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Bank of New York Mellon Trust Co. N.A. v. Legends Maintenance Corp.

United States District Court, D. Nevada

May 17, 2019

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., FKA THE BANK OF NEW YORK TRUST COMPANY, N.A., AS SUCCESSOR-IN-INTEREST TO JPMORGAN CHASE BANK, N.A., AS TRUSTEE FOR THE HOLDERS OF MLMI SURF TRUST, MORTGAGE LOAN ASSETBACKED CERTIFICATES, SERIES 2005- BC4, Plaintiff,
v.
LEGENDS MAINTENANCE CORPORATION; BFP INVESTMENTS 6 LLC, Defendants. AND RELATED CLAIMS

          ORDER

          MIRANDA M. DU UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         This dispute arises from the foreclosure sale (“HOA Sale”) of real property located at 3915 Legend Hills Street, Unit 102, Las Vegas, NV 89129 (“Property”) to satisfy a homeowners' association lien. (ECF No. 1 at 2.) Three motions are currently pending before the Court. Plaintiff/Counterdefendant The Bank of New York Mellon Trust Company, N.A., FKA The Bank of New York Trust Company, N.A., as Successor-in-Interest to JPMorgan Chase Bank, N.A., as Trustee for the Holders of MLMI SURF Trust, Mortgage Loan Asset-Backed Certificates, Series 2005-BC4 (“BoNYM”) and Cross-Defendant Nationstar Mortgage LLC (“Nationstar”) move for summary judgment on BoNYM's remaining claims against Defendant Legends Maintenance Corporation (“Legends” or “HOA”) and Defendant/Cross-claimant BFP Investments 6 LLC (“BFP”) and on BFP's claims against them. (ECF No. 68; ECF No. 1.) Legends moves for summary judgment in its favor on BoNYM's remaining claim against it-for quiet title/declaratory relief. (ECF No. 67; see also ECF No. 40.) BFP also separately moves from summary judgment on BoNYM's claims for quiet title/declaratory relief and injunction and BFP's counterclaims and cross claims for the same relief against BoNYM and Cross-Defendants Nationstar and Katie E. Wilson (“Wilson”).[1] (ECF No. 66; ECF No. 30 at 9-16.) For the following reasons, the Court grants BFP's and Legends' motions for summary judgment (“MSJ”) and denies BoNYM and Nationstar's joint motion.

         II. BACKGROUND

         The following facts are undisputed unless otherwise indicated.[2]

         Wilson (“Borrower”) financed the purchase of the Property within the HOA with a $181, 550.00 loan (“Loan”) in July 2005. (ECF No. 68-1.) The Loan was secured by a first deed of trust (“DOT”). (See id.) The DOT was recorded as assigned to BoNYM via an assignment of deed of trust recorded on May 31, 2012. (ECF No. 68-2.)

         The Borrower failed to pay HOA assessments, and the HOA recorded the following notices through its agent Nevada Association Services, Inc. (“NAS”): (1) notice of delinquent assessment lien on June 26, 2013, reflecting a total amount due for the HOA's lien of $5, 399.99; and (2) notice of default and election to sell on August 30, 2013, noting a total due of $6, 851.08. (ECF Nos. 68-3, 68-4). The latter notice was mailed via certified mail to Wilson, Nationstar and BoNYM. (ECF No. 67-1 at 18-30.) There is no dispute as to whether a tender was made to pay the superpriority amount of the HOA's lien-there was none.

         The HOA recorded a notice of HOA Sale on August 15, 2014, noting a total due of $9, 929.41. (ECF No. 68-5.) This notice was also mailed to Wilson, Nationstar and BoNYM, among others. (ECF No. 67-1 at 35-39.) BFP purchased the Property at the HOA Sale on September 5, 2014 for $27, 100.00. (ECF No. 68-6.)[3]

         In its Complaint, BoNYM asserted the following claims: (1) quiet title/declaratory judgment against all Defendants; (2) breach of NRS § 116.1113 against the HOA; (3) wrongful foreclosure against the HOA; and (4) injunctive relief against BFP. (ECF No. 1.) The Court dismissed the second and third claims against the HOA without prejudice upon finding those claims were subject to mediation under NRS § 38.310 (ECF No. 40.) Thus, the Court's MSJ inquiry focuses only on BoNYM's remaining claims and BFP's counterclaims and crossclaims seeking the same relief.

         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).

         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 plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252. Moreover, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fischbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         IV. DISCUSSION

         As an initial matter, the Court addresses BFP's arguments that BoNYM and Nationstar (collectively, “the Banks”) lack Article III and prudential standing to assert BoNYM's claims. (ECF No. 66 at 11-13; ECF No. 72 at 2, 6.) The Court will then address the merits of the parties' arguments. Upon considering these matters, the Court finds that while there is standing the Banks' legal and equitable arguments fail. The Court therefore grants summary judgment for BFP and Legends.

         A. Standing

         BFP argues that the Banks (1) lack Article III standing to challenge NRS § 116.3116 on due process grounds because they received actual notice of the HOA Sale and (2) lack prudential standing because they have not produced sufficient evidence that they are entitled to enforce the Note and DOT. ...


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