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U.S. Bank National Association v. Antelope Canyon Homeowners Association

United States District Court, D. Nevada

March 15, 2017



         Presently before the court is U.S. Bank National Association, as trustee for the holders of the WMALT 20060-AR8 trust (“U.S. Bank”); Bank of America, N.A. (“BOA”); and Nationstar Mortgage LLC's (“Nationstar”) (collectively “the Banks”) motion for summary judgment (ECF No. 39). SFR Investment Pool 1, LLC (“SFR”) filed a response (ECF No. 45), to which the Banks replied (ECF No. 48).

         Also before the court is SFR's motion for summary judgment. (ECF No. 40). The Banks filed a response (ECF No. 47), to which SFR replied (ECF No. 49).

         Finally, the court also considers SFR's motion to certify a question of law to the Nevada Supreme Court. (ECF No. 66). The Banks filed a response (ECF No. 67), to which SFR replied (ECF No. 68).

         I. Facts

         This case involves a dispute over real property located at 3761 Tohono Canyon Street, Las Vegas, Nevada 89147 (the “property”). (ECF No. 3).

         On May 1, 2006, crossdefendant Gail Bundy (“Bundy”) obtained a loan in the amount of $207, 200.00 from Countrywide Home Loans, Inc. and purchased the property. (Id.). The loan was secured by a deed of trust recorded May 3, 2006. (Id.).

         The deed of trust was assigned to BAC Home Loans Servicing, LP (“BAC”) via a corporate assignment deed of trust.[1] (Id.). The senior deed of trust was then assigned to U.S. Bank via an assignment deed of trust. (Id.).

         On October 20, 2010, Alessi & Koenig (“A&K”), acting on behalf of Antelope Canyon Homeowners Association (“the HOA”), recorded a notice of delinquent assessment lien, stating an amount due of $1, 275.00. (Id.). On January 31, 2011, A&K recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $2, 505.00. (Id.).

         In April 2011, BAC and its counsel requested a payoff ledger that specified the superpriority and subpriority lien amounts. (Id.). A&K responded with a ledger that had the total amount but did not specify the amount of the superpriority portion. (Id.). Because the superpriority portion was not specified, BAC and its counsel calculated the nine months of assessments and determined the superpriority amount to be $1, 440.00. (Id.). On April 22, 2011, BAC tendered that amount to the HOA and included restrictive terms and conditions with the amount. (Id.). The HOA refused the payment and foreclosed on the property on December 5, 2012. (Id.).

         On February 14, 2013, a foreclosure deed in favor of the HOA was recorded. (Id.). The HOA purchased the property for $8, 680.00. (ECF No. 39-8).

         On March 13, 2013, the HOA recorded a quitclaim deed transferring its interest in the property to SFR. (ECF No. 39-9).

         On July 27, 2015, U.S. Bank filed a complaint against SFR and the HOA, alleging four causes of action: (1) quiet title/declaratory judgment against all parties; (2) breach of Nevada Revised Statute (“NRS”) 116.1113 against the HOA; (3) wrongful foreclosure against the HOA; and (4) injunctive relief against SFR. (ECF No. 3).

         On August 18, 2015, SFR filed a counterclaim against U.S. Bank and a crossclaim against BOA, Nationstar, Wells Fargo Bank, and Bundy alleging three causes of action: (1) declaratory relief/quiet title against all parties; (2) preliminary and permanent injunction against all parties; and (3) slander of title against U.S. Bank and Nationstar. (ECF No. 11).

         In the instant motions, the Banks and SFR move for summary judgment (ECF Nos. 39, 40), and SFR moves to certify a question of law to the Nevada Supreme Court (ECF No. 66). The court will address each motion in turn.[2]

         II. Legal Standards

         A. 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 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). 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.

         B. Certify Question of Law to the Nevada Supreme Court

         The Nevada Rules of Appellate Procedure provide that the Supreme Court of Nevada has the power to answer “questions of [state] law . . . which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court of [Nevada].” Nev. R. App. P. 5(a).

         The Nevada Supreme Court “may answer questions of law certified [. . .] by a federal court when (1) [the] answers to the certified questions may be determinative of part of the federal case, (2) there is no clearly controlling Nevada precedent, and (3) the answers to the certified questions will help settle important questions of law. See, e.g., Hartford Fire Ins. Co. v. Tr. of Const. Indus., 208 P.3d 884, 888 (Nev. 2009).

         Where the question does not impact the merits of a claim pending before the certifying court, the question should not be certified to the Nevada Supreme Court. See Nev. R. App. P. 5(a) (requiring that certified question be “determinative”); see also Volvo Cars of N. Am., Inc. v. Ricci, 137 P.2d 1161, 1164 (Nev. 2006) (declining to answer certified questions where “answers to the questions posed [] would not ‘be determinative' of any part of the case”). “The certification procedure is reserved for state law questions that present significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts.” Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003).

         Federal courts have discretion to certify questions of state law. Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974). “Resort to certification is not mandatory where state law is unclear on a particular issue.” Carolina Cas. Ins. Co. v. McGhan, 572 F.Supp.2d 1222, 1225 (D. Nev. 2008) (citing Lehman Bros., 416 U.S. at 390-91). Generally, “[w]hen a decision turns on applicable state law and the state's highest court has not adjudicated the issue, a federal court must make a reasonable determination of the result the highest state court would reach if it were deciding the case.” Aetna Cas. & Sur. Co. v. Sheft, 989 F.2d 1105, 1108 (9th Cir. 1993).

         Further, a federal court may decline to certify a question where controlling precedent is available for guidance. Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033, 1041 (9th Cir. 2014); see also Kehoe v. Aurora Loan Servs., LLC, No. 3:10-cv-256-RCJ-RAM; 2010 WL 4286331, at *11 (D. Nev. Oct. 20, 2010) (declining to certify question to Nevada Supreme Court where statutory language was sufficiently clear for the court to apply).

         Finally, a party must show “particularly compelling reasons” for certification when that party first requests it after losing on an issue. Complaint of McLinn, 744 F.2d 677, 681 (9th Cir. 1984) (“Ordinarily such a movant should not be allowed a second chance at victory when, as here, the district court employed a reasonable interpretation of state law.”).

         III. Discussion

         A. Motions for Summary Judgment (ECF Nos. 39, 40)

         In its motion, SFR moves for summary judgment on its cross/counterclaims for quiet title, preliminary and permanent injunction, and slander of title (ECF No. 40), whereas the Banks move for summary judgment on U.S. Bank's quiet title/declaratory judgment claim, breach of NRS 116.1113, wrongful foreclosure, and injunctive relief claim as well as SFR's cross- and counterclaims. (ECF No. 39).

         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.”).

         SFR asserts that summary judgment in its favor is proper because, inter alia, the foreclosure sale extinguished U.S. Bank'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, 412-14 (Nev. 2014) (“SFR Investments”) and because U.S. Bank has not met the fraud, unfairness, or oppression requirement to equitably 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 No. 40).

         The Banks echo some of SFR's arguments in their motion for summary judgment, asserting that summary judgment is appropriate against SFR's quiet title action. (ECF No. 39). The Banks argue that summary judgment as to the quiet title claim should be granted on their behalf because the superpriority payment amount was tendered, the initial foreclosure sale was invalid, and because the Banks are entitled to equitable relief under Shadow Wood. (Id.). The Banks further argue that summary judgment should be granted on their behalf because the HOA did not authorize its agent to foreclose on the property, rendering ...

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