PennyMac Loan Services, LLC v. Townhouse Greens Association, Inc. et al

Filing 77

ORDER that ECF No. 63 Thunder Properties, Inc's Motion to Dismiss is denied. Signed by Judge Miranda M. Du on 2/6/2018. (Copies have been distributed pursuant to the NEF - LH)

1
2
3
4
5
UNITED STATES DISTRICT COURT

6

DISTRICT OF NEVADA

7

***

8
9

PENNYMAC LOAN SERVICES, LLC,
Plaintiff,

10
11
12
13

ORDER

v.
TOWNHOUSE GREENS ASSOCIATION,
INC.; THUNDER PROPERTIES, INC.;
GAYLE A. KERN, LTD d/b/a KERN &
ASSOCIATES LTD,
Defendants.

14
15

Case No. 3:16-cv-00504-MMD-VPC

I.

SUMMARY

16

This case arises out of a homeowner association’s (“HOA”) foreclosure under NRS

17

Chapter 116. Pending before this Court is Defendant Thunder Properties, Inc.’s

18

(“Thunder”) second Motion to Dismiss (“Motion”) (ECF No. 63). Plaintiff Pennymac Loan

19

Services, LLC (“Pennymac”) filed a response (ECF No. 69), and Thunder did not file a

20

reply.
For the reasons stated below, the Motion is denied.

21
22

II.

RELEVANT BACKGROUND

23

Pennymac initiated this action on August 8, 2016. (ECF No. 1.) In its complaint,

24

Pennymac brings two claims against Thunder: one for quiet title and the other for

25

injunctive relief. (ECF No. 1.) On June 6, 2017, this Court denied Thunder’s first motion

26

to dismiss for lack of subject-matter jurisdiction (ECF No. 21) and did not give Thunder

27

leave to file a new motion. (ECF No. 52, 53.) Moreover, Thunder has not yet filed an

28

answer to Pennymac’s complaint.

1

III.

LEGAL STANDARD

2

Under Rule 12(b)(6), a complaint may be dismissed for “failure to state a claim

3

upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A properly pleaded complaint

4

must provide “a short and plain statement of the claim showing that the pleader is entitled

5

to relief.” Fed. R. Civ. P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

6

The Rule 8 notice pleading standard requires Plaintiff to “give the defendant fair notice of

7

what the . . . claim is and the grounds upon which it rests.” Id. (internal quotation marks

8

and citation omitted). While Rule 8 does not require detailed factual allegations, it

9

demands more than “labels and conclusions” or a “formulaic recitation of the elements of

10

a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550

11

U.S. at 555). “Factual allegations must be enough to rise above the speculative level.”

12

Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain

13

sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556

14

U.S. at 678 (internal quotation marks omitted).

15

In Iqbal, the Supreme Court clarified the two-step approach district courts are to

16

apply when considering motions to dismiss. First, a district court must accept as true all

17

well-pleaded factual allegations in the complaint; however, legal conclusions are not

18

entitled to the assumption of truth. Id. at 678. Mere recitals of the elements of a cause of

19

action, supported only by conclusory statements, do not suffice. Id. Second, a district

20

court must consider whether the factual allegations in the complaint allege a plausible

21

claim for relief. Id. at 679. A claim is facially plausible when the plaintiff’s complaint alleges

22

facts that allow a court to draw a reasonable inference that the defendant is liable for the

23

alleged misconduct. Id. at 678. Where the complaint does not permit the court to infer

24

more than the mere possibility of misconduct, the complaint has “alleged ― but it has not

25

show[n] ― that the pleader is entitled to relief.” Id. at 679 (internal quotation marks

26

omitted). When the claims in a complaint have not crossed the line from conceivable to

27

plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570. Moreover, a

28

complaint must contain either direct or inferential allegations concerning “all the material
2

1

elements necessary to sustain recovery under some viable legal theory.” Id. at 562

2

(quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1989)).

3

IV.

DISCUSSION

4

The Motion raises four arguments: (1) Pennymac lacks standing to assert a

5

violation of due process because it received actual notice of the HOA foreclosure sale;

6

(2) Pennymac has failed to state a claim for quiet title because it did not possess any

7

interest in the property at the time of the HOA foreclosure sale; (3) the fact that the Federal

8

Housing Authority insured the first deed of trust (“DOT”) is irrelevant; and (4) the

9

complaint’s claim for permanent injunction is not a stand-alone claim and fails because

10

Pennymac does not have a valid interest in the property. The Court will consider the first

11

argument only.

12

A.

13

The Court will not consider the second, third, and fourth arguments in the Motion

14

Untimeliness and Waiver

for two reasons.

15

First, Federal Rule of Civil Procedure 12(a)(4)(A) states that “if the court denies

16

the motion [to dismiss] . . .the responsive pleading must be served within 14 days after

17

notice of the court’s action.” Here, no responsive pleading was filed by Thunder; instead,

18

Thunder chose to file a new motion to dismiss, in which it raised arguments for the first

19

time, more than two months after the Court denied its prior motion to dismiss.1 Thus, the

20

Motion generally is untimely except as to the first argument raised within it. See discussion

21

infra Sec. IV(B).

22

Second, Thunder’s failure to raise the Motion’s second, third, and fourth arguments

23

under Rule 12(b)(6) means that it waived them. Rule 12(g)(2) states that, “Except as

24

provided in Rule 12(h)(2) or (3), a party that makes a motion under this rule must not

25

make another motion under this rule raising a defense or objection that was available to

26
27
28

1As

noted, the Court denied Thunder’s first motion to dismiss on June 6, 2017,
wherein counsel for Thunder presented oral argument and, therefore, was on notice of
that motion’s disposition. (ECF No. 53.) Thunder filed the Motion presently before the
Court on August 22, 2017. (ECF No. 63.)
3

1

the party but omitted from its earlier motion.” Rule 12(h)(2) and (3) make limited

2

exceptions for raising arguments under 12(b)(6) in a subsequent motion that have

3

otherwise been waived if such arguments are raised: (1) in any pleading allowed or

4

ordered under Rule 7(a)—e.g., an answer to a complaint; (2) by motion under Rule 12(c)

5

for judgment on the pleadings—which is not possible here because Thunder has never

6

answered the complaint; (3) at trial; or (4) for lack of subject-matter jurisdiction.

7
8
9

Therefore, the Court finds that these arguments have been waived and are
untimely, and it will not consider them. The Motion is denied on these bases.
B.

Article III Standing

10

The Court construes Thunder’s first argument as one challenging Pennymac’s

11

standing under Article III of the United States Constitution. The Court considers this

12

argument here because Article III standing is a jurisdictional question that may be raised

13

at any time, that cannot be waived, and that district courts may consider sua sponte. See

14

Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 954 (9th Cir. 2011).

15

“Article III of the Constitution limits federal-court jurisdiction to ‘Cases’ and

16

‘Controversies.’” Massachusetts v. EPA, 549 U.S. 497, 516 (2007). “To satisfy Article III’s

17

standing requirements, a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a)

18

concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2)

19

the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely,

20

as opposed to merely speculative, that the injury will be redressed by a favorable

21

decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC) Inc., 528 U.S. 167,

22

180-81 (2000) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). The

23

party invoking federal jurisdiction bears the burden of establishing these elements.

24

FW/PBS, 493 U.S. at 231.

25

Thunder argues that Pennymac does not have standing to assert a due process

26

violation—a theory advanced under the complaint’s claim for quiet title—because

27

Pennymac did not acquire an interest in the property or DOT until approximately two years

28

after the HOA foreclosure sale. (See ECF No. 63 at 3-4.) Pennymac responds that
4

1

because it is the assignee it stands in the shoes of and has standing to bring any claims

2

that could have been brought by its predecessor in interest. (See ECF No. 69 at 4-6.) The

3

Court agrees with Pennymac. Moreover, Pennymac is purportedly injured by the

4

extinguishment of the DOT and a decision from this Court quieting title to it would redress

5

that injury.
The Motion is therefore denied as to this argument.

6
7

V.

CONCLUSION

8

The Court notes that the parties made several arguments and cited to several

9

cases not discussed above. The Court has reviewed these arguments and cases and

10

determines that they do not warrant discussion as they do not affect the outcome of the

11

Motion.

12
13

It is therefore ordered that Thunder Properties, Inc.’s Motion to Dismiss (ECF No.
63) is denied.

14
15

DATED THIS 6th day of February 2018.

16
17

MIRANDA M. DU
UNITED STATES DISTRICT JUDGE

18
19
20
21
22
23
24
25
26
27
28
5