Gale v. CitiMortgage, Inc.
2:12-cv-02065
| D. Nev. | Aug 20, 2014Background
- Plaintiff Gale, as individual and trustee, challenged a mortgage-related sale in District of Nevada; the original lender assigned the Deed of Trust to CitiMortgage and servicing later transferred to Nationstar.
- Gale defaulted in 2009 on a $216,315 loan secured by a Nevada property; a Home Affordable Modification Trial Period Plan followed in 2010.
- An LMA was signed Oct. 2010 deferring portion of principal and altering applicable costs, but Gale did not make any payments under the LMA.
- Nationstar began servicing the loan in Nov. 2010 and sent monthly statements showing a deferred principal amount while issuing conflicting past-due demand letters, creating confusion about amounts due.
- Quality Loan serviced notices (breach/default in 2011; trustee’s sale in 2012) leading to a trustee’s sale to Fannie Mae; Gale filed state-court action which was removed to federal court.
- The court denied Gale’s partial summary judgment and granted in part Nationstar and Fannie Mae’s motion for summary judgment; CitiMortgage’s motion to dismiss was converted to summary judgment and granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statutory foreclosure validity under NRS 107.080 | Gale argues foreclosure voidable due to noncompliance. | Defendants contend noncompliance renders no voiding due to lis pendens timing and other defects. | Gale’s claim fails; lis pendens not timely recorded, so sale cannot be voided. |
| Breach of contract under LMA | Nationstar/CitiMortgage breached by improper demand letters and timing. | CitiMortgage shows sale to Nationstar permissible; Nationstar argues no breach before trial; disputed material facts. | CitiMortgage granted summary judgment on contract breach; Nationstar case fact issues remain; overall breach-of-contract claim against Nationstar denied at summary judgment stage. |
| Violation of NRS 205.372 (mortgage lending fraud) | Statutory claim supports private action for fraud. | NRS 205.372 is criminal with no private right of action; state enforcement only. | Claim barred; no private right of action. Statutory claim granted judgment to Nationstar and CitiMortgage. |
| Breach of the implied covenant of good faith and fair dealing | Defendants acted in bad faith by excessive demand letters. | No valid theory linking CitiMortgage to Nationstar’s demands; disputed material facts. | CitiMortgage granted; Nationstar denied on some theories; material disputes as to Nationstar may preclude summary judgment on some aspects. |
| Intentional interference with contractual relations | Nationstar’s actions disrupted the LMA. | No evidence of intentional disruption; communications acknowledged error. | Nationstar granted summary judgment; plaintiff’s claim insufficiently supported. |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. Supreme Court 1986) (summary judgment standard; genuine issues of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. Supreme Court 1986) (burden-shifting under summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. Supreme Court 1986) (necessity of material factual disputes to survive summary judgment)
- Las Vegas Sands, LLC v. Nehme, 632 F.3d 526 (9th Cir. 2011) (materiality and factual disputes in breach-of-contract/covenant claims)
- J.J. Industries, LLC v. Bennett, 71 P.3d 1264 (Nev. 2003) (elements for intentional interference with contract)
- Perry v. Jordan, 900 P.2d 335 (Nev. 1995) (elements of breach of implied covenant in Nevada)
- Crellin Techs., Inc. v. Equipmentlease Corp., 18 F.3d 1 (1st Cir. 1994) (implied covenant theory standards)
- Consol. Generator–Nevada v. Cummins Engine Co., Inc., 971 P.2d 1251 (Nev. 1998) (implied covenant standard; contract interpretation)
- Vega v. E. Courtyard Associates, 24 P.3d 219 (Nev. 2001) (negligence per se; statute-based duty)
- Turner v. Mandalay Sports Entm’t, LLC, 180 P.3d 1172 (Nev. 2008) (nevada negligence per se framework)