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U.S. Bank National Association v. Thunder Properties, Inc.

United States District Court, D. Nevada

May 13, 2019

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, SUCCESSOR-IN-INTEREST TO WACHOVIA BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR GSAA HOME EQUITY TRUST 2005-11, ASSETBACKED CERTIFICATES, SERIES 2005-11, Plaintiff,
v.
THUNDER PROPERTIES, INC.; WOODLAND VILLAGE HOMEOWNERS ASSOCIATION; and HAMPTON & HAMPTON COLLECTIONS, LLC, Defendants.

          ORDER

          MIRANDA M. DU UNITED STATES DISTRICT JUDGE

         I. SUMMARY

         The Court granted summary judgment in favor of Plaintiff U.S. Bank based on a finding of tender in this dispute about a homeowners' association lien foreclosure sale. (ECF No. 38 (“Order”).) Defendant Thunder Properties, Inc. (“Thunder”) seeks reconsideration (ECF No. 40 (“Motion”)) of the Order.[1] For the following reasons, the Court grants Thunder's Motion. The Court also will allow the parties to submit renewed motions for summary judgment in light of the new arguments raised in the briefing and hearing related to the Motion.

         II. BACKGROUND

         Before foreclosing on a superpriority lien, a homeowners association (“HOA”) must, among other things, (1) mail a notice of delinquent assessment to the unit owner; (2) record a notice of default and election to sell; and (3) record a notice of sale. NRS §§ 116.31162, 116.311635.

         Here, the HOA recorded[2] a notice of delinquent assessment on May 17, 2010, and a notice of default and election to sell on June 22, 2010. (ECF Nos. 1-7, 30-3.) Before a notice of sale was recorded and before a foreclosure sale could occur, U.S. Bank's predecessor in interest-Bank of America, N.A. (“BANA”)-tendered the superpriority amount. (ECF No. 29-3 at 3-5.) On this basis, the Court found that BANA's tender discharged the superpriority lien and that the deed of trust (“DOT”) continued to encumber the property at issue. (ECF No. 38 at 4.)

         In connection with summary judgment proceedings, Thunder argued that the HOA initiated a second foreclosure proceeding about three years later. (ECF No. 30 at 8-9 (“MSJ Opposition”).) But Thunder produced no evidence of a second notice of delinquent assessment that would have initiated a new foreclosure proceeding. (See id.) Instead, Thunder argued that the second notice of default and election to sell initiated a new foreclosure proceeding. (Id.) The Court found that the notice of delinquent assessment- not the notice of default and election to sell-initiates a foreclosure proceeding. (ECF No. 38 at 4.) Given that there was no evidence of a second notice of delinquent assessment, the Court found that U.S. Bank had carried its burden of showing the absence of a genuine issue of material fact with respect to tender and that Thunder had failed to raise a genuine issue of material fact in response. (See id.) Accordingly, the Court granted summary judgment in favor of U.S. Bank. (Id. at 4-5.)

         After the Court issued the Order, Thunder located the second notice of delinquent assessment and moved for reconsideration.

         III. DISCUSSION

         Thunder moves for reconsideration under Rule 59(e) and Rule 60(b)(1), (2), and (3). (See ECF No. 40 at 5-8.) The Court finds that relief is warranted under Rule 59(e) and Rule 60(b)(1).

         A. Rule 59(e)

         “Under Federal Rule of Civil Procedure 59(e), a party may move to have the court amend its judgment within twenty-eight days after entry of the judgment.” Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011). The court enjoys “considerable discretion in granting or denying the motion” because “specific grounds for a motion to amend or alter are not listed in the rule.” Id. (quoting McDowell v. Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999)). “In general, there are four basic grounds upon which a Rule 59(e) motion may be granted: (1) if such motion is necessary to correct manifest errors of law or fact upon which the judgment rests; (2) if such motion is necessary to present newly discovered or previously unavailable evidence; (3) if such motion is necessary to prevent manifest injustice; or (4) if the amendment is justified by an intervening change in controlling law.” Id. (citing McDowell, 197 F.3d at 1255 n.1); see also Hiken v. Dep't of Def., 836 F.3d 1037, 1042 (9th Cir. 2016). Nevertheless, “amending a judgment after its entry remains ‘an extraordinary remedy which should be used sparingly.'” Herron, 634 F.3d at 1101 (quoting McDowell, 197 F.3d at 1255 n.1); see also Wood v. Ryan, 759 F.3d 1117, 1121 (9th Cir. 2014).

         Thunder argues that the Order is based on a manifest error of fact and that failure to consider the second notice of delinquent assessment will result in manifest injustice. (ECF No. 40 at 5-6.) U.S. Bank responds that Thunder's failure to identify and locate the second notice of delinquent assessment does not constitute extraordinary circumstances and that the Order does not rest on manifest errors of fact. (ECF No. 41 at 4.) The Court agrees with Thunder.

         The judgment issued as a result of the Order rests upon a manifest error of fact- that no second notice of delinquent assessment existed. (See ECF No. 38 at 4.) It is now clear that a second notice of delinquent assessment did in fact exist. (ECF No. 40-1 at 3-4.) This fact could alter the outcome of the case because there is no evidence in the record that BANA tendered the superpriority amount in connection with the lien created by the second notice of ...


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