United States District Court, D. Nevada
JAMES W. PENGILLY, Plaintiffs,
KE ALOHA HOLDINGS et al., Defendants. AND ALL RELATED COUNTER ACTIONS,
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
the Court are Defendant Ke Aloha Holdings, LLC 's
(“Ke Aloha”) Motion for Release of Funds,
Defendant West Charleston Lofts Owners Association's
Motion of Summary Judgment, and Defendant Ditech Financial
LLC f/ka/ Green Tree Servicing, LLC's
(“Ditech”) Motion for Summary Judgment. ECF Nos.
179, 183, and 184. For the following reasons, the Court
grants Green Tree Servicing LLC's Motion for Summary
Judgment and Ke Aloha's Motion for Release of Funds and
denies the other motions.
James W. Pengilly (“Pengilly”) began this case in
the Eighth Judicial District Court of Clark County, Nevada,
where he sought quiet title and declaratory relief that a HOA
foreclosure sale conducted pursuant to Chapter 116 of the
Nevada Revised Statutes (“NRS”) in December 2013
was unlawful. ECF No. 1-2. Defendant United States Internal
Revenue Service (the “IRS”) removed the case to
federal court on September 10, 2014. ECF No. 1. The IRS
answered the complaint on October 20, 2014. ECF No. 8.
Defendants Bill Blanchard, Douglas L. Crook, Erika Geiser,
and Kenneth R. Sailley moved for summary judgment on February
13, 2015, which Ke Aloha also joined on February 24, 2015.
ECF Nos. 14, 15. Counter Defendant West Charleston Lofts
Owners Association filed a motion to dismiss on June 24,
2015. ECF No. 38. On January 13, 2016, the Court denied all
pending motions without prejudice so that discovery could
continue. ECF No. 70. On March 30, 2016, the parties filed
new motions for summary judgment. ECF Nos. 81 - 85. On March
31, 2017, the Court stayed the case pending petitions for
writs of certiorari before the United States Supreme Court in
two relevant cases. Bourne Valley Ct. Tr. v. Wells Fargo
Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert.
denied, 137 S.Ct. 2296 (2017); Saticoy Bay LLC
Series 350 Durango 104 v. Wells Fargo Home Mortg., 388
P.3d 970 (Nev. 2017). ECF No. 142. On April 10, 2019, the
Court lifted the stay. ECF No. 178. The instant motions were
filed on May 17, 2019. ECF Nos. 181, 183, 184.
Court makes the following findings of disputed and undisputed
matter concerns a nonjudicial foreclosure on a property
located at 11441 Allerton Park, # 411, Las Vegas, Nevada
89109 (the “property”). The property sits in a
community governed by the West Charleston Lofts Owners
Association (the “HOA”). The HOA requires its
community members to pay HOA dues.
about December 21, 2009, James W. Pengilly, as trustee of the
James W. Pengilly Trust, obtained a loan from Bank of
America, N.A. (“BANA”) in the amount of $414,
000. The deed of trust was recorded against the property on
March 29, 2010. The deed listed Pengilly as the borrower,
BANA as the lender, and Recon Trust Company as the trustee.
On April 7, 2011, BANA recorded an assignment of the deed of
trust to BAC Home Loans Servicing, LP f/k/a Countrywide Home
Loans Servicing, LP. On November 17, 2011, an assignment of
the deed of trust was recorded, showing that Countrywide Home
Loans, Inc. had assigned the deed of trust to Ditech on
September 29, 2011. On March 19, 2013 a corrective
corporation assignment of the deed of trust was recorded,
showing that BANA, as successor by merger to BAC Home Loans
Servicing had assigned the deed of trust to Ditech effective
September 29, 2011.
fell behind on HOA dues. Between September 2013 and December
2013, the HOA, through its agent, recorded a notice of
delinquent assessment lien, followed by a notice of default
and election to sell, and finally a notice of foreclosure
sale. On or around December 13, 2013, Ke Aloha purchased the
property as evidenced by a foreclosure deed recorded on
December 19, 2013.
Federal National Mortgage Association (“Fannie
Mae”) previously purchased the note and the deed of
trust in January 2010. 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. Ditech serviced the note and was listed as
the beneficiary of the deed of trust, on behalf of Fannie
Mae, 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 ...