United States District Court, D. Nevada
WELLS FARGO BANK, N.A., AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2007-5 ASSET-BACKED CERTIFICATES, SERIES 2007-5, Plaintiff,
FIDELITY NATIONAL INSURANCE COMPANY, Defendant.
MIRANDA M. DU CHIEF UNITED STATES DISTRICT JUDGE
a dispute about title insurance coverage that relates to a
foreclosure sale by a homeowners association (âHOAâ). Before
the Court is Fidelity National Title Insurance Company's
(âFidelityâ) motion to dismiss (âMotionâ) (ECF No. 5). The
Court has reviewed Plaintiff Wells Fargo Bank, N.A.'s
(âWells Fargoâ) response (ECF No. 7) as well as
Fidelity's reply (ECF No. 8). For the following reasons,
the Court grants Fidelity's Motion.
following facts are taken from the Complaint (ECF No. 1)
unless otherwise indicated.
Milton (“Borrower”) purchased real
property (“Property”) on February 27,
1998, with a loan in the amount of $140, 000 secured by a
first deed of trust (“DOT”). (Id. at
2-3.) The DOT identified Premier Trust Deed Services, Inc. as
the Trustee and Option One Mortgage Corporation as the lender
and beneficiary under the DOT. (Id. at 3.) Wells
Fargo became the assigned beneficiary under the DOT around
November 2016. (See id.)
issued a title insurance policy (“Policy”) in
connection with the recordation of the DOT. (Id.)
The Policy identified Option One Mortgage Corporation and or
its assigns as the insured. (Id.)
Property is located within an HOA, and the HOA recorded a
notice of delinquent assessment lien against the Property on
June 18, 2014 (“HOA Lien”). (See Id. at
4.) The HOA sold the Property to Entrust Education Trust/Deuk
Choi Trustee (“Buyer”) at a foreclosure sale
(“HOA Sale”) on December 17, 2014. (Id.
Fargo filed a complaint in this Court on December 28, 2016,
against Buyer and the HOA. (Id. at 6; see
also Case No. 3:16-cv-00758.) The Court granted summary
judgment in favor of Wells Fargo. (ECF No. 1 at 6.)
Fargo's predecessor provided written notice to Fidelity
that Buyer claimed an interest in the Property superior to
the DOT. (Id.) The tender letter requested both
indemnity and defense from Fidelity. (Id. at 7.)
Fidelity denied the claim on the basis that the claim did not
fall within the insuring provisions of the Policy and that
the HOA Lien was created after the date the Policy issued.
(Id.) Wells Fargo disputed the denial, but Fidelity
maintained the denial in a second, subsequent letter.
(Id. at 7-8.)
Fargo asserts the following claims against Fidelity: (1)
breach of contract; (2) contractual breach of the implied
covenant of good faith and fair dealing; (3) tortious breach
of the implied covenant of good faith and fair dealing; (4)
breach of fiduciary duties; and (5) violation of NRS §
686A.310. (Id. at 8-13.) Wells Fargo seeks
contractual damages, extra-contractual damages including
attorneys' fees and costs, and punitive damages.
(Id. at 13.)
parties first dispute whether the Court has subject matter
jurisdiction over Wells Fargo's claims. Wells Fargo seeks
to invoke the Court's diversity jurisdiction.
(See ECF No. 1 at 2.) Fidelity argues that the Court
lacks subject matter jurisdiction over Wells Fargo's
claims because the amount in controversy does not exceed $75,
000. (ECF No. 5 at 4-7.) The Court disagrees.
12(b)(1) of the Federal Rules of Civil Procedure allows
defendants to seek dismissal of a claim or action for a lack
of subject matter jurisdiction. Dismissal under Rule 12(b)(1)
is appropriate if the complaint, considered in its entirety,
fails to allege facts on its face sufficient to establish
subject matter jurisdiction. In re Dynamic Random Access
Memory (DRAM) Antitrust Litig., 546 F.3d 981, 984-85
(9th Cir. 2008). Here, Wells Fargo bears the burden of
proving that the case is properly in federal court even
though Fidelity is the moving party because Wells Fargo is
the party invoking the ...