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Nationstar Mortgage LLC v. Rainbow Bend Homeowners Association

United States District Court, D. Nevada

May 8, 2019

NATIONSTAR MORTGAGE LLC.; FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiffs,
v.
RAINBOW BEND HOMEOWNERS ASSOCIATION; PHIL FRINK & ASSOCIATES, INC.; and ROSEMARIE AUSTIN, an individual, Defendants.

          ORDER

          MIRANDA M. DU, UNITED STATES DISTRICT JUDGE

         I. SUMMARY

         This dispute arises from the foreclosure sale of property to satisfy a homeowners’ association lien. Before the Court are the following motions: (1) Plaintiffs Federal National Mortgage Association (“Fannie Mae”) and Nationstar Mortgage, LLC’s (“Nationstar”) motion for summary judgment (ECF No. 59); (2) Defendant Rosemarie Austin’s countermotion to dismiss, filed pro se and which the Court construes as a motion for summary judgment[1] (ECF No. 63); and (3) Defendant’s motion to grant her countermotion (ECF No. 70). The Court has reviewed the parties’ responses (ECF Nos. 62, 69, 71) and replies (ECF Nos. 68, 74). The Court grants summary judgment in favor of Plaintiffs on their claim for quiet title against Austin because 12 U.S.C. § 4617(j)(3) (“Federal Foreclosure Bar”) preserved Fannie Mae’s deed of trust. The Court denies Austin’s motions and dismisses Plaintiffs’ remaining claims as moot.

         II. BACKGROUND

         The following facts are undisputed unless otherwise indicated.

         A joint tenancy deed of trust (“DOT”) listing Candace J. Johnson and Judie A. Moore as the borrowers (“Borrowers”) and Land/Home Financial Services, Inc. (“Land/Home”) as the lender was executed on November 9, 1993. (ECF No. 59-2 at 2-10.) The DOT granted Land/Home a security interest in real property known as 239 Rue De La Chartreuse, Sparks, NV 89434 (“Property”) to secure the repayment of a loan (“Loan”) in the original amount of $75,000 to the Borrowers. (Id.) The Property was located within Rainbow Bend Homeowners Association (“Rainbow Bend” or “HOA”). (Id. at 8.)

         The Borrowers failed to pay HOA assessments, and the HOA recorded a notice of delinquent assessment lien, an amended notice of delinquent assessment lien, a notice of default and election to sell, and a notice of foreclosure sale against the Property between May 2010 and June 2012. (ECF Nos. 59-8, 59-9, 59-10, 59-11.) The HOA sold the Property to itself in a foreclosure sale (“HOA Sale”) on November 30, 2012, for $850. (ECF No. 59-12.) The HOA then transferred the Property to Austin via quitclaim deed recorded on December 16, 2014. (ECF No. 59-13.)

         Fannie Mae purchased the Loan in December 1993 and acquired the DOT. (ECF No. 59-4 at 3.) Fannie Mae maintained that ownership at the time of the HOA Sale. (Id.)

         The beneficial interest in the DOT was assigned several times and wound up in the hands of Bank of America, N.A. (“BANA”) at the time of the HOA Sale. First, Land/Home assigned the beneficial interest to Western Sunrise Mortgage Co., LP (“Sunrise”) on November 22, 1993. (ECF No. 59-3 at 2.) Sunrise then apparently assigned its interest to Express American Mortgage Corporation (“Express”), though the assignment is missing. (ECF No. 63 at 40 (affidavit of missing assignment of mortgage).) Nevertheless, Plaintiffs have produced an assignment of the interest from Express to NationsBanc Mortgage Corporation on January 5, 1996. (ECF No. 59-5 at 2.) Plaintiffs allege-and Austin does not dispute-that NationsBanc eventually became part of BANA. (ECF No. 59 at 5; ECF No. 63 at 3-4.) The beneficial interest in the DOT was not assigned again until May 31, 2017, to Nationstar. (ECF No. 59-7.) Thus, BANA was the servicer of the Loan for Fannie Mae at the time of the HOA Sale, a fact that the parties dispute as discussed infra.

         The following claims are asserted in the Complaint: (1) both Plaintiffs assert declaratory relief under the Federal Foreclosure Bar against Austin; (2) both Plaintiffs assert quiet title under the Federal Foreclosure Bar against Austin; (3) Nationstar asserts declaratory relief under the Fifth and Fourteenth Amendments against all Defendants; (4) Nationstar asserts quiet title under the Fifth and Fourteenth Amendments against Austin; (5) Nationstar asserts declaratory judgment against all Defendants; (6) Nationstar asserts breach of NRS § 116.1113 against Rainbow Bend and its agent, Phil Frink & Associates, Inc. (“Frink”); (7) Nationstar asserts wrongful foreclosure against Rainbow Bend and Frink; and (8) Nationstar asserts injunctive relief against Austin. (ECF No. 1 at 11-21.) Plaintiffs primarily seek a declaration that the Federal Foreclosure Bar prevented the HOA Sale from extinguishing the DOT. (See Id. at 21.)

         III. LEGAL STANDARD

         “The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court.” Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric, 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See Id. at 250-51. “The amount of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties’ differing versions of the truth at trial.’” Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56’s requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists,” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient.” Anderson, 477 U.S. at 252.

         Further, “when parties submit cross-motions for summary judgment, ‘[e]ach motion must be considered on its own merits.’” Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two,249 F.3d 1132, 1136 (9th Cir. 2001) (citations omitted) (quoting William W. Schwarzer, et al., The Analysis and Decision of Summary Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992)). “In fulfilling its duty to review ...


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