Absolute Business Solutions, Inc. v. Mortgage Electronic Registration Sys. Inc (MERS)
2:15-cv-01325
D. Nev.Aug 3, 2016Background
- In 2005 Irma Mendez bought residential property in North Las Vegas secured by a deed of trust; she later defaulted on HOA assessments leading to an A&K trustee’s sale to Absolute Business Solutions (ABS).
- Mendez filed multiple related federal actions (2:15-cv-314, 2:15-cv-1325, 2:16-cv-1077) challenging the HOA foreclosure and post-foreclosure recordings and asserting claims including wrongful foreclosure, FDCPA, NUTPA, fraud, quiet title, and breach of contract.
- ABS filed a state-court quiet-title action which was removed (2:15-cv-1325); Fannie Mae and FHFA intervened as defendants/counterclaimants.
- The district court addressed several pending motions: a motion to consolidate the quiet-title case into a separate putative class action, cross-motions for summary judgment on quiet title, a sanctions motion, and motions to dismiss in the 2:16-cv-1077 action.
- The court found triable issues of commercial unreasonableness regarding the HOA sale price, denied consolidation and summary judgment motions, denied sanctions, granted in part and denied in part Rule 12(b)(6)/Rule 9(b) dismissals in the ‘1077 case (with some claims dismissed with leave to amend, some without).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to consolidate 2:15-cv-1325 into a putative class action | Consolidation promotes uniform resolution of preemption issue (12 U.S.C. §4617(j)(3)) | Consolidation would be inefficient because the case contains many unrelated claims | Denied—case contains many issues beyond the preemption question and consolidation would be uneconomical |
| Mendez’s motion for summary judgment (quiet title / set aside sale) | Sale was void or proceeds should be returned to Mendez | Mendez is a defendant only in quiet-title action; state court already found genuine issues | Denied—Mendez not entitled to relief in that removed action; state court earlier found triable issues |
| ABS’s motion for summary judgment (quiet title in ABS’s favor) | HOA sale extinguished Mendez’s interest; ABS holds superior title | Sale may have been commercially unreasonable given low trustee’s-sale price | Denied—sufficient evidence of commercial unreasonableness to present to a jury (Levers standard) |
| Motion for sanctions against Fannie Mae’s counsel | Counsel recorded allegedly fraudulent/unauthorized documents against Mendez | Defendants argue actions were proper advocacy and not sanctionable here | Denied—claims go to merits and alleged conduct not shown to warrant sanctions under cited rules |
| Fraud claim in 2:16-cv-1077 (Rule 9(b)) | Recorded documents were fraudulent/forged causing harm to Mendez | Defendants: fraud not pleaded with particularity; no allegation Mendez relied on documents | Dismissed with leave to amend—pleading fails Rule 9(b) and lacks allegation of justifiable reliance |
| FDCPA claim (2:16-cv-1077) | Debt-collection acts violated FDCPA | Defendants: one-year statute of limitations; claim time-barred | Dismissed without leave to amend—statute of limitations appears on face of complaint |
| Dodd–Frank claim | Mendez alleged violations of Dodd–Frank | Defendants: Dodd–Frank creates no private right of action | Dismissed—no private right of action under Dodd–Frank |
| NRS Chapter 598 consumer-fraud claim | Mendez alleges deceptive trade practices under NRS 598 | Defendants contend no private cause of action under NRS 598.0915 | Claim allowed to proceed—NRS 41.600 provides a private cause of action for consumer fraud including NRS 598 violations |
| Counterclaims for abuse of process (by Stokeses/JimiJack) | Plaintiffs’ litigation conduct was for improper purpose and abused process | Counterplaintiffs allege harassment and conspiracy; defendants contend filing suit alone is not abuse | Dismissed with leave to amend—pleading fails to allege the required willful, improper use of process element |
Key Cases Cited
- Conley v. Gibson, 355 U.S. 41 (establishes notice pleading standard under Rule 8)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state plausible claim to relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (Twombly standard applied to factual plausibility)
- Levers v. Rio King Land & Inv. Co., 560 P.2d 917 (Nev.) (commercial unreasonableness in foreclosure sale can create jury question)
- Bulbman, Inc. v. Nevada Bell, 825 P.2d 588 (Nev.) (elements of common-law fraud in Nevada; Rule 9(b) particularity)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting framework)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard regarding genuine dispute of material fact)