George v. Countrywide Bank, N.A. et al

Filing 22

ORDER Denying 7 Exhibit of Motion for Preliminary Injunction. Signed by Judge Gloria M. Navarro on 5/30/2012. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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JEFFREY J. GEORGE,

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Plaintiff,
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vs.
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COUNTRYWIDE BANK, N.A.;
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RECONTRUST COMPANY; MORTGAGE )
ELECTRONIC REGISTRATION SYSTEMS, )
INC; and U.S. BANK, NATIONAL
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ASSOCIATION, Trustee on behalf of MASTR )
Adjustable Rate Mortgages Trust 2007-3,
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Defendants.
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Case No.: 2:12-cv-00624-GMN-PAL
ORDER

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This is an action arising out of the foreclosure proceedings initiated against Plaintiff

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Jeffrey J. George’s property, filed against Defendants Countrywide Bank, N.A. (“Countrywide”),

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Mortgage Electronic Registration Systems, Inc. (“MERS”), ReconTrust Company (“ReconTrust”),

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and U.S. Bank, National Association, Trustee on behalf of MASTR Adjustable Rate Mortgages

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Trust 2007-3 (“U.S. Bank”) (collectively, “Defendants”).
Pending before the Court is Plaintiff’s Motion for Preliminary Injunction (ECF No. 7),

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which was originally filed in state court before this action was removed to this Court.

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Defendants filed a Response before this Court (ECF No. 5), and Plaintiff filed a Reply (ECF No.

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11).1
The Court heard the parties’ oral arguments on May 10, 2012, and orally denied the

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motion. This Order memorializes the Court’s denial of the motion.

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At the May 20, 2012, hearing, Plaintiff explained that although the Reply (ECF No. 11) and the Complaint (ECF
No. 1-1) both refer to a motion for temporary restraining order, there is no such motion pending before the Court.
Instead, Plaintiff explained, a motion for temporary restraining order was filed and denied in the state court before
the action was removed.

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I.

BACKGROUND
In the Complaint, Plaintiff alleges four causes of action against Defendants. The causes of

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action do not have headings indicating the legal basis for the claim, nor do they clearly

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distinguish between Defendants against whom the claims are alleged, but they appear to be:

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(1) violations of NRS Ch. 107 et seq., Nevada’s foreclosure statute; (2) violations of NRS Ch.

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598, et seq., Nevada’s Deceptive Trade Practices Act; (3) intentional interference with

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contractual relationship; and (4) slander of title. Plaintiff requests injunctive relief and

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declaratory relief.

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Attached to the Complaint as Exhibits 1-7, Plaintiff submits what appears to be an

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illegible copy of the Note, a copy of the Deed of Trust, the Notice of Default, Substitution of

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Trustee, Assignment, Notice of Trustee’s Sale, and another Assignment. (Exs. 1-7 to Pl.’s

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Compl., ECF No. 1-1.)

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The Deed of Trust names ReconTrust as Trustee, Countrywide as Lender, and MERS as

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the beneficiary/nominee on behalf of the Lender, Countrywide. (Ex. 2 to Pl.’s Compl.) The

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Notice of Default was recorded by ReconTrust “as agent for the Beneficiary” on July 31, 2008.

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(Ex. 3 to Pl.’s Compl.) The Notice of Default states the basis as Plaintiff’s “failure to pay the

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installment of principal and interest which became due on 3/01/2008.” (Ex. 3 to Pl.’s Compl.)

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The Substitution of Trustee recorded August 5, 2008, purports to substitute ReconTrust as

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Trustee, although ReconTrust was the original named Trustee in the Deed of Trust. (Ex. 4 to Pl.’s

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Compl.) The Notice of Trustee’s Sale was recorded December 30, 2010, setting a sale date of

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January 18, 2011. (Ex. 6 to Pl.’s Compl.)

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Plaintiff’s Complaint alleges that a Trustee’s Sale was scheduled for April 23, 2012, but

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no documentation of this Trustee’s Sale was submitted to the Court. At the May 10, 2012,

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hearing, the parties agreed that the Trustee’s Sale did not take place on April 23, 2012, and may

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be rescheduled.

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On June 30, 2010, and again on January 20, 2011, MERS assigned the beneficial interest

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under the Deed of Trust to U.S. Bank. (Exs. 5, 7 to Pl.’s Compl.) These Assignments were

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recorded on July 20, 2010, and January 24, 2011, respectively. (Exs. 5, 7 to Pl.’s Compl.)

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II.

LEGAL STANDARD

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“A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on

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the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the

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balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v.

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Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Furthermore, “‘serious questions going to

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the merits’ and a balance of hardships that tips sharply towards the plaintiff can support issuance

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of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of

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irreparable injury and that the injunction is in the public interest.” Alliance for the Wild Rockies

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v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

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III.

DISCUSSION

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The basis for each of Plaintiff’s four causes of action appears to be the foreclosure

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proceedings and documentation. Accordingly, if the foreclosure proceedings and documentation

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are found to be in order, and no violations are found, all four of Plaintiff’s claims will fail.

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First Cause of Action

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In Plaintiff’s first cause of action, Plaintiff alleges that Defendants violated NRS

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107.085(3)(b), which is contained within NRS 107.085, providing for “[r]estrictions on trustee’s

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power of sale concerning certain trust agreements.” Plaintiff states that this statute “requires that

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a copy of the promissory note be attached to the Notice of Trustee’s Sale served upon the person

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who hold [sic] the title of record,” which is partially correct, but incomplete. The requirements

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of NRS 107.085, which was enacted in 2003, only apply to “a transfer in trust of an estate in real

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property,” and Plaintiff does not allege that this action is in regard to a transfer in trust, either in

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the briefs or at oral argument. Accordingly, and because the foreclosure documents appear to

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satisfy the remaining applicable requirements of NRS 107, Plaintiff has presented no basis for the

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Court to find that a violation of NRS 107 has occurred.2 Therefore the Court cannot find that

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Plaintiff is likely to succeed on this cause of action.

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Second Cause of Action

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In Plaintiff’s second cause of action, Plaintiff alleges that “Defendants engaged in

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deceptive acts or practices by preparing and executing the false and ineffectual Assignment and

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other mortgage documents . . . in which Defendant’s employees misrepresented that they had

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signed the document in the presence of a notary public under oath when they had not done so,”

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and that that Defendants “caus[ed] the Notice of Default to be recorded when Defendants were

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not authorized to do so by the Note Holder.”
Plaintiff, however, alleges no facts to support this claim. At the May 10, 2012, hearing,

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Plaintiff argued that discovery was necessary to determine the facts for this claim, and argued

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that the experiences of Plaintiff’s counsel in other cases provided a basis for this claim. The

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Court does not find this argument persuasive, nor sufficient to establish the plausibility of the

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claims alleged in the instant case.

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At the May 10, 2012, hearing, the Court reminded Plaintiff’s counsel of the requirements of Federal Rule of Civil
Procedure 11, and particularly Rule 11(b):
(b) Representations to the Court. By presenting to the court a pleading, written motion, or other
paper – whether by signing, filing, submitting, or later advocating it – an attorney or unrepresented
party certifies that to the best of the person’s knowledge, information, and belief, formed after an
inquiry reasonable under the circumstances:
(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary
delay, or needlessly increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are warranted by existing law or by a
nonfrivolous argument for extending, modifying, or reversing existing law or for
establishing new law;
(3) the factual contentions have evidentiary support or, if specifically so identified, will likely
have evidentiary support after a reasonable opportunity for further investigation or discovery;
and
(4) the denials of factual contentions are warranted on the evidence or, if specifically so
identified, are reasonably based on belief or a lack of information.
Fed. R. Civ. P. 11(b) (emphasis added).

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Plaintiff also alleges that the execution of these mortgage documents breached

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Defendants’ obligations under NRS 598, including 598.0915(5), which prohibits “[k]nowingly

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mak[ing] a false representation as to the characteristics, ingredients, uses, benefits, alterations or

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quantities of goods for service of sales,” 598.0915(15), which prohibits “[k]nowingly mak[ing]

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any other false representation in a transaction,” and 598.092(8), which prohibits “[k]nowingly

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misrepresent[ing] the legal rights, obligations or remedies of a party to a transaction” in the

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course of his or her business or occupation.
Here also, Plaintiff has presented no factual allegations to support this claim. Moreover,

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courts in this District have recognized that Nevada’s Deceptive Trade Practices Act does not

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apply to real property transactions, but to the sale of goods and services, and Plaintiff does not

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cite any case law to the contrary. See Reyna v. Wells Fargo Bank, N.A., No. 2:10-cv-01730-KJD-

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RJJ, 2011 WL 2690087, *9 (D. Nev. July 11, 2011) (“N.R.S. § 598 . . . applies only to goods and

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services and not to real estate loan transactions.”); see also Alexander v. Aurora Loan Services,

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No. 2:09-cv-1790-KJD-LRL, 2010 WL 2773796, *2 (D. Nev. July 8, 2010) (“Plaintiff’s claim

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deals with the sale or lease of real property, not goods or services; therefore [N.R.S. § 598] does

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not provide an avenue of relief to [p]laintiff.”); Parker v. Greenpoint Mortgage Funding, No.

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3:11-cv-00039-ECR-RAM, 2011 WL 2923949, (D. Nev. July 15, 2011) (N.R .S. § 598 “does not

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cover a mortgage foreclosure”).
Therefore, for the reasons stated above, the Court cannot find that Plaintiff is likely to

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succeed on this cause of action.

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Third Cause of Action

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In Plaintiff’s third cause of action, Plaintiff alleges that Defendants ReconTrust and U.S.

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Bank “committed intentional acts intended to or designed to disrupt Plaintiff’s contractual

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relationship with [Countrywide]” when MERS purported to transfer or assign the interest in the

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Note.

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In Nevada, intentional interference with contractual relations requires a plaintiff to

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establish five elements: “(1) a valid and existing contract; (2) the defendant’s knowledge of the

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contract; (3) intentional acts intended or designed to disrupt the contractual relationship;

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(4) actual disruption of the contract; and (5) resulting damage.” J.J. Indus., LLC v. Bennett, 71

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P.3d 1264, 1267 (Nev. 2003).

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Plaintiff appears to allege that the contract at issue here is the loan Note, and that the

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parties to the contract are Plaintiff and Defendant Countrywide. It is not clear in what way

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Plaintiff is alleging that Defendants ReconTrust and U.S. Bank interfered, since Defendants all

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contend that these Defendants acted as agents of Countrywide, and the documents submitted to

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the Court appear to demonstrate this. Plaintiff has not alleged any facts contradicting this.

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Furthermore, since the Court finds that Plaintiff has not made a sufficient showing that the

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foreclosure proceedings and documents were likely improper, the Court cannot find that Plaintiff

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is likely to show that there was any actual disruption of the contract, much less intentional acts

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designed to do so. Accordingly, the Court cannot find that Plaintiff is likely to succeed on this

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cause of action.

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Fourth Cause of Action

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In Plaintiff’s fourth cause of action, Plaintiff alleges that Defendants ReconTrust and

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MERS disparaged Plaintiff’s title to his home by issuing the Notice of Default on July 31, 2008,

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without authority. Plaintiff alleges that this constitutes a false and malicious communication, and

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that ReconTrust knew or acted in reckless disregard of the truth or falsity of the statements in the

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Notice of Default.

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Plaintiff also alleges that the Notice of Default “is statutorily defective because it does

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describe Plaintiff’s alleged failure in performance.” Even if Plaintiff intended to allege that the

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Notice of Default is “statutorily defective because it does NOT describe Plaintiff’s alleged

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failure. . .” the Court cannot find that Plaintiff is likely to succeed on this claim, since the Notice

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of Default states the basis as Plaintiff’s “failure to pay the installment of principal and interest

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which became due on 3/01/2008.” (See Ex. 3 to Pl.’s Compl.) At the May 10, 2012, hearing,

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Plaintiff did not deny that this was a correct statement or that Plaintiff has failed to make

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payments since March 2008.
Finally, Plaintiff alleges that ReconTrust and MERS knew that they did not have any

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grounds to believe that Plaintiff owed them any money on the Note, that ReconTrust and MERS

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do not know who the actual investors on the Note and Deed of Trust are, and that they do not

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know how much is owed or how much has been discharged on the Note.
In Nevada, “[t]he requisites to an action for slander of title are that the words spoken be

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false, that they be maliciously spoken and that the plaintiff sustain some special damage as a

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direct and natural result of their having been spoken.” Rowland v. Lepire, 662 P.2d 1332, 1335

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(Nev. 1983).
The Court does not find that Plaintiff is likely to succeed on this claim because Plaintiff

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has not made a sufficient showing that any of the statements in the foreclosure documents are

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false, much less maliciously spoken.

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IV.

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CONCLUSION
Here, Plaintiff’s motion fails in that he cannot show that he is likely to succeed on the

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merits, nor has he shown that there are serious questions going to the merits. The foreclosure

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proceedings appear to have been conducted properly according to statute, and Plaintiff alleges no

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facts supporting any of his conclusory allegations of deceptive acts or practices or acts intended

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to disrupt a contractual relationship.

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Although losing one’s home and property is a serious hardship representing irreparable

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harm, enjoining Defendants from exercising any rights they may have relating to the property

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would also represent a hardship, and Plaintiff does not show that the balance of hardships is on

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his side. Finally, the Court does not find that an injunction in this case is in the public interest.

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Accordingly,

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IT IS HEREBY ORDERED that the Motion for Preliminary Injunction (ECF No. 7) is

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DENIED.
DATED this 30th day of May, 2012.

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______________________________
Gloria M. Navarro
United States District Judge

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