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Bank of New York Mellon v. Sommerset Park Homeowners Association

United States District Court, D. Nevada

July 10, 2019

BANK OF NEW YORK MELLON, f/k/a Bank of New York, as Trustee for the Certificateholders of the CWABS, Inc., Asset-Backed Certificates, Series 2006-2, Plaintiff,
v.
SOMMERSET PARK HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

          Gloria M. Navarro, Chief Judge.

         Pending before the Court is the Motion for Partial Summary Judgment, (ECF No. 85), filed by Plaintiff Bank of New York Mellon (“Plaintiff”).[1] Defendants SFR Investments Pool 1, LLC (“SFR”) and Sommerset Park Homeowners Association (“HOA”) (collectively “Defendants”) filed Responses, (ECF Nos. 88, 90), and Plaintiff filed a Reply, (ECF No. 95).[2]

         Also pending before the Court are the Motions for Summary Judgment, (ECF Nos. 84, 86), filed by Defendants. Plaintiff filed Responses to Defendants' Motions, (ECF Nos. 91, 92), HOA filed a Response to SFR's Motion, (ECF No. 89), and Defendants filed Replies in support of their summary-judgment Motions, (ECF Nos. 93, 95).

         For the reasons addressed below, Plaintiffs Motion for Partial Summary Judgment is GRANTED and Defendants' Motions for Summary Judgment are DENIED.

         I. BACKGROUND

This case arises from the non-judicial foreclosure on real property located at 6652 Lund Drive, Las Vegas, Nevada 89108 (the “Property”). (See Deed of Trust, ECF No. 85-1). In 2005, Liliana M. Morfin and Raul Chiang-Bueno (“Borrowers”) financed their purchase of the Property by way of a loan in the amount of $228, 000 secured by a deed of trust. (Id.). BNYM became beneficiary under the deed of trust through an assignment recorded on November 17, 2017. (See Assignments of Deed of Trust, ECF Nos. 85-2-85-5).

         In July 2010, upon Borrowers' failure to pay all amounts due, HOA, through its agent Alessi & Koenig, LLC (“A&K”), initiated foreclosure proceedings on the Property. (See Notice of Lien, ECF No. 85-8); (Notice of Default, ECF No. 85-9). In December of that year, Bank of America, NA. (“BANA”), Plaintiffs loan servicer at the time, sent A&K a letter requesting the superpriority portion of HOA's lien. (See Request for Accounting, Ex. 2 to Miles Bauer Aff, ECF No. 85-10). A&K responded with a payment history report from which BANA calculated nine months' worth of common assessments. (Payment History Report, Ex. 3 to Miles Bauer Aff). On December 29, 2010, BANA sent A&K a check for $228.09, which A&K rejected. (Tender Letter, Ex. 4 to Miles Bauer Aff); (see also A&K 30(b)(6) Dep. 46:24-47:5, ECF No. 85-11).

         In November 2012, A&K proceeded with foreclosure proceedings, recording a notice of trustee's sale. (Notice of Sale, ECF No. 85-14). On December 5, 2012, A&K sold the Property to SFR for $7, 800.00. (See Trustee's Deed Upon Sale, ECF No. 85-15).

         Plaintiff filed this quiet title action on July 29, 2016, bringing the following causes of action arising from the foreclosure and subsequent sale of the Property: (1) quiet title with the requested remedy of declaratory relief; (2) breach of NRS 116.1113; (3) wrongful foreclosure; and (4) injunctive relief. (Id. ¶¶ 29-77). On December 2, 2016, SFR filed an Answer asserting competing quiet title and injunctive relief counterclaims against Plaintiff, as well as crossclaims against Borrowers, Household Finance Realty Corporation of Nevada (“HFRC”), University Medical Center (“UMC”), and Allied Collection Services, Inc. (“Allied”).[3] (See Answer 17:11- 18:19, ECF No. 24).

         II. LEGAL STANDARD

         The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “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). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor.” Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         In determining summary judgment, a court applies a burden-shifting analysis. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp.

         Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. Celotex Corp., 477 U.S. at 324.

         At summary judgment, a court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. Id. at 249-50.

         III. DISCUSSION

         Plaintiff moves for summary judgment on the quiet title claim, asserting that BANA's tender of payment to A&K preserved its deed of trust by extinguishing the HOA superpriority lien prior to the sale. (Pl.'s Mot. Summ. J. (“Pl.'s MSJ”) 5:14-8:21, ECF No. 85). Plaintiff further contends that the deed of trust remains a valid encumbrance on the Property because the foreclosure was conducted pursuant to an unconstitutional statute and, alternatively, the Property's inadequate sales ...


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