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Bank of America, N.A. v. Ladera Homeowner's Association

United States District Court, D. Nevada

November 20, 2019

BANK OF AMERICA, N.A., Plaintiff
v.
LADERA HOMEOWNER'S ASSOCIATION, et al., Defendants

          ORDER (1) GRANTING BANK OF AMERICA'S MOTION FOR SUMMARY JUDGMENT, (2) GRANTING SFR'S MOTION FOR DEFAULT JUDGMENT, (3) GRANTING IN PART LADERA'S MOTION FOR SUMMARY JUDGMENT, AND (4) DENYING LADERA'S MOTIONS TO DISMISS AND TO STRIKE [ECF NOS. 74, 78, 86, 87, 88, 89]

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE

         Plaintiff Bank of America, N.A. sues to determine whether its deed of trust encumbering property located at 10514 Arnica Way in Las Vegas, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA), defendant Ladera Homeowner's Association (Ladera). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the foreclosure sale. Bank of America seeks a declaration that its deed of trust still encumbers the property. SFR counterclaims for declaratory relief that it purchased the property free and clear of the deed of trust. SFR also cross-claims for declaratory relief against the former homeowners, Gabrielle M. Gaerlan and Chester Guevara.

         Ladera moves to dismiss Bank of America's claims against it and moves to strike SFR's response to Ladera's motion to dismiss. Bank of America, Ladera, and SFR move for summary judgment on a variety of grounds. The parties are familiar with the facts so I do not repeat them here except where necessary. I grant Bank of America's motion and deny SFR's motion as to Bank of America because no genuine dispute remains that Bank of America tendered the superpriority amount, thereby extinguishing the superpriority lien and rendering the sale void as to the deed of trust. I grant SFR's motion as to its cross-claim against Gaerlan and Guevara because the HOA foreclosure sale extinguished their interests in the property. I deny Ladera's motion to dismiss and motion to strike, but I grant in part Ladera's motion for summary judgment because it is no longer a proper party to Bank of America's declaratory relief claim. I dismiss as moot Bank of America's damages claims against Ladera, which were pleaded in the alternative to Bank of America's declaratory relief claim.

         I. LEGAL STANDARDS

         A. Motion to Dismiss

         In considering a motion to dismiss, “all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party.” Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). However, I do not assume the truth of legal conclusions merely because they are cast in the form of factual allegations. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). A plaintiff must make sufficient factual allegations to establish a plausible entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). Such allegations must amount to “more than labels and conclusions, [or] a formulaic recitation of the elements of a cause of action.” Id. at 555.

         B. Summary Judgment

         Summary 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.

         The 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).

         II. BANK OF AMERICA'S CLAIMS AND SFR'S COUNTERCLAIM

         A. Statute of Limitations

         Both in the motion to dismiss and at summary judgment, Ladera and SFR contend that Bank of America's declaratory relief claim is untimely. The HOA foreclosure sale took place on February 1, 2013 and the foreclosure deed was recorded on February 6, 2013. ECF No. 86-6. The complaint was filed on February 25, 2016. ECF No. 1. Consequently, Bank of America's complaint is timely if a limitation period of more than three years applies.

         SFR and Ladera argue for limitation periods from anywhere between 45 days and three years. However, I have previously ruled that the four-year catchall limitation period in Nevada Revised Statutes § 11.220 applies to claims under § 40.010 brought by a lienholder seeking to determine whether an HOA sale extinguished a deed of trust. See Bank of Am., N.A. v. Country Garden Owners Ass'n, No. 2:17-cv-01850-APG-CWH, 2018 WL 1336721, at *2 (D. Nev. Mar. 14, 2018). Bank of America's declaratory relief claim therefore is timely.

         SFR contends it has refined its argument on this point and I should give the issue another look. I am not persuaded by SFR's new argument that I should use an analogous limitation period rather than the catchall. “Typically, when a statute lacks an express limitations period, courts look to analogous causes of action for which an express limitations period is available either by statute or by case law.” Perry v. Terrible Herbst, Inc., 383 P.3d 257, 260 (Nev. 2016) (en banc) (quotation and alteration omitted). Where a claim may not be analogized “to any other type of claim consistently, ” such as where the claim could be based on multiple different types of allegations, the four-year catchall in Nevada Revised Statutes § 11.220 applies. Id. at 261-62.

         Here, lienholders like Bank of America seeking declaratory relief regarding whether a deed of trust survived an HOA foreclosure sale tend to make a variety of arguments as to why the sale should either be void as to the deed of trust or set aside entirely. Those allegations usually relate to statutory violations, constitutional violations, tender, fraud, or to ...


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