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Wells Fargo Bank, N.A. v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

June 12, 2019




         I. SUMMARY

         This case arises from the foreclosure sale of property to satisfy a homeowners' association lien. Four motions are before the Court: (1) Defendant Savannah Place Homeowners' Association's (the “HOA”) motion to dismiss (the “HOA's MTD”) (ECF No. 44); (2) Plaintiff Wells Fargo Bank, N.A., as Trustee for the Certificate-Holders of Banc of America Alternative Loan Trust 2006-5, Mortgage Pass-Through Certificates, Series 2006-5's motion for summary judgment (the “Motion”) (ECF No. 58); (3) the HOA's motion for summary judgment (ECF No. 59); and (4) Defendant SFR Investments Pool 1, LLC's (“SFR”) motion for summary judgment (ECF No. 60).[1] Because the Court agrees with Plaintiff that Plaintiff's predecessor-in-interest's counsel's tender of a check to pay the superpriority portion of the HOA's lien, combined with the HOA's agent's rejection of that tender, cured the default as to that portion of the lien, the Court will grant Plaintiff's Motion, and deny Defendants' motions.


         The following facts are undisputed unless otherwise indicated.

         In March 2006, Jose and Maria Batres (“Borrowers”) obtained a loan for $264, 939 (“Loan”) and executed a note (the “Note”) secured by a deed of trust (“DOT”) on the real property located at 8850 Ashley Park Avenue, Las Vegas, Nevada 89148 (“the Property”). (ECF Nos. 58 at 2 n.1, 58-1 at 2-4.) Plaintiff had an assignment recorded reflecting its beneficial interest under the DOT on March 10, 2010. (ECF No. 58-3 at 2.)

         Borrowers failed to pay HOA assessments, and the HOA recorded a notice of delinquent assessment lien in November 2011, identifying the amount due to the HOA to date as $1, 767.68.[2] (ECF No. 58-5 at 2.) The HOA later recorded a notice of default and election to sell on February 22, 2012, identifying the amount due to the HOA to date as $2, 371.81. (ECF No. 58-6.)

         On March 12, 2012, Plaintiff's predecessor-in-interest's counsel at the time (the law firm “Miles Bauer”) requested from Red Rock a calculation of the superpriority portion of the HOA's lien and offered to pay that amount.[3] (ECF No. 58-7 at 9-10.) Red Rock responded with a letter stating that the total amount of the delinquent assessment lien due at that time was $3, 007.52. (Id. at 12.) Red Rock attached a ledger to the letter, showing a breakdown of the costs allegedly owed. (Id. at 13-20.) While the ledger lists varying amounts for the monthly assessments Borrowers were required to pay, the maximum monthly assessment listed in the ledger is $46. (Id.) There are no line-item charges in the ledger that specifically state they are for maintenance or nuisance-abatement fees. (Id.)

         Miles Bauer calculated a payoff amount of $414 based on this information, representing nine months of assessments at $46 a month. (Id. at 24.) Miles Bauer sent a letter to Red Rock with an enclosed check for $414, stating: “This is a non-negotiable amount and any endorsement of said cashier's check on your part, whether express or implied, will be strictly construed as an unconditional acceptance on your part of the facts stated herein and express agreement that [Plaintiff's predecessor-in-interest's] financial obligations towards the HOA in regards to the real property located at 8850 Ashley Park Avenue have now been ‘paid in full.'” (Id.; see also Id. at 23-25.) Miles Bauer's internal, electronic records indicate that Red Rock rejected the attempted tender. (Id. at 7.)

         On July 10, 2013, the HOA recorded a notice of foreclosure sale through Red Rock setting the foreclosure sale for August 7, 2013. (ECF No. 58-8.) The HOA ultimately proceeded with the foreclosure sale on February 22, 2012 (the “HOA Sale”), and SFR purchased the Property at the HOA Sale for $26, 000. (ECF No. 58-9.)

         Plaintiff's operative first amended complaint asserts a single claim for quiet title/declaratory judgment against SFR and the HOA. (ECF No. 29 at 5-9.) When it answered Plaintiff's amended complaint, SFR filed a counterclaim for quiet title and injunctive relief against Plaintiff, and substantially the same crossclaims against Borrowers. (ECF No. 33 at 8-15.) Borrowers never responded to the crossclaims SFR asserted against them. Therefore, on SFR's motions (ECF Nos. 54, 55), the Clerk of Court entered a default against Borrowers (ECF No. 56).


         “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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