Defendants Reply in Support of Their Motion To Dismiss Plaintiffs First ...

Case 2:11-cv-00405-PMP-RJJ Document 46 Filed 10/17/11 Page 1 of 25
ARIEL E. STERN, ESQ.

1 Nevada Bar No. 8276
AKERMAN SENTERFITT LLP
2 400 South Fourth Street, Suite 450
Las Vegas, Nevada 89101
3 Telephone: (702) 634-5000
Facsimile: (702) 380-8572
4
J. CHRISTOPHER JORGENSEN, ESQ.
MENG ZHONG, ESQ.
LEWIS AND ROCA LLP
7 3993 Howard Hughes Pkwy., Ste. 600
8 Telephone: (702) 949-8200
Facsimile: (702) 949-8398/fax
9
JOHN D. ADAMS, ESQ.
10 MCGUIREWOODS LLP
TEL.: (702) 634-5000 FAX: (702) 380-8572
901 East Cary Street, One James Center

400 SOUTH FOURTH STREET, SUITE 450
11 Richmond, VA 23219
LAS VEGAS, NEVADA 89101
Telephone: (804) 775-4744

12 Facsimile: (804) 698-2061
13 Attorneys for Defendants
BAC Home Loan Servicing, LP, CTC Real
14
Estate Services, Countrywide Home Loans,
15 Inc., Federal National Mortgage Association,
Merscorp, Inc., Mortgage Electronic Registration
16 Systems, Inc., Recontrust Company, and
Recontrust Company, N.A.
17
18 UNITED STATES DISTRICT COURT
19 DISTRICT OF NEVADA
20
JIMMY L. BANKS, an individual(s), Case No.: 2:11-cv-00405-PMP-RJJ
21
Plaintiff,
22 DEFENDANTS REPLY IN SUPPORT
vs. OF THEIR MOTION TO DISMISS
23 PLAINTIFFS FIRST AMENDED
COUNTRYWIDE HOME LOANS, INC., a New
24 York corporation; FEDERAL NATIONAL COMPLAINT
MORTGAGE ASSOCIATION, a District of
25 Columbia corporation; MERSCORP, INC., a
Virginia Corporation; MORTGAGE ELECTRONIC
26 SYSTEMS, INC., a subsidiary of MERSCORP,
INC., a Delaware corporation; RECONTRUST
27 COMPANY, N.A.; RECONTRUST COMPANY, a
Nevada corporation; BAC HOME LOAN
28
{22409823;1} 1
SERVICING FKA COUNTRYWIDE HOME

1 LOANS SERVICING, LP; CTC REAL ESTATE
SERVICES; THOMAS HUYNH, an individual;
2 MICHELE SJOLANDER, an individual; Nevada
Attorney CHRISTOPHER A.J. SWIFT, an
3 individual; KHADIJA GULLEY, an individual;
ANSELMO PAGKALIWANGAN, an individual;
4 ELSIE E. KROUSSAKIS, an individual; DEBRA
PEDLEY, an individual; MARGARITA PADILLA,
5 an individual; DEEDRA WILLIAMS, an individual;
KRISTEN VOLMER, an individual; and DOES
6 individuals 1 to 100 inclusive; and ROES
Corporations 1 to 30, inclusive; and all other persons
7 and entities unknown claiming any right, title, estate,
lien or interest in the real property described in the
8 Complaint adverse to Plaintiff's ownership, or any
cloud upon Plaintiff's title thereto,
9
Defendants.
10
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 Defendants Countrywide Home Loans, Inc., Federal National Mortgage Association,

12 MersCorp, Inc., Mortgage Electronic Registration Systems, Inc., ReconTrust Company, N.A.,
13 ReconTrust Company, BAC Home Loans Servicing, LP (BAC-HLS),1 and CTC Real Estate
14 Services, (collectively Defendants), submit this Reply in support of their Motion to Dismiss
15 Jimmy L. Bankss (Plaintiff) First Amended Complaint (Amended Complaint
16 I. INTRODUCTION
17 Plaintiffs lawsuit improperly attempts to stave off foreclosure and unwind a transaction
18 which Plaintiff entered into over four years ago by alleging claims and a legal theory that have been
19 consistently rejected by this Court. Plaintiffs claims arise from an April 2007 property refinance
20 cash-out where he received $127,783.33 after he executed a promissory note in the amount of
21 $280,000 secured by a Deed of Trust. Now, in an attempt to improperly deny Defendants their
22 rights to foreclose on the property under the Deed of Trust and Nevada law, Plaintiff brings this
23 eight-count lawsuit that relies on an erroneous split note legal theory and that belatedly claims that
24 Defendants violated provisions of the federal Fair Housing Act (FHA) and Nevadas Unfair
25 Lending Practices Act and Deceptive Trade Practices Act.
26
27 1
Bank of America, N.A. is successor by merger to BAC Home Loans Servicing, LP (f/k/a Countrywide
Home Loans Servicing, LP), effective July 1, 2011.
28
{22409823;1} 2
1 None of Plaintiffs claims is viable. The Amended Complaint suffers from two dispositive
2 infirmities that compel its dismissal. First, the Amended Complaint lacks any additional factual
3 allegations not contained in the original complaint which this Court dismissed on July 20, 2011.
4 Rather, the Amended Complaint unsuccessfully attempts only to make rote, mechanical recitations
5 of the legal elements for each of Plaintiffs causes of action and fails to state a claim for relief that is
6 plausible on its face. Second, the majority of Plaintiffs claims rely on an erroneous split note
7 theory that this Court has consistently rejected as being contrary to Nevada law. Plaintiffs claims
8 that do not rely on the erroneous split note theory the violations of the FHA, Unfair Lending
9 Practices, and Deceptive Trade Practice Act are barred by their respective statute of limitations.
10 For these reasons, and those stated more fully below, Defendants respectfully request that this Court
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11 dismiss the Amended Complaint with prejudice.

12 II. STATEMENT OF FACTS

13 The Amended Complaint offers very few factual allegations and instead contains broad,
14 conclusory claims that fail to distinguish among any of the eight named Defendants.2 See e.g., Am.
15 Compl. pp. 8-9 at 3-12. The limited factual allegations that Plaintiff provides fail to raise a right
16 of relief above a speculative level.
17 Plaintiffs Allegations
18 On April 3, 2007, Plaintiff entered into a cash-out refinance of property located at 6700 Lost
19 River Court, Las Vegas, Nevada 89108 (the Property). See Am. Compl., pp. 7, 9 at 2, 7. At
20 closing, Plaintiff received a promissory note (the Note) and a Deed of Trust (the Deed) securing
21 the Note. See Am. Compl., pp. 7, 9 at 2, 7. Plaintiff claims that he had an excellent3 credit score
22
2
In fact, the Amended Complaint contains fewer factual allegations than the original Complaint which
23 this Court dismissed on July 20, 2011.
3
24 During the July 20, 2011 hearing on Defendants Motion to Dismiss the original complaint, Plaintiffs
counsel characterized Plaintiffs credit score as decent. Hrg. Tr., July 20, 2011, 11:21-22. A copy of the cited
25 portions of the hearing transcript is attached as Exhibit A. The attachments to this Memorandum are appropriate for
consideration in a motion to dismiss through judicial notice. A district court may take judicial notice of matters of public
26 record. See Mack v. South Bay Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). A defendant may also attach to
a pleading documents relied upon in the Complaint, and the Court may consider those documents in ruling upon a Rule
27 12(b)(6) motion. See In re Silicon Graphics Sec. Litig., 183 F.3d 970, 9866 (9th Cir. 1999). Such consideration does
not convert the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.
28 1994).
{22409823;1} 3
1 and qualified for a loan rate of 5.75% to 6% Fixed 30 Year but that he received a loan rate of
2 7.375% fixed for 30 years, allegedly because he is African-American. See Am. Compl., p. 11 at 8.
3 Further, Plaintiff claims that Defendants did not use any commercially reasonable means or
4 mechanism to evaluate Plaintiffs capacity to pay and that Defendants qualified Plaintiff based on
5 credit score, collateral market value, and unverified income. See Am. Compl., p. 12 at 2. Last,
6 Plaintiff alleges that Countrywide Home Loans, Inc. and CTC Real Estate Services securitized the
7 note further separating ownership of the Note from the ownership on the recorded Deed of Trust.
8 Am. Compl., p. 3.
9 The Note and Deed
10 During the April 3, 2007 closing4, Plaintiffs received a $280,000.00 loan5, evidenced by a
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 promissory note (the Note) and a Deed of Trust (the Deed) securing the Note.6 See Am.
12 Compl., pp. 7, 9 at 2, 7. The Note and Deed identify Countrywide Home Loans, Inc.
13 (Countrywide) as the original lender. See Ex. B, 1; Ex. C, p. 2. The Note contains a blank
14 endorsement made without recourse by Countrywide. See Ex. B, p. 2. Plaintiff does not and cannot
15 allege that he is not in default on the Note. See generally Am. Compl.
16 The Note and Deed contain terms which govern the enforcement of the Note and the rights
17 and remedies of the note holder. The terms of the Note provide that the Lender may transfer [the]
18 Note. Ex. B, 1. Further, Lender or anyone who takes [the] Note by transfer and who is entitled
19 to receive payments under [the] Note is called the Note Holder. Ex. B, 1. The rights and
20 benefits under the Note inure to the Note Holder. See, e.g., Ex. B, 1, 4-8, 10. Moreover, [i]n
21 addition to the protections given to the Note Holder under [the] Note, a . . . Deed of Trust . . .
22 protects the Note Holder from possible losses that might result if [the borrower does] not keep the
23 promises that [he] make[s] in this Note. Ex. B, 10.
24
25 4
This was Plaintiffs fourth loan and third refinance on the property. See Hrg. Tr., 5:11-17.
5
26 Plaintiff received approximately $127,000 in cash as a result of the April 2007 refinance. See Hrg.
Tr., 5:16-17.
27 6
A copy of the Note and the Deed are attached as Exhibit B and Exhibit C, respectively. See supra, n.
3.
28
{22409823;1} 4
1 Under the Deed, in the event of an uncured default, the Note Holder may invoke the power
2 of sale, including the right to accelerate full payment of the Note, and any other remedies permitted
3 by Applicable law. Ex. C, 22. The Deed also contains procedures to effectuate a non-judicial
4 foreclosure by the trustee in accordance with the Nevada Code. See Ex. C, 22. Finally, the Deed
5 provides that its covenants and agreements . . . shall bind and benefit the successors and assigns of
6 Lender. Ex. C, 13.
7 The Foreclosure Process
8 After defaulting on the Note, BAC-HLS offered Plaintiff a trial loan modification on April 6,
9 2010. See Loan Modification Package.7 The trial modification reduced Plaintiffs payments to
10 $1,477.46 per month (a reduction of more than $450.00 per month). See Ex. D. Although BAC-
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11 HLS continually followed up with Plaintiff, Plaintiff never responded and failed to accept BAC-
12 HLSs offer.
13 Plaintiff argues that Defendants, through ReconTrust Company, N.A. (ReconTrust), filed a
14 fatally flawed Notice of Default on March 31, 2010. See Am. Compl., p. 16 at 3. According to
15 Plaintiff, the Notice of Default is defective because ReconTrust was not the Substitute Trustee on the
16 date stated on the Notice of Default.8 See Am. Compl., pp. 16-17 at 3, 5. Rather, as Plaintiff
17 alleges, ReconTrust was not named substitute trustee until April 1, 2010, the date the Substitution of
18 Trustee was recorded, which is one day after the date on the Notice of Default. See Am. Compl., p.
19 16 at 3. Plaintiff further alleges that the Notice of Trustees Sale that Defendants filed on
20 December 12, 2010 is likewise defective because: (1) it was recorded without authority for the same
21 reason (See Am. Compl., p. 16-17 at 3, 5); and (2) Countrywide, who Plaintiff claims directed
22 the filing of the Notice of Trustees Sale, was defunct and had no ability to do so. See Am. Compl.,
23 p. 16-17 at 3.
24 Contrary to Plaintiffs allegations, however, the Substitution of Trustee clearly states that
25 ReconTrust was properly substituted as trustee on March 27, 2010 four days before the date on the
26
7
27 A copy of the loan modification package is attached as Exhibit D. See supra, n. 3.
8
A copy of the Notice of Default is attached as Exhibit E. See supra, n. 3.
28
{22409823;1} 5
1 Notice of Default and approximately eight months before the date on the Notice of Trustees Sale.
2 See Substitution of Trustee, p. 29; Notice of Trustees Sale10; Am. Compl., p. 16 at 3. The
3 Substitution was valid because it was signed by the beneficiary of the Deed of Trust, BAC Home
4 Loan Servicing, LP, who was made beneficiary on March 27, 2010. See Assignment of Deed of
5 Trust.11 Further, the Notice of Trustees Sale was not filed on December 12, 2010 as Plaintiff
6 alleges. See Am. Compl., p. 16 at 3. Rather, the Notice of Trustees Sale is dated November 30,
7 2010, was recorded on December 2, 2010, and notices a December 20, 2010 sale date. See Ex. G,
8 pp. 1-2. Last, the Notice of Trustees Sale clearly states that ReconTrust, the substitute trustee, filed
9 the document and it lacks any mention of Countrywide. Moreover, BAC Home Loans Servicing, LP
10 is the successor in interest to Countrywide Home Loans Servicing, LP and it properly appointed
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 ReconTrust as substitute trustee. See Ex. F.

12 According to Plaintiff, he attended a Nevada Foreclosure Mediation Hearing but alleges that
13 Defendants failed to provide a representative with legal authorization to negotiate on their behalf.
14 Am. Compl., p. 10 at 14. See also Am. Compl., p. 15 at 3. On October 23, 2010, the State of
15 Nevada Foreclosure Mediation Program issued a Certificate stating that the mediation occurred on
16 August 19, 2010 and that The Beneficiary may proceed with the foreclosure process. Certificate,
17 p. 1.12
18 III. STANDARD OF REVIEW
19 A district court should grant a motion to dismiss if it is clear that no relief could be granted
20 under any set of facts that could be proved consistent with the allegations. Hishon v. King &
21 Spalding, 467 U.S. 69, 73 (1984). A dismissal under Rule 12(b)(6) may be based on the lack of a
22 cognizable legal theory or on the absence of sufficient facts alleged under a cognizable legal theory.
23 See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001); Balistreri v. Pacifica Police Dept, 901
24
25 9
The Substitution of Trustee is attached as Exhibit F. See supra, n. 3.
26 10
The Notice of Trustees Sale is attached as Exhibit G. See supra, n. 3.
11
27 The Assignment of Deed of Trust is attached as Exhibit H. See supra, n. 3.
12
The Certificate is attached as Exhibit I. See supra, n. 3.
28
{22409823;1} 6
1 F.2d 696, 699 (9th Cir. 1988). Bald contentions, unsupported characterizations, and legal
2 conclusions are not well-pleaded allegations and will not suffice to defeat a motion to dismiss. See
3 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); G.K. Las Vegas Ltd. PShip v.
4 Simon Prop. Grp., Inc., 460 F. Supp. 2d 1246, 1261 (D. Nev. 2006). Courts should not accept as
5 true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable
6 inferences. Sprewell, 266 F.3d at 988. Further, courts will not assume the truth of legal
7 conclusions merely because they are cast in the form of factual allegations. See Warren v. Fox
8 Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). And courts will not assume that
9 plaintiff can prove facts which [he has] not alleged, or that the defendants have violated . . . laws in
10 ways that have not been alleged. Assoc. Gen. Contractors of Cal., Inc. v. Cal. State Council of
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 Carpenters, 459 U.S. 519, 526 (1983).

12 Indeed, a plaintiffs factual allegations must be enough to raise a right to relief above the
13 speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). As such, naked
14 assertions devoid of further factual enhancement do not suffice to state a claim. Ashcroft v. Iqbal,
15 129 S. Ct. 1937, 1949, 1951 (2009). Nor do formulaic recitations of elements suffice to state a
16 claim. See id. Threadbare recitals of the elements of a cause of action, supported by mere
17 conclusory statements, do not suffice . . . . Iqbal, 129 S. Ct. at 1949. Therefore, a court
18 considering a motion to dismiss can choose to begin by identifying pleadings that, because they are
19 not more than conclusions, are not entitled to the assumption of the truth. Id.
20 Accordingly, if the complaint does not contain sufficient factual allegations to state a claim
21 to relief that is plausible on its face, it must be dismissed. Twombly, 550 U.S. at 570.
22 IV. ARGUMENT
23 Plaintiffs Amended Complaint is improperly pled13, filled entirely with conclusory
24 allegations, and relies on an erroneous legal theory. Moreover, Plaintiffs FHA, unfair lending
25
26
13
As a preliminary matter, Plaintiff improperly groups Defendants together instead of making specific allegations
27
against each one. See generally Am. Compl. At no point in the Amended Complaint does Plaintiff specify a particular
28
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1 practices, and deceptive trade practices claims are all barred by the statute of limitations. For the
2 foregoing reasons and for the reasons set forth below, this Court should dismiss Plaintiffs Amended
3 Complaint in its entirety and with prejudice.
4 A. PLAINTIFFS FAIR HOUSING ACT CLAIM FAILS AS A MATTER OF LAW.
5 1. The Fair Housing Act Claim Is Barred By A Two-Year Statute Of Limitations.
6 Plaintiffs FHA claim fails as a matter of law because the applicable statute of
7 limitations has run. Under the FHA, [a]n aggrieved person may commence a civil action in an
8 appropriate United States district court or State court not later than 2 years after the occurrence or
9 the termination of an alleged discriminatory housing practice. Mangum v. Action Collection
10 Servs., Inc., 575 F.3d 935, 946 (9th Cir. 2009) (quoting 42 U.S.C. 3613(a)(1)(A) (2011))
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 (emphasis in original). The FHAs statute of limitations starts the clock on the date the violation
12 occurs, not the date the plaintiff discovers the violation. Id; see also Garcia v. Brockway, 526 F.3d
13 456, 465 (9th Cir. 2008) (en banc) (holding that under the FHA, the statute of limitations for private
14 civil actions begins to run when the discriminatory act occurs not when it's encountered or
15 discovered).
16 Here, Plaintiff alleges that Defendants discriminated against him on the basis of race
17 at the time of his loan origination by giving him a much higher loan rate of 7.375% despite
18 having an excellent credit score. Am. Compl., p. 11 at 8. Thus, although he fails to state it,
19 Plaintiff ostensibly bases his FHA claim on an alleged violation of 42 U.S.C. 3605 which prohibits
20
21
Defendant and associate any act or omission to it. Rather, Plaintiff ostensibly alleges each claim against each Defendant
22
despite the obvious fact that many Defendants are not even subject to a particular claim. These broad brush allegations
23
fail to distinguish among the Defendants and place them on notice of the claim or claims being asserted against them as
24
required under Rule 8 of the Federal Rules of Civil Procedure. See Weinstein v. Home Am. Mortg. Corp., No. 2:10-cv-
25
01552, 2010 U.S. Dist. LEXIS 139093, at *9 (D. Nev. Dec. 29, 2010); Fortaleza v. PNC Fin. Servs. Grp., Inc., 642 F.
26
Supp. 2d 1012, 1022 (N.D. Cal. 2009). The entire complaint should be dismissed for this reason alone. All unpublished
27
cases are attached as Exhibit J.
28
{22409823;1} 8
1 discrimination in making the terms or conditions of a [real estate-related] transaction. 42 U.S.C.

2 3605(a) (2011). Although Plaintiff does not allege when his loan originated, and thus when the
3 claimed discrimination occurred, it is clear that it originated prior to the April 3, 2007 closing. See
4 Am. Compl., p. 7 at 2. Further, even if the alleged discrimination occurred or terminated on the
5 April 3, 2007 closing date, since then, nearly four years have passed before Plaintiff filed his original
6 complaint on January 25, 2011. See Original Complaint, p. 1 (ECF No. 1, Ex. 1). Accordingly,
7 because Plaintiffs FHA claim is barred by the two-year statute of limitations, this Court must
8 dismiss the claim with prejudice.
9 2. The Amended Complaint Lacks Sufficient Allegations To State A Claim For
Discrimination Under The FHA.
10
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11 Even without the statute of limitations bar, Plaintiffs FHA claim cannot survive a
12 motion to dismiss under the Twombly/Iqbal pleading standard. Under the FHA, a party can bring
13 either a disparate treatment or disparate impact cause of action. See McDonald v. Coldwell Banker,
14 543 F.3d 498, 505 n.7 (9th Cir. 2008). Here, Plaintiff attempts to state a disparate treatment claim
15 by alleging that Defendants are prohibited from providing disparate treatment to a member of a
16 protected class and that Defendants purposefully targeted him. See Am. Compl., p. 10 at 3, 5.
17 Courts apply a conjunctive four-part test to determine whether a plaintiff has sufficiently pled a
18 3605 claim. See Davenport v. Litton Loan Servicing, LP, 725 F. Supp. 2d 862, 876 (N.D. Cal.
19 2010). The plaintiff must allege: (1) that he is a member of a protected class; (2) that he applied for
20 and was qualified for a loan; (3) that the loan was given on grossly unfavorable terms; and (4) that
21 the lender either intentionally targeted him for unfair loans or currently makes loans on more
22 favorable terms to others. Id.; see also Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d
23 1039, 1046 (N.D. Cal. 2009) (granting motion to dismiss FHA claim under Twombly/Iqbal
24 standard).
25 Here, Plaintiff's FHA claim fails to state the minimum factual allegations required to defeat a
26 motion to dismiss. Rather, Plaintiff offers only formulaic and conclusory recitations of the elements
27
28
{22409823;1} 9
1 for an FHA claim.14 For example, he simply alleges that he is a member of a protected class whose
2 credit score qualified him for a loan rate lower than what Defendants offered him. See Am. Compl.,
3 pp. 10-11 at 3, 8. And that the terms were less favorable than what would be offered to a white
4 borrower or a male borrower.15 See Am. Compl., p. 11 at 7. These are mere conclusions couched
5 as factual allegations which are not entitled to a presumption of truth. See Sprewell, 266 F.3d at 988
6 (holding that courts should not accept as true allegations that are merely conclusory, unwarranted
7 deductions of fact, or unreasonable inferences.). See also Hafiz, 652 F. Supp. 2d. at 1046
8 (dismissing plaintiffs FHA claim because the allegation that she was a Fijian who was provided a
9 loan on terms less favorable than those provided to her Caucasian counterparts was conclusory and
10 unsupported). Further, Plaintiff claims that Defendants targeted him because of his race, but the
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11 Amended Complaint lacks a single factual allegation that identifies a single act taken by Defendants
12 or any fact whatsoever that supports his bald allegation that Defendants targeted him. Thus, even if
13 Plaintiffs FHA claim was timely, which it is not, it could still not survive a motion to dismiss under
14 Twombly/Iqbal.
15 B. PLAINTIFFS UNFAIR LENDING PRACTICES CLAIM FAILS AS A MATTER OF
LAW.
16
1. The Unfair Lending Practices Claim Is Barred By A Two-Year Statute Of
17 Limitations.
18 As with the FHA claim, Plaintiffs unfair lending practices claim under NRS 598D.100
19 fails as a matter of law because the applicable statute of limitations has run. In Nevada, a plaintiff
20 who alleges a statutory unfair lending practices claim under 598D.100 must file his complaint
21 within two years. NEV. REV. STAT. 11.190(3)(a); see also Barlow v. BNC Mortg., Inc., No. 3:11-
22 cv-00304, 2011 U.S. Dist. LEXIS 107291, at *6-7 (D. Nev. Sept. 21, 2011) (dismissing plaintiffs
23 598D.100 claim as outside the two year statute of limitations); Snook v. Sierra Pac. Mortg. Co., No.
24 3:11-cv-00471, 2011 U.S. Dist. LEXIS 106902, at *6-7 (D. Nev. Sept. 19, 2011) (same).
25
14
26 In fact, with the exception of a single conclusory allegation (Am. Compl., p. 11 at 8), Plaintiffs
amended FHA claim is identical, word-for-word, to his FHA claim from his original complaint that this Court dismissed
27 on July 20, 2011.
15
Because Plaintiff himself is male, this allegation is nonsensical. See Am. Compl., p. 10 at 3.
28
{22409823;1} 10
1 Plaintiff alleges that Defendants failed to determine Plaintiffs ability to repay the loan prior
2 to extending the credit to Plaintiff. Given that the loan closed on April 3, 2007, the alleged failure to
3 confirm the ability to repay occurred on or prior to that date. See Barlow, 2011 U.S. Dist. LEXIS
4 107291, at *6-7 (finding that statute began to run on a 598D.100 on the date of closing); Snook,
5 2011 U.S. Dist. LEXIS 106902, at 7 (same). Thus, because Plaintiff did not file his original
6 complaint until January 25, 2011, nearly four years later, his claim for unfair lending practices is
7 barred by the two-year statute of limitations. See Original Complaint, p. 1 (ECF No. 1, Ex. 1). For
8 this reason alone, this Court must dismiss Plaintiffs claim with prejudice.
9 2. The Amended Complaint Lacks Sufficient Allegations To State A Claim For
Unfair Lending Practices Under The Nevada Code.
10
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11 Plaintiffs claim also fails because he bases it on an October 2007 amendment to the unfair
12 lending practices statute which does not apply to Plaintiffs April 3, 2007 loan. Specifically,
13 Plaintiff alleges that, The Defendants included no evaluation of any commercially reasonable
14 means or mechanism that would demonstrate the Plaintiffs capacity to repay his loan. Am.
15 Compl., p. 12 at 2. Indeed, Plaintiffs language tracks the October 2007 amendment which
16 prohibits lenders from making a home loan without determining by any commercially means or
17 mechanism, that the borrower has the ability to repay the home loan. NEV. REV. STAT. 598D.100
18 (2007). Accordingly, because the October 2007 amendment to 598D.100 does not apply to
19 Plaintiffs April 3, 2007 loan, Defendants could not have violated the current statutory language
20 under which Plaintiff brings his claim.16 See Barlow, 2011 U.S. Dist. LEXIS 107291, at *6-7
21 (finding that the October 2007 amendment did not apply to an earlier dated loan); Snook, 2011 U.S.
22 Dist. LEXIS 106902, at *7 (same). This Court should, therefore, dismiss Plaintiffs claim with
23 prejudice.
24 Moreover, under the previous version of 598D.100, which is the version that applies here,
25 Plaintiffs conclusory allegations still fail to state a claim because they do not show how Defendants
26
27 16
Section 598D.100 as amended lacks any provision for its retroactive application . . . . Goodwin v.
Exec. Trustee Servs., Inc., 680 F. Supp. 2d 1244, 1252 (D. Nev. 2010)
28
{22409823;1} 11
1 failed to comply with the statute.17 The applicable version of 598D.100 prohibited a lender from
2 making:
3 a home loan to a borrower based solely upon the equity of the borrower in the home
property and without determining that the borrower has the ability to repay the home
4 loan from other assets, including, without limitation, income.
5
6 NEV. REV. STAT. 598D.100 (2003). Under this version of the statute, Plaintiff must alleg[e]
7 specific facts showing how Defendants failed to adhere to [the] statutory requirement. Gutierrez v.
8 Pinnacle Fin. Corp., No. 3:20-cv-00054, 2011 U.S. Dist. LEXIS 101893, at *4 (D. Nev. Sept. 8,
9 2011).
10 Here, Plaintiff alleges that Defendants qualified Plaintiff only on the basis of credit score
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11 and collateral market value or stated income that was not verified.18 See Am. Compl., p. 12 at 2.
12 This Court has rejected unfair lending practices claims making this identical, word-for-word
13 allegation.19 See Goodwin, 680 F. Supp. 2d at 1253 (dismissing 598D.100 claim for failure to state
14 a claim); see also Gutierrez, 2011 U.S. Dist. LEXIS 101893, at *4 (finding that plaintiffs claim that
15 the loan was based on [unverified] stated income fails to state a claim for unfair lending
16 practices). Regarding the identical, word-for-word allegation in Plaintiffs Amended Complaint, the
17 Goodwin court found, This allegation falls short of establishing an identifiable claim . . . because it
18 does not identify how each lender at issue calculated or assessed each Plaintiffs ability to repay.
19 Goodwin, 680 F. Supp. 2d at 1253 (find that Plaintiffs Complaint lacks any allegations that
20
21 17
As with Plaintiffs FHA claim, Plaintiffs amended unfair lending practices claim is virtually identical,
word-for-word, to the earlier version of that claim from his original complaint that this Court dismissed on July 20, 2011.
22 18
This is Plaintiffs sole allegation that purports to show how Defendants violated the statute. His claim
23 that Defendants knew or should have known of promises made to Plaintiff that he could refinance in years to come,
see Am. Compl., p. 12 at 4, does not come under the purview of 598D.100 because the statute does not make
24 communications actionable and because the alleged promise is irrelevant to whether the lender properly determined
Plaintiffs ability to pay the present loan. See Simon v. Bank of Am., N.A., No. 10-cv-00300, 2010 U.S. Dist. LEXIS
25 63480, at *19 (D. Nev. June 23, 2010).
19
Plaintiffs Amended Complaint appears to be a form complaint that contains claims and allegations
26 repeatedly rejected by this Court. See Tatro v. Homecomings Fin. Network, Inc., No. 3:10-cv-00346, 2011 U.S. Dist
LEXIS 10233, at *10 (D. Nev. Jan. 20, 2011) (The courts have received thousands of identical cookie-cutter
27 complaints that occupy the resources of the courts with a never-ending stream of identical, legally implausible
claims.)
28
{22409823;1} 12
1 Defendants extended credit to any Plaintiff based solely upon the equity in the property.). Further,
2 Plaintiffs appear to admit that the lender gave them the loan based on the income they reported to
3 the lender. This is sufficient under the statute. Gutierrez, 2011 U.S. Dist. LEXIS 101893, at *4
4 (dismissing an unfair lending practices claim under the previous version of 598D.100).
5 Accordingly, this Court should dismiss Plaintiffs claim with prejudice.
6 C. PLAINTIFFS QUIET TITLE CLAIM FAILS AS A MATTER OF LAW.
7 In Nevada, a quiet title action may be brought by any person against another who claims an
8 . . . interest in real property, adverse to the person bringing the action, for the purpose of determining
9 such adverse claim. NEV. REV. STAT. 40.010. Plaintiff cannot make out a claim for quiet title for
10 three reasons: (1) he has not discharged his debt; (2) the documents Defendants recorded are correct
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 and proper; and (3) his split note theory is incorrect.

12 1. Plaintiffs Quiet Title Claim Fails Because He Has Not Discharged His Debt.
13 Plaintiffs claim fails because he has not paid off the debt owed on the Note. An action to
14 quiet title requires a plaintiff to allege that he has paid off any debt owed on the property. See
15 Lalwani v. Wells Fargo Bank, N.A., No. 2:11-cv-00084, 2011 U.S. Dist. LEXIS 113389, at *8-10
16 (D. Nev. Sept. 30, 2011) (dismissing plaintiffs quiet title claim because he had not satisfied a lien
17 on property); Fuleihan v. Wells Fargo, No. 2:09-cv-01877, 2010 U.S. Dist. LEXIS 105287, at *5 (D.
18 Nev. Sept. 15, 2010) (holding that a borrower cannot quiet title to a property without discharging
19 any debt owed). Further, an action to quiet title based on allegedly deficient foreclosure proceedings
20 should be accompanied by an offer to pay the full amount of the debt for which the property was
21 security. Lalwani, 2011 U.S. Dist. LEXIS 113389, at *8-10 (citations omitted); see also FPCI RE-
22 HAB 01 v. E & G Inv., Ltd., 207 Cal. App. 3d 1018, 1021 (Cal. Ct. App. 1989) (The rationale
23 behind the rule is that if plaintiffs could not have redeemed the property had the sale procedures
24 been proper, any irregularities in the sale did not result in damages to the plaintiffs.).
25 Here, Plaintiff does not and cannot allege that he has paid off the debt owed on the Property.
26 Rather, the duly recorded Notice of Default establishes that Plaintiff has been in default on the Note
27 since November 1, 2009. See Ex. E. Moreover, Plaintiff seeks to quiet title based on his allegation
28
{22409823;1} 13
1 that Defendants have recorded improper or unlawful documents against the Property and have
2 unlawfully attempted to foreclose on the [Property]. Am. Compl., p. 13 at 7. The Amended
3 Complaint, however, lacks any allegation that Plaintiff is ready, willing, and able to pay off the full
4 amount of debt owed on the property. See generally Am. Compl. Thus, Plaintiffs quiet title claim
5 fails as a matter of law because he cannot satisfy the claims pleading requirements as set forth in
6 Lawani and Fuleihan. This Court should dismiss this claim with prejudice.
7 2. The Documents Recorded On The Property Are Valid And Proper.
8 Plaintiffs quiet title claim also fails because his allegation that the Notice of Default,
9 Substitution of Trustee, and/or Notice of Trustees Sale are improper[] and/or unlawful[] is simply
10 incorrect. According to Plaintiff, the Notice of Default and Notice of Trustees Sale, filed by
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11 ReconTrust, are invalid because they allegedly pre-date the Substitution of Trustee naming
12 ReconTrust as substitute trustee. See Am. Compl., pp. 16-17 at 3, 5. And Plaintiff also alleges
13 that the Notice of Trustees Sale was defective because Countrywide, who Plaintiff claims directed
14 the filing of the document, was defunct and had no ability to do so. See Am. Compl., pp. 16-17 at
15 3.
16 Plaintiff makes these bald assertions without any support whatsoever and makes his claims
17 without bothering to attach the referenced documents. Upon review of the relevant documents,
18 however, which are properly attached to this Motion to Dismiss, it is clear that Plaintiffs claims are
19 false. The Substitution of Trustee clearly states that ReconTrust was properly substituted as trustee
20 on March 27, 2010 four days before the date on the Notice of Default and approximately eight
21 months before the date on the Notice of Trustees Sale. See Exs. E-F. And the substitution was
22 valid because it was made by the beneficiary of the Deed of Trust, BAC Home Loan Servicing, LP,
23 who was made beneficiary on March 27, 2010. See Ex G. Last, the Notice of Trustees Sale clearly
24 states that ReconTrust, the substitute trustee, filed the document and it lacks any mention of
25 Countrywide. See Ex. G. Moreover, BAC Home Loans Servicing, LP is the successor in interest to
26 Countrywide Home Loans Servicing, LP and it properly appointed ReconTrust as substitute trustee.
27 See Ex. F. Accordingly, because the Notice of Default, Substitution of Trustee, and Notice of
28
{22409823;1} 14
1 Trustees Sale are all valid, effective, and proper, this Court should dismiss Plaintiffs quiet title
2 claim with prejudice.
3 3. This Court Has Consistently Rejected Plaintiffs Split Note Theories.
4 Last, Plaintiffs quiet title claim fails because it is based on an erroneous legal theory. Courts
5 of this District have held that an action for quiet title should be dismissed where plaintiffs claim is
6 not based on a cognizable legal theory. Manderville v. Litton Loan Servicing, No. 2:10-cv-01696,
7 2011 U.S. Dist. LEXIS 58096, at *3 (D. Nev. May 31, 2011). Here, Plaintiff alleges that, Said
8 Deed of Trust was indeed separated from the Note (Am. Compl., p. 14 at 14), through either the
9 Assignment of Deed of Trust or the securitization of the Note. See Am. Compl., p. 3.
10 Plaintiff's claim that he has better title because the Note was somehow split from the Deed
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11 is erroneous and contrary to the law in this District. See e.g. Chavez v. Cal. Reconveyance Co., No.
12 2:10-cv-00325, 2010 U.S. Dist. LEXIS 63415, at *2 (D. Nev. 2010) (rejecting quiet title claim
13 because securitization of a mortgage loan is not wrongful). With respect to securitization, this Court
14 has held, [t]he alleged securitization of Plaintiffs loan did not invalidate the Deed of Trust, create a
15 requirement of judicial foreclosure, or prevent Defendants from being holders in due course. Id. at
16 *6. Specifically, this Court has found that, [s]ecuritization is merely a complex way of transferring
17 the beneficial interest in the debt. The security interest follows the debt. Pritchard v. Countrywide
18 Home Loans, Inc., No. 3:11-cv-00352, 2011 U.S. Dist. LEXIS 108602, at *3 (D. Nev. Sept. 16,
19 2011). Thus, Plaintiffs theory that securitization split the Note from the Deed making the first
20 unsecured and the latter unenforceable is incorrect.
21 This Court has likewise rejected Plaintiffs theory that the Assignment of Deed of Trust split
22 the Note from the Deed.
23 [T]he separate transfer of a deed of trust would transfer the note by operation of law,
and the deed of trust would not become unenforceable. Section 5.4 of the
24 Restatement [(Third) of Property] proposes that the assignment of a note or deed of
trust effectively assigns both instruments, making them as a default rule legally
25 impossible to split such that the note becomes unsecured and the deed of trust
26 unenforceable. . . . In any case, there appears to have been no assignment of either
the Note or [Deed] in this case, and in cases this Court has seen where there is a
27 transfer to be accounted for, the transferor typically assigns the beneficial interest
28
{22409823;1} 15
under the deed of trust, which language shows an intent to transfer either the note or
1 both the note and the deed of trust, but certainly not the deed of trust alone.
2
3 Pritchard, 2011 U.S. Dist. LEXIS 108602, at *3 (emphasis supplied) (citing to RESTATEMENT
4 (THIRD) OF PROPERTY 5.4).
5 Thus, Plaintiffs quiet title claim fails and this Court should dismiss it with prejudice.
6
D. PLAINTIFFS CLAIM FOR DECEPTIVE TRADE PRACTICES FAILS AS A
7 MATTER OF LAW.20
8 1. Plaintiff Cannot Maintain A Claim Under N.R.S. 598.0923.
9 Although Plaintiff broadly alleges a deceptive practices claim under 598.0923, none of the
10 five provisions in the statute apply in this case. Section 598.0923(2) and (3) apply to transactions
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11 relating to the sale or lease of goods or services. NEV. REV. STAT. 598.0923(2)-(3) (2009).
12 Here, Plaintiff's claim deals with the sale or lease of real property and not goods or services. The
13 only provision in 598.0923 specifically addressing real property deals with land sale installment
14 contracts, which is not at issue here either. See 598.0923(5) (2009). The other two provisions
15 under 598.0923 prohibit the transaction of business without applicable licenses and the use of
16 coercion, intimidation, or duress. See 598.0923(1), (4) (2009). The Amended Complaint lacks
17 any allegations addressing either of these two issues. See generally Am. Compl. Thus, 598.0923
18 cannot provide relief to Plaintiff21 and this Court should dismiss Plaintiffs deceptive trade practices
19 act with prejudice.
20
21
22 20
To the extent that Plaintiff alleges deceptive trade practices related to misrepresentations made
23 regarding his loan, which is unclear, the claim fails as a matter of law because the applicable statute of limitations has
run. The statute of limitations for claims under N.R.S. 598.0915 and 598.0923 is four years. See NEV. REV. STAT.
24 11.190(2)(d). Plaintiffs loan closed on April 3, 2007 and he did not file his Amended Complaint until nearly four and
half years later, on August 23, 2011. See Am. Compl. (ECF No. 42). This claim does not appear in Plaintiffs original
25 complaint so the filing date does not relate back. Accordingly, Plaintiff's claim is time barred and must be dismissed.
21
Moreover, a separate statute is dedicated solely to lending practices, which supports the statutory
26 construction that the real estate transactions of the type at issue here are not covered by 598.0923. See Alexander v.
Aurora Loan Servs., No. 2:09-cv-01790, 2010 U.S. Dist. LEXIS 68172, at *6 (D. Nev. July 8, 2010) (dismissing
27 598.0923 claim against lender because it did not apply to residential mortgage transaction and finding that Nevada
legislature dedicated a separate statute to the issue).
28
{22409823;1} 16
2. Plaintiff Fails To Meet The Heightened Pleading Standards To State A Claim

1 Under N.R.S. 598.0915.
2 Plaintiffs allegations are insufficient to meet the heightened pleading requirement for a
3 claim under 598.0915. This Court has held that the elements of a violation for 598.0915 are: (1)
4 an act of consumer fraud by the defendant (2) causing damage to the plaintiff. See Picus v. Wal-
5 Mart Stores, Inc., 256 F.R.D. 651, 652 (D. Nev. 2009). Plaintiff must plead these elements with
6 particularity under Federal Rule of Civil Procedure 9(b). See Simon, 2010 U.S. Dist. LEXIS 63480,
7 at *23 (dismissing plaintiffs 598.0915 for failure to meet the heightened pleading standard).
8 Plaintiff fails to do so.
9 Plaintiff does not allege any acts, committed by specific defendants, which constitute
10 deceptive trade practices or consumer fraud. Under Rule 9(b), a plaintiff must state with
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11 particularity the circumstances constituting the fraud. FED. R. CIV. P. 9(b). The Ninth Circuit has
12 held this standard to require a plaintiff to state precisely the time, place and nature of the misleading
13 statements, misrepresentations and specific acts of fraud. Kaplan v. Rose, 49 F.3d 1363, 1370 (9th
14 Cir. 1994), cert. denied, 516 U.S. 810 (1995). The plaintiff must also set forth an explanation as to
15 why the statement or omission complained of was false and misleading. In re GlenFed Sec. Litig.,
16 42 F.3d 1541, 1548 (9th Cir. 1994).
17 Here, Plaintiffs bald claim that Defendants made false representations (Am. Compl., pp.
18 14-15 at 2) is conclusory and vague and fails to identify the who, what, where, when, and how
19 required to meet the heightened Rule 9(b) pleading standard. Nowhere in the Amended Complaint
20 does Plaintiff explain why the representation was false, as required under In re GlenFed Sec. Litig,
21 much less does he even identify what the representation even was. See generally Am. Compl.
22 Further, the Amended Complaint lacks any allegation of plausible damages. The broad claim that
23 Plaintiff has suffered harm does not meet the Rule 9(b) or even the more lenient Rule 8 pleading
24
25
26
27
28
{22409823;1} 17
1 standard. Accordingly, because Plaintiff cannot meet the pleading standard to state a claim under
2 598.0915, this Court should dismiss the claim with prejudice.22
3 E. PLAINTIFFS CLAIM FOR WRONGFUL FORECLOSURE FAILS BECAUSE THE
PROPERTY HAS NOT GONE TO SALE AND THE FORECLOSURE IS
4 OTHERWISE PROPER.23
5 At the outset, Plaintiffs wrongful foreclosure claim fails because Plaintiff does not dispute
6 that he is in default and cannot cure the default. A tort claim for wrongful foreclosure can stand only
7 when the plaintiff is not in default on the mortgage loan. See Collins v. Union Fed. Sav. & Loan
8 Ass'n, 662 P.2d 610, 623 (Nev. 1983); Jackson v. Litton Loan Servicing LP, 2:10-cv-01520, 2011
9 U.S. Dist. LEXIS 113279, at *3 (D. Nev. Sept 30, 2011); Lalwani, 2011 U.S. Dist. LEXIS 113389,
10 at *5-7 (dismissing plaintiffs wrongful foreclosure claim because they do not dispute that they were
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11 in default on the loan). Here, Plaintiff does not dispute his delinquency on the mortgage. Because
12 this element of the claim is not satisfied, for this reason alone, this Court must dismiss Plaintiffs
13 claim for wrongful foreclosure with prejudice.
14 Even if Plaintiffs default was not fatal to his claim, this Court should otherwise dismiss it
15 because Plaintiff fails to establish any legitimate reason why the foreclosure was wrongful. Plaintiff
16 argues that the foreclosure is improper because Defendants: (1) failed to properly review or
17 consider Plaintiffs loan documentation, applications, deed of trust; (2) failed to provide Plaintiff
18
19
22
Plaintiff also alleges that Defendants did not furnish Plaintiff [with] the correct Notice of Servicing that the
20
loan may be assigned, sold or transferred to any other person in violation of 12 U.S.C. 2605(a). Am. Compl., p. 15 at
21
5. Addressing this identical, word-for-word allegation, this Court held, To the extent that Plaintiff claims that the state
22
statute imposes an additional burden in providing notices to Plaintiff regarding his loan transaction, Plaintiff's claim
23
under state law is preempted by federal law. Plaintiff's claim of defective Notice of Servicing may not be brought under
24
state statute. If it violated federal law and there is a private right of action, Plaintiff may be able to bring such a claim
25
under the federal statute, but not N.R.S. 598.0915 or 598.0923. Simon, 2010 U.S. Dist. LEXIS 63480, at *22.
26
23
The Amended Complaint contains two claims for wrongful foreclosure. The second claim,
27 Statutorily Defective Foreclosure NRS 170.080 attempts to state a claim based on the Nevada code. Accordingly,
Defendants treat this claim as a tort claim for wrongful foreclosure.
28
{22409823;1} 18
1 any alternative foreclosure prevention options as required by HAMP; and (3) failed to appear at
2 Plaintiffs Nevada Foreclosure Mediation Hearing as an authorized legal representative with
3 original promissory note. Am. Compl., pp. 15-16 at 3. First, Plaintiffs claim that Defendants did
4 not properly review the loan documentation and Deed is wholly conclusory and contrary to
5 Defendants Assignment of Deed of Trust, Substitution of Trustee, and Notice of Default. See Exs.
6 D, E, G. Moreover, Plaintiff does not bother to explain why, pursuant to the loan documentation,
7 applications, deed of trust, foreclosure is wrongful. Thus, Plaintiffs first basis for his claim fails.
8 See Ashcroft, 129 S. Ct. at 1949, 1951 (naked assertions devoid of further factual enhancement do
9 not suffice to state a claim).
10 Plaintiffs second basis for his wrongful foreclosure claim is both factually and legally
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 incorrect. Defendants offered Plaintiff a generous trial modification of his loan (see Ex. A, at 5:18-
12 23) that reduced his payments by 25%, over $450.00 per month. See Exhibit The modification
13 could have become permanent had Plaintiff bothered to make any of the reduced payments, which he
14 did not. The basis for the claim is legally deficient because an allegation that a defendant failed to
15 modify the loan cannot support a claim for wrongful foreclosure. See Nieto v. Litton Loan Servicing,
16 LP, No. 2:10-cv-00223, 2011 U.S. Dist. LEXIS 18885, at *14 (D. Nev. Feb. 23, 2011) (rejecting
17 plaintiffs argument that foreclosure was wrongful because defendant failed to modify the loan);
18 Lalwani, 2011 U.S. Dist. LEXIS 113389, at *6 (dismissing wrongful foreclosure claim where
19 plaintiff argued that defendants failed to properly review or consider plaintiffs loan modification
20 application). Therefore, Plaintiffs second basis for his claim fails.
21 Likewise, Plaintiffs third basis for his wrongful foreclosure claim is both factually and
22 legally incorrect. As a legal matter, Plaintiffs third basis also fails. The Nevada Foreclosure
23 Mediation Program certified Defendants compliance with the program and stated, The Beneficiary
24 may proceed with the foreclosure process. Ex. I. Moreover, Nevada law does not require a party to
25 produce the original note in order to foreclose on property. See Barlow, 2011 U.S. Dist. LEXIS
26 107291, at *8 (Nevada law does not require the production of the original note before one of the
27 statutorily enumerated parties initiates a non-judicial foreclosure.) (citing Weingartner v. Chase
28
{22409823;1} 19
1 Home Fin., LLC, 702 F. Supp. 2d 1276, 1280 (D. Nev. 2010). For all these reasons, this Court
2 should dismiss Plaintiffs wrongful foreclosure claim with prejudice.24
3 F. PLAINTIFFS CLAIM FOR STATUTORILY DEFECTIVE FORECLOSURE FAILS
BECAUSE THE RECORDED DOCUMENTS COMPLY WITH THE NEVADA
4 CODE.
5 Plaintiffs claim under 170.080 fails because, as evidenced by the recorded documents
6 properly attached to this Motion to Dismiss, the foreclosure process was proper and compliant with
7 170.080. Under Nevada law, a deed of trust secure[s] the performance of an obligation or the
8 payment of any debt. NEV. REV. STAT. 107.020. Upon default, the beneficiary, the successor in
9 interest of the beneficiary, or the trustee may foreclose on the property through a trustees sale to
10 satisfy the obligation. Id.; see also NEV. REV. STAT. 107.080(2)(c). A nominee on a deed of trust
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 has the authority, as an agent, to act on behalf of the holder of the promissory note and execute a
12 substitution of trustees. Gomez v. Countrywide Bank, FSB, No. 2:09-cv-01489, 2009 U.S. Dist.
13 LEXIS 108292, at *1 (D. Nev. Oct. 26, 2009). As long as the note is in default and the foreclosing
14 trustee is either the original trustee or has been substituted by the holder of the note or the holders
15 nominee, there is no defect in the foreclosure. Id. at *2.
16 In this case, it is clear that the foreclosure process was properly executed. An examination of
17 each document reveals no deficiency and each party that acted was authorized to take the actions that
18 they did pursuant to the Note, Deed, and statute. In sum, the substitution of trustee, made by BAC-
19 HLS, naming ReconTrust as substitute trustee was valid and so the Notice of Default and the Notice
20 of Trustees Sale were valid as well. See Exs. E-G; supra pp. 15-16.
21 To the extent that Plaintiffs claim is based on his erroneous split note theory, 107.080
22 does not forbid the securitization of a loan. See NEV. REV. STAT. 107.080. The alleged
23 securitization of the Note did not invalidate the Deed, create a requirement of judicial foreclosure, or
24 prevent Defendants from being holders in due course. See Chavez, 2010 U.S. Dist. LEXIS 63415, at
25 *6 (dismissing wrongful foreclosure claim based on erroneous securitization theory); Futch v. BAC
26
24
Plaintiffs claim for punitive damages under 15 U.S.C. 1681n(a)(2) is misplaced and has no
27 applicability here. See Am. Compl., p. 16 at 6. The cited statute relates to fair credit reporting practices and is
irrelevant to a claim that a Nevada foreclosure was wrongful.
28
{22409823;1} 20
1 Home Loans Servicing, LP, No. 2:10-CV-02256, 2011 U.S. Dist. LEXIS 112527, at *5 (D. Nev.
2 Sept. 29, 2011) (same).
3 Accordingly, Plaintiff fails to establish how the foreclosure proceedings did not comply with
4 170.080. Thus, this Court should dismiss Plaintiffs claim with prejudice.
5 G. PLAINTIFFS CLAIM FOR SLANDER OF TITLE FAILS BECAUSE THE
RECORDED DOCUMENTS DO NOT CONTAIN FALSE INFORMATION.25
6
7 Plaintiffs claim for slander of title fails because the false information he alleges is based on
8 his erroneous split note theory. To state a claim for slander of title, a plaintiff must allege false
9 and malicious communications [contained within recorded documents], disparaging to ones title in
10 land and causing special damages. Barlow, 2011 U.S. Dist. LEXIS 107291, at *5 (quoting
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 Executive Mgmt., Ltd. v. Ticor Title Co., 114 Nev. 823 (Nev. 1998)). The element of malice in a
12 slander of title action requires a showing that the defendant knew that the communication was false
13 or acted in reckless disregard of its truth or falsity. Rowland v. Lepire, 662 P.2d 1332, 1335 (Nev.
14 1983). Reckless disregard is found when there is a high degree of awareness of . . . probable
15 falseness of the statement, or there are serious doubts as to [its] truth. RESTATEMENT (SECOND)
16 OF TORTS 580A cmt. d (1977). If a defendant has a reasonable basis for his claim to the property,
17 even if the claim proves to be false, there is no malice and a claim for slander of title must fail.
18 Rowland, at 1335-36 (citation omitted).
19 Plaintiffs claim is confusing as it does not expressly allege any false or malicious
20 communications that disparage the Property. Rather, Plaintiff appears to indirectly argue that the
21 documents recorded by Defendants the Notice of Default, Substitution of Trustee, and Notice of
22 Trustees Sale are false or malicious because, Plaintiff alleges, Defendants illegally separated
23 ownership of [the Note] . . . from ownership of the Nevada-recorded Deed of Trust. Am. Compl.,
24 p. 18 at 2. Based upon his later allegations referring to a Depositor and an Underwriter (Am.
25
25
Plaintiff styles his claims as Broken Chain of Custody (Promissory Note & Slander
26 of Title). Am. Compl. p. 18. Defendants could not find any cognizable cause of action known as
Broken Chain of Custody. Even assuming that Plaintiff meant Broken Chain of Title,
27 Defendants still could not find any cognizable cause of action. Accordingly, Defendants treat this as
a claim for slander of title.
28
{22409823;1} 21
1 Compl., p. 18 at 4-5), Plaintiff appears to argue that the Note split from the Deed as a result of the
2 securitization of the Note. Under this theory, Plaintiffs claim fails because, given this Courts
3 consistent rejection of the securitization split-note theory, Defendants had a reasonable basis to
4 believe that the Note and Deed did not split and that their recorded documents were proper. See
5 Chavez, 2010 U.S. Dist. LEXIS 63415, at *2 (rejecting securitization split note theory); Pritchard,
6 2011 U.S. Dist. LEXIS 108602, at *3 (same). Thus, Defendants could not have known that the
7 communication was false and could not have acted in reckless disregard of its truth or falsity.
8 Plaintiffs claim fails for this reason alone.
9 Plaintiffs claim further fails because where a plaintiff is in default of his mortgage and the
10 foreclosure documents are statutorily proper, a claim for slander of title will not lie. See Ramos v.
TEL.: (702) 634-5000 FAX: (702) 380-8572
11 MERS, Inc., No. 2:08-cv-1089, 2009 U.S. Dist. LEXIS 124874, at *4 (D. Nev. Mar. 5, 2009)
12 (dismissing slander of title action because Plaintiffs do not dispute that they were in default on their
13 loan); Pritchard, 2011 U.S. Dist. LEXIS 108602, at *2 (dismissing slander of title claim because
14 the foreclosure documents were statutorily proper). Here, as established above, see supra p. 15-16,
15 the foreclosure documents are statutorily proper and Plaintiff is in default of his mortgage. See Ex.
16 E. Accordingly, Plaintiff cannot prevail on his claim and this Court should dismiss it with prejudice.
17 H. PLAINTIFFS CLAIM UNDER THE FAIR CREDIT REPORTING ACT FAILS AS A
MATTER OF LAW.
18
19 As with his other claims, Plaintiffs FCRA claim consists of mere conclusory allegations that
20 are insufficient to withstand a motion to dismiss. More importantly, however, Plaintiff cannot
21 satisfy the elements necessary to state a claim under the FCRA. Furnishers of information to credit
22 reporting agencies cannot be liable under the FCRA unless they receive notice from the credit
23 reporting agency that the consumer disputes the negative report and then they fail to comply with
24 their statutory duties. See Torne v. Republic Mortg., LLC, No. 2:09-cv-2445, 2010 U.S. Dist.
25 LEXIS 45518, at *10-11 (D. Nev. May 10, 2010) (citing Nelson v. Chase Manhattan Mortg. Corp.,
26 282 F.3d 1057, 1060 (9th Cir. 2002)).
27
28
{22409823;1} 22
1 Given this notice requirement, Plaintiff's FCRA claim fails as a matter of law. The Amended
2 Complaint lacks any allegation that Plaintiff informed the credit reporting agency that he disputed
3 Defendants alleged negative report. See generally Am. Compl. Rather, Plaintiff bases his entire
4 claim on conclusory allegations that Defendants wrongfully, improperly, and illegally reported
5 negative information . . . . Am. Compl., p. 20 at 2. This is not sufficient to state a claim under the
6 FCRA. Because Plaintiff cannot allege that any of the Defendants received notice that Plaintiff
7 disputed the negative report, his FCRA claim must be dismissed with prejudice.
8 Further, Plaintiff fails to provide any factual support for his allegation that Defendants
9 wrongfully provided information to the credit reporting agencies. See generally Am. Compl. His
10 failure to state what information was unlawfully provided, how this reporting was inaccurate, and
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11 how it caused injury to plaintiffs is fatal to his claim. McCormick v. Exec. Trustee Servs., No. 2:09-
12 cv-02331, 2010 U.S. Dist. LEXIS 87176, at *4 (D. Nev. Aug. 24, 2010) (emphasis in original)
13 (dismissing FCRA claim for failure to state a claim under Rule 8). Absent any facts supporting this
14 allegation, Plaintiff cannot meet his Rule 8 pleading requirements and his claim must be dismissed.
15 Likewise, Plaintiff brings his claim under 15 U.S.C. 1681(o) which allows for recovery for
16 negligent non-compliance. See Am. Compl., p. 20 at 5. However, Plaintiff fails to allege a single
17 factual allegation to establish Defendants negligence. See generally Am. Compl. Accordingly,
18 because Plaintiff fails to meet the basic Rule 8 pleading standards as set forth in Twombly/Iqbal, this
19 Court should dismiss Plaintiffs FCRA claim.
20
21
22
23
24
25
26
27
28
{22409823;1} 23
1 V. CONCLUSION
2 WHEREFORE, for the foregoing reasons, this Court should dismiss Plaintiffs Amended
3 Complaint with prejudice.
4 DATED this 17th day of October, 2011.
5
/s/ Ariel Stern
6 ARIEL E. STERN, ESQ.
Nevada Bar No. 8276
7 400 South Fourth Street, Suite 450
8
J. CHRISTOPHER JORGENSEN, ESQ.
MENG ZHONG, ESQ.
TEL.: (702) 634-5000 FAX: (702) 380-8572
LEWIS AND ROCA LLP

11 3993 Howard Hughes Pkwy., Ste. 600


12
JOHN D. ADAMS, ESQ.
13 MCGUIREWOODS LLP
901 East Cary Street, One James Center
14 Richmond, VA 23219
Telephone: (804) 775-4744
15 Facsimile: (804) 698-2061
16 Attorneys for Defendants BAC Home Loan
Servicing, LP, CTC Real Estate Services,
17
Countrywide Home Loans, Inc., Federal
18 National Mortgage Association, Merscorp, Inc.,
Mortgage Electronic Registration Systems, Inc.,
19 Recontrust Company, and Recontrust Company,
N.A.
20
21
22
23
24
25
26
27
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{22409823;1} 24
1 CERTIFICATE OF SERVICE
2 I HEREBY CERTIFY that, on the 17th day of October, 2011 and FRCP 5(b), I served via
3 CM/ECF and/or deposited for mailing in the U. S. Mail a true and correct copy of the foregoing
4 DEFENDANTS REPLY IN SUPPORT OF THEIR MOTION TO DISMISS PLAINTIFFS
5 FIRST AMENDED COMPLAINT, postage prepaid and addressed to:
6 GERALDINE KIRK-HUGHES
KIRK-HUGHES & ASSOCIATES
7 2551 South Fort Apache Raod
8
9 SAMUEL A. SCHWARTZ
THE SCHWARTZ LAW FIRM
10 626 South Third Street
TEL.: (702) 634-5000 FAX: (702) 380-8572

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Attorneys For Plaintiff

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13 /s/ Sarah Starkey

An employee of AKERMAN SENTERFITT LLP
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Defendants Reply in Support of Their Motion To Dismiss Plaintiffs First ...

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Case 2:11-cv-00405-PMP-RJJ Document 46 Filed 10/17/11 Page 1 of 25

ARIEL E. STERN, ESQ.

901 East Cary Street, One James Center

Telephone: (804) 775-4744

18 UNITED STATES DISTRICT COURT

SERVICING FKA COUNTRYWIDE HOME

11 Defendants Countrywide Home Loans, Inc., Federal National Mortgage Association,

15 Jimmy L. Bankss (Plaintiff) First Amended Complaint (Amended Complaint

25 Lending Practices Act and Deceptive Trade Practices Act.

11 dismiss the Amended Complaint with prejudice.

12 II. STATEMENT OF FACTS

11 ReconTrust as substitute trustee. See Ex. F.

11 Carpenters, 459 U.S. 519, 526 (1983).

1 discrimination in making the terms or conditions of a [real estate-related] transaction. 42 U.S.C.

11 and proper; and (3) his split note theory is incorrect.

8 1. Plaintiff Cannot Maintain A Claim Under N.R.S. 598.0923.

2. Plaintiff Fails To Meet The Heightened Pleading Standards To State A Claim

13 claim for wrongful foreclosure with prejudice.

15 nominee, there is no defect in the foreclosure. Id. at *2.

18 Rowland, at 1335-36 (citation omitted).

26 282 F.3d 1057, 1060 (9th Cir. 2002)).

LEWIS AND ROCA LLP

11 3993 Howard Hughes Pkwy., Ste. 600

Las Vegas, Nevada 89169

Las Vegas, Nevada 89101

Attorneys For Plaintiff

13 /s/ Sarah Starkey

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