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Bank of America v. Manor

United States District Court, D. Nevada

April 17, 2019

BANK OF AMERICA, N.A., Plaintiff,
v.
AZURE MANOR/RANCHO DE PAZ HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

          Gloria M Navarro, Chief Judge United States District Judge

         Pending before the Court is the Motion to Reconsider, (ECF No. 93), filed by Plaintiff Bank of America, N.A. (“BANA”). Defendants Azure Manor/Rancho de Paz Homeowners Association (“HOA”) and SFR Investments Pool 1, LLC (“SFR”) (collectively “Defendants”) filed Responses, (ECF Nos. 97, 98), to which BANA filed Replies, (ECF Nos. 100-01).

         For the reasons discussed below, BANA's Motion to Reconsider is DENIED.

         I. BACKGROUND

         This quiet title action arises from the non-judicial foreclosure on real property located at 2820 Tilten Kilt Avenue, North Las Vegas, Nevada 89081 (the “Property”). (See Deed of Trust, ECF No. 63-1). In 2006, Charles G. Campbell (“Borrower”) financed his purchase of the Property by way of a $323, 000.00 loan secured by a deed of trust. (Id.). BANA, as lender and beneficiary, recorded the deed of trust on May 8, 2007. (Id.). Upon Borrower's failure to pay all amounts due to HOA, Alessi & Koenig (“A&K”), on behalf of HOA, initiated foreclosure proceedings. (See Notice of Lien, ECF No. 63-2); (see also Notice of Default, ECF No. 63-3).

         Relevant to the instant Motion, [1] A&K recorded a notice of foreclosure sale on August 2, 2012, setting a sale date for September 5, 2012. (See Notice of Sale, ECF No. 63-5). BANA mailed a letter to A&K on August 31, and sent a fax on September 4, requesting the amount of HOA's superpriority lien. (See Accounting Request, ECF No. 63-8); (see also Second Accounting Request, Ex. A to Mot. to Recons. at 4, ECF No. 93-1).

         On September 5, 2012, A&K conducted the foreclosure sale, at which the Property reverted to HOA for a credit bid of $7, 695.22. (See Trustee's Deed Upon Sale, ECF No. 63-6). Following the sale, on September 12, 2012, A&K responded to BANA with a ledger providing the outstanding fees, interest, and costs. (A&K Ledger, ECF No. 75-5). A&K also sent BANA an email the same day, stating “the nine-month super-priority is not triggered until the beneficiary under the first deed of trust forecloses.” (A&K Email Correspondence, Ex. A to Mot. to Recons. at 5, ECF No. 93-1). On March 11, 2013, A&K sold the Property to SFR through a quitclaim deed. (See Quitclaim Deed, ECF No. 63-7).

         On February 14, 2019, the Court issued its decision on the parties' summary-judgment motions. (See Order, ECF No. 90). The Court held that BANA was not entitled to summary judgment on its quiet title claim because, among other things, BANA failed to tender the HOA superpriority amount ahead of the foreclosure sale. (Id. 8:17-16:12). The Court rejected BANA's argument that A&K's “alleged refusal to cooperate-by not responding to BANA's accounting request-constitutes an affirmative effort to prevent BANA's tender, ” such that BANA's attempt to tender was enough to save its deed of trust from extinguishment. (Id. 10:3- 11). Finding BANA's remaining quiet-title arguments unavailing, the Court granted Defendants' motions for summary judgment. (Id. 8:17-16:12, 17:2-9).

         Shortly thereafter, the Nevada Supreme Court handed down its decision in Bank of Am., N.A. v. Thomas Jessup, LLC Series VII, 435 P.3d 1217 (Nev. 2019), and BANA filed the instant Motion to Reconsider, (ECF No. 93).

         II. LEGAL STANDARD

         The court has inherent power to entertain motions for reconsideration of interlocutory orders. See Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996) (“[I]nterlocutory orders . . . are subject to modification by the district judge at any time prior to final judgment.”); see also Fed. R. Civ. P. 54(b). The standard governing reconsideration of an interlocutory order is the same as the standards governing motions to alter or amend final judgments under Federal Rule of Civil Procedure 59(e) or 60(b). Motions for reconsideration are disfavored, and “should not be granted, absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law.” McDowell v. Calderon, 197 F.3d 1253, 1254 (9th Cir. 1999) (per curiam) (internal quotation and citation omitted).

         III. DISCUSSION

         BANA moves for reconsideration on the basis that Jessup constitutes an intervening change in controlling law which entitles BANA to judgment in its favor on its quiet title claim. (Mot. to Recons. 2:8-17, ECF No. 93).

         As a general rule, a first deed of trust holder may pay off the superpriority portion of an HOA lien to prevent the foreclosure sale from extinguishing the deed of trust. See NRS 116.31166(1); see also SFR Invs. Pool 1 v. U.S. Bank, 334 P.3d 408, 414 (Nev. 2014). “Valid tender requires payment in full, ” and must be either unconditional or limited to “conditions on which the tendering ...


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