Guillen et al v. American Home Mortgage Servicing, Inc. et al

Filing 26

ORDER Granting 8 Motion to Dismiss. FURTHER ORDERED that 11 Motion to Expunge Lis Pendens is GRANTED. Signed by Judge James C. Mahan on 10/28/11. (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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ESTELLA M. GUILLEN, et al.,

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2:11-CV-1068 JCM (CWH)

Plaintiffs,
v.
AMERICAN HOME MORTGAGE
SERVICING, INC., et al.,
Defendants.

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ORDER

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Presently before the court is defendants American Home Mortgage Servicing, Inc., et. al.’s

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motion to dismiss. (Doc. #8). Defendants contemporaneously filed a motion to expunge lis pendens.

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(Doc. #11). Plaintiffs Estella Guillen, et. al. filed oppositions to these motions. (Docs. #13 and

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#14). Defendants then filed replies. (Docs. #17 and #18).

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In April 2006, plaintiffs obtained a $375,000 mortgage loan, secured by real property at

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11278 Tuscolana St., Las Vegas, Nevada. Plaintiffs failed to make monthly mortgage payments.

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Therefore, pursuant to NRS §§ 107.080, et seq., defendant AHMSI Default Services, Inc.

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commenced non-judicial foreclosure proceedings by recording a notice of default and election to sell

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under deed of trust. Defendant American Home Mortgage Servicing, Inc. purchased the property

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at a public foreclosure sale on August 28, 2008.

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Plaintiffs filed their complaint in state court on May 31, 2011. (Doc. #1, Ex. 1). Defendants

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removed the case to federal court on June 29, 2011. (Doc. #1). Plaintiffs’ complaint alleges four

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James C. Mahan
U.S. District Judge

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causes of action against all of the defendants: (1) wrongful foreclosure, (2) slander of title, (3) civil

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conspiracy, and (4) quiet title. (Doc. #1, Ex. 1). Defendants now move to dismiss each of these

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claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which

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relief can be granted. (Doc. #8). Defendants also move the court to expunge the notice of lis

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pendens. (Doc. #11).

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Legal Standard

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Contrary to plaintiffs’ assertion, the court applies the Federal Rules of Civil Procedure. “It

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is well-settled that the Federal Rules of Civil Procedure apply in federal court, ‘irrespective of the

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source of the subject matter jurisdiction, and irrespective of whether the substantive law at issue is

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state or federal.’” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (citing Vess v.

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Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003)).

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A complaint must include a “short and plain statement of the claim showing that the pleader

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is entitled to relief.” FED. R. CIV. P. 8(a)(2). The statement of the claim is intended to “give the

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defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atlantic Corp.

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v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). Pursuant to Federal Rule of Civil

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Procedure 12(b)(6), courts may dismiss causes of action that “fail[] to state a claim upon which relief

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can be granted.”

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The court must “accept all factual allegations in the complaint as true.” Tellabs, Inc. v.

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Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). Further, the court must draw all reasonable

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inferences in plaintiff’s favor. Twombly, 550 U.S. at 547. However, “[t]o survive a motion to

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dismiss, a complaint must contain sufficient factual matter . . . to state a claim to relief that is

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plausible on its face.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (internal citations omitted).

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Although “not akin to a ‘probability requirement,’” the plausibility standard asks for more than a

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sheer possibility that a defendant has acted unlawfully. Id.

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Discussion
I.

Wrongful Foreclosure
Defendants argue that the wrongful foreclosure claim should be dismissed because plaintiffs

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James C. Mahan
U.S. District Judge

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have “neglected to allege or show that they were not in default under the terms of the [n]ote.” (Doc.

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#8).

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

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establish that at the time . . . the foreclosure occurred, no breach of condition or failure of

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performance existed . . . .” Collins v. Union Fed. Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev.

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1983). Thus, the material inquiry in a wrongful foreclosure action “is whether the trustor was in

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default when the power of sale was exercised.” Id.

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Plaintiffs’ wrongful foreclosure claim is premised on the assertion that the “wrong party or

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parties” instituted the foreclosure. (Doc. #13). Plaintiffs allege that by divorcing the deed of trust

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from the promissory note, the loan was no longer secured and neither MERS nor AHMSI Default

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Services, Inc. had a right to institute foreclosure proceedings. (Doc. #13). This argument has been

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rejected by the Ninth Circuit. See Cervantes v. Countrywide Home Loans, Inc., – F.3d –, 2011 WL

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3911031, *6-7 (9th Cir. Sept. 7, 2011).
In light of the Ninth Circuit’s Cervantes decision, plaintiffs have failed to state a claim for

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wrongful foreclosure upon which relief can be granted. See id.; FED. R. CIV. P. 12(b)(6).

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II.

Slander of Title

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“The requisites to an action for slander of title are that the words spoken be false, that they

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be maliciously spoken and that the plaintiff sustain some special damage as a direct and natural result

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of their having been spoken.” Rowland v. Lepire, 662 P.2d 1332, 1335 (Nev. 1983).

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Again, plaintiffs’ slander of title allegations are premised on the alleged illegality of the

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MERS system. (See Doc. #1). Plaintiffs allege that the defendants had no legitimate enforceable

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interest in the note and, thus, “participated in recording, filing, mailing and/or otherwise publishing

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false title-related documents containing erroneous claims . . . .” (Doc. #1, Ex. 1). Considering the

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Ninth Circuit’s holding in Cervantes, plaintiffs have failed to establish that the “words spoken be

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false.” See Rowland, 662 P.2d at 1335; Cervantes, 2011 WL 3911031, at *6-7. Plaintiffs

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additionally have failed to demonstrate that they have sustained a special damage as a result of

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defendants’ words. See Cervantes, 2011 WL 3911031, at *4. Therefore, they have failed to state

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James C. Mahan
U.S. District Judge

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a claim for slander of title upon which relief can be granted. FED. R. CIV. P. 12(b)(6).

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III.

Civil Conspiracy

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“An actionable civil conspiracy is a combination of two or more persons who, by some

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concerted action, intend to accomplish some unlawful objective for the purpose of harming another

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which results in damage.” Collins, 662 P.2d at 622. To assert a valid claim for civil conspiracy,

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plaintiffs must identify the required “unlawful objective.” Morris v. Bank of America Nevada, 886

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P.2d 454, 456 (Nev. 1994).

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Plaintiffs’ civil conspiracy claim fails under the controlling Cervantes case. See Cervantes,

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2011 WL 3911031, at *4. The allegations in the complaint fail to establish that the defendants

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intended to accomplish an “unlawful objective.” Collins, 662 P.2d at 622. Similarly, the allegations

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do not establish that defendants’ actions caused plaintiffs any “injury” or harm. See id.; Cervantes,

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2011 WL 3911031, at *4. Therefore, plaintiffs’ civil conspiracy claim must be dismissed for failure

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to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6).

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IV.

Quiet Title

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After the court’s dismissal of the previous three claims, plaintiffs’ quiet title claim must also

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fail. Plaintiffs’ quiet title action is based on the faulty assumption that “rogue or otherwise

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improper” parties are claiming ownership interests in the property. (Doc. #13). However,

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controlling case law in the Ninth Circuit and Nevada show that plaintiffs’ allegations are not

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meritorious. See, e.g., Cervantes, 2011 WL 3911031; Collins, 662 P.2d 610. Plaintiffs’ quiet title

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claim is dismissed for failure to state a claim upon which relief can be granted. FED. R. CIV. P.

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12(b)(6).

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V.

Leave to Amend

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Defendants move the court to grant their Rule 12(b)(6) motion without leave to amend.

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(Doc. #8). A court may grant a motion to dismiss without leave to amend if “it determines that the

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pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc.

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v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990). Finding that the pleading could

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not be cured by other facts, the court grants defendants’ instant motion to dismiss without leave to

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James C. Mahan
U.S. District Judge

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amend.

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VI.

Motion to expunge notice of pendency action

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Finally, defendants move the court to expunge notice of lis pendens. (Doc. #11). Pursuant

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to NRS 14.015(3), the party who recorded the notice “must establish to the satisfaction of the court

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. . . [t]hat the party . . . is likely to prevail in the action.”

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Here, plaintiffs have not demonstrated that they are likely to prevail in the action. The court

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has dismissed all four claims in the complaint for failure to state a claim upon which relief can be

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granted. The court has further found that leave to amend would be futile. Accordingly, plaintiffs

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have not established a likelihood of success. NRS 14.015(3).

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants American

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Home Mortgage Servicing, Inc., et. al.’s motion to dismiss (doc. #8) be, and the same hereby is,

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GRANTED.

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IT IS FURTHER ORDERED that defendants American Home Mortgage Servicing, Inc., et.
al.’s motion to expunge lis pendens (doc. #11) be, and the same hereby is, GRANTED.
DATED October 28, 2011.

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

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