Goodwin et al v. Executive Trustee Services, LLC et al

Filing 546

ORDER. IT IS ORDERED that Ds' 461 , 464 , 465 , 468 , 470 , 471 , 473 , 474 , and 476 Motions to Dismiss are GRANTED on the following basis: We lack jurisdiction over Ps' claims that were transferred to the MDL court; thi s order thus only dismisses the claims remanded to us pursuant to the MDL court's 453 Order clarifying which claims remain within our jurisdiction. Signed by Judge Edward C. Reed, Jr on 12/2/2010. (Copies have been distributed pursuant to the NEF - PM)

Goodwin et al v. Executive Trustee Services, LLC et al

Doc. 546

1 2 3 4 5 6 7 ALETA ROSE GOODWIN, ROBERT PAUL 8 MCARTOR, and HEATHER GABEL, individually and on behalf of a 9 class of similarly situated individuals; JOSEPH JONES, MEISA 10 JONES, MICHAEL R. TIERNEY and FREDRICK TULIP, individually and 11 on behalf of a class of similarly situated individuals; LINDA R. 12 BARBA; CYNTHIA and CHARLES FLAGG; JANICE GANNON; WILLIAM DAN KLUTTZ; 13 BRIAN E. JONES; JAMES H. MULLENNIX and JEANNE K. MULLENIX; HEATHER 14 MONAHAN and GEORGE R. MORENO; TRAVIS RAWLINGS and SYLVIA 15 RAWLINGS; JOHN SULLIVAN and DEBBIE SULLIVAN; JOSEPH E. THURSTON and 16 ARLENE THURSTON; JESUS TOVAR; JOHN F. WILBURN; and ROSALIE W. 17 WILBURN, 18 19 20 21 22 23 24 25 26 27 28 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiffs, ) ) vs. ) ) EXECUTIVE TRUSTEE SERVICES, LLC.; ) COUNTRYWIDE HOME LOANS, INC., a ) New York corporation; ) MERSCORP, INC. a Virginia ) corporation; MORTGAGE ELECTRONIC ) REGISTRATION SYSTEMS, INC., a ) subsidiary of MERSCORP, Inc. a ) Delaware Corporation; RECONTRUST ) COMPANY; SAXON MORTGAGE INC.; ) T.D. SERVICE COMPANY; DEUTSCHE ) BANK NATIONAL TRUST COMPANY; ) OCWEN LOAN SERVICING, LLC; WESTERN ) PROGRESSIVE, LLC.; AHMSI DEFAULT ) SERVICES, INC.; QUALITY LOAN ) SERVICE CORPORATION; NATIONAL ) DEFAULT SERVICING CORPORATION; ) AZTEC FORECLOSURE CORPORATION; ) 3:09-CV-306-ECR-PAL UNITED STATES DISTRICT COURT DISTRICT OF NEVADA RENO, NEVADA

Order

Dockets.Justia.com

1 FEDERAL HOME LOAN MORTGAGE ) CORPORATION, a Virginia ) 2 corporation; FEDERAL NATIONAL ) MORTGAGE ASSOCIATION, a District ) 3 of Columbia corporation; GMAC ) MORTGAGE, L.L.C., a Delaware ) 4 corporation; NATIONAL CITY ) MORTGAGE, a foreign company and a ) 5 division of NATIONAL CITY BANK, ) a subsidiary of National City ) 6 Corporation; NATIONAL CITY ) CORPORATION, a Delaware ) 7 corporation and a subsidiary of ) PNC Financial Services, Inc.; ) 8 PNC FINANCIAL SERVICES, INC., a ) Pennsylvania corporation; J.P. ) 9 MORGAN CHASE BANK, N.A., a ) New York corporation; ) 10 CITIMORTGAGE, INC., a New York ) corporation; HSBC MORTGAGE ) 11 CORPORATION, U.S.A., a Delaware ) corporation; AIG UNITED GUARANTY ) 12 CORPORATION, a foreign ) corporation; WELLS FARGO BANK, ) 13 N.A., a California corporation, ) dba WELLS FARGO HOME EQUITY and ) 14 dba WELLS FARGO HOME MORTGAGE ) division of WELLS FARGO BANK, N.A.,) 15 a California corporation; BANK ) OF AMERICA, N.A., a Delaware ) 16 corporation; and GE MONEY BANK, ) an Ohio corporation, ) 17 ) Defendants. ) 18 ) ) 19 20 This is a putative class action brought by numerous homeowners

21 who are in danger of losing or have already lost their homes to 22 foreclosure. Plaintiffs assert nine claims for relief, but only The claims under

23 some of those claims are under our jurisdiction.

24 our jurisdiction are Plaintiffs' first claim for fraud in the 25 inducement, fifth claim for wrongful filing of an unlawful detainer, 26 and part of Plaintiffs' second, eighth and ninth claims for unjust 27 enrichment, injunctive and declaratory relief respectively. 28
2

Now

1 pending are nine motions to dismiss (## 461, 464, 465, 468, 470, 2 471, 473, 474 and 476). 3 Defendants replied. 4 5 6 I. Procedural Backnground Plaintiffs filed a class action complaint (#1) and motion for On June 10, 2009, we Plaintiffs opposed each motion, and

The motions are ripe, and we now rule on them.

7 preliminary injunction (#2) on June 9, 2009.

8 granted (#5) Plaintiffs' motion for preliminary injunction to the 9 extent it sought a temporary restraining order. We restrained

10 Defendants from pursuing any foreclosure actions against Plaintiffs 11 or their properties. The temporary restraining order remained in On June 11, 2009, we amended (#10) the

12 effect until June 22, 2009.

13 temporary restraining order. On June 22, 2009, we denied Plaintiffs' 14 motion for preliminary injunction (#2) as moot in light of a 15 stipulation of the parties (#26) and an Order (#28) of the Court 16 approving the stipulation. 17 On June 24, 2009, Plaintiffs filed an amended complaint (#47).

18 On June 29, 2009, Plaintiffs filed a motion (#59) for temporary 19 restraining order and preliminary injunction. We granted (#67) the

20 motion (#59) to the extent it sought a temporary restraining order. 21 The temporary restraining order remained in effect until July 16, 22 2009. On July 15, 2009, certain Defendants stipulated (#110) that

23 they would not initiate or advance any foreclosures with respect to 24 certain properties at issue in this case pending a trial on the 25 merits. On the same date we entered an Order (#111) approving parts On July 16,

26 of the stipulation (#110) and disapproving others.

27 2009, another stipulation (#118) was entered into between certain 28
3

1 Defendants and certain Plaintiffs.

On July 16, 2009, we held a (Mins. (#123).)

2 hearing to clarify our previous Order (#111). 3

On July 11, 2009, Plaintiffs filed a motion for preliminary Defendants

4 injunction (#98) and a motion to certify class (#99). 5 opposed both motions and Plaintiffs replied.

On July 29, 2009,

6 Defendants Federal Home Loan Mortgage Corporation and Federal 7 National Mortgage Association filed a motion (#142) for "Protective 8 Order Staying Discovery and Staying Their Oppositions to Plaintiffs' 9 Motions for Class Certification and Preliminary Injunction and 10 Joinder to Certain Defendants' Joint Motion to Temporarily Stay 11 Proceedings." The motion (#142) was unopposed. Between July 29,

12 2009, and December 3, 2009, Defendants filed numerous motions to 13 dismiss (## 141, 143, 145, 153, 154, 156, 161, 162, 163, 164, 165, 14 166, 167, 173, 198, 200, 202, 227, 243, 342, 344 and 356). 15 Plaintiffs opposed the motions, and Defendants replied. On January

16 8, 2010, we granted (#436) Defendants' motions to dismiss and denied 17 as moot Plaintiffs' motion for preliminary injunction (#98), 18 Plaintiffs' motion to certify class (#99) and Defendants' motion for 19 a protective order (#142). 20 On December 9, 2009, pursuant to a transfer order (#412) issued

21 by the United States Judicial Panel on Multidistrict Litigation, the 22 claims in this case that are related to the formation and/or 23 operation of the MERS system were transferred to the District of 24 Arizona (the "MDL court") and assigned to the Honorable James A. 25 Teilborg for coordinated or consolidated pretrial proceedings. 26 On January 29, 2010, Plaintiffs filed a second amended On March 23, 2010, the MDL court filed an order
4

27 complaint (#443). 28

1 (#453) clarifying which claims were under the MDL court's 2 jurisdiction and which had been remanded to our court. Between

3 April 7, 2010 and April 8, 2010, Defendants filed nine motions to 4 dismiss (## 461, 464, 465, 468, 470, 471, 473, 474 and 476). 5 Plaintiffs opposed the motions, and Defendants replied. 6 7 8 II. Motion to Dismiss Standard A motion to dismiss under Fed. R. Civ. P. 12(b)(6) will only be

9 granted if the complaint fails to "state a claim to relief that is 10 plausible on its face." 11 570 (2007). Bell Atl. Corp. v. Twombly, 550 U.S. 544,

On a motion to dismiss, "we presum[e] that general

12 allegations embrace those specific facts that are necessary to 13 support the claim." Lujan v. Defenders of Wildlife, 504 U.S. 555,

14 561 (1992) (quoting Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 15 (1990)) (alteration in original). Moreover, "[a]ll allegations of

16 material fact in the complaint are taken as true and construed in 17 the light most favorable to the non-moving party." In re Stac

18 Elecs. Sec. Litig., 89 F.3d 1399, 1403 (9th Cir. 1996) (citation 19 omitted). 20 Although courts generally assume the facts alleged are true,

21 courts do not "assume the truth of legal conclusions merely because 22 they are cast in the form of factual allegations." 23 Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). W. Mining Accordingly,

24 "[c]onclusory allegations and unwarranted inferences are 25 insufficient to defeat a motion to dismiss." 26 F.3d at 1403 (citation omitted). 27 28
5

In re Stac Elecs., 89

1

Review on a motion pursuant to Fed. R. Civ. P. 12(b)(6) is See Lee v. City of L.A.,

2 normally limited to the complaint itself. 3 250 F.3d 668, 688 (9th Cir. 2001).

If the district court relies on

4 materials outside the pleadings in making its ruling, it must treat 5 the motion to dismiss as one for summary judgment and give the non6 moving party an opportunity to respond. Fed. R. Civ. P. 12(d); "A

7 see United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003).

8 court may, however, consider certain materials -- documents attached 9 to the complaint, documents incorporated by reference in the 10 complaint, or matters of judicial notice -- without converting the 11 motion to dismiss into a motion for summary judgment." 12 F.3d at 908. 13 If documents are physically attached to the complaint, then a Ritchie, 342

14 court may consider them if their "authenticity is not contested" and 15 "the plaintiff's complaint necessarily relies on them." Lee, 250

16 F.3d at 688 (citation, internal quotations, and ellipsis omitted). 17 A court may also treat certain documents as incorporated by 18 reference into the plaintiff's complaint if the complaint "refers 19 extensively to the document or the document forms the basis of the 20 plaintiff's claim." Ritchie, 342 F.3d at 908. Finally, if

21 adjudicative facts or matters of public record meet the requirements 22 of Fed. R. Evid. 201, a court may judicially notice them in deciding 23 a motion to dismiss. Id. at 909; see Fed. R. Evid. 201(b) ("A

24 judicially noticed fact must be one not subject to reasonable 25 dispute in that it is either (1) generally known within the 26 territorial jurisdiction of the trial court or (2) capable of 27 28
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1 accurate and ready determination by resort to sources whose accuracy 2 cannot reasonably be questioned."). 3 4 5 6 III. Discussion A. Fraud in the Inducement Plaintiffs' first claim for relief is fraud in the inducement.

7 The claim fails to satisfy the particularity requirements of Rule 8 9(b). Federal Rule of Civil Procedure 9(b) requires that a

9 complaint "must state with particularity the circumstances 10 constituting fraud or mistake." FED. R. CIV. P. 9(B). Rule 9(b)

11 "requires . . . an account of the time, place, and specific content 12 of the false representations as well as the identities of the 13 parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d

14 756, 764 (9th Cir. 2007) (internal quotation marks and citation 15 omitted). "[I}n a fraud action against a corporation, a plaintiff

16 must allege the names of the persons who made the allegedly 17 fraudulent representations, their authority to speak, to whom they 18 spoke, what they said or wrote, and when it was said or written." 19 Saldate v. Wilshire Credit Corp., 686 F. Supp. 2d 1051, 1065 (E.D. 20 Cal. 2010). 21 Plaintiffs' claim fails to satisfy the requirements of Rule

22 9(b) because Plaintiffs fail to allege, inter alia, the names of the 23 person or persons who made the allegedly fraudulent representations, 24 their authority to speak and whether their representations were 25 verbal or in writing and when and where the alleged 26 misrepresentation took place. 27 28
7

1

Plaintiffs cite Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir.

2 2007), for the proposition that they need not identify the 3 individual who made the allegedly fraudulent representations. 4 however, involved a consumer purchase at a Best Buy store. 5 554. Odom,

Id. at

Fraud was pleaded with particularity with the exception that

6 the plaintiff did not name the individual cashier who conducted the 7 allegedly fraudulent transaction. Id. Under those narrow

8 circumstances the Ninth Circuit created a limited exception to the 9 general rule that the alleged maker of a fraudulent representation 10 must be identified: "[I]n the circumstances of a retail transaction 11 whose full consequences are realized only months later, the employee 12 of the store need not be named." Id. This case does not involve a

13 routine retail transaction like the kind at issue in Odom and the 14 logic of Odom does not apply with the same force. 15 Moreover, Plaintiffs' failure to plead the identities of the

16 individuals who made the allegedly fraudulent misrepresentations is 17 not the only deficiency in Plaintiffs' claim. With respect to each

18 of the statements and omissions alleged, Plaintiffs claim that "an 19 agent or agent" made the misrepresentation. It is thus unclear how

20 many parties made the alleged misrepresentations and whether they 21 were made on one or multiple occasions. Plaintiffs also fail to

22 plead facts relating to the contexts in which the agent or agents 23 made the misrepresentations at issue. Plaintiffs do not indicate

24 whether the misrepresentations were made in person, in writing or 25 over the phone. This further obscures the context of the alleged

26 fraud and ultimately deprives Defendants of the specific notice 27 28
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1 required under Rule 9(b). 2 dismissed. 3 4 B. Unjust Enrichment

Plaintiffs' first claim will thus be

Plaintiffs' second claim for relief alleges unjust enrichment.

5 Plaintiffs' unjust enrichment claim has been remanded (#453) to us 6 only with respect to Plaintiffs Linda Barba, John Wilburn and Rosa 7 and Sergio Diaz. Plaintiffs allege that because the loan contracts

8 at issue were obtained through fraud and misrepresentation, any 9 retention of benefits by Defendants is unjust. 10 Under Nevada law, unjust enrichment occurs when "a person has

11 and retains a benefit which in equity and good conscience belongs to 12 another." Leasepartners Corp. v. Robert L. Brooks Trust Dated An action "based

13 November 12, 1975, 942 P.2d 182, 187 (Nev. 1997).

14 on a theory of unjust enrichment is not available when there is an 15 express, written contract, because no agreement can be implied when 16 there is an express agreement." Id. The doctrine of unjust

17 enrichment thus only "applies to situations where there is no legal 18 contract but where the person sought to be charged is in possession 19 of money or property which in good conscience and justice he should 20 not retain but should deliver to another [or should pay for]." 21 (quoting 66 Am. Jur. 2d Restitution § 11 (1973)). 22 Plaintiffs contend that because the mortgages at issue were Id.

23 procured through fraud, they may proceed under an unjust enrichment 24 theory. Plaintiffs, as noted above, have not alleged sufficient

25 facts to support a claim for fraud and therefore the written 26 contract guides the relationship between the parties. 27 unjust enrichment claim thus fails. 28
9

Plaintiffs'

1 2

C. Wrongful Filing of an Unlawful Retainer Plaintiffs' fifth claim is titled "wrongful filing of an The claim is alleged by Plaintiff Gable against Gable alleges that Saxon

3 unlawful retainer."

4 Saxon Mortgage Services, Inc. ("Saxon").

5 wrongfully served her with a notice to quit the premises and 6 wrongfully filed an unlawful detainer action against her. 7 Am. Compl. § 200 (#443).) (Second

As a result, Gabel experienced "mental

8 anguish" and incurred attorney fees and costs in defending against 9 the action. (Id.) We have not discovered, nor has Plaintiff

10 provided, any authority in support of the proposition that "wrongful 11 filing of an unlawful retainer" is a tort recognized in Nevada. 12 Moreover, it appears that any fees or damages Gabel incurred as a 13 result of defending against the action should have been addressed in 14 the context of that proceeding, for example as a counterclaim or a 15 motion for attorneys fees. 16 be dismissed. 17 18 D. Injunctive and Declaratory Relief Plaintiffs' eighth and ninth claims are injunctive and These are not independent claims, Plaintiffs' fifth claim will therefore

19 declaratory relief respectively. 20 but rather forms of relief.

They have been remanded to us to the In light

21 extent they are based on the underlying remanded claims.

22 of our dismissal of all the remanded claims, we likewise dismiss 23 Plaintiffs' eighth and ninth claims for relief. 24 25 26 27 28
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1 2

IV.

Leave to Amend

Under Rule 15(a) leave to amend is to be "freely given when FED. R. CIV. P. 15(a). In general, amendment Owens v. Kaiser Found.

3 justice so requires."

4 should be allowed with "extreme liberality."

5 Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (quoting 6 Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th 7 Cir. 1990)). If factors such as undue delay, bad faith, dilatory

8 motive, undue prejudice or futility of amendment are present, leave 9 to amend may properly be denied in the district court's discretion. 10 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051-52 (9th 11 Cir. 2003)(discussing Foman v. Davis, 371 U.S. 178, 182 (1962). 12 We have already given Plaintiffs leave to amend their Complaint Indeed, this is Plaintiffs' third complaint in this lawsuit, We therefore conclude that giving

13 once.

14 and it is fatally deficient.

15 Plaintiffs further leave to amend their complaint would be futile. 16 17 18 VI. Conclusion None of Plaintiffs' remanded claims survive the pending motions Plaintiffs' first claim for fraudulent inducement fails Plaintiffs' second claim for unjust

19 to dismiss.

20 to satisfy Rule 9(b).

21 enrichment fails because the parties' relationship is governed by an 22 express, written contract. Plaintiffs' fifth claim for wrongful

23 filing of an unlawful detainer action is not a recognized tort in 24 the state of Nevada. Plaintiffs' eighth and ninth claims are forms They will therefore

25 of relief, not independent causes of actions. 26 27 28
11

1 be dismissed in light of our dismissal of the underlying substantive 2 claims. 3 4 IT IS, THEREFORE, HEREBY ORDERED THAT Defendants' Motions to 461, 464, 465, 468, 470, 471, 473, 474 and 476) are

5 Dismiss (##

6 GRANTED on the following basis: We lack jurisdiction over 7 Plaintiffs' claims that were transferred to the MDL court; this 8 order thus only dismisses the claims remanded to us pursuant to the 9 MDL court's order (#453) clarifying which claims remain within our 10 jurisdiction. 11 12 13 14 DATED: December 2, 2010. 15 16 17 18 19 20 21 22 23 24 25 26 27 28
12

____________________________ UNITED STATES DISTRICT JUDGE