Reynolds et al v. Homecomings Financial Network, Inc. et al
Filing
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ORDER granting 57 Motion for Summary Judgment; denying 67 Motion to Amend/Correct Complaint; and denying 72 Notice of Admissions by Defendants and Notice of Motion and Motion to Go Forward. Clerk shall enter judgment accordingly. Signed by Chief Judge Robert C. Jones on 1/25/13. (Copies have been distributed pursuant to the NEF - JC)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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TAYLOR LEE REYNOLDS and CONNIE B. )
EVANS,
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Plaintiffs,
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v.
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HOMECOMINGS FINANCIAL NETWORK, )
INC. et al.,
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Defendants.
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___________________________________
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3:11-cv-910-RCJ-VPC
ORDER
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Currently before the Court are a Motion for Summary Judgment (#57), a Motion for
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Leave to File an Amended Complaint (#67), and a Notice of Admissions and Notice of Motion
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and Motion to Go Forward (#72).
BACKGROUND
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I.
Complaint
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In December 2011, Defendant GMAC Mortgage, LLC filed a petition for removal and
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attached Plaintiffs Taylor L. Reynolds and Connie B. Evans’ (“Plaintiffs”) complaint from the
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First Judicial District Court in Carson City. (Pet. for Removal (#1); Compl. (#1-2) at 2-10). In
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the complaint, Plaintiffs, pro se, sued Homecomings Financial Network, Inc.; GMAC Mortgage;
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Executive Trustee Services, LLC; and Fannie Mae/Freddie Mac (collectively “Defendants”).
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(Compl. (#1-2) at 2, 4).
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In the complaint, Plaintiffs appeared to allege causes of action for quiet title, Truth in
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Lending Act (“TILA”) violations, and statutorily defective foreclosure. (See generally id. at 5-7).
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Plaintiffs asserted that there was a controversy over who the real parties in interest were. (Id.
at 8). Plaintiffs asserted that because no one party could come forth to claim a perfected
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security interest in the deed of trust, the deed of trust was void. (Id.). They also asserted that
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their debt had been discharged by credit default swaps, securitization, REMIC, and bailout
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funds. (Id. at 7). They sought a judgment declaring that the deed of trust was null and void,
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that the promissory note had been fully discharged, and that they were the rightful holder and
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title to the property. (Id. at 8-9).
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II.
Foreclosure Facts
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Plaintiffs executed a note secured by a deed of trust on a piece of property located at
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5691 Camus Road, Carson City, Nevada 89701, which was recorded in Carson City on April
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3, 2006. (Deed of Trust (#4-1) at 2, 4). The mortgage, dated March 28, 2006, was for
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$373,000. (Id. at 3). The lender on the deed of trust was Homecomings Financial Network,
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Inc. (Id. at 2). The trustee on the deed of trust was Stewart Title. (Id. at 3). The Mortgage
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Electronic Registration Systems, Inc. (“MERS”) was named as “a nominee for Lender and
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Lender’s successors and assigns” and claimed to be the beneficiary under the security
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instrument. (Id.).
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On August 1, 2010, Plaintiffs defaulted on their mortgage payments for an unspecified
amount. (See Notice of Default (#4-3) at 2).
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On December 22, 2010, MERS executed an assignment of the deed of trust and
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granted GMAC Corporation, LLC fka GMAC Mortgage Corporation all beneficial interest in the
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deed of trust. (Assignment of Deed of Trust (#4-2) at 2).
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On March 31, 2011, Executive Trustee Services, LLC, as agent for beneficiary,
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executed a notice of default and election to sell and recorded it with the Carson City
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Recorder’s office the next day. (Notice of Default (#4-3) at 2-3). The notice of default named
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Executive Trustee Services, LLC as the duly appointed trustee under the deed of trust. (Id.
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at 2). The deed of trust identified the breach of obligations as “installment of principal and
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interest plus impounds and/or advances which became due on 8/1/2010 plus late charges,
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and all subsequent installments of principal, interest, balloon payments, plus impounds and/or
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advances and late charges that become payable.” (Id.).
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On September 21, 2011, Executive Trustee Services, LLC recorded a notice of trustee’s
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sale with the Carson City Recorder’s office. (Notice of Trustee’s Sale (#4-4) at 2). On
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November 28, 2011, Executive Trustee Services, LLC recorded a trustee’s deed upon sale
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which explained that Executive Trustee Services, LLC had sold the property to GMAC
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Mortgage, LLC fka GMAC Mortgage Corporation for $307,790.07 at a public auction on
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November 17, 2011. (Trustee’s Deed Upon Sale (#4-5) at 3-4).
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III.
July 2012 Order
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Based on the foreclosure facts stated above, this Court denied in part and granted in
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part Defendants’ motion to dismiss. (Order (#56) at 9). The Court granted the motion to
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dismiss the TILA claim but denied the motion to dismiss the claims for statutorily defective
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foreclosure and quiet title. (Id. at 5-6). This Court found that the record demonstrated that
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Stewart Title was the original trustee under the deed of trust but that there was no substitution
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of trustee in the record demonstrating that Executive Trustee Services was a duly appointed
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trustee even though it had executed the notice of default. (Id. at 5). The Court directed
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Defendants to provide evidence demonstrating that Executive Trustee Services was a properly
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substituted trustee upon filing a motion for summary judgment. (Id. at 8 n.4). This Court
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dismissed Homecomings Financial Network from the lawsuit because it had executed a valid
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assignment of the deed of trust to GMAC Mortgage. (Id. at 6).
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The pending motions now follow.
LEGAL STANDARD
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In reviewing a motion for summary judgment, the court construes the evidence in the
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light most favorable to the nonmoving party. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.
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1996). Pursuant to Fed.R.Civ.P. 56, a court will grant summary judgment “if the movant shows
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that there is no genuine dispute as to any material fact and the movant is entitled to judgment
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as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are “facts that might affect the outcome
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of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106
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S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A material fact is “genuine” if the evidence is such
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that a reasonable jury could return a verdict for the nonmoving party. Id.
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The moving party bears the initial burden of identifying the portions of the pleadings and
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evidence that the party believes to demonstrate the absence of any genuine issue of material
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fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265
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(1986). A party asserting that a fact cannot be or is genuinely disputed must support the
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assertion by “citing to particular parts of materials in the record, including depositions,
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documents, electronically stored information, affidavits or declarations, stipulations (including
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those made for purposes of the motion only), admissions, interrogatory answers, or other
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materials” or “showing that the materials cited do not establish the absence or presence of a
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genuine dispute, or that an adverse party cannot produce admissible evidence to support the
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fact.” Fed. R. Civ. P. 56(c)(1)(A)-(B). Once the moving party has properly supported the
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motion, the burden shifts to the nonmoving party to come forward with specific facts showing
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that a genuine issue for trial exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
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U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). “The mere existence of a
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scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be
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evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252,
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106 S.Ct. at 2512. The nonmoving party cannot defeat a motion for summary judgment “by
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relying solely on conclusory allegations unsupported by factual data.” Taylor v. List, 880 F.2d
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1040, 1045 (9th Cir. 1989). “Where the record taken as a whole could not lead a rational trier
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of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita, 475
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U.S. at 587, 106 S.Ct. at 1356.
DISCUSSION
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I.
Defendants’ Motion for Summary Judgment (#57)
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Defendants file a motion for summary judgment and attach a copy of the substitution
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of trustee. (Mot. for Summ. J. (#57) at 3, 7). The substitution of trustee demonstrates that
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Franco Torres, an authorized officer, executed the substitution of trustee on March 21, 2011,
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substituting Executive Trustee Services, LLC as the trustee under the deed of trust.
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(Substitution of Trustee (#57) at 7-8). The affidavit of Russell Calhoun, a Senior Litigation
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Analyst for GMAC Mortgage, LLC, states that Franco Torres has been employed with GMAC
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Mortgage, LLC for three years and two months and is a quality assurance agent. (Calhoun
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Aff. (#57) at 10). Calhoun states that GMAC Mortgage, LLC had instructed and authorized
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Torres, as a quality assurance agent, to execute the substitution of trustee. (Id.). Calhoun
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states that the substitution of trustee is a true and correct copy. (Id.).
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In response, Plaintiffs, pro se, argue that the Court should deny the motion for summary
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judgment in its entirety because there are facts in dispute and triable issues of fact. (Opp’n
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to Mot. for Summ. J. (#61) at 2). Specifically, Plaintiffs dispute whether various Defendants
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had the authority to execute assignments and/or substitutions of trustees. (Id.). Plaintiffs also
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assert that Defendants’ notice of default was defective because it did not comply with the
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current version of NRS § 107.080(2)(c)(1)-(6). (Id. at 3-4).
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In reply, Defendants assert that no material facts are genuinely in dispute. (Reply to
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Mot. for Summ. J. (#63) at 3). Defendants assert that Assembly Bill (“AB”) 284, or the new
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NRS § 107.080, does not apply to this case because Plaintiffs’ notice of default was recorded
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on April 1, 2011, and AB 284 did not become effective until October 1, 2011. (Id. at 5).
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The Court grants summary judgment to Defendants on the claims for statutorily
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defective foreclosure and quiet title. The substitution of trustee and affidavit provided by
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Defendants demonstrate that GMAC Mortgage had properly substituted Executive Trustee
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Services in place of Stewart Title prior to Executive Trustee Services executing the notice of
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default on March 31, 2011. See Gomez v. Countrywide Bank, FSB, 2009 WL 3617650, * 2
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(D. Nev. 2009) (finding that as long as the note is in default and the foreclosing trustee is
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either the original trustee or has been substituted by the holder of the note or the holder’s
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nominee, there is no defect in the Nevada foreclosure). As such, the Court grants the motion
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for summary judgment (#57) in its entirety with prejudice.
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Moreover, AB 284 does not apply in this case because AB 284's stricter notice of
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default requirements only apply to notices of defaults filed on or after October 1, 2011. See
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Peterson v. Am. Home Mortg., 2012 WL 1739715, *2 (D. Nev. 2012). Because Executive
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Trustee Services executed a notice of default on March 31, 2011, AB 284 does not apply.
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II.
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Plaintiffs’ Motion for Leave to File an Amended Complaint (#67)
Plaintiffs move to file an amended complaint that includes causes of action for
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declaratory relief to determine the status of Defendants’ claims, violation of the Fair Debt
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Collection Practices Act (“FDCPA”), accounting, trespass, and quiet title. (Mot. to Amend
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(#67) at 1; Am. Compl. (#67-1) at 19-27).
Defendants filed a response and Plaintiffs filed a reply. (Resp. to Mot. to Amend (#68);
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Sur-reply to Mot. to Amend (#70)).
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A court should “freely give” leave to amend when there is no “undue delay, bad faith or
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dilatory motive on the part of the movant . . . undue prejudice to the opposing party by virtue
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of allowance of the amendment, [or] futility of amendment.” Fed. R. Civ. P. 15(a)(2); Foman
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v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962). Generally, leave to
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amend is only denied when it is clear that the deficiencies of the complaint cannot be cured
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by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
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In this case, the Court denies the motion to file an amended complaint based on futility.
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As discussed above, Defendants properly foreclosed on the property and, thus, Plaintiffs fail
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to state a claim for declaratory relief and quiet title. Additionally, foreclosure pursuant to a
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deed of trust does not constitute debt collection under the FDCPA, 15 U.S.C. § 1692.
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Camacho-Villa v. Great Western Home Loans, 2011 WL 1103681, *4 (D. Nev. 2011).
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Therefore, Plaintiffs fail to state a claim under the FDCPA. Plaintiffs appear to couch the
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trespass claim in terms of clouding the title to their property and tarnishing their standing and
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good name in the credit community. (See Am. Compl. (#67-1) at 26). Because Defendants
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properly foreclosed on the property there is no claim for “trespassing” on Plaintiff’s title and
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credit standing. Plaintiffs also fail to state a claim for accounting because there is no
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relationship of special trust between Plaintiffs and Defendants and, thus, Plaintiffs are not
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entitled to accounting. See Thomas v. Wachovia Mortg., FSB, 2011 WL 3159169, *6 (D. Nev.
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2011) (finding that absent special circumstances, no relationship of special trust exists
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between a lender and borrower to sustain an action for accounting). As such, the Court finds
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that amendment would be futile and denies Plaintiffs’ motion for leave to file an amended
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complaint (#67).
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III.
Plaintiffs’ Notice of Admissions by Defendants and Notice of Motion and Motion
to Go Forward (#72)
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Plaintiffs file a motion arguing that Defendants have accepted Plaintiffs’ version of the
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facts because Defendants did not rebut Plaintiffs’ version of the facts in the response to the
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motion for summary judgment, proposed amended complaint, and reply to motion for leave
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to amend. (Mot. of Notice (#72) at 1-2).
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The Court finds that this motion is without merit and denies the motion for notice (#72).
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Defendants have disputed Plaintiffs’ version of the facts in every pleading by providing the
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Court with the documents at issue in this foreclosure.
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CONCLUSION
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For the foregoing reasons, IT IS ORDERED that Defendant’s Motion for Summary
Judgment (#57) is GRANTED in its entirety. There are no remaining claims in this case.
IT IS FURTHER ORDERED that Plaintiffs’ Verified Motion for Leave to File an
Amended Complaint (#67) is DENIED.
IT IS FURTHER ORDERED that Plaintiffs’ Notice of Admissions by Defendants and
Notice of Motion and Motion to Go Forward (#72) is DENIED.
The Court of the Clerk shall enter judgment accordingly.
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DATED: This 25th day of January, 2013.
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_________________________________
United States District Judge
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