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

Filing 78

ORDER denying 74 Motion to Reconsider. Signed by Chief Judge Robert C. Jones on 11/07/2013. (Copies have been distributed pursuant to the NEF - KR)

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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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The Court denied a motion to reconsider denial of Plaintiffs’ motion for summary

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judgment. The Court also denied Defendants’ motion for an order voiding the Trustee’s Deed

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Upon Sale. The Court noted that the state statute did not require a court order for a party to

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rescind a trustee’s sale on its own volition, and that insofar as Defendants appeared to offer to

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enter into a consent judgment to the effect that the foreclosure was statutorily improper, such a

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finding would require additional remedies beyond the mere rescission to which Defendants

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appeared to consent, additional rulings that the Court under state law could only avoid if the

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parties entered into a settlement agreement so stipulating. There was no evidence Plaintiffs had

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agreed to withdraw the section 107.080 claim, which provides for statutory damages and

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injunctive relief.
Defendants then moved for summary judgment, noting that the additional statutory

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remedies do not apply in this case because the Notice of Default was filed before October 1,

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2011. The Court agreed and therefore granted summary judgment but has not yet entered

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judgment. In granting summary judgment, the Court explicitly noted that it would not enter

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judgment in favor of Defendants “unless and until they file proof that the Trustee’s Deed has

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been reconveyed to the trustee in trust for Plaintiffs, subject, of course, to the Deed of Trust, or

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that the purchaser has quitclaimed any interest in the Property.” The Court put this condition

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upon the entry of judgment because although the statutory penalties are not available in this case,

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statutory avoidance of the potentially improper foreclosure is available, although that remedy will

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be moot if Defendants get the purchaser to reconvey the Trustee’s Deed or quitclaim the Property

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to Plaintiffs, which they appear to be willing to do. But unless and until this happens, Plaintiffs

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may continue to prosecute the quiet title claim to trial. Plaintiffs indicate that Defendants have

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promised to reconvey the title and that they would be willing to dismiss the remaining claim if

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Defendants do so, but the Court will not order Defendants to do so at this time. Plaintiffs may

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either settle with Defendants, if they can, or continue to prosecute the quiet title claim by
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proceeding to trial.1 Defendants may either reconvey the title or choose to defend at trial.
Plaintiffs have asked the Court to reconsider its last order granting partial summary

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judgment. Plaintiffs first argue that the foreclosure was statutorily improper, because, as the

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Court has noted, it appears that the party that filed the notice of default had not yet been

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substituted as the trustee. The Court denies the motion, because there is nothing to reconsider.

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The Court has never granted summary judgment as to the quiet title claim, which remains for

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trial. As far as Plaintiffs’ request for sanctions based upon Defendants’ alleged bad faith in

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foreclosure, that is a question of punitive damages for trial, which will be a bench trial, as there

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appears to be no jury demand in this case.

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CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Reconsider (ECF No. 74) is DENIED.

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IT IS SO ORDERED.

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Dated this 29th day of October, 2013.
Dated this 7th day of November, 2013.

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_____________________________________
ROBERT C. JONES
United States District Judge

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Discovery closed in June, and dispositive motions were due in July. (See Am. Sched.
Order, Apr. 25, 2013, ECF No. 55). A proposed joint pretrial order was due in August, (see id.),
but no party appears to have filed one. Plaintiffs risk a dismissal for failure to prosecute if they
do not press the remaining claim to trial.
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