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Bank of America, N.A. v. Esplanade At Damonte Ranch Homeowners' Association

United States District Court, D. Nevada

May 23, 2017

BANK OF AMERICA, N.A., Plaintiff,
v.
ESPLANADE AT DAMONTE RANCH HOMEOWNERS' ASSOCIATION 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. Now pending before the Court are two Motions for Summary Judgment. (ECF Nos. 24, 29.) For the reasons given herein, the Court grants summary judgment for Plaintiff Bank of America.

         I. FACTS AND PROCEDURAL BACKGROUND

         On or about September 26, 2008, non-party German Pineda purchased a home located at 1945 Wind Ranch Road #A, Reno, Nevada, 89521 (“the Property”), subject to the Covenants, Conditions, and Restrictions (“CC&Rs”) of Defendant Esplanade at Damonte Ranch Homeowners' Association (“the HOA”). (Compl. ¶¶ 6, 12, ECF No. 1.) The Deed of Trust (“DOT”) identified Bank of America as lender and beneficiary, PRLAP, Inc. as trustee, and a secured amount of $225, 832. (Deed of Trust, ECF No. 27-1.)

         On September 8, 2009, Defendant Angius & Terry Collections, LLC (“ATC”)-as the HOA's agent-recorded a Notice of Default and Election to Sell against the Property, due to Pineda's failure to pay HOA dues. (Compl. ¶ 15; Notice of Default, ECF No. 24-3.) On September 9, 2010, ATC recorded a Notice of Sale against the Property. (Compl. ¶ 16; Notice of Sale, ECF No. 24-4.) The Notice of Sale indicated that unless the HOA's lien was satisfied, a foreclosure sale would take place on October 1, 2010, at 11:00 AM.

         On the morning of October 1, 2010, ATC sent an email to the company conducting the foreclosure sale. (Sale Instruction Email, ECF No. 24-1.) The email stated:

[ATC] has a foreclosure sale scheduled for today in Washoe County, Nevada. We have received a clear date down from our title company. You are instructed to proceed with the sale. The opening bid is to be: $2, 592.71.
The person crying the sale must announce the following:
You are hereby being notified by the Association, the beneficiary, through its foreclosure agent, that the opening bid does not include the super-priority lien amount. That the super-priority lien amount will still be a lien on the property once the sale is completed. You are hereby being notified by the Association, the beneficiary, through its foreclosure agent, that said lien may affect the property, title to the property or value of the property. The purchaser buys this property with full knowledge and understanding of same.”

(Id. (emphasis added).) The HOA then purchased the Property at the foreclosure sale, by credit bid in the amount of $2, 592.71, despite an appraised value of $177, 000. (Foreclosure Deed, ECF No. 24-5; Appraisal Report, ECF No. 27 at 5-8.) On December 10, 2013, ATC recorded the foreclosure deed, which expressly conveyed to the HOA “only that portion of [the HOA's] right, title and interest secured by the non-priority portion of its lien under NRS 116.3116 . . . .” (Id.) The foreclosure deed further provided that the HOA, as grantee, purchased the Property “by satisfaction, pro tanto, of the obligations then due and payable to association claimant in excess of the Super-Priority Lien set forth in NRS 116.3116 et seq.” (Id.)

         Notwithstanding the unequivocal limitation on the title it acquired at the foreclosure sale, on December 12, 2013, the HOA attempted to re-record its trustee's deed to “correct the verbiage” in the deed and extend the foreclosure of its lien, post hoc, to include both the subpriority and superpriority portions. (Am. Foreclosure Deed, ECF No. 27-6.) The HOA simply removed any language that limited the scope of the foreclosure to the subpriority lien only, and re-recorded the deed. The same day, December 12, 2013, the HOA transferred its interest in the Property to Defendant Thunder Properties, Inc. (“Thunder”) by quitclaim deed. (Quitclaim Deed, ECF No. 27-8.)

         Bank of America alleges four causes of action in its Complaint: (1) quiet title/declaratory judgment against all Defendants; (2) breach of N.R.S § 116.1113 against the HOA and ATC; (3) wrongful foreclosure against the HOA and ATC; and (4) injunctive relief against Thunder. The HOA and Bank of America have both moved for summary judgment. (ECF Nos. 24, 29.)

         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 ...


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