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Nationstar Mortgage, LLC v. Berezovsky

United States District Court, D. Nevada

February 13, 2017

NATIONSTAR MORTGAGE, LLC, Plaintiffs,
v.
ALEX BEREZOVSKY, et al., Defendants.

          ORDER

         Presently before the court is defendant/counterclaimant Alex Berezovsky's (“Berezovsky”) motion for summary judgment. (ECF No. 44). Plaintiff/counterdefendant Nationstar Mortgage, LLC (“Nationstar”) filed a response (ECF No. 55), to which Berezovsky replied (ECF No. 61).

         Also before the court is plaintiff Nationstar's motion for summary judgment. (ECF No. 46). Defendant Tanglewood Homeowners Association (the “HOA”) filed a response (ECF No. 53), as did Berezovsky (ECF No. 54). No reply was filed, and the period to do so has since passed.

         Also before the court is the HOA's motion for summary judgment. (ECF No. 48). Berezovsky filed a joinder to the motion. (ECF No. 50). Nationstar filed a response (ECF No. 56), to which the HOA replied (ECF No. 62).

         I. Facts

         This case involves a dispute over property that was subject to a homeowners' association's superpriority lien for delinquent assessment fees. On December 29, 2005, Curtis Barschdorf and Gayle Ann Barschdorf (the “borrowers”) obtained a $230, 800.00 loan from Countrywide Bank, N.A. (“Countrywide”) to purchase the property located at 6529 Hartwood Road, Las Vegas, Nevada 89108 (the “property”). (ECF No. 1 at 3).

         The loan was secured by a first deed of trust encumbering the property, which was recorded on November 22, 2006. (ECF No. 46-1 at 2-18). Under the first deed of trust, Mortgage Electronic Registration Systems, Inc. (“MERS”) was named nominee-beneficiary for Countrywide. (ECF No. 46-1 at 2-18).

         On June 29, 2010, Hampton & Hampton (“H&H”), as the HOA's authorized trustee, recorded a notice of delinquent assessment lien on behalf of the HOA. (ECF No. 46-1 at 23-24). The notice asserted that the borrowers owed $1, 256.00 in fees. (ECF No. 46-1 at 23-24). On January 29, 2013, H&H mailed (by certified mail, return receipt requested) a notice of delinquent assessment lien to the borrowers. (ECF No. 44-1 at 16-25). The notice asserted that the borrowers owed $2, 120.00 in fees. (ECF No. 44-1 at 16-25).

         On February 28, 2013, Bank of America, N.A. (“BANA”), successor by merger to BAC Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP (“BAC”), assigned the deed of trust to Nationstar. (ECF No. 46-1 at 20-21).

         On March 15, 2013, the HOA recorded a notice of default and election to sell under the HOA lien. (ECF No. 44-2 at 2-3). The notice of default asserted that the borrowers owed $2, 933.00 in fees. (ECF No. 44-2 at 2-3). On March 20, 2013, H&H mailed a copy of the notice of default to the borrowers (by certified mail, return receipt requested) and to the beneficiaries of record, which included MERS and BAC (by first class mail). (ECF No. 44-2 at 5-12).

         On April 1, 2013, the corporation assignment of deed of trust was recorded, wherein Nationstar obtained all beneficial interest under the deed of trust securing the property from BANA. (ECF No 46-1 at 20-21).

         On May 8, 2013, Nationstar recorded a notice of default and election to sell against the property. (ECF No. 46-1 at 78-83). The notice of default asserted that the borrowers owed $268, 170.37. (ECF No. 46-1 at 78-83).

         On August 20, 2013, H&H mailed a notice of trustee's sale to the borrowers (by certified mail, return receipt requested) and to the beneficiaries of record, which included MERS, BAC, and Nationstar. (ECF No. 44-2 at 14-22). The notice asserted that the “sale will be made . . . to pay the remaining principal sum due . . . plus fees and costs of the Trustee, to wit: $4, 112.00 (Accrued interest and additional advances, if any, will increase this figure prior to sale.).” (ECF No. 44-2 at 14-22). On August 22, 2013, H&H recorded the notice of trustee's sale. (ECF No. 44-2 at 24-26).

         On October 9, 2013, H&H held a foreclosure sale, and Borozovsky purchased the property for $5, 100.00. (ECF No. 44-2 at 28-31). On October 22, 2013, H&H recorded the trustee's deed upon sale. (ECF No. 44-2 at 28-31).

         Nationstar filed the original complaint on May 13, 2015, asserting four claims against Berezovsky and the HOA (collectively, “defendants”): (1) declaratory relief/quiet title; (2) unjust enrichment; (3) injunctive relief against Berezovsky; and (4) violation of procedural due process. (ECF No. 1). Plaintiff contends that the HOA foreclosure sale violated NRS 116.31162(6), that the sale should be set aside as it was commercially unreasonable, and that Nevada's statutory scheme providing superpriority liens to homeowner's associations is violative of procedural due process under the Constitution. (ECF No. 1).

         The HOA filed a motion to dismiss on June 17, 2015, seeking dismissal of plaintiff's claims. (ECF No. 7). This court dismissed Nationstar's claims for unjust enrichment and violation of procedural due process pursuant to an unopposed motion to dismiss. (ECF No. 47).

         On October 2, 2015, Berezovsky filed an answer and verified counterclaim, asserting claims of quiet title and declaratory relief against the borrowers, Nationstar, and Richland Holdings, Inc. d/b/a Acctcorp of Southern Nevada. (ECF No. 22).

         In the instant motions, Berezovsky, the HOA, and Nationstar all seek summary judgment declaring the rightful holder of title to the property.

         Berezovsky and the HOA[1] assert that summary judgment in their favor is proper because the foreclosure sale extinguished Nationstar's deed of trust pursuant to NRS 116.3116 and SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (“SFR Investments”) and because Nationstar has not met the fraud, unfairness, or oppression requirement to set aside a foreclosure sale as outlined in Shadow Wood Homeowners Assoc. v. N.Y. Cmty. Bancorp., Inc., 366 P.3d 1105, 1112 (Nev. 2016) (“Shadow Wood”). (ECF Nos. 44, 48).

         Nationstar contends that summary judgment in its favor is proper because the foreclosure sale was commercially unreasonable, the foreclosure sale is void because the trustee violated NRS 116.3116(6), SFR Investments should not be applied retroactively, and the foreclosure sale is invalid because the notice scheme of NRS Chapter 116 is facially unconstitutional. (ECF No. 46).

         The court will address each in turn.[2]

         II. Legal standard

         The Federal Rules of Civil Procedure allow summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         For purposes of summary judgment, disputed factual issues should be construed in favor of the non-moving party. Lujan v. Nat'l Wildlife Fed., 497 U.S. 871, 888 (1990). However, to be entitled to a denial of summary judgment, the nonmoving party must “set forth specific facts showing that there is a genuine issue for trial.” Id.

         In determining summary judgment, a court applies a burden-shifting analysis. The moving party must first satisfy its initial burden. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

         By contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the non-moving party's case; or (2) by demonstrating that the non-moving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159- 60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987).

         In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex, 477 U.S. at 324.

         At summary judgment, a court's function is not to weigh the evidence and determine the truth, but to determine whether there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Nonmovant's evidence is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See Id. at 249-50.

         III. Discussion

         Under Nevada law, “[a]n action may be brought by any person against another who claims an estate or interest in real property, adverse to the person bringing the action for the purpose of determining such adverse claim.” Nev. Rev. Stat. § 40.010. “A plea to quiet title does not require any particular elements, but each party must plead and prove his or her own claim to the property in question and a plaintiff's right to relief therefore depends on superiority of title.” Chapman v. Deutsche Bank Nat'l Trust Co., 302 P.3d 1103, 1106 (Nev. 2013) (citations and internal quotation marks omitted). Therefore, for claimant to succeed on its quiet title action, it needs to show that its claim to the property is superior to all others. See also Breliant v. Preferred Equities Corp., 918 P.2d 314, 318 (Nev. 1996) (“In a quiet title action, the burden of proof rests with the plaintiff to prove good title in himself.”).

         A. Nev. Rev. Stat. ...


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