United States District Court, D. Nevada
NATIONSTAR MORTGAGE LLC and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiffs,
TYROLIAN VILLAGE ASSOCIATION, INC. and AIRMOTIVE INVESTMENTS LLC, Defendants. AIRMOTIVE INVESTMENTS LLC, Counterclaimant,
NATIONSTAR MORTGAGE LLC and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Counter-Defendants.
ORDER ON REMAND
R. HICKS, UNITED STATES DISTRICT JUDGE
November 2017 and June 2018, the court issued two orders in
this case (ECF Nos. 50, 60) which were subsequently appealed
to the Ninth Circuit. Following the Nevada Supreme
Court's decision in SFR Investments Pool 1, LLC v.
Bank of New York Mellon, 422 P.3d 1248 (Nev. 2018) (en
banc), the Ninth Circuit vacated the judgment and remanded
the case to this court for reconsideration in light of this
new relevant authority. ECF No. 65.
court now reconsiders the following motions: (1) motion to
dismiss by Tyrolian Village Association, Inc.
(“Tyrolian” or “HOA”) (ECF No. 23);
(2) motion for partial summary judgment by Nationstar
Mortgage LLC (“Nationstar”) and Federal National
Mortgage Association (“Fannie Mae”) (collectively
“plaintiffs”) (ECF No. 38); (3) motion for
partial summary judgment by Nationstar and Fannie Mae (ECF
No. 53); and (4) motion for partial summary judgment by
Airmotive Investments, LLC (“Airmotive” or
“counterclaimant”) (ECF No. 54).
2004, Gloria Brimm obtained a loan from CMG Mortgage, Inc. to
purchase a property located at 1364 Carinthia Court, Incline
Village, Nevada 89451. ECF No. 38-1. This transaction gave rise
to the first deed of trust on the property, which was
recorded in Washoe County, Nevada, on July 29, 2004.
Id. The deed of trust identified Gloria S. Brimm as
the borrower, CMG Mortgage, Inc. as the lender, Stewart Title
of Northern Nevada as trustee, and Mortgage Electronic
Registration Service (“MERS”) as mortgagee and
nominee for Lender and Lender's successors and assigns.
Id. In 2013, MERS-as nominee for CM Mortgage, Inc.,
its successors and/or assigns-assigned the interest to
Nationstar. ECF No. 38-2.
at-issue property sits in a community governed by Tyrolian, a
homeowners' association, and is therefore subject to HOA
assessments. See ECF No. 38-1; see Id. at
3; see ECF No. 45 at 4-6. After Brimm failed to pay
the assessments as they came due, Tyrolian recorded a notice
of delinquent assessment lien. ECF No. 38-3; ECF No. 45 at 6.
When the delinquent assessments remained unpaid, Tyrolian
recorded a notice of default and election to sell. ECF No.
38-4; ECF No. 45 at 6. Still, the delinquent assessments
remained unpaid, prompting Tyrolian to record a notice of
foreclosure sale. ECF No. 38-5; ECF No. 45 at 6. At the
nonjudicial foreclosure sale held in July 2014, TBR I, LLC (a
non-party) purchased the property. ECF No. 38-6; ECF No. 45
at 6-7. Airmotive then purchased the property from TBR I. ECF
No. 38-7; ECF No. 45 at 7.
Mae and Nationstar brought this action after the foreclosure
sale, alleging eight causes of action: (1) declaratory relief
under 12 U.S.C. § 4617(j)(3); (2) quiet title under 12
U.S.C. § 4617(j)(3); (3) declaratory relief under the
Fifth and Fourteenth Amendment of the U.S. Constitution; (4)
quiet title under the Fifth and Fourteenth Amendment of the
U.S. Constitution; (5) declaratory judgment under 28 U.S.C.
§ 2201, N.R.S. § 40.010, and N.R.S. § 30.040
et seq.; (6) breach of N.R.S. § 116.1113; (7)
wrongful foreclosure; and (8) injunctive relief. ECF No. 13.
Airmotive brought two counterclaims: (1) quiet title and
declaratory relief and (2) negligent or intentional
misrepresentation. ECF No. 30. Airmotive asserts its second
counterclaim solely against Nationstar. Id.
5, 2017, Tyrolian motioned this court to dismiss
Nationstar's third, fifth, sixth, and seventh causes of
action for failure to state a claim upon which relief could
be granted. ECF No. 23. Nationstar filed a response (ECF No.
34), to which Tyrolian replied (ECF No. 37).
August 2017, Fannie Mae and Nationstar moved for partial
summary judgment, requesting the court apply Bourne
Valley Court Trust v. Wells Fargo Bank, NA, 832 F.3d
1154 (9th Cir. 2016), cert. denied, 137 S.Ct. 2296
(2017) to their quiet-title and declaratory-judgment claims.
ECF No. 38. Tyrolian and Airmotive responded (ECF Nos. 41,
45), and plaintiffs replied (ECF Nos. 44, 46).
November 2017, the court granted summary judgment on
plaintiffs' claim to quiet title under the Fourteenth
Amendment to the United States Constitution, relying on the
Ninth Circuit's holding in Bourne Valley. ECF
No. 50. In Bourne Valley, the Ninth Circuit ruled
that the notice scheme in NRS Chapter 116 facially violated
due process principles under the Fourteenth Amendment. 832
F.3d at 1156. Because the at-issue foreclosure sale occurred
under the same version of NRS Chapter 116, the court was
bound by the Bourne Valley decision. See
ECF No. 50. Thus, the court granted summary judgment on
plaintiffs' claim to quiet title under the Fourteenth
Amendment, finding that the foreclosure sale could not have
extinguished the first deed of trust. Id. The court
also dismissed as moot the parties' remaining claims to
quiet title on the property and for declaratory relief.
result of that order, a single claim remained in the matter:
Airmotive's claim for negligent or intentional
misrepresentation against Nationstar. See Id. In the
complaint, plaintiffs alleged that Fannie Mae acquired
ownership of the underlying mortgage in 2004. ECF No. 13.
Based on this allegation, Airmotive claimed that Nationstar
misrepresented its interest in the property by recording
documents that identified Nationstar as the holder,
beneficiary, and servicer of the mortgage secured by the
first deed of trust. Id. Airmotive asserted that
Nationstar misrepresented its interest by including the title
of “holder” in the recorded documents and by
omitting any indication of Fannie Mae's ownership of the
mortgage. Id. Airmotive also alleged that it relied
on Nationstar's statements when purchasing the property.
2018, the court granted plaintiffs' motion for partial
summary judgment (ECF No. 53) and denied defendant's
motion for summary judgment (ECF No. 54). Again, the court
relied on Bourne Valley, which at the time was still
binding law in this District. ECF No. 60.
the court's two decision were on appeal to the Ninth
Circuit, the Nevada Supreme Court decided SFR Invs. Pool
1, LLC v. Bank of N.Y. Mellon, 422 P.3d 1248, 1253 (Nev.
2018), which effectively overruled Bourne Valley on
an issue of state law. The Ninth Circuit therefore vacated
the court's prior judgments, and the case was remanded to
this court for reconsideration in light of this new
authority. ECF No. 65. The court now reconsiders the parties
Motion to Dismiss Pursuant to Federal Civil Procedure Rule
may seek the dismissal of a complaint under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a legally
cognizable cause of action. See Fed. R. Civ. P.
12(b)(6) (stating that a party may file a motion to dismiss
for “failure to state a claim upon which relief can be
granted[.]”). To survive a motion to dismiss for
failure to state a claim, a complaint must satisfy the notice
pleading standard of Federal Rule 8(a)(2). See Mendiondo
v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th
Cir. 2008). Under Rule 8(a)(2), a complaint must contain
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed.R.Civ.P.
8(a)(2). Rule 8(a)(2) does not require detailed factual
allegations; however, a pleading that offers only
“‘labels and conclusions' or ‘a
formulaic recitation of the elements of a cause of
action'” is insufficient and fails to meet this
broad pleading standard. Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007)).
sufficiently allege a claim under Rule 8(a)(2), viewed within
the context of a Rule 12(b)(6) motion to dismiss, a complaint
must “contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Id. (quoting Twombly,
550 U.S. at 570). A claim has facial plausibility when the
pleaded factual content allows the court to draw the
reasonable inference, based on the court's judicial
experience and common sense, that the defendant is liable for
the alleged misconduct. See Id. at 678-679 (stating
that “[t]he plausibility standard is not akin to a
probability requirement, but it asks for more than a sheer
possibility that a defendant has acted unlawfully. Where a
complaint pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief.”
(internal quotation marks and citations omitted)). Further,
in reviewing a motion to dismiss, the court accepts the
factual allegations in the complaint as true. Id.
However, bare assertions in a complaint amounting “to
nothing more than a formulaic recitation of the elements of a
. . . claim . . . are not entitled to an assumption of
truth.” Moss v. U.S. Secret Serv., 572 F.3d
962, 969 (9th Cir. 2009) (quoting Iqbal, 556 U.S. at
698) (internal quotation marks omitted). The court discounts
these allegations because “they do nothing more than