My Home Now, LLC v. JPMorgan Chase Bank, N.A. et al

Filing 58

ORDER denying 37 Motion for Summary Judgment.; granting 8 Motion to Dismiss.; denying 29 Motion for Summary Judgment.; Amended Complaint deadline: 2/27/2017. Plaintiff's quiet title claim against Defendant is dismissed with prejudice . Plaintiff's slander of title and breach of contract claims against Defendant are dismissed without prejudice with leave to amend. Signed by Chief Judge Gloria M. Navarro on 2/15/2017. (Copies have been distributed pursuant to the NEF - JM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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MY HOME NOW, LLC, a Nevada Limited
Liability Company,

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Plaintiff,
vs.

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JP MORGAN CHASE BANK, N.A. a
National Banking Corporation; U.S. BANK
TRUST, N.A. AS TRUSTEE FOR LSF9
MASTER PARTICIPATION TRUST, a
National Banking Corporation; CALIBER
HOME LOANS, a South Carolina
Corporation,
Defendants.

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Case No.: 2:16-cv-00727-GMN-NJK
ORDER

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Pending before the Court is the Motion to Dismiss, (ECF No. 8), filed by Defendant JP

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Morgan Chase Bank, N.A. (“Defendant”). Plaintiff My Home Now, LLC (“Plaintiff”) filed a

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Response, (ECF No. 9), and Defendant filed a Reply, (ECF No. 13). For the reasons discussed

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below, Defendant’s Motion to Dismiss is GRANTED.

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I.

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BACKGROUND
This case arises out of the parties’ disputed ownership of real property located at 7555

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Glowing Ember Court, Unit 101, Las Vegas, Nevada, 89130 (the “Property”). (Ex. A to Mot. to

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Dismiss (First Am. Compl. (“FAC”)) ¶ 1, ECF No. 8-1). Plaintiff alleges that Defendant

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“claims an interest in the Property via a deed of trust securing a loan . . . on September 18, 2008

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. . . with the Clark County Recorder, State of Nevada.” (Id. ¶ 3). Plaintiff acquired the

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Property on June 18, 2014. (Id. ¶ 14).

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In October 2014, Plaintiff filed a separate quiet title suit against Defendant in this Court

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for Defendant’s interest in the Property. (Id. ¶ 5); (see My Home Now, LLC v. JP Morgan

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Chase Bank N.A., et al, 2:14-cv-01958-APG-NJK) (hereinafter the “Prior Action”). In

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February 2015, Defendant notified Plaintiff that it “had no interest in the Property and that the

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title had been reassigned to another entity along with beneficial interest therein.” (FAC ¶ 8).

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Pursuant to this exchange, Defendant filed a Disclaimer of Interest (the “Disclaimer”) in

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February 2015, disclaiming any legal or equitable interest in the Property. (Id. ¶ 9). Because

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Defendant filed the Disclaimer, Plaintiff stipulated to dismiss its claims against Defendant in

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the Prior Action. (Id. ¶ 19).

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Subsequently, Plaintiff later learned that Defendant assigned its interest to the Secretary

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of Housing and Urban Development (“HUD”) on July 31, 2015, and then HUD assigned its

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interest to U.S. Bank on August 31, 2015. (Id. ¶ 20). Both assignments were recorded on

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September 23, 2015. (Id.). Plaintiff alleges that Defendant’s assignment following the

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stipulation of dismissal filed in the Prior Action constitutes “slander of title.” (Id. ¶ 21).

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Plaintiff contends that because of the assignment, he cannot obtain title insurance for the

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Property due to “the existence of a cloud on title caused by the [a]ssignments of [i]nterest.” (Id.

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¶¶ 20–24). Additionally, Plaintiff alleges that Defendant’s assignment constitutes a breach of

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contract of the Prior Action’s stipulated dismissal because the stipulation was based on

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Defendant claiming it had no interest in the Property. (Id. ¶¶ 42–46).

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II.

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LEGAL STANDARD
Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon

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which relief can be granted. Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544,

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555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on

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which it rests, and although a court must take all factual allegations as true, legal conclusions

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couched as factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule
12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements
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of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain

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sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

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face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A

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claim has facial plausibility when the plaintiff pleads factual content that allows the court to

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draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This

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standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
If the Court grants a motion to dismiss for failure to state a claim, leave to amend should

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be granted unless it is clear that the deficiencies of the complaint cannot be cured by

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amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant

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to Rule 15(a), the court should “freely” give leave to amend “when justice so requires,” and in

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the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the

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movant, repeated failure to cure deficiencies by amendments previously allowed, undue

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prejudice to the opposing party by virtue of allowance of the amendment, futility of the

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amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962).

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III.

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DISCUSSION
In the instant Motion, Defendant seeks to dismiss Plaintiff’s allegations of: (1) quiet

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title; (2) slander of title; and (3) breach of contract. (See Mot. to Dismiss (“MTD”), ECF No.

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8). Because neither party disputes dismissal of the quiet title action, (see id. 6:18–19); (Resp.

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2:9–11, ECF No. 9), the Court will address the remaining claims of slander of title and breach

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of contract in turn.

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A.

Slander of Title

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Plaintiff alleges slander of title against Defendant because Defendant “clouded title to

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the Property” by recording its assignment with HUD. (FAC ¶ 34). Plaintiff alleges Defendant

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assigned the interest “with the deliberate intent to harm and injure Plaintiff and interfere with

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its existing property ownership.” (FAC ¶ 35). “Slander of title involves false and malicious
communication, disparaging to one’s title in land, and causing special damage.” Higgins v.
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Higgins, 744 P.2d 530, 531 (Nev. 1987) (per curiam). Allegations that the defendant knew the

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statement was false or acted in reckless disregard of its truth or falsity will satisfy the malice

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requirement. Rowland v. Lepire, 662 P.2d 1332, 1335 (Nev. 1983). Special damages may

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include “both impairment of the land’s vendibility as well as expenses sustained in removing

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the cloud on plaintiff’s title caused by the false statement.” Tai-Si Kim v. Kearney, 838 F. Supp.

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2d 1077, 1089 (D. Nev. 2012) (citing Summa Corp v. Greenspun, 655 P.2d 513, 515 (Nev.

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1982)).

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Here, Plaintiff fails to assert in its FAC that Defendant’s Disclaimer was completed “in

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reckless disregard of its truth or falsity.” Rowland, 662 P.2d at 1335. Instead, Plaintiff merely

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alleges that Defendant’s assignment was completed “with the deliberate intent to harm and

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injure Plaintiff.” (FAC ¶ 35). This conclusory recitation does not satisfy the element of malice.

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See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Plaintiff contends in its

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Response that Defendant’s Disclaimer was a “knowingly false communication,” (Resp. 4:17),

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the Court must rely on the allegations set forth in the FAC to determine the plausibility of

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Plaintiff’s claims. See, e.g., Ashcroft, 556 U.S. at 678. Therefore, the Court dismisses

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Plaintiff’s slander of title action.

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B. Breach of Contract

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Plaintiff alleges breach of contract pursuant to the stipulation of dismissal the parties

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signed in the Prior Action. (FAC ¶ 46). Even construing the stipulation of dismissal as a

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contract, Plaintiff fails to sufficiently allege how the contract has been breached. See Med.

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Providers Fin. Corp. II v. New Life Centers, L.L.C., 818 F. Supp. 2d 1271, 1274 (D. Nev. 2011)

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(holding that a breach of contract claim requires: (1) the existence of a valid contract, (2) a

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breach by the defendant, and (3) damage as a result of the breach). On this point, Plaintiff

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simply alleges that Defendant’s “subsequent assignment of interest on July 31, 2015 [to HUD]

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is a breach of the contract.” (FAC ¶ 46). While perhaps relevant to a separate agreement

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between the parties, this assertion fails to explain how a subsequent assignment of real property

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constitutes a breach of an agreement to dismiss a lawsuit. In failing to explain Defendant’s

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breach, Plaintiff presents “allegations that are merely conclusory, unwarranted deductions of

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fact, or unreasonable inferences.” See Sprewell v. Golden State Warriors, 266 F.3d 979, 988

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(9th Cir. 2001). Accordingly, even taking Plaintiff’s allegations as true and construing them in

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the light most favorable to Plaintiff, the FAC does not adequately plead a claim for breach of

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contract, and Plaintiff’s FAC must be dismissed against Defendant.

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C. Leave to Amend

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Rule 15(a)(2) of the Federal Rules of Civil Procedure permits courts to “freely give

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leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). The Ninth Circuit “ha[s]

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held that in dismissing for failure to state a claim under Rule 12(b)(6), ‘a district court should

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grant leave to amend even if no request to amend the pleading was made, unless it determines

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that the pleading could not possibly be cured by the allegation of other facts.’” Lopez v. Smith,

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203 F.3d 1122, 1127 (9th Cir. 2000) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir.

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1995)).

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The Court finds that Plaintiff may be able to plead additional facts to support its slander

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of title and breach of contract claims. Accordingly, the Court will grant Plaintiff leave to file a

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second amended complaint. Plaintiff shall file its second amended complaint within fourteen

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days of the date of this Order if it can allege sufficient facts that plausibly establish its second

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and third causes of action against Defendant. Failure to file a second amended complaint by

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this date shall result in the Court dismissing these claims with prejudice.

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IV.

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CONCLUSION
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss, (ECF No. 8), is

GRANTED. Plaintiff’s quiet title claim against Defendant is dismissed with prejudice.

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Additionally, Plaintiff’s slander of title and breach of contract claims against Defendant are

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dismissed without prejudice with leave to amend.

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IT IS FURTHER ORDERED that Plaintiff shall file its second amended complaint by

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February 27, 2017. Failure to file a second amended complaint by this date shall result in

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dismissal of Plaintiff’s slander of title and breach of contract claims against Defendant with

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prejudice.

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IT IS FURTHER ORDERED that the pending cross Motions for Summary Judgment,

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(ECF Nos. 29, 37), which pertain to the now dismissed FAC, are DENIED without prejudice

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as moot and with leave to refile. The parties may refile their Motions within thirty days after

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Plaintiff files its second amended complaint.
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DATED this _____ day of February, 2017.

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___________________________________

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Gloria M. Navarro, Chief Judge
United States District Judge

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