Villagrana v. Recontrust Company, N.A. et al

Filing 39

ORDERED that Ds Countrywide, MERS, and Recontrust's # 7 Motion to dismiss is DENIED as moot. FURTHER ORD that P's # 9 Motion to remand is DENIED. FURTHER ORD that P's # 16 Motion to strike and for sanctions and attorneys fees is DE NIED. FURTHER ORD that Ds' # 22 , 24 Motions to dismiss are GRANTED. FURTHER ORD that P's # 26 Motion to strike is DENIED. FURTHER ORD that P's # 30 Motion for a preliminary injunction is DENIED. FURTHER ORD that P's # 34 Motion to amend complaint is DENIED. The Clerk shall enter judgment accordingly. Signed by Judge Edward C. Reed, Jr on 5/22/2012. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

4
5
6 GUSTAVO VILLAGRANA, an individual, )
)
7
Plaintiffs,
)
)
8 vs.
)
)
9 RECONTRUST COMPANY, N.A.; MORTGAGE )
ELECTRONIC REGISTRATION SYSTEM,
)
10 INC.; EAGLE HOME MORTGAGE OF
)
CALIFORNIA INC.; FIRST CENTENNIAL )
11 TITLE; JLM TITLE, LLC; DOE
)
INDIVIDUALS I-X; and ROE COMPANIES )
12 I-X, inclusive
)
)
13
Defendants.
)
)
14
)

3:11-cv-00652-ECR-WGC
Order

15
16

This case arises out of allegations that Defendants wrongfully

17 foreclosed on Plaintiff’s home.

Now pending before the Court is a

18 motion to dismiss (#7) filed by Defendants Countrywide Home Loans,
19 Inc. (“Countrywide”), Mortgage Electronic Registration System, Inc.
20 (“MERS”), and Recontrust Company, N.A. (“Recontrust”); Plaintiff’s
21 motion to remand (#9); Plaintiff’s motion to strike and for sanctions
22 and attorney’s fees (#16); Defendants First Centennial Title (“First
23 Centennial”) and JLM Title, LLC’s (“JLM”) motion to dismiss (#22);
24 Defendants

Countrywide,

MERS,

and

Recontrust’s

second

motion

to

25 dismiss (#24); Plaintiff’s motion to strike (#26); Plaintiff’s motion
26 for a preliminary injunction (#30); and Plaintiff’s motion to amend
27 complaint (#34).
28

The motions are ripe and we now rule on them.

1

I. Factual Background

2

On or about June 1, 2007, Plaintiff and another individual

3 executed a promissory note in the amount of $250,000.00, Loan
4 #A975008, in favor of Defendant Eagle Home Mortgage of California
5 Inc. (“Eagle”) in order to purchase the property located at 1004
6 Stanford Drive, Carson City, Nevada 89701.
7 17 (#15); Deed of Trust1 (#24-8).)

(Amd. Compl. ¶¶ 1-2, 16-

The loan was secured with a Deed

8 of Trust recorded on June 4, 2007 as document #368427.
9 ¶ 2 (#15); Deed of Trust (#24-8).)

(Amd. Compl

The Deed of Trust names

10 Defendant First Centennial as the trustee and Defendant MERS as the
11 nominee of the lender and beneficiary.

(Deed of Trust (#24-8).)

12 The Deed of Trust allows the lender to appoint a substitute trustee
13 and provides that “MERS holds only legal title to the interests
14 granted by Borrower in this Security Instrument,” but has the right
15 to exercise the right to foreclose and sell the Property as a
16 nominee of the lender.
17

(Id.)

On February 24, 2009, Defendant MERS substituted Defendant

18 Recontrust as trustee under the Deed of Trust via a Substitution of
19 Trustee recorded on February 26, 2009.
20 (#24-9).)

(Substitution of Trustee

Also on February 24, 2009, Defendant Recontrust executed

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22
23

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Defendants Countrywide, MERS, and Recontrust have requested
that the Court take judicial notice of relevant publicly recorded
documents, copies of which are attached to their second motion to
dismiss (#24).
This Court takes judicial notice of these public
records. See Disabled Rights Action Comm. v. Las Vegas Events, Inc.,
375 F.3d 861, 866 n.1 (9th Cir. 2004) (the court may take judicial
notice of the records of state agencies and other undisputed matters
of public record under Fed. R. Evid. 201).

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2

24
25
26

1 and recorded a Notice of Default and Election to Sell Under Deed of
2 Trust.
3

(Notice of Default (#24-10).)

On November 26, 2010, MERS executed an Assignment of Deed of

4 Trust (the “2010 Assignment”), assigning the Deed of Trust and the
5 underlying note to BAC Home Loans Servicing, LP f/k/a Countrywide
6 Home Loans Servicing, LP (“BAC/Countrywide”).
7 (#24-11).)
8 (Id.)

(2010 Assignment

The 2010 Assignment was recorded on November 30, 2010.

Also on November 30, 2010, BAC/Countrywide substituted

9 Defendant Recontrust as trustee under the deed of trust.

(Second

10 Substitution of Trustee (#30-10).)
11

On July 18, 2011, Defendant Recontrust recorded a Notice of

12 Trustee’s Sale, setting the sale date for August 11, 2011.
13 of Sale, (#24-12).)

(Notice

On August 9, 2011, BAC/Countrywide assigned the

14 Deed of Trust and the underlying note to the Federal National
15 Mortgage Association (“FNMA”), recording the document on August 19,
16 2011 (the “2011 Assignment”).

(2011 Assignment (#24-13).)

On

17 August 11, 2011 the property was sold at a Trustee’s Sale, and FNMA
18 purchased the property with a credit bid of $236,446.80.

(Trustee’s

19 Deed Upon Sale (#24-14).)
20
21
22

II. Procedural Background
On August 11, 2011, Plaintiff filed the original complaint (#1-

23 2) in the First Judicial District Court of the State of Nevada in
24 and for Carson City.

Defendants Mortgage Electronic Registration

25 System, Inc. (“MERS”), Recontrust Company, N.A. (“Recontrust”), and
26 Countrywide Home Loans, Inc. (“Countrywide”) removed the action to
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1 this Court via petition for removal (#1) on September 9, 2011.
2 Defendants First Centennial Title (“First Centennial”) and JLM
3 Title, LLC (“JLM”) filed a joinder (#23) to the petition for
4 removal(#1) on November 4, 2011.
5

Defendants Countrywide, MERS, and Recontrust filed a motion to

6 dismiss (#7) on September 30, 2011.

Plaintiff responded (#16) on

7 October 20, 2011 and Defendants replied (#17) on October 25, 2011.
8 Defendants First Centennial and JLM joined (#28) the motion to
9 dismiss (#7) and the reply (#17) on December 7, 2011.
10

Plaintiff filed a motion to remand (#9) on October 12, 2011 and

11 a corrected image (#13) of the motion of October 18, 2011.
12 Defendants Countrywide, MERS, and Recontrust responded (#20) on
13 October 31, 2011.
14

Plaintiff replied (#25) on November 10, 2011.

On October 20, 2011, Plaintiff filed the first amended

15 complaint (#15) alleging three causes of action: (i) Unlawful or
16 Fraudulent Foreclosure; (ii) Declaratory Relief; and (iii)
17 Injunctive Relief.
18

On November 3, 2011, Defendants First Centennial and JLM filed

19 a motion to dismiss (#22) the first amended complaint (#15).
20 Plaintiff responded (#26) on November 23, 2011, and Defendants did
21 not reply.
22

On November 4, 2011, Defendants Countrywide, MERS, and

23 Recontrust filed a motion to dismiss (#24) the first amended
24 complaint (#15).

Plaintiff responded (#26) on November 23, 2011,

25 and Defendants replied (#27) on December 5, 2011.
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1

Plaintiff filed a motion for preliminary injunction (#30) on

2 December 9, 2011 and corresponding errata (#32) on December 21,
3 2011.

Defendants Countrywide, MERS, and Recontrust responded (#35)

4 on January 3, 2012, and Plaintiff replied (#38) on January 16, 2012.
5

Plaintiff filed a motion to amend complaint (#34) on December

6 21, 2011.

Defendants First Centennial and JLM responded (#36) on

7 January 6, 2012, and Defendants Countrywide, MERS, and Recontrust
8 responded (#37) on January 9, 2012.

Plaintiff did not file a reply.

9
10

III. Discussion

11 A. Plaintiff’s Motion to Amend Complaint (#34)
12

Pursuant to Federal Rule of Civil Procedure 15(a), leave to

13 amend is to be “freely given when justice so requires.”
14 amendment should be allowed with “extreme liberality.”

In general,
Owens v.

15 Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)
16 (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074,
17 1079 (9th Cir. 1990)).

If factors such as undue delay, bad faith,

18 dilatory motive, undue prejudice, or futility of amendment are
19 present, leave to amend may properly be denied in the district
20 court’s discretion.

Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d

21 1048, 1051-52 (9th Cir. 2003).

The futility analysis determines

22 whether the proposed amendment would survive a motion to dismiss
23 pursuant to Rule 12(b)(6).

Miller v. Rykoff-Sexton, Inc., 845 F.2d

24 209, 214 (9th Cir. 1988).
25

Plaintiff seeks leave to amend the first amended complaint

26 (#15) for the following reasons: (i) to remove causes of action
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1 previously pled; (ii) to make further allegations against Defendant
2 First Centennial in its capacity as a trustee under the Deed of
3 Trust; (iii) to make further allegations against Defendant MERS; and
4 (iv) to name as a new defendant and make allegations against the
5 Federal National Mortgage Association (“FNMA”) in light of newly
6 discovered evidence.

For the reasons stated below, the Court will

7 deny leave to amend the complaint.
8

With regard to amending the complaint in order to remove causes

9 of action for unjust enrichment, slander of title, and civil
10 conspiracy or alternatively civil rights violation, Plaintiff
11 seemingly has neglected the fact that the original complaint (#1-2)
12 has already been amended, and the first amended complaint (#15) has
13 already eliminated the three causes of action Plaintiff now seeks to
14 remove.

It would therefore prove futile to grant leave to amend in

15 order to remove these three claims, so we will not grant leave on
16 this basis.
17

We also find that it would prove futile to allow Plaintiff to

18 amend the complaint in order to make further allegations against
19 Defendant First Centennial.

In the proposed amended complaint,

20 Plaintiff alleges that First Centennial, as named trustee in the
21 Deed of Trust, breached its duties of “independence” and
22 “impartiality” by failing to warn Plaintiff that the other
23 Defendants had falsely “usurped” First Centennial’s role as trustee.
24 First, Plaintiff cannot establish that First Centennial owed
25 Plaintiff any duty to inform him of the conduct of the other
26 Defendants.

See Brown v. Fed. Home Loan Mortg. Corp., No. 2:11-CV-

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1 01228, 2011 WL 5877545, at *2 (D. Nev. Nov. 23, 2011) (“[The
2 trustee] asserts that all other claims must also be dismissed,
3 because a trustee owes no duties other than those required by
4 statute. . . . [T]he Court agrees that [the trustee] does not owe
5 special duties to Plaintiff.”); Padilla v. PNC Mortg., No. 3:11-cv6 0326, 2011 WL 3585484, at *3 (D. Nev. Aug. 15, 2011) (“Because
7 plaintiffs have failed to allege sufficient facts to establish that
8 defendants acted outside their capacities as adverse parties 9 namely as lender, loan service, trustee and title recordation
10 company - during the non judicial foreclosure process, which does
11 not in itself create a fiduciary relationship, plaintiffs’ claim for
12 breach of fiduciary duty fails to state a claim upon which relief
13 can be granted.”) (emphasis added).

“There is no fiduciary duty

14 where, as here, the parties engaged in arms-length transactions
15 while having diverse interests.
16 breach.”

Absent a duty, there can be no

Padilla, 2011 WL 3585484, at *3 (citing A.C. Shaw Constr.

17 v. Washoe Cty., 784 P.2d 9, 10 (Nev. 1989)).

Moreover, the Nevada

18 Legislature recently ratified the Court’s understanding that
19 trustees generally have no duties to homeowners in Plaintiff’s
20 position by amending Chapter 107 of the Nevada Revised Statutes to
21 include the following: “The trustee does not have a fiduciary
22 obligation to the grantor or any other person having an interest in
23 the property which is subject to the deed of trust.”
24 § 107.028(5).

NEV . REV . STAT.

For these reasons, a claim that Defendant First

25 Centennial breached its duty to Plaintiff as a named trustee on the
26 Deed of Trust would not survive motion to dismiss - without a duty,
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1 there can be no breach.

We will therefore deny leave to amend to

2 include these allegations against First Centennial for reason of
3 futility.
4

We likewise find that allowing Plaintiff to augment his claims

5 against Defendant MERS would prove futile.

For the most part,

6 Plaintiff’s claim that the foreclosure was “fraudulent” because MERS
7 held no beneficial interest in the deed or trust and was therefore
8 without power to assign the beneficial interest in the deed of trust
9 has been stated exhaustively in the first amended complaint.

The

10 only new allegations with regard to MERS in the proposed amended
11 complaint contend that the various recorded documents, such as the
12 substitutions of trustee and the assignments of the deed of trust,
13 are void because they were not properly notarized.

These

14 allegations are completely without merit: Plaintiff baldly asserts
15 that the notarizations on the Substitution of Trustee (#24-9) and
16 the 2010 Assignment (#24-11) do not comply with Nevada law, but
17 fails to say why or otherwise allege a statutory defect.

Moreover,

18 the Court has examined the judicially noticed documents at issue,
19 and finds that they comply with Nev. Rev. Stat. § 240.1655 and §
20 240.166.

Because Plaintiff has provided no reason why these notary

21 acknowledgments are faulty, and because these allegations would not
22 survive a motion to dismiss, the Court will not permit Plaintiff to
23 amend the complaint on this basis due to futility.
24

Finally, Plaintiff seeks leave to amend in order to include a

25 new Defendant, FNMA.

Plaintiff claims that he did not know that

26 FNMA came to own Plaintiff’s mortgage until he obtained a copy of
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1 the Trustee’s Deed Upon Sale (#24-14), which was recorded on August
2 19, 2011, eight days after Plaintiff filed the original complaint
3 (#1-2) on August 11, 2011.

However, Plaintiff was on notice of

4 FNMA’s ownership of the property when Plaintiff filed the first
5 amended complaint (#15) on October 20, 2011.

Plaintiff’s motion to

6 add FNMA as a defendant is therefore unduly delayed.
7

Further, the Court finds that granting Plaintiff leave to amend

8 to add allegations against FNMA would prove futile.

Plaintiff

9 contends that FNMA and the other Defendants unlawfully concealed
10 FNMA’s interest in the loan in violation of Nevada’s non-judicial
11 foreclosure statute, Nev. Rev. Stat. § 107.080.

Plaintiff further

12 objects that FNMA and the named Defendants did not have authority to
13 foreclose on Plaintiff’s property, also in violation of Nev. Rev.
14 Stat. § 107.080 and Nevada’s statute of frauds, Nev. Rev. Stat. §
15 111.205.

Finally, Plaintiff has obtained evidence that customer

16 service representatives for FNMA that FNMA acquired Plaintiff’s loan
17 on July 1, 2007.

However, as will be described in further detail

18 below with regard to the pending motions to dismiss, the Court has
19 reviewed the judicially noticed recorded documents, and finds that
20 Defendants have complied with the requirements of Nev. Rev. Stat. §
21 107.080.

Trustees were properly substituted, and the beneficial

22 interest was properly assigned, and Defendants had authority to
23 foreclose on Plaintiff’s property.

Moreover, Plaintiff’s wrongful

24 foreclosure claim is foreclosed by Plaintiff’s failure of
25 performance on the mortgage.

An action for the tort of wrongful

26 foreclosure will lie only “if the trustor or mortgagor can establish
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1 that at the time the power of sale was exercised or the foreclosure
2 occurred, no breach of condition or failure of performance existed
3 on the mortgagor’s or trustor’s part which would have authorized the
4 foreclosure or exercise of the power of sale.”

Collins v. Union

5 Fed. Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983).

The fact

6 that Plaintiff failed to make the required payments on the loan is
7 unchanged by affidavits suggesting that FNMA may have acquired the
8 loan in 2007.

Because Plaintiff’s claim against FNMA would not

9 survive a motion to dismiss, the Court will deny leave to amend to
10 include allegations against FNMA.
11 B. Plaintiff’s Motion to Remand (##9, 13)2
12

Under the federal removal statute, 28 U.S.C. § 1441, “any civil

13 action brought in a State court of which the district courts of the
14 United States have original jurisdiction, may be removed by the
15 defendant or the defendants, to the district court of the United
16 States for the district and division embracing the place where such
17 action is pending.”

28 U.S.C. § 1441(a).

Removal of a case to a

18 United States District Court may be challenged by motion, and a
19 federal court must remand a matter if there is a lack of
20 jurisdiction.

28 U.S.C. § 1441(c).

Removal statutes are construed

21 restrictively and in favor of remanding a case to state court.

See

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In the motion for leave to file an amended complaint (#34),
Plaintiff’s concede that federal jurisdiction is proper because
Plaintiff seeks to include a federal agency, FNMA, as a defendant in
the proposed amended complaint. However, the status of FNMA as a
federal agency has no bearing on this Court’s jurisdiction. Further,
a party may not consent to subject matter jurisdiction, and federal
court have a continuing independent obligation to determine whether
subject matter jurisdiction exists. Arbaugh v. Y&H Corp., 546 U.S.
500, 515 (2006) (citations omitted).

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25
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1 Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941);
2 Gaus v. Miles, Inc., 980 F.2 564, 566 (9th Cir. 1992).

On a motion

3 to remand, the removing defendant faces a strong presumption against
4 removal and bears the burden of establishing that removal is proper.
5 Gaus, 980 F.2d at 566-67; Sanchez v. Monumental Life Ins. Co., 102
6 F.3d 398, 403-04 (9th Cir. 1996).
7

A district court has original jurisdiction over civil actions

8 where the suit is between citizens of different states and the
9 amount in controversy, exclusive of interest and costs, exceeds
10 $75,000.00.

28 U.S.C. § 1332(a).

Further, an action based on

11 diversity jurisdiction is “removable only if none of the parties in
12 interest properly joined and served as defendants is a citizen of
13 the state in which such action is brought.”

28 U.S.C. § 1441(b).

14 Here, Plaintiff contends the parties are not completely diverse for
15 the purposes of federal diversity jurisdiction.

Specifically,

16 Plaintiff alleges that Defendant First Centennial Title is a
17 registered as doing business as JLM Title, LLC (“JLM”), a Nevada
18 limited liability company.

Defendants counter that non-diverse

19 Defendants First Centennial and JLM are fraudulently joined
20 defendants whose Nevada citizenship cannot be used to defeat the
21 exercise of diversity jurisdiction.3
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Defendants also argue that the motion to remand (#9) is
untimely and that the Court may also exercise federal question
jurisdiction. There arguments are unavailing. Under 28 U.S.C. §
1447(c) which provides as follows: “A motion to remand the case on the
basis of any defect other than lack of subject matter jurisdiction
must be made within 30 days after the filing of the notice of removal
under 1446(a).” However, by the very terms of the statute, this time
limit does not apply where, as here, the motion to remand is based on
a lack of subject matter jurisdiction. Further, “[t]he presence or

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1

A fraudulently joined defendant does not “defeat removal on

2 diversity grounds.”
3 (9th Cir. 1998).

Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318

Fraudulent joinder “occurs when a plaintiff fails

4 to state a cause of action against a resident defendant, and the
5 failure is obvious according to the settled rules of the state.”
6 Id. at 1318; see also Kruso v. Int’l Tel. & Tel. Corp., 872 F.2d
7 1416, 1426-27 (9 th Cir. 1989); McCabe v. Gen. Foods Corp., 811 F.2d
8 1336, 1339 (9th Cir. 1987).

In determining whether a cause of

9 action is stated against a non-diverse defendant, a court looks only
10 to a plaintiff’s pleadings.

Gardner v. UICI, 508 F.3d 559, 561 n.3

11 (9th Cir. 2007).
12

In the first amended complaint (#15), Plaintiff’s only

13 allegation against Defendants First Centennial, doing business as
14 Defendant JLM, is that it was the original trustee on the Deed of
15 Trust.

However, First Centennial/JLM was substituted out as the

16 trustee prior to the filing of the underlying Notice of Default and
17 the initiation of non judicial foreclosure proceedings.

Plaintiff

18 has failed to allege that First Centennial and/or JLM took any
19 action in furthering the allegedly wrongful foreclosure of the
20 property.

Furthermore, as stated above with regard to Plaintiff’s

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25
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absence of federal-question jurisdiction is governed by the ‘wellpleaded complaint rule,’ which provides that federal jurisdiction
exists only when a federal question is presented on the face of the
plaintiff’s properly pleaded complaint.” Caterpillar Inc., 482 U.S.
at 392 (citing Gully v. First Nat’l Bank, 299 U.S. 109, 112-13
(1936)). The first amended complaint (#15) could not possibly be read
to present a federal question as it relies entirely on state
foreclosure law. Defendants argument that the complaint’s reference
to the Nevada Constitution somehow involves the Federal Constitution
is nonsensical. Accordingly, federal question jurisdiction is absent.

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1 motion to amend the complaint, Plaintiff cannot establish that a
2 trustee breached any duties to Plaintiff because the trustee owed
3 Plaintiff no duty as a matter of law.

See Brown v. Fed. Home Loan

4 Mortg. Corp., No. 2:11-CV-01228, 2011 WL 5877545, at *2 (D. Nev.
5 Nov. 23, 2011) (“[The trustee] asserts that all other claims must
6 also be dismissed, because a trustee owes no duties other than those
7 required by statute. . . . [T]he Court agrees that [the trustee]
8 does not owe special duties to Plaintiff.”).

Plaintiff has

9 therefore failed to state a cause of action against First Centennial
10 and JLM.

The Court finds that non-diverse defendants First

11 Centennial and JLM were fraudulently joined defendants whose
12 citizenship does not defeat the exercise of diversity jurisdiction.
13 As there is complete diversity among the parties, the exercise of
14 diversity jurisdiction is appropriate and Plaintiff’s motion to
15 remand must be denied.
16 C. Defendants’ Motions to Dismiss (##22, 24)
17

1. Plaintiff’s First Cause of Action for “Unlawful or

18 Fraudulent Foreclosure”
19

Plaintiff claims that the foreclosure on his home is unlawful

20 because Defendants have not produced documents establishing their
21 authority to foreclose.

Plaintiff’s claim is completely without

22 merit and belied by the judicially noticed documents.

The facts

23 delineated above indicate a statutorily valid foreclosure where in
24 trustees were properly substituted and beneficial interests were
25 properly assigned via properly notarized and publicly recorded
26 documents.

To the extent that Plaintiff’s claim rests primarily on

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1 the theory that MERS did not have the authority to assign the
2 beneficial interest in the underlying note, Courts in this district
3 have held otherwise.

In Smith v. Community Lending, Inc., the Court

4 examined language in the deed of trust identical to the language in
5 the Deed of Trust in this case4 and found that it was sufficient to
6 grant MERS authority to assign the beneficial interest in the
7 underlying debt:
8
9
10
11
12
13
14
15

[T]his language clarifies the scope of MERS’ agency on
behalf of the beneficiary (the lender). It indicates that
not only the trustee, as is the custom, but also MERS
under this deed of trust, may initiate foreclosure. The
Court is also convinced that this language is clear
enough, in conjunction with the (improper) identification
of MERS as the beneficiary, to indicate that the parties
intended MERS would be able to transfer the beneficial
interest in the underlying debt directly. Although MERS
is not in fact the beneficiary, the attempt to name it as
such coupled with the above-quoted language indicates an
intent to give MERS the broadest possible agency on behalf
of the owner of the beneficial interest in the underlying
debt. Such agency would include the ability to sell the
interest in the debt.

16 773 F.Supp.2d 941, 944 (D.Nev. 2011).

For this reason, MERS had the

17 power to assign the beneficial interest in the underlying note from
18 the original lender, Eagle Mortgage to BAC/Countrywide via the 2010
19
20
21
22
23
24
25
26
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4

The identical language in the deed of trust in Smith and in the
Deed of Trust (#24-8) here provides as follows:
Borrower understands and agrees that MERS holds only legal
title to the interests granted by Borrower in this Security
Instrument, but, if necessary to complay with law or
custom, MERS (as nominee for Lender and Lender’s successors
and assigns) has the right: to exercise any and all of
those interests, including, but not limited to, the right
to foreclose and sell the Property; and to take any action
required of Lender, including but not limited to, releasing
and cancelling this Security Instrument.
Smith, 773 F.Supp.2d at 943-44; Deed of Trust at 3 (#24-8).
14

1 Assignment (#24-11).

Moreover, the 2010 Assignment and the 2011

2 Assignment meet the requirements of the recent Nevada Supreme Court
3 decision Levya v. National Default Servicing Corp., which held that
4 an obligor, such as Plaintiff, has the right to know the identity of
5 the entity that is entitled to enforce the mortgage note.
6 1275, 1279-80 (Nev. 2011).

255 P.3d

See also Foust v. Wells Fargo, N.A., No.

7 55520, 2011 WL 3298915, at *2 (Nev. Jul. 29, 2011) (holding that
8 plaintiffs stated a claim where foreclosing defendant could not
9 produce documents establishing a valid assignment of the underlying
10 debt).

Plaintiff was provided with the identities of the entities

11 with authority to enforce the note via these publicly recorded
12 assignments.
13

Furthermore, even if the 2010 Assignment or the 2011 Assignment

14 are invalid, Plaintiff does not have standing to challenge its
15 validity because Plaintiff is neither a party to nor a third-party
16 beneficiary of the contract between the assignors and assignees 17 only the parties to those transactions would have standing to
18 challenge their validity.

See Smith, 773 F.Supp.2d at 922 (“The

19 lender or its assigns (the true beneficiary) would of course have
20 standing to challenge MERS’ actions on its behalf - for example, if
21 MERS absconded with the proceeds of such a sale - but no entity
22 claiming to hold the underlying debt has made any such challenge
23 here.”).
24

Finally, an action for the tort of wrongful foreclosure,

25 whether or not Plaintiff properly labels it as such, will lie only
26 “if the trustor or mortgagor can establish that at the time the
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15

1 power of sale was exercised or the foreclosure occurred, no breach
2 of condition or failure of performance existed on the mortgagor’s or
3 trustor’s part which would have authorized the foreclosure or
4 exercise of the power of sale.”
5 1983).

Collins, 662 P.2d at 623 (Nev.

The “material issue of fact in a wrongful foreclosure claim

6 is whether the trustor was in default when the power of sale was
7 exercised.”

Id.

Plaintiff has failed to allege that he was not in

8 default.
9

For these three reasons, Plaintiff has failed to state a cause

10 of action against Defendants for wrongful foreclosure, and
11 Plaintiff’s first cause of action must be dismissed.
12

2. Plaintiff’s Second and Third Causes of Action for

13 Declaratory and Injunctive Relief
14

Injunctive and declaratory relief are remedies, not independent

15 causes of action.

Parker v. Greenpoint Mortg. Funding Inc., No.

16 3:11-cv-00039-ECR-RAM, 2011 WL 2923949, at *5 (D. Nev. Jul. 15,
17 2011); In re Wal-Mart Wage & Hour Emp’t Practices Litig., 490
18 F.Supp.2d 1091, 1130 (D. Nev. 2007).

Because we have dismissed

19 Plaintiff’s single substantive cause of action for unlawful
20 foreclosure, Plaintiff’s second and third causes of action for
21 declaratory and injunctive relief must also be dismissed.
22

Accordingly, Defendants’ motions to dismiss (#22, 24) will be

23 granted.
24 D. Plaintiff’s Motion for Preliminary Injunction (#30)
25

Plaintiff requests that the Court issue a preliminary

26 injunction precluding an eviction and allowing Plaintiff to stay on
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1 the property.

“A plaintiff seeking a preliminary injunction must

2 establish that he is likely to succeed on the merits, that he is
3 likely to suffer irreparable harm in the absence of preliminary
4 relief, that the balance of equities tips in his favor, and that an
5 injunction is in the public interest.”

Winter v. Natural Res. Def.

6 Council, Inc., 555 U.S. 7, 20 (2008).

In foreclosure cases, because

7 “real property and its attributes are considered unique and loss of
8 real property rights generally results in irreparable harm,” the
9 second factor of a requisite for a preliminary injunction is often
10 satisfied.

Dixon v. Thatcher, 742 P.2d 1029, 1029 (Nev. 1987).

11 However, as discussed with regard to the motions to dismiss,
12 Plaintiff has failed to show a reasonable probability of success on
13 the merits.

Because we dismiss all of Plaintiff’s claims, a

14 preliminary injunction will not issue.
15 E. Plaintiff’s Requests for Sanctions, Attorney’s Fees, and to
16 Strike (#16, 26)
17

In Plaintiff’s responses (##16, 26) to Defendants’ motions to

18 dismiss,

Plaintiff requests that Defendants’ motions be stricken

19 pursuant to Federal Rule of Civil Procedure 12(f), that Defendants
20 be sanctioned, and that Plaintiff be awarded attorney’s fees because
21 Defendants cite to unpublished opinions.

First, should Plaintiff’s

22 counsel seek sanctions, fees, or to strike Defendants’ motions,
23 counsel should do so in a proper motion before the Court properly
24 supported by a memorandum of points and authorities and should not
25 submit such “requests” in untimely responses to Defendants’ motions
26 to dismiss.

See Local Rule 7-2.

Second, Plaintiffs’ substantive

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1 arguments are completely without merit and borderline frivolous.

It

2 is true that unpublished district court opinions are not
3 precedential; however, they may be considered for their persuasive
4 authority.

In re Van Wagoner Funds, Inc. Sec. Litig., 382 F.Supp.2d

5 1173, 1182 n.5 (N.D.Cal. 2004) (citing Herring v. Teradyne, Inc.,
6 256 F.Supp.2d 1118, 1128 n.2 (S.D.Cal. 2002).

The citation to

7 unpublished opinions does not run counter to Local Rule 7-3(b),
8 which merely states the Court’s preferred citation form for opinions
9 that have been reported in the Federal Report System.
10 does not speak to unreported cases.

Rule 7-3(b)

Furthermore, the Ninth Circuit

11 now explicitly allows citation of its unpublished decisions.

United

12 States v. Soto-Castelo, 621 F.Supp.2d 1062, 1069 n.2 (D. Nev. 2008)
13 (“Under Ninth Circuit Rule 36-3, unpublished dispositions and order
14 of the court issued on or after June 1, 2007 may be cited to the
15 courts of this circuit in accordance with Fed. R. App. P. 32.1, but
16 are not precedent except when relevant under the doctrine of law of
17 the case or rules of claim preclusion and issue preclusion.”).
18 Finally, Plaintiff’s motions and citations to authority themselves
19 often violate Local Rule 7-3(b), as Plaintiff does not provide the
20 proper citation form for Nevada Supreme cases, and Plaintiff cites
21 to Westlaw summaries and does not provide the specific pages upon
22 which the pertinent language appears.

(See, e.g. Mot. Prelim. Inj.

23 at 3, 14 (#30); Opp’n Mot. Dismiss at 5, 7 (#26)).
24 reasons, Plaintiff’s “requests” will be denied.
25
26
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For these

1
2

IV. Conclusion
Plaintiff’s motion to amend will be denied as leave to amend

3 would prove futile: Plaintiff cannot state a cause of action against
4 First Centennial and JLM in their capacity as the original trustee
5 on the Deed of Trust, and Plaintiff cannot state a cause of action
6 against FNMA for wrongful foreclosure.

Moreover, the Court may

7 validly exercise its diversity jurisdiction because non-diverse
8 Defendants First Centennial and JLM were fraudulently joined.
9 Plaintiff’s wrongful foreclosure claim fails because MERS had the
10 authority to assign the beneficial interest in the Deed of Trust and
11 the underlying note and Plaintiff failed to make payments.

The

12 substitutions of trustees and the assignments all comport with the
13 law and were properly recorded.
14 of the note.

Plaintiff was advised of the holder

Because we dismiss all of Plaintiff’s claim, we will

15 not issue a preliminary injunction as Plaintiff cannot demonstrate a
16 likelihood of success on the merits.
17
18

IT IS, THEREFORE, HEREBY ORDERED that Defendants Countrywide,

19 MERS, and Recontrust’s motion to dismiss (#7) is DENIED as moot due
20 to the subsequent filing of an amended complaint.
21

IT IS FURTHER ORDERED that Plaintiff’s motion to remand (#9) is

22 DENIED.
23

IT IS FURTHER ORDERED that Plaintiff’s motion to strike and for

24 sanctions and attorney’s fees (#16) is DENIED.
25

IT IS FURTHER ORDERED that Defendants’ motions to dismiss (#22,

26 24) are GRANTED.
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1
2

IT IS FURTHER ORDERED that Plaintiff’s motion to strike (#26)

3 is DENIED.
4

IT IS FURTHER ORDERED that Plaintiff’s motion for a preliminary

5 injunction (#30) is DENIED.
6

IT IS FURTHER ORDERED that Plaintiff’s motion to amend

7 complaint (#34) is DENIED.
8
9

The Clerk shall enter judgment accordingly.

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14 DATED: May 22, 2012.
15
____________________________
UNITED STATES DISTRICT JUDGE

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