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Lakeview Loan Servicing, LLC v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

March 28, 2019

SFR INVESTMENTS POOL 1, LLC, et al., Defendant.



         Pending before the Court is the Motion for Summary Judgment, (ECF No. 62), filed by Plaintiff PHH Mortgage Corporation.[1] Defendant SFR Investments Pool 1, LLC (“SFR”) filed a Response, (ECF No. 64), and Plaintiff filed a Reply, (ECF No. 66). Also pending before the Court is SFR's Motion for Summary Judgment, (ECF No. 70). Plaintiff filed a Response, (ECF No. 76), and SFR filed a Reply, (ECF No. 77).

         For the reasons discussed below, Plaintiff's Motion for Summary Judgment is DENIED and SFR's Motion for Summary Judgment is GRANTED.[2]

         I. BACKGROUND

         This case arises from the non-judicial foreclosure on real property located at 8909 Topaz Springs Court, Las Vegas, Nevada 89149 (the “Property”). (Compl. ¶ 21, ECF No. 1). In 2008, Andrew E. Cato (“Cato”) purchased the Property by way of a loan in the amount of $130, 752.00 secured by a deed of trust (“DOT”) recorded on December 30, 2008. (Id. ¶¶ 22- 23); (DOT, Ex. 2 to Pl.'s Mot. Summ. J. (“MSJ”), ECF No. 62-2). The loan and the DOT were guaranteed by the Department of Veteran's Affairs (“VA”) via its VA Home Loan Guaranty program. (Compl. ¶ 24-25); (see Note, Ex. 4 to Pl.'s MSJ, ECF No. 62-4); (see also VA Guaranty Certificate, Ex. 5 to Pl.'s MSJ, ECF No. 62-5). Further, the DOT identifies USAA Federal Savings Bank (“USAA”) as the lender, and Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee-beneficiary. (See DOT, Ex. 2 to Pl.'s MSJ); (Compl. ¶ 23).

         Upon Cato's failure to stay current on payment obligations, Centennial Park HOA (“HOA”), through its agent Absolute Collection Services, LLC, recorded a Notice of Delinquent Assessment against the Property on August 1, 2011. (See Lien Notice, Ex. 6 to Pl.'s MSJ, ECF No. 62-6). On December 1, 2011, HOA recorded a Notice of Default and Election to Sell to satisfy the delinquent assessment lien. (See Default Notice, Ex. 7 to Pl.'s MSJ, ECF No. 62-7). A Notice of Trustee's Sale was recorded against the Property on March 23, 2012, and a non-judicial foreclosure occurred on July 17, 2012, through which SFR acquired its interest in the Property. (See Compl. ¶ 33); (Notice of Sale, Ex. 8 to Pl.'s MSJ, ECF No. 62-8). SFR recorded a foreclosure deed on July 19, 2012. (Compl. ¶ 35); (Foreclosure Deed, Ex. A-12 to SFR's MSJ, ECF No. 70-1). On April 12, 2013, MERS assigned the DOT to Plaintiff. (Assignment, Ex. 3 to Pl.'s MSJ, ECF No. 62-3).

         On July 13, 2016, Plaintiff filed its Complaint containing claims against SFR for quiet title, declaratory relief, and unjust enrichment. (Compl. ¶¶ 45-84). SFR subsequently filed crossclaims and counterclaims against Plaintiff and Cato, respectively, for “declaratory relief/quiet title, ” and injunctive relief. (See Answer ¶¶ 38-51, ECF No. 15).


         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. See 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. See 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. 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 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. See 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. See Id. at 249-50.


         Plaintiff moves for summary judgment on its quiet title and declaratory relief claims, asserting that the DOT survived because the foreclosure was conducted pursuant to a facially unconstitutional statute. (Pl.'s MSJ 4:16-6:15, ECF No. 62). Plaintiff further argues that the foreclosure sale cannot extinguish a loan guaranteed by the VA because federal law preempts NRS Chapter 116. (Id. 6:16-8:27). Furthermore, Plaintiff contends that SFR purchased a mere lien interest in the Property, thus title did not transfer to SFR. (Id. 9:1-26).

         SFR seeks judgment in the form of a declaration that it is the title holder to the Property. (SFR's MSJ 2:23-3:1, ECF No. 70). SFR asserts that Plaintiff's quiet title claim is barred by the applicable statute of limitations and that, even if timely, it cannot survive because Plaintiff is without standing to bring the claim. (Id. 7:20-10:26, 14:15-16:16); (see also SFR's Resp. 3:20-7:19, ECF No. 64). SFR further argues that Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) has been superseded and has never been dispositive. (SFR's MSJ 11:1-13:2). Lastly, SFR argues that Plaintiff's unjust enrichment claim fails as a matter of law because Plaintiff does not have admissible evidence showing that a benefit was conferred and appreciated by SFR. (Id. 24:23-25:8). The Court will address the parties' arguments in turn.

         A. Constitutionality ...

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