Kerr et al v. U.S. Bank N.A.

Filing 28

ORDERED that the Motion to Dismiss (ECF No. 6 ) is GRANTED. FURTHER ORDERED that the Motion for Default Judgment (ECF Nos. 8 , 26 , 27 ) is DENIED. FURTHER ORDERED that the Motion to Dismiss (ECF No. 16 ) is DE NIED as moot. FURTHER ORDERED that the Motion for Sanctions (ECF No. 20 ) is DENIED. See Fed. R. Civ. P. 11(c)(2). FURTHER ORDERED that the Clerk shall enter judgment and close the case. Signed by Judge Robert C. Jones on 4/13/2017. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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TERRY KERR et al.
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Plaintiffs,
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vs.
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U.S. BANK, N.A. et al.,
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Defendants.
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3:17-cv-00012-RCJ-VPC
ORDER

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This case arises out of a residential foreclosure. Pending before the Court are a motion to

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dismiss and a motion for default judgment.

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I.

FACTS AND PROCEDURAL HISTORY
Plaintiffs have sued Defendants in this Court in pro se for: (1) violations of the Bank

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Holding Companies Act (“BHCA”); (2) violations of the Racketeer Influenced Corrupt

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Organizations Act (“RICO”); (3) violations of the Servicemembers Civil Relief Act (“SCRA”);

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(4) Intentional Infliction of Emotional Distress (“IIED”); (5) breach of the implied covenant of

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good faith and fair dealing; (6) RICO; and (7) violations of the Truth in Lending Act (“TILA”).

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Defendants have move to dismiss, and Plaintiffs have moved for a default judgment.

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II.

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LEGAL STANDARDS
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the

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claim showing that the pleader is entitled to relief” in order to “give the defendant fair notice of

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what the . . . claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47

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(1957). Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action

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that fails to state a claim upon which relief can be granted. A motion to dismiss under Rule

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12(b)(6) tests the complaint’s sufficiency. See N. Star Int’l v. Ariz. Corp. Comm’n, 720

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F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for

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failure to state a claim, dismissal is appropriate only when the complaint does not give the

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defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell

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Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is

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sufficient to state a claim, the court will take all material allegations as true and construe them in

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the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th

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Cir. 1986). The court, however, is not required to accept as true allegations that are merely

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conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden

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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

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A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a

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plaintiff must plead facts pertaining to his own case making a violation “plausible,” not just

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“possible.” Ashcroft v. Iqbal, 556 U.S. 662, 677–79 (2009) (citing Twombly, 550 U.S. at 556)

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(“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to

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draw the reasonable inference that the defendant is liable for the misconduct alleged.”). That is,

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under the modern interpretation of Rule 8(a), a plaintiff must not only specify or imply a

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cognizable legal theory (Conley review), he must also allege the facts of his case so that the court

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can determine whether he has any basis for relief under the legal theory he has specified or

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implied, assuming the facts are as he alleges (Twombly-Iqbal review). Put differently, Conley

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only required a plaintiff to identify a major premise (a legal theory) and conclude liability

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therefrom, but Twombly-Iqbal requires a plaintiff additionally to allege minor premises (facts of

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the plaintiff’s case) such that the syllogism showing liability is complete and that liability

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necessarily, not only possibly, follows (assuming the allegations of fact are true).
“Generally, a district court may not consider any material beyond the pleadings in ruling

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on a Rule 12(b)(6) motion. However, material which is properly submitted as part of the

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complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner

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& Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citation omitted). Similarly, “documents

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whose contents are alleged in a complaint and whose authenticity no party questions, but which

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are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6)

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motion to dismiss” without converting the motion to dismiss into a motion for summary

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judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Moreover, under Federal Rule

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of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay

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Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court

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considers materials outside of the pleadings, the motion to dismiss is converted into a motion for

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summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir.

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2001).

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III.

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ANALYSIS
The Court denies the motion for default judgment. Plaintiffs argue that BOA has failed

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to answer within 21 days of being served. The docket indicates that BOA (and other

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Defendants) filed the present motion to dismiss on the 21st day after service. A motion to

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dismiss under Rule 12 that is filed within the time to answer constitutes a sufficient defense to

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avoid a default and suspends the time to answer. See Fed. R. Civ. P. 12(a)(4). If a court grants a

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motion to dismiss, no answer to the dismissed pleading is required, and if a court denies or

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postpones a ruling on the motion, a defendant has 14 days from notice of the court’s decision to

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answer. See Fed. R. Civ. P. 12(a)(4)(A). Accordingly, Defendants have not defaulted. Also, a

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plaintiff seeking a default judgment must first petition the clerk of court for entry of default; only

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after the clerk enters default against a defendant may a plaintiff ask the court (or the clerk under

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certain circumstances) to enter a default judgment. See Fed. R. Civ. P. 55(a)–(b).

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The Court also grants the motion to dismiss. It appears clear that the lawsuit arises out of

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a foreclosure of Plaintiffs’ real property. But Plaintiffs make few allegations of fact concerning

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Defendants’ wrongdoing apart from generalized claims of “violations,” “crimes,” “corruption,”

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etc. Plaintiffs do not even identify the real property at issue. Plaintiffs do allege that certain

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Defendants conspired to convince Defendant Harmony Title Agency to falsely state that there

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was no lis pendens against the property. 1 This allegation is not sufficient to make out a claim

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under any of the listed causes of action, however. Even if it is in fact true that Defendants

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conspired to lie about the existence of a lis pendens to a prospective buyer who then purchased

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the property at issue where he would not have done so had he known of the lis pendens, it is

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difficult to see how Plaintiffs’ interests in the property could have been adversely affected. The

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buyer might be aggrieved by such a misrepresentation, but Plaintiffs’ interest in the property

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cannot have been affected by a misrepresentation made to the buyer.

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More importantly, as Defendants note, Plaintiffs previously filed a similar action against
some of the same Defendants in this District arising out of the same foreclosure. The causes of

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notes that a lis pendens functions as a warning to potential purchasers that litigation
is pending as to real property and that the property, if purchased, will be taken subject to the
results of that litigation, but a lis pendens does not prevent a sale. A purchaser may accept the
risk of pending litigation if he wishes to.
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action listed in the present action mirror those made in the first amended complaint of the

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previous action. Judge Du dismissed the previous action without leave to amend. (See Order,

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ECF No. 102 in Case No. 3:15-cv-306). An appeal is pending. The Court will not adjudicate

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duplicative claims contrary to Judge Du’s ruling. See, e.g., Adams v. Cal. Dep’t of Health Servs.,

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487 F.3d 684, 689 (9th Cir. 2007), overruled on other grounds by Taylor v. Sturgell, 553 U.S.

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880, 904 (2008).
CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Dismiss (ECF No. 6) is GRANTED.

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IT IS FURTHER ORDERED that the Motion for Default Judgment (ECF Nos. 8, 26, 27)

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is DENIED.
IT IS FURTHER ORDERED that the Motion to Dismiss (ECF No. 16) is DENIED as

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moot.
IT IS FURTHER ORDERED that the Motion for Sanctions (ECF No. 20) is DENIED.
See Fed. R. Civ. P. 11(c)(2).

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IT IS FURTHER ORDERED that the Clerk shall enter judgment and close the case.

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IT IS SO ORDERED.

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Dated thisThis 13th dayApril, 2017.
DATED: 11th day of of April, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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