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The Bank of New York Mellon v. Desert Shores Community Association

United States District Court, D. Nevada

July 20, 2017



         Presently before the court is defendant Desert Shores Community Association's (the “HOA”) motion to dismiss. (ECF No. 11). Plaintiff Bank of New York Mellon (“BNYM”) filed a response (ECF No. 22), and defendant filed a reply (ECF No. 28).

         Also before the court is plaintiff's motion for default judgment against defendant Nevada Association Services, Inc. (“NAS”). (ECF No. 14). NAS has failed to respond to both the complaint and the motion for default judgment.

         I. Introduction

         On July 1, 2016, plaintiff filed a complaint in relation to the September 30, 2013, non-judicial foreclosure sale of the real property at 8416 Haven Brook Court, Las Vegas, Nevada. (ECF No. 1). Against the HOA and NAS, plaintiff asserts the following causes of action: (1) quiet title/declaratory judgment; (2) breach of Nevada Revised Statute (“NRS”) § 116.1113's obligation of good faith; and (3) wrongful foreclosure. (Id.). Against Premier One Holdings, Inc. (“Premier”), plaintiff asserts a “claim” for injunctive relief. (Id.).[1]

         NAS was served on July 5, 2016. (ECF No. 7). Consequently, an answer from NAS was due on July 26, 2016. (Id.). Plaintiff filed a motion for default judgment on January 4, 2017. (ECF No. 14). To date, NAS has not responded.[2]

         II. Legal Standard

         The court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although rule 8 does not require detailed factual allegations, it does require more than labels and conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Furthermore, a formulaic recitation of the elements of a cause of action will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009) (citation omitted). Rule 8 does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Id. at 678-79.

         To survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. When a complaint pleads facts that are merely consistent with a defendant's liability, and shows only a mere possibility of entitlement, the complaint does not meet the requirements to show plausibility of entitlement to relief. Id.

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering a motion to dismiss. Id. First, the court must accept as true all of the allegations contained in a complaint. However, this requirement is inapplicable to legal conclusions. Id. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. at 678. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged - but not shown - that the pleader is entitled to relief.” Id. at 679. When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

         The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court held:

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.


         III. Discussion

         As an initial matter, the court finds that plaintiff's complaint can be considered in its entirety because the mediation requirement of NRS 38.310 has been satisfied. Nev. Rev. Stat. § 38.310. The parties participated in Nevada Real Estate Division's alternate dispute resolution program on July 7, 2016, and that mediation was unsuccessful. (ECF No. 16 at 2); (see also ECF No. 23).

         A. Motion to dismiss

         i. Quiet title/declaratory relief

         a. Standing

         Under Nevada law, “[a]n action may be brought by any person against another who claims an estate or interest in real property, adverse to the person bringing the action for the purpose of determining such adverse claim.” Nev. Rev. Stat. § 40.010 (emphasis added). “A plea to quiet title does not require any particular elements, but each party must plead and prove his or her own claim to the property in question and a plaintiff's right to relief therefore depends on superiority of title.” Chapman v. Deutsche Bank Nat'l Trust Co., 302 P.3d 1103, 1106 (Nev. 2013) (internal quotation marks and citations omitted). Therefore, plaintiff must show that its claim to the property is superior to all others to succeed on its quiet title action. See also Breliant v. Preferred Equities Corp., 918 P.2d 314, 318 (Nev. 1996) (“In a quiet title action, the burden of proof rests with the plaintiff to prove good title in himself.”).

         The HOA relies heavily on the argument that BNYM cannot bring a quiet title claim because it does not allege that it holds a title in the contested parcel. (ECF No. 11). However, the mere allegation of an interest in the land is sufficient to assert this claim. See Nev. Rev. Stat. § 40.010.

         b. Proper party

         Under Federal Rule of Civil Procedure 19(a), a party must be joined as a “required” party in two circumstances: (1) when “the court cannot accord complete relief among existing parties” in that party's absence, or (2) when the absent party “claims an interest relating to the subject of the action” and resolving the action in the person's absence may, as a practical matter, “impair or impede the person's ability to protect the interest, ” or may “leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.” Fed.R.Civ.P. 19(a)(1).

         The HOA maintains that it does not have a current adverse interest in the property as required by a plea to quiet title under NRS 40.010 and asks the court to dismiss it from this claim. (ECF No. 11 at 6-7). The HOA states it does not claim an interest in the property, as any interest the HOA had was extinguished with the foreclosure of the delinquent assessment lien. (Id.).

         This court has previously held that dismissal is appropriate when the holder of the prior deed of trust seeks a declaration that the deed of trust survived foreclosure sale. See, e.g., Bayview Loan Servicing, LLC v. SFR Invs. Pool 1, LLC, No. 2:14-CV-1875-JCM-GWF, 2015 WL 2019067, at *1 (D. Nev. May 1, 2015). In contrast, this court has also held that dismissal is inappropriate in these circumstances when the holder of the prior deed of trust challenges the validity of the foreclosure sale. See, e.g., Nationstar Mortg., LLC v. ...

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