Dalton et al vs Citimortgage, Inc., et al

Filing 437

ORDER GRANTING #430 Motion to Expunge Lis Pendens. Signed by Judge Lloyd D. George on 11/22/2011. (Copies have been distributed pursuant to the NEF - MLC)

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Abran E. Vigil
Nevada Bar No. 7548
Christina Royce
Nevada Bar No. 12274
BALLARD SPAHR LLP
100 North City Parkway, Suite 1750
Las Vegas, NV 89106-4617
Telephone: [phone]
Facsimile: 702-471-7070
E-mail: [e-mail]
E-mail: [e-mail]

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Attorneys for Defendant
SunTrust Mortgage

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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[phone] FAX [phone]

BALLARD SPAHR LLP
100 NORTH CITY PARKWAY, SUITE 1750
LAS VEGAS, NEVADA 89106-4617

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LACY DALTON, et al.,

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Plaintiffs,

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SUNTRUST MORTGAGE’S RENEWED
MOTION TO EXPUNGE PLAINTIFF
CHRISTOPHER BALLENGEE’S LIS
PENDENS, OR ALTERNATIVELY
MOTION TO RECONSIDER

vs.

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CASE NO. 3:09-cv-00534-LDG-VPC

CITIMORTGAGE INC., et al.,

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Defendants.

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Defendant SunTrust Mortgage (“SunTrust”) files this renewed motion to expunge

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the notice of lis pendens filed by Christopher Ballengee (“Plaintiff”) following the dismissal

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of all pending claims in the In re Mortgage Electronic Registration Systems (MERS)

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Litigation, No. 09-2119(JAT) (the “MDL litigation”) by Judge Teilborg in the United States

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District Court of Arizona (the “MDL Court”). Alternatively, SunTrust brings this motion to

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reconsider this Court’s Order [#428] denying SunTrust’s original Motion to Expunge Lis

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Pendens [#414]. This motion is based on the pleadings and papers on file herein, the

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following memorandum of points and authorities, and any oral argument the Court may

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entertain on the matter.

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION

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Plaintiff Ballengee filed this action on September 14, 2009 with a group of other

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plaintiffs as part of a putative class action in the United States District Court of Nevada.

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The multi-district litigation panel transferred all claims relating to the formation and

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operation of MERS to the MDL Court on June 3, 2010 [#60]. In its March 21, 2011 Order,

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the MDL Court explained that it would not retain claims that related to origination and

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collection practices, or otherwise strayed from the common factual core of the MDL, even

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if MERS was named as a defendant. See MDL Order [#79] at 3.

[phone] FAX [phone]

Plaintiff Ballengee stipulated to dismissal of his claims against SunTrust on

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BALLARD SPAHR LLP
1100 NORTH CITY PARKWAY, SUITE 1750
LAS VEGAS, NEVADA 89106-4617

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December 20, 2010. See Stipulation of Dismissal and Order to Dismiss Defendants

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Midland Mortgage Company and SunTrust Mortgage with Prejudice Pursuant to Fed. R.

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Civ. P. 41(a)(1)(A)(ii) [#399].

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December 22, 2010. See Order [#401]. Despite SunTrust’s dismissal, on February 2,

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2011, Plaintiff recorded a lis pendens (the “Lis Pendens”) on the property located at 7013

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Voyage Drive, Sparks, Nevada 89436 (the “Property”). SunTrust brought a motion to

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expunge the Lis Pendens on April 1, 2011 [#414]. Plaintiff opposed the motion, arguing

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that it was premature because of the ongoing MDL litigation. See Response to Motion to

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Expunge Lis Pendens [#420]. The Court denied SunTrust’s motion, stating that the “MDL

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court retains jurisdiction over Christopher Ballengee’s remaining claims, and the propriety

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of the lis pendens must be analyzed in the context of any remaining claims.” See Order

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[#428].

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This Court then dismissed SunTrust with prejudice on

The putative class action plaintiffs filed their Consolidated Amended Complaint

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(“CAC”) [#1424] in the MDL litigation on June 4, 2011.

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pleadings since have articulated any claims against SunTrust. On October 3, 2011, the

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MDL Court dismissed the putative class action plaintiffs’ CAC with prejudice. See Order

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[#1602] (“MDL Dismissal Order”). As Plaintiff Ballengee had no basis for filing the Lis

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Pendens, and his claims against SunTrust and all of the putative class action plaintiffs’
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Neither the CAC, nor any

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claims in the MDL litigation have both been dismissed with prejudice, SunTrust renews its

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request that this Court expunge the Lis Pendens based on the claims pending before it.

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Alternatively, SunTrust requests that the Court reconsider its Order denying SunTrust’s

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Motion to Expunge because allowing a Lis Pendens on the Property to continue following

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the dismissal of all claims in the MDL litigation creates an inequitable and injurious result

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to SunTrust.

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II.

LEGAL ARGUMENT

Pursuant to Nevada statute, Plaintiff has the burden of demonstrating that the Lis

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Pendens is proper. See N.R.S. §14.015(2). A lis pendens is appropriate only where the

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[phone] FAX [phone]

A.

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BALLARD SPAHR LLP
1100 NORTH CITY PARKWAY, SUITE 1750
LAS VEGAS, NEVADA 89106-4617

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action affects title or possession of real property.

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claimant records a notice of lis pendens, the opposing party may move to expunge the lis

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pendens pursuant to Nev. Rev. Stat. §14.015. To justify the filing of a lis pendens, a

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claimant must meet the requirements set forth in Nev. Rev. Stat. §14.015(2), namely that

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(a) the action affect the title or possession of the property; (b) the action was not brought

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in bad faith or for an improper motive; (c) claimant will be able to perform any conditions

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precedent to the relief sought in the action regarding the title or possession of the

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property; and (d) claimant can establish that it would be injured by the transfer of any

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interest in the property before the action is concluded. In addition to these elements, a

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claimant must also establish the likelihood of success on the merits or a fair chance of

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success, such that the hardship on the party recording the lis pendens is greater than the

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hardship on the property owner. See N.R.S. §14.015(3). “If the court finds that the party

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who recorded the [lis pendens] has failed to [meet the required standards], the court shall

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order the cancellation of the lis pendens.” N.R.S. §14.015(5).

Standard of Review

See N.R.S. §14.010(1).

Once a

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On a motion for reconsideration, a party may seek relief from a judgment or order

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based on (1) a mistake; (2) newly discovered evidence; (3) fraud; (4) if the judgment is

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void; (5) if the judgment has been satisfied, discharged, reversed, vacated, or if applying

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it is no longer equitable; (6) or any other reason justifying relief. See Fed. R. Civ. P.
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60(b).

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long-established principle of equity practice, that a court has discretion to recognize

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changed circumstances. See Gilmore v. California, 220 F.3d 987 (9th Cir. 2000).

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Courts have recognized a motion to reconsider under Rule 60 as codifying the

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SunTrust’s Motion to Expunge Should Be Granted Based on the
Issues Before This Court
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Plaintiff Cannot Meet Its Burden Under N.R.S. §14.015(2)

§14.015(2) and therefore cannot establish any legal basis for recording the Lis Pendens.

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Under the Nevada statute, claimants are prohibited from having a bad or improper motive

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for recording a lis pendens. See N.R.S. §14.015(2)(b). Plaintiff’s motive here, at best, is

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questionable. Plaintiff has already dismissed SunTrust from the pending litigation with

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[phone] FAX [phone]

Plaintiff is unable to satisfy the statutory requirements under Nev. Rev. Stat.

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BALLARD SPAHR LLP
1100 NORTH CITY PARKWAY, SUITE 1750
LAS VEGAS, NEVADA 89106-4617

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prejudice.

Moreover, Plaintiff never added any claims as to SunTrust in the MDL

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litigation.

Plaintiff’s filing of the Lis Pendens impedes SunTrust’s contractual and

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statutory rights to the property, in a hope of maintaining property for which Plaintiff has no

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rights. See N.R.S. §14.015(2)

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In addition, a claimant must be able to perform any conditions precedent to the

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relief sought as well as establish that it would be injured by a transfer of interest in the

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property before the action is concluded.

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Ballengee cannot perform any conditions precedent to the relief sought since he has

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already defaulted on his loan agreement and no longer owns the Property. Moreover,

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Plaintiff cannot establish that he would be damaged by a transfer of interest in the

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Property at issue.

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conclusion that the action and Plaintiff was not successful on his claims.

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Plaintiff does not meet the necessary requirements under Nev. Rev. Stat. § 14.015(2)

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and therefore cannot meet his burden for maintaining a Lis Pendens on the Property.

Plaintiff

The dismissal of all claims in the MDL litigation resulted in the

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See N.R.S. §14.015(2)(c)-(d).

As such,

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Plaintiff Cannot Establish a Likelihood of Success on the Merits
or Fair Success Under the Balancing Requirements Under
§14.015(3)

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Plaintiff’s inability to satisfy the statutory requirements under Nev. Rev. Stat.

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§14.015(3) of establishing a likelihood of success on the merits or a fair success under

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the balancing requirements further necessitates removal of the Lis Pendens. In addition

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to meeting the requirements under Nev. Rev. Stat. §14.015(2) detailed above, a claimant

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must also show either that it (a) has a likelihood of success on the merits or (b) has a fair

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chance of success, such that the hardship on the party recording the lis pendens is

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greater than the hardship on the opposing party under Nev. Rev. Stat. §14.015(3).

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Plaintiff Ballengee has no probability of success on the merits because SunTrust

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discharged all of its duties under the foreclosure statute and has been dismissed from the

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litigation with prejudice, pursuant to Plaintiff’s own stipulation. Any other claims or legal

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theories Plaintiff may have attempted to pursue in the MDL litigation have now also been

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dismissed with prejudice.

[phone] FAX [phone]

BALLARD SPAHR LLP
1100 NORTH CITY PARKWAY, SUITE 1750
LAS VEGAS, NEVADA 89106-4617

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Moreover, a balancing of hardships falls in favor of expunging the Lis Pendens.

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SunTrust has suffered a severe hardship for over eight months because of Plaintiff’s Lis

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Pendens, which effectively precludes a sale of the Property. During that time, Plaintiff

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has not brought any additional claims against SunTrust and all of its claims in the MDL

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litigation have now been dismissed. In contrast, expunging the Lis Pendens will cause no

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harm to Plaintiff because Plaintiff no longer has an interest in the Property and any claims

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to the contrary have now been dismissed with prejudice. Plaintiff cannot establish either

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a likelihood of success on the merits or that a balancing of hardships falls in his favor.

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Accordingly, Plaintiff cannot meet his statutory burden and the Court should therefore

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expunge the Lis Pendens.

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Alternatively, Reconsideration of the Court’s Order Denying
SunTrust’s Motion to Expunge is Proper in Light of the Recent
Dismissal of Claims in the MDL Litigation

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SunTrust’s motion to reconsider should be granted based upon the changed

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circumstances and inequitable result of Plaintiff maintaining the Lis Pendens on the

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C.

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Procedure, relief from a court’s order is proper if its application is no longer equitable or

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for any other reason that justifies relief. See F.R.C.P. 60(b)(5)-(6). The Court’s Order

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denying SunTrust’s motion to expunge was based on the MDL Court’s jurisdiction of

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Plaintiff Ballengee’s remaining claims.

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ordered a complete dismissal of all of the putative class claims. See MDL Dismissal

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Order at 20. Thus, Plaintiff Ballengee no longer has any existing claims in the MDL

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action.

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SunTrust and as part of the MDL litigation with prejudice, allowing the Lis Pendens to

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continue on the Property will cause further injury and an inequitable result to SunTrust.

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Property following the MDL Dismissal Order. Under Rule 60 of the Federal Rules of Civil

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BALLARD SPAHR LLP
1100 NORTH CITY PARKWAY, SUITE 1750
LAS VEGAS, NEVADA 89106-4617

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Accordingly, SunTrust asks the Court to reconsider its Order dismissing SunTrust’s

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motion to expunge because there are no remaining claims in the MDL action to consider,

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and to expunge the lis pendens based on the claims pending before this Court.

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III.

See Order [#428]. The MDL Court has now

Given that Plaintiff Ballengee’s claims have now been dismissed both as to

CONCLUSION

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Because Plaintiff is unable to demonstrate the validity of the Lis Pendens as

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required by statute, and because all of Plaintiff’s claims in the MDL litigation and against

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SunTrust have been dismissed, SunTrust respectfully requests that this Court expunge

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the Lis Pendens either on the basis of SunTrust’s Renewed Motion to Expunge the Lis

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Pendens or alternatively as a Motion to Reconsider.

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DATED this __ day of October, 2011.
BALLARD SPAHR LLP

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ORDER
IT IS SO ORDERED the above Motion
to Expunge Lis Pendens is granted.

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DATED this ___ day of November, 2011.
___________________
Lloyd D. George
Sr. U.S. District Judge

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By:/s/
Abran E. Vigil
Nevada Bar No. 7548
Christina Royce,
Nevada Bar No. 12274
100 North City Parkway, Suite 1750
Las Vegas, Nevada 89106-4617
Attorneys for Defendant
SunTrust Mortgage
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