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Ocwen Loan Servicing, LLC v. Nevada Ranch Twilight Homeowners Association

United States District Court, D. Nevada

April 23, 2018

OCWEN LOAN SERVICING, LLC, Plaintiff,
v.
NEVADA RANCH TWILIGHT HOMEOWNERS ASSOCIATION, Defendant.

          ROBERT S. LARSEN, ESQ. Nevada Bar No. 7785 DAVID T. GLUTH, II, ESQ. Nevada Bar No. 10596 GORDON REES SCULLY MANSUKHANI, LLP Attorneys for Nevada Ranch Twilight Homeowners Association

          WRIGHT FINLAY ZAK DANA J. NITZ, ESQ. Nevada Bar No. 0050 CHRISTINA V. MILLER, ESQ. Nevada Bar No. 12448 Attorneys for Plaintiff Ocwen Loan Servicing, LLC

          STIPULATION AND ORDER TO WITHDRAW PENDING MOTIONS AND LEAVE FOR PLAINTIFF TO AMEND COMPLAINT (FIRST REQUEST)

         Pursuant to Local Rules IA 6-1 and 7-1, Plaintiff Ocwen Loan Servicing, LLC (“Ocwen”), and Defendant Nevada Ranch Twilight Homeowners' Association (“Nevada Ranch”), by and through their respective attorneys of record, stipulate as follows:

1. Ocwen filed its Complaint on September 18, 2017 (ECF No. 1).
2. Nevada Ranch filed a Motion to Dismiss Complaint on January 10, 2018. (ECF No. 8).
3. Ocwen filed its Opposition to the Motion to Dismiss on March 26, 2018. (ECF No. 13).
4. Ocwen also filed a Motion for Leave to Amend Complaint and Caption (“Motion to Amend”) on March 29, 2018. (ECF No. 14).
5. For judicial economy, and to avoid duplication of litigation costs, the parties agree to withdraw the pending Motion to Dismiss (ECF No. 8) and Motion to Amend for Leave to Amend Complaint and Caption (ECF No. 14) and jointly stipulate to an order allowing Plaintiff to file an Amended Complaint in this matter.
6. The parties agree that Nevada Ranch is not waiving any of its defenses to any amended pleading Ocwen may file. Nevada Ranch expressly reserves its rights under the Federal Rules of Civil Procedure to file any motion to dismiss, motion for summary judgment, other responsive motion or pleading, or assert affirmative defenses in response to Ocwen's amended pleading. Nevada Ranch further does not waive any defense to any claims made against it.
7. A copy of Ocwen's proposed Amended Complaint is attached to this Stipulation as Exhibit 1.

         ORDER

         IT IS SO ORDERED.

         EXHIBIT 1

         Proposed Amended Complaint

         OCWEN LOAN SERVICING, LLC'S FIRST AMENDED COMPLAINT

         Plaintiff Ocwen Loan Servicing, LLC (“Plaintiff” or “Ocwen”), by and through its attorneys of record, Dana Jonathon Nitz, Esq., and Christina V. Miller, Esq., of the law firm of Wright, Finlay & Zak, LLP, hereby complains against Defendants Nevada Ranch Twilight Homeowners Association (“Nevada Ranch Twilight”), Nevada Ranch Master Homeowners Association (the “Nevada Ranch Master”) (Nevada Ranch Master and Nevada Ranch Twilight are collectively referred to herein as the “HOA Defendants”) and Alessi & Koenig, LLC (the “HOA Trustee” collectively referred to with Nevada Ranch Master and Nevada Rach Twilight as “Defendants”) as follows:

         PARTIES

         1. Plaintiff, Ocwen Loan Servicing, LLC is a Delaware limited liability company authorized to conduct business within the State of Nevada.

         2. Upon information and belief, Defendant Nevada Ranch Twilight is a Nevada nonprofit corporation conducting business within the State of Nevada.

         3. Upon information and belief, Defendant Nevada Ranch Master is a Nevada nonprofit corporation conducting business within the State of Nevada.

         4. Upon information and belief, Defendant Alessi & Koenig, LLC was a Nevada limited liability company conducting business within the State of Nevada.

         5. Plaintiff is further informed, believes, and thereon alleges that at all times herein mentioned Defendants were agents, servants, employees, alter egos, superiors, successors-in interest, joint venturers and/or co-conspirators of each of his co-Defendants and in doing the things herein after mentioned, or acting within the course and scope of his authority of such agents, servants, employees, alter egos, superiors, successors-in-interest, joint venturers, and/or co-conspirators with the permission and consent of his co-Defendants, and consequently each Defendant named herein, are jointly and severally liable to Plaintiff for the damages and harm sustained as a result of his wrongful conduct.

         6. Defendants aided and abetted, encouraged, and rendered substantial assistance to the other Defendants in breaching obligations owed to Plaintiff as alleged herein. In taking action, as alleged herein, to aid and abet and substantially assist the commissions of these wrongful acts and other wrongdoings complained of, each of the Defendants acted with an awareness of its primary wrongdoing and realized that its conduct would substantially assist the accomplishment of the wrongful conduct and objectives.

         7. Defendants, and each of them, knowingly and willfully conspired, engaged in a common enterprise, and engaged in a common course of conduct to accomplish the wrongs complained of herein. The purpose and effect of the conspiracy, common enterprise, and common course of conduct complained of was, inter alia, to financially benefit Defendants at the expense and detriment of Plaintiff by engaging in fraudulent activities. Defendants agreed and acted in a common course of conduct by misrepresenting and concealing material information regarding the foreclosing HOA. Each Defendant was a direct, necessary and substantial participant in the conspiracy, common enterprise and common course of conduct complained of herein, and was aware of its overall contribution to and furtherance thereof.

         JURISDICTION AND VENUE

         1. The Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1332, as all plaintiffs are “citizens of different States” from all defendants and the amount in controversy exceeds $75, 000, exclusive of interest and costs.

         2. The Court also has subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1331, as it involves federal questions of the laws and Constitution of the United States.

         3. Venue is proper in this judicial district pursuant to 28 U.S.C. §§ 1391(b)(1)-(2) because Defendant resides in this district; a substantial part of the events or omissions giving rise to the claims occurred in this district; and the property that is the subject of this action is situated in this district.

         4. The Court has personal jurisdiction over Defendant because this lawsuit arises out of and is connected with Defendants' purposeful acts or omissions involving real property situated in Nevada and, upon information and belief, Defendants have their primary place of business in the State of Nevada.

         FACTUAL BACKGROUND

         The Subject Property

         5. This action centers around the parties' rights in that certain real property commonly described as 5646 Low Stakes Court, Las Vegas, Nevada 89122; APN 161-21-816-038 (the “Property”). The Property is legally described as follows:

LOT 38 IN BLOCK 1 OF FINAL MAP OF NEVADA RANCH - PHASE 1. AS SHOWN BY MAP THEREOF ON FILE IN BOOK 129 OF PLATS, PAGE 70, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA.

         6. On or about December 26, 2006, a Deed of Trust, securing a loan in the amount of $252, 436.00 (the “Michu Loan”), was recorded as Book and Instrument Number 20061226-0003545 identifying Adanech M. Michu (“Michu”) as the Borrower, DHI Mortgage Company, Ltd. as the Lender, DHI Title of Nevada, Inc. as the Trustee, and Mortgage Electronic Registration Systems, Inc. as beneficiary acting solely as nominee for Lender and Lender's successors and assigns (the “Deed of Trust”).[1]

         7. In or about April 2007, Federal National Mortgage Association (“Fannie Mae”) purchased the Michu Loan and thereby acquired a first secured interest on the Property and still owns the Michu Loan.

         8. On or about July 30, 2009, an Assignment of Deed of Trust was recorded against the Property as Book and Instrument Number 20090730-0003761 whereby the Deed of Trust was assigned to IndyMac Federal Bank FSB.[2]

         9. On or about February 21, 2013, a Corporation Assignment of Deed of Trust was recorded against the Property as Book and Instrument Number 20130221-0002400 whereby the Deed of Trust was assigned to OneWest Bank, FSB (“OneWest”).[3]

         10. On or about March 1, 2014, servicing of the Michu Loan was transferred from OneWest to Plaintiff.

         11. On or about July 6, 2016, a Corporate Assignment of Deed of Trust was recorded against the Property as Book and Instrument Number 20160706-0001552 whereby the Deed of Trust was assigned to Plaintiff.[4]

         12. Plaintiff is the beneficiary of record of the Deed of Trust and, as such, is authorized, and has constitutional and prudential standing, to bring this action regarding the Michu Loan.

         13. Plaintiff is and was a servicer for Fannie Mae, the owner of the Deed of Trust and Michu Loan it secures, and as servicer, Plaintiff is authorized by Fannie Mae to bring this action and protect Fannie Mae's interest in the Deed of Trust and Michu Loan.

         The HOA Foreclosure and Borgert's Acquisition of the Property

         14. The Property is subject to a Master Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Nevada Ranch Master Community recorded on April 4, 2006 as Book and Instrument Number 20060404-0003025 (the “CC&Rs”).

         15. On or about August 25, 2009, a Notice of Delinquent Assessment (Lien) was recorded as Book and Instrument Number 20090825-0003614 on behalf of Nevada Ranch Twilight by its foreclosure trustee, Alessi & Koenig, LLC (the “HOA Trustee”).[5] The Nevada Ranch Twilight Notice of Delinquent Assessment (Lien) stated that the amount owing as of August 25, 2009 was $899.66, of which $295.00 represent collection or attorney fees and $50.00 represent collection costs, late fees, service charges and interest.[6]

         16. Also on or about August 25, 2009, a Notice of Delinquent Assessment (Lien) was recorded as Book and Instrument Number 20090825-0003615 on behalf of Nevada Ranch Master by its foreclosure trustee, the HOA Trustee.[7] The Nevada Ranch Master Notice of Delinquent Assessment (Lien) stated that the amount owing as of August 11, 2009 was $498.75, of which $295.00 represent collection and/or attorney fees and $50.00 represent collection costs, late fees, service charges and interest.[8]

         17. The HOA Trustee is the agent of Nevada Ranch Twilight and Nevada Ranch Master and both Nevada Ranch Twilight and Nevada Ranch Master are responsible for the HOA Trustee's acts and omissions under the doctrine of respondeat superior.

         18. On or about November 16, 2009, a Notice of Default and Election to Sell Under Homeowners Association Lien (“Notice of Default”) was recorded as Book and Instrument Number 20091116-0001335 on behalf of Nevada Ranch Twilight by the HOA Trustee.[9]

         19. The Nevada Ranch Twilight Notice of Default stated that the amount owing as of October 22, 2009, was $1, 861.66.[10]

         20. On or about November 16, 2009, a Notice of Default and Election to Sell Under Homeowners Association Lien (“Notice of Default”) was recorded as Book and Instrument Number 20091116-0001336 on behalf of Nevada Ranch Master by the HOA Trustee.[11]

         21. The Nevada Ranch Master Notice of Default stated that the amount owing as of October 22, 2009, was $1, 471.25.[12]

         22. On or about November 5, 2010, a second Notice of Default was recorded as Book and Instrument Number 201011050002942 on behalf of Nevada Ranch Master by the HOA Trustee.[13]

         23. The Nevada Ranch Master second Notice of Default stated that the amount owing as of September 16, 2010, was $2, 878.91.[14]

         24. On or about August 14, 2012, a Notice of Trustee's Sale was recorded as Book and Instrument Number 20120814-0002047 on behalf of Nevada Ranch Twilight by the HOA Trustee.[15]

         25. The Nevada Ranch Twilight Notice of Trustee's Sale stated that “[t]he total amount of the unpaid balance of the obligation secured by the property to be sold and reasonable estimated costs, expenses and advances at the time of the initial publication of the Notice of Sale is $2, 241.66.” 26. On or about March 20, 2012, a Notice of Trustee's Sale was recorded as Book and Instrument Number 201203200001182 on behalf of Nevada Ranch Master by the HOA Trustee.[16]

         27. The Nevada Ranch Master Notice of Trustee's Sale stated that “[t]he total amount of the unpaid balance of the obligation secured by the property to be sold and reasonable estimated costs, expenses and advances at the time of the initial publication of the Notice of Sale is $4, 096.41.”[17]

         28. On or about August 14, 2012, a second Notice of Trustee's Sale was recorded as Book and Instrument Number 20120814-0002048 on behalf of Nevada Ranch Master by the HOA Trustee.[18]

         29. The Nevada Ranch Master second Notice of Trustee's Sale stated that “[t]he total amount of the unpaid balance of the obligation secured by the property to be sold and reasonable estimated costs, expenses and advances at the time of the initial publication of the Notice of Sale is $5, 340.00.”[19]

         30. On or about January 8, 2013, a Trustee's Deed Upon Sale (“Trustee's Deed”) was recorded as Book and Instrument Number 20131080-0002396, stating that MYE Construction, LLC (“MYE”) had prevailed at an HOA lien foreclosure sale conducted by the HOA Trustee on behalf of Nevada Ranch Twilight Homeowners Association on December 12, 2012 (the “HOA Sale”). The Trustee's Deed states the sale price as $6, 300.00.[20]

         31. A Corrective Trustee's Deed Upon Sale was recorded on April 25, 2013, recorded as Book and Instrument Number 20130425-0002338, stating that it was recorded to correct the foreclosing beneficiary's name from Nevada Ranch Twilight to Nevada Ranch Master and to correct the “TS No.” from 17659-5646 to 17660-5646.[21]

         32. Upon information and belief, as a result of correspondence between counsel for Nevada Ranch Twilight and Ocwen on or about January 19, 2018, Nevada Ranch Master was not the homeowners association that foreclosed on the Property at the HOA Sale, but instead, Nevada Ranch Twilight was the foreclosing association.

         33. Defendants' misrepresented to the public, including Plaintiff, that Nevada Ranch Master not Nevada Ranch Twilight was the foreclosing association. Defendants have not corrected this misrepresentation and continue to knowingly misrepresent to the public, including Plaintiff, that Nevada Ranch Master not Nevada Ranch Twilight was the foreclosing association.

         34. Upon information and belief, no corrective document has been recorded against the Property to correctly reflect the proper foreclosing association.

         35. At no time prior to the filing of this action did Defendants contact or attempt to contact Fannie Mae, Plaintiff or its predecessors, to notify them of the false Corrective Trustee's Deed Upon Sale.

         36. On or about June 5, 2013, a Quitclaim Deed was recorded as Book and Instrument Number 20130605-0002906, wherein MYE quitclaimed its interest in the Property to Borgert.[22]

         37. The above-identified foreclosure notice recorded by the HOA Trustee on behalf of Nevada Ranch Master and Nevada Ranch Twilight (collectively “HOA Foreclosure Notices”) failed to identify what proportion of the claimed lien was for alleged assessments, late fees, interest, fines/violations, or collection fees/costs.

         38. None of the HOA Foreclosure Notices specified what proportion of the lien, if any, that Defendants claimed constituted a “super-priority” lien.

         39. None of the HOA Foreclosure Notices specified whether Defendants were foreclosing on the “super-priority” portion of their liens, if any, or under the non-super-priority portion of the liens.

         40. None of the HOA Foreclosure Notices specified what portion of the liens, if any, that Defendants claimed constituted a “super-priority” lien.

         41. None of the HOA Foreclosure Notices provided any notice of a right to cure by Plaintiff or its predecessors-in-interest.

         42. Upon information and belief, Plaintiff or its predecessors-in-interest never received notice of the foreclosure sale from Defendants or their agent, the HOA Trustee.

         GENERAL ALLEGATIONS

         43. The HOA Sale did not comply with NRS 116.3102 et seq. because none of the aforementioned HOA Foreclosure Notices identified what portion of the claimed liens were for alleged late fees, interest, fines/violations, or collection fees/costs.

         44. The HOA Sale is unlawful and void under NRS 116.3102 et seq.

         45. The above-identified Notice of Defaults for Defendants did not “describe the deficiency in ...


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