Gibilterra v. Aurora Loan Services LLC et al

Filing 16

ORDER that plaintiffs motion to remand 9 is DENIED. Plaintiffs motion for a temporary restraining order 13 is DENIED. Signed by Judge James C. Mahan on 5/18/12. (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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JOSEPH A. GIBILTERRA,

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2:12-CV-685 JCM (VCF)

Plaintiff,
v.
AURORA LOAN SERVICES, LLC, et
al.,
Defendants.

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ORDER

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Presently before the court is plaintiff Joseph A. Gibilterra’s motion to remand. (Doc. #9).

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Defendant Quality Loan Servicing Corporation (“Quality”) has filed an opposition (doc. #10), to

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which Mr. Gibilterra has replied (doc. #9).

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Also before the court is Mr. Gibilterra’s motion for a temporary restraining order. (Doc.
#13). Quality has filed an opposition. (Doc. #15).

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The property at issue in this case is located at 4520 Vicki Avenue, Las Vegas, Nevada 89139.

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Doc. #1-1, Compl. at ¶ 1. Plaintiff purchased the property by executing a promissory note on March

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3, 2004. Id. at ¶ 8. On March 9, 2007, plaintiff refinanced the loan in the principal amount of

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$800,000, executing a deed of trust in connection with the loan. Id. at ¶¶ 10-11; Doc. #1-1, Ex. 1.

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Quality recorded a notice of default and election to sell on February 18, 2009. Compl. at ¶ 12; Doc.

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#1-1, Ex. 2. Quality recorded a notice of trustee’s sale on May 21, 2009. Compl. at ¶ 13. The

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property has not yet been sold. Quality removed this case to federal court on April 25, 2012. (Doc.

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James C. Mahan
U.S. District Judge

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#1).

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Motion to Remand

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The motion to remand asserts that this court should remand the case to state court because:

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(1) the parties should be realigned such that Quality is the plaintiff for purposes of removal, and (2)

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the $75,000 amount in controversy jurisdictional requirement has not been met.

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Plaintiffs first argue that the court should realign the parties such that Quality is the plaintiff

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for purposes of removal. Pursuant to 28 U.S.C. § 1441(a), only defendants have the right to remove

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a case from state court to federal court. Thus, if the court realigns the parties, as the plaintiff Quality

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would not have the right to remove the case.

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In support of their assertion that the court should realign the parties, plaintiffs cite several

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cases, including two United States Supreme Court cases: Chicago, R.I & P.R. Co. v. Stude, 346 U.S.

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574 (1954) and Mason City & Ft. D.R. Co. v. Boynton, 204 U.S. 570 (1907). The court realigned

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the parties in those cases because the relevant state law classified the parties in a manner contrary

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to federal law; the court held that federal law determines the identities of the plaintiff and defendant

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for removal purposes. See Stude, 346 U.S. at 580.

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The cases are inapposite. Here, plaintiffs instituted the case in state court. The complaint

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asks the court to enjoin any foreclosure and award damages and punitive damages. Thus, plaintiffs

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have acted as plaintiffs throughout the course of this case. It would be inappropriate to realign the

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parties, and the court declines to do so.

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Second, plaintiffs argue that the $75,000 amount in controversy requirement has not been

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met. Specifically, plaintiffs note that the complaint only seeks recovery in excess of $10,000.

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Further, plaintiffs argue that the injunctive relief claims do “not amount to a monetary award.”

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“In actions seeking declaratory or injunctive relief, it is well established that the amount in

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controversy is measured by the value of the object of the litigation.” Cohn v. Petsmart, Inc., 281

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F.3d 837, 841 (9th Cir. 2002). In this case, the loan at issue is for $800,000. Therefore, the amount

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in controversy requirement is met. Accordingly, the court declines to remand this case to state court.

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James C. Mahan
U.S. District Judge

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Motion for Temporary Restraining Order

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According to Federal Rule of Civil Procedure 65, a court may issue a temporary restraining

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order when the moving party provides specific facts showing that immediate and irreparable injury,

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loss, or damage will result before the adverse party’s opposition to a motion for preliminary

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injunction can be heard. The Supreme Court has stated that courts must consider the following

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factors in determining whether to issue a temporary restraining order and preliminary injunction:

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(1) a likelihood of success on the merits; (2) likelihood of irreparable injury if preliminary relief is

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not granted; (3) balance of hardships; and (4) advancement of the public interest. Winter v.

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N.R.D.C., 129 S. Ct. 365, 374–76 (2008).

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Mr. Gibilterra argues that he is likely to succeed in his lawsuit because MERS, as a mere

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nominee under the deed of trust, lacked the authority to assign the deed to Aurora. Further, Mr.

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Gibilterra argues that because the defendants failed to strictly comply with the notice requirements

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of NRS § 107, he is likely to prevail in this suit.

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The court does not agree. First, Mr. Gibilterra’s attack on MERS and the MERS system is

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without merit. Relying on Leyva v. Nat’l Default Servicing Corp., 255 P.3d 1275 (Nev. 2011), Mr.

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Gibilterra argues that the nominal defendants must provide a signed writing from the original lender

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demonstrating a transfer of interest. Mr. Gibilterra does not, however, explain why the reasoning

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of the Leyva court is applicable to the facts of the instant case. In Leyva the court was not

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considering the requirements of non-judicial foreclosure, but instead determining the requirements

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of Nevada’s foreclosure mediation program. Moreover, the Ninth Circuit has approved of the MERS

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system of assignments. See Cervantes v. Countrywide Home Loans, Inc., – F.3d –, 2011 WL

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3911031 (9th Cir. Sept. 7, 2011).

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Furthermore, the version of § 107 in effect at the time the foreclosure at issue began, did not

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require strict compliance, as Mr. Gibilterra contends, but only substantial compliance. Thus, where

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there are immaterial or de minimis irregularities with the notice requirements of § 107, and a lack

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of prejudice to a borrower in default other than the loss of the property, courts will uphold the

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foreclosure. See, Matter of Stanfield, 6 B.R. 265 (Bankr. Ct. D. Nev. 1980); and see, Knapp v.

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James C. Mahan
U.S. District Judge

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Doherty 20 Cal. Rptr.3d 1, 13-19, 2004 W.L. 209, 2002 (2004); FPCI Re-Hab 01 v. E & G

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Investments, Ltd., 207 Cal. App.3d 1018, 1022 (1989).

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As to Mr. Gibilterra’s argument that MERS was required to provide the original promissory

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note, this court has already held, on several occasions, that there is no such requirement. See Byrd

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v. Meridian Foreclosure Service, 2011 WL 1362135, *2 (D. Nev. April 8, 2011) (“The ever-

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expanding body of case law within this district holds that the Nevada law governing non judicial

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foreclosure, NEV. REV. STAT. § 107.080, does not require a lender to produce the original note as

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a prerequisite to nonjudicial foreclosure proceedings.”); see also Kemberling v. Ocwen Loan

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Servicing, LLC, 2009 WL 5039495, *3 (D. Nev. Dec. 15, 2009) (“Defendants are not required to

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produce the original loan documents. Courts across the country have rejected claims by plaintiffs

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asserting a duty by the lender to provide the original note under the U.C.C. to prove its holder in due

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course status.”); Aguilar v. WMC Mortg. Corp., 2010 WL 185951, at *2 (D. Nev. Jan. 15, 2010)

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(“Nevada’s foreclosure statute is comprehensive and does not require production of the original

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note.”).

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Mr. Gibilterra’s final argument, that MERS was not entitled to record the notice is similarly

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without merit. “Nothing prevents an authorized agent from recording a notice of default. Nor does

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Nevada law require a substitution of trustee be recorded prior to a notice of default.” Berilo v. HSBC

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Mortg. Corp., USA, 09-0253, 2010 WL 2667218, *4 (D. Nev. June 29, 2010).

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion to

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remand (doc. #9) be, and the same hereby is, DENIED.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiff’s motion for a
temporary restraining order (doc. #13) be, and the same hereby is, DENIED.
DATED May 18, 2012.

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

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