Sfr Investments Pool 1, LLC v. Nationstar Mortgage, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 12, 2024
• Docket: 23-15380
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 12 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

SFR INVESTMENTS POOL 1, LLC, No. 23-15380

Plaintiff-Appellant, D.C. No. 3:22-cv-00128-MMD-CLB v.

NATIONSTAR MORTGAGE, LLC, DBA MEMORANDUM* Mr. Cooper,

Defendant-Appellee.

Appeal from the United States District Court for the District of Nevada Miranda M. Du, Chief District Judge, Presiding

Submitted February 7, 2024** San Francisco, California

Before: R. NELSON, FORREST, and SANCHEZ, Circuit Judges.

SFR Investments Pool 1, LLC (SFR) appeals the district court’s dismissal of

its complaint for failure to state a claim. We have jurisdiction under 28 U.S.C.

§ 1291, and we affirm in part, reverse in part, and remand for further proceedings.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). We review de novo a district court’s dismissal of a complaint for failure to

state a claim. Bafford v. Northrop Grumman Corp., 994 F.3d 1020, 1025 (9th Cir.

2021). In reviewing a motion to dismiss, “[w]e accept all factual allegations in the

complaint as true and construe the pleadings in the light most favorable to the

nonmoving party.” Id. (alteration in original) (quoting Curtis v. Irwin Indus., Inc.,

913 F.3d 1146, 1151 (9th Cir. 2019)). A complaint cannot “survive a motion to

dismiss unless it ‘contain[s] sufficient factual matter . . . to state a claim to relief that

is plausible on its face.’” Karasek v. Regents of the Univ. of Cal., 956 F.3d 1093,

1104 (9th Cir. 2020) (alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009)). A claim is facially plausible “when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Iqbal, 556 U.S. at 678. “Threadbare recitals of the elements

of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

1. Private Right of Action. SFR contends that it has a private right of action

to contest Nationstar Mortgage, LLC’s (Nationstar) failure—under Nevada Revised

Statutes § 107.260—to provide a requested copy of the promissory note secured by

property SFR owns. We disagree. Under Nevada law, a plaintiff may only pursue

claims under a statute if the statute creates an express or implied private right of

action. See Baldonado v. Wynn Las Vegas, LLC, 194 P.3d 96, 100 (Nev. 2008) (en

banc). An express private right of action exists where a statute “expressly state[s]”

2 that a private litigant “has a . . . right of action” to pursue a specific claim. Freeman

Expositions, LLC v. Eighth Jud. Dist. Ct., 520 P.3d 803, 808 (Nev. 2022) (en banc).

“[I]n the absence of plain, clear language [creating a private right of action], we

examine the entire statutory scheme, reason, and public policy” to determine

whether the legislature intended to imply a cause of action. Baldonado, 194 P.3d at

101. The following three factors guide us in ascertaining the legislature’s intent: “(1)

whether the plaintiffs are of the class for whose . . . special benefit the statute was

enacted; (2) whether the legislative history indicates any intention to create or to

deny a private remedy; and (3) whether implying such a remedy is consistent with

the underlying purposes of the legislative [sch]eme.” Id. (alteration in original)

(internal quotation marks omitted) (citation omitted). These “three factors are not

necessarily entitled to equal weight” as “the determinative factor is always whether

the [l]egislature intended to create a private judicial remedy.” Id.

Here, section 107.300 provides the remedial scheme for a deed of trust

beneficiary’s failure to deliver requested statements concerning the debt.

Specifically, section 107.300 expressly provides a private right of action for

violations of sections 107.200 and 107.210 but is silent as to section 107.260.

Section 107.300 therefore cannot provide an express right of action for failure to

deliver the promissory note. Moreover, the three factors weigh against recognizing

an implied right of action. First, although successors in interest, like SFR, would

3 benefit from a right of action, section 107.300 does not demonstrate a legislative

intent to grant them a private right to receive a copy of the promissory note. See id.

at 101 n.12. Second, the legislative history demonstrates that the Nevada

legislature’s focus, when enacting the statutory scheme, was on ensuring that

beneficiaries provide authorized requesters with statements about the status of the

debt—not copies of the promissory note. See, e.g., Minutes of the S. Comm. on

Judiciary, 1995 Leg., 68th Sess. 2621 (Nev. 1995) (proponent stating that “the bill

[is] designed to require the holders of . . . deeds of trust to issue statements relating

to the status of the loans, based on requests from specific groups or individuals”).

Third, for the same reason, implying a private cause of action is inconsistent with

the legislative scheme. The Nevada legislature, in section 107.300, created an

express remedy for a beneficiary’s willful failure to provide a statement specified

under section 107.200 or 107.210 when requested. The legislature, however,

excluded section 107.260 addressing requests for promissory notes from the

remedial scheme. See id. The Nevada Supreme Court has cautioned courts against

recognizing a private cause of action for violations of a statute where, as here, the

legislature has expressly created a right of action for other sections in the same

chapter. See Baldonado, 194 P.3d at 104 n.33.

2. Sufficiency of Factual Allegations. SFR next argues that the district court

erred in dismissing its claims against Nationstar for violations of sections 107.200

4 and 107.210 because SFR’s complaint contained insufficient factual allegations. We

agree with the district court that the complaint does not adequately allege in what

way Nationstar’s response was incomplete. We agree with SFR, however, that the

complaint sufficiently pleads that Nationstar willfully sent an untimely response in

violation of sections 107.200 and 107.210.

Section 107.300(1) provides that “[a] beneficiary who willfully fails to deliver

a statement requested pursuant to [section] 107.200 or 107.210 within 21 days after

it is requested is liable to the person who requested the statement in an amount of

$300 and any actual damages suffered by the person who requested the statement.”

“[W]illfully” is defined as “an intentional failure to comply with the requirements

of [section] 107.200 or 107.210 without just cause.” § 107.300(3).

In its complaint, SFR alleged that it is an authorized requester as a successor

in interest; that Nationstar is the beneficiary of the deed of trust on property owned

by SFR; that SFR requested statements under sections 107.200 and 107.210; and

that Nationstar’s response to SFR’s request was untimely. SFR further alleged that

Nationstar, after receiving SFR’s request, mailed SFR a letter stating that Nationstar

would respond to the request after the 21-day deadline and then followed through

with its plan. In other words, SFR alleged that from the outset Nationstar intended

not to comply with the response deadline imposed by the statute without just cause.

5 Thus, SFR sufficiently alleged that Nationstar willfully failed to timely deliver the

requested statements.1

AFFIRMED in part, REVERSED in part, and REMANDED.

1 While Nationstar argues that none of SFR’s damages allegations are based on the untimeliness (as opposed to incompleteness) of Nationstar’s response, this argument ignores that SFR also requests statutory and actual damages for Nationstar’s failure to comply with the statutory requirements, including the 21-day deadline.