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Bank of America, N.A. v. Esplanade at Damonte Ranch Homeowner's Association

United States District Court, D. Nevada

March 30, 2018

BANK OF AMERICA, N.A., Plaintiff,

          ORDER RE: ECF NO. 46


         Before the court is Defendant Esplanade at Damonte Ranch Homeowner's Association's (Esplanade) Motion for Leave to File Amended Answer and Counterclaims (ECF No. 46), Bank of America's (BANA) opposition (ECF No. 49), and Defendant's reply (ECF No. 52).[1] After thorough consideration of the parties' memoranda, the court will grant Esplanade's motion.


         Plaintiff's opposition is predicated primarily upon three premises - the first is that the proposed amended answer/counterclaim is untimely under the scheduling order and Esplanade cannot demonstrate the “good cause” required under Fed.R.Civ.P. 16(b) for an amendment of a pleading sought by a party after the expiration of the deadline for amendments in the scheduling order. Second, BANA argues it would be prejudiced by having to undertake and/or participate in discovery. Third, BANA contends all of the proposed counterclaims would be barred by the statute of limitations and/or substantive Nevada law. (ECF No. 49.)

         Esplanade in reply argues that the multiple stays imposed upon this case militate against a finding of delay and that BANA itself has either caused or at least acquiesced in delays, including the failure to complete a new scheduling order which District Judge Miranda M. Du suggested should be undertaken at the court's motion hearing on August 23, 2017. Esplanade contends the proposed assertion of its counterclaims would not be futile because the relevant statute of limitations expired, if at all, years later than that suggested by BANA. Esplanade also argues the “relation back” doctrine would make its proposed counterclaims timely regardless of which date of activity (or inactivity) triggers the statute of limitations. Insofar as any prejudice BANA may incur in having to undertake discovery is concerned, Esplanade again points to Judge Du's comments about the parties having to revise the discovery plan and scheduling order, which would necessitate the parties' participation in discovery regardless of the amendment. (ECF No. 52.)


         This is not the “typical HOA foreclosure” case. Judge Du noted the distinctive nature of this case at the commencement of the August 23, 2017 motions hearing:

THE COURT: All right. In 3:16-cv-120, in the Motion For Partial Summary Judgment, the HOA raises several arguments in its motion. The majority of the arguments is premised on the contention that the Trustee's deed upon sale states that Esplanade -- the HOA. [ ] -- the HOA only conveyed its right, title and interest by the nonpriority portion of its lien and, therefore, the foreclosure sale in this case did not extinguish the lender's first deed of trust.
It's rather a novel position because in response, of course, Thunder Properties took the position that the foreclosure sale did extinguish the first deed of trust. The lender argues that it's wonderful if it didn't extinguish our first deed of trust, but because we have a party who contends otherwise, we oppose the motion.
I think, at a minimum, Thunder Properties has presented evidence to create a material issue of fact to preclude summary judgment in favor of the HOA because, apparently, the final deed that was recorded did not have the limitation that, that the sale only extinguished -- that the sale did not extinguish the first deed of trust.
The alternative arguments, to the extent they're premised on Bourne Valley not applying, I'm not going to address because the motion fails on that basis. I find there's a factual dispute as to whether or not the foreclosure sale here extinguished the first deed of trust; and, therefore, on that basis, I'm denying the Motion For Summary Judgment.

(ECF No. 44 at 10, 11.)

         Although Judge Du denied Esplanade's motion for summary judgment (ECF No. 28), she did so on the grounds that there were questions of fact surrounding the rather novel theory asserted by Esplanade that there was only a limited conveyance by Esplanade of its deed rights (ECF No. 44 at 10-11). The various causes of action pled in the proposed counterclaim by Esplanade against BANA generally relate in one fashion or another to the subject of Defendant Esplanade's motion for summary judgment, BANA's complaint, and Thunder Properties' answer (see, e.g., ECF No. 8 at 4-5) and opposition to Esplanade's motion for summary judgment (ECF No. 29). While the proposed amended answer and counterclaim should perhaps have been asserted shortly - or soon - after Judge Du ruled from the bench (ECF No. 43, 8/23/17), there appears to have been a legitimate question whether the case was still subject to a stay (ECF No. 52-1 at 2-3). Even if the case were not stayed, it does not appear BANA itself moved expeditiously to either submit a new scheduling order - or to contact the Courtroom Administrator to schedule a discovery conference of the discovery plan. (See, ECF No. 44 at 12-13; ECF No. 49 at 3; ECF No. 52 at 3.) BANA stated in its opposition that it “plans to request a scheduling conference for the court's assistance.” (ECF No. 49 at 2.) To date, however, none of the parties has done so.

         As Esplanade characterizes the history of this case, “. . . in Esplanade's view, from the day it was served, it has been in the case without the impediment of a stay for no more than five (5) months. If the time is counted from when Esplanade filed it Answer, rather than when it was served, ...

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