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U.S. Bank, National Association v. NV Eagles, LLC

United States District Court, D. Nevada

May 23, 2017

U.S. BANK, NATIONAL ASSOCIATION, Plaintiff,
v.
NV EAGLES, LLC et al., Defendants.

          ORDER

          ROBERT C. JONES, UNITED STATES DISTRICT JUDGE

         This case arises from the foreclosure of a residential property pursuant to a homeowners association lien. Pending before the Court are three offensive Motions for Summary Judgment (ECF Nos. 130, 131, 147), one defensive Motion for Summary Judgment (ECF No. 134), and a Motion to File Excess Pages (ECF No. 132).

         I. FACTS AND PROCEDURAL BACKGROUND

         On June 27, 2006, Michael Cress purchased a home located at 517 W. Mesquite Boulevard #1524, Mesquite, Nevada 89027 (“the Property”). (Am. Compl. ¶¶ 8, 12, ECF No. 55.) The Deed of Trust (“DOT”) executed identified GreenPoint Mortgage Funding, Inc. as the lender, MERS as the beneficiary, Marin Conveyance Corp. as the trustee, and a secured amount of $148, 000. (Id. at ¶ 13.) The Property is in a planned community and is subject to certain covenants, conditions, and restrictions (“CC&Rs”). On May 31, 2012, Defendant Nevada Association Services, Inc. (“NAS”)-as agent of Sandstone Condominiums Homeowners Association (“HOA”)-recorded a Notice of Default and Election to Sell against the Property, due to Cress's failure to pay HOA dues. (Id. at ¶ 18.)

         In July 2012, Bank of America, the prior beneficiary and servicer of the loan and Plaintiff U.S. Bank's predecessor-in-interest, requested a current HOA lien payoff demand and account ledger from NAS. (Id. at ¶ 19.) Bank of America was then informed by NAS that NAS was not willing to provide a current payoff ledger due to a concern of violating the Fair Debt Collection Practices Act. (Id. at ¶ 20.) In the midst of these payoff ledger discussions, on July 30, 2012, U.S. Bank obtained all beneficial interest in the Property via recorded assignment. (Id. at ¶ 14.) Despite the assignment to U.S. Bank, however, Bank of America continued to seek, through its agent Miles Bauer Bergstrom & Winters LLP (“Miles Bauer”), to satisfy the superpriority portion of the HOA's lien. Based on information about the assessments charged on similar properties within the HOA, Bank of America estimated the HOA's lien plus reasonable collection costs to be about $2, 036.33. (Id. at ¶ 21.) On August 9, 2012, Miles Bauer tendered this amount to NAS in an attempt to protect what was now U.S. Bank's interest in the Property. (Id. at ¶ 22.) On August 10, 2012, NAS informed Miles Bauer that its tender was rejected. (Id. at ¶ 23.)

         On January 22, 2013, NAS recorded a Notice of Foreclosure Sale against the Property at the HOA's direction. (Id. at ¶ 24.) On May 21, 2013, a Foreclosure Deed was recorded with Defendant Underwood Partners, LLC (“Underwood”) named as the grantee. Despite an appraised value of $79, 500, Underwood paid just $9, 000 for the Property at the foreclosure sale. (Appraisal Report, ECF No. 146-13; Am. Compl. ¶¶ 25-26.) Underwood also took the foreclosure deed without warranty. (Foreclosure Deed, ECF No. 130-1 at 46.) Subsequently, on October 18, 2013, Underwood Partners sold the Property to Defendant NV Eagles, LLC. (Am. Compl. ¶ 27; Sale Deed, ECF 148-8.) Underwood and NV Eagles are “parent and direct subsidiary, ” both with the same business address in Newport Beach, California. (Declaration of Value, ECF No. 148-8 at 5.) Moreover, although it is Underwood that appears as the grantee on the Foreclosure Deed, NV Eagles states, in its own opposition brief: “[NV] Eagles is an innocent third-party purchaser, having paid $9, 000 at the trustee's sale.” (Resp. 18, ECF No. 150.)

         Plaintiff alleges ten causes of action in its First Amended Complaint (“FAC”): (1) voidable transfer under N.R.S. § 112.190; (2) voidable transfer under N.R.S. § 112.180 against Underwood and NV Eagles; (3) declaratory relief; (4) quiet title; (5) wrongful foreclosure against the HOA and NAS; (6) negligence against the HOA and NAS; (7) breach of contract against the HOA and NAS; (8) unjust enrichment against Underwood, NV Eagles, the HOA, and NAS; (9) breach of the covenant of good faith and fair dealing against the HOA and NAS; (10) declaratory relief that N.R.S. § 116.3116 et seq. violates the Fifth Amendment to the Nevada and U.S. Constitutions.

         U.S. Bank has moved for offensive summary judgment in multiple motions, (ECF Nos. 130, 131, 147), and NV Eagles has moved for defensive summary judgment on all claims in the FAC, (ECF No. 134).

         II. LEGAL STANDARDS

         A court must grant summary judgment when “the movant shows 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). Material facts are those which may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See Id. 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).

         In determining summary judgment, a court uses a burden-shifting scheme. 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.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation and internal quotation marks omitted). In 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 nonmoving 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 (1970). If the moving party meets its initial burden, the burden then shifts to the opposing party to establish a genuine issue of material fact. 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 unsupported by facts. 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 Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324.

         At the summary judgment stage, 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, 477 U.S. at 249. 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. Notably, facts are only viewed in the light most favorable to the non-moving party where there is a genuine dispute about those facts. Scott v. Harris, 550 U.S. 372, 380 (2007). That is, even where the underlying claim contains a reasonableness test, where a party's evidence is so clearly ...


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