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Bank of America, N.A. v. Aspen Meadows-Fernley Flood Control Facility Maintenance Association

United States District Court, D. Nevada

June 10, 2019




         I. SUMMARY

         This case arises from the non-judicial foreclosure sale of property located at 1041 Brierwood Lane in Fernley, Nevada 89408 (the “Property”) to satisfy a homeowners' association lien. (ECF No. 1 at 3-9.) Four motions are before the Court: (1) Plaintiff Bank of America, N.A., Successor by Merger to BAC Home Loans Servicing, LP formerly known as Countrywide Home Loans Servicing, L.P.'s motion for partial summary judgment (the “Motion”) (ECF No. 63); (2) Defendant Aspen Meadows - Fernley Flood Control Facility Maintenance Association's (“Aspen Meadows”) motion to dismiss (ECF No. 64); (3) Aspen Meadows' motion for summary judgment (ECF No. 65); and (4) Plaintiff's motion for leave to file supplemental authorities (“Supplemental Authority Motion”) (ECF No. 68).[1] Because Aspen Meadows is a limited-purpose association to which NRS § 116.001, et seq. (“NRS Chapter 116”) does not apply, and as explained below, Aspen Meadows' foreclosure sale could not have-and did not-extinguish Plaintiff's deed of trust on the Property. Therefore, the Court will grant summary judgment in Plaintiff's favor, deny Aspen Meadows' cross-motions, decline to address most of the parties' other arguments, and deny Plaintiff's Supplemental Authority Motion as moot.


         The parties agree that Aspen Meadows is governed by the Declaration Creating Aspen Meadows Flood Control Facility Maintenance Association (“CC&Rs”). (ECF No. 63-1 (CC&Rs); see also ECF Nos. 63 at 3-4, 69 at 3.) In relevant part, the CC&Rs provide:

1.1 Not Governed by the Act. This Declaration and the Subdivision are not subject to the requirements of the Common-Interest Ownership Act, Chapter 116 of the Nevada Revised Statutes, by reason of NRS 116.1202(2) as the Association created hereby is created for the limited purpose of maintaining facilities for flood control and/or landscaping of such facilities.

(ECF No. 63-1 at 3.) However, people who buy a house within Aspen Meadows must pay assessments to live there. (Id. at 6-8.) If they do not pay these assessments, Aspen Meadows has the right to foreclose “in the same manner and using the same powers as granted to associations governed by NRS Chapter 116.” (Id. at 8.) Similarly, “[a]ll sums assessed to any Lot pursuant to this Article, together with interest, fees, charges, fines, and other expenses allowed by law shall be secured by a lien on the Lot in favor of the Association in the same manner and using the same powers as granted to associations governed by NRS Chapter 116.” (Id.)

         Aspen Meadows' CC&Rs state that Aspen Meadows' purpose includes “at a minimum the maintenance, replacement and perpetuation of the flood control drainage basin[.]” (Id. at 4.) Notably, the CC&Rs contain no use restrictions, or related enforcement mechanisms, that would, for example, dictate what an individual property owner can or cannot do with her property. (See generally id.)

         NRS Chapter 116 governs foreclosure proceedings when people stop paying their homeowners' association dues in Nevada. As noted above, the CC&Rs provide both that Aspen Meadows is not subject to NRS Chapter 116, but also that Aspen Meadows may use a procedure resembling the foreclosure procedures laid out in NRS Chapter 116 when a homeowner within Aspen Meadows stops paying their homeowners' association dues. (Id. at 3, 8.) Aspen Meadows appears to have done so here. (ECF No. 63 at 3-5.) But the Court does not recite facts going to Aspen Meadows' foreclosure to collect on back homeowners' association dues because they are unnecessary to the Court's decision resolving the pending motions. As relevant here, Plaintiff is the owner by assignment of a note (the “Note”) and Deed of Trust (“DOT”) securing a loan for $246, 137.00 that Pablo Lopez-Perez and Nora M. Alcantara obtained in 2006 to purchase the Property. (ECF Nos. 63-2, 63-3.)

         Plaintiff brings claims for: (1) quiet title/declaratory judgment against all Defendants; (2) breach of NRS § 116.1113 against Aspen Meadows and Defendant Gayle A. Kern, Ltd. d/b/a Kern & Associates (“Kern”); (3) wrongful foreclosure against Aspen Meadows and Kern; and (4) injunctive relief against Defendant Comstock Capital Partners, LLC (“Comstock”). (ECF No. 1 at 9-18.) When it answered, Comstock also filed a counterclaim for quiet title and declaratory relief against all other parties to the case, primarily seeking a declaration that Comstock purchased the Property free and clear of Plaintiff's DOT. (ECF No. 7 at 4-8.)

         The Court previously dismissed Plaintiff's claims against Kern, so Kern is no longer a party to this case. (ECF No. 54.) Magistrate Judge William G. Cobb permitted counsel for Comstock and Remedy Property Partners, LLC (“Remedy”) to withdraw. (ECF No. 46.) Thus, Comstock and Remedy are currently unrepresented. Because corporations and other unincorporated associations cannot represent themselves pro se in federal court, Judge Cobb ordered Comstock and Remedy to file a substitution of counsel by December 29, 2017. (ECF No. 46 at 2.) To date, they have not done so.


         “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. See 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. 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 ...

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