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Springland Village Homeowners Association v. Pearman

United States District Court, D. Nevada

January 10, 2018

SPRINGLAND VILLAGE HOMEOWNERS ASSOCIATION, a Nevada Non-Profit Cooperative Corporation, Plaintiff,
v.
JENNIE M. PEARMAN, et al,, Defendants. FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff,
v.
DWIGHT CARLSON, Defendant, And related counterclaims.

          ORDER

          MIRANDA DU UNITED STATES DISTRICT JUDGE

         I. SUMMARY

         Pending before this Court is Federal National Mortgage Association's (“Fannie Mae”) motion for summary judgment in two related cases.[1] (Lead Case, ECF No. 28; Member Case, ECF No. 17.)[2] In the Member Case, Pyramid Tribe filed a response (ECF No. 18), and Fannie Mae filed a reply (ECF No. 24). No. response was filed in the Lead Case. For the following reasons, Fannie Mae's motion is granted.

         II. BACKGROUND

         Defendant Dwight Carlson as Trustee for Pyramid Tribe TR-116 (“Pyramid Tribe”) purchased property (“Property”) at a homeowner association foreclosure sale (“HOA Sale”), which it contends extinguished a deed of trust (“DOT”) then encumbering the Property. (Main Case, ECF No. 28 at 2.) At the time of the HOA Sale, Fannie Mae owned a loan secured by the Property and was the record beneficiary of the associated DOT. (Id.) In Fannie Mae's motion for summary judgment, it contends that (1) the foreclosure sale could not have extinguished the deed of trust due to the effect of 12 U.S.C. § 4617(j)(3) (“Federal Foreclosure Bar”) and (2) that Pyramid Tribe's claims for unjust enrichment and equitable mortgage fail. (Lead Case, ECF No. 28 at 9-14; Member Case, ECF No. 17 at 9-14.)

         III. LEGAL STANDARD

         “The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court.” Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could 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, however, summary judgment is not appropriate. See Id. at 250-51. “The amount of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties' differing versions of the truth at trial.'” Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, ” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252.

         IV. DISCUSSION

         Fannie Mae contends that the Federal Foreclosure Bar protects its DOT such that the DOT still encumbers the Property. Fannie Mae further contends that Pyramid Tribe's counterclaims fail as a matter of law.

         A. Federal Foreclosure Bar

         The Federal Foreclosure Bar prohibits nonconsensual foreclosure of Federal Housing Finance Agency (“FHFA”) assets. Berezovsky v. Moniz, 869 F.3d 923, 925 (9th Cir. 2017). As a result, the Federal Foreclosure Bar generally protects Fannie Mae's property interests from extinguishment if Fannie Mae was under FHFA's conservatorship, possessed an enforceable property interest at the time of the HOA Sale, and did not consent[3] to such extinguishment. See Id. at 933.

         Here, it is undisputed that Fannie Mae was placed into conservatorship under FHFA in September 2008 and did not consent to the HOA Sale extinguishing or foreclosing Fannie Mae's interest in the Property. (Main Case, ECF No. 28 at 4, 6.) Fannie Mae acquired an enforceable property interest in the Property on June 24, 2014, and continued to hold that interest at the time of the HOA Sale on January 22, 2016. (Id. at 5.) This is amply demonstrated in both the public record and Fannie Mae's business records. (See ECF No. 28-5 at 2; ECF No. 28-2 at 2-4; ECF No. 28-3 at 2-14).

         The Court finds that the Federal Foreclosure Bar protected Fannie Mae's DOT from extinguishment given that Fannie Mae held an enforceable interest in the Property at the time of the HOA Sale, was under the conservatorship of FHFA at the time of the HOA Sale, and did not consent to the HOA Sale extinguishing or foreclosing Fannie Mae's interest in the Property. Accordingly, the HOA Sale did not ...


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