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Deutsche Bank National Trust Co. v. Wingfield Springs Community Association

United States District Court, D. Nevada

June 4, 2019

DEUTSCHE BANK NATIONAL TRUST COMPANY, solely as Trustee for HARBORVIEW MORTGAGE LOAN TRUST MORTGAGE LOAN PASS-THROUGH CERTIFICATES, SERIES 2005-11, Plaintiff,
v.
WINGFIELD SPRINGS COMMUNITY ASSOCIATION, et al., Defendants.

          ORDER

          MIRANDA M. DU, UNITED STATES DISTRICT JUDGE

         I. SUMMARY

         This dispute arises from the foreclosure sale (“HOA Sale”) of real property located at 2690 Lawry Drive, Sparks, Nevada 89436, APN No. 520-114-01 (“Property”) to satisfy a homeowners' association lien. (See, e.g., ECF No. 1 at 2, 4.) Before the Court is Plaintiff Deutsche Bank National Trust Company, solely as Trustee for Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2005-11's motion for summary judgment primarily seeking a declaration that Plaintiff's interest in the Property was not extinguished by the HOA Sale (“Motion”).[1] (ECF No. 34.) Because Bourne Valley no longer binds this Court, and because a material factual dispute remains as to whether Defendant Wingfield Springs Community Association's (“HOA”) agent sent the statutorily-required notices-and as further explained below-the Court will deny Plaintiff's Motion.

         II. BACKGROUND

         The following facts are undisputed unless otherwise indicated.[2] Kendall Fielding and Cindi Yakimow (collectively, “Borrowers”) financed the purchase of the Property in 2005 with a $244, 000.00 loan (“Loan”) from Community Lending Incorporated. (ECF No. 21-2 at 3-4.) The Loan was secured by a deed of trust (“DOT”) against the Property. (Id.) The DOT named Mortgage Electronic Systems, Inc. (“MERS”) as the beneficiary and provided MERS' address. (Id. at 3.) MERS assigned the DOT to Plaintiff on December 12, 2012. (ECF No. 21-3.)

         The HOA, through its agent ATC Assessment Collection Group (“ATC”), recorded a notice of delinquent lien assessment against the Property on May 24, 2012. (ECF No. 21-4.) This notice stated that Borrowers owed $1, 335.90. (Id.) ATC then recorded a notice of default and election to sell the Property on July 3, 2012, which stated Borrowers owed $2, 276.45. (ECF No. 21-5.) (Id.) ATC recorded a notice of the HOA Sale against the Property on May 2, 2013 (ECF No. 21-6), and sold the Property to the HOA for $4, 424.71 at the HOA Sale on May 28, 2013 (ECF No. 21-7).

         The HOA later sold the Property to Defendant Westland Construction Corporation in January 2014, for $4, 500. (ECF No. 21-8.) Finally, Westland Construction Corporation sold the Property to Defendant Thunder Properties Corporation (“Thunder”) in February 2014, also for $4, 500. (ECF No. 21-9.)

         Plaintiff filed suit on November 3, 2016, bringing claims for: (1) quiet title/declaratory relief against all Defendants; (2) a preliminary injunction against Thunder and fictitious Defendants; (3) statutorily defective foreclosure against the HOA and fictitious Defendants; (4) negligence against the HOA and fictitious Defendants; (5) negligence per se against the HOA and fictitious Defendants; (6) and unjust enrichment against all Defendants. (ECF No. 1 at 8-15.) Plaintiff primarily seeks a declaration and determination that its DOT continues to encumber the Property, though it also seeks other, alternative relief. (Id. at 15-16.)

         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. See 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, the Court views all facts and draws all inferences in the light most favorable to the nonmoving party. See Kaiser Cement Corp. v. Fischbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         IV. DISCUSSION

         Plaintiff moves for summary judgment on the grounds that: (1) the HOA Sale is void because the HOA failed to comply with the statutory notice requirements of NRS Chapter 116; (2) the statute governing the HOA Sale-NRS § 116.3116 et seq.-is unconstitutional under Bourne Valley; and (3) Plaintiff is entitled to equitable relief-having the HOA Sale set aside or reformed under Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon (“Shadow Canyon”), 405 P.3d 641 (Nev. 2017)-for unfairness. (ECF No. 34.) The HOA and Thunder oppose each of these arguments, and specifically argue there is a material factual dispute as to whether the HOA complied with the statutory notice requirements, i.e. whether ATC mailed them. (See ECF Nos. 37 at 4-5, 42 at 14-17.) The Court finds that the dispositive issue is whether ATC mailed statutorily required notices, and thus primarily considers that issue here.[3] Further, the Court agrees with the HOA and Thunder that a material factual dispute remains as to whether those notices were mailed- precluding summary judgment.

         For the HOA Sale to extinguish the DOT, ATC had to mail the notice of default and election to sell, and notice of the HOA Sale, to Plaintiff. By NRS § 116.31168's incorporation of NRS § 107.090's notice requirement, the HOA was required to send notices to “all holders of subordinate interests, even when such persons or entities did not request notice.” SFR Invs. Pool 1, LLC v. Bank of New York Mellon, 422 P.3d 1248, 1253 (Nev. 2018); see also NRS § 107.090(3)(b), (4) (requiring notice of default and notice of sale be mailed to “[e]ach other person with an interest whose interest or claimed interest is subordinate to the deed of trust”). Such persons with an interest undoubtedly include Plaintiff, the holder of a first security interest-the DOT. See, e.g., SFR, 422 P.3d at 1252 (“the language of NRS 107.090 then requires that the homeowners' association provide notice to the holder of the first security interest as a subordinate interest.”). And “[c]ompliance with NRS Chapter 116's provisions with respect to default, notice, and publication of the notice of sale is a ‘statutory prerequisite [] to ...


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