Miyayama v. Ditech Financial LLC
2:16-cv-00413
D. Nev.Jan 13, 2017Background
- Kaithong bought 2343 La Puente St. in 2006, secured by a promissory note and a deed of trust; assignments later transferred the loan to Green Tree/Ditech and Quality Loan as trustee.
- Kaithong defaulted and filed Chapter 7 in 2012; the trustee authorized a § 363 sale; H&N Properties bought the property at the bankruptcy sale in April 2014 and later sold to Miyayama for $10,000.
- Quality Loan recorded a Notice of Breach and Default (July 2015), the Foreclosure Mediation certificate issued, and a Notice of Trustee’s Sale was recorded Jan. 5, 2016; Miyayama obtained a state-court TRO and then removed to federal court.
- Miyayama sued asserting: (1) violation of NRS 107.080 (notice to persons with an interest), (2) declaratory relief (right to cure and lack of standing because note and deed are separated), (3) unjust enrichment for improvements, and (4) violation of NRS 107.087 (deficient contact info in notice of sale).
- Defendants moved to dismiss all claims and sought sanctions; court took judicial notice of recorded foreclosure documents and considered whether claims are legally and factually plausible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NRS 107.080 required notice to Miyayama (successor) | Miyayama: statute requires notice to all persons with an interest, including him | Ditech: statute requires notice to the grantor or the person of record (Kaithong), not successors generally | Court: Statute requires notice to grantor or record title holder (alternative, not conjunctive); claim dismissed with leave to amend if plaintiff can allege neither he nor Kaithong received notice |
| Whether notice of sale complied with NRS 107.087 (trustee contact info) | Miyayama: notice lacked required trustee contact information | Defs: recorded notice contains trustee name, address, phone numbers, and website | Court: Judicially noticed notice satisfies NRS 107.087; claim dismissed with prejudice |
| Whether unjust-enrichment claim is viable now | Miyayama: he improved/maintained property and would be unjustly dispossessed if foreclosure succeeds | Defs: any mortgage payoff was by insurer, not plaintiff; improvements primarily benefit owner and there is no showing defendants accepted/retained benefit; claim is unripe pre-sale | Court: Plaintiff failed to plead benefit, defendant's appreciation/acceptance, and ripeness; claim dismissed without prejudice (may reassert if it ripens) |
| Whether defendants lack standing to foreclose (note/deed split) and whether plaintiff has a right to cure | Miyayama: separation of note and deed means no authority to foreclose; purchaser entitled to curing opportunity | Defs: Nevada law permits foreclosure despite split when holder has authority or agent relationship; statute no longer requires notice to successor-in-interest so right-to-cure theory inapplicable | Court: Separation-of-documents theory rejected under Nevada precedent; right-to-cure theory not supported by current statute; declaratory relief dismissed with prejudice |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not presumed true on a Rule 12(b)(6) review)
- Edelstein v. Bank of New York Mellon, 286 P.3d 249 (Nev.) (separation of note and deed does not automatically prohibit foreclosure)
- In re Montierth, 354 P.3d 648 (Nev.) (same principle regarding split documents and authority to foreclose)
- Topaz Mut. Co. v. Marsh, 839 P.2d 606 (Nev.) (elements of unjust enrichment; benefit must be conferred by plaintiff)
- Title Ins. & Trust Co. v. Chicago Title Ins. Co., 634 P.2d 1216 (Nev.) (successor-in-interest notice reasoning under pre-1989 version of NRS 107.080)