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Bank of New York Mellon v. Stone Canyon West Homeowners Association

United States District Court, D. Nevada

March 19, 2019

BANK OF NEW YORK MELLON, F/K/A BANK OF NEW YORK, AS SUCCESSOR IN INTEREST TO JPMORGAN CHASE BANK, N.A., AS TRUSTEE FOR THE STRUCTURED ASSET MORTGAGE INVESTMENTS II TRUST 2006-AR6, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-AR6, Plaintiff,
v.
STONE CANYON WEST HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

          Gloria M. Navarro, Chief Judge United States District Judge.

         Pending before the Court is the Motion for Summary Judgment, (ECF No. 75), filed by Plaintiff Bank of New York Mellon (“BNYM”) and Cross Defendant Nationstar Mortgage, LLC (“Nationstar”) (collectively “Plaintiffs”). Defendant SFR Investments Pool, LLC (“SFR”) filed a Response, (ECF No. 80), and Plaintiffs filed a Reply, (ECF No. 81). Also pending before the Court is SFR's Motion for Summary Judgment, (ECF No. 76), to which Plaintiffs filed a Response, (ECF No. 79), and SFR filed a Reply, (ECF No. 82).

         For the reasons discussed herein, Plaintiffs' Motion for Summary Judgment is DENIED and SFR's Motion for Summary Judgment is GRANTED.

         I. BACKGROUND

         This case arises from the non-judicial foreclosure on real property located at 7972 Laurena Avenue, Las Vegas, Nevada 89147 (the “Property”). (See Deed of Trust, Ex. 1 to Pl.'s MSJ, ECF No. 75-1). In 2006, Juan A. Chacon (“Chacon”) financed his purchase of the Property by way of a loan in the amount of $188, 000.00 secured by a deed of trust (the “DOT”). (Id.). BNYM became beneficiary under the DOT through an assignment recorded on March 16, 2012, (see Assignment, Ex. 2 to Pl.'s MSJ, ECF No. 75-2), and Nationstar is BNYM's loan servicer, (see Nationstar's Request for Foreclosure Notices, Ex. 10 to Pl.'s MSJ, ECF No. 75-10).

         Upon Chacon's failure to pay all amounts due, Stone Canyon West Homeowners Association (“HOA”), through its agent Nevada Association Services, Inc. (“NAS”), recorded a notice of delinquent assessment lien in March 2010 and a subsequent notice of default and election to sell in June 2010. (See Notice of Delinquent Assessment, Ex. 4 to Pl.'s MSJ, ECF No. 75-4); (Notice of Default and Election to Sell, Ex. 5 to Pl.'s MSJ). During the time period that Chacon's account was in collections, Chacon made payments toward his delinquent account totaling $905.00. (See NAS Collections File at 4-6, Ex. 5 to Pl.'s MSJ, ECF No. 75-5).

         On July 2, 2013, NAS recorded a notice of foreclosure sale stating a public auction would take place on July 28 of that year. (Notice of Sale, Ex. 7 to Pl.'s MSJ, ECF No. 75-7). At the sale, SFR purchased the Property for $13, 000 and recorded a foreclosure deed on August 5, 2013. (Foreclosure Deed, Ex. 8 to Pl.'s MSJ, ECF No. 75-8).

         Plaintiffs bring this quiet title action seeking a declaration that the DOT continues to encumber the Property and that SFR's interest in the Property is subject to this encumbrance. (See Compl. ¶¶ 26-73, ECF No. 1).[1] SFR asserts competing declaratory and injunctive relief counterclaims against Plaintiffs, [2] as well as crossclaims against Chacon for declaratory and injunctive relief. (See Answer 14:8-16:5, ECF No. 20).

         II. LEGAL STANDARD

         The Federal Rules of Civil Procedure provide for summary adjudication 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 judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor.” Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). 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).

         In determining summary judgment, a court applies a burden-shifting analysis. “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). In 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 nonmoving 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. 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. 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. 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. 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. Celotex Corp., 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. Anderson, 477 U.S. at 249. 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. Id. at 249-50.

         III. DISCUSSION

         Plaintiffs move for summary judgment on their quiet title claim, asserting that Chacon's payments to NAS preserved their DOT by extinguishing the HOA superpriority lien before the sale. (Pl.'s MSJ 9:19-10:22, ECF No. 75). Plaintiffs further contend that the DOT survived because the foreclosure was conducted pursuant to a facially unconstitutional statute and, alternatively, the Property's inadequate sales price, in conjunction with other evidence of unfairness, warrants setting aside the sale on equitable grounds. (Id. 5:5-9:18, 10:23-15:20).

         SFR seeks judgment in the form of a declaration that it is the title holder to the Property and that Plaintiffs' DOT was extinguished by the foreclosure sale. (SFR's MSJ 27:2-5, ECF No. 76). SFR asserts that Plaintiff's quiet title claim is barred by the applicable statute of limitations and, even if timely, cannot survive because Plaintiffs are without standing to bring the claim. (Id. 20:7-23:9); (see also SFR's Resp. 6:21-10:15, ECF No. 80).

         The Court begins with the threshold issues of the timeliness of Plaintiffs' claim, the constitutionality of NRS Chapter 116, and Plaintiffs' standing to bring this action.

         A. Statute of Limitations

         According to SFR, Plaintiffs' quiet title claim is time-barred because the Complaint was filed outside of the applicable three-year limitations period prescribed by NRS 11.190(3)(a). (Id. 10:20-12:11). Plaintiffs respond, asserting that under NRS 11.080, a five-year limitations period governs the claim. (Pl.'s Resp. 6:3-17, ECF No. 79).

         Courts in this District apply either the four-year limitations period under NRS 11.220, or else the five-year period set forth in NRS 11.070 and 11.080 to a lienholder's quiet title claim. See, e.g., Bank of Am., N.A. v. Azure Manor/Rancho de Paz Homeowners Ass'n, No. 2:16-cv-00764-GMN-GWF, 2019 WL 636973, at *3 (D. Nev. Feb. 14, 2019); Wilmington Tr., Nat'l Ass'n v. Royal Highlands St. & Landscape Maint. Corp., No. 2:18-cv-00245-JAD-PAL, 2018 WL 2741044, at *2 (D. Nev. June 6, 2018). See also Saticoy Bay LLC Series 2021 ...


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