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Deutsche Bank National Trust Co. v. Sonrisa Homeowners Association

United States District Court, D. Nevada

March 30, 2019

DEUTSCHE BANK NATIONAL TRUST COMPANY, Plaintiff,
v.
SONRISA HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

          GLORIA M. NAVARRO, CHIEF JUDGE

         Pending before the Court is the Motion for Summary Judgment, (ECF No. 80), filed by Plaintiff Deutsche Bank National Trust Company (“Plaintiff). Defendants Sonrisa Homeowners Association (“HOA”) and SFR Investments Pool, LLC (“SFR”) filed Responses, (ECF Nos. 84, 91), and Plaintiff filed a Reply, (ECF No. 94). Also pending before the Court is HOA's Motion for Summary Judgment, (ECF No. 81), to which Plaintiff and SFR filed Responses, (ECF Nos. 85, 87), and HOA filed a Reply, (ECF No. 92). Lastly before the Court is SFR's Motion for Summary Judgment, (ECF No. 82), to which Plaintiff filed a Response, (ECF No. 86), and SFR filed a Reply, (ECF No. 93). For the reasons stated herein, the Court grants summary judgment in favor of SFR and HOA.

         I. BACKGROUND

         This case arises from the non-judicial foreclosure on real property located at 1232 La Ballena Trail, Henderson, NV 89074 (the “Property”). (See Deed of Trust, Ex. A to Pl.'s MSJ, ECF No. 80-1). In 2006, Buenaventura and Rosalina Alcantara (“Alcantaras”) financed their purchase of the Property by way of a loan in the amount of $313, 500.00 secured by a deed of trust (the “DOT”). (Id.). Plaintiff became beneficiary under the DOT through an assignment recorded on August 22, 2013. (Assignment, Ex. B to Pl.'s MSJ, ECF No. 80-2). On June 20, 2007, the Alcantaras conveyed the property to Ray Alcantara, but the property was returned in 2009. (Transfers, Exs. C, I to Pl.'s MSJ, ECF No. 80-3). Upon the Alcantaras failure to pay all amounts due, the HOA, through its agent Nevada Association Services, Inc. (“NAS”), recorded a notice of delinquent assessment lien in March 2009, which was later released on June 3, 2009. (See First Notice of Delinquent Assessment, Ex. J to Pl.'s MSJ, ECF No. 80-10); (Release, Ex. K to Pl.'s MSJ, ECF No. 80-11). Between 2009 and 2013, NAS recorded three more delinquent assessment liens against various purported owners of the property, but each were released. (See Exs. L-X to Pl.'s MSJ, ECF No. 80).

         On March 27, 2013, NAS recorded a fifth lien, which listed the Alcantaras as the property owners. (See Fifth Notice of Delinquent Assessment, Ex. Y to Pl.'s MSJ, ECF No. 80-25). On September 4, 2013, NAS recorded a notice of foreclosure sale, which took place on September 27, 2013. (See Foreclosure Notice, Exs. AA to Pl.'s MSJ, ECF No. 80-26). At the sale, SFR purchased the Property for $23, 000.00 and recorded a foreclosure deed on October 7, 2013. (Foreclosure Deed, Ex. CC to Pl.'s MSJ, ECF No. 80-28).

         Plaintiff brings 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. ¶¶ 48-98, ECF No. 1). Plaintiff also raises claims for breach of NRS 116, wrongful foreclosure, and injunctive relief. (Id.). In turn, SFR asserts competing quiet title, declaratory relief, and injunctive relief counterclaims against Plaintiff. (See Answer 18:10- 19:18, ECF No. 24).

         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

         Plaintiff moves for summary judgment on its quiet title claim, asserting that the DOT survived because the foreclosure was conducted pursuant to an unconstitutional statutory scheme and, alternatively, the Property's inadequate sales price, in conjunction with other evidence of unfairness, warrants setting aside the sale on equitable grounds. (Pl.'s MSJ 5:25- 10:8, ECF No. 80). SFR seeks judgment in the form of a declaration that it is the title holder to the Property and that Plaintiff's DOT was extinguished by the foreclosure sale. (SFR's MSJ 23:2-8, ECF No. 82). SFR also asserts that Plaintiff's quiet title claim cannot survive because Plaintiff is without standing to bring the claim. (SFR's Resp. 19:18-20:5, ECF No. 84). The Court begins with the threshold issues of NRS Chapter 116's constitutionality and Plaintiff's standing to bring this action.

         A. Constitutionality of NRS Chapter 116

         The parties dispute whether the Ninth Circuit's decision in Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017), compels the Court to find that Plaintiff's DOT survived the ...


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