Bank of America, N.A. v. Inspirada Community Association

          ORDER

          MIRANDA M. DU, UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         This case arises from the foreclosure sale of property to satisfy a homeowners' association lien. Before the Court are three motions: (1) Defendant Inspirada Community Association's (“HOA”) motion for summary judgment (ECF No. 109); (2) Plaintiff Bank of America, N.A.'s (“BANA”) motion for summary judgment (ECF No. 110); and (3) Defendant SFR Investments Pool 1, LLC's (“SFR”) motion for summary judgment (ECF No. 111). The Court has reviewed the parties' responses (ECF Nos. 115, 116, 117, 118) and replies (ECF Nos. 119, 120, 121). The Court also has reviewed the supplemental briefs that the parties submitted (ECF Nos. 123, 124 (errata), 125) in response to the Court's order (ECF No. 122) allowing the parties to address the applicability of a recent Nevada Supreme Court case^[1] to the facts of this case. For the following reasons, the Court denies BANA's motion for summary judgment, grants SFR's motion for summary judgment, and denies the HOA's motion for summary judgment as moot.

         II. RELEVANT BACKGROUND

         The following facts are undisputed unless otherwise indicated.

         Kyle and Kelly Schramm (“Borrowers”) purchased real property^[2] (“Property”) within the HOA on September 2, 2008, with a $281, 975 loan (“Loan”). (ECF No. 110-1 at 2-3, 12.) The Loan was evidenced by a note (“Note”) and secured by a first deed of trust (“DOT”) that named Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee beneficiary. (Id. at 3.) MERS assigned the DOT to a company in May 2011 that merged into and with BANA. (ECF No. 110-3 at 2 (assignment); ECF No. 110-4 at 2 (certificate of merger).)

         The Borrowers failed to pay HOA assessments, and the HOA recorded the following notices through its agent, Leach Johnson Song & Gruchow (“Leach”): (1) notice of delinquent assessment on January 4, 2011 (ECF No. 110-5 at 2-3); and (2) notice of default and election to sell on March 25, 2011 (ECF No. 110-6 at 2-3).

         BANA asked Leach to identify the superpriority amount of the HOA's lien and offered to pay that amount on April 22, 2011. (ECF No. 110-7 at 5-6.) Leach refused to provide any account information to BANA unless BANA obtained the Borrowers' authorization to release their assessment account records. (Id. at 8.) The authorization form required the Borrowers to consent to a $150 fee. (Id. at 9.) It does not appear that BANA and Leach communicated further after this.

         The HOA recorded a notice of sale on May 14, 2012. (ECF No. 110-9 at 2-4.) The HOA sold the Property to SFR on April 18, 2013 (“HOA Sale”) for $14, 000. (ECF No. 110-10 at 2-4.)

         BANA asserts the following claims in its Complaint: (1) quiet title/declaratory judgment against all Defendants; (2) breach of NRS § 116.1113 against the HOA and Leach; (3) wrongful foreclosure against the HOA and Leach; and (4) injunctive relief against SFR. (ECF No. 1 at 6-14.)

         SFR asserted a counterclaim and crossclaim for quiet title and injunctive relief against BANA and the Borrowers. (ECF No. 25 at 9-16.)

         III. LEGAL STANDARD

         “The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court.” Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See Id. at 250-51. “The amount of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties' differing versions of the truth at trial.'” Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, ” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita ...