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Nationstar Mortgage LLC v. Tyrolian Village Association, Inc.

United States District Court, D. Nevada

November 7, 2017

NATIONSTAR MORTGAGE LLC, and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiffs,
v.
TYROLIAN VILLAGE ASSOCIATION, INC., and AIRMOTIVE INVESTMENTS LLC, Defendants. AIRMOTIVE INVESTMENTS LLC, Counterclaimant,
v.
NATIONSTAR MORTGAGE LLC, and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Counter-Defendants.

          ORDER

          LARRY R. HICKS UNITED STATES DISTRICT JUDGE.

         This matter centers on a nonjudicial foreclosure sale. The foreclosure sale was conducted under Nevada Revised Statute (“N.R.S.”) § 116.3116 et seq. in 2014. See ECF Nos. 38, 41, 45. After the foreclosure sale, the Ninth Circuit struck down the notice scheme employed by N.R.S. § 116.3116 et seq. as facially unconstitutional. Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), cert. denied, 137 S.Ct. 2296 (2017). As a result, plaintiffs Federal National Mortgage Association (“Fannie Mae”) and Nationstar Mortgage LLC (“Nationstar”) brought this action, seeking declaratory relief and an order to quiet title. ECF No. 13.

         Now, two motions come before the court. First, defendant Tyrolian Village Association, Inc. (“Tyrolian”) moves to dismiss Fannie Mae and Nationstar's complaint. ECF No. 23. Fannie Mae and Nationstar opposed the motion, and Tyrolian filed a reply. ECF Nos. 34, 37. Second, Fannie Mae and Nationstar moved for partial summary judgment on their declaratory-judgment claim and their quiet-title claim, both of which were brought under the U.S. Constitution. ECF No. 38. Defendant Airmotive Investments, LLC (“Airmotive”) opposed the motion. ECF No. 45. Tyrolian also opposed the motion but in a limited manner. ECF No. 41. Fannie Mae and Nationstar filed a reply to both oppositions. ECFS No. 44, 46. To resolve the two motions, the court turns to Bourne Valley-a Ninth Circuit opinion that binds the court in its decision. Under the guidance of Bourne Valley, the court grants Fannie Mae and Nationstar's motion for partial summary judgment as to the quiet-title claim and denies Tyrolian's motion as moot.

         I. BACKGROUND

         In 2004, Gloria Brimm obtained a loan from CMG Mortgage, Inc. to purchase a property located at 1364 Carinthia Court, Incline Village, Nevada 89451. ECF No. 38, Ex. A.[1] This transaction gave rise to the first deed of trust on the property, which was recorded in Washoe County, Nevada. Id. The deed of trust designated Mortgage Electronic Registration Services, Inc. (“MERS”) as the beneficiary. Id. In 2013, MERS assigned the deed of trust to Nationstar. ECF No. 38, Ex. B.

         The at-issue property sits in a community governed by a homeowners' association (Tyrolian) and is therefore subject to HOA assessments. See ECF No. 38, Ex. A; see Id. at 3; see ECF No. 45 at 4-6. After Brimm failed to pay the assessments as they came due, Tyrolian recorded a notice of delinquent assessment lien. ECF No. 38, Ex. C; ECF No. 45 at 6. When the delinquent assessments remained unpaid, Tyrolian recorded a notice of default and election to sell. ECF No. 38, Ex. D; ECF No. 45 at 6. Still, the delinquent assessments remained unpaid, prompting Tyrolian to record a notice of foreclosure sale. ECF No. 38, Ex. E; ECF No. 45 at 6. At the nonjudicial foreclosure sale held in July 2014, TBR I, LLC (a non-party) purchased the property. ECF No. 38, Ex. F; ECF No. 45 at 6-7. Airmotive then purchased the property from TBR. ECF No. 38, Ex. G; ECF No. 45 at 7.

         Fannie Mae and Nationstar brought this action after the foreclosure sale, alleging eight causes of action and seeking declaratory relief or an order to quiet title.[2] ECF No. 13. Tyrolian brought a counterclaim, also seeking declaratory relief or an order to quiet title. ECF No. 30. Tyrolian now moves to dismiss the complaint in part. ECF No. 23. Additionally, Fannie Mae and Nationstar move for partial summary judgment, requesting the court to apply Bourne Valley to their quiet-title claim and their declaratory-judgment claim. ECF No. 38.

         II. LEGAL STANDARD

         Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that “there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).

         The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is “sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.” Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001).

         To successfully rebut a motion for summary judgment, the nonmoving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A “material fact” is a fact “that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See Id. at 252.

         III. DISCUSSION

         The court addresses three arguments to resolve the summary judgment motion. First, the court considers the effect of Bourne Valley. Second, the court determines whether to apply the “return doctrine.” Finally, the court resolves the quiet-title claim brought under the U.S. Constitution. But because Bourne Valley is dispositive, the court does not consider the parties' remaining arguments or Tyrolian's motion to dismiss.

         A. Bourne Valley binds this ...


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