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Bank of America, N.A. v. Desert Pine Villas Homeowners Association

United States District Court, D. Nevada

July 6, 2017

BANK OF AMERICA, N.A., Plaintiffs,
v.
DESERT PINES VILLAS HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

         Presently before the court is plaintiff/counter-defendant Bank of America, N.A.'s (“BANA”) motion for summary judgment.[1] (ECF No. 41). SFR Investments Pool 1, LLC (“SFR”) responded (ECF No. 86), to which BANA replied (ECF No. 89).

         Also before this court is SFR's motion for summary judgment (ECF No. 79), joined by Desert Pine Villa Homeowners Association (the “HOA”) (ECF No. 80). BANA responded (ECF No. 85), to which SFR replied (ECF No. 90).

         Also before this court is SFR's motion for partial summary judgment regarding a pure issue of law. (ECF No. 69). BANA responded (ECF No. 71), to which SFR replied (ECF No. 74).

         Also before this court is SFR's motion to certify a question of law to the Nevada Supreme Court. (ECF No. 62). BANA filed a response (ECF No. 65), to which SFR replied (ECF No. 67).

         I. Facts

         This case involves a dispute over real property located at 3928 Lazy Pine Street, #103, Las Vegas, Nevada 89108 (the “property”). (ECF No. 41 at 3). On January 10, 2005, Janet Robitaille obtained a loan in the amount of $170, 895.00 to purchase the property, which was secured by a deed of trust recorded on January 28, 2005. (Id.).

         The deed of trust was “assigned to [BANA] via an assignment of deed of trust recorded on October 7, 2011.” (Id.).

         On September 16, 2011, defendant Alessi & Koenig, LLC (“Alessi”), acting on behalf of the HOA, recorded a notice of delinquent assessment lien, stating an amount due of $1, 776.00. (Id.). On March 16, 2012, Alessi recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $3, 751.00. (Id.).

         On April 11, 2012, BANA requested a ledger from Alessi to identify the superpriority amount allegedly owed to the HOA. (ECF No. 41-7 at 6-7). Alessi did not identify the super-priority portion of the lien but reasserted the total amount due, $4, 760.00. (Id. at 9-11). BANA calculated the superpriority amount to be $1, 512.00 and tendered that amount to Alessi on May 3, 2012, which Alessi refused. (Id. at 14-16).

         On November 5, 2012, Alessi recorded a notice of trustee's sale, stating an amount due of $5, 888.00. (ECF No. 41 at 3). On December 5, 2012, SFR purchased the property at the foreclosure sale for $7, 557. (Id. at 4). A foreclosure deed in favor of SFR was recorded on December 10, 2012. (Id.).

         On April 1, 2016, BANA filed the underlying complaint, alleging four causes of action: (1) quiet title/declaratory judgment against all defendants; (2) breach of NRS 116.1113 against the HOA and Alessi; (3) wrongful foreclosure against the HOA and Alessi; and (4) injunctive relief against SFR. (ECF No. 1).

         In the instant motions, BANA moves for summary judgment inter alia regarding quiet title and argues: (1) its tender was sufficient and should not have been rejected; (2) the HOA lien statute is facially unconstitutional, and “any factual issue[s] concerning actual notice [are] irrelevant”; (3) the Supremacy Clause bars the foreclosure sale; (4) the SFR Investments decision should not be applied retroactively; (5) the foreclosure sale was commercially unreasonable; and (6) SFR was not a bona fide purchaser for value. (ECF Nos. 41 at 11, 85).

         Conversely, SFR moves for summary judgment regarding quiet title and argues the court should sever the relevant subsection of NRS chapter 116 (ECF Nos. 79 and 90), for partial summary judgment regarding a pure issue of law; that the court apply the “return doctrine” to NRS 116.31163, 116.311635, and 116.31168 (ECF No. 69); and to certify a question of law to the Nevada Supreme Court (ECF No. 62).

         II. Legal Standards

         A. Certify question of law to the Nevada Supreme Court

         The Nevada Rules of Appellate Procedure provide that the Supreme Court of Nevada has the power to answer “questions of [state] law . . . which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court of [Nevada].” Nev. R. App. P. 5(a).

         The Nevada Supreme Court “may answer questions of law certified [] by a federal court when (1) [the] answers to the certified questions may be determinative of part of the federal case, (2) there is no clearly controlling Nevada precedent, and (3) the answers to the certified questions will help settle important questions of law. See, e.g., Hartford Fire Ins. Co. v. Tr. of Const. Indus., 208 P.3d 884, 888 (Nev. 2009).

         Where the question does not impact the merits of a claim pending before the certifying court, the question should not be certified to the Supreme Court. See Nev. R. App. P. 5(a) (requiring that certified question be “determinative”); see also Volvo Cars of N. Am., Inc. v. Ricci, 137 P.3d 1161, 1164 (Nev. 2006) (declining to answer certified questions where “answers to the questions posed [] would not ‘be determinative' of any part of the case”). “The certification procedure is reserved for state law questions that present significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts.” Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003).

         Federal courts have discretion to certify questions of state law. Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974). “Resort to certification is not mandatory where state law is unclear on a particular issue.” Carolina Cas. Ins. Co. v. McGhan, 572 F.Supp.2d 1222, 1225 (D. Nev. 2008) (citing Lehman Bros., 416 U.S. at 390-91). Generally, “[w]hen a decision turns on applicable state law and the state's highest court has not adjudicated the issue, a federal court must make a reasonable determination of the result the highest state court would reach if it were deciding the case.” Aetna Cas. & Sur. Co. v. Sheft, 989 F.2d 1105, 1108 (9th Cir. 1993).

         Further, a federal court may decline to certify a question where controlling precedent is available for guidance. Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033, 1041 (9th Cir. 2014); see also Kehoe v. Aurora Loan Servs., LLC, No. 3:10-cv-256-RCJ-RAM; 2010 WL 4286331, at *11 (D. Nev. Oct. 20, 2010) (declining to certify question to Nevada Supreme Court where statutory language was sufficiently clear for the court to apply).

         Finally, a party must show “particularly compelling reasons” for certification when that party first requests it after losing on an issue. Complaint of McLinn, 744 F.2d 677, 681 (9th Cir. 1984) (“Ordinarily such a movant should not be allowed a second chance at victory when, as here, the district court employed a reasonable interpretation of state law.”).

         B. Motion for Summary Judgment

         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. Certify a question of law to the Nevada Supreme Court

         SFR requests that the court certify the following question to the Nevada Supreme Court: “Whether NRS § 116.31168(1)'s incorporation of NRS § 107.090 requires homeowners' associations to provide notices of default to banks even when a bank does not request notice?” (ECF No. 62 at 2).

         The court declines to certify this question as controlling precedent is available for guidance. The Ninth Circuit, in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016)-which SFR cites to in its motion-explicitly answered SFR's exact question in the ...


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