Opinion
3:10-cv-0204-LRH-VPC.
July 7, 2011
ORDER
Before the court is defendants Wells Fargo Bank, N.A. ("Wells Fargo"); MERSCORP, Inc. ("MERSCORP"); and Mortgage Electronic Registration Systems, Inc.'s ("MERS") (collectively "moving defendants") motion to dismiss the remanded claims (Doc. #37) to which defendant US Bank National Association ("US Bank"), as trustee for Residential Asset Securities Corporation, joined (Doc. #43). Plaintiff Robert C. Sedlmayr filed an opposition (Doc. #41) to which moving defendants replied (Doc. #42).
Refers to the court's docket number.
Also before the court are defendant US Bank's motion to dismiss (Doc. #11) and defendant Placer Title Company, Inc.'s ("Placer Title") motion to dismiss (Doc. #16).
I. Facts and Procedural History
In March 2006, Sedlmayr purchased real property through a loan issued by defendant Mortgage Lenders Network USA, Inc. Sedlmayr defaulted on the loan and defendants initiated non-judicial foreclosure proceedings on the property.
Subsequently, on October 13, 2009, Sedlmayr filed a complaint alleging thirteen separate causes of action against defendants: (1) unfair lending practices in violation of NRS 598D.100; (2) conspiracy to commit fraud; (3) permanent injunction; (4) declaratory relief; (5) wrongful foreclosure; (6) fraud through omission; (7) quiet title; (8) contractual breach of good faith and fair dealing; (9) tortious breach of good faith and fair dealing; (10) civil conspiracy; (11) racketeering; (12) unjust enrichment; and (13) fraud in the inducement. Doc. #1, Exhibit 2.
Meanwhile, in late 2009, the United States Judicial Panel on Multi-District Litigation ("panel") consolidated a series of cases in which plaintiffs alleged that MERS engaged in improper business practices when processing home loans. The panel assigned Judge James A. Teilborg to oversee these cases and preside over all issues (discovery, dispositive motions, settlement) except for trials. In re: Mortgage Electronic Registration Systems (MERS) Litigation, MDL No. 2119.
On June 3, 2010, the panel issued a transfer order and consolidated the present action with the MDL litigation. Doc. #23. However, as part of the transfer order, the panel transferred only those claims that "relate to the formation and/or operation of MERS" and held that all other claims "unrelated to the formation and/or operation of the MERS system are separately and simultaneously remanded" to the district court in which they were first brought. Id.
On March 21, 2011, Judge Teilborg issued an initial remand order. Doc. #34. Pursuant to that order Judge Teilborg remanded: (1) claim 1 for violation of unfair lending practices, NRS 598D.100; (2) claim 10 for civil conspiracy as it relates to other remanded claims; (3) claim 11 for racketeering activity in violation of Nevada law as it relates to other remanded claims; (4) claim 12 for unjust enrichment; (5) claim 3 for injunctive relief as it relates to the remanded claims; and (6) claim 4 for declaratory relief as it relates to the remanded claims. Id. Thereafter, moving defendants filed the present motion to dismiss the remanded claims. Doc. #37.
Defendant US Bank and Placer Title's motions to dismiss were filed prior to the order of remand. See Doc. ##11, 16. These motions address claims which are not before the court and contain arguments that are not applicable to the remanded claims in their present form. Therefore, the court shall deny these initial motions to dismiss without prejudice.
II. Legal Standard
Moving defendants seek dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. To survive a motion to dismiss for failure to state a claim, a complaint must satisfy the Federal Rule of Civil Procedure 8(a)(2) notice pleading standard. See Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008). That is, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The Rule 8(a)(2) pleading standard does not require detailed factual allegations; however, a pleading that offers "'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action'" will not suffice. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
Furthermore, Rule 8(a)(2) requires a complaint to "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. at 1949 (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference, based on the court's judicial experience and common sense, that the defendant is liable for the misconduct alleged. See id. at 1949-50. "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. at 1949 (internal quotation marks and citation omitted).
In reviewing a motion to dismiss, the court accepts the facts alleged in the complaint as true. Id. However, "bare assertions . . . amount[ing] to nothing more than a formulaic recitation of the elements of a . . . claim . . . are not entitled to an assumption of truth." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S. Ct. at 1951) (brackets in original) (internal quotation marks omitted). The court discounts these allegations because "they do nothing more than state a legal conclusion — even if that conclusion is cast in the form of a factual allegation." Id. (citing Iqbal, 129 S. Ct. at 1951.) "In sum, for a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Id.
III. Discussion
A. Unfair Lending Practices, NRS 598D.100
NRS 598D.100 prohibits lenders from making loans "without determining, using commercially reasonable means or mechanisms, that the borrower has the ability to repay the home loan." NRS 598D.100(1)(b). However, this suitability language was added in mid-2007 when the statute was amended. Although Sedlmayr alleges that defendants violated the present version of the statute, his loan originated in March 2006, prior to the current amendment. Therefore, Sedlmayr's loan cannot have violated the current statutory language requiring a determination that a borrower has the ability to repay the loan.
Moreover, Sedlmayr's unfair lending practices claim is barred by the applicable statute of limitations. The statute of limitations on an unfair lending practices claim under NRS 598D is two (2) years. See NRS § 11.190(3)(a). Sedlmayr purchased his property in March 2006, and did not file the present action until 2010, over two years after the statute of limitations had expired.
Additionally, none of the moving defendants were involved in the origination of Sedlmayr's loan. Thus, they could not have violated the statute by lending Sedlmayr money "without determining, using commercially reasonable means or mechanisms, that the borrower has the ability to repay the home loan." NRS 598D.100(1)(b). Accordingly, the court shall grant moving defendants' motion to dismiss as to this claim.
B. Civil Conspiracy
To establish a claim for civil conspiracy, a plaintiff must establish: (1) the commission of an underlying tort; and (2) an agreement between the defendants to commit that tort. GES, Inc. v. Corbitt, 21 P.3d 11, 15 (Nev. 2001). Further, the cause of action must be pled with particular specificity as to "the manner in which a defendant joined in the conspiracy and how he participated in it." Arroyo v. Wheat, 591 F. Supp. 141, 144 (D. Nev. 1984).
Here, Sedlmayr fails to plead a claim for civil conspiracy with the required specificity. Sedlmayr never identifies how each individual defendant participated or joined the conspiracy. Further, Sedlmayr does not clearly identify the underlying tort that defendants committed. Sedlmayr merely alleges that his loan was one of many executed in violation of Nevada laws. Therefore, the court finds that Sedlmayr has failed to sufficiently plead a claim for civil conspiracy with the requisite specificity.
C. Racketeering
In Nevada, civil racketeering claims brought under NRS 207.400, et seq., must be plead with specificity. Hale v. Burkhardt, 764 P.2d 866, 869 (Nev. 1988). That is, the complaint must allege at least two predicate crimes related to racketeering in order to sufficiently plead a racketeering claim upon which relief can be granted. Id.
Here, Sedlmayr merely alleges that his loan was one of many executed in violation of Nevada laws. From the complaint, it is unclear what these violations were and, more importantly, what the two requisite "crimes" were. Therefore, the court finds that Sedlmayr has failed to sufficiently plead a claim for civil racketeering upon which relief can be granted.
D. Unjust Enrichment
To set forth a claim for unjust enrichment, a plaintiff must allege that a defendant unjustly retained money or property of another against fundamental principles of equity. See Asphalt Prods. Corp. v. All Star Ready Mix, 898 P.2d 699, 700 (Nev. 1995). However, an action for unjust enrichment cannot stand when there is an express written contract which guides the activities of the parties. LeasePartners Corp. v. Robert L. Brooks Trust Dated Nov. 12, 1975, 942 P.2d 182, 187 (Nev. 1997).
Here, there was a written contract between the parties, namely, the deed of trust and mortgage note. These documents guided the interactions, obligations, and rights of the parties. As such, Sedlmayr cannot make a claim in equity for actions that are guided by a contract to which he is a party. See LeasePartners Corp., 942 P.2d at 187-88.
E. Declaratory Relief and Permanent Injunction
Sedlmayr's remaining causes of action for injunctive and declaratory relief are remedies that may be afforded to a party after he has sufficiently established and proven his claims; they are not separate causes of action. See e.g., In re Wal-Mart Hour Employment Practices Litig., 490 F. Supp. 1091, 1130 (D. Nev. 2007) (holding that a claim for injunctive relief was not a separate cause of action or independent ground for relief). Here, Sedlmayr's remanded claims fail to establish a claim for relief. Accordingly, Sedlmayr is not entitled to his requested remedies.
IT IS THEREFORE ORDERED that defendants' motion to dismiss (Doc. #37) and joinder to the motion to dismiss (Doc. #43) are GRANTED. Defendants Wells Fargo Bank, N.A.; MERSCORP, Inc.; Mortgage Electronic Registration Systems, Inc.; and US Bank National Association, as trustee for Residential Asset Securities Corporation, are DISMISSED as defendants as to the remanded claims: (1) claim 1 for violation of unfair lending practices, NRS 598D.100; (2) claim 10 for civil conspiracy; (3) claim 11 for racketeering activity in violation of Nevada law (4) claim 12 for unjust enrichment; (5) claim 3 for injunctive relief; and (6) claim 4 for declaratory relief.
IT IS FURTHER ORDERED that defendants' motions to dismiss filed prior to the order of remand (Doc. ##11, 16) are DENIED without prejudice.
IT IS SO ORDERED.