Lund v. Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2007-3 et al
Filing
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ORDER Granting 6 Countermotion to Dismiss. Case terminated. Signed by Judge Roger L. Hunt on 9/14/11. (Copies have been distributed pursuant to the NEF - MMM)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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SANDI L. LUND, an individual,
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Plaintiff,
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vs.
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HARBORVIEW MORTGAGE LOAN TRUST )
MORTGAGE LOAN PASS-THROUGH
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CERTIFICATES, SERIES 2007-3, an entity of )
unknown formation and origin; GMAC
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MORTGAGE, LLC FKA GMAC MORTGAGE )
CORPORATION, a foreign limited-liability
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company; EXECUTIVE TRUSTEE
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SERVICES, LLC, a foreign limited liability
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company; and DOES I through X, inclusive;
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ROE CORPORATIONS I through X inclusive, )
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Defendants.
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_______________________________________)
Case No.: 2:11-cv-00384-RLH-RJJ
ORDER
(Countermotion to Dismiss–#6)
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Before the Court is Defendants Wells Fargo Bank, N.A., as Trustee for Harborview
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Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2007-3 (“Harborview”),
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GMAC Mortgage, LLC FKA GMAC Mortgage Corporation (“GMAC”), and Executive Trustee
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Services, LLC’s (“Executive Trustee”) Countermotion to Dismiss (#6, filed Mar. 15, 2011) for
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failure to state a claim. The Court has also considered Plaintiff Sandi L. Lund’s Amended
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Opposition (#18, filed July 6, 2011), and Defendants’ Reply (#19, filed July 13,
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2011).
AO 72
(Rev. 8/82)
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BACKGROUND
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In November 2006, Lund refinanced her home loan with non-party BankUnited.
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Lund’s refinanced loan with BankUnited was secured by a deed of trust on her Las Vegas home.
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BankUnited later assigned the mortgage to Wells Fargo, N.A., as trustee for Defendant
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Harborview. Lund subsequently defaulted on the loan and Defendants initiated non-judicial
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foreclosure proceedings. Lund’s home was sold at a trustee’s sale to Defendant GMAC, who
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obtained a Writ of Restitution in a different state court proceeding, requiring Lund to vacate her
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home. Lund filed suit in state court and the case was removed to this Court. Lund asserts various
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state common law causes of action against Defendants claiming that Defendants misled her during
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the loan origination and modification processes, and that they have wrongfully foreclosed on her
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home. Defendants have now filed a countermotion to dismiss all of Lund’s claims. For the
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reasons discussed below, the Court grants Defendants’ motion.
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DISCUSSION
I.
Legal Standard
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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) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).
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“Factual allegations must be enough to rise above the speculative level.” Bell Atlantic Corp. v.
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Twombly, 550 U.S. 544, 555 (2007). Thus, to survive a motion to dismiss, a complaint must
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contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 129
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S. Ct. at 1949 (internal citation omitted).
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AO 72
(Rev. 8/82)
In Iqbal, the Supreme Court recently clarified the two-step approach district courts
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.
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Analysis
a.
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Unfair Lending Practices
Under NRS 598D.100(1)(b), a lender is prohibited from making a loan “without
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determining, using any commercially reasonable means or mechanism, that the borrower has the
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ability to repay the home loan.” Lund claims that Harborview violated § 598D.100(b) by
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“providing a sub-prime loan that was neither suitable nor appropriate for Plaintiff’s personal
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financial condition and well-being.” (Dkt. #1-2, Complaint, ¶45). However, Lund’s claim fails
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because Harborview did not make the loan at issue, non-party BankUnited did, and “[a] loan
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servicer who did not make the loan at issue cannot be subject to an unfair lending practices claim.”
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Vo v. American Brokers Conduit, No. 3:09-cv-00654-LRH-VPC, 2010 WL 2696407, *2 (D. Nev.
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July 2, 2010); see also Benito v. Indymac Mortg. Services, No. 2:09-cv-01218-PMP-PAL, 2010
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WL 2130648, *5 (D. Nev. May 21, 2010). Therefore, the Court dismisses Lund’s first cause of
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action.
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AO 72
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b.
Negligent and Intentional Misrepresentation
Lund alleges that Defendants intentionally misrepresented the sub-prime nature of
the loan at issue and whether the loan was suitable to her financial condition. She also alleges that
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Defendants negligently misrepresented the loan by failing to provide her with accurate information
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in a manner that would allow her to understand her obligations under the loan. However, Lund’s
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misrepresentation claims are time-barred under NRS 11.190(3)(d), which requires “an action for
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relief on the ground of fraud or mistake” to be filed within 3 years “upon the discovery by the
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aggrieved party of the facts constituting the fraud or mistake.” Lund and BankUnited closed the
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loan in April 2007, but Lund did not file her complaint until almost 4 years later in February 2011.
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Therefore, because Lund does not allege she was delayed in discovering the facts constituting
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Defendants’ alleged misrepresentations, her misrepresentation claims are time-barred.
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Accordingly, the Court dismisses Lund’s second and fifth causes of action.
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c.
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Negligence and Negligence Per Se
Lund alleges that Defendants were negligent by placing Lund in a loan that is not
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appropriate for her personal financial circumstances. Lund also alleges that Defendants were
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negligent per se by violating NRS 645B.460 and 598D.100. However, Lund’s negligence claims
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are time-barred because they were not filed within 2 years from the date the loan was closed. NRS
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11.190(4)(e) (limitations period is two years for “an action to recover damages for injuries to a
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person . . . caused by the wrongful act or neglect of another”). Lund’s negligence per se claim also
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fails because she has not pled a valid claim under either NRS 645B.460 or NRS 598D.100.
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Therefore, the Court dismisses Lund’s third and fourth causes of action.
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e.
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Breach of Fiduciary Duty
One of the requirements to prevail on a breach of fiduciary duty claim is to show
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that the defendant owed a fiduciary duty to the plaintiff. Mosier v. Southern California Physicians
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Ins. Exchange, 74 Cal. Rptr. 2d 550, 565 (Cal. Ct. App. 1998). Yet, “the law does not recognize a
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fiduciary relationship between a lender and a borrower.” Cascade Investments, Inc. v. Bank of
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America, N.A., S.A., No. CV-N-99-599-ECR-RAM, 2000 WL 1842945, *3 (D. Nev. Sep. 29,
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2000). Therefore, because Defendants do not owe Lund a fiduciary duty, her claim fails as a
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matter of law.
AO 72
(Rev. 8/82)
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f.
Breach of the Covenant of Good Faith and Fair Dealing
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Lund alleges that Defendants breached the covenant of good faith and fair dealing
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by not dealing with her in good faith regarding the loan transaction, loan modification, and short
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sale processes. However, for such a claim to survive there must be an enforceable contract.
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Martin v. Sears Roebuck and Co., 899 P.2d 551, 555 (Nev. 1995). Therefore, Lund’s claim fails
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with respect to the original loan agreement between her and BankUnited because that agreement
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was not in existence during the loan origination process, when the alleged breach occurred.
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Furthermore, Lund’s claim fails with respect to the purported loan modification and short sale
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processes because Defendants were not contractually obligated to modify her loan or approve a
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short sale. Clingman v. Somy, No. 2:10-cv-01834-JCM-LRL, 2011 WL 383951, *3 (D. Nev. Feb.
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3, 2011). Accordingly, the Court dismisses this claim.
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g.
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Wrongful Foreclosure
Lund alleges that because Defendants GMAC Mortgage and Executive Trustee
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have not produced the promissory note at issue they lack authority to institute foreclosure
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proceedings. However, “Defendants do not need to produce the note to the property in order to
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proceed with a non-judicial foreclosure.” Urbina v. Homeview Lending, Inc., 681 F. Supp. 2d
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1254, 1258 (D. Nev. 2009) (citing NRS 107.080). In addition, to sustain a wrongful foreclosure
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claim Lund must show that “at the time the power of sale was exercised or the foreclosure
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occurred, no breach of condition or failure of performance existed on [her] part which would have
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authorized the foreclosure or exercise of the power of sale.” Collins v. Union Federal Sav. &
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Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983). Because Lund is in default on the loan at issue she
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cannot meet this requirement. Therefore, the Court finds that Lund’s wrongful foreclosure claim
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fails as a matter of law.
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h.
Declaratory Relief
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Declaratory relief is not a separate cause of action but a claim for relief. Reece v.
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Republic Servs., No. 2:10-cv-00114-GMN-RJJ, 2011 WL 868386, *13 (D. Nev. Mar. 10, 2011).
AO 72
(Rev. 8/82)
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Therefore, because the Court has found that Lund’s other claims fail, her claim for declaratory
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relief also fails.
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CONCLUSION
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Accordingly, and for good cause appearing,
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IT IS HEREBY ORDERED that Defendants Harborview and Executive Trustee’s
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Countermotion to Dismiss (#6) is GRANTED.
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The Court instructs the Clerk of Court to close the case.
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Dated: September 14, 2011
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____________________________________
ROGER L. HUNT
United States District Judge
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AO 72
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