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JP Morgan Chase Bank N.A. v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

February 21, 2018



         Presently before the court is defendant/counter claimant SFR Investments Pool 1, LLC's (“SFR”) motion for summary judgment. (ECF No. 48). Plaintiff/counter defendant JPMorgan Chase Bank, N.A. (“JPMorgan”) responded (ECF No. 50), to which SFR replied (ECF No. 53).

         Also before the court is JPMorgan's motion for summary judgment. (ECF No. 49). SFR responded (ECF No. 51), to which JPMorgan replied (ECF No. 52).

         I. Facts

         This case involves a dispute over real property located at 9875 Maspalomas Street, Las Vegas, NV 89178 (the “property”). On April 22, 2008, a deed of trust listing Gordon S. Adam (the “borrower”) as the borrower and First Horizon Home Loans (the “lender” or “First Horizon”) as the lender was recorded. (ECF No. 48). The deed of trust granted the lender a security interest in the property to secure repayment of the loan. Id.

         On August 1, 2011, Absolute Collection Services, LLC (“Absolute”), as agent of Viva Valencia/Viva Venture Homeowner's Association (the “HOA”), recorded a notice of delinquent assessment against the property. (ECF No. 49). On October 21, 2011, Absolute, on behalf of the HOA, recorded a notice of default and election to sell under homeowner's association lien against the property. Id. Absolute mailed the notice to all interested parties, including the lender. (ECF No. 48).

         Absolute then recorded a notice of foreclosure sale on February 24, 2012 and mailed the notice to all interested parties, including the lender. (ECF No. 48). JPMorgan received notice of the sale and executed the certified mail receipt. Id. The notice of sale was also published in the Nevada Legal News for three consecutive weeks. Id.

         On July 17, 2012, pursuant to the notice of trustee's sale, a non-judicial foreclosure sale occurred, whereby SFR acquired interest in the property for $7, 500.00. (ECF No. 48). There were multiple bidders at the sale. Id.

         On July 19, 2012, a trustee's deed upon sale was recorded against the property vesting title in SFR. (ECF No. 48). SFR has remained as the owner of record since that date. On October 30, 2012, a corporate assignment of deed of trust was recorded assigning JPMorgan as the beneficiary under the deed of trust. (ECF No. 49).

         On July 15, 2016, JPMorgan filed the underlying complaint, asserting claims for quiet title and declaratory relief against SFR. (ECF No. 1). JPMorgan alleges the deed of trust was not extinguished at the foreclosure sale and/or that SFR took subject to the deed of trust. (ECF No. 1).

         On November 29, 2016, SFR filed its answer and counterclaim for declaratory relief/quiet title and injunctive relief against JPMorgan and the borrower. (ECF No. 20). The borrower was defaulted by clerk's order on August 2, 2017. (ECF No. 46).

         In the instant motion, SFR moves for summary judgment against JPMorgan on its claims for quiet title and permanent injunction. (ECF No. 48). Specifically, SFR argues title should be quieted in its favor, the deed of trust held by JPMorgan should be expunged from the title, and JPMorgan and the borrower should be permanently enjoined from any sale or transfer that would affect SFR's title in the property. (ECF No. 48). JPMorgan also moves for summary judgment against SFR as to its claims for quiet title and declaratory relief. (ECF No. 49). . . .

         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

         A. Quiet Title [1]

         In SFR's motion, it contends that summary judgment in its favor is proper because, inter alia, the foreclosure sale extinguished JPMorgan's deed of trust pursuant to NRS 116.3116 and SFR Investments. (ECF No. 48). SFR further contends that the foreclosure sale should not be set aside because the price paid at the foreclosure sale was commercially reasonable, JPMorgan 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”), JPMorgan failed to tender the super-priority portion of the lien, and because there was no due process violation. (ECF No. 48). The court agrees.

         Conversely, JPMorgan argues summary judgment should be granted in its favor because NRS 116's opt-in notice scheme was ruled facially unconstitutional by Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) and because the Nevada Supreme Court's decision in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. Adv. Op. 75, 334 P.3d ...

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