Phillips et al v. First Horizon Home Loan Corp et al

Filing 63

ORDER denying 51 Motion for District Judge to Reconsider Order and denying 62 Motion to Rescind. Signed by Chief Judge Robert C. Jones on 7/9/13. (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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MARK PHILLIPS et al.,
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Plaintiffs,
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vs.
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FIRST HORIZON HOME LOAN CORP et al.,
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Defendants.
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3:12-cv-00013-RCJ-WGC
ORDER

This is a residential foreclosure avoidance case removed in diversity from state court.

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The Complaint listed causes of action for quiet title and intentional interference with prospective

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economic advantage. Defendants moved to dismiss, and Plaintiffs responded by moving to

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amend and for summary judgment on the proposed amended complaint. The Court granted leave

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to amend, denied the motion to dismiss as moot, and denied the motion for summary judgment

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because the proposed amended complaint had not yet been served upon Defendants. Plaintiffs

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then filed the Amended Complaint, which lists causes of action for wrongful foreclosure, quiet

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title, negligence, and fraud. The Court denied cross motions for summary judgment, noting that

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there was a genuine issue of material fact as to the statutory propriety of the foreclosure such that

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the quiet title claim could not be summarily adjudicated, but also noting that no common law

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claim for wrongful foreclosure could lie because there was no genuine issue of material fact as to

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default.

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Two motions are pending before the Court. First, Plaintiffs ask the Court to reconsider

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denial of their motion for summary judgment. Plaintiffs argue that the Court incorrectly relied on

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Gomez v. Countrywide Bank, FSB, No. 2:09-cv-01489-RCJ-LRL, 2009 WL 3617650 (D. Nev.

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Oct. 26, 2009) in ruling that no claim could lie for wrongful foreclosure where there was a

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default because Gomez is not authoritative. Gomez, however, relies on the authoritative case

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from the Nevada Supreme Court. See 2009 WL 3617650, at *7 (quoting Collins v. Union Fed.

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Sav. & Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983) (“An action for the tort of wrongful

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foreclosure will lie if the trustor or mortgagor can establish that at the time the power of sale was

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exercised or the foreclosure occurred, no breach of condition or failure of performance

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existed . . . .”)). The Court denies the motion to reconsider.1

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Second, Defendants ask the Court for an order voiding the Trustee’s Deed Upon Sale

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recorded on December 12, 2011 as document no. 4065705 in the Washoe County Recorder’s

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Office. Defendants argue that such a rescission requires an order form the Court. See Nev. Rev.

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State. § 107.080(5)(a). The statute, however, does not require a court order for a party to rescind

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a trustee’s sale on its own volition. Rather, the statute simply mandates that a court with

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jurisdiction over such a dispute must declare a trustee’s sale under section 107.080 void if the

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trustee or other authorized seller has not substantially complied with the requirements of section

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107.080. See id. § 107.080(5), (5)(a). In other words, Defendants appear via the present motion

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to offer to enter into a consent judgment to the effect that the foreclosure was statutorily

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improper. But such a finding would require additional remedies beyond the mere rescission to

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which Defendants consent; the Court must also under the statute award damages of $5000 or

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The Court also disagrees with Defendants’ contention in the Response that the
potentially defective Appointment of Successor Trustee (the “Substitution”) was effective as of
the date typed thereupon, June 28, 2010. (See Substitution, ECF No. 40-5, at 8). Although that
would be the case if the signatory had previously signed the document and later appeared before
the notary to acknowledge her signature, in this case the notary’s jurat clearly states that the
signatory appeared before her and signed on July 8, 2010.
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treble actual damages, whichever is greater, plus fees and costs, plus an injunction against sale

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until the requirements of subsections (2)–(4) of section 107.080 are complied with. See id.

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§ 107.080(7)(a)–(c). The Court therefore denies Defendants’ motion, as the Court cannot simply

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void the trustee’s sale without also awarding damages, fees, costs, and an injunction, remedies to

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which Defendants do not clearly consent via their present motion. The Court can only avoid

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these additional rulings under state law if the parties enter into a settlement agreement so

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stipulating.

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CONCLUSION
IT IS HEREBY ORDERED that the Motion to Reconsider (ECF No. 51) and the Motion
to Rescind (ECF No. 62) are DENIED.

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IT IS SO ORDERED.

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Dated this 9th day of July, 2013.
Dated this 21st day of June, 2013.

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_____________________________________
ROBERT C. JONES
United States District Judge

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