Peshek v. Litton Loan Servicing LP et al

Filing 44

ORDER that 40 Motion to Dismiss is GRANTED. IT IS FURTHER ORDERED that 35 Motion to Reconsider is DENIED. IT IS FURTHER ORDERED that 36 Motion for Summary Judgment is GRANTED. Clerk shall enter judgment accordingly. Signed by Judge Gloria M. Navarro on 6/25/12. (Copies have been distributed pursuant to the NEF - EDS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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HEATHEN PESHEK,
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Plaintiff,

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vs.

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LITTON LOAN SERVICING, et al.,
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Defendants.

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Case No.: 2:10-cv-00812-GMN-RJJ
ORDER

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Pending before the Court is the Motion to Dismiss (ECF No. 40) filed by Defendants

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Litton Loan Servicing, LP (“Litton Loan”) and Bank of America, N.A. (“Bank of America”)

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(collectively, “Moving Defendants”). Also before the Court is Moving Defendants’ Motion to

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Reconsider Order on Motion to Dismiss or, in the Alternative, Motion for Summary Judgment,

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and Renewed Motion for Summary Judgment on the Remaining Fraud Claim against

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Defendant Litton Loan (ECF No. 35, 36).

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I.

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BACKGROUND
On September 26, 2011, the Court granted Defendant Bank of America’s Motion to

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Dismiss (ECF No. 13), but gave Plaintiff leave to amend the complaint except the Breach of

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Contract claim, which was dismissed without leave to amend. (Order, ECF No. 34.) The

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Court also granted in part the joint Motion to Dismiss filed by Moving Defendants (ECF No.

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14), denying only Plaintiff’s fraud claim against Defendant Litton Loan Servicing. (Id.)

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The next day, Moving Defendants filed their Motion to Reconsider Order on Motion to

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Dismiss or, in the Alternative, Motion for Summary Judgment, and the Renewed Motion for

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Summary Judgment on the Remaining Fraud Claim, which was filed twice in the docket. (ECF

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Nos. 35, 36.)

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On October 18, 2011, Plaintiff filed his Second Amended Complaint (ECF No. 39) and
Moving Defendants subsequently filed their Motion to Dismiss (ECF No. 40).

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Moving Defendants have also filed two Notices of Non-Opposition to their pending

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motions. (ECF Nos. 42, 43.) Plaintiff has not filed any Response to either of the motions.

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II.

LEGAL STANDARD

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A.

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The Federal Rules of Civil Procedure provide for summary adjudication when the

Summary Judgment

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pleadings, depositions, answers to interrogatories, and admissions on file, together with the

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affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant

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is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those that

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may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

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(1986). A dispute as to a material fact is genuine if there is sufficient evidence for a

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reasonable jury to return a verdict for the nonmoving party. See id. “Summary judgment is

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inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party,

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could return a verdict in the nonmoving party’s favor.” Diaz v. Eagle Produce Ltd. P’ship, 521

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F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04

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(9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of

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factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).

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In determining summary judgment, a court applies a burden-shifting analysis. “When

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the party moving for summary judgment would bear the burden of proof at trial, it must come

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forward with evidence which would entitle it to a directed verdict if the evidence went

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uncontroverted at trial. In such a case, the moving party has the initial burden of establishing

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the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp.

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Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In

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contrast, when the nonmoving party bears the burden of proving the claim or defense, the

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moving party can meet its burden in two ways: (1) by presenting evidence to negate an

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essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving

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party failed to make a showing sufficient to establish an element essential to that party’s case

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on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–

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24. If the moving party fails to meet its initial burden, summary judgment must be denied and

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the court need not consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co.,

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398 U.S. 144, 159–60 (1970).

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B.

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Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of

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action that fails to state a claim upon which relief can be granted. See North Star Int’l. v.

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Arizona Corp. Comm’n., 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to

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dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the

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complaint does not give the defendant fair notice of a legally cognizable claim and the grounds

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on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering

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whether the complaint is sufficient to state a claim, the Court will take all material allegations

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as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v.

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Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

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Rule 12(b)(6)

The Court, however, is not required to accept as true allegations that are merely

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conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v.

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Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause

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of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that

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a violation is plausible, not just possible. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)

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(citing Twombly, 550 U.S. at 555) (emphasis added).

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“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

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of the complaint may be considered on a motion to dismiss. Hal Roach Studios, Inc. v. Richard

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Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly,

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“documents whose contents are alleged in a complaint and whose authenticity no party

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questions, but which are not physically attached to the pleading, may be considered in ruling

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on a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion

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for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal

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Rule of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v.

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S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court

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considers materials outside of the pleadings, the motion to dismiss is converted into a motion

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for summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925

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(9th Cir. 2001).

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If the court grants a motion to dismiss, it must then decide whether to grant leave to

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amend. The court should “freely give” leave to amend when there is no “undue delay, bad

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faith[,] dilatory motive on the part of the movant . . . undue prejudice to the opposing party by

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virtue of . . . the amendment, [or] futility of the amendment . . . .” Fed. R. Civ. P. 15(a); Foman

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v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear

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that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow

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Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

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III.

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DISCUSSION
Moving Defendants filed their Motion to Reconsider and their renewed Motion for

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Summary Judgment because the Court’s Order stated that their original Motion for Summary

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Judgment would be denied without prejudice because discovery was not concluded.

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Defendants correctly point out that by the time the Order was filed, discovery had concluded.

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However, this does not alter the fact that by the time the motions were briefed, discovery had

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not concluded. Therefore, the Court finds that no good cause exists for reconsideration of the

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Order, and will deny the Motion to Reconsider. The Court will, however, grant Defendants’

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Motion for Summary Judgment, as discussed below. Also, and as discussed below, the Court

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will grant the Motion to Dismiss.

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A.

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Moving Defendants request summary judgment in their favor on Plaintiff’s fraud claim

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Summary Judgment

against Defendant Litton Loan, for which the Court previously denied a motion to dismiss.
The elements necessary to establish a claim of fraud are: (1) a false representation made

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by the defendant; (2) the defendant’s knowledge or belief that its representation was false;

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(3) the defendant’s intent to induce the plaintiff to act or refrain from acting upon the

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misrepresentation; and (4) damage to the plaintiff as a result of relying on the misrepresentation.

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Barmettler v. Reno Air, Inc., 956 P.2d 1382, 1386 (Nev. 1998).

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Discovery has now closed, and Plaintiff has submitted no evidence to the Court to

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establish a genuine dispute of material facts in his favor. Plaintiff has not even responded to

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the motion. In the Complaint, Plaintiff claimed that a representative of Litton Loan, Debra

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Gomez, told Plaintiff that the date of the trustee’s sale would be postponed if he sent certain

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documents. Plaintiff sent some of those documents, but the date was not postponed, and his

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home was sold on January 26, 2010. Plaintiff claimed that he suffered damages in that he did

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not get the benefit of the extra time before sale.

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The Court can find that a reasonable jury might find in favor of Plaintiff on three of the

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four required elements to establish fraud, but cannot find that there is enough evidence that a

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reasonable jury could find that Gomez or Litton Loan knew that its representation was false.

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There is simply no basis on which such an inference could be drawn. Since discovery is now

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closed, and Plaintiff has not indicated to the Court that any other evidence in support of this

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claim is forthcoming, the Court must find in favor of Moving Defendants and grant the Motion

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for Summary Judgment on Plaintiff’s fraud claim.

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B.

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In the Court’s previous Order, the Motion to Dismiss was granted with leave to amend

Rule 12(b)(6)

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only as to Plaintiff’s claims for: (1) Breach of Written Contract (Loan Modification

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Agreement); (2) Breach of Implied Covenant of Good Faith and Fair Dealing; (3) Statutory

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Violations (Wrongful Foreclosure); and (4) Unjust Enrichment. Moving Defendants’ Motion

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to Dismiss the Second Amended Complaint points out that Plaintiff has not remedied the

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deficiencies identified by the Court in its previous Order. Furthermore, Plaintiff has failed to

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file any response to the motion. Accordingly, and as discussed below, the motion will be

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granted, and Plaintiff’s Second Amended Complaint will be dismissed, without further leave

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to amend.
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Breach of Contract Against Litton Loan Servicing (Loan
Modification Agreement) and Breach of Implied Covenant of
Good Faith and Fair Dealing
In its Order, the Court explained that no claim for breach of contract or breach of

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implied covenant of good faith and fair dealing could be supported where there was no

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evidence of a valid contract. The basis for Plaintiff’s claims is the “Workout Plan” offered by

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Defendant Litton Loan. However, as Moving Defendants argued, and the Court agreed, there

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is no evidence that this was a binding contract, and there is evidence that it was explicitly

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disclaimed as a binding contract. In his Second Amended Complaint, Plaintiff has alleged no

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facts to support an inference that the Workout Plan was a valid contract or that any other valid

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contract existed. Therefore, the Court finds that Plaintiff has failed to state a claim on which

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relief can be granted as to these two claims. Accordingly, these claims will be dismissed.

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2.

Statutory Violations (Notice of Foreclosure and Foreclosure Sale)

In its Order, the Court explained that Plaintiff’s claims of statutory violations were

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unsupported by any evidence. For example, Plaintiff claimed that no auction had taken place,

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but offered no basis on which this allegation was founded. The Court granted Plaintiff leave to

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amend this claim, if he could allege any facts supporting an inference of statutory violations.

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In his Second Amended Complaint, Plaintiff did not add any such facts. Accordingly, the

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claim must be dismissed.

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3.

Unjust Enrichment

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In its Order, the Court explained that Plaintiff’s claims of unjust enrichment could not

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be supported where a deed of trust and mortgage note already governs the relationship of the

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parties. See, e.g., Laughlin v. MidCountry Bank, No. 3:10-cv-00294-LRH-VPC, 2011 WL

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2174972, at *4 (D. Nev. June 3, 2011). The Court also recognized that Plaintiff’s claims of

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unjust enrichment relating to Defendant Litton Loan’s acceptance of payments and Defendant

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Bank of America’s payments to Defendant Litton Loan failed to allege facts sufficient to

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support the heightened pleading standards of Rule 9(b). In his Second Amended Complaint,

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Plaintiff has also failed to allege such facts. Accordingly, the claim must be dismissed.
Because the Court finds that Plaintiff failed to state a claim on which relief can be

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granted, the Court also finds that Plaintiff’s requests for declaratory relief must be denied.

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IV.

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CONCLUSION
IT IS HEREBY ORDERED that the Motion to Dismiss (ECF No. 40) is GRANTED.

The Clerk shall enter judgment accordingly.

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IT IS FURTHER ORDERED that the Motion to Reconsider Order on Motion to

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Dismiss or, in the Alternative, Motion for Summary Judgment, and Renewed Motion for

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Summary Judgment on the Remaining Fraud Claim against Defendant Litton Loan (ECF Nos.

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35, 36) is DENIED as to the Motion to Reconsider, and GRANTED as to the Motion for

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Summary Judgment. The Clerk shall enter judgment accordingly.
gment
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DATED this 25th day of June, 2012.

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_____________________________
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Gloria M.
Gloria M. Navarro
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United States
United States District Judge
i d
Judg

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