Godino v. Countrywide KB Home Loans et al
Filing
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ORDER Granting 6 and 7 Motions to Dismiss Complaint. Signed by Judge James C. Mahan on 12/8/11. (Copies have been distributed pursuant to the NEF - ASB)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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SCOTT GODINO, JR.,
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2:11-CV-1216 JCM (PAL)
Plaintiff,
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v.
COUNTRYWIDE KB HOME LOANS,
et al.,
Defendants.
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ORDER
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Presently before the court are defendants Countrywide KB Home Loans, et. al.’s motions to
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dismiss complaint. (Docs. #6 and #7). Plaintiff Scott Godino, Jr. filed oppositions to these motions.
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(Docs. #12 and #13). Defendants then filed replies. (Docs. #14 and #15).
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The property at issue in this case is located at 10451 Lyric Arbor Drive, Las Vegas, Nevada.
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(Doc. #1). Plaintiff purchased this property with a $275,636.00 loan. (Doc. #1). The property was
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sold at a public auction on May 23, 2011. (Doc. #1). In the complaint, plaintiff asserts that “[u]pon
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information and belief, the [n]ote has been paid off and fully satisfied the indebtedness under the
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[n]ote and [d]eed of [t]rust.” (Doc. #1).
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Defendants move to dismiss the complaint for failure to state a claim upon which relief can
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be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docs. #6 and #7). The complaint
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alleges nine causes of action: (1) fraud, (2) satisfaction, (3) wrongful foreclosure, (4) conversion, (5)
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unjust enrichment, (6) declaratory relief, (7) violations of NRS 107.080, et. seq., (8) slander of title,
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James C. Mahan
U.S. District Judge
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and (9) declaratory relief. (Doc. #1). Defendants’ primary contention is that plaintiff’s claims rely
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on the legally flawed argument that MERS did not have authority to act as a nominee, substitute the
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trustee, and/or assign the deed of trust. (Docs. #6 and #7). Accordingly, the complaint should be
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dismissed for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6).
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Legal Standard
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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. “Where a complaint pleads facts that are
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‘merely consistent’ with a defendant’s liability, it ‘stops short of the line between possibility and
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plausibility of entitlement to relief.’” Id.
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I.
Count one: fraud
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In count one of the complaint, plaintiff asserts that MERS made false representations of
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material fact by recording the assignment of deed of trust and substitution of trustee. (Doc. #1).
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Plaintiff argues that MERS did not have the authority to make assignments or substitutions.
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Plaintiff’s legal arguments are contrary to the law. It is well-established that MERS has the
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authority to make assignments and substitutions. See, e.g., Cervantes v. Countrywide Home Loans,
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Inc., – F.3d –, 2011 WL 3911031 (9th Cir. Sept. 7, 2011); In re Mortgage Electronic Registration
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James C. Mahan
U.S. District Judge
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Systems (MERS) Litigation, 2011 WL 4550189 (MDL Oct. 3, 2011). Because MERS had the
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authority to assign the note and substitute the trustee, plaintiff has not pled a cognizable fraud claim.
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Plaintiff has failed to identify any misrepresentations about MERS or the MERS system. Indeed,
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by signing the deed of trust, plaintiff acknowledged MERS’ authority to make assignments and
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substitutions. See Cervantes, 2011 WL 3911031 at *5. Accordingly, count one of plaintiff’s
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complaint is dismissed.
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II.
Count two: satisfaction
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In count two of the complaint, plaintiff asserts “[u]pon information and belief, the [n]ote has
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been paid off and fully satisfied the indebtedness under the [n]ote and [d]eed of [t]rust.” (Doc. #1).
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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 Court
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in Iqbal. 129 S.Ct. at 1949. Plaintiff’s complaint does not “contain sufficient factual matter . . . to
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state a claim to relief that is plausible on its face.” Id. The court is not “required to accept as true
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allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.”
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Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Accordingly, count two of
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plaintiff’s complaint is dismissed.
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III.
Count three: wrongful foreclosure
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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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Similar to the conclusory allegations discussed above, plaintiff has never established that he
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is not in default. At best, plaintiff argues that “[a]t no point in [p]laintiff’s [c]omplaint does
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[p]laintiff allege that he is in default of his [n]ote.” (Doc. #12). However, this pleading falls short
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of the requirements of a valid wrongful foreclosure claim; plaintiff, at a minimum, must “establish
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that . . . no breach of condition or failure of performance existed.” Collins, 662 P.2d at 623.
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James C. Mahan
U.S. District Judge
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Plaintiff has failed to plead a valid wrongful foreclosure claim. Accordingly, count three of
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plaintiff’s complaint is dismissed.
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IV.
Count four: conversion
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In Nevada, conversion is “a distinct act of dominion wrongfully exerted over another’s
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personal property in denial of, or inconsistent with his title or rights therein or in derogation,
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exclusion, or defiance of such title or rights.” Evans v. Dean Witter Reynolds, Inc., 5 P.3d 1043,
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1048 (Nev. 2000); see also Tai-Si Kim v. Kearney, 2010 WL 3603651 at *4 (D. Nev. 2011).
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Plaintiff did not oppose defendants’ motion to dismiss this claim. Further, plaintiff has failed
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to plead a cognizable claim for conversion because the property at issue is real property, not personal
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property. See Evans, 5 P.3d at 1048. Accordingly, count four of plaintiff’s complaint is dismissed.
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V.
Count five: unjust enrichment
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“An action based on a theory of unjust enrichment is not available when there is an express,
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written contract, because no agreement can be implied when there is an express agreement.”
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Leasepartners Corp. v. Robert L. Brooks Trust, 942 P.2d 182, 187 (Nev. 1997) (per curiam). Thus,
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the doctrine of unjust enrichment “applies to situations where there is no legal contract but where
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the person sought to be charged is in possession of money or property which in good conscience and
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justice he should not retain but should deliver to another [or should pay for].” Id.
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Plaintiff’s complaint admits that the parties entered into an express contract when they
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executed the deed of trust and note. (Doc. #1). Accordingly, plaintiff’s unjust enrichment claim
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must fail, and count five of plaintiff’s complaint is dismissed.
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VI.
Count seven: violations of NRS 107.080, et. seq.
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Count seven of the complaint identifies two alleged deficiencies under Nevada’s non-judicial
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foreclosure statute, NRS 107.080, et. seq. (Doc. #1). Plaintiff first asserts that the notice of default
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does not describe the deficiency in performance or payment. Second, plaintiff argues that a copy of
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the promissory note was not attached to the notice of trustee’s sale.
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Pursuant to NRS 107.080(3)(a), the notice of default must “[d]escribe the deficiency in
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performance or payment . . . .” The statute does not require a specific dollar amount necessary to
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James C. Mahan
U.S. District Judge
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cure the deficiency. NRS 107.080(3)(a).
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In the case at bar, the notice of default stated that there had been a “[f]ailure to pay the
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installment of principal, interest, and impounds which became due on 04/01/2010 and all subsequent
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installments of principal, interest and impounds . . . .” (Doc. #6, Ex. B). This description of the
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deficiency sufficiently identifies the deficiency for purposes of NRS 107.080(3)(a). See also Riley
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v. Greenpoint Mortgage Funding, Inc., 2011 WL 1979831 at *2 (D. Nev. 2011) (stating that “this
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notice is substantially compliant with NRS § 107.080 because the notice describes the type of
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default, failure to pay on the mortgage, and provided [p]laintiffs with a simple means of determining
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the amount in arrears”).
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Pursuant to NRS 107.080, et. seq., a court may “void a trustee sale if, inter alia, the person
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or entity that conducted the sale did not substantially comply with the statute.” Berilo v. HSBC
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Mortg. Corp., USA, 2010 WL 2667218, at *3 (D. Nev. 2010). Further, “[t]he ever-expanding body
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of case law within this district holds that the Nevada law governing non judicial foreclosure . . . does
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not require a lender to produce the original note as a prerequisite to nonjudicial foreclosure
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proceedings.” Byrd v. Meridian Foreclosure Service, 2011 WL 1362135, at *2 (D. Nev. 2011); see
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also Urbina v. Homeview Lending, Inc., 681 F. Supp. 2d 1254, 1258 (D. Nev. 2009).
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Defendants substantially complied with the requirements of NRS 107.080, et. seq. Further,
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plaintiff has not demonstrated that he was prejudiced by any alleged procedural deficiency in the
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nonjudicial foreclosure proceedings. Accordingly, count seven of plaintiff’s complaint is dismissed.
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VII.
Count eight: 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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Plaintiff’s slander of title allegations are premised on the alleged illegality of the MERS
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system. (See Doc. #1). Plaintiff has failed to establish that the “words spoken be false.” See
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Rowland, 662 P.2d at 1335; Cervantes, 2011 WL 3911031, at *6-7. Plaintiff additionally has failed
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to demonstrate that he sustained a special damage as a result of defendants’ words. See Cervantes,
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James C. Mahan
U.S. District Judge
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2011 WL 3911031, at *4. Therefore, plaintiff has failed to state a claim for slander of title upon
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which relief can be granted, and count eight of plaintiff’s compliant is dismissed. FED. R. CIV. P.
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12(b)(6).
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VIII. Counts six and nine: declaratory relief
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A claim for declaratory relief is a remedy, not a cause of action. See Stock West, Inc. v.
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Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989). The
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declaratory relief remedy derives from the substantive claims for relief. Roberts v. McCarthy, 2011
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WL 1363811 at *4 (D. Nev. 2011). If the substantive claims fail, then the claim for declaratory relief
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also fails. Id.
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Plaintiff has failed to plead a claim for which relief can be granted. FED. R. CIV. P. 12(b)(6).
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Accordingly, plaintiff’s substantive claims fail, and the claims for declaratory relief also fail. Counts
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six and nine of the complaint are dismissed.
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Accordingly,
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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants Countrywide
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KB Home Loans, et. al.’s motions to dismiss complaint (docs. #6 and #7) be, and the same hereby
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are, GRANTED.
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DATED December 8, 2011.
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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge
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