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Las Vegas Development Group, LLC v. Steven

United States District Court, D. Nevada

May 23, 2017

ROBERTO E. STEVEN et al., Defendants.


          ROBERT C. JONES United States District Judge.

         This case arises out of competing foreclosure sales of the same property. Now pending before the Court is a Motion to Reconsider the Court's prior dismissal of this action. (Mot. Recon., ECF No. 95.) For the reasons given herein, the Court denies the motion.


         On or about August 2, 1993, Defendants George and Marie Cooper acquired title to real property located at 1901 Fan Fare Drive, Las Vegas, Nevada 89032 (the “Property”). (Am. Compl. ¶¶ 19, 24, ECF No. 66.) Non-party Durable Homes, Inc. recorded a first deed of trust (the “DOT”) against the Property, and Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) later became the beneficiary of the DOT, re-recording it, as modified, on or about August 19, 2003. (Id. at ¶¶ 27-29.) The Property has been subject to recorded Covenants, Conditions, and Restrictions (“CC&Rs”) since before the DOT was first recorded. (Id. at ¶¶ 19, 32.)

         The Coopers defaulted on their HOA dues, and non-party Hidden Canyon Owners Association (the “HOA”) eventually conducted an HOA sale in accordance with state law on or about March 2, 2011, purchasing the Property itself for $3, 780.82. (Id. at ¶¶ 19, 34-53; Trustee's Deed Upon Sale, ECF No. 66-5 at 2.) Prior to the sale, Wells Fargo had not assigned the DOT to Defendant Secretary of Housing and Urban Development (“HUD”) or any other government agency or instrumentality. (Am. Compl. ¶ 62, ECF No. 66.) Nor did the United States or any agency or instrumentality thereof possess any interest in the DOT or the Property. (Id. at ¶ 63.) On April 6, 2011, the HOA quitclaimed the Property to Plaintiff Las Vegas Development Group, LLC (“LVDG”) for $5, 000. (Id. at ¶¶ 78-79; Quitclaim Deed, ECF No. 66-6 at 2-3.)

         Wells Fargo and Defendant National Default Servicing Corp. (“NDSC”) then foreclosed the DOT under state law, selling the property to HUD on November 23, 2011. (Am. Compl. ¶¶ 82-86, ECF No. 66.) On February 28, 2012, HUD sold the Property to Defendant Roberto Steven. (Id. at ¶ 87.) Steven financed the Property via two mortgages from Defendant Evergreen Moneysource Mortgage Co. (“Evergreen”). (Id. at ¶¶ 15, 88-89.) One or more of Steven's mortgages has been transferred to Defendant U.S. Bank National Association (“U.S. Bank”). (Id. at ¶¶ 16, 90.)

         LVDG sued Defendants in state court for: (1) quiet title; (2) unjust enrichment; (3) equitable mortgage; (4) slander of title; and (5) conversion. LVDG also sought equitable relief via the sixth and seventh nominal causes of action. HUD removed. The parties stipulated to the dismissal of HUD.

         On February 2, 2016, Wells Fargo filed a motion to dismiss, in which Evergreen, Steven, and U.S. Bank joined. (ECF No. 36.) The Court granted the motion, with leave to amend certain claims. (ECF No. 53.) On July 14, 2016, LVDG filed a First Amended Complaint (“FAC”), reasserting only its claims for quiet title, unjust enrichment, slander of title, and conversion. (ECF No. 66.) Wells Fargo then moved to dismiss the FAC for failure to state a claim under Rule 12(b)(6). (ECF No. 79.) Evergreen, Steven, and U.S. Bank once again joined in Wells Fargo's motion to dismiss. (ECF No. 81.)

         On December 6, 2016, the Court granted the motion to dismiss, holding in part that the HOA's foreclosure sale could not have extinguished the DOT because the sale was conducted pursuant to NRS 116.3116, and the Ninth Circuit had recently ruled in Bourne Valley Court Trust v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), that the statute's opt-in notice provisions are facially unconstitutional. LVDG now argues that the Court committed error in granting the motion to dismiss on this basis, and asks the Court to reconsider its ruling. (Mot. Recon., ECF No. 95.)


         Granting a motion to reconsider is an “extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (quoting 12 James Wm. Moore et al., Moore's Federal Practice § 59.30[4] (3d ed. 2000)). “Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law.” Sch. Dist. No. 1J, Multnomah Cnty., Or. v. Acand S, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). In some cases, “other, highly unusual, circumstances” may also warrant reconsideration. Id.

         However, a motion to reconsider “may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation.” Carroll, 342 F.3d at 945; see also United States v. Lopez-Cruz, 730 F.3d 803, 811-12 (9th Cir. 2013). Moreover, “[a] motion to reconsider is not a second chance for the losing party to make its strongest case or to dress up arguments that previously failed.” United States v. Huff, 782 F.3d 1221, 1224 (10th Cir.), cert. denied, 136 S.Ct. 537 (2015).

         III. ANALYSIS

         a. The Scope and ...

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