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Deutsche Bank National Trust Co. v. Seven Hills Master Community

United States District Court, D. Nevada

December 13, 2019

DEUTSCHE BANK NATIONAL TRUST COMPANY, Plaintiff
v.
SEVEN HILLS MASTER COMMUNITY, et al., Defendants

          ORDER (1) GRANTING DEUTSCHE AND NATIONSTAR'S MOTION FOR SUMMARY JUDGMENT; (2) GRANTING IN PART SFR'S MOTION FOR SUMMARY JUDGMENT; AND (3) DISMISSING DEUTSCHE'S DAMAGES CLAIMS AS MOOT [ECF NOS. 104, 105]

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         Plaintiff Deutsche Bank National Trust Company (Deutsche) sues to determine whether its deed of trust encumbering property located at 1444 European Drive in Henderson, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA), defendant Seven Hills Master Community (Seven Hills). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the foreclosure sale. Deutsche seeks a declaration that its deed of trust still encumbers the property and it asserts damages claims against Seven Hills. SFR counterclaims and crossclaims to quiet title in itself.[1]

         Deutsche and cross-defendant Nationstar Mortgage, LLC move for summary judgment. SFR also moves for summary judgment. The parties are familiar with the facts so I do not repeat them here except where necessary. I grant Deutsche and Nationstar's motion and deny in part SFR's motion because no genuine dispute remains that Deutsche's predecessor tendered the superpriority amount, thereby extinguishing the superpriority lien and rendering the sale void as to the deed of trust. I dismiss as moot Deutsche's damages claims against Seven Hills because those claims were pleaded in the alternative to the declaratory relief claim. I grant SFR's motion in part to quiet title in SFR vis-à-vis the prior homeowner, Valorie Holcomb.

         I. ANALYSIS

         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).

         A. Deutsche's Declaratory Relief Claim

         Under Nevada law, a “first deed of trust holder's unconditional tender of the superpriority amount due results in the buyer at foreclosure taking the property subject to the deed of trust.” Bank of Am., N.A. v. SFR Investments Pool 1, LLC, 427 P.3d 113, 116 (Nev. 2018) (en banc). To be valid, tender must be for “payment in full” and must be either “unconditional, or with conditions on which the tendering party has a right to insist.” Id. at 118.

         Deutsche has met its burden of establishing that its predecessor, Bank of America, N.A. (BANA), tendered the superpriority amount in full. The monthly HOA assessment was $50 per month. ECF Nos. 104-9 at 12; 104-10 at 3. Prior to the HOA foreclosure sale, BANA tendered $450 to Seven Hills' foreclosure agent, Leach Johnson Song & Gruchow (Leach), to cover the superpriority amount of nine months of assessments. ECF Nos. 104-9 at 14-16; 104-11. Leach received the check. ECF No. 104-11. SFR has presented no contrary evidence. Consequently, no genuine dispute remains that the superpriority lien was extinguished and the property remains subject to the deed of trust. Bank of Am., N.A., 427 P.3d at 121.

         SFR raises several arguments as to why tender did not extinguish the superpriority lien. None raises a genuine dispute precluding summary judgment.

         1. Evidentiary Challenge

         SFR argues that Deutsche cannot rely on Doug Miles' affidavit because Deutsche did not disclose him as a witness in discovery. Deutsche responds that it disclosed that it was relying on the Rule 30(b)(6) witness from Miles Bauer and provided the affidavit, so it disclosed the relevant witness and SFR is not prejudiced.

         SFR's position is difficult to understand given that Deutsche attached Miles' declaration to a prior motion for summary judgment in this case. ECF No. 77-11; see also ECF No. 113-1 (Deutsche and Nationstar's third supplement to initial disclosures dated March 2016 disclosing person most knowledgeable from Miles Bauer and disclosing Miles' affidavit). SFR thus had known about Miles and the content of his declaration for three years by the time the second round of summary judgment briefing took place.

         2. ...


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