United States District Court, D. Nevada
ORDER GRANTING IN PART THE MOTION TO DISMISS [ECF NO.
P. GORDON, UNITED STATES DISTRICT JUDGE.
a dispute over the effect of a non-judicial foreclosure sale
conducted by defendant Indigo Homeowners' Association
(Indigo). Indigo foreclosed on the property located at 9268
Lapeer Street in Las Vegas after the former homeowner ceased
paying homeowners association (HOA) assessments. Plaintiff
Bank of America, N.A. sues to determine whether the HOA
foreclosure sale extinguished Bank of America's deed of
trust encumbering the property.
moves to dismiss the claims against it for quiet title,
unjust enrichment, wrongful foreclosure, negligence,
negligence per se, breach of contract, misrepresentation, and
tortious interference with contract. I grant the motion in part.
considering a motion to dismiss, “all well-pleaded
allegations of material fact are taken as true and construed
in a light most favorable to the non-moving party.”
Wyler Summit P'ship v. Turner Broad. Sys., Inc.,
135 F.3d 658, 661 (9th Cir. 1998). However, I do not
necessarily assume the truth of legal conclusions merely
because they are cast in the form of factual allegations in
the complaint. See Clegg v. Cult Awareness Network,
18 F.3d 752, 754-55 (9th Cir. 1994). A plaintiff must make
sufficient factual allegations to establish a plausible
entitlement to relief. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 556 (2007). Such allegations must amount to
“more than labels and conclusions, [or] a formulaic
recitation of the elements of a cause of action.”
Id. at 555.
moves to dismiss the quiet title claim, arguing Bank of
America did not pay all debts owed on the property, Bank of
America cannot prove good title in itself because it is only
a lienholder, and Indigo does not assert an adverse claim to
the property. Bank of America responds that it need not pay
all debts on the property to establish its lien priority. It
also argues it has adequately alleged a claim to determine
adverse interests in property.
Nevada Revised Statutes § 40.010, an “action may
be brought by any person against another who claims an estate
or interest in real property, adverse to the person bringing
the action, for the purpose of determining such adverse
claim.” “Thus, any person claiming an interest in
the property may seek to determine adverse claims, even if
that person does not have title to or possession of the
property.” Nationstar Mortg. LLC v. Amber Hills II
Homeowners Ass'n, No. 2:15-cv-01433-APG-CWH, 2016 WL
1298108, at *3 (D. Nev. Mar. 31, 2016). Accordingly, it is
not fatal to Bank of America's claim that it asserts a
lien interest rather than title to the property.
Indigo is a proper party to the quiet title
claim. Bank of America challenges the validity of
the sale Indigo conducted and the corresponding validity of
the title Indigo transferred to the purchaser at the HOA
sale. If the HOA foreclosure sale is invalidated,
Indigo's superpriority lien might be reinstated as an
encumbrance against the property. Further, the existence and
priority of that lien might still be in doubt where Bank of
America alleges it tendered payment of that lien. “The
disposition of this action in the HOA's absence may
impair or impede [Bank of America's] ability to protect
its interests.” U.S. Bank, N.A. v. Ascente
Homeowners Ass'n, No. 2:15-cv-00302-JAD-VCF, 2015 WL
8780157, at *2 (D. Nev. Dec. 15, 2015). Additionally, if Bank
of America “succeeds in invalidating the sale without
the HOA being a party to this suit, separate litigation to
further settle the priority of the parties' respective
liens and rights may be necessary.” Id. Thus,
if Indigo is dismissed as a party, Bank of America would not
be able to secure the complete relief it seeks. See
id.; Fed.R.Civ.P. 19(a). Accordingly, Indigo is a proper
party to Bank of America's quiet title claim, and its
motion to dismiss on this basis is denied.
Bank of America is not required to pay all debts on the
property to determine whether its lien was extinguished. The
case Indigo cites, Nebab v. Bank of Am., N.A., No.
2:10-cv-01865-KJD-GWF, 2012 WL 2860660 (D. Nev. July 11,
2012), relies on a California case, Ferguson v. Avelo
Mortg., LLC, 126 Cal.Rptr.3d 586, 591 (Cal.Ct.App.
2011). Ferguson, in turn, relies on
another California case stating that a “mortgagor
cannot quiet his title against the mortgagee without paying
the debt secured.” Shimpones v. Stickney, 28
P.2d 673, 678 (Cal. 1934). These cases have no application
here because Bank of America is not the mortgagor trying to
quiet title against the mortgagee. I therefore deny the
motion to dismiss on that basis.
Common Law Claims
argues that Bank of America's common law claims for
wrongful foreclosure, unjust enrichment, and negligence have
been superseded by the comprehensive statutory scheme set
forth in Nevada Revised Statutes Chapter 116. Bank of America
responds that Supreme Court of Nevada authority establishes
that common law claims are not statutorily superseded by
statute, Nevada follows the “common law of England, so
far as it is not repugnant to or in conflict with the . . .
laws of this State.” Nev. Rev. Stat. § 1.030;
see also State v. Hamilton, 111 P. 1026, 1029 (Nev.
1910) (stating Nevada adopts the common law “except as
specially abrogated or where unsuitable to our
conditions”). Chapter 116, although comprehensive, does
not reflect an intent to supersede all common law causes of
action. To the contrary, § 116.1108 reflects that the
common law remains applicable to Chapter 116 unless the two
The principles of law and equity, including the law of
corporations and any other form of organization authorized by
law of this State, the law of unincorporated associations,
the law of real property, and the law relative to capacity to
contract, principal and agent, eminent domain, estoppel,
fraud, misrepresentation, duress, coercion, mistake,
receivership, substantial performance, or other validating or
invalidating cause supplement the provisions of this chapter,
except to the extent inconsistent with this chapter.
therefore deny the motion to dismiss on this basis.
Indigo argues the wrongful foreclosure claim must be
dismissed because the prior homeowner was in default at the
time of the HOA foreclosure sale. Indigo also argues that a
lienholder like Bank of America cannot assert a wrongful
foreclosure claim because that claim belongs only to the
trustor or mortgagor. Bank of America responds that there is
no law requiring a lienholder to show the homeowner was not
in default to assert a wrongful foreclosure claim against ...