Green Tree Servicing LLC v. William Won Holdings, LLC et al

Filing 37

ORDER denying 25 Motion to Dismiss. Signed by Judge Howard D. McKibben on 11/18/15. (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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GREEN TREE SERVICING LLC,

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Plaintiff,
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vs.
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WILLIAM WON HOLDINGS, LLC,
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WINGFIELD SPRINGS COMMUNITY
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ASSOCIATION, et al.,
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Defendants.
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_________________________________ )
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WINGFIELD SPRINGS COMMUNITY
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ASSOCIATION,
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Third-Party Plaintiff,
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vs.
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ANGIUS & TERRY LLP, ATC
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ASSESSMENT COLLECTION GROUP, LLP, )
et al.
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Third-Party Defendants.
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_________________________________ )

3:15-cv-00197-HDM-WGC
ORDER

This action concerns real property located at 2400 Dodge

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Drive, Sparks, Nevada, 89436.

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Marceliano Samano purchased the property with a loan secured by a

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deed of trust on the property.

In 2006, Rafael Samano Reyes and

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In May 2008, Samano and Samano Reyes filed bankruptcy.

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Thereafter, they became delinquent on assessments and fees they

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owed to the homeowners association, defendant Wingfield Springs

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Community Association (“Wingfield”). Samano and Samano Reyes were

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discharged from bankruptcy in February 2011, and the bankruptcy was

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terminated on August 3, 2011.

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foreclosure notices throughout 2011 and 2012, including during the

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pendency of Samano and Samano Reyes’ bankruptcy, Wingfield

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foreclosed upon its HOA lien on the property, and the property was

After filing and recording various

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sold at a foreclosure sale in 2012.

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process, Wingfield was first represented by Nevada Association

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Services and later by ATC Assessment Collection Group, LLC (“ATC”).

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During the foreclosure

Plaintiff Green Tree Servicing LLC is the current servicer of

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the subject loan and beneficiary of the subject deed of trust.

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Plaintiff has filed suit against Wingfield, alleging that it,

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through its foreclosure agents, failed to comply with statutory

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notice and mailing requirements and violated the automatic

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bankruptcy stay.

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invalid as well as commercially unreasonable.

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It alleges that the HOA sale was therefore

In response, Wingfield has filed a third-party complaint

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against ATC Assessment Collection Group, LLC (“ATC”), its

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foreclosure agent at the time of the foreclosure sale, asserting

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claims of express indemnity, equitable indemnity, and contribution.

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ATC now moves to dismiss the claims of express indemnity and

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equitable indemnity pursuant to Federal Rule of Civil Procedure

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12(b)(6) (#25).

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(#36).

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Wingfield has responded (#32), and ATC has replied

In considering a motion to dismiss under Rule 12(b)(6), the
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court must accept as true all material allegations in the complaint

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as well as all reasonable inferences that may be drawn from such

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allegations.

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2000).

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the light most favorable to the nonmoving party.

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States, 234 F.3d 428, 435 (9th Cir. 2000).

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conclusions are not entitled to the presumption of truth.

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v. Iqbal, 556 U.S. 662, 679 (2009).

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LSO, Ltd. v. Stroh, 205 F.3d 1146, 1150 n.2 (9th Cir.

The allegations of the complaint also must be construed in
Shwarz v. United

However, legal
Ashcroft

While plaintiff is required to give only a ‘short and plain

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statement’ of their claims in the complaint,” Paulsen v. CNF, Inc.,

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559 F.3d 1061, 1071 (9th Cir. 2009), a complaint must also “contain

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sufficient factual matter . . . to state a claim to relief that is

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plausible on its face.”

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facial plausibility when the plaintiff pleads factual content that

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allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.”

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Iqbal, 556 U.S. at 678.

“A claim has

Id.

In ruling on a Rule 12(b)(6) motion to dismiss, a court may

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consider documents incorporated by reference without converting the

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motion into a motion for summary judgment.

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Ritchie, 342 F.3d 903, 907 (9th Cir. 2003).

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reference allows the court to consider documents not attached to

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the complaint if the authenticity of the documents is not

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questioned and either (1) the plaintiff’s claim depends on the

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contents of the document, or (2) the contents of the document are

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alleged in the complaint.

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(9th Cir. 2005).

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incorporated by reference and is not limited to considering only

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those portions mentioned in the complaint.

United States v.
Incorporation by

Kneivel v. ESPN, 393 F.3d 1068, 1076

The court may consider the entirety of a document

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In re Stac Electronics

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Sec. Litig., 89 F.3d 1399, 1405 n.4 (9th Cir. 1996).
Wingfield bases its express indemnity claim on an

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indemnification provision in the parties’ agreement.1

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provision states:

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That

ATC agrees that if any claims or any proceedings are
brought against the Client, whether by a governmental
agency, private person, or otherwise, in which it is
alleged that ATC has violated any law, regulation, order
or ruling, ATC shall defend, indemnify and hold Client
harmless against any liabilities, loss, damage, or
expense, including but not limited to attorney’s fees and
court costs, to the extent such claims are a result of
the assertion that ATC has violated such law, regulation,
order or ruling. Client will be responsible for all
costs, including attorney’s fees, which are the result of
actual or alleged conduct of Client.

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ATC, however, argues that Wingfield’s express indemnification
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claim is subject to the agreement’s arbitration provision, which
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provides:
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Any dispute arising out of this Agreement shall first be
submitted to mediation as a condition precedent to
proceeding with arbitration. If the dispute cannot be
resolved in mediation, any dispute arising out of this
Agreement shall be resolved by binding arbitration
pursuant to the rules of the American Arbitration
Association or Judicial Arbitration and Mediation
Services. . . . This mediation and arbitration provision
applies only to disputes between Client and ATC and
expressly does not provide a right to mediation or
arbitration to any third party including, without
limitation, a homeowner subject in the delinquent
assessment collection process.

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ATC asserts that all claims of alleged wrongdoing in the
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plaintiff’s complaint concern actions taken by NAS and not by ATC.
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As such, ATC argues that the complaint does not allege that ATC
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“violated any law, regulation, order or ruling” and therefore the
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The court may consider the agreement under the incorporation by
reference doctrine without converting the motion to dismiss to a motion for
summary judgment.
Wingfield’s claim relies upon the agreement, and the
agreement’s authenticity is not questioned.

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indemnification provision of the agreement does not apply.

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However, because Wingfield believes the indemnification provision

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does apply and that ATC therefore owes a duty both to defend and to

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indemnify Wingfield in this case, ATC asserts, there is a dispute

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over what the agreement requires, and that dispute must be

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submitted to arbitration.

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Whether a dispute must be arbitrated “is an issue for judicial

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determination unless the parties clearly and unmistakably provide

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otherwise.”

Goldman, Sachs & Co. v. City of Reno, 747 F.3d 733,

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738 (9th Cir. 2014).

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arbitrability of their dispute is a question for the arbitrator,

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nor does the agreement appear to contain any clear and unmistakable

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provision requiring such.

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arbitrability is for this court.

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The parties have not argued that the

Accordingly, the question of

The parties agree that until May 4, 2011, collection

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activities with respect to 2400 Dodge Drive were conducted by NAS,

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and that ATC took over collection activities beginning on May 5,

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2011.

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Assessment Lien was recorded.

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of Default and Election to Sell under Homeowners Association Lien

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was recorded.

On June 12, 2012, an Intent to File Notice of Sale

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was recorded.

On August 23, 2012, a Notice of Sale was recorded.

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On September 26, 2012, the property was sold at auction, and on

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October 1, 2012, the Trustee’s Deed Upon Sale was recorded.

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and Samano Reyes’ bankruptcy, filed on May 17, 2008, was terminated

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on August 3, 2011.

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On or about April 11, 2011, a Notice of Delinquent
On or about July 15, 2011, a Notice

Samano

The plaintiff’s first amended complaint alleges that several
of the foreclosure notices violated the bankruptcy stay and/or were
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otherwise deficient.

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that violated the bankruptcy stay were not filed, recorded, or

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mailed by ATC.2

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notices, the complaint alleges that: (1) “the HOA and its

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foreclosure agents did not comply with all mailing and notice

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requirements stated in N.R.S. 116.31162 through N.R.S. 116.31168”;

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(2) the “HOA assessment lien and foreclosure notices included

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improper fees and costs in the amount demanded”; (3) the “HOA Sale

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violated [plaintiff’s] rights to due process because it, its

The parties apparently agree that the notices

However, in addition to those allegedly invalid

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agents, loan servicers, and/or predecessors in interest were not

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given proper, adequate notice and the opportunity to cure the

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deficiency or default in the payment of the HOA’s assessments”; (4)

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the “HOA Sale did not comply with N.R.S. 116.3102 et seq.”; and (5)

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the sale price at the HOA sale “was not commercially reasonable”;

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and (6) the HOA sale was not “conducted in good faith.”

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the complaint alleges that because the various notices were

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deficient or invalid, the resulting foreclosure sale was unlawful,

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void, and invalid.

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Further,

The complaint does not separate its allegations with respect

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to Wingfield’s two collection agents.

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complaint’s general allegations of wrongdoing, at this stage of the

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proceedings, must be construed as claims against both agents.

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Moreover, the complaint alleges that the foreclosure sale itself

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was unlawful and invalid, and it is undisputed that ATC conducted

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the foreclosure sale.

Accordingly, all of the

Thus, the complaint very clearly alleges

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Although the Notice of Default and Election to Sell under Homeowners
Association Lien was recorded on July 15, 2011 after ATC took over
collection activities, Wingfield has not argued that ATC was responsible for
the filing or recording of this notice.

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that ATC, or Wingfield through ATC, violated the law.

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therefore concludes that as the indemnification provision clearly

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applies, there is no dispute arising out of the agreement that must

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be submitted to arbitration, and the motion to dismiss on that

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basis is accordingly DENIED.

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to renew after the close of discovery should discovery support a

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renewal of the motion.

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The denial will be without prejudice

ATC’s motion to dismiss the equitable indemnity claim is
likewise denied without prejudice.
In accordance with the foregoing, ATC’s motion to dismiss
(#25) is hereby DENIED WITHOUT PREJUDICE.

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IT IS SO ORDERED.

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DATED: This 18th day of November, 2015.

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The court

____________________________
UNITED STATES DISTRICT JUDGE

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