Wasiak v. Cal-Western Reconveyance Corporation et al

Filing 30

ORDER that Defendant PNC Bank Mortgages Motion to Dismiss 7 is GRANTED. Plaintiffs Complaint is DISMISSED with prejudice for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Case terminated. Signed by Judge Gloria M. Navarro on 3/29/12. (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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ANDREW WASIAK,
Plaintiff,

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vs.

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CAL-WESTERN RECONVEYANCE
CORPORATION, et al.,

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Defendants.

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Case No.: 2:11-cv-01190-GMN-PAL
ORDER

INTRODUCTION

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Before the Court is Defendant PNC Bank Mortgage’s Motion to Dismiss (ECF No. 7).

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Plaintiff Andrew Wasiak filed a Response (ECF No. 21) and PNC Bank Mortgage (hereinafter

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“PNC”) filed a Reply (ECF No. 24). Defendant Cal-Western Reconveyance (hereinafter “Cal-

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Western”) filed a Joinder to PNC’s Motion to Dismiss and Reply (ECF No. 25).
FACTS AND BACKGROUND

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On May 7, 2004,1 Plaintiff Andrew Wasiak executed a promissory note in favor of

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National City Mortgage (hereinafter “National City” or “Lender”) in the principal amount of

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$672,000.00 for a loan in connection with his purchase of property located at 2655 Grassy Spring

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Place, Las Vegas, Nevada 89135 (hereinafter the “Property”). (Compl. ¶¶14–15, ECF No. 1; see

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Note, Ex. 1 attached to Compl., ECF No. 1.) The purchase of the Property with the loan was

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secured by a first position deed of trust (“DOT”) which is dated May 10, 2004.2 (Compl. at ¶ 17;

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see DOT, Ex. 2 attached to Compl., ECF No. 1.) The DOT lists National City Mortgage Co. as

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the Lender and Fidelity National as the Trustee. (See DOT.)

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The Complaint says the Note was executed on May 12, 2004, but Ex. 1 shows the Note was dated May 7, 2004.
The Complaint says the DOT was executed on November 15, 2004, but Ex. 2 shows the DOT was signed on May 10, 2004.

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On July 13, 2009 Cal-Western was substituted in as the trustee under the DOT by

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“National City Mortgage Co by Cal-Western Conveyance Corporation as Attorney-in-fact.” (See

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Substitution of Trustee (“SOT”), Ex. 4 attached to Compl., ECF No. 1.) On July 15, 2009 Cal-

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Western recorded a Notice of Breach and Default (“NOD”). (See NOD, Ex. 3 attached to Compl.,

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ECF No. 1.)
Approximately one year later, a Certificate of Foreclosure Mediation was recorded on

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December 1, 2010 stating that foreclosure mediation was held on November 6, 2009 wherein the

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parties were unable to come to a resolution. (See Mediation Certificate, Ex. A attached to

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Request for Judicial Notice, ECF No. 9–1.) A Notice of Trustee’s Sale was recorded on January

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21, 2011 by Cal-Western. (Notice of Sale, Ex. 5 attached to Compl., ECF No. 1.) Thereafter, an

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Assignment was recorded assigning the Deed of Trust to “U.S. Bank N.A. as trustee for Bear

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Stearns Arm Trust 2004-6” (“U.S. Bank”) on February 17, 2011. (Second Assignment, Ex. 6

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attached to Compl., ECF No. 1.) The subject property was sold to U.S. Bank at the trustee’s sale

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on April 18, 2011 in the amount of $585,000.00. (Trustee’s Deed upon Sale, Ex. 7 attached to

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Compl, ECF No. 1.)
Plaintiff filed the instant suit on July 21, 2011 alleging nine causes of action: (1) fraud,

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(2) satisfaction, (3) wrongful foreclosure, (4) violation of N.R.S. § 107, (5) slander of title,

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(6) interference with contractual relationship, (7) declaratory relief, (8) cancellation of trustee’s

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sale and (9) injunctive relief.
DISCUSSION

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A.

Legal Standard – Fed. R. Civ. P. 12(b)(6)

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Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the

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claim showing that the pleader is entitled to relief” in order to “give the defendant fair notice of

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what the . . . claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47

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(1957). 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. A motion to dismiss under Rule

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12(b)(6) tests the complaint’s sufficiency. See North Star Int’l. v. Arizona Corp. Comm’n., 720

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F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for

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failure to state a claim, dismissal is appropriate only when the complaint does not give the

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defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl.

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Corp. v. Twombly, 550 U.S. 544, 554, 127 S.Ct. 1955, 1964 (2007). However, facts must be

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sufficient to edge a complaint from the conceivable to the plausible in order to state a claim. Id.

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In considering whether the complaint is sufficient to state a claim, the court will take all material

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allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus.,

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Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The court, however, is not required to accept

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as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable

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inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

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The Supreme Court clarified that, in order to avoid a motion to dismiss, the complaint

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must contain “factual content that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

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The Court in Ashcroft further stated “[w]here a complaint pleads facts that are ‘merely consistent

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with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of

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entitlement to relief.’” Id. Therefore, merely making an allegation is not enough to survive a

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motion to dismiss; facts that a particular defendant may plausibly be liable for the alleged

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conduct must be pled.

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If the court grants a motion to dismiss, it must then decide whether to grant leave to

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amend. The court should “freely give” leave to amend when there is no “undue delay, bad

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faith[,] dilatory motive on the part of the movant . . . undue prejudice to the opposing party by

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virtue of . . . the amendment, [or] futility of the amendment . . . .” Fed. R. Civ. P. 15(a); Foman v.

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Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that

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the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight

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Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).

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B.

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Judicial Notice
A court may judicially notice matters of public record. Mack v. S. Bay Beer Distrib., 798

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F.2d 1279, 1282 (9th Cir. 1986). A court can take judicial notice of facts in recorded documents

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that are not subject to a reasonable dispute. See Lund v. Harbor View Mortgage Loan Trust

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Mortgage Loan Pass-Through Certificates, Series 2007-3, 2011 WL 2470580, *1 n.1 (D. Nev.

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June 21, 2011).

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Defendant requests judicial notice of the certificate of mediation dated November 26,

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2010 that was recorded by the Clark County Recorder. The remaining documents upon which

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the Defendant relies for its motion were attached to Plaintiff’s complaint. Plaintiff argues that

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the Court cannot take notice of the documents because they contain inadmissible hearsay.

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Plaintiff asserts that the Court cannot take judicial notice of key issues and that recordation is not

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a substitution for evidentiary proof of the truth of the facts asserted in a recorded document. See

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Leber v. Berkley Vacation Resorts, Inc., 2009 U.S.Dist. LEXIS 66928, pg. 7 (citing Lee v. City of

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Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).

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Courts within this district have routinely taken judicial notice of the publicly recorded

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documents in foreclosure cases. In fact, it is quite helpful to include the documents as part of the

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pleadings to ensure that cases that raise meritorious issues are heard. Too many times, this Court

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has seen suits brought by plaintiffs alleging wrongful foreclosure that simply do not state any

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causes of action. A motion to dismiss is a proper way to ensure that judicial economy is satisfied

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and cases alleging proper causes of action are heard.

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A party can challenge a request for judicial notice by raising a reasonable dispute as to the

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authenticity of the documents and the facts contained with the documents. Plaintiff does not do

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this. He merely argues that they should not be allowed. Plaintiff does not offer any evidence that

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would give rise to a reasonable dispute that the facts contained within those documents are false.

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There is no reason given for the Court to not rely upon them. Accordingly, the Court takes

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judicial notice of the Foreclosure Mediation Certificate.

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Furthermore, material which is properly submitted as part of the complaint may be

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considered on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896

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F.2d 1542, 1555 n. 19 (9th Cir. 1990) (citations omitted). Therefore, the Court will consider the

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documents attached by Plaintiff to his complaint.

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1.

Fraud

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To prove a claim for fraud or intentional misrepresentation, the plaintiff must establish

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three factors: (1) a false representation by the defendant that is made with either knowledge or

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belief that it is false or without sufficient foundation, (2) an intent to induce another’s reliance,

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and (3) damages that result from this reliance. Guthrie v. Argent Mort. Co., LLC, No. 2:11-CV-

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1811-JCM-PAL, 2011 WL 6140660, at *2 (D.Nev. Dec. 9, 2011)(citing Nelson v. Heer, 163 P.3d

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420,426 (Nev. 2007)). A claim of “fraud or mistake” must be alleged “with particularity.” Fed.

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R .Civ. P. 9(b); see also Desaigoudar v. Meyercord, 223 F.3d 1020, 1022 (9th Cir. 2000)

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(“Federal Rule of Civil Procedure 9(b) ... require[s] [plaintiff] to plead her case with a high

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degree of meticulousness.”). A complaint alleging fraud or mistake must include allegations of

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the time, place, and specific content of the alleged false representations and the identities of the

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parties involved. See Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir.2007).

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Plaintiff alleges that PNC made false representations of material fact on February 17,

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2011 by recordation of the Assignment of the Deed of Trust. (Compl. at ¶25.) Plaintiff claims

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that these false representations were that PNC was authorized to and did assign the Note to U.S.

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Bank/Bear Sterns 2004 trust and that U.S. Bank/Bear Sterns 2004 Trust could accept assignment.

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(Id.) Plaintiff goes on to allege that he reasonably relied on said representations. (Id. at 28.)

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Defendant argues that it is impossible for Plaintiff to claim that he relied on the said

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assignment because it happened after the Plaintiff had defaulted and finished the foreclosure

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mediation program. Plaintiff responds that he did rely on the assignment at the mediation

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program because it was produced at the mediation program. He claims that had he known the

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assignment was fraudulent he would have told the mediator and the mediator would not have

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issued the foreclosure certification. However, Plaintiff’s arguments are inconsistent with the

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facts on the record. The assignment took place on February 17, 2011 (this is the date Plaintiff

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claims the false representations were made) but the foreclosure mediation occurred on November

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6, 2009. Thus, it would have been impossible for Defendant to have produced the document at

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mediation and therefore, Plaintiff’s allegations that he relied on the assignment is demonstrably

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false.

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2.

Satisfaction

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Plaintiff’s second cause of action asserts that “the Note has been paid fully satisfying the

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indebtedness” entitling Plaintiff “to have the Note and DOT discharged of record.”(Comp. at

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¶¶35–36.) Plaintiff has not pleaded any factual basis for this claim.

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Plaintiff’s Complaint fails to meet the pleadings standard established by the Supreme

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Court in Iqbal. 129 S.Ct. at 1949. Plaintiff’s Complaint does not “contain sufficient factual

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matter ... to state a claim to relief that is plausible on its face.” Id. The court is not “required to

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accept as true allegations that are merely conclusory, unwarranted deductions of fact, or

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unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.2001).

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Furthermore, the court is also not required to “accept at true allegations that contradict matter

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properly subject to judicial notice.” Id. The Notice of Default and Election to Sell contradict any

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allegation that the note has been paid off and fully satisfied. Accordingly, Plaintiff’s second

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cause of action is dismissed.

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3.

Wrongful Foreclosure

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In Nevada, “[a]n action for the tort of wrongful foreclosure will lie if the trustor or

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mortgagor can establish 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 the mortgagor’s or trustor’s

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part which would have authorized the foreclosure or exercise of the power of sale.” Collins v.

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Union Federal Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev.1983) (citations omitted).

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Plaintiff alleges that there was not breach of condition or failure of performance existing

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on Plaintiff’s part. (Compl. at ¶39.) This is clearly contradicted by the NOD which demonstrates

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that Plaintiff has been in default under his mortgage for over two years, since April 1, 2009. (See

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NOD.) Therefore, Plaintiff fails to state a claim for wrongful foreclosure because the judicially

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noticeable fact that Plaintiff was in default on his mortgage payment effectively rebuts Plaintiff’s

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allegation that he was not in breach of condition or failure of performance. This claim is dismissed.

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4.

Violation of N.R.S. § 107

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Nevada law provides that a deed of trust is an instrument that may be used to “secure the

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performance of an obligation or the payment of any debt.” N.R.S. § 107.020(1). The procedures

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for conducting a trustee’s foreclosure sale are set forth in N.R.S. § 107.080. To commence a

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foreclosure, the beneficiary, the successor in interest of the beneficiary, or the trustee must

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execute and record a notice of the breach and election to sell. N.R.S. § 107.080(2)(c). The NOD

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must describe the deficiency in performance or payment. N.R.S. 107.080(3)(a). After at least

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three months have elapsed, the trustee or other person authorized to make the sale under the

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terms of the deed of trust shall give notice of sale in accordance with the posting requirements for

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residential foreclosures. N.R.S. § 107.080(4). A foreclosure sale may be declared void if the

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trustee or other person authorized to make the sale did not substantially comply with the

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foreclosure statutes. N.R.S. § 107.080(5).

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Cal-Western was properly substituted as the Trustee under the Deed of Trust on July 13,

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2009. (See SOT.) Two days later, the Notice of Default filed by Cal-Western, was recorded.

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(See NOD.) Since the trustee, beneficiary or their assigns, or an authorized agent may execute

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and record the NOD under NRS § 107.080(2)(c), the recordation of the NOD was proper and

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Plaintiff’s allegations fail to state a claim.

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Plaintiff alleges that the NOD did not describe the deficiency in performance or payment.

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(Compl. at ¶ 44.) A review of the NOD shows that the deficiency in performance was noted in

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that Plaintiff had failed to make his monthly mortgage payments from April 1, 2009 to present.

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(See NOD.) Thus, the NOD was sufficient.

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Additionally, Plaintiff argues that N.R.S. § 107.086(2)(a) requires the notice of default to

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include contact information which the grantor may use to reach a person with authority to

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negotiate a loan modification. N.R.S. §107.086(b) required the trustee to serve a copy of the

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notice upon the Mediation Administrator. Defendant offers a copy of the Certificate of

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Compliance with Nevada’s Foreclosure Mediation program to show that they complied with

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N.R.S. § 107.086(b). (See Mediation Certificate.) In addition, the Notice of Default plainly

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provides a number to the Loss Mitigation Department for loan modification information and

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contact information to determine if reinstatement was possible to discuss if he qualified for a loan

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modification. (See NOD.)

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Plaintiff also argues that Defendants must comply with N.R.S. §107.085(3)(b) which

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requires a promissory note to be attached to the Notice of Sale. However, this section only

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applies to transfers in trust of real property. N.R.S. § 107.085(1). Furthermore, Plaintiff attached

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a copy of the promissory note to his complaint so this claim is disingenuous at best.

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Accordingly, this claim is dismissed.

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5.

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To succeed on a slander of title claim, the plaintiff must show “false and malicious

Slander of Title

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communications, disparaging to one’s title in land, and causing special damage.” Exec. Mgmt.,

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Ltd. v. Ticor Title Ins. Co., 963 P.2d 465, 478 (Nev.1998) (quoting Higgins v. Higgins, 744 P.2d

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530, 531 (Nev.1987)). Plaintiff alleges that Defendants knew or acted in reckless disregard of

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the truth or falsity of the statement in the NOD that it was “either the original trustee, the duly

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appointed substituted trustee, or acting agent for the trustee or beneficiary under the Deed of

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Trust.” (Comp. at ¶52.)

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As explained above, Cal-Western was properly substituted as trustee. Therefore, it was

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not a false and malicious statement for Cal-Western to state it was the appointed substituted

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trustee on the NOD. Accordingly, Plaintiff has failed to state a slander of title claim.

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To state a claim for interference with a contractual relationship, plaintiff must allege

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Interference with Contractual Relationship

(1) there existed a valid contract between plaintiffs and a third party, (2) defendant knew of the

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contract, (3) defendant committed intentional acts intended or designated to disrupt the

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contractual relationship, (4) there was an actual disruption of the contract, and (5) plaintiffs

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sustained damages as a result. Hilton Hotels Corp. v. Butch Lewis Productions, Inc., 862 P.2d

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1207 (Nev. 1993).

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Here, Plaintiff claims a valid contract exists between himself and the lender. Plaintiff

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alleges that Defendant PNC committed intentional acts which were intended or designed to

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disrupt Plaintiff’s contractual relationship with the lender. (Compl. at ¶60.)

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The DOT provides that the lender may substitute the trustee and may foreclose on the

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property if the borrower is in default. (See DOT.) The lender substituted Cal-Western as trustee.

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There cannot be an interference with the contract when Defendants have complied with all the

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terms of the contract. Accordingly, this claim is dismissed.
Declaratory Relief, Cancellation of Trustee’s Sale, Injunctive Relief

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Plaintiff’s seventh, eighth and ninth claims are not causes of action but are remedies.

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Without a viable cause of action in the Complaint, the remedy requests must be dismissed.
CONCLUSION
IT IS HEREBY ORDERED that Defendant PNC Bank Mortgage’s Motion to Dismiss

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(ECF No. 7) is GRANTED.
Plaintiff’s Complaint is DISMISSED with prejudice for failure to state a claim under
Fed. R. Civ. P. 12(b)(6).
DATED this 29th day of March, 2012.

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Gloria M. Navarro
United States District Judge

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