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Bank of America v. Aliante Master Association

United States District Court, D. Nevada

March 31, 2019



          Gloria M. Navarro, Chief Judge

         Pending before the Court is Plaintiff Bank of America, N.A.'s (“BANA's”) Second Motion for Partial Summary Judgment, (ECF No. 77). Defendants Aliante Master Association (“HOA”) and SFR Investments Pool 1, LLC (“SFR”) filed Responses, (ECF Nos. 80, 82), and BANA filed a Reply, (ECF No. 87).

         Also pending before the Court are the Motions for Summary Judgment, (ECF Nos. 78, 79), filed by SFR and HOA. BANA filed a Response, (ECF No. 81), and SFR and HOA filed Replies, (ECF Nos. 88, 89).

         For the reasons discussed below, the Court GRANTS in part and DENIES in part BANA's Second Motion for Partial Summary Judgment, (ECF No. 77); GRANTS in part and DENIES in part SFR's Motion for Summary Judgment, (ECF No. 79); and DENIES HOA's Motion for Summary Judgment, (ECF No. 78).

         I. BACKGROUND

         This case arises from the non-judicial foreclosure on real property located at 6716 Sea Swallow Street, North Las Vegas, Nevada 89084 (the “Property”). (See Deed of Trust, Ex. A to BANA's Mot. Summ. J. (“MSJ”), ECF No. 77-1). In 2007, Mary L. Slabon (“Borrower”) purchased the Property by way of a loan in the amount of $328, 000.00, secured by a deed of trust (the “DOT”). (Id.). BANA was the lender for Borrower's loan, and BANA recorded its interest in the DOT on February 1, 2007. (See id.).

         Upon Borrower's failure to stay current on her payment obligations, Nevada Association Services (“NAS”), on behalf of HOA, initiated foreclosure proceedings by recording a notice of delinquent assessment lien and a subsequent notice of default and election to sell. (See Notice of Delinquent Assessment Lien, Ex. B to BANA's MSJ, ECF No. 77-2); (Notice of Default, Ex. C to BANA's MSJ, ECF No. 77-3).

         On April 7, 2014, the law firm Miles, Bauer, Bergstrom & Winters LLP (“Miles Bauer”), on behalf of BANA, sent a letter to NAS requesting a ledger identifying the amount of HOA's superpriority lien. (See Request for Accounting at 6-9, Ex. 1 to Miles Aff., ECF No. 77-4). NAS responded with a ledger detailing the amount of HOA's lien. (See Statement of Account, Ex. 2 to Miles Aff., ECF No. 77-4). Based upon the monthly assessments identified in the ledger, BANA calculated what it determined to be HOA's superpriority lien, and delivered a check to NAS for $421.74. (See Tender Letter, Ex. 3 to Miles Aff., ECF No. 77-4).

         Notwithstanding the alleged tender, NAS proceeded with the foreclosure by recording a notice of foreclosure sale and subsequently foreclosing on the Property. (See Notice of Sale, Ex. E to BANA's MSJ, ECF No. 77-5). On May 9, 2014, SFR recorded a foreclosure deed, stating that it purchased the Property for $26, 000. (Foreclosure Deed, Ex. F to BANA's MSJ, ECF No. 77-6).

         BANA filed the instant Complaint on March 17, 2016, asserting the following causes of action arising from the foreclosure and subsequent sale of the Property: (1) quiet title; (2) breach of NRS 116.1113; (3) wrongful foreclosure; and (4) injunctive relief. (See Compl. ¶¶ 29-71). On May 14, 2016, SFR filed crossclaims and counterclaims against BANA and Borrower, respectively, for quiet title and injunctive relief. (See Answer 12:17-13:25, ECF No. 18).


         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; it is 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.


         BANA moves for summary judgment on its quiet title and declaratory relief claims, asserting that Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), cert. denied, 137 S.Ct. 2296, 198 L.Ed.2d 726 (2017), compels the Court to hold that the HOA foreclosure sale did not extinguish BANA' DOT. (BANA's MSJ 8:27-9:12, ECF No. 77). BANA alternatively argues that summary judgment is warranted because BANA properly tendered the superpriority HOA lien prior to the foreclosure sale, thus eliminating the lien's superpriority status. (Id. 5:3-8:18).

         SFR and HOA oppose BANA's Motion on the following grounds: Bourne Valley is not controlling authority; BANA lacks standing to assert its quiet title claim; BANA did not validly tender the superpriority amount prior to foreclosure; and BANA is otherwise not entitled to an equitable remedy. (SFR's Resp. 4:14-18:2, ECF No. 82); (HOA's Resp. 5:13-9:13, ECF No. 80).

         SFR seeks summary judgment in its favor on the basis that its purchase of the Property extinguished all junior liens, and alternatively, its status as a bona fide purchaser for value safeguards its title to the Property. (SFR's MSJ. 17:9-26:14, ECF No. 79). Similarly, HOA requests summary judgment, arguing the foreclosure sale was not “wrongful” under Nevada law or principles of equity, and that BANA received constitutionally sufficient notice of the foreclosure, resulting in the sale's extinguishment of BANA's DOT. (HOA's MSJ 5:13-12:27, ECF No. 78).

         The Court's discussion below first addresses the constitutionality of NRS Chapter 116, followed by BANA's standing to bring this quiet title action.

         A. Constitutionality ...

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