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Nationstar Mortgage LLC v. Falls At Hidden Canyon Homeowners Association

United States District Court, D. Nevada

March 27, 2018

NATIONSTAR MORTGAGE, LLC, Plaintiff,
v.
FALLS AT HIDDEN CANYON HOMEOWNERS ASSOCIATION et al., Defendants.

          ORDER

          ROBERT C. JONES, JUDGE

         This case arises from a residential foreclosure by the Falls at Hidden Canyon Homeowners Association ("the HOA") for failure to pay HOA fees. Pending before the Court are a Motion to Dismiss, (ECF No. 62), and two Motions for Summary Judgment, (ECF Nos. 64, 65). For the reasons given herein, the Court grants summary judgment for Plaintiff and denies the other motions.

         I. FACTS AND PROCEDURAL BACKGROUND

         In October 2005, non-party Gwendolyn L. Farrow obtained a $256, 500 mortgage loan to purchase property located at 1852 Fossil Butte Way, North Las Vegas, Nevada 89032 ("the Property"). Non-party The Bank of New York Mellon ("BNYM") acquired the note and Deed of Trust ("DOT") by Corporate Assignment of Deed of Trust recorded March 24, 2010.

         On January 5, 2011, as a result of the homeowner's failure to pay HOA fees, the HOA recorded a lien for delinquent assessments. The HOA later recorded a notice of default and election to sell on March 11, 2011, and a notice of trustee's sale on July 28, 2011. On April 8, 2011, BNYM requested, through its agent, a payoff ledger identifying the amount of the superpriority portion of the HOA's lien. The HOA refused to provide the ledger. On November 15, 2011, the HOA foreclosed on the Property, acquiring the Property itself for the sale price of $9, 850. The HOA assigned the Property to Defendant Las Vegas Development Group, LLC ("LVDG") by quitclaim deed recorded November 23, 2011. LVDG then quitclaimed its interest in the Property to Defendant Airmotive Investments, LLC ("Airmotive"). Plaintiff Nationstar Mortgage, LLC ("Nationstar") alleges it later obtained its interest in the Property from BNYM by a Corporate Assignment of Deed of Trust recorded November 21, 2014.

         On July 8, 2015, Nationstar brought this action for quiet title and declaratory judgment, violation of NRS 116.1113, wrongful foreclosure, and injunctive relief. On April 26, 2017, Nationstar filed a First Amended Complaint ("FAC"). Nationstar alleges that the HOA's foreclosure sale did not extinguish BYNM's interest in the Property, and therefore the title Nationstar acquired from BNYM following the foreclosure is superior to any interest held by any Defendant.

         The HOA filed a motion to dismiss the FAC, which the Court granted. (Order, ECF No. 41.) Nationstar then filed its Second Amended Complaint, and the HOA moved to dismiss it. The Court granted that motion in part, finding that Nationstar had not alleged adequate facts to state a claim of wrongful foreclosure based on violations of the applicable CC&Rs. (Order 4-5, ECF No. 60.) However, the Court declined to dismiss Nationstar's quiet title claim. On October 27, 2017, Nationstar filed its Third Amended Complaint. (ECF No. 61.) The HOA moves again to dismiss. (Mot. Dismiss, ECF No. 62.) In addition, both the HOA and Nationstar have moved for summary judgment. (Mots. Summ. J., ECF Nos. 64, 65.)

         II. LEGAL STANDARDS

         A court must grant summary judgment when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Material facts are those which may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See Id. 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).

         In determining summary judgment, a court uses a burden-shifting scheme. 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." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation and internal quotation marks omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (I) by presenting evidence to negate an essential element of the nonmoving 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 (1970). If the moving party meets its initial burden, the burden then shifts to the opposing party to establish a genuine issue of material fact. 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 unsupported by facts. 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 Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324.

         At the summary judgment stage, 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, 477 U.S. at 249. 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. Notably, facts are only viewed in the light most favorable to the nonmoving party where there is a genuine dispute about those facts. Scott v. Harris, 550 U.S. 372, 380 (2007). That is, even where the underlying claim contains a reasonableness test, where a party's evidence is so clearly contradicted by the record as a whole that no reasonable jury could believe it, "a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Id.

         III. ANALYSIS

         a. Quiet and ...


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