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Wells Fargo Bank, N.A. v. Platinum Realty and Holdings, LLC

United States District Court, D. Nevada

September 23, 2019

WELLS FARGO BANK, N.A., Plaintiff,
v.
PLATINUM REALTY AND HOLDINGS LLC, et al., Defendants. SFR INVESTMENTS POOL 1, LLC, Counterclaimaint,
v.
WELLS FARGO BANK, N.A., Counterdefendant.

          ORDER

          Lloyd D. George United States District Judge

         Defendant Spring Mountain Ranch Association (the HOA) conducted a foreclosure sale of the property underlying this dispute to satisfy its lien. Platinum Realty and Holdings, LLC, [1] purchased the property, and subsequently transferred it to defendant SFR Investments Pool 1, LLC. The plaintiff, Wells Fargo Bank, N.A., brought this suit seeking a determination that the foreclosure sale was void, that the foreclosure sale did not extinguish its Deed of Trust against the property, and that it has quiet title to the property. SFR filed a counterclaim seeking a determination that the foreclosure sale was valid, that Wells Fargo's interest in the property was extinguished, and that it has quiet title to the property.

         These three parties have each filed motions for summary judgment (ECF Nos. 93, 94, 95) and have filed the corresponding responses and replies. Having considered the papers, pleadings and evidence submitted by the parties, the Court finds that the foreclosure sale was conducted properly and holds that SFR is the rightful owner of the property and that Wells Fargo's interest in the property is extinguished. Accordingly, the Court will grant the HOA's and SFR's motions, and deny Wells Fargo's motion for summary judgment.

         Background

         Barbara Forfa purchased the property at issue in 2004. To finance the purchase, she obtained a loan for $240, 000 from World Savings Bank, FSB (Wells Fargo's predecessor-in-interest), which loan was secured with a Deed of Trust against the property.

         After Forfa became delinquent on her HOA assessments, the HOA[2] recorded and mailed a Notice of Delinquent Assessment Lien to Forfa. More than 30 days later, the HOA sent recorded a Notice of Default and Election to Sell. More than 90 days later, the HOA mailed a Notice of Foreclosure Sale to Forga and to World Savings Bank, which Notice was also recorded in the Clark County Recorder's office, and published and posted.

         Subsequent to the mailing of the Notice of Sale, Wells Fargo sent a letter to the HOA's agent in which it stated, "[i]f you are claiming lien priority over our mortgage and are seeking a court order allowing the proceeds of the sale to be applied to your debt first, please inform the undersigned immediately so that Wells Fargo Bank, NA may take the appropriate action to protect our secured interest in the property." Neither the HOA nor its agent responded to the letter.

         As Forfa did not cure the delinquent assessment, the HOA conducted a foreclosure sale on October 12, 2012. Platinum Realty and Holdings purchased the property for $6, 000. Wells Fargo notes that, at the time of the foreclosure sale, the value of the property was assessed at $140, 000. SFR acquired the property via a Grant Bargain Sale Deed from Platinum and is the current title holder of record.

         On January 17, 2014, SFR sued Wells Fargo and Forfa in state court seeking to quiet title in itself. SFR recorded a Lis Pendens on the property. On October 16, 2014, shortly after the Nevada Supreme Court decided SFR v. U.S. Bank, SFR voluntarily dismissed its state court suit. On April 29, 2015, Wells Fargo brought the present action asserting the following claims: (1) declaratory relief under Amendment V to the United States Constitution-Takings Clause; (2) declaratory relief under Amendments V and XIV to the United States Constitution-Due Process Clauses; (3) wrongful foreclosure based on various theories including that the sale was commercially unreasonable, which incorporated Plaintiffs constitutional claims; (4) violation of NRS § 116.1113, et seq., (the "Statute"); (5) intentional interference with contract; and (6)[3] quiet title.

         SFR counterclaimed-and cross-claimed against Forfa-for quiet title and declaratory injunctive relief establishing its ownership of the property free and clear of the Deed of Trust.

         Motion for Summary Judgment In considering a motion for summary judgment, the court performs "the threshold inquiry of determining whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); United States v. Arango, 670 F.3d 988, 992 (9th Cir. 2012). To succeed on a motion for summary judgment, the moving party must show (1) the lack of a genuine issue of any material fact, and (2) that the court may grant judgment as a matter of law. Fed. R. Civ. Pro. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Arango, 670 F.3d at 992.

         A material fact is one required to prove a basic element of a claim. Anderson, 477 U.S. at 248. The failure to show a fact essential to one element, however, "necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323. Additionally, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient." United States v. $133, 420.00 in U.S. Currency, 672 F.3d 629, 638 (9th Cir. 2012) (quoting Anderson, 477 U.S. at 252).

         "[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. "Of course, a party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact." Id., at 323. As such, when the non-moving party bears the initial burden of proving, at trial, the claim or defense that the motion for summary judgment places in issue, the moving party can meet its initial burden on summary judgment "by 'showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case." Id, at 325. Conversely, when the burden of proof at trial rests on the party moving for summary judgment, then in moving for summary judgment the party must establish each element of its case.

         Once the moving party meets its initial burden on summary judgment, the non-moving party must submit facts showing a genuine issue of material fact. Fed. R. Civ. Pro. 56(e); Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc.,210 F.3d 1099, 1103 (9th Cir. 2000). As summary judgment allows a court "to isolate and dispose of factually unsupported claims or defenses, " Celotex, 477 U.S. at 323-24, the court construes the evidence before it "in the light most favorable to the opposing party." Adickes v. S. H. Kress & Co.,398 U.S. 144, 157 (1970). The allegations or denials of a pleading, however, will not defeat a well-founded motion. Fed. R. Civ. Pro. 56(e); Matsushita Bee. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586-87 (1986). That is, the opposing party cannot "'rest upon the mere allegations or denials of [its] pleading' but must instead produce evidence that ...


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