Conley et al v. Wells Fargo et al

Filing 11

ORDER that defendants' motion to dismiss 4 is GRANTED without prejudice. Wells Fargo is DISMISSED. Signed by Judge James C. Mahan on 5/3/11. (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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JERRY CONLEY and GEORGETTA
CONLEY,

2:11-CV-141 JCM (LRL)

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Plaintiffs,

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v.

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WELLS FARGO, et al.,

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Defendants.

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ORDER

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Presently before the court is defendant Wells Fargo Bank, N.A.’s motion to dismiss

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plaintiff’s complaint with prejudice. (Doc. #4). Defendant has submitted a request for judicial notice

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along with the motion. (Doc. #5). Plaintiffs have responded (doc. #8), and the defendant has replied

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(doc. #9).

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The instant dispute concerns property located at 3778 Bossa Nova Drive, Las Vegas, Nevada

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89129. Plaintiffs acquired ownership of the property on or around August 30, 2004, from the Joseph

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A. Murray Living Trust by away of a “grant, bargain, sale deed.” On December 10, 2007, plaintiffs

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obtained a $251,447.00 loan, secured by a deed of trust on the property, from defendant Wells Fargo.

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Following default, a notice of default and election to sell under deed of trust was recorded on June

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1, 2010, by Wells Fargo’s agent. A notice of trustee’s sale was recorded on October 26, 2010, and

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the property sold at public auction on November 19, 2010.

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Plaintiff filed the instant complaint on January 26, 2011, alleging four claims for relief: (1)

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wrongful foreclosure, (2) breach of the duty of good faith and fair dealing, (3) fraudulent

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James C. Mahan
U.S. District Judge

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misrepresentation, and (4) negligent misrepresentation. (Doc. #1). In the prayer for relief, plaintiff

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requests: (1) the foreclosure be rescinded, (2) Wells Fargo be required to negotiate with plaintiffs

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in good faith, (3) the unlawful detainer judgement be rescinded and plaintiffs be allowed to return

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to the property, and (4) attorneys’s fees and costs.

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DISCUSSION

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“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted

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as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937,

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1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Where a

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complaint pleads facts that are ‘merely consistent’ with a defendant’s liability, it ‘stops short of the

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line between possibility and plausibility of entitlement to relief.’” Id. (citing Bell Atlantic, 550 U.S.

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at 557). However, where there are well pled factual allegations, the court should assume their

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veracity and determine if they give rise to relief. Id. at 1950. Defendant Wells Fargo now urges the

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court to dismiss the complaint with prejudice. (Doc. #4).

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(1)

Wrongful Foreclosure

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The defendant argues that this first claim for relief is barred by the judicial doctrine of

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collateral estoppel. See Taylor v. Sturgell, 553 U.S. 880, 892 (2008) (“Under the doctrine of claim

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preclusion, a final judgment forecloses successive litigation of the very same. . . .”). In Conley et al.

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v. Stumph et al., 2:10-cv-01260-GMN-RJJ, Judge Navarro granted defendants’ motion to dismiss

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plaintiff’s claim of wrongful foreclosure, which allegedly involved the same parties and same

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underlying issues. (See doc. # 20 in 2:10-cv-01260-GMN-RJJ). Accordingly, defendant contends that

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because it requested “dismissal with prejudice” in its motion, that order constituted a final judgment,

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barring further suit on this issue.

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The court rejects this argument, noting that Judge Navarro never stated in her order that she

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intended to dismiss the case with prejudice. Rather, it appears that the plaintiff failed to respond, and

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the motion was granted pursuant to Local Rule 7-2, which declares that the failure of an opposing

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party to file a response to any motion shall constitute consent to the granting of the motion. Whereas

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the court declines to presume that the case was dismissed with prejudice, that order cannot constitute

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James C. Mahan
U.S. District Judge

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a final judgment. See Weinberg v. Whatcom County, 241 F.3d 746, 751 (9th Cir. 2001) (“[A]

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dismissal without prejudice is not a decision on the merits and thus lacks preclusive effect.”).

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Accordingly, the court considers the merits of the motion to dismiss.

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“An action for the tort of wrongful foreclosure will lie [only] if the trustor or mortgagor can

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

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

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authorized the foreclosure or exercise of the power of sale.” Collins v. Union Federal, 662 P.2d 610,

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623 (Nev. 1983). Here, plaintiffs admit on the face of the complaint that they “fell behind on

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payments.” (Doc. #1, ¶ 11). Accordingly, the court grants the motion to dismiss the first claim for

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relief.

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(2)

Breach of Duty of Good Faith and Fair Dealing

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To state a claim of breach of the covenant of good faith and fair dealing, plaintiff must allege:

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(1) plaintiff and defendants were parties to an agreement; (2) the defendants owed a duty of good

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faith to the plaintiff; (3) the defendants breached that duty by preforming in a manner that was

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unfaithful to the purpose of the contract; and (4) the plaintiff’s justified expectations were denied.

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Perry v. Jordan, 900 P.2d 335, 338 (Nev. 1995). In Nevada, an implied covenant of good faith and

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fair dealing exists in every contract, Consol Generator-Nevada v. Cummins Engine, 917 P.2d 1251,

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1256 (Nev. 1998), and a plaintiff may assert a claim for its breach if the defendant deliberately

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contravenes the intention and spirit of the agreement, Morris v. Bank Am. Nev., 886 P.2d 454 (Nev.

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1994).

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Here, the complaint merely restates the elements of a claim for breach of the duty of good

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faith and fair dealing. Under Federal Rule of Civil Procedure 8(a)(2), “[a] pleading that states a claim

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for relief must contain . . . a short and plain statement of the claim showing that the pleader is

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entitled to relief.” Plaintiffs have failed this obligation, in that the complaint is devoid of any factual

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explanation of how Wells Fargo breached this duty. Accordingly, the court grants the motion to

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dismiss the second claim for relief.

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James C. Mahan
U.S. District Judge

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(3)

Fraudulent Misrepresentation

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A claim of fraudulent misrepresentation requires a plaintiff to allege: (1) the defendant made

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a false representation; (2) the defendant knew or believed the representation was false; (3) the

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defendant intended to induce the plaintiff into acting in reliance of the misrepresentation; (4) the

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plaintiff justifiably relied on the representation; and (5) the plaintiff suffered damages from so

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relying. Bulbman, Inc. v. Nev. Bell, 825 P.2d 588, 592 (Nev. 1992). The plaintiff has the burden of

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proving each element of fraud by clear and convincing evidence. Id. at 110–11 (citing Lubbe v.

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Barba, 540 P.2d 115 (Nev. 1975)).

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Again, plaintiff has failed to plead any facts to explain how defendant is guilty of fraudulent

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misrepresentation. The totality of plaintiff’s claim is: “The defendants used tricky, deceit and

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unscrupulous actions leading plaintiff into a false sense of security.” (Doc. #1, ¶ 28). This is

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insufficient to identify the “‘who, what, when, where and how’ of the misconduct charged.” Vess v.

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Ciba-Geigy Corp., 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616,

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627 (9th Cir. 1997)). Accordingly, the court grants the motion to dismiss the third claim for relief.

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(4)

Negligent Misrepresentation

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A plaintiff alleging a claim for negligent misrepresentation must plead the claim with the

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requisite particularity under Federal Rule of Civil Procedure 9(b). See Eder v. Allstate Ins. Co., 60

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F.3d 833, *5 (9th Cir. 1995) (affirming the district court’s dismissal of such a claim for failure to

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comply with Rule 9(b)). Again, plaintiffs have failed to allege any facts in support of this claim, and

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the court grants the motion to dismiss claim four.

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant’s motion to

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dismiss (doc. #4) is GRANTED without prejudice.
DATED May 3, 2011.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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