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Capital One, N.A. v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

March 31, 2019

CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association, Plaintiff,
v.
SFR INVESTMENTS POOL 1, LLC, a Nevada limited liability company; and ANTHEM COUNTRY CLUB COMMUNITY, ASSOCIATION, a Nevada nonprofit corporation, Defendants. SFR INVESTMENTS POOL 1, LLC, a Nevada limited liability company, Counter-Claimant/Cross-Claimant,
v.
CAPITAL ONE, NATIONAL ASSOCIATION, a national banking Association; LEON BENZER, an individual; UNITED STATES OF AMERICA, Cross-Defendants, Counter-Defendants. UNITED STATES OF AMERICA, Plaintiff,
v.
LEON BENZER; SFR INVESTMENTS POOL 1, LLC; CAPITAL ONE, N.A., ANTHEM COUNTRY CLUB COMMUNITY ASSOCIATION; STAR INSURANCE COMPANY; AMERICAN EXPRESS BANK FSB; and REPUBLIC SILVER STATE DISPOSAL INC., Defendants. CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association, Counter-Claimant/Cross-Claimant,
v.
UNITED STATES OF AMERICA; LEON BENZER, an individual; SFR INVESTMENTS POOL 1, LLC, a Nevada limited liability company; and ANTHEM COUNTRY CLUB ASSOCIATION, a Nevada corporation, Cross-Defendants, Counter-Defendants.

          ORDER

          RICHARD F. BOULWARE, II UNITED STATES DISTRCIT JUDGE

         I. INTRODUCTION

         Before the Court is Anthem Country Club Community Association's (“Anthem's”) Renewed Motion to Dismiss, ECF No. 92, and SFR Investments Pool 1, LLC's (“SFR's”) Motion to Dismiss, ECF No. 98. For the reasons stated below, the Court grants in part and denies in part Anthem's Renewed Motion to Dismiss and denies SFR's Motion to Dismiss.

         II. FACTUAL BACKGROUND

         The Court summarizes the facts alleged in Capital One's Complaint. ECF No. 1.

         On or about March 27, 2002, Leon and Harold Benzer acquired title as joint tenant to real property located at 29 Highland Creek Drive, Henderson, Nevada 89052, Parcel Number 190-07-711-001 (the “Property”).

         In April 2005, Courthouse Café, LLC obtained a commercial loan from Bank of Las Vegas for $990, 000 (the “2005 Loan”). The principal amount of the 2005 Loan was later increased to $1, 200, 000. To secure Courthouse Café, LLC's obligations under the 2005 Loan, Leon and Harold Benzer executed a deed of trust encumbering the Property and naming Bank of Las Vegas as beneficiary (the “First Deed of Trust”). Pursuant to the terms of the First Deed of Trust, Leon and Harold Benzer also assigned all rents from the Property to Bank of Las Vegas to secure Courthouse Café, LLC's obligations under the 2005 Loan. On or about August 17, 2012, Bank of Las Vegas assigned all its interest in the 2005 Loan, including the First Deed of Trust, to Plaintiff Capital One. Courthouse Café, LLC defaulted in its obligations under the 2005 Loan by, among other things, failing to make monthly payments of principal and interest, In September 2007, Leon Benzer obtained a loan from Chevy Chase Bank, F.S.B. in the principal amount of $1, 610, 000 (the “2007 Loan”). The 2007 Loan is secured by a second-position deed of trust (the “Second Deed of Trust”) which encumbers the Property and names Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee-beneficiary. MERS assigned the Second Deed of Trust to Plaintiff Capital One on or about March 9, 2015. Leon Benzer defaulted in his obligations under the 2007 Loan by, among other things, failing to make monthly payments of principal and interest.

         On October 12, 2010, Anthem caused a Notice of Delinquent Assessment Lien (the “HOA Lien”) to be recorded against the Property due to Leon and Harold Benzer's alleged failure to pay assessments to Anthem. Nevada Association Services, Inc. (“NAS”), Anthem's collections and foreclosure agent with respect to the HOA Lien, recorded a Notice of Default and Election to Sell under Homeowners Association Lien against the Property on October 19, 2011.

         On December 27, 2011, Capital One contacted NAS to request the amount of the HOA Lien so that Capital One could satisfy the lien. On September 10, 2012 and twice on September 12, 2012, Capital One again contacted NAS to request the amount of the HOA Lien. On all occasions, NAS refused to provide the information.

         NAS recorded a Notice of Foreclosure Sale against the Property on August 20, 2012 which scheduled a foreclosure sale for September 14, 2012.

         The amount of assessments for common expenses which would have accrued against the Property in the absence of acceleration during the 9-month period ending October 19, 2011 was less than $13, 385.65. Since NAS would not provide the amount of the HOA Lien, Capital One tendered a check to NAS for $13, 385.65 on September 12, 2012. The check for $13, 385.65 represented the full amount of the HOA Lien as shown in the Notice of Foreclosure Sale recorded August 20, 2012.

         After Capital One tendered its payment, NAS cashed the check and postponed the foreclosure sale originally scheduled for September 14, 2012. However, NAS later resumed its foreclosure proceedings against the Property without notifying Capital One. On or about March 1, 2013, NAS purportedly foreclosed against the Property.

         The highest bidder at the purported sale (the “HOA Sale”) was SFR, with a bid of $20, 000. Upon information and belief, the Property's fair market value exceeded $1 million at the time of the HOA Sale.

         III. ...


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