Burns v. Ocwen Loan Servicing LLC

Filing 16

ORDER. IT IS HEREBY ORDERED that defendant's 4 motion to dismiss is GRANTED. Plaintiff's complaint ( 1 , Exhibit A) is DISMISSED in its entirety. FURTHER ORDERED defendant Ocwen Servicing shall have ten (10) days after issuance of this order to file an appropriate order expunging the lis pendens and submit the same for signature. FURTHER ORDERED, plaintiff's 11 objection to removal is DENIED. Signed by Judge Larry R. Hicks on 4/27/2011. (Copies have been distributed pursuant to the NEF - KO)

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 *** ) ) ) ) ) ) ) ) ) ) ) 9 SANDRA L. BURNS, 10 Plaintiff, 11 v. 12 OCWEN SERVICING, 13 Defendant. 3:11-cv-0001-LRH-VPC ORDER 14 Before the court is defendant Ocwen Servicing’s (“Ocwen”) motion to dismiss. Doc. #4.1 15 16 Plaintiff Sandra Burns (“Burns”) filed an opposition (Doc. #9) to which Ocwen replied (Doc. #15). 17 Also before the court is Burns’s objection to removal which the court shall construe as a 18 motion to remand. Doc. #11. 19 I. 20 Facts and Procedural History In October, 2006, Burns purchased real property through a mortgage note and deed of trust 21 executed by non-party WMC Mortgage. Eventually, Burns defaulted on the mortgage note and 22 Ocwen, as the subsequent loan servicer, initiated non-judicial foreclosure proceedings on the 23 property. 24 Subsequently, Burns filed a complaint in state court against defendants alleging five causes 25 26 1 Refers to the court’s docket entry number. 1 of action: (1) breach of contract; (2) negligence; (3) negligence per se; (4) breach of fiduciary duty; 2 and (5) quiet title. Doc. #1, Exhibit A. Ocwen removed the action to federal court based upon 3 diversity jurisdiction. Doc. #1. Thereafter, Ocwen filed the present motion to dismiss. Doc. #4. 4 II. Motion to Remand 5 A. Legal Standard 6 Under 28 U.S.C. § 1441, “any civil action brought in a State court of which the district 7 courts of the United States have original jurisdiction, may be removed by the defendant or the 8 defendants, to the district court of the United States for the district and division embracing the 9 place where such action is pending." 28 U.S.C. § 1441(a). 10 Removal of a case to a United States district court may be challenged by motion. 28 U.S.C. 11 § 1441(c). A federal court must remand a matter if there is a lack of jurisdiction. Id. Removal 12 statutes are construed restrictively and in favor of remanding a case to state court. See Shamrock 13 Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Gaus v. Miles, Inc., 980 F.2d 564, 566 14 (9th Cir. 1992). On a motion to remand, the removing defendant faces a strong presumption against 15 removal, and bears the burden of establishing that removal is proper. Gaus, 980 F.2d at 566-67; 16 Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403-04 (9th Cir. 1996). 17 B. Discussion 18 A district court has original jurisdiction over civil actions where the suit is between citizens 19 of different states and the amount in controversy, exclusive of interest and costs, exceeds $75,000. 20 28 U.S.C. § 1332(a). Further, an action based on diversity jurisdiction is “removable only if none of 21 the parties in interest properly joined and served as defendants is a citizen of the state in which such 22 action is brought.” 28 U.S.C. § 1441(b). 23 Here, there is complete diversity between the parties because Burns is a Nevada resident 24 and Ocwen is a Delaware corporation. Further, Burns concedes that the parties are diverse for 25 purposes of jurisdiction. See Doc. #11. Therefore, the court finds that there is complete diversity 26 2 1 between the parties and that the exercise of diversity jurisdiction is appropriate. Accordingly, the 2 court shall deny Burns’s objection to removal. 3 III. Motion to Dismiss 4 A. Legal Standard 5 Defendant Ocwen seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) for 6 failure to state a claim upon which relief can be granted. To survive a motion to dismiss for failure 7 to state a claim, a complaint must satisfy the Federal Rule of Civil Procedure 8(a)(2) notice 8 pleading standard. See Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 9 2008). That is, a complaint must contain “a short and plain statement of the claim showing that the 10 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The Rule 8(a)(2) pleading standard does not 11 require detailed factual allegations; however, a pleading that offers “‘labels and conclusions’ or ‘a 12 formulaic recitation of the elements of a cause of action’” will not suffice. Ashcroft v. Iqbal, 129 S. 13 Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 14 Furthermore, Rule 8(a)(2) requires a complaint to “contain sufficient factual matter, 15 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. at 1949 (quoting 16 Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual content allows 17 the court to draw the reasonable inference, based on the court’s judicial experience and common 18 sense, that the defendant is liable for the misconduct alleged. See id. at 1949-50. “The plausibility 19 standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 20 defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a 21 defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to 22 relief.” Id. at 1949 (internal quotation marks and citation omitted). 23 In reviewing a motion to dismiss, the court accepts the facts alleged in the complaint as 24 true. Id. However, “bare assertions . . . amount[ing] to nothing more than a formulaic recitation of 25 the elements of a . . . claim . . . are not entitled to an assumption of truth.” Moss v. U.S. Secret 26 3 1 Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S. Ct. at 1951) (brackets in original) 2 (internal quotation marks omitted). The court discounts these allegations because “they do nothing 3 more than state a legal conclusion—even if that conclusion is cast in the form of a factual 4 allegation.” Id. (citing Iqbal, 129 S. Ct. at 1951.) “In sum, for a complaint to survive a motion to 5 dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be 6 plausibly suggestive of a claim entitling the plaintiff to relief.” Id. 7 8 9 B. Discussion 1. Breach of Contract To prevail on a breach of contract claim, a plaintiff must demonstrate: (1) the existence of a 10 valid contract; (2) a breach by the defendant; and (3) damages resulting from defendant’s breach. 11 Saini v. Int’l Game Tech., 434 F. Supp. 2d 913, 919-20 (D. Nev. 2006); Brown v. Kinross Gold 12 U.S.A., Inc., 531 F. Supp. 2d 1234, 1240 (D. Nev. 2008). 13 Here, Burns alleges that Ocwen breached a loan modification agreement when Ocwen 14 proceeded with non-judicial foreclosure proceedings. However, Burns acknowledges in her 15 opposition that there was no actual contract between her and Ocwen and no approved loan 16 modification agreement. Absent a contract, there can be no breach. See Saini, 434 F. Supp. 2d at 17 919. Therefore, the court finds that Burns has failed to state a claim for breach of contract. 18 2. Negligence 19 In order to allege a claim for negligence, a plaintiff must show: (1) a duty owed by 20 defendants to plaintiff; (2) a breach of that duty by defendants; (3) causation; and (4) damages. See 21 Hammerstein v. Jean Dev. W., 907 P.2d 975, 977 (Nev. 1995). A trustee owes a “duty to conduct 22 the foreclosure sale fairly, openly, reasonably, and with due diligence and sound discretion to 23 protect the rights of all parties.” Hatch v. Collins, 225 Cal.App.3d 1104, 1111 (1990). 24 Burns alleges that Ocwen breached its duty to her to abide by the terms of a loan 25 modification agreement and forestall the non-judicial foreclosure proceedings. However, Ocwen 26 4 1 did not owe Burns a duty to stop the foreclosure proceedings because there was no loan 2 modification agreement between her and Ocwen. Absent a duty, there can be no breach. See A.C. 3 Shaw Constr. v. Washoe County, 784 P.2d 9, 10 (Nev. 1989). Therefore, the court finds that Burns 4 has failed to state a claim for negligence against Ocwen. 5 3. Negligence Per Se 6 In order to establish a claim for negligence per se, a plaintiff must show: (1) that he belongs 7 to a class of persons that a statute was intended to protect; (2) defendants violated the statute; (3) 8 the violation was the cause of plaintiff’s injuries; (4) plaintiff’s injuries were the type which the 9 statute was designed and intended to protect; and (5) damages. See Anderson v. Baltrusaitis, 944 10 P.2d 797, 799 (Nev. 1997). 11 Here, Burns fails to state which specific statute Ocwen violated. Moreover, Burns neither 12 alleges how Ocwen violated the statute nor that she falls within the identified class that is protected 13 by the unknown statute. Accordingly, Burns fails to state a claim for negligence per se. 14 4. Breach of Fiduciary Duty 15 Generally, a loan servicer or lender does not owe a borrower a fiduciary duty. See Yerington 16 Ford, Inc. v. Gerard Motors Acceptance Corp., 359 F.Supp.2d 1075, 1092 (D. Nev. 2004); see also 17 Cascade Investments, Inc. v. Bank of America, N.A., 2000 WL 1842945, *2-3 (D. Nev. 2009). 18 Absent a duty, there can be no breach. A.C. Shaw Constr., 784 P.2d at 10. Accordingly, Burns’s 19 claim for breach of a fiduciary duty fails to state a claim upon which relief can be granted. 20 5. Quiet Title 21 Under Nevada law, a quiet title action is a remedy which may be brought by someone who 22 claims an adverse interest in property. NRS 40.010. Here, Burns does not have any actionable 23 claims against Ocwen which would quite title in her name if she was successful. Therefore, Burns 24 has no grounds to quiet title against Ocwen. 25 /// 26 5 1 2 3 IT IS THEREFORE ORDERED that defendant’s motion to dismiss (Doc. #4) is GRANTED. Plaintiff’s complaint (Doc. #1, Exhibit A) is DISMISSED in its entirety. IT IS FURTHER ORDERED that defendant Ocwen Servicing shall have ten (10) days after 4 issuance of this order to file an appropriate order expunging the lis pendens and submit the same 5 for signature. 6 IT IS FURTHER ORDERED that plaintiff’s objection to removal (Doc. #11) is DENIED. 7 IT IS SO ORDERED. 8 DATED this 27th day of April, 2011. 9 10 11 __________________________________ LARRY R. HICKS UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 6

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