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Nationstar Mortgage LLC v. Summit Hills Homeowners Association

United States District Court, D. Nevada

June 12, 2019

NATIONSTAR MORTGAGE LLC, Plaintiff,
v.
SUMMIT HILLS HOMEOWNERS ASSOCIATION and EDWARD KIELTY TRUST, Defendants. SUMMIT HILLS HOMEOWNERS ASSOCIATION, Third-Party Plaintiff,
v.
ALESSI & KOENIG, LLC, Third-Party Defendant.

          ORDER

          MIRANDA M. DU UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         This dispute arises from the foreclosure sale (“HOA Sale”) of real property located at 2116 Peach Hill Avenue, Las Vegas, Nevada 89106 (“Property”) to satisfy a homeowners' association lien. Two motions are currently pending before the Court. In the first motion, Plaintiff Nationstar Mortgage LLC seeks summary judgment on its quiet title/declaratory relief claim against all Defendants.[1] (ECF No. 54 at 13; ECF No. 1 at 6.) In the second motion, Defendant Edward Kielty Trust (“Kielty Trust”)-current owner of the Property-moves for summary judgment in its favor on all of Nationstar's claims. (ECF Nos. 57, 58 at 4.) The Court deems Kielty Trust's motion as limited to only the claims Nationstar asserts against it-Nationstar's quiet title/declaratory relief and injunctive relief claims. (ECF No. 1 at 6, 12.) For the following reasons, the Court grants Kielty Trust's motion on Nationstar's quiet title/declaratory relief claim[2] and denies Nationstar's motion.[3]

         II. BACKGROUND

         The following facts are undisputed unless otherwise indicated.[4]Modesta Balderas (“Borrower”) financed the purchase of the Property within the HOA with a $155, 920 loan (“Loan”) in 2005. (ECF No. 54-1 at 2-3.) The Loan was secured by a first deed of trust (“DOT”) recorded in March 2005 and re-recorded in August the same year. (Id.; ECF No. 54-2.) The DOT was assigned to Nationstar via a corporate assignment of deed of trust on October 3, 2012. (ECF No. 54-3 at 2.)

         Borrower failed to pay HOA assessments, and the HOA recorded the following notices through its agent, Alessi & Koenig, LLC (“Alessi”): (1) notice of delinquent assessment lien on May 9, 2012, stating $1, 035.00 was due (ECF No. 54-5); and (2) notice of default and election to sell on August 13, 2012, noting $2, 205.00 was due as of July 9, 2012 (ECF No. 54-6); and (3) a notice of trustee's sale scheduling the HOA's sale for February 13, 2013 and stating $3, 555.00 was due recorded on January 14, 2013 (ECF No. 54-7). Alessi later recorded a second notice of trustee's sale which was recorded on July 31, 2013 and set the sale for August 28, 2013 as well as providing that $5, 441.54 was due (ECF No. 54-8).

         Relevant to the arguments Nationstar makes in this case, the HOA's Declaration of Covenants, Conditions, and Restrictions (“CC&Rs”) (ECF No. 54-4) at section 12.4 provides:

Notwithstanding any other provision hereof, no amendment, violation, breach of, or failure to comply with any provision of this Declaration and no action to enforce any such provision shall affect, defeat, render invalid or impair the lien of any Mortgage, deed of trust or other lien on any Lot taken in good faith and for value and recorded prior to the time of recording of notice of such amendment, violation, breach or failure to comply. Any subsequent Owner of such Lot shall, however, take subject to this Declaration, whether such Owner's title was acquired by foreclosure in a trustee's sale or otherwise.

(Id. at 32-33.)

         Alessi sold the Property to Kielty Trust on August 28, 2013 for $6, 000. (ECF No. 54-9.)

         In its Complaint, Nationstar asserts 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 Kielty Trust. (ECF No. 1 at 6-12.) In the prayer for relief, Nationstar primarily requests an order declaring Kielty Trust took the Property subject to Nationstar's DOT. (Id. at 12-13.)

         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 ...


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