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Bank of America, N.A. v. Sonrisa Homeowners Association

United States District Court, D. Nevada

July 17, 2018

BANK OF AMERICA, N.A., Plaintiffs,
v.
SONRISA HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

         Presently before the court is plaintiff Bank of America, N.A.'s (“BANA”) motion for summary judgment. (ECF No. 115). Defendants SFR Investments Pool 1, LLC (“SFR”) (ECF No. 121) and Sonrisa Homeowners Association (“the HOA”) (ECF No. 124) responded, to which BANA replied (ECF No. 126).

         Also before the court is the HOA's motion for summary judgment. (ECF No. 116). BANA filed a response (ECF No. 118).

         Also before the court is SFR's motion for summary judgment. (ECF No. 117). BANA filed a response (ECF No. 119), to which SFR replied (ECF No. 127).

         I. Facts

         This case involves a dispute over real property located at 1208 El Viento Court, Henderson, Nevada 89074 (the “property”). On April 21, 2010, Rick and Jennifer Watkins obtained a loan from First Option Mortgage in the amount of $152, 192.00 to purchase the property, which was secured by a deed of trust recorded on April 28, 2010. (ECF No. 1 at 3-4).

         The deed was assigned to BANA via an assignment of deed of trust recorded on April 23, 2012. (ECF No. 1 at 4).

         On October 30, 2012, defendant Nevada Association Services, Inc. (“NAS”), acting on behalf of the HOA, recorded a notice of delinquent assessment lien, stating an amount due of $1, 565.73. (ECF No. 1 at 4). On January 4, 2013, NAS recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $2, 765.43. (ECF No. 1 at 4).

         On April 19, 2013, BANA tendered to NAS $1, 125.00, what it calculated to be the superpriority amount-i.e., the sum of nine months of assessments. (ECF No. 1 at 5).

         On August 13, 2013, NAS recorded a notice of trustee's sale, stating an amount due of $4, 443.81. (ECF No. 1 at 4-5). On September 6, 2013, SFR purchased the property at the foreclosure sale for $18, 000.00. (ECF No. 1 at 6). A trustee's deed upon sale in favor of SFR was recorded on September 9, 2013. (ECF No. 1 at 6).

         On April 14, 2016, BANA filed the underlying complaint, alleging four causes of action: (1) quiet title/declaratory judgment against SFR and the HOA; (2) breach of NRS 116.1113 against NAS and the HOA; (3) wrongful foreclosure against NAS and the HOA; and (4) injunctive relief against SFR. (ECF No. 1).

         On February 15, 2017, the court dismissed claim (4) of BANA's complaint. (ECF No. 95).

         In the instant motions, BANA moves for summary judgment against the HOA, NAS, and SFR, as well as on SFR's counterclaims (ECF No. 115) and the HOA and SFR move for summary judgment as to all claims asserted by BANA (ECF Nos. 116, 117).

         II. Legal Standard

         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

         In the HOA and SFR's motions, they contend that summary judgment in their favor is proper because, inter alia, the foreclosure sale extinguished BANA's deed of trust pursuant to NRS 116.3116 and SFR Investments. (ECF Nos. 116, 117). The HOA further contends that the foreclosure sale should not be set aside because the HOA complied with all notice requirements under NRS 116 and BANA received actual notice, NRS 116 is not barred by the Supremacy clause, the HOA's rejection of BANA's tender was proper, and the standard of commercial reasonableness does not apply to foreclosure sales. (ECF No. 116). SFR further argues that Bourne Valley is not controlling, BANA is not entitled to an equitable remedy, and SFR is a bona fide purchaser. (ECF No. 117). The court will address each argument as it sees fit.

         Under Nevada law, “[a]n 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.” Nev. Rev. Stat. § 40.010. “A plea to quiet title does not require any particular elements, but each party must plead and prove his or her own claim to the property in question and a plaintiff's right to relief therefore depends on superiority of title.” Chapman v. Deutsche Bank Nat'l Trust Co., 302 P.3d 1103, 1106 (Nev. 2013) (internal quotation marks and citations omitted). Therefore, for plaintiff to succeed on its quiet title action, it needs to show that its claim to the property is superior to all ...


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