United States District Court, D. Nevada
ORDER (1) DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT AND (2) GRANTING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT [ECF NOS. 53, 56]
P. GORDON UNITED STATES DISTRICT JUDGE.
Nationstar Mortgage LLC sues to determine whether a deed of
trust owned by the Federal Home Loan Mortgage Corporation
(Freddie Mac) still encumbers property located at 312 Pocono
Ranch Avenue following a non-judicial foreclosure sale
conducted by the homeowners association (HOA). Defendant 312
Pocono Ranch Trust (Pocono) purchased the property at the
moves for summary judgment, arguing that Nationstar's
declaratory relief claim is untimely because under either
federal or state law, a three-year limitation period applies.
Nationstar opposes Pocono's motion and moves for summary
judgment, arguing its claim is timely and the federal
foreclosure bar preserved the deed of trust.
parties are familiar with the facts so I do not repeat them
here except where necessary. I deny Pocono's motion
because Nationstar's declaratory relief claim is timely.
I grant Nationstar's motion because the federal
foreclosure bar precludes the HOA's foreclosure sale from
extinguishing the deed of trust.
judgment is appropriate if the movant shows “there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a), (c). A fact is material if it “might affect the
outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A dispute is genuine if “the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” Id.
party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion and
identifying those portions of the record that demonstrate the
absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden
then shifts to the non-moving party to set forth specific
facts demonstrating there is a genuine issue of material fact
for trial. Fairbank v. Wunderman Cato Johnson, 212
F.3d 528, 531 (9th Cir. 2000); Sonner v. Schwabe N. Am.,
Inc., 911 F.3d 989, 992 (9th Cir. 2018) (“To
defeat summary judgment, the nonmoving party must produce
evidence of a genuine dispute of material fact that could
satisfy its burden at trial.”). I view the evidence and
reasonable inferences in the light most favorable to the
non-moving party. James River Ins. Co. v. Hebert Schenk,
P.C., 523 F.3d 915, 920 (9th Cir. 2008).
Pocono's Motion (ECF No. 53)
argues that under either federal or state law,
Nationstar's declaratory relief claim is untimely. The
HOA sale took place on October 17, 2013 and the deed was
recorded on October 28, 2013. ECF No. 56-10. Nationstar filed
the complaint on June 28, 2017. ECF No. 1. If the applicable
limitation period is four or more years, Nationstar's
claims are timely.
and Nationstar dispute whether and how 12 U.S.C. §
4617(b)(12) applies to Nationstar's claim. That statute
extends the limitation period for claims brought by the
Federal Housing Finance Agency (FHFA) as conservator for
Freddie Mac. Contract claims must be brought within the
longer of six years or the applicable state law period, and
tort claims must be brought within the longer of three years
or the applicable state law period. 12 U.S.C. §
4617(b)(12)(A). Courts have interpreted § 4617(b)(12) to
govern any action brought by FHFA as conservator, and thus
one of these two limitation periods must apply even to a
claim like Nationstar's declaratory relief claim that is
neither a contract nor a tort claim. See FHFA v. UBS
Americas Inc., 712 F.3d 136, 144 (2d Cir. 2013);
Fed. Hous. Fin. Agency v. LN Mgmt. LLC, Series 2937
Barboursville, 369 F.Supp.3d 1101, 1108-09 (D. Nev.
2019); FHFA v. Royal Bank of Scotland Grp. PLC, 124
F.Supp.3d 92, 95-99 (D. Conn. 2015); FHFA v. HSBC No.
Amer. Holdings, Inc., Nos. 11cv6189 (DLC), 11cv6201
(DLC), 2014 WL 4276420, at *5 (S.D N.Y. Aug. 28, 2014);
In re Countrywide Fin. Corp. Mortgage-Backed Sec.
Litig., 900 F.Supp.2d 1055, 1067 (C.D. Cal. 2012).
Pocono and Nationstar agree on this point.
they disagree about whether Nationstar's claim is more
like a contract claim or more like a tort claim. Pocono
argues that Nationstar's claim is essentially for
wrongful foreclosure and thus is a tort claim. Nationstar
contends that because its security interest in the property
is derived from a contract, the six-year limitation period
claim is not comparable to wrongful foreclosure. Under Nevada
law, a “wrongful foreclosure claim challenges the
authority behind the foreclosure, not the foreclosure act
itself.” McKnight Family, L.L.P. v. Adept
Mgmt., 310 P.3d 555, 559 (Nev. 2013) (en banc).
Nationstar's declaratory relief claim does not challenge
the HOA's authority or legal right to conduct the
foreclosure, and it does not dispute that the homeowner was
in default on the HOA assessments. See Collins v. Union
Fed. Sav. & Loan Ass'n, 662 P.2d 610, 623 (Nev.
1983) (stating that “the material issue of fact in a
wrongful foreclosure claim is whether the trustor was in
default when the power of sale was exercised”). Rather,
Nationstar concedes the HOA had the authority to foreclose
but disputes that the foreclosure extinguished the deed of
trust. And Nationstar does not request tort damages.
fitting comparison is to a contract claim. The security
interest in the property was established through the deed of
trust, which is a contract. See Edelstein v. Bank of New
York Mellon, 286 P.3d 249, 254, 258 (Nev. 2012) (en
banc). Nationstar's declaratory relief claim seeks to
establish whether that security interest still encumbers the
property, and thus is more akin to a contract claim than a
tort claim. See LN Mgmt. LLC, Series 2937
Barboursville, 369 F.Supp.3d at 1109-10 (reaching the
same conclusion). Consequently, if § 4617(b)(12)(A)
applies to Nationstar's claim, then the six-year
limitation period governs and Nationstar's claim is
not decide whether § 4617(b)(12)(A) applies to
Nationstar's claim because even if it does not, the
complaint is timely under Nevada law. Although the parties
advocate for either a three- or five-year limitation period
under Nevada law, I have previously ruled that the four-year
catchall limitation period in Nevada Revised Statutes §
11.220 applies to claims brought by a lienholder seeking to
determine whether an HOA sale extinguished its deed of trust.
See Bank of America, N.A. v. Country Garden Owners
Ass'n, 2:17-cv-01850-APG-CWH, 2018 WL 1336721, at *2
(D. Nev. ...