United States District Court, D. Nevada
before the court is plaintiff Bank of America, N.A.'s
(“BANA”) motion for summary judgment. (ECF No.
68). Defendant Samuel Bailey has filed a response (ECF No.
71), and plaintiff has filed a reply (ECF No. 73).
before the court is the defendant's motion for summary
judgment. (ECF No. 70). Plaintiff filed a response (ECF No.
72), and defendant filed a reply (ECF No. 75).
initiated the present action, requesting declaratory relief
and quiet title as to its alleged first-position security
interest in the real property at 4850 Impressario Court, Las
Vegas, Nevada (the “property”). (ECF No. 1).
then filed the following counterclaims against BANA: (1) an
offset to BANA's potential damages due to costs incurred
by acquiring the property; (2) unjust enrichment; (3) slander
of title; and (4) attorneys' fees as special damages.
(ECF No. 39).
to BANA, dismissed co-defendant Peter Aguilar owned the
property, refinancing it with a roughly $400, 000.00 loan
from Countrywide Bank, FSB (“Countrywide”) on
December 17, 2008. (ECF No. 68). This transaction was secured
by a deed of trust for Countrywide that was recorded on the
same day. (Id.).
January 23, 2010, Aguilar then refinanced the property by
means of a $396, 459.00 loan from BANA, which satisfied the
outstanding Countrywide loan. (Id.). As a result, a
February 2, 2010, substitution of trustee and reconveyance
was recorded. (Id.).
asserts that a first deed of trust on the property secured
the BANA loan. (Id.). Importantly, plaintiff
indicates that the deed of trust was executed by Aguilar on
January 23, 2010, but it was not recorded until October 21,
meantime, Aguilar and Bailey allegedly acted as principals of
Silver State Steel Group, Inc. in the course of that
entity's acquisition of a Small Business Administration
(“SBA”) loan from Meadows Bank
(“Meadows”). (ECF No. 70).
informs the court that “Aguilar and Bailey additionally
each personally guaranteed the SBA Loan. As additional
collateral for the SBA Loan, Aguilar granted Meadows a
second-position Deed of Trust . . . on the Property, which
was recorded on July 1, 2010.” (ECF No. 68 at 4)
(citations omitted). Plaintiff alleges that Bailey and
Meadows had actual knowledge of the BANA loan and unrecorded
deed of trust. (Id.).
Aguilar received a loan from Franklin America Mortgage
Company (“Franklin”). (Id.). That
“[l]oan was secured by a First Deed of Trust recorded
against the Property on December 1, 2010.”
(Id. at 5). This loan was “used to fully
satisfy the outstanding balance owed on the B[ANA]
December 13, 2012, Franklin assigned its deed of trust to
BANA. (Id.). Thereafter, “Bailey . . .
acquired an assignment of Meadows' right, title, and
interest on June 6, 2013.” (ECF No. 71 at 6).
September 3, 2013, defendant Bailey recorded a notice of
default and election to sell. (Id.). On May 14,
2014, defendant recorded a notice of sale. (Id.).
Plaintiff initiated the instant action on June 6, 2014,
requesting a declaratory judgment that its security interest
in the property, stemming from the Franklin deed of trust,
“is superior to and holds priority over the Meadows
Deed of Trust.” (ECF No. 1 at 4). Finally,
“Bailey acquired a Trustee's Sale Deed to the
Property on September 9, 2014.” (ECF No. 70 at 5).
plaintiff requests that the court rule in its favor as to two
questions: (1) “Was the B[ANA] Deed of Trust in a
position of priority to the Meadows Deed of Trust?”;
and (2) “Was the Franklin Deed of Trust equitably
subrogated to the position of the BOA Deed of Trust?”
(ECF No. 68 at 8).
the first question, BANA argues that the BOA deed of trust
was in a priority position to the Meadows deed of trust
because Meadows and Bailey had actual knowledge of BANA's
loan and underlying position in the property. (Id.).
As to the second question, BANA argues “that a
refinancing mortgagee expects to receive equal priority to
the mortgage being discharged” and “that the
proceeds of the Franklin mortgage went to fully satisfy the
B[ANA] mortgage, that Franklin did not intend to
subordinate its interest to Meadows, and that Meadows was not
prejudiced.” (Id. at 12).
alternative, BANA requests that the court should grant
summary judgment in its favor against Bailey's offset
counterclaim because he received the benefit of the Meadows
note and because BANA accuses Bailey of seeking damages for
an issue outside of the scope of the instant litigation.
(Id. at 16-17) (“Bailey's damage
calculation similarly includes attorneys' fees incurred
in wholly unrelated litigation against [his co-defendant, ]
BANA also seeks relief from this court against Bailey's
counterclaims of unjust enrichment, slander of title, and
attorneys' fees. (Id.).
motion for summary judgment asks that this court adjudicate
plaintiff's claims and Bailey's third counterclaim,
slander of title, in his favor. (ECF No. 70). Bailey asserts
two central points. (Id.). First, Bailey argues that
“[BANA] cannot invoke equity to create a lien that does
not exist, ” due to BANA's failure to record its
deed of trust. (Id. at 2). Next, Bailey contests
that “there is no justification for recording an
extinguished deed of trust.” (Id. at 3).
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 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).
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
non-moving party must “set forth specific facts showing
that there is a genuine issue for trial.” Id.
determining summary judgment, the court applies a
burden-shifting analysis. “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).
Moreover, “[i]n such a case, the moving party has ...