Vo v. American Brokers Conduit et al

Filing 86

ORDER DENYING 77 Motion for Attorney Fees. Signed by Judge Larry R. Hicks on 5/21/2012. (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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TAMMY VO,

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Plaintiff,

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v.

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AMERICAN BROKERS CONDUIT; et al.,

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Defendants.

3:09-cv-00654-LRH-VPC
ORDER

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Before the court is intervening defendant Ceref Reo II, LLC’s (“Ceref”) motion for

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attorney’s fees. Doc. #77.1 Plaintiff Tammy Vo (“Vo”) filed an opposition (Doc. #78) to which

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Ceref replied (Doc. #80).

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I.

Facts and Procedural History

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On July 12, 2007, Vo purchased real property through a mortgage and note executed by

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defendant American Brokers Conduit. Vo eventually defaulted on her mortgage and defendants

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initiated foreclosure proceedings.

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Subsequently, on September 18, 2009, Vo filed a complaint alleging fourteen separate

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causes of action against defendants: (1) unfair lending practices in violation of NRS 598D.100;

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(2) conspiracy to commit fraud; (3) permanent injunction; (4) declaratory relief; (5) wrongful

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Refers to the court’s docket entry number.

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foreclosure; (6) fraud through omission; (7) quiet title; (8) contractual breach of good faith and fair

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dealing; (9) tortious breach of good faith and fair dealing; (10) civil conspiracy; (11) racketeering;

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(12) unjust enrichment; (13) conspiracy to commit fraud against defendant Mortgage Electronic

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Registration Systems, Inc. (“MERS”); and (14) fraud in the inducement. Doc. #1, Exhibit A.

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In late 2009, the United States Judicial Panel on Multi-District Litigation (“panel”)

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consolidated a series of cases in which plaintiffs alleged that MERS engaged in improper business

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practices when processing home loans. The panel assigned Judge James A. Teilborg to oversee

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these cases and preside over all issues (discovery, dispositive motions, settlement) except for trials.

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In re: Mortgage Electronic Registration Systems (MERS) Litigation, MDL No. 2119.

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On February 18, 2010, the panel issued a transfer order and consolidated the present action

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with the MDL litigation. Doc. #35. However, as part of the transfer order, the panel transferred only

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those claims that “relate to the formation and/or operation of MERS” and held that all other claims

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“unrelated to the formation and/or operation of the MERS system are separately and simultaneously

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remanded” to the district court in which they were first brought. Id.

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On June 4, 2010, Judge Teilborg issued an initial remand order. Doc. #39. Pursuant to that

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order Judge Teilborg remanded: (1) claim 1 for unfair lending practices; (2) claim 10 for civil

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conspiracy as it relates to remanded claims; (3) claim 11 for racketeering in violation of Nevada

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law as it relates to remanded claims; (4) claim 12 for unjust enrichment; (5) claim 3 for injunctive

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relief as it relates to the remanded claims; and (6) claim 4 for declaratory relief as it relates to the

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remanded claims. Id.

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Subsequently, Ceref filed a motion to dismiss the remanded claims (Doc. #53) which was

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also granted by the court (Doc. #58). Thereafter, Ceref filed the present motion for an award of

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attorney’s fees. Doc. #77.

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II.

Discussion
In its motion, Ceref argues that it is entitled to an award of attorney’s fees because it is the

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prevailing party in this action. See Doc. #77. Specifically, Ceref argues that the mortgage note

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executed by Vo provides in pertinent part that the note holder has a right to recoup its costs and

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expenses, including attorney’s fees, for enforcing its rights under the note. See Doc. #77, Exhibit 1,

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Section 7(E) (“If the Note Holder has required me to pay immediately in full as described above,

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the Note Holder will have the right to be paid back by me for all of its costs and expenses in

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enforcing this Note to the extent not prohibited by applicable law. Those expenses, include, for

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example, reasonable attorneys’ fees.”).

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However, the underlying complaint was based on defendants’ alleged failures to comply

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with various state laws in pursuing the non-judicial foreclosure, rather than intervening defendant

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Ceref’s ability to enforce the note. Further, Ceref did not initiate the present action and was not a

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defendant until it intervened after it purchased the mortgage note from another defendant. Thus, the

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court finds that Ceref did not incur attorney’s fees in “enforcing” the note. Lastly, there is no

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evidence before the court that Ceref required Vo to “pay immediately in full” the note as required

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by Section 7(E) to trigger the repayment of attorney’s fees. Therefore, the court finds that Ceref is

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not entitled to attorney’s fees.

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IT IS THEREFORE ORDERED that defendant-in-intervention’s motion for attorney’s fees
(Doc. #77) is DENIED.

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IT IS SO ORDERED.

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DATED this 21st day of May, 2012.

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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

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