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Bank of America, N.A. v. Hollow De Oro Homeowners Association

United States District Court, D. Nevada

January 23, 2018

BANK OF AMERICA, N.A., Plaintiff(s),
v.
HOLLOW DE ORO HOMEOWNERS ASSOCIATION, et al., Defendant(s).

          ORDER

         Presently before the court is plaintiff Bank of America, N.A.'s (“BOA”) motion for partial summary judgment. (ECF No. 30). Defendants Williston Investment Group, LLC, (“Williston”) and Hollow De Oro Homeowners' Association (“the HOA”) filed responses (ECF Nos. 40, 41), to which plaintiff replied (ECF Nos. 42, 43).

         Also before the court is defendant Williston's motion for summary judgment. (ECF No. 31). Plaintiff filed a response (ECF No. 38), to which defendant replied (ECF No. 44).

         Also before the court is defendant HOA's motion for summary judgment. (ECF No. 32). Plaintiff filed a response (ECF No. 39), to which defendant replied (ECF No. 45).

         I. Facts

         This case involves a dispute over real property located at 2117 Summer Lily Avenue, North Las Vegas, Nevada (the “property”). On November 24, 2008, Magdelyn Vasquez-Castro obtained a loan in the amount of $212, 199 from non-party Universal American Mortgage Company, LLC, (“UAMC”) to purchase the property. (ECF No. 1). The loan was secured by a deed of trust recorded on November 26, 2008. Id.

         On March 22, 2010, the deed of trust was assigned to BAC Home Loans Servicing, LP, via an assignment of deed of trust (recorded on April 2, 2010). Id.; (ECF No. 30-3). On July 1, 2011, BAC Home Loans Servicing, LP, merged with plaintiff. (ECF No. 1). The note and senior deed of trust are insured by the Federal Housing Administration (“FHA”). Id.

         On March 15, 2012, defendant Absolute Collection Services (“ACS”), acting on behalf of the HOA, recorded a notice of delinquent assessment lien, stating an amount due of $1, 061.04. Id. On June 20, 2012, ACS recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $1, 863.55. Id.

         On October 16, 2012, NAS recorded a notice of trustee's sale, stating an amount due of $3, 827.43 and an anticipated sale date of December 11, 2012. Id. On July 16, 2012, plaintiff requested a ledger from the HOA, through ACS, that identified the super-priority amount owed to the HOA. Id. In the request, plaintiff stated “[Nine months of assessments for common expenses incurred before the date of your notice of delinquent assessment] is the amount [BOA] should be required to rightfully pay to fully discharge its obligations to the HOA per NRS 116.3102 and my client hereby offers to pay that sum upon presentation of adequate proof of the same by the HOA.” (ECF No. 1-1). On July 26, 2012, the HOA, through ACS, responded by requesting proof that plaintiff held an interest in the property. Id. Neither party offers evidence that plaintiff replied to this request.

         On March 12, 2013, the HOA foreclosed on the property. (ECF No. 1). Williston purchased the property at the foreclosure sale for $7, 600. Id. A foreclosure deed in favor of Williston was recorded on March 19, 2013. Id.

         On June 15, 2015, BOA filed the underlying complaint, alleging four causes of action: quiet title against all defendants; breach of NRS 116.1113 against the HOA and ACS; wrongful foreclosure against the HOA and ACS; and injunctive relief against Williston. Id. On March 9, 2017, the court granted defendant HOA's motion to dismiss in part, thereby dismissing plaintiff's claims for breach of NRS 116.1113 and wrongful foreclosure. (ECF No. 39).

         In the instant motions, plaintiff, defendant HOA, and defendant Williston all move for summary judgment in their favor. (ECF Nos. 30, 31, 32).

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

         In determining summary judgment, a court applies a burden-shifting analysis. The moving party must first satisfy its initial burden. “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. In 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.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).

         By contrast, when the nonmoving 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 nonmoving 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 nonmoving 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, 631 (9th Cir. 1987).

         In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex, 477 U.S. at 324.

         At summary judgment, a court's function is not to weigh the evidence and determine the truth, but to determine whether there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See Id. at 249-50.

         III. Discussion

         As an initial matter, the court takes judicial notice of the following recorded documents: the first deed of trust (ECF No. 30-1); the assignment to BOA; (ECF No. 30-3); the notice of delinquent assessment (ECF No. 30-4); the notice of default and election to sell (ECF No. 30-5); the notice of trustee's sale (ECF No. 30-6); and the trustee's deed upon sale (ECF No. 30-8). 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., Inv. v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007).

         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. “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) (citations and internal quotation marks omitted). Therefore, for plaintiff to succeed on its quiet title action, it needs to show that its claim to the property is superior to all others. 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.”).

         Section 116.3116(1) of the Nevada Revised Statutes[1] gives an HOA a lien on its homeowners' residences for unpaid assessments and fines; moreover, NRS 116.3116(2) gives priority to that HOA lien over all other liens and encumbrances with limited exceptions-such as “[a] first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent.” Nev. Rev. Stat. § 116.3116(2)(b).

         The statute then carves out a partial exception to subparagraph (2)(b)'s exception for first security interests. See Nev. Rev. Stat. § 116.3116(2). In SFR Investment Pool 1 v. BOA, the Nevada Supreme Court provided the following explanation:

As to first deeds of trust, NRS 116.3116(2) thus splits an HOA lien into two pieces, a superpriority piece and a subpriority piece. The superpriority piece, consisting of the last nine months of unpaid HOA dues and maintenance and nuisance-abatement charges, is “prior to” a first deed of trust. The subpriority piece, consisting ...

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