Carter v. Sables, LLC, a Nevada Limited Liability Company
3:17-cv-00594
D. Nev.Dec 11, 2017Background
- Plaintiffs Max and Sundae Carter obtained a $209,600 mortgage in 2006 secured by a deed of trust on property in Carson City, NV; notices of default were recorded in 2010 and 2015.
- Plaintiffs sued multiple defendants (including H&R Block Mortgage, Countrywide entities, Bank of America, CWALT, BNYM, and Sables LLC) alleging improper securitization/assignments and raising 11 claims (standing/wrongful foreclosure, unconscionable contract, breach of contract, breach of fiduciary duty, quiet title, slander of title, civil conspiracy, federal and Nevada RICO, injunctive/temporary restraining order, and declaratory relief).
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6) (and Rule 9(b) for fraud/RICO claims), arguing the complaint fails to state plausible claims and many claims are time‑barred.
- The core of Plaintiffs’ theory was that securitization and splitting of the note and deed of trust (and MERS assignments) deprived defendants of standing to foreclose.
- The court found Plaintiffs’ theories rejected by controlling law, that many claims were untimely or legally deficient, and that amendment would be futile.
- The court granted the motion to dismiss, dismissed the complaint with prejudice, denied the TRO as moot, and ordered judgment for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to foreclose / statutory defect | Securitization and split of note/DOT and defective MERS assignments mean no defendant has standing to foreclose | Securitization/assignments do not defeat standing; plaintiffs lack standing to challenge assignments; Ninth Circuit law rejects the ‘‘MERS is a sham’’ theory | Dismissed with prejudice; securitization/assignment theory fails as a matter of law |
| Unconscionable contract (H&R Block) | Contract terms and origination practices were one‑sided and concealed material facts | Claim untimely and pleadings fail to identify specific unconscionable terms or facts | Dismissed with prejudice as time‑barred and insufficiently pleaded |
| Breach of contract / fiduciary duty | H&R Block/MERS failed to satisfy/reconvey the DOT; H&R Block breached fiduciary duties | A deed of trust is security, not a contract; lenders in arm’s‑length transactions owe no fiduciary duty | Both claims dismissed with prejudice as legally deficient |
| RICO / conspiracy / quiet title / slander / injunctive relief | Defendants engaged in conspiracy/RICO and created secret liens; seek injunctive/declaratory relief | Claims rest on rejected securitization/assignment theory and fail Rule 9(b) pleading standards | All dismissed with prejudice; injunctive/declaratory remedies fall with underlying claims |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must contain plausible factual allegations)
- Ashcroft v. Iqbal, 556 U.S. 662 (two‑step plausibility analysis for Rule 12(b)(6))
- Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir.) (rejecting blanket challenge to MERS/securitization as defeating foreclosure rights)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir.) (Rule 9(b) heightened pleading applied to fraud‑based claims)
- Edelstein v. Bank of New York Mellon, 286 P.3d 249 (Nev.) (note and deed may be severed; requirements to foreclose explained)
- Wood v. Germann, 331 P.3d 859 (Nev.) (homeowner lacks standing to challenge loan assignment)
- Bergenfield v. Bank of America, 302 P.3d 1141 (Nev.) (foreclosure mediation/venue to challenge joining note and DOT)
- Collins v. Union Fed. Sav. & Loan Ass'n, 662 P.2d 610 (Nev.) (wrongful foreclosure tort arises only after foreclosure occurs)