Claros v. Landamerica Onestop, Inc., et al

Filing 50

NUNC PRO TUNC ORDER re 48 Order. Signed by Chief Judge Roger L. Hunt on 4/13/2011. (Copies have been distributed pursuant to the NEF - MJZ)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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SAUL CLAROS,
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Plaintiff,
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vs.
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LANDAMERICA ONESTOP, INC.;
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MORTGAGE ELECTRONIC
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REGISTRATION SYSTEMS; METLIFE
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HOME LOANS; FIRST HORIZON HOME
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LOANS CORPORATION; UTLS NATIONAL )
DEFAULT SERVICES, LLC; S.B.
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MANAGEMENT, LLC, David Zepeda, Trustee )
of the David Rose, Chris Rose, Sam Kirby, Irv )
Kirby, Jack, Cad, Lydia Cadman, Kenneth
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Gilbert, Fran Gilbert Trust, W.J. Bradley, Frank )
Ruualcaba; Bonnie Mac, Individually; Federal )
National Mortgage Association UNKNOWN )
BENEFICIARIES/SUCCESSORS AND/OR
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PREDECESSORS an ens legis being used to )
conceal fraud, AND JOHN DOES
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INVESTORS 1-50, et. al.,
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Defendants.
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_______________________________________)

Case No.: 2:10-cv-1788-RLH-PAL
NUNC PRO TUNC CORRECTION
OF O R D E R #48
(Motion to Dismiss–#10;
Motion to Dismiss–#21;
Motion to Dismiss–#38)

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On March 24, 2011, this Court entered an Order (#48) granting three motions to

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dismiss (##10, 21, 38). The Court is now aware of an inadvertent error in that Order and issues

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this nunc pro tunc correction order for the limited purpose of making the record reflect what the

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Court did not sufficiently express in the original order. See In re Warren, 568 F.3d 1113, 1116 n.1

AO 72
(Rev. 8/82)

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(9th Cir. 2009). Specifically, that Defendant UTLS National Default Services, LLC joined

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Defendant Mortgage Electronic Registration Systems, Inc.’s Motion to Dismiss (#10).

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***

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Before the Court is Defendant Mortgage Electronic Registration Systems, Inc.’s

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(“MERS”) Motion to Dismiss (#10, filed Nov. 10, 2010) for failure to state a claim. The Court

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has also considered Plaintiff Saul Claros’ Opposition (#18, filed Nov. 18. 2010), and MERS’

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Reply (#25, filed Nov. 29, 2010). Defendant UTLS National Default Services, LLC has joined

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MERS’ Motion to Dismiss (#10) and Reply (#25).

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Also, before the Court is Defendants Federal National Mortgage Association

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(“Fannie Mae”) and Lender Business Process Services’ (“LBPS”) Motion to Dismiss (#21, filed

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Nov. 22, 2010) for failure to state a claim. The Court has also considered Claros’ Opposition

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(#28, filed Nov. 30, 2010), and Fannie Mae and LBPS’ Reply (#37, filed Dec. 10, 2010).

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Finally, before the Court is Defendants MetLife Bank, N.A. (“MetLife”) and First

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Horizon Home Loans Corporation’s (“First Horizon”) Motion to Dismiss (#38, Dec. 27, 2010) for

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failure to state a claim. Claros did not file an opposition.

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BACKGROUND

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In November 2004, Claros refinanced his home located in Las Vegas. The deed of

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trust for the refinanced mortgage loan named First Horizon as the lender, Fidelity National Title as

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the trustee, and MERS as the beneficiary. In late 2008 or early 2009, Claros defaulted on this loan

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and Defendant LandAmerica Onestop, Inc., acting as agent for MERS, issued a notice of default.

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Claros subsequently hired Defendant S.B. Management, a California company, to assist him in

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modifying the loan or to stop the pending foreclosure. Specifically, Claros alleges that S.B.

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Management promised to pay off the refinanced loan and accept monthly payments from Claros

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until the debt was paid in full. However, S.B. Management allegedly never followed through on

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that promise.

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AO 72
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Then in February 2010, MERS transferred all beneficial interest under the deed of

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trust to MetLife. MetLife then substituted Defendant UTLS Default Services (“UTLS”) as the

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trustee under the deed of trust and on April 15, UTLS recorded a notice of trustee sale.

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Accordingly, on June 17, UTLS sold Claros’ home to MetLife at a trustee sale. Metlife

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subsequently transferred the property to Fannie Mae, which currently holds legal title to the home.

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On October 14, 2010, Claros filed a complaint asserting two claims under the Truth

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in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., one claim under NRS § 107.080, and one

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wrongful foreclosure claim. Each claim appears to have been asserted against each Defendant.

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Defendants MERS, UTLS, Fannie Mae, LBPS, MetLife, and First Horizon subsequently filed

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motions to dismiss. For the reasons discussed below, the Court grants Defendants’ motions.

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DISCUSSION
I.

Standard of Review

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A court may dismiss a plaintiff’s complaint for “failure to state a claim upon which

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relief can be granted.” Fed. R. Civ. P. 12(b)(6). 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). While Rule 8 does not require detailed factual allegations, it demands “more than labels

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and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v.

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Iqbal, 129 S. Ct. 1937, 1949 (2009). “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 recently clarified the two-step approach district courts

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are to apply when considering motions to dismiss. First, a district court must accept as true all

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well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the

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assumption of truth. Id. at 1950. Mere recitals of the elements of a cause of action, supported only

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by conclusory statements, do not suffice. Id. at 1949. Second, a district court must consider

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whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 1950. A

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claim is facially plausible when the plaintiff’s complaint alleges facts that allows the court to draw

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a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 1949. Where

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the complaint does not permit the court to infer more than the mere possibility of misconduct, the

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complaint has “alleged—but not shown—that the pleader is entitled to relief.” Id. (internal

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quotation marks omitted). When the claims in a complaint have not crossed the line from

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conceivable to plausible, plaintiff’s complaint must be dismissed. Twombly, 550 U.S. at 570.

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II.

Analysis

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A.

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TILA requires creditors to disclose certain information about the terms of a loan to

TILA

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the prospective borrower. See, 15 U.S.C. §§ 1631–1632, 1638; 12 C.F.R. § 226.17. A creditor

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who fails to comply with TILA’s requirements is liable to the borrower for damages. 15 U.S.C.

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§ 1640(a). However, damages claims under TILA must be brought within one year from the date

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of the occurrence of the violation (i.e., closing). Furthermore, TILA also provides borrowers with

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the right to rescind a mortgage transaction under certain parameters. 15 U.S.C. § 1635(a).

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However, the borrowers right of recission must be exercised within three years after the date of the

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consummation of the transaction (i.e., closing) or before the property in question is sold,

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whichever occurs first. 15 U.S.C. § 1635(f). Finally, the remedy of recission is available only

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where a borrower is willing and able to tender the balance on the promissory note. Yamamoto v.

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Bank of N.Y., 329 F.3d 1167, 1173 (9th Cir. 2003).

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Claros seeks both damages and recission under TILA. However, the loan in

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question closed in November 2004 and Claros commenced this action in October 2010—more

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than six years later. Therefore, Claros’ TILA claim fails under the statute of limitations (his

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damages claim expired in November 2005 and his recission claim expired in November 2007).

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Claros’ TILA claim also fails because he has not alleged that he is willing and able to tender the

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remaining balance on his debt. Accordingly, the Court dismisses Claros’ first and second causes

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of action.

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B.

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“An action for the tort of wrongful foreclosure will lie if the trustor or mortgagor

Wrongful Foreclosure

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can establish that at the time the power of sale was exercised or the foreclosure occurred, no

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breach of condition or failure of performance existed on the mortgagor’s or trustor’s part which

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would have authorized the foreclosure or exercise of the power of sale.” Collins v. Union Fed.

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Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983). Claros’ wrongful foreclosure claim fails

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because at the time of foreclosure he was in breach of the terms of the deed of trust. Therefore, the

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Court dismisses Claros’ third cause of action.

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C.

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NRS § 107.080 requires, among other things, the trustee or beneficiary of a deed of

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trust to record a notice of default and election to sell the property subject to the deed of trust before

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that property is sold. Section 107.080(3) further requires the trustee to mail a copy of the notice of

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default and election to sell to the trustor (i.e., the debtor), before the subject property is sold. A

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sale made pursuant to § 107.080 may be declared void if the trustee or beneficiary does not

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substantially comply with these requirements.

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NRS § 107.080

Claros alleges that the Defendants violated NRS § 107.080(3) by failing to properly

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notify him of the trustee’s sale. However, as discussed below, the Court takes judicial notice of

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the “Notice of Breach and Default and of Election to Cause Sale of Real Property Under Deed of

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Trust,” which was recorded on April 24, 2009, and substantially complies with NRS § 107.080. In

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addition, Claros does not allege that Defendants failed to mail this document to him. Therefore,

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Claros fails to allege sufficient facts for this claim to be plausible. Accordingly, the Court

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dismisses Claros’ fourth cause of action.

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III.

Judicial Notice

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Pursuant to Rule 201(b) of the Federal Rules of Evidence, a court may take judicial

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notice of facts that are not subject to reasonable dispute because they are “(1) generally known

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within the territorial jurisdiction of the trial court or (2) capable of accurate and ready

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determination by resort to sources whose accuracy cannot reasonably be questioned.” Because the

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“Notice of Breach and Default and of Election to Cause Sale of Real Property Under Deed of

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Trust” (Dkt. #10, Ex. F, Mot. to Dis.) was recorded in the office of the Clark County Recorder it is

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capable of accurate and ready determination. Therefore, the Court takes judicial notice of that

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document.

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CONCLUSION

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Accordingly, and for good cause appearing,

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IT IS HEREBY ORDERED that MERS and UTLS’ Motion to Dismiss (#10) is

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GRANTED.

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IT IS FURTHER ORDERED that Fannie Mae and LBPS’ Motion to Dismiss (#21)
is GRANTED.
IT IS FURTHER ORDERED that MetLife and First Horizon’s Motion to Dismiss
(#38) is GRANTED.
Claros’ claims are dismissed as to all Defendants and the Clerk of Court is
instructed to close the case.
Dated: April 13, 2011

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____________________________________
ROGER L. HUNT
Chief United States District Judge

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AO 72
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