Miller v. Skogg et al

Filing 65

ORDER that Defendants Motion to Dismiss Plaintiffs Amended Complaint 33 is GRANTED. Signed by Judge Kent J. Dawson on 7/21/11. (Copies have been distributed pursuant to the NEF - ECS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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JEAN KILAT MILLER,

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Plaintiff,

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v.

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RICK W. SKOGG, et al.,

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Case No. 2:10-CV-01121-KJD-GWF

Defendants.

ORDER

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Currently before the Court is the Motion to Dismiss Plaintiff’s Amended Complaint (#33) of

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Defendants Rick W. Skogg, individually and in his capacity as President of Aurora Loan Services,

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LLC and Linda Cervin, individually and in her capacity as President of Mortgage Electronic

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Registration Systems, Inc. (collectively “Defendants”). Plaintiff responded (#53) and Defendants

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have replied (#54).

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I. Background

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On or about December 13, 2005, pro se Plaintiff Jean Kilat Miller borrowed $310,500 to

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purchase real property located at 8164 Kentshire Drive, Las Vegas, NV 89117. Plaintiff obtained

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two loans, each of which was secured by a Deed of Trust naming Direct Access, LLC as the lender,

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Plaintiff as the borrower, Ticor Title as Trustee, and Mortgage Electronic Registration Systems, Inc.

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(“MERS”) as the Lender’s nominee. Aurora Loan Services (“Aurora”) serviced the loan. The Deeds

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of Trust each expressly granted MERS the right to sell the subject property if necessary to satisfy the

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debt. In February of 2009, Plaintiff defaulted on her mortgage obligations.

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On May 8, 2009, MERS, as lender’s nominee, substituted Quality Loan Service Corporation

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(“QLS”) in the place of the original Trustee of the First Deed of Trust which secured a Promissory

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Note in the amount of $241,500. QLS thereafter recorded a Notice of Default. Plaintiff did not cure

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the default, and QLS recorded a Notice of Trustee’s Sale. The original sale date was postponed.

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QLS subsequently recorded a second Notice of Trustee’s Sale on June 21, 2010, listing the sale date

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as August 16, 2010. On July 8, 2010, Plaintiff filed her Complaint in this Court, alleging a variety of

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claims against several parties, including Defendants Cervin on behalf of MERS and Skogg on behalf

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of Aurora. The property was sold on October 27, 2010.

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The causes of action alleged in the pleadings are not entirely clear, but it appears that

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Plaintiff’s Amended Complaint brings claims alleging violations of the Uniform Commercial Code

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(“UCC”), fraud, lack of standing to foreclose, and apparently for a qui tam action.

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II. Legal Standard for Motion to Dismiss

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Pursuant to Fed. R. Civ. P. 12(b)(6), a court may dismiss a plaintiff’s complaint for “failure

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to state a claim upon which relief can be granted.” A properly pled complaint must provide “a short

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and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.

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8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require

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detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation

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of the elements of a cause of action.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Papasan

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v. Allain, 478 U.S. 265, 286 (1986)). “Factual allegations must be enough to rise above the

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speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint

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must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal,

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129 S. Ct. at 1949 (internal citation omitted).

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In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when

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considering motions to dismiss. First, the Court must accept as true all well-pled factual allegations

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in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 1950.

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Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not

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suffice. Id. at 1949. Second, the Court must consider whether the factual allegations in the

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complaint allege a plausible claim for relief. Id. at 1950. A claim is facially plausible when the

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plaintiff’s complaint alleges facts that allow the court to draw a reasonable inference that the

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defendant is liable for the alleged misconduct. Id. at 1949. Where the complaint does not permit the

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court to infer more than the mere possibility of misconduct, the complaint has “alleged—but not

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shown—that the pleader is entitled to relief.” Id. (internal quotation marks omitted). When the

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claims in a complaint have not crossed the line from conceivable to plausible, plaintiff’s complaint

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must be dismissed. Twombly, 550 U.S. at 570.

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Courts must liberally construe the pleadings of pro se parties. See United States v. Eatinger,

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902 F.2d 1383, 1385 (9th Cir. 1990). However, pro se litigants must supply a minimum factual basis

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for the claims they assert against defendants. Brazil v. U.S. Dept. of Navy, 66 F.3d 193, 199 (9th

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Cir. 1995). “Even given the more generous pleading standards for pro se plaintiffs,” a plaintiff must

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“provide [the] minimum factual basis needed to provide notice to [the] defendants.” Turner v.

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County of Los Angeles, 18 Fed.Appx. 592, 596 (9th Cir. 2001). A pro se complaint can be

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dismissed if it appears “beyond doubt that the plaintiff can prove no set of facts in support of his

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claim which would entitle him to relief.” Haines v. Kerner, 404 U.S. 519, 520-521. (1972) (quoting

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Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

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III. Discussion

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A. UCC Claims

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Plaintiff’s Amended Complaint avers that this action is based on provisions of the UCC

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codified by the Nevada Legislature as N.R.S. §§ 104.9207 (rights and duties of a secured party in

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possession of collateral), 104.9210 (request for accounting), 40.010 (action for adverse claims) “and
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others.” (#7 at ¶ 2.) However, N.R.S. § 104.9109(2)(k) expressly provides that the Article does not

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apply to the creati0on or transfer of an interest or lien in real property. Moreover, Plaintiff includes

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no allegations to support her claims based on the statutes listed and provides no information

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sufficient to put Defendants on notice of how they violated these provisions. Plaintiff does not deny

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that she executed documents to obtain financing for the subject property and that she stopped making

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payments on the loans, which triggered non-judicial foreclosure pursuant to N.R.S.§ 107.080.

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Accordingly, Plaintiff fails to state a claim under N.R.S. §§ 104.9207, 104.9210, or 40.010 as alleged

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in her Complaint.

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B. Fraud

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Fed. R. Civ. P. 9(b) requires that a party pursuing a cause of action for fraud “state with

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particularity the circumstances constituting [the] fraud.” Thus to sufficiently plead fraud a plaintiff

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must provide “an account of the time, place, and specific content of the false representations, as well

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as the identities of the parties to the misrepresentations.” Swartz v. KPMG, LLP, 476 F.3d 756, 764

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(9th Cir. 2007); see also, Morris v. Bank of Nev., 886 P.2d 454, 456 n. 1 (Nev.1994).

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Here, Plaintiff fails to allege any details regarding the time, place, or circumstances of the

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alleged fraudulent actions of the moving Defendants. Although the Court must construe the

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pleadings of pro se parties liberally, “[p]ro se litigants must follow the same rules of procedure that

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govern other litigants.” King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.1987). See also, Ghazali v.

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Moran, 46 F .3d 52, 54 (9th Cir.1995) (“Although we construe pleadings liberally in their favor, pro

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se litigants are bound by the rules of procedure.”); Jacobsen v. Filler, 790 F.2d 1362, 1364 (9th

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Cir.1986) (“[P]ro se litigants in the ordinary civil case should not be treated more favorably than

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parties with attorneys of record.”). Plaintiff’s fraud claim fails to meet the required pleading

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standard. Accordingly, her fraud claim is dismissed.

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C. Non-Judicial Foreclosure

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In her complaint, Plaintiff claims that Defendants “altered, destroyed, and/or mutilated”

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original copies of the promissory note, allonges, deed of trust, registration statement, prospectus, and
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Federal Reserve Board Forms connected with the subject property. (#7.) Plaintiff however, provides

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no support for these allegations. Plaintiff also claims that Defendants lack standing or authority to

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foreclose on the subject property because they have not produced the original note. The Court is

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familiar with this and similar arguments as said arguments have been raised in previous cases.

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Contrary to Plaintiff’s argument, however, this Court has held that a nominee beneficiary—in this

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case MERS—does have standing to implement non-judicial foreclosure proceedings under Nevada

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law. See eg., Croce v. Trinity Mortgage Assur., Case No. 2-08-cv-01612-KJD (D. Nev. Sept. 28,

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2009); Elias v. HomeEQ Servicing, No. 08-1836, 2009 WL 481270, at *1 (D.Nev. Feb. 25, 2009);

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Dunlap v. Mortgage Elec. Registration Sys., Inc., No. 2:08-cv-00918, slip op. at 1 (D.Nev. Jan. 5,

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2009) (granting motions to dismiss filed by MERS and ReconTrust because MERS “does have

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standing and the authority to initiate foreclosure proceedings on the subject property under the

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language of the Deed of Trust”).

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California courts have made it clear that an “allegation that the trustee did not have the

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original note or had not received it is insufficient to render the foreclosure proceeding invalid.” Neal

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v. Juarez, 2007 WL 2140640 (S.D. Cal. July 23, 2007) (citing R.G. Hamilton Corp. v. Corum, 218

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Cal. 92, 97, 21 P.2d 413 (1933) and California Trust Co. v. Smead Inv. Co., 6 Cal.App.2d 432, 435,

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44 P.2d 624 (1935)); See also Hafix v. GreenPoint Mortgage Funding, Inc., 652 F.Supp.2d 1039,

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1043 (N.D. Cal. 2009). Nevada courts often look to California law where, as here, the statues at

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issue are substantively similar. Commercial Standard Ins. Co. v. Tab Constr., Inc., 94 Nev. 536, 583

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P.2d 449, 451 (Nev. 1978). Accordingly, the Court finds that Plaintiff’s claims based upon

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Defendants’ alleged lack of standing should also be dismissed.

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D. Qui Tam

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The right to bring a qui tam action is entirely created by statute. Vt. Agency of Natural

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Resources v. U.S. ex rel Stevens, 529 U.S. 765, 769 (2000). A qui tam action is for redress of an

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injury to the government. More specifically, it is the government’s injury that confers standing upon

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the private person, and the qui tam plaintiff has standing because he is a partial assignee of the

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United States’ claims against a defendant. Id.

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Here, Plaintiff both fails to cite a statutory basis for her alleged qui tam claim, or to allege

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sufficient facts to support such an action. The Complaint merely alleges that “defendants have

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defrauded Nevada, Nevada taxpayers, Nevada body politic, Nevada citizens, and Nevada

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government, et al. Out of their rightfully due ‘public’ recording fees . . . .” (#7 at ¶ 9.) Accordingly,

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Plaintiff’s complaint does not state a valid qui tam cause of action.

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E. Other Claims

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Plaintiff’s complaint contains numerous other almost incomprehensible assertions. None of

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these state a cause of action or give sufficient notice to the Defendants of what they did wrong.

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Accordingly, Defendants’ Motion to Dismiss is granted as to the entire Complaint.

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IV. Request to Replace Defendant Cervin

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Plaintiff, in her Response, asks the Court to replace Linda Cervin for MERS with Mr. R.K.

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Arnold. Plaintiff has no claim against either of these individuals and the request is moot.

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V. Conclusion

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Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss Plaintiff’s

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Amended Complaint (#33) is GRANTED.

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DATED this 21st day of July 2011.

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_____________________________
Kent J. Dawson
United States District Judge

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