Suarez-Smith v. Bank of America, N.A. et al
Filing
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ORDER. IT IS HEREBY ORDERED that 5 , 7 , 11 Defendants' Motions to Dismiss are GRANTED. IT IS FURTHER ORDERED that the Clerk of the Court enter JUDGMENT for Defendants and against Plaintiff. Signed by Judge Kent J. Dawson on 3/28/17. (Copies have been distributed pursuant to the NEF - ADR)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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CARMEN SUAREZ-SMITH,
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Plaintiff,
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v.
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Case No. 2:16-CV-01478-KJD-PAL
BANK OF AMERICA, N.A., et al.,
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ORDER
Defendants.
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Presently before the Court are Defendants’ Motions to Dismiss (#5/7/11). Plaintiff filed
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responses in opposition (#16/18/21) to which Defendants replied (#21/23).
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I. Background
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On or about December 11, 2006, Borrower Thomas A. Smith (deceased) executed a
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Promissory Note (“Note”) in favor of predecessor-in-interest Countrywide Home Loans, Inc.
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(“Countrywide”) in the amount of $375,000.00. As part of the same transation, the Note was and is
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secured by a Deed of Trust in favor of MERS as nominee for Countrywide, which was recorded on
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December 20, 2006. On January 24, 2011, an Assignment of Deed of Trust from MERS, as nominee
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for Countrywide, to Defendant The Bank of New York Mellon (“BNY Mellon”) was recorded. On
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October 16, 2015, a Substitution of Trustee naming Defendant Sables in the place of original trustee
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Reconstrust Company, N.A., was recorded. On May 25, 2016, the Notice of Default was recorded by
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Sables on behalf of BNY Mellon.
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Previously, on or about October 13, 2010, Plaintiff, asserting that she was acting as successor
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to the estate of the Borrower, sent a letter via certified mail to Bank of America asserting that she
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was rescinding the loan in accordance with 15 U.S.C. § 1635. On June 22, 2016, she filed the present
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complaint alleging a claim for rescission under § 1635 against Bank of America and for quiet title
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against all Defendants. The crux of her claims is that because the loan was securitized there was no
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consummation of the loan agreement, and therefore, no duty to send notice of rescission within three
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days or three years of the execution of the loan agreement. Further, with no such “consummation” all
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later assignments of trustees and recording of notices is without affect. Defendants then filed the
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present motions to dismiss.
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II. Standard for a Motion to Dismiss
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In considering a motion to dismiss, “all well-pleaded allegations of material fact are taken as
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true and construed in a light most favorable to the non-moving party.” Wyler Summit Partnership v.
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Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation omitted).
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Consequently, there is a strong presumption against dismissing an action for failure to state a claim.
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See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted).
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“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted
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as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937,
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1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the
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context of a motion to dismiss, means that the plaintiff has pleaded facts which allow “the court to
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draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
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The Iqbal evaluation illustrates a two prong analysis. First, the Court identifies “the
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allegations in the complaint that are not entitled to the assumption of truth,” that is, those allegations
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which are legal conclusions, bare assertions, or merely conclusory. Id. at 1949-51. Second, the
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Court considers the factual allegations “to determine if they plausibly suggest an entitlement to
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relief.” Id. at 1951. If the allegations state plausible claims for relief, such claims survive the motion
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to dismiss. Id. at 1950.
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III. Analysis
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The purpose of the Truth in Lending Act (“TILA”) is “to assure a meaningful disclosure of
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credit terms so that the consumer will be able to compare more readily the various credit terms
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available to him and avoid the uninformed use of credit ...” 15 U.S.C. § 1601(a). In transactions, like
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the one here, secured by a principal dwelling, TILA gives borrowers an unconditional three-day right
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to rescind. 15 U.S.C. § 1635(a); see also id. § 1641(c) (extending rescission to assignees). The
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three-day rescission period begins upon the consummation of the transaction or the delivery of the
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required rescission notices and disclosures, whichever occurs later. Id. § 1635(a). Required
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disclosures must be made to “each consumer whose ownership interest is or will be subject to the
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security interest” and must include two copies of a notice of the right to rescind. 12 C.F.R. §
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226.23(a)-(b)(1). If the creditor fails to make the required disclosures or rescission notices, the
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borrower’s “right of rescission shall expire three years after the date of consummation of the
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transaction.” 15 U.S.C. § 1635(f); see 12 C.F.R. § 226.23(a)(3); Jesinoski v. Countrywide Home
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Loans, Inc., 135 S. Ct. 790, 792-93 (2015)(notice to lender of intent to rescind must be sent within
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three years of loan execution).
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Unfortunately for Plaintiff, it is clear that the underlying note and deed of trust were executed
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on or about December 11, 2006. Therefore, notice of rescission had to be provided to the lender no
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later than December 11, 2009. Plaintiff does not dispute that notice was not sent until October 13,
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2010. The statute of repose established by § 1635 is applied strictly and her claim for rescission must
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be dismissed. Further, her arguments that the loan was never consummated due to the underlying
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securitization of the note do not save her action. See Lial v. Bank of Am., N.A., 2016 WL 6405812
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(D. Nev. October 27, 2016)(alleged securitization of a loan does not invalidate the deed of trust or
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allow challenge to the loan’s validity)(citing Lial v. Bank of Am. Corp., 2011 WL 5239242 (D. Nev.
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Nov. 1, 2011), aff’d Lial v. Bank of Am. Corp., 633 Fed. Appx. 406 (9th Cir. 2016); Beck v.
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Nationstar Mortg., 2015 WL 6755276 (D. Nev. Nov. 4, 2015)).
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Finally, in response to Defendants’ arguments that her claims for quiet title must be
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dismissed, Plaintiff asserts “Plaintiff has standing to raise all of these issues because her loan has
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been legally rescinded under 15 U.S. Code § 1635 et. seq., not because of some failed securitization
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theory[.]” Opposition to Motion to Dismiss . . . Filed by Defendant Bank of America, Docket No. 16,
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p. 6., l. 1-3. However, the Court has already ruled that her October 13, 2010 rescission letter was too
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late and is barred by the statute of repose. Therefore, Plaintiff’s complaint must be dismissed.
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Normally, the Court would grant Plaintiff leave to amend the complaint, but it is clear that doing so
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would be futile.
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IV. Conclusion
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Accordingly, IT IS HEREBY ORDERED that Defendants’ Motions to Dismiss (#5/7/11) are
GRANTED;
IT IS FURTHER ORDERED that the Clerk of the Court enter JUDGMENT for Defendants
and against Plaintiff.
DATED this 28th day of March 2017.
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_____________________________
Kent J. Dawson
United States District Judge
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