United States District Court, D. Nevada
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
the Court are Defendant Saticoy Bay LLC Series 6671 W.
Tropicana 103âs (âSaticoy Bayâ) Motion to Certify Question to
the Nevada Supreme Court (ECF No. 46) and Motion for Summary
Judgment (ECF No. 52), and Plaintiff Federal National
Mortgage Associationâs (âFannie Maeâ) Motion for Summary
judgment (ECF No. 51). For the following reasons, the Court
grants Plaintiffâs motion and denies Defendantâs motions.
Fannie Mae sued Defendants Saticoy Bay and the Casa Mesa
Villas Homeowners Association (the “HOA”) on June
26, 2017. ECF No. 1. Fannie Mae filed the operative amended
complaint on June 28, 2017. ECF No. 2. Fannie Mae seeks
declaratory relief that a nonjudicial foreclosure sale
conducted in 2016 under Chapter 116 of the Nevada Revised
Statutes (“NRS”) did not extinguish Fannie
Mae’s interest in a Las Vegas property. To obtain this
relief, Fannie Mae asserts the following claims: 1)
declaratory judgment relief under 12 U.S.C. § 4617(j)(3)
against Saticoy Bay; 2) quiet title under 12 U.S.C. §
4617(j)(3) against Saticoy Bay; 3) declaratory relief under
the Fifth and Fourteenth Amendments against Saticoy Bay and
the HOA; 4) quiet title under the Fifth and Fourteenth
Amendments against Saticoy Bay; 5) and injunctive relief
against Saticoy Bay. Saticoy Bay filed a motion to dismiss on
October 11, 2017. ECF No. 12. The HOA answered the amended
complaint on October 20, 2017. ECF No. 15. Fannie Mae moved
for summary judgment on March 9, 2018. ECF No. 28. The motion
was fully briefed. ECF Nos. 32, 35. The Court held a hearing
on September 10, 2018. ECF No. 42. On September 28, 2018, the
Court administratively stayed the case pending the Nevada
Supreme Court’s decisions in SFR Investments Pool
1, LLC v. Green Tree Servicing, LLC, 431 P.3d 718 (Nev.
2018) (unpublished) and Onewest Bank FSB v. Holm
Int’l Props., LLC 432 P.3d 741 (Nev. 2018)
(unpublished). The Court also denied all pending motions. ECF
No. 43. The Court lifted the stay on January 11, 2019. ECF
No. 45. Saticoy Bay moved the court to certify questions to
the Nevada Supreme Court on January 31, 2019. ECF No. 46. The
motion was fully briefed. ECF Nos. 54, 58. Saticoy Bay also
answered and asserted counterclaims against Fannie Mae for
declaratory relief on February 8, 2019. ECF Nos. 48, 50. On
February 11, 2019, Fannie Mae and Saticoy Bay moved for
summary judgment. ECF Nos. 51, 52. Both motions were fully
briefed. ECF Nos. 56, 59, 62, 63.
Court makes the following findings of undisputed and disputed
matter concerns a nonjudicial foreclosure on a property
located at 6671 W. Tropicana Avenue, # 103, Las Vegas, Nevada
89103 (the “property”). The property sits in a
community governed by the HOA. The HOA requires its community
members to pay HOA dues.
Frank Kiyono borrowed funds from RMS & Associates to
purchase the property in 2007. To obtain the loan, Kiyono
executed a promissory note and a corresponding deed of trust
to secure repayment of the note. The deed of trust, which
lists Kiyono as the borrower, RMS & Associates as the
lender, and Mortgage Electronic Registration Systems, Inc.,
(“MERS”) as the beneficiary, was recorded on
March 23, 2007. On March 2, 2017, MERS executed an assignment
of the deed of trust to Fannie Mae.
fell behind on HOA payments. From July 2015 through February
2016, the HOA, through its agent, recorded a notice of
delinquent assessment lien, followed by a notice of default
and election to sell and then a notice of foreclosure sale.
On March 4, 2016, the HOA held a foreclosure sale on the
property under NRS Chapter 116. Saticoy Bay purchased the
property at the foreclosure sale. A foreclosure deed in favor
of Saticoy Bay was recorded on May 5, 2016.
Federal National Mortgage Association (“Fannie
Mae”) previously purchased the note and the deed of
trust in April 2007. While its interest was not recorded
under its name until March 2, 2017, Fannie Mae continued to
maintain its ownership of the note and the deed of trust at
the time of the foreclosure.
relationship between Fannie Mae and MERS, is governed by
Fannie Mae’s Single-Family Servicing Guide (“the
Guide”) and the MERS System Rules of Membership. The
MERS System Rules of Membership state as follows:
Mortgage Electronic Registration Systems, Inc.
(“MERS”) is . . . created for the purpose of
serving as the Mortgagee of Record in the applicable public
land records solely as Nominee for the Note Owner and the
Note Owner’s successors and assigns, including the Note
Holder. MERS shall have no rights whatsoever to retain any
payments made on account of a MERS Loan, to any servicing
rights related to MERS Loans, or to retain any mortgaged
properties securing MERS Loans. MERS agrees not to assert ...