Hurst-Castl v. Long Term Capital Partnership VI, LLC

District Court, D. Nevada·Decided April 30, 2025·No. 2:24-cv-02334·Unknown

Opinion

TRACY HURST-CASTL, Plaintiff, Case No.: 2:24-cv-02334-GMN-MDC vs. ORDER LONG TERM CAPITAL PARTNERSHIP VI, LLC, et al.,

Defendants. Pending before the Court is a Motion to Dismiss, (ECF No. 12), filed by Defendants Long Term Capital Partnership VI, LLC (“LTCP”) and FCI Lender Services, Inc. Because Plaintiff Tracy Hurst-Castl subsequently filed her First Amended Complaint (“FAC”), (ECF No. 20), the Court DENIES as MOOT the first Motion to Dismiss. Also pending before the Court is Plaintiff’s Motion to Strike, (ECF No. 31). Defendants filed a Response, (ECF No. 42), to which Plaintiff replied, (ECF No. 51). Because Plaintiff was properly served, the Court DENIES the Motion to Strike. Further pending before the Court is Plaintiff’s Motion to Take Discovery Prior to Ruling on Motion to Dismiss, (ECF No. 34). Defendants filed a Response, (ECF No. 57). Plaintiff did not file a Reply. Because Defendants’ Motion to Dismiss does not contain evidence that converts it into a Motion for Summary Judgment, the Court DENIES the Motion to Take Discovery Prior to Ruling on the operative Motion to Dismiss. Next, pending before the Court is Defendants’ Motion to Dismiss the First Amended Complaint, (ECF No. 25). Plaintiff filed a Response, (ECF No. 32), to which Defendants replied, (ECF No. 43). Because Plaintiff’s claims are barred by res judicata, the Court GRANTS Defendants’ second Motion to Dismiss. Lastly, pending before the Court are Plaintiff’s Motions for Temporary Restraining Order and Preliminary Injunction, (ECF Nos. 35, 40, 47, 48, 61, 62). Defendants filed Responses, (ECF Nos. 55, 56, 57). Plaintiff filed a Reply, (ECF Nos. 64). Because Plaintiff cannot succeed on the merits of her claims, the Court DENIES her Motions for Temporary Restraining Order and Preliminary Injunction. This action arises out of the foreclosure proceedings initiated against the property located at 3910 White Fir Way, Las Vegas, Nevada, 89124, (the “Property”), formally known as 123 Rainbow Canyon Blvd., Mt. Charleston, Nevada, 89124. (See generally FAC, ECF No. 20). On June 1, 2007, Plaintiff obtained a mortgage from Washington Mutual Bank in the principal amount of $2,250,000 to re-finance the Property. (See generally Promissory Note, Ex. A to Req. Judicial Notice, ECF No. 14-1). A Promissory Note was executed, as well as a Deed of Trust that pledged the Property as security (the Deed of Trust and Promissory Note are collectively referred to as the “Loan”). (See id.); (see also Deed of Trust, Ex. B. to Req. Judicial Notice, ECF No. 14-2). The Loan was assigned to various entities over the years and in April 2022, the interest in the Deed of Trust was transferred to Defendant LTCP. (See LTCP Assignment Deed of Trust, Ex. I to Req. Judicial Notice, ECF No. 14-9). Plaintiff disputes that Defendants possess an interest in the Property. (See generally FAC). Plaintiff defaulted on her loan a year after obtaining it. (See Default Notice, Ex. J to Req.

Judicial Notice, ECF No. 14-10). Thereafter, Plaintiff initiated numerous bankruptcy proceedings. (Case No. 10-20635-bam, Bankr. Dist. Nev.; Case No. 10-28140-bam, Bankr. Dist. Nev.; Case No. 12-23874-btb, Bankr. Dist. Nev.; Case No. 23-10410-gs, Bankr. Dist. Nev.). Plaintiff also initiated several actions in Nevada state court challenging the Loan and the Property’s foreclosure. (Case No. A-15-724525-C; Case No. A-15-726907-J; Case No. A-16- 742267-C) (the “Quiet Title Action”)). In Plaintiff’s most recent bankruptcy case, she filed for Chapter 11 Bankruptcy and challenged the validity of Defendants’ interest in the Property. (FAC at 10–11). The bankruptcy court entered an order in June 2023, (the “Claim Allowance Order”), finding that Plaintiff had not presented sufficient evidence to overcome the presumptive validity of LTCP’s claim, overruling Plaintiff’s objection to the validity of it, and allowing LTCP’s claim to proceed. (See generally Claim Allowance Order, Ex. P to Req. Judicial Notice, ECF No. 14- 16). In November 2024, LTCP moved the bankruptcy court for relief from an automatic stay that was in place so that it could enforce the Deed of Trust and foreclose on the Property. (See Order re Stay, Ex. R to Req. Judicial Notice, ECF No. 14-18). Plaintiff initiated this present matter in December 2024, challenging the validity of Defendants’ interest in the Property. Although Plaintiff’s current bankruptcy proceeding remains pending, the bankruptcy court granted LTCP’s motion for relief from the automatic stay on January 31, 2025, finding that Plaintiff’s current bankruptcy had been filed as part of a scheme to delay, hinder, and defraud LTCP and allowing LTCP to move forward with foreclosure. (See id.). Plaintiff alleges 20 claims against Defendants, seeks declaratory and injunctive relief, and seeks damages. (See generally FAC). Defendants move to dismiss the FAC in its entirety. (See generally Mot. Dismiss, ECF No. 25).

The Court takes up each pending Motion in turn, beginning with Plaintiff’s Motion to Strike. A. Plaintiff’s Motion to Strike Plaintiff argues that certain filings should be stricken because Defendants failed to serve her with their Motion to Dismiss, (ECF No. 25), Response to Amended Complaint, (ECF No. 26), Request for Judicial Notice, (ECF No. 28), and the Court’s Minute Order Regarding the Requirements of Klingele v. Eikenberry and Rand v. Rowland,1 (ECF No. 29). (See generally Mot. Strike, ECF No. 31). Plaintiff asserts that she only became aware of the filings by logging on to PACER, the Court’s online docketing system. (Id. 4:22). Pursuant to Rule 12(f), “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent or scandalous matter.” Fed. R. Civ. P. 12(f). Plaintiff does not put forth any arguments for how the filings at issue meet the Rule 12(f) standard. Instead, she relies on Rule 5(b), which in pertinent part states that service is proper by “mailing [the paper] to the person’s last known address—in which event service is complete upon mailing.” Fed. R. Civ. P. 5(b)(2)(C) (emphasis added). Plaintiff avers that she did not receive the filings and therefore service was improper, which warrants striking the filings at issue.2 (See generally Mot. Strike). Defendants assert that they served the Motion to Dismiss, (ECF No. 25), Response to Amended Complaint, (ECF No. 26), and Request for Judicial Notice, (ECF No. 28), via certified mail to the address Plaintiff provided to this Court as her mailing address. (Resp. 2:12, ECF No. 42); (see generally Flintz Decl., ECF No. 42-1). Plaintiff confirms that Defendants mailed the filings to her, but they were initially returned “undelivered” and “unsigned.” (See Reply 2:26–3:6, ECF No. 51). Importantly, service is complete upon mailing the papers regardless of whether Plaintiff ultimately received them. See S. Cal. Darts Ass’n v. Zaffina, 762 F.3d 921, 928 (9th Cir. 2014) (explaining that service is not necessarily deficient “even if it is

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