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Bank of New York Mellon v. GR Investments, LLC

United States District Court, D. Nevada

May 25, 2018

GR INVESTMENTS, LLC, et al., Defendant(s).


         Presently before the court is defendant Terra Bella Owners Association, Inc.'s (the “HOA”) motion to dismiss. (ECF No. 35). Defendants/counter claimants/cross claimants Silverstone, LLC (“Silverstone”) and GR Investments, LLC (“GR Investments”) and plaintiff/counter defendant Bank of New York Mellon (“BNYM”) filed responses (ECF Nos. 37, 38), to which the HOA replied (ECF Nos. 39, 43).

         Also before the court is Silverstone and GR Investments' motion for summary judgment. (ECF No. 40). The HOA joined (ECF No. 41) and BNYM filed a response (ECF No. 45), to which Silverstone and GR Investments replied (ECF No. 48).

         Also before the court is BNYM's motion for summary judgment. (ECF No. 42). Silverstone and GR Investments and the HOA filed responses (ECF Nos. 44, 46), to which BNYM replied (ECF No. 47).

         I. Facts

         This case involves a dispute over real property located at 7509 Royal Crystal St., Las Vegas, Nevada 89149 (the “property”).

         On December 19, 2005, Arthur and Liwliwa Olivares (the “borrowers”) obtained a loan in the amount of $511, 600.00 from Loan Link Financial Services (“Loan Link”) to purchase the property, which was secured by a deed of trust recorded on January 4, 2006. (ECF No. 1). BNYM holds the note and the first deed of trust. Id.

         On November 2, 2010, Hampton & Hampton, P.C. (“the “HOA agent”), acting on behalf of the HOA, recorded a notice of delinquent assessment lien on the property. (ECF No. 1). On December 6, 2010, the HOA agent, acting on behalf of the HOA, recorded a notice of default and election to sell real property to satisfy delinquent assessment lien against the property. Id.

         On July 3, 2012, the HOA agent, on behalf of the HOA, recorded a notice of trustee's sale. (ECF No. 1). On August 17, 2012, the HOA agent, on behalf of the HOA, sold the property at a foreclosure sale. Id. GR Investments purchased the property for $8, 300.00. Id. On September 7, 2012, a trustee's deed upon sale was recorded. Id.

         BNYM alleges that the fair market value of the property on the date of the foreclosure sale was at least $300, 000.00, and likely higher. (ECF No. 1).

         On June 15, 2016, a quitclaim deed transferring all right, title, interest, and claim of GR Investments in the property to Silverstone was recorded. (ECF No. 40).

         On August 17, 2016, BNYM filed a complaint (ECF No. 1), which was later amended on March 3, 2017 (ECF No. 15). In the amended complaint, BNYM alleges four claims for relief: (1) quiet title/declaratory relief against the HOA, GR Investments, and Silverstone; (2) permanent and preliminary injunction against GR Investments and Silverstone; (3) unjust enrichment against the HOA, GR Investments, and Silverstone; and (4) conversion against the HOA. Id.

         On March 17, 2016, GR Investments and Silverstone filed a crossclaim against Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for Loan Link, and the borrowers and a counterclaim against BNYM alleging a claim for quiet title/declaratory relief. (ECF No. 17).

         In the instant motions, the HOA moves to dismiss BNYM's amended complaint (ECF No. 35), GR Investments and Silverstone move for summary judgment against BNYM (ECF No. 40), and BNYM moves for summary judgment on its claim for quiet title/declaratory relief (ECF No. 42). The court will address these motions as it sees fit.

         II. Legal Standards

         A. Motion to Dismiss

         A court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).

         “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (citation omitted).

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id. at 678-79. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. at 678.

         Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.

         Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged-but not shown-that the pleader is entitled to relief.” Id. (internal quotation marks omitted). When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly, 550 U.S. at 570.

         The Ninth Circuit addressed post-Iqbal pleading standards in Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court stated, in relevant part:

First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively. Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.


         B. Summary Judgment

         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. The HOA's motion to ...

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