Torno v. Green Tree Servicing, LLC
2:15-cv-01018
D. Nev.Jul 12, 2017Background
- Torno bought a Nevada home in 2005 secured by a deed of trust; Green Tree serviced the loan and purportedly signed an assignment to Fannie Mae in Jan. 2013 that was not recorded until Feb. 2014.
- A notice of default recorded in Jan. 2013 attached an affidavit completed by a Green Tree officer stating Green Tree had authority to exercise the power of sale; Torno alleges that affidavit was false because the deed had already been assigned.
- Torno pursued foreclosure mediation and attempted a short sale; the property was later sold at trustee’s sale in Jan. 2014, with Fannie Mae credit-bidding and later recording the assignment.
- Torno sued Green Tree and Fannie Mae under Nev. Rev. Stat. § 107.080(2), seeking statutory damages and fees and moving to certify two classes of homeowners whose files allegedly contain materially similar false affidavits.
- The district court conducted the Rule 23 predominance inquiry and denied class certification, concluding individualized inquiries about assignment effectiveness and damages/fee reductions would predominate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether common questions predominate under Rule 23(b)(3) about false affidavits of authority | Torno: many homeowners share the same defective practice — affidavits falsely identifying Green Tree as beneficiary/holder before assignment — so class treatment is appropriate | Green Tree/Fannie Mae: effectiveness of unrecorded assignments and intent vary by file; proof will be individualized (signed-only assignments, delivery, assignee acceptance) | Denied — predominance not met because individualized factual issues about assignment effectiveness predominate |
| Whether assignments (signed by Green Tree pre-notice) were effective absent recording or assignee assent | Torno: assignments should be treated as effective and classwide proof can establish this (including alleged agency relationship) | Defendants: Nevada law requires manifestation of intent/assignee acceptance; unrecorded signed assignments may not be effective | Court: Need individualized findings (delivery, acceptance, intent); no classwide proof provided |
| Whether statutory damages under § 107.080(7) and attorney’s fees are amenable to classwide resolution | Torno: damages and fees are mandatory and thus suitable for class adjudication | Defendants: court can find "good cause" to alter awards based on individual circumstances (e.g., occupants retaining benefits post-sale) | Denied — good-cause inquiries and damage calculations raise individualized issues defeating predominance |
| Adequacy of plaintiff’s evidentiary showing for class certification (sample files, common practice) | Torno: random sample and counsel statements show multiple files fit the pattern; class administration feasible | Defendants: sample is limited; plaintiff failed to present the underlying files or proof of systemic practice/agency | Court: Plaintiff’s evidence was insufficient and did not show a common policy or systematic custom; certification denied |
Key Cases Cited
- Ellis v. Costco Wholesale Corp., 657 F.3d 970 (9th Cir.) (principles for Rule 23 analysis and plaintiff’s burden for certification)
- Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (U.S.) (distinguishing common vs. individualized proof; classwide proof can sometimes suffice)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (U.S.) (class certification requires common questions that produce common answers)
- Comcast Corp. v. Behrend, 133 S. Ct. 1426 (U.S.) (plaintiff must prove Rule 23 requirements with evidence; not a mere pleading standard)
- Torres v. Mercer Canyons Inc., 835 F.3d 1125 (9th Cir.) (predominance focuses on issues that will drive resolution of litigation)
- Leyva v. Medline Indus. Inc., 716 F.3d 510 (9th Cir.) (damages calculations can be individualized but do not always defeat certification)
- Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d 952 (9th Cir.) (single significant common question may suffice under Rule 23(b)(3))
- Easton Bus. Opp. v. Town Exec. Suites, 230 P.3d 827 (Nev. 2010) (Nevada law on manifestation of intent for assignments)