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Federal National Mortgage Association v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

July 22, 2019

FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff
v.
SFR INVESTMENTS POOL 1, LLC and SOUTHERN HIGHLANDS COMMUNITY ASSOCIATION, Defendants

          ORDER (1) DENYING THE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT, (2) GRANTING DEFENDANT SFR'S MOTION FOR RULE 56(D) RELIEF, AND (3) GRANTING IN PART DEFENDANT SFR'S MOTION FOR SUMMARY JUDGMENT [ECF NOS. 71, 77, 87]

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE

         Plaintiff Federal National Mortgage Association (Fannie Mae) brought this lawsuit to determine whether its deed of trust still encumbers property located at 3052 Cantabria Court in Las Vegas, Nevada, following a non-judicial foreclosure sale conducted by the homeowners association (HOA). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the HOA sale. SFR asserts a quiet title counterclaim against Fannie Mae and a quiet title cross-claim against the former homeowner, cross-defendant Ken Yao-Hui Kwong (Kwong).

         I previously dismissed Fannie Mae's quiet title and declaratory relief claims as time-barred. ECF No. 67. Fannie Mae's unjust enrichment claim against SFR remains pending, as do Fannie Mae's claims against defendant Southern Highlands Community Association.

         Fannie Mae now moves for summary judgment on SFR's quiet title counterclaim, arguing that the federal foreclosure bar in 12 U.S.C. § 4617(j)(3) precludes SFR from establishing that the HOA foreclosure sale extinguished the deed of trust. SFR responds that because Fannie Mae's declaratory relief claims are untimely, so are its defenses to the extent they are mirror images of the time-barred claims. Alternatively, SFR requests relief under Federal Rule of Civil Procedure 56(d).

         SFR separately moves for summary judgment, arguing that because Fannie Mae's defenses are time-barred, SFR is entitled to quiet title in its favor. SFR also contends that Fannie Mae's unjust enrichment claim is untimely and that Fannie Mae has produced no evidence in support of it. Fannie Mae responds that its reliance on the federal foreclosure bar is not time-barred, its unjust enrichment claim is timely because the statute of limitations runs from each payment, and it will provide evidence in support of its unjust enrichment claim once the discovery stay is lifted.

         Finally, SFR seeks summary judgment against Kwong. Kwong has not appeared in this action and did not respond to the summary judgment motion.

         The parties are familiar with the facts, and I do not repeat them here except where necessary. As to SFR's quiet title counterclaim, Fannie Mae may assert the federal foreclosure bar as a defense in this equitable proceeding. Because application of the federal foreclosure bar may prevent SFR from meeting its burden of showing it has superior title, I deny SFR's motion for summary judgment on its quiet title counterclaim. I also deny Fannie Mae's motion for summary judgment because I grant SFR's motion for Rule 56(d) relief. I grant SFR's motion for summary judgment as to Kwong because SFR is entitled to a presumption that the HOA sale was properly conducted and Kwong has presented no contrary evidence or argument.

         Finally, I grant SFR's motion for summary judgment on Fannie Mae's unjust enrichment claim because a claim for unjust enrichment based on payments Fannie Mae made more than four years before filing the amended complaint is time-barred and Fannie Mae provides no evidence in support of this claim.

         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. Quiet Title Against Fannie Mae

         The only remaining quiet title claim as between SFR and Fannie Mae is SFR's counterclaim. Both SFR's and Fannie Mae's motions for summary judgment on the counterclaim turn on whether Fannie Mae can assert the federal foreclosure bar as a defense. SFR contends Fannie Mae cannot because (1) SFR's counterclaim became moot once Fannie Mae's claims were dismissed as untimely and (2) the federal foreclosure bar defense is a mirror image of Fannie Mae's time-barred declaratory relief claims and so should also be time-barred. Fannie Mae contends that SFR's counterclaim was not mooted by the dismissal of Fannie Mae's claims and that the federal foreclosure bar is a theory of defense that is not subject to a statute of limitations.

         1.Mootn ...


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