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U.S. Bank, National Association v. Sunridge Heights Homeowners Association LLC

United States District Court, D. Nevada

August 20, 2019

U.S. BANK, NATIONAL ASSOCIATION, Plaintiff,
v.
SUNRIDGE HEIGHTS HOMEOWNERS ASSOCIATION, LLC, et al., Defendants. SFR INVESTMENTS POOL 1, LLC, Counter/Cross-Claimant,
v.
U.S. BANK, NATIONAL ASSOCIATION; SUZIE NGUYEN SU, Counter/Cross-Defendants.

          ORDER

          Gloria M. Navarro, Chief United States District Court Judge.

         Pending before the Court is Plaintiff U.S. Bank, National Association's (“Plaintiff's”) Motion for Partial Summary Judgment, (ECF No. 73). SFR Investments Pool 1, LLC (“SFR”) and Sunridge Heights Homeowners Association (“HOA”) (collectively “Defendants”) filed Responses, (ECF Nos. 81, 82), and Plaintiff filed Replies, (ECF Nos. 84, 85).

         Also pending before the Court are Defendants' Motions for Summary Judgment, (ECF Nos. 72, 74). Plaintiff filed Responses, (ECF Nos. 79, 80); SFR filed a Response, (ECF No. 77), to HOA's Motion for Summary Judgment; and Defendants filed Replies in support of their Motions for Summary Judgment, (ECF Nos. 78, 83, 86).

         I. BACKGROUND

         This case arises from the non-judicial foreclosure on real property located at 2128 Horse Prairie Drive, Henderson, Nevada 89052 (the “Property”). In 2004, Suzie Nguyen Su (“Borrower”) financed a purchase of the Property by way of loan in the amount of $567, 650.00 secured by a deed of trust (“DOT”), for which DHI Mortgage Company, Ltd. (“DHI”) served as the original beneficiary. (See DOT, Ex. A-3 to SFR's MSJ, ECF No. 74-1). DHI later assigned the DOT to BAC Home Loans Servicing, LP (“BAC”). (Assignment, Ex. A-9 to SFR's MSJ, ECF No. 74-1).

         In 2010, upon Borrower's failure to pay all amounts due on the Property, HOA through its agent Nevada Association Services, Inc. (“NAS”) initiated foreclosure proceedings. (Notice of Lien, Ex. E to Pl.'s MSJ, ECF No. 73-5); (Notice of Default, Ex. F to Pl.'s MSJ, ECF No. 73-6). In September of that year, BAC sent NAS a letter requesting a calculation of the superpriority portion of HOA's lien. (Request for Accounting, Ex. 1 to Miles Bauer Aff., ECF No. 73-7). NAS responded with a payment history report, from which BAC calculated nine months' worth of common assessments. (Payment History Report, Ex. 2 to Miles Bauer Aff., ECF No. 73-7). Accordingly, on November 5, 2010, BAC sent NAS a check for $607.50, which NAS rejected. (Tender Letter, Ex. 3 to Miles Bauer Aff., ECF No. 73-7); (see also 30(b)(6) Dep. 64:15-65:20, Ex. H to Pl.'s MSJ, ECF No. 73-8).

         In February of 2011, NAS proceeded with foreclosure proceedings by recording a Notice of Foreclosure Sale. (Notice of Sale, Ex. I to Pl.'s MSJ, ECF No. 73-9). In July of that year, BAC merged with Bank of America, National Association (“BANA”). (Certificate of Merger, Ex. C. to Pl.'s MSJ, ECF No. 73-3). With BANA as the DOT holder, NAS recorded a second Notice of Foreclosure sale in December of 2012. (Notice of Sale, Ex. J to Pl.'s MSJ, ECF No. 73-10).

         On January 11, 2013, NAS, on behalf of HOA, sold the Property through a foreclosure sale. (Foreclosure Deed, Ex. K to Pl.'s MSJ, ECF No. 73-11). That same day, BANA recorded its assignment of the DOT to Plaintiff. (Assignment, Ex. D to Pl.'s MSJ, ECF No. 73-4).

         Due to the foreclosure sale, Plaintiff initiated this lawsuit on April 29, 2016, asserting four causes of action: (1) quiet title with the requested remedy of declaratory relief; (2) breach of Nevada Revised Statute (“NRS”) 116.1113; (3) wrongful foreclosure; and (4) injunctive relief. (Compl. ¶¶ 9-79, ECF No. 1). SFR then filed an Answer, asserting counterclaims for quiet title, slander of title, and injunctive relief against Plaintiff; as well as crossclaims for quiet title and injunctive relief against Borrower. (Answer ¶¶ 45-69, ECF No. 25).

         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. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is a sufficient evidentiary basis on which a reasonable factfinder could rely to find for the nonmoving party. See Id. “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)). “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) (citations omitted). 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. See 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. See 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. See 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). However, 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 America, 285 F.3d 764, 783 (9th Cir. 2002) (internal citations omitted). “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252. In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See 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. See 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. See 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. See Id. at 249-50.

         III. DISCUSSION

         Plaintiff moves for summary judgment with its quiet title claim on the ground that BAC tendered payment to NAS prior to the foreclosure sale and accordingly preserved Plaintiff's DOT by extinguishing HOA's superpriority lien. (Pl.'s MSJ 2:11-3:11, 6:10-9:3, ECF No. 73). Plaintiff also contends that the DOT remains on the Property because the foreclosure was conducted pursuant to an unconstitutional statutory scheme, or, in the alternative, the Property's foreclosure sale violated due process and was conducted under unfair circumstances that warrant setting aside the sale on equitable grounds. (Id. 2:11-3:11).

         Defendants seek summary judgment on Plaintiff's claims by arguing that Plaintiff's quiet title claim is time-barred, that Plaintiff does not have standing to assert it claims, that the foreclosure sale complied with NRS Chapter 116, that Plaintiff cannot establish an equitable basis for setting aside the sale, and that Plaintiff's constitutional arguments fail based on recent case law. (HOA's MSJ 6:23-8:23, 10:8-16:26, ECF No. 72); (SFR's MSJ 8:3-16:5, ECF No. 74); (SFR's Resp. to Pl.'s MSJ (“SFR's Resp.”) 6:11-7:2, ECF No. 82). SFR further contends that the Court should grant summary judgment in its favor for its competing quiet title claim against Plaintiff and Borrower. (SFR's MSJ 12:3-15:14, 17:6-12).

         The below discussion first addresses the statutory limitations period applicable to Plaintiff's quiet title claim. Then, it addresses Plaintiff's standing, the constitutionality of the foreclosure, and ...


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