM would lose its interest in the Property. (See Compl. at 13-14) (seeking, among other forms of relief, a declaration that the foreclosure sale was void and a discharge of Plaintiffs' debt related to the loan on the Property). Accordingly, to proceed with this lawsuit Plaintiffs must include BONYM as a party. See Fed. R. Civ. P. 19(a). Because the Court dismisses Plaintiffs' Complaint with leave to amend as explained below, Plaintiffs will have an ...

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