Holmes v. Countrywide Home Loans et al

Filing 32

ORDER that 5 Motion to Dismiss is GRANTED. FURTHER ORDERED that 9 Motion to Dismiss, construed as a motion to remand, is DENIED. FURTHER ORDERED that 20 Motion to Dismiss, construed as a motion to remand, is DENIED. FURTHER ORDERED that plaitiff's complaint be dismissed without prejudice. The Clerk shallenter judgment and close the case. Signed by Judge James C. Mahan on 4/25/13. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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SHARON HOLMES,

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2:12-CV-2013 JCM (CWH)

Plaintiff(s),
v.
COUNTRYWIDE HOME LOANS, et
al.,

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Defendant(s).

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ORDER

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Presently before the court is a motion to dismiss filed by the following defendants: (1) Bank

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of America Home Loan Servicing, LP; (2) Bank of America, N.A.; (3) Countrywide Home Loans;

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(4) Mortgage Electronic Registration Systems; and, (5) ReconTrust Co., N.A. (Doc. # 5). Plaintiff

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did not file a response in opposition, and defendants filed a non-opposition. (Doc. # 19).

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Instead of filing a response to defendants’ motion to dismiss, pro se plaintiff filed her own

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motion to dismiss. (Doc. # 9). This motion is actually a motion to remand to state court and the

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court has construed it as such. Defendants filed responses in opposition (docs. ## 16 & 17).

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Plaintiff elected not to file a reply.

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Pro se plaintiff filed a second motion to dismiss that is really a motion to remand to state

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court. (Doc. # 20). Defendants filed a response in opposition (doc. # 24), and plaintiff has not filed

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a reply.

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James C. Mahan
U.S. District Judge

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I.

Background

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The subject property in this mortgage related lawsuit is located at 3709 El Cederal Avenue,

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Las Vegas, Nevada. The prior owner of the property was Jimmie L. Garrett. Garrett purchased the

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property through a grant, bargain, and sale deed for $115,000. The deed was recorded on September

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15, 2003.1

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Garrett borrowed $72,000 from Countrywide Home Loans, Inc., in order to purchase the

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property. This loan was secured by a first position deed of trust, which was also recorded on

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September 15, 2003. Garrett took out a junior mortgage from Nevada State Bank in 2005.

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Sometime thereafter, Garrett defaulted.

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A notice of default and election to sell was recorded on January 5, 2010. The senior deed

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of trust was assigned to BAC Home Loans Servicing, L.P. (frequently known as Countrywide Home

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Loans Servicing, L.P.). The assignment was recorded on February 2, 2010. ReconTrust was

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substituted as trustee. The substitution was recorded on February 2, 2010. The notice of default was

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rescinded. The rescission was recorded on February 23, 2010.

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The foreclosure process was then restarted. A second notice of default was recorded on

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August 4, 2010. Attorney in fact for Garrett, Steven Kooser, agreed to transfer the property to

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plaintiff. A quit claim deed memorializing the transfer to plaintiff was recorded on September 28,

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2010.

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A certificate of compliance with the foreclosure mediation program was recorded on

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November 16, 2010. A notice of trustee’s sale was recorded on November 16, 2010. The notice of

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default was rescinded a second time. This rescission was recorded on January 4, 2011.

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James C. Mahan
U.S. District Judge

The court judicially recognizes all of the following properly recorded documents: the grant,
bargain, and sale deed; the first position deed of trust; the junior deed of trust; notices of default and
election to sell; assignments of the deed of trust; substitution of trustees; rescissions; certificate of
compliance with the foreclosure mediation program; transfer of property; quit claim deed; and,
notice of trustee’s sale. See Intri-Plex Technology, Inc. v. Crest Group, Inc., 499 F.3d 1048, 1052
(9th Cir. 2007) (“A court may take judicial notice of matters of public record without converting a
motion to dismiss into a motion for summary judgment as long as the facts are not subject to
reasonable dispute.”).
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The senior deed of trust was assigned to Bank of America and was recorded on September

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15, 2011.

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A.

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Plaintiff filed a wrongful foreclosure suit in the Eighth Judicial District Court on November

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18, 2010. The complaint in that action alleged three causes of action. The first cause of action was

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essentially for wrongful foreclosure. The second cause of action actually requested relief only–that

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the senior mortgage be declared as paid in full. The third cause of action also requested relief

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only–$10,000 in damages.

Prior Action by Plaintiff

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Plaintiff obtained an ex parte preliminary injunction on November 18, 2010. Pursuant to the

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injunction order, the state court prohibited Bank of America and ReconTrust from foreclosing on the

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property. The same order also required plaintiff to make the monthly mortgage payments on the

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senior mortgage and deposit the payments into an attorney’s trust account.

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Defendants in the prior action removed the case to federal court on December 20, 2010. See

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Holmes et al v. BAC Home Loans Servicing, L.P., et al, case number 2:10-cv-2210-RCJ-GWF. The

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parties then stipulated to dismiss the action with prejudice.

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II.

Remand

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Plaintiff has filed two motions to dismiss. These motions are actually an attempt to remand

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the case back to state court. Plaintiff argues that the amount in controversy does not meet the

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$75,000 threshold. The outstanding amount on the loan is $69,970.

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Federal district courts have original jurisdiction of all civil actions where (1) the matter in

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controversy exceeds the sum or value of $75,000 and (2) the parties are citizens of different states.

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28 U.S.C. § 1332(a). The removal statutes are construed restrictively, and doubts regarding the

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viability of removal are resolved in favor of remanding the case to state court. Shamrock Oil & Gas

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Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th

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Cir. 1992).

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There is complete diversity in this case. Plaintiff is a citizen of Arizona. (Compl. at p. 6).

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None of the institutional defendant are incorporated or have their principal place of business in

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James C. Mahan
U.S. District Judge

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Arizona. There is complete diversity between the parties. In the complaint, plaintiff alleges that the

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property is valued at $77,863. (See Doc. # 1, Ex. A, compl. at p. 11). This meets the minimum

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amount in controversy requirement. See Cohn v. Petsmart, 281 F.3d 837, 840 (9th Cir. 2002) (“[I]t

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is well established that the amount in controversy is measured by the value of the object of the

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litigation.”).

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Additionally, this court has federal question jurisdiction pursuant to 28 U.S.C. § 1331.

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Plaintiff has alleged violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C.

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§ 2605 et seq. This court has jurisdiction over the action and remand would be improper.

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III.

Motion to Dismiss

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Plaintiff’s complaint does not explicitly enumerate the causes of action. It appears the

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complaint alleges all of the following causes of action: (1) violations of Nevada’s Unfair Lending

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Practices Act; (2) quiet title; (3) declaratory relief; and, (4) RESPA violations. The court will

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address each in turn. Ultimately, the court finds that plaintiff has failed to state a claim and the

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complaint is dismissed.2

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Defendants do not raise any collateral estoppel or res judicata defenses. Instead, defendants

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go to the merits of each of plaintiff’s causes of action. The court will also go straight to the merits.

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A.

Nevada’s Unfair Lending Practices Act

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Nevada’s Unfair Lending Practices Act (NULPA) prohibits lenders from engaging in certain

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activities in connection with the origination of loans. See NRS 598D.010, et seq. Under NULPA,

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certain actions by a lender during the origination of a loan are unfair lending practices. See id.; see

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also Berilo v. HSBC Mortg. Corp., no. 2:09-cv-02353, 2010 WL 2667218, at *3 (D. Nev. June 29,

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2010) (“[T]o state a valid claim for unfair lending practices, a plaintiff must allege that a defendant

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is a lender under the statutory definition and made the loan in question. A plain reading of NRS

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598D.100(1)(b) suggests that successors in interest to the loan originator (or a loan servicer) cannot

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incur liability for a violation because this statute applies only to circumstances surrounding the

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James C. Mahan
U.S. District Judge

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Additionally, plaintiff never filed a response to the defendants’ motion to dismiss. This
court could grant defendants’ motion pursuant to local rule 7-2(d).
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origination of a loan.”).

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This cause of action must fail for four reasons. First, defendants MERS, Bank of America,

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and ReconTrust did not make the loan at issue and cannot be subject to unfair lending practices.

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Second, plaintiff was not the borrower on the senior mortgage (she received a quit claim deed

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through Garrett). Third, this claim fails to defendant Countrywide because plaintiff has not alleged

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a single specific fact. Fourth, the statute of limitations is two years running from the date of the

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issuance of the loan. See Patterson v. Grimm, no. 2:10-cv-1292, 2010 WL 4395419, at *3) (noting

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two year statute of limitations for NULPA). This loan occurred in 2003 and is time barred.

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Plaintiff’s first cause of action for violations of NULPA does not state a claim and is
dismissed.

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B.

Quiet Title

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Plaintiff seeks to quiet title against all defendants. In Nevada, “[a]n action may be brought

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by any person against another who claims an estate or interest in real property, adverse to him, for

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the purpose of determining such adverse claim.” NRS 40.010. “A trustor cannot quiet title without

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discharging his debt. The cloud upon his title persists until the debt is paid.” Lopez v. Bank of

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America, N.A., no. 2:12-cv-801-JCM, 2013 WL 1501449, at *3 (D. Nev. April 10, 2013). “The

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purpose of a quiet title action is to establish one’s title against adverse claims to real property or any

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interest therein.” Id. “In a quiet title action, the burden of proof rests with the plaintiff to provide

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good title in himself.” Id.

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Here, plaintiff took title to the property via quit claim deed. Plaintiff took the property

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subject to the first position deed of trust. A quiet title claim is proper only if there is a dispute

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between two or more parties over ownership of property. Plaintiff cannot assert a superior interest

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in the property since plaintiff took title via a quit claim deed subject to the senior deed of trust.

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Plaintiff does not state a claim for quiet title and the cause of action is dismissed.

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C.

Declaratory Relief

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Plaintiff seeks declaratory relief that the senior deed of trust was paid in full on September

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10, 2011. First, declaratory relief is a remedy and not a separate cause of action. See Freeto v. Litton

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James C. Mahan
U.S. District Judge

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Loan Serv., LP, no. 3:09-cv-754, 2011 WL 112183, at *3 (D. Nev. Jan. 12, 2011) (dismissing claims

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for declaratory relief and permanent injunction because those remedies may only “be afforded to a

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party after he has sufficiently established and proven his claims”). Plaintiff has not pled sufficient

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facts demonstrating the senior mortgage has been paid in full. In fact, in the prior action, plaintiff

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stipulated to reinstate the senior mortgage and to continue to make payments to Bank of America.

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Plaintiff fails to state a claim for declaratory relief.

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D.

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Loan servicers are obligated to respond to legitimate qualified written requests (“QWR”)

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under 12 U.S.C. § 2605(e)(1). However, a loan servicer has no obligation to respond to an improper

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QWR. To be proper, a QWR, must state, among other things, a reason why the borrower believes

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the “account is in error.” 12 U.S.C. § 2605(e)(1)(B).

RESPA

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Plaintiff’s complaint fails to state a claim because her QWR consisted only of a request of

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a certified copy of the senior mortgage. The QWR did not state why the account was in error.

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Additionally, a QWR, such as plaintiff’s in this case, is also improper because it is “more akin to a

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discovery demand than a qualified written request.” Moon v. Countrywide Home Loans, Inc., no.

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3:09-cv-00298, 2010 WL 522753, at *5 (D. Nev. Feb. 9, 2010).

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Plaintiff has failed to state a proper RESPA violation and the cause of action is dismissed.

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Accordingly,

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

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dismiss (doc. # 5) be, and the same hereby, is GRANTED.

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IT IS FURTHER ORDERED that plaintiff’ motion to dismiss, construed as a motion to
remand (doc. # 9) be, and the same hereby, is DENIED.

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IT IS FURTHER ORDERED that plaintiff’ motion to dismiss, construed as a motion to

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remand (doc. # 20) be, and the same hereby, is DENIED.

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James C. Mahan
U.S. District Judge

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IT IS FURTHER ORDERED that plaintiff’s complaint be dismissed without prejudice. The
clerk of the court shall enter judgment and close the case.
DATED April 25, 2013.

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

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