United States District Court, D. Nevada
J. DAWSON, UNITED STATES DISTRICT JUDGE
the Court is plaintiff/counterdefendant Bank of America's
motion for partial summary judgment (#51) to which
defendant/counterclaimant SFR Investments Pool 1, LLC
responded (#54), and Bank of America replied (#55).
Defendant/counterclaimant SFR Investments Pool 1, LLC has
also moved for summary judgment (#52). Bank of America
responded (#53), and SFR Investments replied (#56).
before the Court is Bank of America's motion to file
supplemental authority in light of the Nevada Supreme
Court's decision in Bank of America, N.A. v. Thomas
Jessup, LLC Series VII, 435 P.3d 1217 (Nev. 2019).
(#57). SFR Investments opposed the motion (#58), and Bank of
America has replied (#59).
a dispute over whether a non-judicial foreclosure
extinguished Bank of America's deed of trust on a
property located at 1063 Country Skies Avenue in Las Vegas,
Nevada. SFR Investments purchased the property at auction
after Sagecreek foreclosed on its delinquent-assessment lien.
SFR Investments argues that it owns the property free and
clear because Sagecreek's foreclosure extinguished Bank
of America's deed of trust. Bank of America, on the other
hand, claims that its deed of trust survived Sagecreek's
foreclosure because the bank satisfied the association's
superpriority lien by attempting to tender payment.
the bank never actually sent a check, its tender is excused
because Sagecreek made clear that it would reject such a
payment. As a result, Sagecreek's foreclosure did not
extinguish Bank of America's deed of trust on the
property. That deed of trust continues to encumber the
property, and SFR Investments purchased the property subject
to the bank's interest. Accordingly, the Court grants
Bank of America's motion for partial summary judgment
(#51) and denies SFR Investments' competing motion for
summary judgment (#52) inasmuch as it seeks to quiet title
against Bank of America.
April of 2009, cross-defendants Erik and Lauralee Novy
refinanced their mortgage on the Country Skies property.
Paramount Mortgage financed the loan, and the Federal Housing
Administration (FHA) insured the loan. Pl.'s Mot. Summ.
J. Ex. A, ECF No. 51. The loan amount was $140, 248, which
was secured by a deed of trust against the property.
Id In February of 2012, Paramount Mortgage assigned
its senior deed of trust to Bank of America. Pl.'s Mot
Summ. J. Ex. C, ECF No. 51. The property was part of the
Sagecreek Homeowners Association and subject to the
association's Covenants, Conditions, and Restrictions
(“CC&Rs”). The CC&Rs required the Novys
to pay monthly assessments for maintenance and other common
point, the Novys fell behind on their mortgage and
association obligations. That caused Sagecreek to initiate
foreclosure proceedings against the Novys. Sagecreek used
defendant Absolute Collection Services, LLC to record the
foreclosure liens and notices. Absolute Collection Services
recorded a notice of delinquent assessment lien against the
property on July 31, 2012. Id at Ex. D. That lien
identified a total delinquency of $1, 037.36. Id
Neither the Novys nor Bank of America satisfied the
delinquency, and Sagecreek recorded a notice of trustee's
sale the following February. Id at Ex. I. The
trustee's sale was scheduled for April 16, 2013.
to the sale, Bank of America retained law firm Miles, Bauer,
Bergstrom & Winters LLP to ascertain and satisfy the
superpriority lien on the property. Miles Bauer contacted
Absolute Collection and offered to pay the outstanding lien
balance if Absolute Collection would disclose what that
balance was. Id at Ex. G 2. Miles Bauer's letter
It is unclear . . . what amount the nine months' of
common assessments . . . actually are. That amount,
whatever it is, is the amount BAN A should be required to
rightfully pay to fully discharge its obligations to the HOA
per NRS 116.3102 and my client hereby offers to pay that
sum upon presentation of adequate proof of the same by
Id (emphasis added). Collection Manager, Kelly
Mitchell, responded to Miles Bauer's letter but refused
to disclose the outstanding balance. Instead, Mitchell stated
that it was Absolute Collection's view that
“without the action of foreclosure, a 9 month Statement
of Account [was] not valid.” Id at Ex. H.
Mitchell's response also confirmed Absolute
Collection's intent to proceed with its foreclosure
despite not disclosing the outstanding delinquent balance to
the bank. Id Without knowing the amount of the
outstanding balance, Bank of America did not send a check.
Absolute Collection proceeded to foreclosure on July 16,
2013. It sold the home to SFR Investments for $15, 000.
Id at Ex. J.
America then brought this suit seeking to quiet title and
seeking a declaration that its deed of trust survived
Sagecreek's nonjudicial foreclosure. See Compl.,
ECF No. 1. The bank brought four total causes of action: a
quiet title and declaratory relief claim against SFR
Investments, a claim for an injunction against SFR
Investments, a claim for wrongful foreclosure against
Sagecreek and Absolute Collection, and a claim for breach of
NRS § 116 against Sagecreek and Absolute Collection.
Id SFR Investments answered the complaint. It
counterclaimed for quiet title and declaratory relief against
the bank and crossclaimed for quiet title and declaratory
relief against the Novys.
many other foreclosure cases in this district, the case was
then stayed for a time pending the outcome of related cases
at the Ninth Circuit and Nevada Supreme Court. The Court
lifted the stay in October of 2018. Order Lifting Stay, ECF
No. 48. Bank of America moved for partial summary judgment on
its quiet title and declaratory relief claims against SFR
Investments. Pl.'s Mot. Summ. J., ECF No. 51. The bank
has not moved for judgment on its claims against Sagecreek or
Absolute Collection. In response, SFR Investments cross-moved
for summary judgment on its own quiet title and declaratory
relief claims against Bank of America and the Novys.