Case Type:
Case Status:
BAP No. NV-22-1175-GCB (9th Circuit, Apr 12,2023) Not Published
Under the principles of claim preclusion, a prior Rule 12(b)(6) dismissal of the debtor's claims by the United States District Court precluded the debtor from reasserting the same claims in bankruptcy court. Thus, the bankruptcy court properly dismissed the debtor's adversary proceeding complaint, with prejudice, under Fed. R. Bankr. P. 7012/Fed. R. Civ. P. 12(b)(6).
Procedural context:
The debtor appealed an order of the bankruptcy court dismissing his adversary proceeding under Fed. R. Bankr. P. 7012/Fed. R. Civ. P. 12(b)(6).
In 2004, the debtor and his wife refinanced their existing mortgages with a loan of $740,000 from BNC Mortgage, Inc (“BNC”) secured by a deed of trust on their home in Las Vegas, Nevada (the “Property”). In October 2007, National Default Servicing Corporation (“NDSC”), the deed of trust trustee, recorded a notice of default indicating a payment default of $37,401.44. In January 2008, NDSC rescinded the first notice of default and recorded a second notice of default indicating a payment default of $53,914.90 (the “Second Notice of Default”). BNC securitized the mortgage loan, with LaSalle Bank, N.A. serving as the trustee. Wells Fargo was the servicer for the securitization trust. In March 2008, the debtor and Wells Fargo agreed to a loan modification which added the arrears to the principal balance, fixed the previously variable interest rate, adjusted the monthly payment amount, and removed his wife as a borrower (the “2008 Loan Modification”). Wells Fargo recorded the 2008 Loan Modification in April 2008. The debtor failed to make payments under the 2008 Loan Modification, and a third notice of default was recorded in October 2008. The third notice of default was rescinded. In July 2015, a fourth notice of default was recorded. After a failed attempt at mediation, the debtor filed suit in Nevada state court, alleging that Wells Fargo had no right to modify the loan and that the right to enforce the deed of trust had expired under Nevada Rev. Stat. § 106.240. The defendants removed the case to the U.S. District Court, and the court dismissed the debtor's case under Fed. R. Civ. P. 12(b)(6).
GAN, CORBIT, and BRAND, Bankruptcy Judges

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