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Bank of America, N.A. v. Diamond Point Homeowners' Association

United States District Court, D. Nevada

September 26, 2019

BANK OF AMERICA, N.A., Plaintiff,



         Presently before the Court is Defendant SFR Investments Pool 1, LLC’s Motion for Summary Judgment (#97). Plaintiff Bank of America, N.A. (“BANA”), filed a response in opposition (#103) to which SFR replied (#110).

         Also, before the Court is Plaintiff Bank of America, N.A.’s Motion for Summary Judgment (#98). Defendant Diamond Point Homeowners’ Association (“Diamond Point” or “the Association”) filed a response in opposition (#102) as did Defendant SFR Investments Pool 1, LLC (“SFR”) (#105) to which BANA replied (#108).

         Finally, before the Court is Defendant Diamond Point Homeowners’ Association’s Motion for Summary Judgment (#99). BANA filed a response in opposition (#104) to which Diamond Point replied (#109).

         I. Facts

         Deborah Callaway and Michael Ortiz (“Borrowers”) financed their property located at 1204 E. Hammer Lane, North Las Vegas, Nevada with a $264, 499 loan from Universal American Mortgage Company. They secured the loan with a deed of trust. In 2011, the deed of trust was assigned to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP. On July 1, 2011, BAC Home Loans Servicing, LP merged with an into BANA.

         The property is subject to and governed by the Declaration of Covenants, Conditions and Restrictions and Grant of Easements (“CC&Rs”) for Diamond Point Homeowners’ Association. Eventually, Borrowers defaulted on their obligation to pay assessments of approximately $31 per month under the CC&Rs to Diamond Point. On June 2, 2011, Diamond Point through its foreclosure agent, Defendant Nevada Association Services (“NAS”), recorded notice of delinquent assessment lien. NAS recorded notice of default and election to sell on July 22, 2011. The notice stated that Borrowers owed $1, 999.28 plus costs and fees without specifying which part was the superpriority lien.

         On August 24, 2011, BANA’s counsel, Miles Bauer Bergstrom & Winters LLP (“Miles Bauer”) offered to pay the superpriority lien and asked for a total. In response, NAS provided an account statement which reflected that Borrowers owed $31 per quarter in assessments. The statement did not indicate that they owed any maintenance or nuisance abatement charges. Based on the ledger, BANA calculated the superpriority amount as $279.00 (nine months of assessments) and tendered that amount by check to NAS on September 22, 2011. NAS received, but rejected, BANA’s tender.[1]

         Notice of sale was recorded on March 20, 2012. Foreclosure sale was conducted on or about July 27, 2012. SFR purchased the property for $8, 000.00. The parties now disagree as to whether Diamond Point’s foreclosure extinguished BANA’s lien or whether SFR 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

         Bank of America argues that its deed of trust survived Diamond Point’s nonjudicial foreclosure for four discrete reasons: (1) the bank tendered-or was excused from tendering- the superpriority portion of the HOA lien; (2) the association foreclosed under an unconstitutional version of NRS § 116 and violated due process as-applied; (3) the Supremacy Clause preempts NRS § 116; and (4) the sale was unfair and should be equitably set aside under Shadow Canyon. Because the Court finds Bank of America’s tender argument dispositive, it need not reach the bank’s other arguments. Diamond Point and SFR, on the other hand, moves for summary judgment on their quiet title claims. They seeks a declaration that Diamond Point’s foreclosure extinguished both BANA’s and Borrower’s interest in the property. Further, they assert this action is barred by the statute of limitations.

         A. Statute ...

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