United States District Court, D. Nevada
ORDER GRANTING IN PART DEFENDANT TANTALUM TRUST'S
MOTION TO DISMISS [ECF NO. 29]
P. GORDON UNITED STATES DISTRICT JUDGE.
Bank of New York Mellon (BONY) brought this suit to determine
whether its deed of trust still encumbers property located at
5510 Tantalum Lane in Las Vegas, Nevada following a
non-judicial foreclosure sale conducted by the homeowners
association (HOA). The HOA bought the property at the sale
and then quitclaimed it to defendant Tantalum Trust, which is
the current property owner. Tantalum Trust moves to dismiss,
arguing BONY's declaratory relief claim is untimely and
fails to allege a basis to set aside the HOA foreclosure
sale. BONY responds that its claim is timely and adequately
alleges several reasons to set aside the sale. BONY
alternatively requests leave to amend.
parties are familiar with the facts, and I do not repeat them
here except where necessary. I deny Tantalum Trust's
motion on the ground that the complaint is untimely, but I
grant Tantalum Trust's motion to dismiss for failure to
state a claim, with leave to amend.
Statute of Limitations
claim may be dismissed as untimely pursuant to a 12(b)(6)
motion only when the running of the statute of limitations is
apparent on the face of the complaint.” United
States ex rel. Air Control Techs., Inc. v. Pre Con Indus.,
Inc., 720 F.3d 1174, 1178 (9th Cir. 2013) (alteration
and quotation omitted). A limitations period begins to run
“from the day the cause of action accrued.”
Clark v. Robison, 944 P.2d 788, 789 (Nev. 1997). A
cause of action generally accrues “when the wrong
occurs and a party sustains injuries for which relief could
be sought.” Petersen v. Bruen, 792 P.2d 18, 20
(Nev. 1990); see also State ex rel. Dep't of Transp.
v. Pub. Emps.' Ret. Sys. of Nev., 83 P.3d 815, 817
(Nev. 2004) (en banc) (“A cause of action
‘accrues' when a suit may be maintained
thereon.” (quotation omitted)). Nevada has adopted the
discovery rule, and thus time limits generally “do not
commence and the cause of action does not ‘accrue'
until the aggrieved party knew, or reasonably should have
known, of the facts giving rise to the damage or
injury.” G & H Assocs. v. Ernest W. Hahn,
Inc., 934 P.2d 229, 233 (Nev. 1997).
Trust argues a three-year limitation period applies to
BONY's declaratory relief claim, although it cites no
authority in support of that proposition. I have previously
ruled that the four-year catchall limitation period in Nevada
Revised Statutes § 11.220 applies to claims under §
40.010 brought by a lienholder like BONY seeking to determine
whether an HOA sale extinguished its deed of trust. See
Bank of Am., N.A. v. Country Garden Owners Ass'n,
No. 2:17-cv-01850-APG-CWH, 2018 WL 1336721, at *2 (D. Nev.
Mar. 14, 2018).
sale took place on June 28, 2013, and the trustee's deed
upon sale was recorded on July 15, 2013. ECF No. 1 at 5. BONY
filed its complaint on April 11, 2017. Its declaratory relief
claim therefore is timely. Consequently, I deny Tantalum
Trust's motion to dismiss the declaratory relief claim as
Failure to State a Claim
considering a motion to dismiss, “all well-pleaded
allegations of material fact are taken as true and construed
in a light most favorable to the non-moving party.”
Wyler Summit P'ship v. Turner Broad. Sys., Inc.,
135 F.3d 658, 661 (9th Cir. 1998). However, I do not assume
the truth of legal conclusions merely because they are cast
in the form of factual allegations. See Clegg v. Cult
Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994).
A plaintiff must make sufficient factual allegations to
establish a plausible entitlement to relief. Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007). Such
allegations must amount to “more than labels and
conclusions, [or] a formulaic recitation of the elements of a
cause of action.” Id. at 555.
argues that BONY's complaint does not allege a basis to
set aside the sale. BONY responds that Chapter 116 as it
existed at the time of this sale violated BONY's due
process rights; the HOA's foreclosure notices were
insufficient because they did not identify the superpriority
amount; and the HOA sale was not calculated to promote an
equitable sales price or properly attract bidders.
bears the burden of alleging a plausible basis to set aside
the HOA sale “in light of [Tantalum Trust's] status
as the record title holder . . . and the statutory
presumptions that the HOA's foreclosure sale complied
with NRS Chapter 116's provisions.” Nationstar
Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow
Canyon, 405 P.3d 641, 642-43 (Nev. 2017). “[M]ere
inadequacy of price is not in itself sufficient to set aside
the foreclosure sale, but it should be considered together
with any alleged irregularities in the sales process to
determine whether the sale was affected by fraud, unfairness,
or oppression.” Id. at 648. “A grossly
inadequate price may require only slight evidence of fraud,
unfairness, or oppression to set aside a foreclosure
sale.” SFR Investments Pool 1, LLC v. First Horizon
Home Loans, a Div. of First Tennessee Bank, N.A., 409
P.3d 891, 895 (Nev. 2018) (en banc). However, the fraud,
unfairness, or oppression must have “affected the sales
price.” Res. Grp., LLC as Tr. of E. Sunset Rd. Tr.
v. Nevada Ass'n Servs., Inc., 437 P.3d 154, 161
(Nev. 2019) (en banc).
complaint does not plausibly allege a basis to set aside the
sale. First, Chapter 116 as it existed at the time of this
sale did not violate BONY's due process rights. See
Bank of Am., N.A. v. Arlington W. Twilight Homeowners
Ass'n, 920 F.3d 620, 623-24 (9th Cir. 2019) (citing
SFR Invs. Pool 1, LLC v. Bank of N.Y. Mellon, 422
P.3d 1248 (Nev. 2018) (en banc)); Nationstar Mortg. LLC
v. Amber Hills II Homeowners Ass'n, No.
2:15-cv-01433-APG-CWH, 2016 WL 1298108, at *6-9 (D. Nev. Mar.
31, 2016). Second, the HOA “was not required to
identify that it was foreclosing on a superpriority lien or
the amount of the superpriority lien.” U.S. Bank
Nat'l Ass'n for GSAA Home Equity Tr. 2007-3
Asset-Backed Certificates Series 2007-3 v. Saticoy Bay LLC
Series 3930 Swenson, No. 2:17-cv-00463-APG-GWF, 2018 WL
3231245, at *3 (D. Nev. July 2, 2018) (citing SFR
Investments Pool 1 v. U.S. Bank, 334 P.3d 408, 418 (Nev.
2014) (en banc)). Finally, the Supreme Court of Nevada has
rejected the notion that an HOA has a duty to obtain the
highest price it could when conducting an HOA foreclosure
sale. Nationstar Mortg., LLC v. Saticoy Bay LLC Series
2227 Shadow Canyon, 405 P.3d 641, 644-45 (Nev. 2017).
although BONY did not mention it in its opposition to the
motion to dismiss, the complaint alleges on information and
belief that a tender attempt would have been futile. ECF No.
1 at 8. However, the complaint does not allege anyone
attempted tender. “Absent evidence that the HOA or its
agent affirmatively thwarted . . . efforts to tender the
superpriority amount, the alleged futility of any such effort
does not establish unfairness or oppression.”
Nationstar Mortg., LLC v. Melvin Grp., LLC, No.
71028, 422 P.3d 711, 2018 WL 3544972, at *2 (Nev. 2018);
but see Bank of Am., N.A. v. Thomas Jessup, LLC Series
VII, 435 P.3d 1217, 1220 (Nev. 2019) (holding that an
offer to pay the superpriority lien, ...