United States District Court, D. Nevada
WELLS FARGO BANK, N.A., FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff,
CHESTNUT BLUFFS AVENUE TRUST, and NEVADA ASSOCIATION SERVICES, INC., Defendants.
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
the Court is Plaintiffs Federal National Mortgage Association
(“Fannie Mae”) and Wells Fargo Bank, N.A.'s
(“Wells Fargo) Joint Motion for Partial Summary
Judgment and Defendant Chestnut Bluffs Avenue Trust's
(“Chestnut”) Motion to Dismiss. ECF Nos. 36, 38.
For the following reasons, the Court grants Plaintiffs'
Motion and denies Defendant's motion.
Fannie Mae and Well Fargo filed their complaint against
Defendants Chestnut Bluffs Avenue Trust, Nevada Association
Services, Inc., (“NAS”) and Copper Ridge
Community Association (the “HOA”) on May 11,
2017. ECF No. 1. The complaint sought a declaration that
Plaintiffs' deed of trust survived a nonjudicial
foreclosure sale on a Las Vegas property conducted under
Chapter 116 of the Nevada Revised Statutes
(“NRS”). To that end, the complaint asserted
causes of action for declaratory relief, quiet title, due
process violations, wrongful foreclosure, statutory
violations of NRS 116, and unjust enrichment. Id.
The HOA filed its answer on September 7, 2017. ECF No. 25. On
June 4, 2018, the Court so-ordered Wells Fargo's
stipulation to dismiss its claims with prejudice against the
HOA. ECF No. 31. Chestnut filed its answer on June 11, 2018.
ECF No. 32. On September 14, 2018, Plaintiffs filed a motion
for summary judgment. ECF No. 36. The motion was fully
briefed. ECF Nos. 37, 44. Chestnut filed a motion to dismiss
on October 25, 2018. ECF No. 38. That motion was also fully
briefed. ECF Nos. 43, 45. On July 10, 2019, the Federal
Finance Housing Agency (“FHFA”) filed an amicus
brief in support of Plaintiffs. ECF No. 49.
allege the following facts.
matter concerns a nonjudicial foreclosure on a property
located at 2255 Chestnut Bluffs Avenue, Henderson, Nevada
89052 (the “property”). The property sits in a
community governed by the HOA. The HOA requires its community
members to pay HOA dues.
Robert and Nancy Fortunato borrowed funds from Ohio Savings
Bank to purchase the property in 2005. To obtain the loan,
the Fortunatos executed a promissory note and a corresponding
deed of trust to secure repayment of the note. The deed of
trust, which lists the Fortunatos as the borrowers, Ohio
Savings Bank as the lender, and Mortgage Electronic
Registration Systems, Inc. (“MERS”) as the
beneficiary of record, was recorded on or about September 23,
2005. On or about October 3, 2011, an assignment of the deed
of trust from MERS to Wells Fargo was recorded.
Fortunatos fell behind on their HOA payments. From September
2, 2010 through February 24, 2012, the HOA, through its agent
NAS, recorded a notice of delinquent assessment lien,
followed by a notice of default and election to sale, and
finally a notice of foreclosure sale against the property for
past-due assessments. On May 11, 2012, Chestnut purchased the
property for $6, 000, as recorded on May 17, 2012.
Fannie Mae previously purchased the note and the deed of
trust in 2005. While its interest was never recorded under
its name, Fannie Mae continued to maintain its ownership of
the note and the deed of trust at the time of the
foreclosure. Wells Fargo serviced the note and was listed as
the record beneficiary at the time of the foreclosure sale.
relationship between Fannie Mae and its servicers, is
governed by Fannie Mae's Single-Family Servicing Guide
(“the Guide”). The Guide provides that servicers
may act as record beneficiaries for deeds of trust owned by
Fannie Mae. It also requires that servicers assign the deeds
of trust to Fannie Mae on Fannie Mae's demand. The Guide
The servicer ordinarily appears in the land records as the
mortgagee to facilitate performance of the servicer's
contractual responsibilities, including (but not limited to)
the receipt of legal notices that may impact Fannie Mae's
lien, such as notices of foreclosure, tax, and other liens.
However, Fannie Mae may take any and all action with respect
to the mortgage loan it deems necessary to protect its ...
ownership of the mortgage loan, including recordation of a
mortgage assignment, or its legal equivalent, from the
servicer to Fannie Mae or its designee. In the event that
Fannie Mae determines it necessary to record such an
instrument, the servicer must assist Fannie Mae by [ ]
preparing and ...