Stabley v. Bank Of America NA et al
Filing
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ORDER Granting 30 Defendants' Motion to Dismiss. All of Plaintiff's claims are dismissed with prejudice. Clerk shall enter judgment accordingly. Signed by Chief Judge Gloria M. Navarro on 7/22/2014. (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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GARTH E. STABLEY,
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Plaintiff,
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vs.
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BANK OF AMERICA, N.A., et al.,
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Defendants.
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Case No.: 2:11-cv-00635-GMN-CWH
ORDER
Pending before the Court is a pro se civil action filed by Garth E. Stabley (“Plaintiff”)
against Bank of America, N.A. (“BOA”), BAC Home Loans Servicing, LP (incorrectly sued as
“Countrywide Financial Corp., a Delaware Corp. dba BAC Home Loans Servicing”),
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Countrywide Home Loans, Inc., ReconTrust Company N.A., and CTC Real Estate Services
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(collectively “Defendants”). (Amend. Complaint, ECF No. 28.) Defendants filed a Motion to
Dismiss Plaintiff’s Amended Complaint on November 29, 2013. (ECF No. 30.) Plaintiff failed
to submit a timely response in opposition to Defendants’ motion, which pursuant to Local Rule
7-2(d) allows this Court to consider Plaintiff’s silence as constituting consent to grant the
motion. D. Nev. R. 7-2(d). Plaintiff, however, eventually filed his Opposition to Defendants’
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Motion to Dismiss on January 13, 2014. (ECF No. 40.) In light of the fact that Plaintiff is
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proceeding pro se in this litigation, the Court will consider Plaintiff’s Response and rule on the
merits of Defendants’ Motion to Dismiss.
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For the following reasons, the Court will GRANT Defendants’ Motion to Dismiss
Plaintiff’s Complaint. (ECF No. 30.)
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I.
BACKGROUND
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On April 22, 2011, Plaintiff filed his original Complaint. (ECF No. 1-1.) This
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Complaint was filed using a handwritten fill-in-the-blank form provided to prisoners who wish
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to file a civil rights complaint and stated three counts on which Plaintiff’s suit was based:
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“COUNT I – Fraud, Deception and Concealment; COUNT II – Predatory Lending, Civil Rights
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and Constitutional Rights; COUNT III – Fair Housing Complaint, HUD Complaint,
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Securitization Contaminated and Prejudice Due to age and Income being prayed [sic] upon.”
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(Complaint ¶ 1, ECF No. 1-1.) On May 13, 2011, Defendants filed a Motion to Dismiss
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Plaintiff’s Complaint. (ECF No. 6.) After determining that Plaintiff’s Complaint failed to give
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Defendants fair notice of a legally cognizable claim or allege sufficient facts to show that a
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violation was plausible instead of merely possible, this Court granted Defendants’ Motion to
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Dismiss without prejudice and gave Plaintiff leave to file an amended complaint. (Order, ECF
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No. 22.)
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Plaintiff filed his Amended Complaint on February 3, 2013. (Amend. Complaint, ECF
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No. 24.) Liberally construing this second inartfully pled complaint, Plaintiff appears to be
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asserting the same original three counts for (1) “Fraud, Deception and Concealment,” (2)
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“Predatory Lending, Civil Rights and Constitutional Rights,” and (3) “Fair Housing Complaint,
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HUD Complaint, Securitization Contaminated and Prejudice Due to age and Income being
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prayed [sic] upon,” along with five new counts for (4) “Violation of the Real Estate Settlement
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Procedures Act (RESPA),” (5) “Breach of Contract – Promissory Note,” (6) “Intentional
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Misrepresentation,” (7) violations of the “Fair Debt Collection Practices Act (FDCPA), and (8)
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“Violations of Racketeer Influenced and Corrupt Organizations Act (RICO).” (Id. ¶¶ 21-82.)
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Defendants subsequently filed their Motion to Dismiss Amended Complaint on November 29,
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2013. (ECF No. 30.)
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II.
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LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action
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that fails to state a claim upon which relief can be granted. See North Star Int’l. v. Arizona
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Corp. Comm’n., 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss
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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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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. Golden
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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action
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with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a
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violation is plausible, not just possible. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing
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Twombly, 550 U.S. at 555) (emphasis added).
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A court may also dismiss a complaint pursuant to Federal Rule of Civil Procedure 41(b)
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for failure to comply with Federal Rule of Civil Procedure 8(a). Hearns v. San Bernardino
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Police Dept., 530 F.3d 1124, 1129 (9th Cir. 2008). Rule 8(a)(2) requires that a plaintiff's
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complaint contain “a short and plain statement of the claim showing that the pleader is entitled
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to relief.” Fed. R. Civ. P. 8(a)(2). “Prolix, confusing complaints” should be dismissed because
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“they impose unfair burdens on litigants and judges.” McHenry v. Renne, 84 F.3d 1172, 1179
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(9th Cir.1996). Mindful of the fact that the Supreme Court has “instructed the federal courts to
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liberally construe the ‘inartful pleading’ of pro se litigants,” Eldridge v. Block, 832 F.2d 1132,
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1137 (9th Cir. 1987), the Court will view Plaintiffs’ pleadings with the appropriate degree of
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leniency.
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“Generally, a district court may not consider any material beyond the pleadings in ruling
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on a Rule 12(b)(6) motion . . . . However, material which is properly submitted as part of the
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complaint may be considered on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner
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& Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly, “documents
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whose contents are alleged in a complaint and whose authenticity no party questions, but which
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are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6)
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motion to dismiss” without converting the motion to dismiss into a motion for summary
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judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of
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Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay
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Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers
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materials outside of the pleadings, the motion to dismiss is converted into a motion for
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summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th
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Cir. 2001).
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III.
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DISCUSSION
Plaintiff alleges as background in his Amended Complaint that a representative from
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BOA informed him that he was eligible for a loan modification, but instead of providing him
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information about the loan, the representative “forced him into a scheme of operation so
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horribly dysfunctional that the constant barrage of misinformation, misdirection, and deliberate
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inactivity amounted to abuse and harassment.” (Amend. Complaint, ¶ 11, ECF No. 24.) He
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also alleges that as he tried to obtain information he was “spun [into] a labyrinth of transfers,”
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blocked from speaking to supervisors, and generally subject to a “pattern and practice by
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[Defendants] of deception and deliberately misinforming borrowers about default.” (Id. ¶¶ 12-
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15.) Plaintiff further alleges that as a result of Defendants’ actions, he suffered distress causing
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“severe mental disorders and physical handicaps” that required hospitalization and led to his
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divorce and an inability to pay his mortgage. (Id. ¶¶ 12-20.)
A. Count I: “Fraud, Deception and Concealment”
Under the heading for this Count, Plaintiff appears to have copied and pasted a number
of Nevada statues and excerpts from cases relating to foreclosure fraud without any explanation
of how these citations may relate to a claim for fraud, deception, or concealment against
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Defendants. See (Id. ¶¶ 70-72.) As Plaintiff fails to give Defendants fair notice of a legally
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cognizable claim or the grounds on which it rests, this count is dismissed.
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B. Count II: “Predatory Lending, Civil Rights and Constitutional Rights”
Under the heading for this Count, Plaintiff appears to have copied and pasted unrelated
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complaints or internet postings alleging tortious conduct on the part of Defendants as support
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for his claim. (Amend. Complaint, ¶¶ 73-74, ECF No. 24.) The only allegation under this
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count which actually refers to alleged misconduct on the part of Defendants toward Plaintiff is
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that the “‘Civil Rights’ and Constitutional Rights of the Plaintiff were grossly violated [by]
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senior loan officer Mr. Jason Schaaf [on] 3/5/2007 [because] Mr. Schaaf dece[ived Plaintiff by]
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telling Plaintiff that the only loan he qualified for was the [one] he signed [which was] not only
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false but very misleading.” (Id. ¶ 74.) Plaintiff, however, fails to state how this alleged
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statement was false or a violation of his civil or constitutional rights and he fails to even state
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which of his civil or constitutional rights have been violated. Plaintiff therefore has failed to
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give Defendants fair notice of a legally cognizable claim or the grounds on which it rests, and
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this count is dismissed.
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C. Count III: “Fair Housing Complaint, HUD Complaint, Securitization
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Contaminated and Prejudice Due to age and Income being prayed [sic] upon”
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Under the heading for this Count, Plaintiff again appears to have copied and pasted
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various unrelated postings from the internet to support his claim. (Amend. Complaint, ¶¶ 75-82,
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ECF No. 24.) To the extent Plaintiff alleges a claim under the Fair Housing Act (“FHA”), 42
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U.S.C. § 3601, et seq., he bases his claim on “prejudice [] because of age discrimination.” (Id. ¶
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75.) However, age is not a protected class under the FHA. See 42 U.S.C. § 3605(a) (“It shall be
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unlawful … to discriminate against any person … because of race, color, religion, sex,
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handicap, familial status, or national origin.”). Therefore, Plaintiff’s claim under the FHA for
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age discrimination fails.
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Furthermore, Plaintiff’s vague allegations that the securitization of his loan was illegal
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and that Defendants’ failure to produce the note renders the note void has already been rejected
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by this Court. (Order, ECF No. 22.); see also Duenas v. Bank of Am., 2:13-CV-00354-GMN,
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2014 WL 258203, at *4 (D. Nev. Jan. 23, 2014) (“Plaintiff’s underlying argument that the
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securitization and pooling of his mortgage altered his debt or that the assignment of beneficiary
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interest somehow terminated Defendants’ rights under the Deed of Trust has been routinely
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rejected by this Court.”).
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Finally, Plaintiff’s confusing allegations that his house was built on “land that had been
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contaminated” fails to state how this contamination was caused by Defendants or gives rise to
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any liability on the part of Defendants. (Amend. Complaint, ¶¶ 75-82, ECF No. 24.) Therefore,
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under this Count, Plaintiff has failed to give Defendants fair notice of any legally cognizable
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claim or the grounds on which it rests, and this count is dismissed.
D. Count IV: “Violation of the Real Estate Settlement Procedures Act (RESPA)”
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Plaintiff alleges that Defendants violated RESPA by failing to properly respond to his
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“qualified written request” (“QWR”) for a loan modification, which is required under 12 U.S.C.
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§ 2605(e), and by failing to send him a notice of transfer of loan, which is required under 12
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U.S.C. § 2605(c). (Amend. Complaint, ¶¶ 21-29, ECF No. 24.) However, even if Plaintiff’s
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email1 to Defendants constituted a QWR under the statute and Defendants failed to properly
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respond to the QWR or to provide notice of a transfer, Plaintiff’s claim must still fail. Under 12
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U.S.C. § 2605(f), an individual borrower may seek damages of “an amount equal to the sum of
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(A) any actual damages to the borrower as a result of the failure; and (B) any additional
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damages, as the court may allow, in the case of a pattern or practice of noncompliance….” 12
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U.S.C. § 2605(f)(1). Here, Plaintiff has failed to allege any actual damages or a pattern or
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Neither Plaintiff nor Defendants have included in their filings a copy of the email sent by Plaintiff to
Defendants on April 24, 2011 that the Plaintiff alleges constituted a QWR under 12 U.S.C. § 2605(e).
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practice of RESPA violations by Defendants. See (Amend. Complaint, ¶¶ 21-29, ECF No. 24.)
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Alleging a breach of RESPA duties alone without also alleging that the breach resulted in
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pecuniary loss does not state a claim under RESPA. Lal v. Am. Home Servicing, Inc., 680 F.
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Supp. 2d 1218, 1223 (E.D. Cal. 2010) (“Under RESPA, a borrower may not recover actual
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damages for nonpecuniary losses.”); Moon v. Countrywide Home Loans, Inc.,
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309CV00298ECRVPC, 2010 WL 522753, at *5 (D. Nev. Feb. 9, 2010) (“Plaintiff must have
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also suffered pecuniary loss to support a RESPA violation.”). Therefore, this count is
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dismissed.
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E. Count V: “Breach of Contract – Promissory Note”
Plaintiff alleges that Defendants breached the terms of the Promissory Note by violating
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regulations promulgated by the Secretary of Housing and Urban Development. (Amend.
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Complaint, ¶¶ 30-35, ECF No. 24.) However, these HUD regulations do not apply to
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Plaintiff’s Promissory Note, and even if they did, the regulations do not create a private right of
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action against Defendants. See (Deed of Trust, Ex. B to Mot. to Dismiss, ECF No. 30);
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Weatherford v. Nevada Rural Hous. Auth., 946 F. Supp. 2d 1101, 1111 (D. Nev. 2013) (citing
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to “several circuits that have … found that there is no private right of action to enforce HUD
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regulations.”); McHatten v. Chase Home Fin. LLC, CV03-1094-PCT, 2010 WL 3882587, at *6
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(D. Ariz. Sept. 29, 2010) (“HUD regulations promulgated under the National Housing Act do
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not provide a claim to the mortgagor for duty owed or for the mortgagee’s failure to follow the
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regulations.”). Therefore, this count is dismissed.
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F. Count VI: “Intentional Misrepresentation”
To state a claim for intentional misrepresentation, a plaintiff must allege three factors:
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(1) a false representation by the defendant that is made with either knowledge or belief that it is
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false or without sufficient foundation; (2) an intent to induce another’s reliance; and (3)
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damages that result from this reliance. See Nelson v. Heer, 163 P.3d 420, 426 (Nev. 2007). A
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claim of “fraud or mistake” must be alleged “with particularity.” Fed. R. Civ. P. 9(b). A
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complaint alleging fraud or mistake must include allegations of the time, place, and specific
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content of the alleged false representations and the identities of the parties involved. See Swartz
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v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007). Rule 9(b) does not allow a complaint to
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merely lump multiple defendants together but requires plaintiffs to differentiate their
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allegations when suing more than one defendant and inform each defendant separately of the
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allegations surrounding his alleged participation in the fraud.” Id.
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Plaintiff’s vague and conclusory allegations that Defendants “made false statements
about what he owed” and “misrepresented the loan modification” and “supplied false
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information” to him do not include any allegations of the time, place, or specific content of the
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alleged false representations. (Amend. Complaint, ¶¶ 36-47, ECF No. 24.) These allegations
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are insufficient to assert a claim for intentional misrepresentation. See Swartz, 476 F.3d at 764.
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Therefore, this count is dismissed.
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G. Count VII: “Fair Debt Collection Practices Act (FDCPA)”
Plaintiff alleges that Defendants have violated the FDCPA in their attempts to collect
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“erroneous amounts” owed by Plaintiff to Defendants under his mortgage. (Amend. Complaint,
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¶¶ 48-51, ECF No. 24.) However, “the activity of foreclosing on a property pursuant to a deed
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of trust is not collection of a debt within the meaning of the FDCPA.” Diessner v. Mortgage
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Elec. Registration Sys., 618 F. Supp. 2d 1184, 1189 (D. Ariz. 2009) aff’d, 384 F. App’x 609
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(9th Cir. 2010) (citing Hulse v. Ocwen Fed. Bank, 195 F.Supp.2d 1188, 1204 (D. Or. 2002)).
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Therefore, Plaintiff’s claim under the FDCPA must fail, and this count is dismissed.
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H. Count VIII: “Violations of Racketeer Influenced and Corrupt Organizations Act
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(RICO)”
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Under the heading of a count for “Violations of Racketeer Influenced and Corrupt
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Organizations Act (RICO),” Plaintiff appears to have copied and pasted a number of Nevada
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and federal statues along with some confusing allegations against BOA filed in other unrelated
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suits. See (Id. ¶¶ 52-67.) Plaintiff’s allegations in this count are devoid of any facts that would
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show a predicate act for a RICO claim under 18 U.S.C. § 1961 against Defendants. (Id.); see 18
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U.S.C. § 1961(1) (defining the types of “racketeering activit[ies]” that give rise to a RICO
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claim). As Plaintiff fails to give Defendants fair notice of a legally cognizable claim or the
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grounds on which it rests, this count is dismissed.
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I. Leave to Amend
Generally, if the court grants a motion to dismiss, it must then decide whether to grant
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leave to amend. The court should “freely give” leave to amend when there is no “undue delay,
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bad faith[,] dilatory motive on the part of the movant . . . undue prejudice to the opposing party
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by virtue of . . . the amendment, [or] futility of the amendment . . . .” Fed. R. Civ. P. 15(a);
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Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is
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clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v.
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Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
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Here, granting Plaintiff additional time to amend his Complaint would be futile and
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cause undue delay and prejudice to Defendants by further prolonging this suit. Plaintiff’s first
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complaint was dismissed without prejudice for failing to state a claim upon which relief could
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be granted. (Order, ECF No. 22.) Despite adding an additional five counts, Plaintiff’s
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Amended Complaint has also failed to state a claim upon which relief could be granted.
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Plaintiff’s inability to correct the deficiencies from his original complaint in his Amended
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Complaint indicates that allowing further amendment would be futile. Allowing Plaintiff
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additional time to amend his Complaint again would serve no purpose but to prejudice
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Defendants.
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IV.
CONCLUSION
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss (ECF No. 30) is
GRANTED. All of Plaintiff’s claims are dismissed with prejudice.
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The Clerk of the Court shall enter judgment accordingly and close the case.
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DATED this ______ day of July, 2014.
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___________________________________
Gloria M. Navarro, Chief Judge
United States District Judge
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