Clark v. US Bank National Association

• Court: District Court, D. Nevada
• Decided: March 5, 2024
• Docket: 2:23-cv-00493
• Status: Unknown

Opinion

2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 * * *

5 ALRED CLARK, Case No. 2:23-cv-00493-GMN-BNW

6 Plaintiff, ORDER AND REPORT AND RECOMMENDATION 7 v.

8 U.S. BANK NATIONAL ASSOCIATION, et al., 9 Defendants. 10 11 12 Before the Court is Plaintiff’s Motion for Leave to File a First Amended Complaint. ECF 13 No. 45. Defendants opposed (ECF No. 47), and Plaintiff replied. ECF No. 48. Because the Court 14 finds that Defendants have not met their burden to show that Plaintiff’s wrongful foreclosure and 15 Fair Debt Collection Practices Act (“FDCPA”) claims are barred by res judicata or that 16 amendment would be futile, the Court grants Plaintiff’s motion. But because these claims (as 17 they presently stand) are insufficiently pleaded, the Court recommends dismissal of Plaintiff’s 18 wrongful foreclosure and FDCPA claims without prejudice and with leave to amend. As to 19 Plaintiff’s other causes of action—which include a harassment and abuse claim, miscellaneous 20 criminal claims, and a section 1983 claim—the Court recommends dismissal with prejudice as 21 amendment would be futile. 22 I. BACKGROUND 23 Plaintiff’s claims center around the foreclosure of a home he purchased in 2006. See 24 generally ECF No. 1. Plaintiff’s home loan was secured by a deed that was assigned numerous 25 times: first to Clarion Mortgage Capital, then to New Century, then to U.S. Bank National 26 Association (“U.S. Bank”). ECF No. 47 at 3. Before New Century assigned the deed to U.S. 27 Bank, it declared bankruptcy. Id. Plaintiff disputes the validity of this final assignment due to 28 New Century’s bankruptcy, but Defendants allege that New Century executed a limited power of 2 attorney that gave Barclays Capital Real Estate (“Barclays”) the power to execute assignments. 3 Compare ECF No. 1 with ECF No. 47 at 4. 4 After Plaintiff received a notice of default from Defendants in 2016, he initiated a series 5 of lawsuits: one in 2016, one in 2017, and one in 2018. In each lawsuit, Plaintiff alleged 6 wrongful foreclosure and numerous FDCPA violations. ECF No. 47 at 5. Plaintiff, however, 7 voluntarily dismissed his 2016 case. See Clark v. New Century Mortg. Co., 2:16-cv-02113- 8 GMN-GWF. Then, his 2017 case was dismissed because his wrongful foreclosure claim was 9 unripe (as the foreclosure had not yet occurred) and the statute of limitations had run on his 10 FDCPA claims. See Clark v. New Century Mortg. Co., 2:17-cv-01065-JAD-VCF. Later, his 2018 11 case was also dismissed because his claims were barred by res judicata. See Clark v. New 12 Century Mortg. Co., 2:18-cv-02241-APG-BNW. 13 Plaintiff’s home foreclosed on March 30, 2023. ECF No. 45-1 at 5. He then filed the 14 underlying action on April 4, 2023, alleging wrongful foreclosure, FDCPA violations, and 15 harassment and abuse. See generally ECF No. 1. He now seeks to amend his complaint to add 16 U.S. Bank Trust National Association as a defendant because he recently learned that U.S. Bank 17 and U.S. Bank Trust National Association “appear to be one in the same.” ECF No. 45 at 3.1 18 Defendants oppose the proposed amendment based on futility, in part by arguing that 19 Plaintiff’s claims are barred by res judicata. See ECF No. 47. 20 II. ANALYSIS 21 “[A] party may amend its pleading only with the opposing party’s written consent or the 22 court’s leave.” FED. R. CIV. P. 15(A)(2). “Five factors are taken into account to assess the 23 propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, 24 futility of amendment, and whether the plaintiff has previously amended the complaint.” Johnson 25 v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004). Not all these factors carry equal weight and 26 prejudice is the “touchstone.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th 27

28 1 Though Plaintiff’s motion states that he solely seeks to add a defendant, the Court notes that the attached proposed first amended complaint differs significantly from his initial complaint and

adds new causes of action. Nevertheless, for the sake of efficiency, the Court addresses the 2 Cir. 2003). Absent a showing of prejudice or a strong showing of any of the remaining factors, 3 there is a presumption that leave to amend should be granted. Id. “In exercising this discretion, a 4 court must be guided by the underlying purpose of Rule 15—to facilitate decision on the merits, 5 rather than on the pleadings or technicalities.” Roth v. Garcia Marquez, 942 F.2d 617, 628 (9th 6 Cir. 1991) (quoting United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981)). Generally, the 7 analysis “should be performed with all inferences in favor of granting the motion.” Griggs v. 8 Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999). 9 “Denial of leave to amend on this ground [futility] is rare. Ordinarily, courts will defer 10 consideration of challenges to the merits of a proposed amended pleading until after leave to 11 amend is granted and the amended pleading is filed.” Netbula, LLC v. Distinct Corp., 212 F.R.D. 12 534, 539 (N.D. Cal. 2003). “Deferring ruling on the sufficiency of the allegations is preferred in 13 light of the more liberal standards applicable to motions to amend and the fact that the parties’ 14 arguments are better developed through a motion to dismiss or motion for summary judgment.” 15 Steward v. CMRE Fin’l Servs., Inc., 2015 WL 6123202, at *2 (D. Nev. Oct. 16, 2015). 16 The party opposing the amendment bears the burden of showing why leave should be denied, 17 including the burden of establishing prejudice. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 18 187 (9th Cir. 1987). 19 A. Wrongful Foreclosure 20 Plaintiff alleges that Defendants wrongfully foreclosed on his home because New 21 Century—due to its bankruptcy—did not have authority to assign the deed on Plaintiff’s home 22 loan to U.S. Bank. See generally ECF Nos. 1, 45-1. In turn, Plaintiff contends that the 23 unauthorized assignment created a chain-of-title issue, precluding Defendants from foreclosing 24 on his home. See generally ECF Nos. 1, 45-1. 25 Defendants take issue with the legal validity underlying Plaintiff’s claims and also 26 respond that (1) Plaintiff’s claim is barred by res judicata because it is the same claim that was 27 dismissed in his 2017 lawsuit and that was later barred in his 2018 lawsuit; and (2) regardless of 28 whether Plaintiff’s claim is barred, amendment would be futile because he cannot allege that he 2 The elements necessary to establish res judicata are: (1) an identity of claims, (2) a final 3 judgment on the merits, and (3) privity between parties. Tahoe-Sierra Pres. Council, Inc. v. 4 Tahoe Reg’l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003). Defendants do not engage in 5 a discussion regarding the elements, nor do they explain how Plaintiff’s wrongful foreclosure 6 claim is barred by res judicata other than summarily stating, without citing to authority, that the 7 foreclosure of Plaintiff’s home does not “resurrect” his claim. ECF No. 47 at 9. But this 8 argument ignores the fact that his 2017 claim—and by extension, his 2018 claim—was dismissed 9 without prejudice as unripe because the foreclosure had not happened yet. See Clark v. New 10 Century Mortg. Co., 2:17-cv-01065-JAD-VCF. It might be the case that Plaintiff’s wrongful 11 foreclosure claim is, in fact, barred by the doctrine of claim preclusion. But at this juncture, 12 Defendants have not met their burden of establishing that Plaintiff’s wrongful foreclosure claim 13 is barred. 14 The Court next turns to the sufficiency of Plaintiff’s allegations. The elements for a 15 wrongful foreclosure claim are: (1) that a foreclosure sale occurred, and (2) that the debtor was 16 not in default. Bank of New York Mellon v. Log Cabin Manor Homeowners Ass’n, 362 F. Supp. 17 3d 930, 939 (D. Nev. 2019). As Defendants point out, Plaintiff has not alleged in his complaint 18 nor his proposed first amended complaint that he was not in Default at the time that Defendants 19 foreclosed on his home. Although this is an essential element of a wrongful foreclosure claim, 20 Plaintiff’s failure to allege the second element does not mean that amendment would be futile, or 21 that “allegation of other facts consistent with the challenged pleading could not possibly cure the 22 deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 23 1986). Plaintiff could, hypothetically, allege facts to support the proposition that he was not in 24 default.2 At this stage in the proceedings, the Court does not evaluate the veracity of the 25 allegations, but rather determines whether the allegations, accepted as true, state a claim for 26 relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). 27 28 2 The Court reminds Plaintiff that should he choose to amend his complaint to include facts

supporting an allegation that he was not in default, such factual contentions must have evidentiary 2 Because Plaintiff’s complaint and proposed first amended complaint do not sufficiently 3 allege that he was not in default at the time of foreclosure, the Court recommends that Plaintiff’s 4 wrongful foreclosure cause of action be dismissed without prejudice and that he be allowed leave 5 to amend for an opportunity to cure the claim’s deficiencies. 6 B. FDCPA Claims 7 Plaintiff alleges various violations under the FDCPA including false and misleading 8 representations under 15 U.S.C. § 1692e, civil liability under 15 U.S.C. § 1692k, and furnishing 9 certain deceptive forms under 15 U.S.C. § 1692j. ECF No. 45-1. According to Plaintiff, 10 Defendants violated these particular provisions of the FDCPA when they “conspir[ed] to defraud 11 Plaintiff of his private property.” Id. at 3. 12 Defendants respond that Plaintiff fails to sufficiently allege which Defendants violated 13 which particular provisions, how they violated them, or what factual contentions support each 14 alleged violation. ECF No. 47 at 8. Defendants claim that regardless of the insufficiency of 15 Plaintiff’s allegations, his FDCPA claims are barred by res judicata. Id. at 9. 16 As noted above, Defendants do not contend with the elements of claim preclusion nor 17 explain how each element is met. Importantly, the 2017 FDCPA claims were dismissed because 18 the Court found that the one-year statute of limitations had run. But here, it is not clear what 19 dates correspond to the alleged FDCPA violations. Given that the foreclosure of Plaintiff’s home 20 did not occur until March 2023, it is possible that the FDCPA violations alleged in Plaintiff’s 21 present complaints are not time barred and are not barred by res judicata. Thus, Defendants 22 failed to meet their burden of establishing that Plaintiff’s FDCPA claims are barred. 23 And although the Court agrees that Plaintiff’s FDCPA claims are not sufficiently 24 pleaded, Defendants have likewise failed to establish that amendment of such claims would be 25 futile. The Court therefore recommends that Plaintiff’s FDCPA claims be dismissed without 26 prejudice and that Plaintiff be allowed leave to amend for an opportunity to cure the claims’ 27 deficiencies regarding specific factual contentions and their corresponding dates. 28 2 C. Harassment and Abuse 3 Plaintiff alleges that Defendants committed “harassment and abuse” when they sent him 4 allegedly threatening correspondences related to the foreclosure of his home. ECF No. 45-1. 5 Plaintiff does not state whether he alleges his claim pursuant to a statute, or under a common-law 6 theory. See id. Nevertheless, as Defendants correctly point out, Nevada law only recognizes a 7 crime of harassment, not a civil action for harassment. Randazza v. Cox, No. 2:12-CV-2040- 8 JAD, 2014 WL 2123228, at *4 (D. Nev. May 21, 2014). Plaintiff does not have a private right of 9 action for violation of criminal statutes. Allen v. Gold Country Casino, 464 F.3d 1044, 1048 (9th 10 Cir. 2006). The Court therefore recommends that Plaintiff’s “harassment and abuse” cause of 11 action be dismissed with prejudice as amendment would be futile. 12 D. Miscellaneous Criminal Claims 13 In his proposed first amended complaint, Plaintiff alleges violations of various criminal 14 statutes. See ECF No.45-1. Although it is not entirely clear which factual contentions Plaintiff 15 attributes to each alleged violation, because each of the following statutes are mentioned, the 16 Court will liberally construe his complaints as alleging claims under each. As detailed below, 17 because each of the statutes mentioned are purely criminal in nature, Plaintiff cannot pursue a 18 private right of action under them. Allen, 464 F.3d at 1048. 19 15 U.S.C. § 645(a). This statute deals with making a false statement or overvaluing a 20 security to obtain a loan for a person’s small business. Section 645 is titled “Offenses and 21 Penalties” and the last sentence of subsection (a) states that this offense is punishable by “a fine 22 of not more than $5,000 or by imprisonment for not more than two years, or both.” Such 23 language indicates that this is a criminal statute, and that Plaintiff cannot pursue relief under it. 24 18 U.S.C. § 241. Section 241 is titled “Conspiracy Against Rights” and refers to persons 25 who conspire to intimidate anyone in the exercise of their rights. Violations of this statute can 26 result in a fine, imprisonment not more than ten years, or both. Plaintiff cannot pursue a cause of 27 action under this statute because it is purely criminal in nature. 28 18 U.S.C. § 242. Section 242 is titled “Deprivation of Rights Under Color of Law” and 2 Violations of this section are punishable by a fine, imprisonment of not more than one year, or 3 both. Because this too is a criminal statute, Plaintiff cannot pursue a cause of action under it. 4 18 U.S.C. § 1001. Section 1001 is titled “Statements or Entries Generally” and deals with 5 persons who commit fraud in matters before the judiciary, legislative, and executive branches. 6 Punishment for this offense involves a fine, imprisonment of not more than five years, or both. 7 Plaintiff cannot pursue a claim under this criminal statute. 8 18 U.S.C. § 1002. Section 1002 is titled “Possession of False Papers to Defraud United 9 States” and applies to persons who knowingly intend to defraud the United States to enable 10 another person to obtain money. Given that this offense is punishable by a fine, imprisonment of 11 not more than five years, or both, it is a criminal statute that Plaintiff cannot seek relief under. 12 18 U.S.C. § 1341. Section 1341 is titled “Frauds and Swindles” and refers to using the 13 post office for fraud. Violations of the statute are similarly punishable by a fine, imprisonment of 14 not more than twenty years, or both, so it is a criminal statute under which Plaintiff cannot 15 pursue a claim. 16 18 U.S.C. § 1342. Section 1342 is titled “Fictitious Name or Address” and applies to 17 persons who use aliases through the mail. A person in violation of this section can be fined, 18 imprisoned for not more than five years, or both—indicating that it too is a criminal statute. 19 18 U.S.C. § 1349. Section 1349 is titled “Attempt and Conspiracy” and states that anyone 20 who attempts or conspires to commit an offense under Title 18 will be subject to the same 21 (criminal) penalties as the underlying offense. 22 NRS 205.395. This statute falls under Chapter 205 of the Nevada Revised Statutes, which 23 is titled “Crimes Against Property” and refers specifically to “false representation concerning 24 title.” Violations of this statute, depending on which subsection they fall under, constitute Class 25 B or C felonies. Plaintiff therefore cannot pursue relief under this criminal statute. 26 Theft. Finally, Plaintiff also pursues a claim for theft. He does not articulate whether he is 27 moving under a statute, or pursuant to common law. Regardless, the Court has not identified a 28 civil law cause of action for theft, as theft is a criminal charge. See, e.g., NEV. REV. STAT. 2 In light of the above, recommends that Plaintiff’s miscellaneous criminal claims be 3 dismissed with prejudice as amendment would be futile. 4 E. 42 U.S.C. § 1983 5 Though Plaintiff does not clearly articulate a factual basis for his section 1983 claim, his 6 proposed first amended complaint references the statute, so the Court will liberally construe 7 Plaintiff’s complaints and analyze the sufficiency of the claim. Title 42 U.S.C. § 1983 provides a 8 remedy for persons who are deprived of Constitutional rights by state actors. Lugar v. 9 Edmondson Oil Co., 457 U.S. 922, 939 (1982). Here, all Defendants—U.S. Bank, Western 10 Progressive Nevada, PHH Mortgage Services, and U.S. Bank Trust—are private entities. To 11 maintain this claim, Plaintiff’s allegations must include some theory of collusion between the 12 private parties and the state actors. Collins v. Womancare, 878 F.2d 1145, 1154 (9th Cir. 1989). 13 He does not do that here. The Court therefore will dismiss Plaintiff’s 1983 claim with leave to 14 amend in the event that he claims such collusion exists. 15 III. CONCLUSION 16 IT IS THEREFORE ORDERED that Plaintiff’s Motion for Leave to File First 17 Amended Complaint (ECF No. 45) is GRANTED in part and DENIED in part. 18 IT IS FURTHER ORDERED that Plaintiff’s wrongful foreclosure cause of action be 19 dismissed with leave to amend. 20 IT IS FURTHER ORDERED that Plaintiff’s FDCPA claims be dismissed with leave to 21 amend. 22 IT IS FURTHER ORDERED that Plaintiff’s claim pursuant to 42 U.S.C. § 1983 be 23 dismissed with leave to amend. 24 IT IS FURTEHR ORDERED that should Plaintiff choose to file an amended 25 complaint, he must do so by April 5, 2024. The Court directs Plaintiff that his amended 26 complaint must be complete in and of itself, without reference to prior pleadings. His complaint 27 must also list each individual cause of action, accompanied by the claim’s supporting factual 28 contentions. The Court will not continue to piece Plaintiff’s claims together for him. Plaintiff is 2 IT IS RECOMMENDED that Plaintiff’s claim for harassment and abuse be dismissed 3 with prejudice. 4 IT IS FURTHER RECOMMENDED that Plaintiff’s criminal claims, as detailed in 5 Section II.D of this order, be dismissed with prejudice. 6 7 DATED this 5th day of March 2024. 8

9 BRENDA WEKSLER UNITED STATES MAGISTRATE JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28