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Bank of America N. A. v. Inspirada Community Association

United States District Court, D. Nevada

September 26, 2019

BANK OF AMERICA, N.A., Plaintiff,
v.
INSPIRADA COMMUNITY ASSOCIATION, et al., Defendants.

          ORDER

          Kent J. Dawson United States District Judge

         Presently before the Court is Defendant LVDG, LLC’s Motion for Summary Judgment (#51). Plaintiff filed a response in opposition (#60) to which Defendant LVDG replied (#69).

         Also, before the Court is Defendant Leach Johnson Song & Gruchow LTD’s Motion for Summary Judgment (#57). Plaintiff filed a response in opposition (#64) to which Leach Johson replied (#75).

         Also, before the Court is Defendant Inspirada Community Association’s Motion for Summary Judgment (#58). Plaintiff filed a response in opposition (#65) to which Inspirada replied (#74).

         Finally, before the Court is Plaintiff Bank of America, N.A.’s, Motion for Partial Summary Judgment (#59). Defendant Inspirada Community Association (“Inspirada”) filed a response in opposition (#66). Defendant Leach Johnson Song & Gruchow LTD (“Leach Johnson”) also filed a response in opposition (#67). Defendant LVDG also filed a response in opposition (#68). Plaintiff filed a unified reply (#76) to the oppositions. Plaintiff has also filed a Motion for Leave to File Supplemental Authority (#63) in support of its motion. Defendant LVDG filed a response (#70) to which Plaintiff replied (#71).[1]

         I. Facts

         On or about October 22, 2008, Robert and Judy Colegrove (“Borrowers”) purchased a home at 3233 Via Seranova, Henderson, NV 89044 (“the Property”). The Property is subject to the Declaration of Covenants, Conditions & Restrictions and Reservations of Easements (“CC&Rs”) of Defendant Inspirada Community Association (“Inspirada” or “the Association”). Borrowers failed to pay the Association assessments due under the CC&Rs. As a result of Borrower’s failure to pay assessments, on March 25, 2011, a Notice of Delinquent Assessment was recorded with the Clark County Recorder’s office.

         On June 2, 2011, a Notice of Default and Election to Sell was recorded against the Property. On July 5, 2011, Leach Johnson received a letter from BANA’s agent, law firm Miles, Bauer, Bergstrom & Winters, LLP (“Miles Bauer”), in which BANA offered to pay nine months assessments and asking for “a breakdown of the HOA arrears.” Instead of simply informing the agent of the amount of the superpriority lien, Leach Johnson responded on July 6, 2011 asserting that “[p]ursuant to NRS and NAC Chapter 116, including NRS 116.31175 and NAC 116.405, the Association may not disclose confidential owner account information to anyone other than the owner unless the disclosure is authorized by the owner.” Attached to the July 6, 2011 letter was an Authorization to Release Unit Owner’s Assessment Account Records to allow the Bank to obtain the authorization of Borrowers. Leach Johnson advised Miles Bauer that once he obtained the consent of the borrower, it would release the owner account information to the Bank to allow it to submit a payoff. The Bank neither responded, nor did it obtain the consent of Borrowers to allow the Association to release the account information.

         On April 30, 2012, a Notice of Foreclosure Sale was recorded against the Property. The Notice of Sale was mailed to the Borrowers, BAC Home Loans Services, LP, MERS and others. On August 22, 2013, the Property was sold at foreclosure to LVDG LLC Series 128 for $8, 200.00. Plaintiff BANA then filed the present action. The parties have each filed summary judgment seeking a declaration as to whether Inspirada’s foreclosure extinguished BANA’s lien or whether LVDG purchased the property subject to the lien.

         II. Standard for Summary Judgment

         The purpose of summary judgment is to avoid unnecessary trials by disposing of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986); Nw. Motorcycle Ass’n v. U.S. Dept. of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). It is available only where the absence of material fact allows the Court to rule as a matter of law. Fed.R.Civ.P. 56(a); Celotex, 477 U.S. at 322. Rule 56 outlines a burden shifting approach to summary judgment. First, the moving party must demonstrate the absence of a genuine issue of material fact. The burden then shifts to the nonmoving party to produce specific evidence of a genuine factual dispute for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A genuine issue of fact exists where the evidence could allow “a reasonable jury [to] return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court views the evidence and draws all available inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fischbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986). Yet, to survive summary judgment, the nonmoving party must show more than “some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586.

         III. Analysis

         Plaintiff has filed for summary judgment on its claims and the opposing parties have filed for summary judgment on the claims against them. For the reasons stated below, the Court finds that BANA’s deed of trust was extinguished by the HOA’s foreclosure of its superpriority lien. Therefore, BANA’s motion for summary judgment is denied and Defendants’ motions for summary judgment are granted.

         A. Foreclosure of the Superpriority Lien

         1. Tender

         Bank of America contends that its attempt to ascertain and pay the superpriority amount of Inspirada’s lien constituted valid tender and preserved its deed of trust. The Nevada Supreme Court has addressed whether valid tender preserves a lender’s deed of trust in a series of recent cases. In Bank of America, N.A. v. SFR Invs. Pool 1, LLC, the Court definitively held that a lender’s valid tender prior to the association’s foreclosure preserves the lender’s first deed of trust. 427 P.3d 113, 118 (Nev. 2018) (“Diamond Spur”). Tender is valid if (1) it pays the entire superpriority lien (id. at 117) and (2) it is unconditional or insists only on conditions the tendering party has a right to insist upon (id. at 118). The tendering party is under no obligation to “keep [the tender] good” or deposit the tender into an escrow or court-established account. Id. at ...


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