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The Bank of New York Mellon v. Invest Vegas, LLC

United States District Court, D. Nevada

June 11, 2019

THE BANK OF NEW YORK MELLON, Plaintiff
v.
INVEST VEGAS, LLC, et al., Defendants

         ORDER (1) GRANTING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT REGARDING TENDER AND UNJUST ENRICHMENT; (2) DISMISSING PLAINTIFF'S DECLARATORY RELIEF CLAIM AGAINST MERIDIAN; (3) DISMISSING PLAINTIFF'S WRONGFUL FORECLOSURE CLAIM AGAINST MERIDIAN AND RED ROCK; AND (4) DENYING OTHER PENDING MOTIONS AS MOOT [ECF NOS. 23, 30, 31, 32]

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         Plaintiff The Bank of New York Mellon (BONY) filed this lawsuit to determine whether its deed of trust still encumbers property located at 230 E. Flamingo Road #123, Las Vegas, Nevada, following a non-judicial foreclosure sale conducted by defendant Meridian Private Residences Homeowners Association (Meridian). ECF No. 1. BONY also asserted various damages claims against Meridian; Meridian's foreclosure agent, Red Rock Financial Services (Red Rock); and the current property owner, Invest Vegas, LLC (Invest Vegas), some of which I dismissed. Id.; ECF Nos. 26, 27. Invest Vegas asserted counterclaims for declaratory relief and quiet title against BONY. ECF No. 16.

         BONY moves for summary judgment, arguing that because it tendered the superpriority amount, Meridian's non-judicial foreclosure sale did not extinguish the deed of trust. BONY also argues it is entitled to judgment on its unjust enrichment claim against Invest Vegas for homeowners association (HOA) assessments that BONY paid even though Invest Vegas is the property owner who is legally responsible for the assessments.

         Only Meridian responded, arguing that the HOA's lien included fees and costs, so BONY's payment of only nine months' of assessments did not satisfy the lien. Meridian also argues it rejected BONY's tender in good faith and BONY took no further action to preserve its deed of trust after that rejection. Finally, Meridian states that it does not oppose BONY's unjust enrichment claim against Invest Vegas. Meridian also moves for summary judgment, raising many of these same arguments. As to BONY's wrongful foreclosure claim, Meridian argues the foreclosure was not wrongful because it is undisputed the homeowner was in default on the HOA assessments and Meridian's rejection of the tender was in good faith.

         The parties are familiar with the facts, and I will not repeat them here except where necessary to resolve the motions. Because no genuine dispute remains that BONY tendered the superpriority amount, BONY is entitled to judgment as a matter of law on its own declaratory relief claim and on Invest Vegas's counterclaims. Because the deed of trust was not extinguished, there is no basis to set aside the sale, so I dismiss Meridian from the quiet title claim. I grant summary judgment in Meridian's and Red Rock's favor on the wrongful foreclosure claim because it was an alternative claim for relief if the deed of trust was extinguished.

         As for BONY's unjust enrichment claim, I deny it because BONY has not sufficiently shown that it paid HOA assessments for this property and BONY has not supplemented its complaint to request additional sums BONY allegedly paid after the complaint was filed. I decline to consider BONY's arguments regarding unjust enrichment against Meridian because I previously dismissed that claim against Meridian. BONY did not move for summary judgment on its unjust enrichment claim against Red Rock. That claim therefore remains pending.

         I. ANALYSIS

         Summary judgment is appropriate if the movant shows “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000); Sonner v. Schwabe N. Am., Inc., 911 F.3d 989, 992 (9th Cir. 2018) (“To defeat summary judgment, the nonmoving party must produce evidence of a genuine dispute of material fact that could satisfy its burden at trial.”). I view the evidence and reasonable inferences in the light most favorable to the non-moving party. James River Ins. Co. v. Hebert Schenk, P.C., 523 F.3d 915, 920 (9th Cir. 2008).

         A. Declaratory Relief and Wrongful Foreclosure

         Under Nevada law, a “first deed of trust holder's unconditional tender of the superpriority amount due results in the buyer at foreclosure taking the property subject to the deed of trust.” Bank of Am., N.A. v. SFR Investments Pool 1, LLC, 427 P.3d 113, 116 (Nev. 2018) (en banc). To be valid, tender must be for “payment in full” and must either be “unconditional, or with conditions on which the tendering party has a right to insist.” Id. at 118.

         There is no dispute that Bank of America, N.A. paid the superpriority amount in full. The monthly homeowners association (HOA) assessment was $408.00 per month. ECF No. 23-2 at 13-18. Prior to the HOA foreclosure sale, Bank of America tendered $3, 672.00 to cover the superpriority amount of nine months' of assessments. Id. at 21-22. There is no evidence Meridian recorded a second notice of delinquent assessment lien that might have triggered a second superpriority lien. See Prop. Plus Investments, LLC v. Mortg. Elec. Registration Sys., Inc., 401 P.3d 728, 731-32 (Nev. 2017) (en banc). The Supreme Court of Nevada has already rejected similar arguments that Meridian makes regarding the conditions on the tender, the amount of the superpriority lien, and good faith rejection of the tender. See Bank of Am., N.A., 427 P.3d at 117-18, 121; Nationstar Mortg., LLC v. Jackel Properties, LLC, No. 75040, 435 P.3d 1224, 2019 WL 1244787, at *1 (Nev. 2019). The superpriority lien therefore was extinguished, and the property remains subject to the deed of trust. Bank of Am., N.A., 427 P.3d at 121.

         Consequently, I grant BONY's motion for summary judgment on its declaratory relief claim against Invest Vegas and on Invest Vegas's counterclaims. Because the HOA sale will not be set aside, I dismiss the declaratory relief claim against Meridian because it is no longer a necessary party to that claim.[1] Additionally, because the deed of trust was not extinguished, and BONY asserted its wrongful foreclosure claim against Meridian and Red ...


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