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Bank of America, N.A. v. ANN Losee Homeowners Association

United States District Court, D. Nevada

May 18, 2017

BANK OF AMERICA, N.A., Plaintiffs,


         Presently before the court is plaintiff Bank of America, N.A., successor by merger to BAC Home Loans Servicing, LP f/k/a Countrywide Home Loans Servicing, LP's (“BANA”) motion for summary judgment. (ECF No. 36). Defendant Ann Losee Homeowners' Association (the “HOA”) (ECF No. 39) and defendants Arkham, LLC and Arkham XIII, LLC (ECF No. 40) filed responses, to which BANA replied (ECF Nos. 45, 46, respectively).

         Also before the court is the HOA's motion for summary judgment. (ECF No. 37). BANA filed a response (ECF No. 38), to which the HOA replied (ECF No. 47).

         I. Facts

         This case involves a dispute over real property located at 2317 Clarington Avenue, North Las Vegas, Nevada (the “property”). On November 21, 2009, Paul Borin obtained a loan from First Option Mortgage in the amount of $204, 355.00, which was secured by a deed of trust recorded on November 30, 2009. (ECF No. 1).

         The deed of trust was assigned to BANA via an assignment of deed of trust recorded on November 14, 2011. (ECF No. 1).

         On November 19, 2013, defendant Absolute Collection Services, LLC (“ACS”), acting on behalf of the HOA, recorded a notice of delinquent assessment lien, stating an amount due of $1, 668.83. (ECF No. 1). On January 8, 2014, ACS recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $2, 385.68. (ECF No. 1).

         On February 3, 2014, BANA requested a ledger from the HOA/ACS identifying the superpriority amount allegedly owed to the HOA. (ECF No. 1). The HOA/ACS provided a ledger dated February 19, 2014, stating a superpriority amount owed of $2, 104.35 and a total owed of $6, 553.45. (ECF No. 1). BANA calculated the superpriority amount to be $180.00 and tendered that amount to ACS on March 3, 2014, which the HOA allegedly accepted. (ECF No. 1).

         On April 30, 2014, ACS recorded a notice of trustee's sale, stating an amount due of $3, 843.76 and scheduling the sale for June 17, 2014. (ECF No. 1). On June 17, 2014, defendant Nevada New Builds, LLC (“NNB”) purchased the property at the foreclosure sale for $9, 000.00. (ECF No. 1). A foreclosure deed in favor of NNB was recorded on June 19, 2014. (ECF No. 1).

         NNB transferred the property to defendant Janet Garcia (“Garcia”) by a deed of sale recorded on July 23, 2014. (ECF No. 1). Thereafter, Garcia transferred the property to defendant Arkham, LLC (“Arkham”) by quitclaim deed recorded on May 1, 2015. (ECF No. 1). Subsequently, Arkham, LLC transferred the property to defendant Arkham XIII, LLC (“Arkham XIII”) by a grant, bargain, sale deed recorded on May 11, 2015. (ECF No. 1).

         On February 26, 2016, BANA filed the underlying complaint, alleging four claims of relief: (1) quiet title/declaratory judgment against all defendants; (2) breach of NRS 116.1113 against ACS and the HOA; (3) wrongful foreclosure against ACS and the HOA; and (4) injunctive relief against Arkham XIII. (ECF No. 1).

         On May 20, 2016, Arkham and Arkham XIII filed a counterclaim against BANA alleging two claims for relief: (1) quiet title; and (2) cancellation of instruments. (ECF No. 26).

         On December 19, 2016, the court dismissed claims (2) through (4) of BANA's complaint. (ECF No. 35).

         In the instant motions, BANA and the HOA both move for summary judgment. (ECF Nos. 36, 37). The court will address each as it sees fit.

         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 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. Judicial Notice

         As an initial matter, the court takes judicial notice of the following recorded documents: first deed of trust (ECF No. 36-1); the assignment of deed of trust (ECF No. 36-3); notice of delinquent assessment (ECF No. 36-4); notice of default and election to sell (ECF Nos. 36-5, 36-6); notice of trustee's sale (ECF No. 36-7); and trustee's deed upon sale (ECF No. 36-10). See, e.g., United States v. Corinthian Colls., 655 F.3d 984, 998-99 (9th Cir. 2011) (holding that a court may take judicial notice of public records if the facts noticed are not subject to reasonable dispute); Intri-Plex Tech., Inv. v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007). . . . . . . . . .

         B. Deed Recitals[1]

         Section 116.3116(1) of the Nevada Revised Statutes gives an HOA a lien on its homeowners' residences for unpaid assessments and fines; moreover, NRS 116.3116(2) gives priority to that HOA lien over all other liens and encumbrances with limited exceptions-such as “[a] first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent.” Nev. Rev. Stat. § 116.3116(2)(b).

         The statute then carves out a partial exception to subparagraph (2)(b)'s exception for first security interests. See Nev. Rev. Stat. § 116.3116(2). In SFR Investment Pool 1 v. U.S. Bank, ...

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