Mendez v. Fiesta Del Norte Home Owners Association et al

Filing 210

ORDERED that the Motions for Attorney's Fees (ECF Nos. 200 , 201 ) are DENIED. Signed by Judge Robert C. Jones on 5/17/2018. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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IRMA MENDEZ,
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Plaintiff,
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vs.
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FIESTA DEL NORTE HOME OWNERS
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ASSOCIATION et al.,
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Defendants.
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2:15-cv-00314-RCJ-NJK
ORDER

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This case arises out of a homeowners’ association foreclosure sale. Pending before the

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Court are two motions for attorney’s fees.

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I.

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FACTS AND PROCEDURAL HISTORY
Plaintiff Irma Mendez, a California resident, purchased an investment property in North

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Las Vegas, Nevada (“the Property”) for $315,000, giving the lender a promissory note for

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$252,792 and an attendant deed of trust (“the DOT”) against the Property. Alessi & Koenig,

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LLC (“A&K”), on behalf of Fiesta Del Notre Homeowners Association (“the HOA”), sold the

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Property to Absolute Business Solutions, Inc. (“ABS”) under Nevada Revised Statutes (“NRS”)

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Chapter 116.

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Plaintiff sued A&K, the HOA, Complete Association Management Co., LLC
(“CAMCO”), ABS, and Amir Hujjuttallah in diversity in this Court in pro se on eight causes of

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action: (1) wrongful foreclosure; (2) violations of constitutional rights; (3) Nevada Unfair Trade

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Practices Act (“NUTPA”); (4) Fair Debt Collection Practices Act (“FDCPA”); (5) Fraud; (6)

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Unjust Enrichment; (7) Racketeering; and (8) Breach of Contract and Fiduciary Duties.

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CAMCO moved to dismiss for failure to state a claim, and the HOA and A&K joined the

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motion. ABS and Hujjuttallah separately moved to dismiss under Brillhart v. Excess Insurance

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Co., 316 U.S. 491 (1942), and the HOA joined the motion. The Court denied the second motion

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but granted the first motion in part, with leave to amend in part. Specifically, the Court

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dismissed the claims for unjust enrichment, racketeering, breach of fiduciary duty, and the claims

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under NRS sections 598.0915(1) and (15), 42 U.S.C. § 1983, and 15 U.S.C. §§ 1692f(6),

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1692g(c), 1692i(b), and 1692k, without leave to amend. The Court dismissed the claim for fraud

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and the claims under 15 U.S.C. §§ 1692d, 1692e, and 1692j(a), with leave to amend. The Court

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refused to dismiss the claims for wrongful foreclosure and breach of contract and the claims

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under NRS section 598A.060(1)(12) and 15 U.S.C. § 1692f(1).

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Plaintiff filed the First Amended Complaint (“FAC”), listing five causes of action: (1)

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wrongful foreclosure; (2) NUTPA; (3) FDCPA; (4) Fraud; and (5) Breach of Contract. CAMCO

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filed two motions to dismiss the FAC, and the HOA joined the first motion. A&K filed a

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separate motion to dismiss, which the HOA joined. The Court denied the motions as against the

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wrongful foreclosure claim, based on Plaintiff’s allegations that Defendants wrongfully rejected

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her attempt to redeem the default before the foreclosure sale. The Court denied the motions as

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against the claim of bid rigging under NRS section 598A.060(1)(a)(12), based on Plaintiff’s

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allegation that the foreclosure sale occurred in the private offices of the auctioneer for

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approximately 10% of the Property’s fair market value. Plaintiff also alleged violations of 15

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U.S.C. §§ 1692d, 1692f, and 1692g. The Court dismissed the claims under §§ 1692d and 1692g

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and dismissed the § 1692f claim as against CAMCO but not as against the HOA or A&K. The

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Court dismissed the fraud claim. Finally, the Court permitted the breach of contract claim to

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proceed as against the HOA, based on Plaintiff’s allegations that the HOA failed to obtain the

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consent of two thirds of unit owners in the HOA before pursuing foreclosure as required by the

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Covenants, Conditions and Restrictions (“the CC&R”).
The Court granted a motion to amend the FAC in part, and Plaintiff filed the Second

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Amended Complaint (“SAC”), listing four causes of action: (1) wrongful foreclosure (the HOA,

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CAMCO, A&K, Absolute Collection Services, LLC (“ACS”)); (2) NUTPA bid rigging (A&K,

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Kendrall Williams, ABS, Hujjutallah); (3) FDCPA § 1692f (the HOA, A&K); and (4) Breach of

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Contract (the HOA). Plaintiff moved for offensive summary judgment on the FDCPA claim, and

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the HOA moved for defensive summary judgment against that claim. Three groups of

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Defendants and “indispensable parties” (as named in the SAC) separately moved to dismiss. The

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Court dismissed Williams, the Jimijack Irrevocable Trust, Joel and Sandra Stokes, and ACS from

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the action and granted summary judgment to the HOA against the FDCPA claim.

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At that point, the remaining claims were: (1) wrongful foreclosure (the HOA, CAMCO,

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A&K); (2) NUTPA bid rigging (A&K, ABS, Hujjutallah); (3) FDCPA § 1692f (A&K); and (4)

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Breach of Contract (the HOA). A&K filed for bankruptcy protection. The HOA and CAMCO

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moved for defensive summary judgment against the wrongful foreclosure and breach of contract

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claims. Plaintiff filed a countermotion for offensive summary judgment. The Court granted

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Defendants’ motion and denied Plaintiff’s, noting that the bid rigging claim under NRS section

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598A.060(1)(a)(12) against ABS and Hujjutallah, as well as the stayed claims against A&K

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remained for trial. The HOA and CAMCO have now separately moved for attorney’s fees.

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II.

DISCUSSION
Movants appear to base their entitlement to fee shifting on 28 U.S.C. § 1927. The only

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controlling authority they have cited is Ry. Express, Inc. v. Piper, 447 U.S. 752 (1980), which

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concerned costs for vexatious multiplication of proceedings under § 1927 and discovery

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sanctions under Rule 37. Section 1927 applies to pro se litigants. Wages v. IRS, 915 F.2d 1230,

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1235–36 (9th Cir. 1990).
The Court permitted some claims to proceed to summary judgment against Movants.

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And the wrongful foreclosure claim against Movants may have survived summary judgment if

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Plaintiff had managed to marshal some evidence to support it. In opposition to summary

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judgment, Plaintiff adduced deposition excerpts that she claimed indicated she mailed payments

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to CAMCO within a time frame such that her account should not have been sent to collections

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but that CAMCO (as the HOA’s agent) rejected the payments. (See Opp’n 4–5, ECF No. 188;

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Dep. 84–85, ECF No. 188-1, at 11; Dep. 35–37, ECF No. 188-1, at 13). If admissible, that

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evidence might have shown a wrongful rejection of tender, but the Court could not consider the

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unauthenticated evidence. See Orr v. Bank of Am., NT & SA, 285 F.3d 764, 774 (9th Cir. 2002).

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Under these circumstances, the Court cannot say the claims against Movants were

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altogether frivolous so as to support fee shifting under § 1927. Nor were the claims vexatious.

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Movants note there are three cases pending in this Court related to the Property. But Plaintiff

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brought only two of the three cases. She is a defendant in the third case. Moreover, Movants are

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only Defendants in the present, first-filed case and cannot claim to be the victims of vexatious

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litigation by Plaintiff where Plaintiff has only filed claims against them in one action and where

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at least one of those claims nearly survived summary judgment.

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CONCLUSION

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IT IS HEREBY ORDERED that the Motions for Attorney’s Fees (ECF Nos. 200, 201)
are DENIED.

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IT IS SO ORDERED.

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17th day of May, 2018.
Dated this 4th day of April, 2018.

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_____________________________________
ROBERT C. JONES
United States District Judge

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