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The Bank of New York Mellon v. Vegas Property Services, Inc.

United States District Court, D. Nevada

August 30, 2019

THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF THE CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2005-11, Plaintiff,
v.
VEGAS PROPERTY SERVICES, INC.; SHADOW SPRINGS COMMUNITY ASSOCIATION; and DOES 1 THROUGH 10, inclusive, Defendants.

          ORDER

          MIRANDA M. DU, UNITED STATES DISTRICT JUDGE.

         I. SUMMARY

         This dispute arises from the foreclosure sale of property to satisfy a homeowners' association lien. Before the Court are the parties' cross motions for summary judgment.[1](ECF Nos. 88, 90.) Because the Court agrees with Plaintiff Bank of New York Mellon (“BONY”) that it properly tendered the superpriority amount, the Court grants BONY's motion for summary judgment.

         II. BACKGROUND

         The following facts are undisputed unless otherwise indicated.

         Jason Schuetts (“Borrower”) obtained a loan in the amount of $242, 896 secured by a first deed of trust (“DOT”) against the property at issue (“Property”) in July 2005. (ECF No. 88-1 at 2-3.)

         The DOT was assigned to BONY on September 12, 2011. (ECF No. 88-2 at 2.)

         Shadow Springs Community Association (“HOA”) recorded a “lien for delinquent assessments” against the Property on November 19, 2010, through its agent, Red Rock Financial Services (“Red Rock”). (ECF No. 88-3 at 2.) The HOA recorded a foreclosure deed against the Property on October 1, 2014. (ECF No. 88-5 at 2.) The deed indicates that the Property was sold to Defendant Vegas Property Services (“VPS”) on September 23, 2014 (“HOA Sale”). (Id.)

         Before the sale, BONY tendered the superpriority portion of the HOA's lien to Red Rock through its sub-servicer, Bank of America, N.A. (“BANA”).[2] (See ECF No. 88-6 at 4.) BANA's counsel forwarded Red Rock a request for payoff information on February 10, 2011. (Id. at 9-10.) Red Rock responded by providing BANA's counsel an accounting ledger and payment history from August 10, 2005, through March 1, 2011. (Id. at 12-19.) The accounting ledger indicated that the HOA dues on the subject Property were $52 per month, with no nuisance or abatement charges accrued. (Id.) BANA's counsel forwarded Red Rock a check in the amount of $468, representing nine months of assessments, on March 18, 2011. (Id. at 21-23.) The HOA rejected BANA's tender and proceeded to foreclose. (Id. at 7.)

         BONY asserts the following claims in its amended complaint: (1) quiet title/declaratory relief - tender of superpriority lien; and (2) quiet title/declaratory relief - unconstitutional statute (ECF No. 32 at 5-7). BONY seeks “a declaration that the HOA Sale did not extinguish the Deed of Trust and thus did not convey the Property free and clear to VPS and that VPS' interest in the Property, if any, is subject to the Deed of Trust.” (Id. at 8.)

         VPS filed a counterclaim for declaratory relief/quiet title against BONY. (ECF No. 60 at 10.) VPS also filed a crossclaim for declaratory relief/quiet title against Frink Family Living Trust (“Trust”), alleging that the Trust “may claim an interest through a Quitclaim Deed from Jason Schuetts in April 2013.” (Id. at 12.) VPS asks that the Court declare that any interest the Trust had in the Property was extinguished by the HOA Sale. The Clerk of the Court entered default against the Trust (ECF No. 76).[3]

         III. LEGAL STANDARD

         “The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court.” Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See Id. at 250-51. “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)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. 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 Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita ...


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