Barna v. Wells Fargo Bank, NA et al
Filing
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ORDER Granting 7 Defendants' Motion to Dismiss. Plaintiff's Complaint is DISMISSED without prejudice, with leave to amend by 4/4/13. IT IS FURTHER ORDERED that 6 Defendants' Motion to Expunge Lis Pendens is DENIED with leave to re-file. IT IS FURTHER ORDERED that 22 Defendants' Motion for Hearing or Decision is DENIED as moot in light of this order. Signed by Judge Gloria M. Navarro on 3/20/13. (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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VALEAN BARNA,
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Plaintiff,
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vs.
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WELLS FARGO BANK, N.A.; and
FEDERAL HOME LOAN MORTGAGE
CORPORATION,
Defendants.
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Case No.: 2:12-cv-00496-GMN-GWF
ORDER
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Before the Court is the Motion to Dismiss, or in the Alternative, Motion for Summary
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Judgment (ECF No. 7) filed by Defendants Wells Fargo Bank, N.A. (“Wells Fargo”) and
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Federal Home Loan Mortgage Corporation (“FHLMC”) (collectively, “Defendants”). Also
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pending before the Court are Defendants’ Motion to Expunge Lis Pendens (ECF No. 6) and
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Defendants’ Motion for Hearing or Decision (ECF No. 22.)
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I.
BACKGROUND
This case arises out of an alleged failure to consider an application to modify a home
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loan. In May 2007, Plaintiff executed a Note secured by a Deed of Trust in favor of the lender,
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Wells Fargo Bank, N.A., for the real property located at 2006 Santa Rita Drive, Las Vegas,
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Nevada, 89104, APN#: 162-03-415-045 (“the Property”). (Compl. at ¶ 7, ECF No. 1; Deed of
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Trust, Ex. A to Req. Judicial Notice (“RJN”), ECF No. 8.) In January 2011, MTC Financial
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Inc., dba Trustee Corps1 recorded a notice of default against the Property naming Wells Fargo as
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the beneficiary. (Compl. at ¶ 9; Notice of Default, Ex. 3 to RJN.) In or after June 2011, Plaintiff
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MTC Financial Inc., dba Trustee Corps was originally named as a defendant but was voluntarily dismissed on October 29,
2012. (ECF No. 48.)
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requested a loan modification. (Id. at ¶¶ 10-13.) In October 2011, Trustee Corps filed a Notice
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of Trustee Sale. (Id. at ¶ 12.) In November 2011, Wells Fargo denied the HAMP loan request
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but represented that it would consider Plaintiff for a traditional loan. (Id. at ¶ 13.)
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requested a postponement of the Trustee’s Sale, for which FHLMC “impermissibly withheld its
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approval” but was later successfully postponed. (Id. at ¶¶ 14-15.) On November 16, 2011,
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Plaintiff received a Notice of Trustee’s Sale setting the date for December 22, 2011, again
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naming Wells Fargo as the beneficiary. (Id. at ¶ 16.) On December 14, 2011, Plaintiff learned
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Wells Fargo had not reviewed Plaintiff’s file, despite representations by Wells Fargo that the
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application was being reviewed. (Id. at ¶ 17.) On December 22, 2011, the Property was sold to
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Plaintiff
Lawrence Pasini.2 (Id. at ¶ 19.)
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Plaintiff filed suit in the Eighth Judicial District Court, Clark County, Nevada on March
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1, 2012. The case was removed to this Court on March 23, 2012. Plaintiff’s Complaint asserts
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claims for (1) Breach of Contract, (2) Breach of Covenant of Good Faith and Fair Dealing,
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(3) Negligence, (4) Violations of Chapter 107 of the Nevada Revised Statutes, and (5) Injunctive
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Relief. Defendants seek to dismiss the complaint for failure to state a claim and to expunge the
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associated lis pendens. Plaintiff opposed the motion and sought, in the alternative, leave to
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amend.
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II.
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 Corp.
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Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule
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12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not
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give the defendant fair notice of a legally cognizable claim and the grounds on which it rests.
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Lawrence Pasini was originally named as a defendant but was voluntarily dismissed on September 19, 2012. (ECF No. 46.)
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See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint
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is sufficient to state a claim, the Court will take all material allegations as true and construe them
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in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th
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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 violation
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is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550
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U.S. at 555) (emphasis added).
“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
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Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly,
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“documents whose contents are alleged in a complaint and whose authenticity no party
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questions, but which are not physically attached to the pleading, may be considered in ruling on
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a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for
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summary 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 summary
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judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001).
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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
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v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear
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that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow
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Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Leave to amend may be denied if a court
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determines that “allegation of other facts consistent with the challenged pleading could not
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possibly cure the deficiency.” Abagninin v. AMVAC Chemical Corp., 545 F.3d 733, 742 (9th
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Cir. 2008) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th
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Cir. 1986)).
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III. DISCUSSION
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I.
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In Nevada, a claim for breach of contract must allege (1) the existence of a valid contract;
Breach of Contract
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(2) that plaintiff performed or was excused from performance; (3) that the defendant breached
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the terms of the contract; and (4) that the plaintiff was damaged as a result of the breach. See
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Restatement (Second) of Contracts § 203 (2007); Calloway v. City of Reno, 993 P.2d 1259, 1263
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(Nev. 2000) (“A breach of contract may be said to be a material failure of performance of a duty
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arising under or imposed by agreement.”). To create an enforceable contract there must be an
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“offer and acceptance, meeting of the minds, and consideration.” May v. Anderson, 119 P.3d
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1254, 1257 (Nev. 2005).
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Here, it is unclear in Plaintiff’s Complaint whether Plaintiff is alleging the existence of a
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valid contract, and if so, what that contract is. In the Complaint, Plaintiff refers obliquely to
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“the loan documents concerning the Subject Property” to which Defendants “allege that they are
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a party” and that “they have a legally valid and binding contract.” (Compl., ¶ 24.) Plaintiff
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alleges that Defendants “have failed to abide by the terms of the agreement to which they allege
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they are a party.” (Id. at ¶ 25.) However, Plaintiff does not specify what the “agreement” was,
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and does not provide any facts to support his allegations that Defendants have alleged the
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existence of a legally valid and binding contract. Even so, Plaintiff himself must allege the
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existence of a valid contract, and must also provide sufficient factual support to show that a
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violation on the part of Defendants is plausible. Here, Plaintiff has not done so. Accordingly,
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this cause of action must be dismissed.
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B.
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Plaintiff bases his claim for breach of the implied covenant of good faith and fair dealing
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on an alleged breach of duty by Defendants when they failed to consider the loan modification,
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denied postponement of the sale, and improperly foreclosed on the property.
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Breach of the Implied Covenant of Good Faith and Fair Dealing
To state a claim of breach of the covenant of good faith and fair dealing, Plaintiff must
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allege: (1) Plaintiff and Defendants were parties to an agreement; (2) Defendants owed a duty of
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good faith to the Plaintiff; (3) Defendants breached that duty by performing in a manner that was
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unfaithful to the purpose of the contract; and (4) Plaintiff’s justified expectations were denied.
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Perry v. Jordan, 900 P.2d 335, 338 (Nev. 1995). In Nevada, an implied covenant of good faith
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and fair dealing exists in every contract, Consol. Generator–Nevada, Inc. v. Cummins Engine
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Co., Inc., 971 P.2d 1251, 1256 (Nev. 1998), and a plaintiff may assert a claim for its breach if
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the defendant “deliberately countervenes the intention and spirit of the contract,” Morris v. Bank
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of Am. Nev., 886 P.2d 454, 457 (Nev. 1994) (internal quotation marks omitted).
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Here, as in the first cause of action, Plaintiff alleges that Defendants “asserted that they
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and Plaintiff were parties to a valid and existing contract” (Compl., ¶ 31), but does not explain
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what that contract is, nor does Plaintiff allege the existence of such a contract himself. Plaintiff
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does allege that Defendants breached their duty of good faith and fair dealing “[b]y refusing to
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deal with Plaintiff’s modification application” and “wrongfully denying the postponement of the
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foreclosure sale and improperly foreclosing on the property.” (Compl., ¶ 33.) However,
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Plaintiff does not allege any facts to support the allegation that “refusing to deal” with the
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modification application, “wrongfully denying” postponement of the sale, and “improperly
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foreclosing” are actions in breach of any contract or agreement. Accordingly, this cause of
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action must be dismissed.
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C.
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To bring a negligence claim in Nevada, a plaintiff must show that: (1) defendant owed a
Negligence
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duty of care to plaintiff; (2) defendant breached that duty; (3) defendant’s breach was the legal
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cause of the plaintiff’s injuries; and (4) plaintiff was damaged. Scialabba v. Brandise Constr.
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Co., Inc., 921 P.2d 928, 930 (Nev. 1996). Liability based on negligence does not exist without a
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breach of a duty. Bradshaw v. Blystone Equip. Co. of Nev., 386 P.2d 396, 397 (Nev. 1963).
Although Plaintiff’s Complaint includes a recitation of the elements of negligence, the
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allegations in the Complaint fail to satisfy the pleading standard as stated in Iqbal and Twombly.
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Contrary to this pleading standard, Plaintiff’s Complaint lacks the factual support needed to
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plead a plausible negligence cause of action. Plaintiff first alleges that “Defendants Wells
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Fargo, and Freddie Mac owed a duty to Plaintiff to perform their professional services in a
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manner consistent with similarly situated professionals in their respective fields, and to perform
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their duties with usual and reasonable care.” (Compl. ¶ 37.) This allegation fails to allege
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sufficient facts that, when taken as true, establish that Defendants owed Plaintiff a duty of care.
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Even if Plaintiff had adequately alleged the factual support to establish that Defendants owed a
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duty of care, Plaintiff’s Complaint also fails to allege sufficient factual support to establish that
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Defendants breached that duty. In fact, Plaintiff’s Complaint merely alleges that this “duty” was
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breached when Defendants failed to “properly perform their functions in a competent and
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workmanlike fashion.” (Id. at ¶ 38.) Such a conclusory statement fails to lift Plaintiff’s
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allegations above the possible into the probable. Furthermore, this bare allegation fails to give
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Defendants fair notice of this claim and the grounds on which it rests. For these reasons, this
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cause of action must be dismissed.
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D.
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Plaintiff alleges that Defendants “failed to properly notice the Trustee Sale and Notice of
Violation of Chapter 107 of the Nevada Revised Statutes
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Default pursuant to sections 107.080, 107.090, and NRS 107.095 of the Nevada Revised
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Statutes,” but does not specify what requirement of these statutes Defendants have violated.
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(Compl., ¶ 45.) The judicially noticeable documents recorded in Clark County and provided by
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Defendants do not show a violation of section 107.080 on the part of Defendants. Plaintiff
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provides no factual allegations to support the claim that Defendants are subject to section
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107.090, and Plaintiff does not allege that any request was made to trigger Defendants’
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responsibilities under this section. Plaintiff does not allege the existence of any “guarantor or
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surety of the debt” to whom a notice of default must be sent pursuant to section 107.095, and
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does not allege facts to support any allegation that Defendants were subject to such a
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requirement. For these reasons, and because Plaintiff fails to identify any specific facts or
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portions of the statute to show a violation on the part of Defendants, this cause of action must be
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dismissed.
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E.
Injunctive Relief
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Plaintiff’s fifth cause of action is not recognized as a cause of action in Nevada.
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Injunctive relief is a remedy, not a claim. Accordingly, this “cause of action” is dismissed.
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IV.
LEAVE TO AMEND
Because the Court cannot find that amendment would be futile, the Court grants leave to
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amend the complaint if the Plaintiff can remedy his complaint consistent with the deficiencies
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identified by this Order. Failure to file an amended complaint by April 4, 2013, shall result in
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dismissal of this action with prejudice.
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V.
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CONCLUSION
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss Plaintiff’s Complaint
(#7) is GRANTED. Plaintiff’s Complaint is DISMISSED without prejudice. However, the
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Court grants leave to file an amended complaint if Plaintiff can amend his complaint consistent
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with the deficiencies identified in this Order. Failure to file an amended complaint by April 4,
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2013, shall result in dismissal of this action with prejudice.
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IT IS FURTHER ORDERED that Defendants’ Motion to Expunge Lis Pendens (#6) is
DENIED with leave to re-file.
IT IS FURTHER ORDERED that Defendants’ Motion for Hearing or Decision (#22) is
DENIED as moot in light of this Order.
DATED this 20th day of March, 2013.
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Gloria M. Navarro
United States District Judge
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