United States District Court, D. Nevada
JAMES W. PENGILLY, Plaintiffs,
NEVADA ASSOCIATION SERVICES et al., Defendants.
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
the Court are Plaintiff's and Defendants' Motions for
Summary Judgment. ECF Nos. 81, 82, 83, 84, 85, and 88. For
the reasons stated below ECF No. 81 Motion for Summary
Judgment is denied with prejudice in part and denied without
prejudice in part; ECF No. 82 Motion for Summary judgment is
GRANTED; ECF No. 83 is GRANTED in part and DENIED in part;
ECF No. 84 Motion for Summary Judgment is DENIED as moot; and
ECF Nos. 85 is denied with prejudice in part and denied
without prejudice in part; ECF No. 88 Motion for Summary
Judgment is DENIED.
case involves a dispute over real property foreclosed on by a
Homeowners Association (HOA). The Property, located at 1141
Allerton Park, #411, Las Vegas, Nevada 89109, was originally
owned by Plaintiff James Pengilly. The parties now dispute
the validity of the foreclosure and title to the property.
and counterclaimants bring the following causes of action: Ke
Aloha Holdings, LLC (“Ke Aloha”) asserts claims
for quiet title and declaratory relief that it is the proper
owner of the property. Ditech Financial, LLC, formerly known
as Green Tree Servicing, LLC (“Ditech”) seeks
declaratory relief that the foreclosure sale was void as a
matter of law. James Pengilly asserts quiet title and
declaratory relief that he is the rightful owner and the
foreclosure was invalid.
case was removed on September 10, 2014 by counter-defendant
Internal Revenue Service. ECF No. 1. At a hearing on January
13, 2016, the Court denied without prejudice a pending Motion
for Summary Judgment and Motion to Dismiss, permitting the
parties to refiled at the close of discovery ECF No.70.
Discovery closed on March 23, 2016. ECF No. 58. The parties
filed their Motions for Summary Judgment on March 30, 2016.
Motion for Summary Judgment
judgment is appropriate 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 judgment as a matter of law.” Fed.R.Civ.P.
56(a); accord Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). When considering the propriety of summary
judgment, the court views all facts and draws all inferences
in the light most favorable to the nonmoving party.
Gonzalez v. City of Anaheim, 747 F.3d 789, 793
(9th Cir. 2014). If the movant has carried its
burden, the non-moving party “must do more than simply
show that there is some metaphysical doubt as to the material
facts . . . . Where the record taken as a whole could not
lead a rational trier of fact to find for the nonmoving
party, there is no genuine issue for trial.” Scott
v. Harris, 550 U.S. 372, 380 (2007) (alteration in
original) (internal quotation marks omitted).
Motion for Summary Judgment by Defendants Stuhmer et al. ECF
individual defendants who raise this motion are in the case
only as defendants to James Pengilly's claims for quiet
title and declaratory relief. NAS is a defendant in those
claims as well as Ditech.
Court finds the following facts to be undisputed. The
individual defendants bringing this motion are former members
of the executive board of the Home Owners Association
(“HOA”) at the time of the non-payment, alleged
default, and foreclosure. Nevada Association Services
(“NAS”) was the trustee and private debt
collector hired by the HOA that carried out the foreclosure.
Neither individual former members of the HOA executive board
nor NAS have claimed or now claims any interest in the
property or proceeds from the foreclosure sale.
40.010 governs Nevada quiet title actions and provides:
“An 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.” “In a quiet
title action, the burden of proof rests with the plaintiff to
prove good title in himself.” Breliant v. Preferred
Equities Corp, 918 P.2d 314, 318 (Nev. 1996).
“[T]here is a presumption in favor of the record
court will refuse to consider a complaint for declaratory
relief if a special statutory remedy has been provided. A
separate action for declaratory judgment is not an
appropriate method of testing defenses in a pending action,
nor is it a substitute for statutory avenues of judicial and
appellate review.” Public Service Com'n of
Nevada v. Eighth Judicial Dist. Court of State of Nev.,
818 P.2d 396, 399 (Nev. 1991) (internal citations omitted).
The United States Supreme Court has stated the following as
to standing in cases for declaratory relief:
“Basically, the question in each case is whether the
facts alleged, under all the circumstances, show that there
is a substantial controversy, between parties having adverse
legal interests, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.”
Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 119,
127 (2007) (quoting Maryland Casualty Co. v. Pacific Coal
& Oil Co., 312 U.S. 270, 273 (1941)).
argue that the individual board members are not proper
parties to this action. The individual parties are only in
this case as Defendants in Pengilly's claims for quiet
title (and the derivative “claim” for declaratory
relief). Defendants argue that Nevada statutes governing
claims related to statutory HOA requirements preclude claims
against individual members. NRS 116.4117(2)(a)-(c) provides
as follows: “Subject to the requirements set forth in
NRS 38.310 and except as otherwise provided in NRS 116.3111,
a civil action for damages or other appropriate relief for a
failure or refusal to comply with any provision of this
chapter or the governing documents of an association may be
brought: (a) by the association against: (1) a declarant; (2)
a community manager; or (3) a unit's owner; (b) by a
unit's owner against: (1) the association; (2) a
declarant; or (3) another unit's owner of the
association; (c) by a class of units' owners constituting
at least 10 percent of the total number of voting members of
the association against a community manager”. In their
Reply and in their Response to Pengilly's MSJ, Defendants
further argue that NRS 40.010, governing quiet title actions,
permits suits against those who claim an adverse
“estate or interest” in the property at issue.
Pengilly argues that while individual members are absent from
NRS 116.4118(2), their behavior is governed by NRS 116.31183,
prohibiting certain forms of retaliation. Pengilly further
argues that the misconduct of NAS and the HOA members is
relevant to his claim for declaratory relief where he claims
that he has superior interest in the property and that the
foreclosure auction was invalid.
only claims are for quiet title and declaratory relief as to
title-and the invalidity of the foreclosure sale, so as to
establish title. Pengilly asserts no other statutory cause of
action, and makes no claim that would require action or
payment on the part of the individual former members of the
HOA. Even if HOA members had some authority to provide
relief, it is undisputed that these individuals do not
control the current HOA, and that they did not file any liens
and did not and do not claim any interest in the property.
Pengilly represents in his Motion for Summary Judgment (ECF
88) that only Ke Aloha claims an adverse interest in the
property. In his deposition he stated he is unaware of any
liens by individual members, and there are no facts in record
showing any interest by individual members.
plain language of NRS 40.010 permits quiet title claims
against those who could provide and would be necessary for
relief, parties claiming some adverse interest in the
property. In evaluating the claims against Ke Aloha, the
party with an adverse interest in the property, the Court can
consider the claims as to the legitimacy of the foreclosure
sale, and issue such declaratory relief as necessary and
proper. But NAS and the individual members have no present
interest in the determination of title or the determination
of the legitimacy of the foreclosure sale. They are not
necessary or indispensable to the claim for quiet title.
the complaint could be read to seek declaratory judgment
against these Defendants, the judgment as against these
defendants would have no present or reasonably likely future
impact on either Plaintiff or the Defendants. As such there
may be no cognizable case or controversy sufficient to
satisfy Article III standing. Therefore, the individual
defendants will be dismissed from the case.
same reason, NAS must be dismissed from Pengilly's
claims. The undisputed facts show that NAS acted as the
foreclosure trustee or private debt collector for the HOA,
and there is no evidence that NAS ever claimed any interest
in the property. Therefore, NAS is dismissed from
Pengilly's claims. NAS remains in the case as a defendant
in Ditech's cross-claims. Therefore, the Court GRANTS ECF
No. 82 Motion for Summary Judgment.
Motions for Summary Judgment by James Pengilly, ECF No. 88,
and Ke Aloha Holdings, ECF No. 81.
Court finds the following facts to be undisputed.
James W. Pengilly's ("Plaintiff' or
"Pengilly") purchased the Property located within
the Association on August 29, 2007, as evidenced by a Grant,
Bargain, Sale Deed, recorded in the Clark County
Recorder's Office in Book No. 20070829, as Instrument
02229. James Pengilly, as trustee, pledged the Property to
secure repayment of a promissory note for $414, 400.00 to
Bank of America, N.A. The beneficial interest of the Deed of
Trust was transferred and assigned to Ditech and recorded on
November 17, 2011. Fannie Mae has been the owner of the loan
continuously since origination. Ditech is the undisputed
beneficiary of the First Deed of Trust.
Declaration requires, among other things, that each owner of
a unit that has been annexed into the Association, including
Pengilly, must pay to the Association monthly assessments. An
owner's failure to pay assessments results in an
automatically perfected, foreclosable delinquent assessment
lien. On or about March 14, 2012, Pengilly and fifteen (15)
other unit owners in WCL filed a lawsuit against Mark A.
Stuhmer, Douglas L. Crook, Bill Blanchard, Kenneth R.
Sailley, Erika Geiser (together "HOA's Executive
Board") and other parties alleging violations of NRS 116
as well as other causes of action (“HOA
Lawsuit”). Pengilly failed to pay overdue
homeowners' assessments and, accordingly, on July 19,
2012, a Notice of Delinquent ...