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Deutsche Bank National Trust Co. v. Talasera and Vicanto Homeowners' Association

United States District Court, D. Nevada

February 24, 2017




         Presently before the court is defendant/counterclaimant SFR Investments Pool 1, LLC's (“SFR”) motion for summary judgment. (ECF No. 62). Plaintiff/counterdefendant Deutsche Bank National Trust Company as trustee for the GSAA trust pass-through certificates, series 2006-8 (“Deutsche Bank”) and crossdefendants Nationstar Mortgage LLC (“Nationstar”) and Bank of America, N.A. (“BANA” and collectively, with Deutsche Bank and BANA, as the “Banks”) filed a response (ECF No. 69), to which SFR replied (ECF No. 75). Also before the court is defendant Talasera and Vicanto Homeowners' Association's (the “HOA”) motion to dismiss. (ECF No. 72). Deutsche Bank filed a response (ECF No. 78), to which the HOA replied (ECF No. 86). Also before the court is the Banks' motion for summary judgment. (ECF No. 89).

         I. Facts

         This case involves a dispute over real property located at 9165 Cantina Creek Court, Las Vegas, NV 89178 (the “property”).

         On February 1, 2006, David and Keri Bases (the “borrowers”) obtained a loan in the amount of $377, 000.00 from Ryland Mortgage Company to purchase the property, which was secured by a deed of trust recorded on February 14, 2006. (ECF Nos. 55; 69).

         The deed of trust was assigned to BAC Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP (“BAC”) via an assignment of deed of trust recorded June 13, 2011. (ECF No. 22 at 13). BANA is the successor by merger to BAC, effective July 2011. (ECF Nos. 22 at 13; 69 at 4).

         On December 29, 2011, Nevada Association Services, Inc. (“NAS”), acting on behalf of the HOA, recorded a notice of delinquent assessment lien, stating an amount due of $1, 099.40. (ECF No. 55). On February 29, 2012, NAS recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $1, 942.90. (ECF No. 55). On March 26, 2012, BANA requested a superpriority demand payoff from NAS, to which NAS did not respond. (ECF No. 55). BANA determined the superpriority portion of the lien to be $765.00, and tendered that amount to NAS on April 12, 2012, which NAS allegedly rejected. (ECF No. 55).

         On August 30, 2012, NAS recorded a notice of trustee's sale, stating an amount due of $3, 483.57. (ECF No. 55). On September 21, 2012, SFR purchased the property at the foreclosure sale for $8, 800.00. (ECF No. 55). A foreclosure deed in favor of SFR was recorded on September 25, 2012. (ECF No. 55).

         BANA assigned the deed of trust to Nationstar via an assignment of deed of trust recorded August 15, 2013. (ECF No. 22 at 13). Thereafter, Nationstar assigned the deed of trust to Deutsche Bank via an assignment of deed of trust recorded September 4, 2014. (ECF No. 22 at 14). On January 23, 2015, Nationstar recorded a request for notice against the property. (ECF No. 22 at 14).

         On June 16, 2015, Deutsche Bank filed a complaint (ECF No. 1), which was later amended on May 19, 2016 (ECF No. 55). In the amended complaint, Deutsche Bank alleges four claims for relief: (1) quiet title/declaratory relief; (2) breach of NRS 116.1113 against the HOA; (3) wrongful foreclosure against the HOA; and (4) injunctive relief against SFR. (ECF No. 55). On September 18, 2015, SFR filed a counterclaim against Deutsche Bank and a crossclaim against Nationstar, BANA, and the borrowers, alleging three causes of action: (1) quiet title/declaratory relief; (2) preliminary and permanent injunction; and (3) slander of title against the Banks. (ECF No. 22).

         In the instant motions, SFR (ECF No. 62) and the Banks (ECF No. 89) move for summary judgment on their claims, and the HOA moves to dismiss Deutsche Bank's claims against it (ECF No. 72). The court will address each as it sees fit.[1]

         II. Legal Standards

         A. Motion to Dismiss

         A court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).

         “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citation omitted).

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 678.

         Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.

         Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged-but not shown-that the pleader is entitled to relief.” Id. (internal quotation marks omitted). When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

         The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court stated, in relevant part:

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.


         B. Summary Judgment

         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 nonmoving 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). The evidence of the nonmovant 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

         A. The HOA's Motion to Dismiss (ECF No. 72)

         1. Quiet Title/Declaratory Relief (claim 1)

         The HOA argues that Deutsche Bank's quiet title claim fails because it cannot prove good title in itself and because the HOA claims no adverse interest in the property. (ECF No. 72). 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 plaintiff 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.”).

         Under Federal Rule of Civil Procedure 19(a), a party must be joined as a “required” party in two circumstances: (1) when “the court cannot accord complete relief among existing parties” in that party's absence, or (2) when the absent party “claims an interest relating to the subject of the action” and resolving the action in the person's absence may, as a practical matter, “impair or impede the person's ability to protect the interest, ” or may “leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.” Fed.R.Civ.P. 19(a)(1).

         Here, the HOA is a necessary party to this action based on the current allegations and relief sought. The HOA has a present interest in the property because Deutsche Bank challenges the validity of the foreclosure sale and/or to equitably set aside the sale. See, e.g., U.S. Bank, N.A. v. Ascente Homeowners Ass'n, No. 2:15-cv-00302-JAD-VCF, 2015 WL 8780157, at *2 (D. Nev. Dec. 15, 2015). If the foreclosure sale is invalidated or set aside, the HOA's superpriority lien might be reinstated as an encumbrance against the property.

         Further, the existence and priority of that lien might still be in doubt where Deutsche Bank alleges it tendered payment of that lien. “The disposition of this action in the HOA's absence may impair or impede its ability to protect its interests.” U.S. Bank, N.A., 2015 WL 8780157, at *2. Furthermore, if Deutsche Bank “succeeds in invalidating the sale without the HOA being a party to this suit, separate litigation to further settle the priority of the parties' respective liens and rights may be necessary.” Id. Thus, if the HOA is dismissed as a party, Deutsche Bank would not be able to secure the complete relief it seeks. See id.; see also Fed. R. Civ. P. 19(a). Accordingly, the HOA is a proper party to Deutsche Bank's quiet title claim, and its motion to dismiss as to this claim will be denied.

         2. Breach of NRS 116.1113 (claim 2) & Wrongful Foreclosure (claim 3)

         Next, the HOA argues that the court lacks subject matter jurisdiction to consider Deutsche Bank's claims for breach of NRS 116.1113 and wrongful foreclosure pursuant to NRS 38.310. (ECF No. 72 at 5).

         In response, the Banks contend that NRS 38.310 is inapplicable and that Real Estate Division of the Nevada Department of Business and Industry's (“NRED”) authority expired. (ECF No. 78 at 7). Deutsche Bank asserts that it exhausted its administrative remedies or “was excused from doing so” because it submitted the dispute to NRED on December 8, 2015, and NRED failed to timely complete mediation in the allotted 60 days. (ECF No. 78 at 11). As an initial matter, NRS 38.310 is an exhaustion statute that creates prerequisites for filing certain state-law claims, not a jurisdictional statute. See, e.g., Carrington Mortg. Servs., LLC, v. ...

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