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Bank of New York Mellon v. Christopher Communities at Southern Highlands Golf Club Homeowners Association

United States District Court, D. Nevada

June 27, 2018

BANK OF NEW YORK MELLON, Plaintiffs,
v.
CHRISTOPHER COMMUNITIES AT SOUTHERN HIGHLANDS GOLF CLUB HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

         Presently before the court is plaintiff Bank of New York Mellon's (“BNYM”) motion for summary judgment. (ECF No. 59). Defendant Kupperlin Law Group (“Kupperlin”) filed a response (ECF No. 65), as did defendants Alan Lahrs and Theresa Lahrs (“The Lahrs”) (ECF No. 69). Thereafter, plaintiff filed a reply. (ECF No. 72).

         Also before the court is Kupperlin's motion for summary judgment. (ECF No. 60). Plaintiff filed a response (ECF No. 70), to which Kupperlin replied (ECF No. 71).

         Also before the court is the Lahrs' motion to dismiss. (ECF No. 52). Plaintiff filed a response (ECF No. 55), to which the Lahrs replied (ECF No. 57).

         I. Facts

         The present case concerns a dispute over real property located at 11966 Port Labelle Drive, Las Vegas, Nevada, 89141 (“the property”). (ECF No. 1).

         In August of 2005, Michael and Julie Frye purchased the property. Id. The Fryes financed their purchase through a loan of $1, 000, 000. Id. The note was secured by a deed of trust, recorded on August 31, 2005. Id. The deed of trust lists Countrywide Home Loans, Inc. as the lender and Mortgage Electronic Registration Systems, Inc. (“MERS”) as the beneficiary “solely as nominee for Lender and Lender's successors and assigns.” (ECF No. 59-1).

         On December 12, 2008, Red Rock Financial Services (“RRFS”), acting on behalf of Christopher Communities at Southern Highlands Golf Club Homeowners Association (“the HOA”), recorded a notice of delinquent assessment lien, stating an amount due of $2, 275.03. Id. On February 20, 2009, RRFS, acting on behalf of the HOA, recorded a notice of default and election to sell, stating an amount due of $3, 871.58. Id. On May 4, 2009, RRFS sent MERS a letter detailing the Frye's delinquency and describing the HOA's intent to foreclose on the property. Id. When describing the priority of the lien, RRFS stated, “[t]he Association's Lien for Delinquent Assessments is Junior only to the Senior Lender/Mortgage Holder.” Id. On February 3, 2011, and June 6, 2012, RRFS re-sent the same letter to MERS. Id.

         On September 12, 2011, MERS assigned beneficial interest in the deed of trust to plaintiff. Id.

         “[A]t some point in time before September 7, 2012, [defendant] First 100 entered into an agreement with the HOA to purchase the delinquency, if any, owed by the [Fryes] to the HOA.” Id. The agreement contained several notable provisions. The HOA retained its lien interest, but sold its interest in receivables arising from or related to the lien in exchange for nine months of unpaid assessments. (ECF No. 59-2 at 5, 15); see (ECF No. 1) (“First 100 transferred a sum of money equal to nine months of unpaid assessments to the HOA in exchange to [sic] the rights to collect on the alleged delinquent account and foreclose upon the property.”). Id. The HOA agreed to not negotiate or impair the value of the account upon which the lien was based. (ECF No. 59-2 at 8-9). The HOA promised that it would not send anyone to the foreclosure sale to bid “in any amount in excess of the Opening Bid” of $99. (ECF No. 59-2 at 9).

         “Per the purchase and sale agreement, [RRFS] was removed as the HOA's agent and replaced with Kupperlin.” Id. “Kupperlin was instructed not to postpone any foreclosure sale, even if few or no bidders were present.” Id.

         On September 7, 2012, Kupperlin recorded a notice of foreclosure sale, stating an amount due of $22, 346.67. (ECF No. 1). On September 29, 2012, Kupperlin foreclosed against the property. Id. Defendant First 100 was the only bidder at the foreclosure sale. (ECF No. 59-2 at 46). First 100 purchased the property at the foreclosure sale for $151.[1] Id. at 3. A foreclosure deed was recorded on October 4, 2012. Id. at 50. On February 4, 2013, First 100 transferred its interest in the property to the Lahrs Family Trust (“the Trust”) for $509, 513.78. Id. at 54.

         Plaintiff's complaint alleges the following causes of action: (1) quiet title/declaratory judgment against all defendants; (2) breach of NRS 116.1113 against the HOA and Kupperlin; (3) wrongful foreclosure against the HOA and Kupperlin; (4) injunctive relief against the Trust; and (5) deceptive trade practices against the HOA and Kupperlin. Id. On June 30, 2017, Kupperlin filed a counterclaim against plaintiff's attorney, Natalie Winslow. (ECF No. 29).

         On March 23, 2018, the court dismissed plaintiff's claim for injunctive relief and Kupperlin's counterclaim. (ECF No. 73).

         II. Legal Standard

         a. Failure to state a claim

         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. 662, 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 ...


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