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Elizon Master Participation Trust 1 v. Saticoy Bay LLC

United States District Court, D. Nevada

September 21, 2017

ELIZON MASTER PARTICIPATION TRUST 1, et al., Plaintiffs,
v.
SATICOY BAY LLC SERIES 8920 EL DIABLO, et al., Defendants.

          ORDER

         Presently before the court is defendant/counter-claimant Saticoy Bay LLC Series 8920 El Diablo's (“Saticoy”) motion for summary judgment. (ECF No. 35). Plaintiff/counter-defendant Elizon Master Participation Trust 1, U.S. Bank Trust National Association, as Owner Trustee (“Elizon”) filed a response (ECF No. 40), and Saticoy filed a reply (ECF No. 41).

         Also before the court is Elizon's motion for summary judgment.[1] (ECF No. 36). Saticoy filed a response (ECF No. 39), and Elizon filed a reply (ECF No. 42).

         I. Introduction

         The present case involves a dispute over real property located at 8920 El Diablo Street, Las Vegas, Nevada 89131 (the “property”).

         On January 13, 2012, Ralph and Rebecca Lake (the “Borrowers”) obtained a loan in the amount of $149, 121 from Bank of America, N.A. (“BOA”) and purchased the property. (ECF No. 3). The deed of trust listed Recon Trust Company, N.A. as the Trustee and Mortgage Electronic Registration System, Inc. (“MERS”) as the beneficiary. Id.

         On July 31, 2012, an assignment of the deed of trust was recorded, whereby MERS assigned the deed of trust to BOA. Id.

         On January 30, 2013, Hampton & Hampton Collections, LLC (“the HOA trustee”) recorded a notice of default and election to sell property, on behalf of Silverstone Ranch Community Association (“the HOA”). Id.

         On March 12, 2013, BOA, through counsel, requested a superpriority lien payoff demand and an account ledger from the HOA trustee. Id. The HOA trustee sent BOA a ledger stating an amount due of $2, 354.50. Id. The ledger did not specify the amount of the superpriority portion. Id. Because the ledger did not provide the superpriority portion, BOA, through its counsel, estimated nine months of HOA assessments at $509.85 and tendered as much to the HOA. Id. On May 3, 2013, the HOA trustee accepted BOA's payment. Id.

         On July 19, 2013, a second assignment of the deed of trust was recorded in which BOA conveyed the property to Nationstar Mortgage LLC. Id.

         On September 9, 2013, the HOA trustee, on behalf of the HOA, recorded a second notice of default and election to sell property. Id. On June 16, 2014, the HOA trustee, on behalf of the HOA, recorded a notice of trustee's sale against the property, stating that the total amount due on the lien was $3, 338.10. Id.

         On July 30, 2014, Saticoy purchased the property at the homeowner's association lien foreclosure sale for $34, 100. Id.

         On September 3, 2014, a third assignment of the deed of trust was recorded in which Nationstar conveyed the deed of trust to the secretary of Housing and Urban Development. Id. That same day the secretary conveyed the property to Elizon Master Participation Trust I via a fourth assignment of the deed of trust. Id. Then, again on September 3, 2014, Elizon Master Participation Trust I conveyed the property to Elizon via a fifth assignment of the deed of trust.

         On January 15, 2015, Saticoy recorded its interest in the property acquired at the HOA foreclosure sale. Id.

         On April 5, 2016, Elizon filed a complaint against Saticoy, the HOA, and the HOA trustee. (ECF No. 1). On April 7, 2016, Elizon filed its amended complaint. (ECF No. 3). The amended complaint asserts six causes of action: (1) quiet title/declaratory relief against Saticoy and the HOA; (2) preliminary injunction versus Saticoy; (3) unjust enrichment as to all defendants; (4) wrongful foreclosure against the HOA and the HOA trustee (5) negligence against the same; and (6) negligence per se against the same.

         In turn, Saticoy asserted counterclaims against Elizon for declaratory relief and to quiet title. (ECF No. 12). Both parties now move for summary judgment on their respective claims.

         II. Legal Standard

         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 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 non-moving party must “set forth specific facts showing that there is a genuine issue for trial.” Id.

         In 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 the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” Id.

         By contrast, when the non-moving 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 non-moving 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 non-moving 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, 630 (9th Cir. 1987).

         III. Discussion

         A. Preliminary injunction

          As an initial matter, claim (2) of Elizon's complaint will be dismissed, as this court follows the well-settled rule that a claim for “injunctive relief” is not a cause of action. See, e.g., In re Wal-Mart Wage & Hour Emp't Practices Litig., 490 F.Supp.2d 1091, 1130 (D. Nev. 2007); Tillman v. Quality Loan Serv. Corp., No. 2:12-CV-346 JCM RJJ, 2012 WL 1279939, at *3 (D. Nev. Apr. 13, 2012) (finding that “injunctive relief is a remedy, not an independent cause of action”); Jensen v. Quality Loan Serv. Corp., 702 F.Supp.2d 1183, 1201 (E.D. Cal. 2010) (“A request for injunctive relief by itself does not state a cause of action.”).

         B. Quiet title

         The court takes judicial notice of the following recorded documents: the first deed of trust (ECF No. 37-2); the assignments of deed of trust (ECF Nos. 37-3 through 37-7); the first notice of default and election to sell (ECF No. 37-8); the second notice of default and election to sell (ECF No. 37-12); the notice of trustee's sale (ECF No. 37-13); and the trustee's deed upon sale (ECF No. 37-14). See, e.g., United States v. Corinthian Colls., 655 F.3d 984, 998-99 (9th Cir. 2011) (holding that a court may take judicial notice of public records if the facts noticed are not subject to reasonable dispute); Intri-Plex Tech v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007). The court also takes judicial notice of the notice of delinquent assessment lien. (ECF No. 35-3).

         In Saticoy's motion, it contends that summary judgment in its favor is proper because, inter alia, the foreclosure sale extinguished Elizon's deed of trust pursuant to NRS 116.3116 and SFR Investments. (ECF No. 37). Saticoy further contends that the foreclosure sale should not be set aside because Elizon has not shown fraud, unfairness, or oppression as outlined in Shadow Wood Homeowners Assoc. v. N.Y. Cmty. Bancorp., Inc., 366 P.3d 1105 (Nev. 2016) (“Shadow Wood”). (ECF No. 37).

         In Elizon's motion for summary judgment and in its response to Saticoy's motion for summary judgment, Elizon sets forth the following relevant arguments: (1) the foreclosure sale is invalid because NRS Chapter 116 is facially unconstitutional pursuant to Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017) (“Bourne Valley”); (2) its predecessor-in-interest offered to pay, and the HOA accepted, an amount equal to nine months of homeowner's association assessments, thus adequately preserving the first deed of trust; (3)) the trustee's sale failed to comply with NRS 116.3116 as the foreclosure notices includes additional costs and fees which are impermissible under the statute and the sale crier's failure to indicate at the foreclosure sale that there had been tender to extinguish the superpriority portion of the HOA's constitutes grounds for setting aside the sale;[2] (4) the foreclosure sale was commercially unreasonable and there was fraud, unfairness, and oppression as the foreclosure sale failed to comply with NRS 116.3116; (5) Saticoy is not a bona fide purchaser; and (6) SFR Investments should not be applied retroactively. (ECF Nos. 36, 40). The court begins with the question of tender and analyzes the rest of Elizon's claims in turn.

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