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Bank of America, N.A. v. Lamplight Village at Centennial Springs Homeowners Association

United States District Court, D. Nevada

August 26, 2019

BANK OF AMERICA, N.A., Plaintiff,
v.
LAMPLIGHT VILLAGE AT CENTENNIAL SPRINGS HOMEOWNERS ASSOCIATION, et al., Defendants.

          ORDER

          GLORIA M. NAVARRO, CHIEF JUDGE

         Pending before the Court is the Motion to Dismiss, (ECF No. 38), filed by Defendant SFR Investments Pool 1, LLC (“SFR”). Plaintiff Bank of America, N.A. (“BANA”) filed a Response, (ECF No. 39), and SFR filed a Reply, (ECF No. 40).

         Also pending before the Court are the Motions for Summary Judgment, (ECF Nos. 58, 59), filed by BANA and SFR. BANA and SFR filed Responses to the Motions, (ECF Nos. 62, 65), as well as Replies in support of their respective Motions, (ECF Nos. 66, 67).

         For the reasons discussed herein, SFR's Motion to Dismiss and Motion for Summary Judgment are DENIED, and BANA's Motion for Summary Judgment is GRANTED.

         I. BACKGROUND

         This quiet title action arises from the foreclosure on real property located at 7617 Brilliant Forest Street, Las Vegas, Nevada 89131 (the “Property”). (See Compl. ¶ 7, ECF No. 1). In 2009, Frederick L. Gallegos Jr. (“Borrower”) obtained a loan from Meridias Capital (“Meridias”) in the amount of $199, 863.00, secured by a deed of trust recorded on January 30, 2009. (See Deed of Trust, ECF No. 58-1). The deed of trust initially identified Mortgage Electronic Registration Systems, Inc. (“MERS”) as beneficiary, solely as nominee for Medias. (Id.). BANA was later assigned all beneficial interest in the deed of trust following an assignment and subsequent corporate merger. (See Assignment, ECF No. 58-2); (see Merger Certificate, ECF No. 58-3).

         On April 16, 2010, upon Borrower's failure to stay current on his loan obligations, Lamplight Village at Centennial Springs Homeowners Association (“HOA”) initiated foreclosure proceedings on the Property through its agent, Alessi & Koenig, LLC (“A&K”). (See Notice of Lien, ECF No. 58-4); (see also Notice of Default, ECF No. 58-6). On December 15, 2011, A&K recorded of notice of trustee's sale, and later a second notice of trustee's sale, scheduling a public auction to take place on September 5, 2012. (See Notices of Sale, ECF Nos. 58-7, 58-8).

         On January 26, 2012, following the first notice of sale, BANA sent A&K a letter requesting the superpriority portion of HOA's lien and stating an intent to satisfy the balance. (See Accounting Request, Ex. 1 to Miles Bauer Aff, ECF No. 58-9). A&K responded to BANA's inquiry with a letter stating “the nine-month super-priority is not triggered until the beneficiary under the first deed of trust forecloses, ” and that unless “all past due obligations, plus collections costs and fees, ” are paid, the foreclosure would proceed. (A&K Resp. Letter, Ex. 2 to Miles Bauer Aff, ECF No. 58-9). A&K also responded with a payment history report for the Property, identifying the total amount owed. (Id.). Based upon these records, BANA calculated what it determined to be the HOA superpriority lien amount and sent A&K a check for $720.00, which A&K rejected. (See Tender Letter, Ex. 3 to Miles Bauer Aff, ECF No. 58-9); (see also Confirmation of Receipt, Ex. 4 to Miles Bauer Aff).

         A&K proceeded with foreclosure and sold the Property to HOA for $7, 330.53 on September 5, 2012. (See Foreclosure Deed, ECF No. 58-10). HOA subsequently conveyed the Property to SFR by a quitclaim deed, recorded on March 6, 2013. (See Quitclaim Deed, ECF No. 58-13).

         BANA filed the instant action on March 16, 2016, asserting the following causes of action arising from the HOA foreclosure and subsequent sales of the Property: (1) quiet title; (2) breach of NRS 116.1113; (3) wrongful foreclosure; and (4) injunctive relief. (Id. ¶¶ 32-85). SFR later filed a Motion to Dismiss, (ECF No. 38), and both BANA and SFR filed competing summary-judgment Motions with respect to BANA's claims, (ECF Nos. 58-59).

         II. LEGAL STANDARD

         A. Rule 12(b)(6)

         Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         “Generally, a district court may not consider any material beyond the pleadings in a ruling on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). “However, material which is properly submitted as part of the complaint may be considered.” Id. Similarly, “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in a Ruling on a Rule 12(b)(6) motion to dismiss. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). On a motion to dismiss, a court may also take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if a court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. Fed.R.Civ.P. 12(d).

         B. Rule 56(a)

         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 ...


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