United States District Court, D. Nevada
FEDERAL NATIONAL MORTGAGE ASSOCIATION; and ROUNDPOINT MORTGAGE SERVICING CORPORATION, Plaintiffs,
RAINBOW BEND HOMEOWNERS ASSOCIATION; DANIEL HALL; and DIANA HALL, Defendants.
R. HICKS UNITED STATES DISTRICT JUDGE
matter centers on a nonjudicial foreclosure sale. The
foreclosure sale was conducted under Nevada Revised Statute
(“N.R.S.”) § 116.3116 et seq. in
2013. See ECF Nos. 10, 16, 28. 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 Roundpoint Mortgage Servicing
Corporation (“Roundpoint”) brought this action,
seeking declaratory relief or an order quieting title on the
at-issue property. ECF No. 1.
three motions come before the court. First, defendant Rainbow
Bend Homeowners' Association (the “HOA”)
moves to dismiss or, alternatively, for summary judgment on
Fannie Mae and Roundpoint's complaint. ECF No. 10.
Second, defendants Daniel Hall and Diana Hall move to dismiss
or, alternatively, for summary judgment on the complaint. ECF
No. 16. And third, Fannie Mae and Roundpoint oppose both
motions and counter-move for summary judgment. ECF No. 28.
The defendants filed a joint reply. ECF No. 33. The court
resolves the three pending motions by turning to Bourne
Valley-a Ninth Circuit opinion that binds the court in
its decision. Under the guidance of Bourne Valley,
the court denies the HOA's motion, denies the Hall's
motion, and grants Fannie Mae and Roundpoint's
court takes the following facts from the HOA's motion for
summary judgment unless otherwise noted.
2003, a pair of trustees (James Loftis and Jean Loftis)
obtained a loan from Morgan Stanley Dean Witter Credit
Corporation to purchase property at 53 Avenue Bleu De Clair,
Sparks, Nevada 89434 (Parcel Number
003-531-23). ECF No. 10 at 6. This transaction gave
rise to the first deed of trust on the property, which was
recorded in Storey County, Nevada. ECF No. 10 at 8; ECF No.
1, Ex. 1. After multiple assignments, Roundpoint
came to hold the beneficial interests under the deed of
trust. ECF No. 10 at 9; ECF No. 1, Exs. 1-4.
purchased property sits in a community governed by the HOA
and is subject to HOA assessments. ECF No. 10 at 7. In 2012,
the trustees failed to pay the required assessments. ECF No.
10 at 12. The HOA therefore recorded a Notice of Delinquent
Assessment Lien in March 2012. Id.; ECF No. 1, Ex.
5. Approximately five months later, the HOA recorded a Notice
of Default and Election to Sell. ECF No. 10 at 12; ECF No. 1,
Ex. 6. The delinquent assessments remained unpaid, prompting
the HOA to record a Notice of Foreclosure Sale in August
2013. ECF No. 10 at 13; ECF No. 1, Ex. 7. At the nonjudicial
foreclosure sale, which was held in September 2013, the HOA
purchased the property. ECF No. 10 at 13; ECF No. 1, Ex. 8.
The Halls then purchased the property in 2014. ECF No. 10 at
13, ECF No. 1, Ex. 9.
Mae and Roundpoint brought this action after the foreclosure
sale, alleging five causes of action: (1) declaratory relief
under 12 U.S.C. § 4617(j)(3); (2) quiet title under 12
U.S.C. § 4617(j)(3); (3) declaratory relief under the
Fifth and Fourteenth Amendment of the U.S. Constitution; (4)
quiet title under the Fifth and Fourteenth Amendment of the
U.S. Constitution; and (5) permanent and preliminary
injunction. ECF No. 1. The HOA and the Halls now move to
dismiss or, alternatively, for summary judgment. ECF Nos. 10,
16. Fannie Mae and Roundpoint counter-move for summary
judgment. ECF No. 28. The HOA and the Halls filed a joint
reply. ECF No. 33.
Motion to Dismiss
Rule of Civil Procedure (“Rule”) 8(a)(2) requires
a pleading to contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). A court may dismiss a
complaint that fails to meet this standard under Rule
12(b)(6). Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) permits
dismissal on the basis of either (1) the “lack of a
cognizable legal theory, ” or (2) “the absence of
sufficient facts alleged under a cognizable legal
theory.” Balistreri v. Pacifica Police
Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
considering whether the complaint is sufficient to state a
claim, the court accepts as true all factual allegations
contained in the complaint. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). However, a court need not “accept
as true allegations that contradict matters properly subject
to judicial notice or by exhibit” or “allegations
that are merely conclusory, unwarranted deductions of fact,
or unreasonable inferences.” In re Gilead Scis.
Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008)
(internal quotations omitted). While a complaint need not
allege detailed factual allegations, it “must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible when it “allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
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.