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Nationstar Mortgage LLC v. Curti Ranch Two Maintenance Association, Inc.

United States District Court, D. Nevada

December 16, 2019

NATIONSTAR MORTGAGE LLC, Plaintiff,
v.
CURTI RANCH TWO MAINTENANCE ASSOCIATION, INC.; SFR INVESTMENTS POOL 1, LLC, Defendants.

          ORDER FINDINGS OF FACT AND CONCLUSIONS OF LAW

          LARRY R. HICKS, UNITED STATES DISTRICT JUDGE

         On October 23, 2019, a bench trial was held on the sole remaining issue before the court: whether Nationstar Mortgage LLC (“Nationstar”) has a property interest sufficient to bring its claims for relief (quiet title) and prove its entitlement to judgment in its favor. ECF No. 131. During the trial, the court reserved ruling on defendant's, SFR Investments Pool 1, LLC (“SFR”), motion in limine to exclude the corrective assignment recorded July 23, 2018, from evidence (ECF No. 88). Id. On the eve of trial, Curti Ranch Two Maintenance Association Inc. (“the Association” or “Curti Ranch”) and Nationstar filed a notice of settlement. ECF No. 129. That same night, SFR filed a “Supplemental Trial Brief” which was actually a motion to dismiss based on the settlement agreement between Curti Ranch and Nationstar. ECF No. 130. As Nationstar was unaware of this filing when the parties met for trial, no argument was heard on the motion, and the court ordered the parties to fully brief the issue. ECF No. 131. During the bench trial, SFR also argued a motion to reconsider the court's prior ruling that Nationstar's quiet title claim was governed by a 5-year statute of limitations. See Id. Nationstar objected to such argument as untimely, but effectively opposed the motion before the court. Id. With briefing now complete on SFR's supplemental trial brief, the court rules on all pending issues.

         I. STATUTE OF LIMITATIONS

         During SFR's oral argument at the bench trial, SFR orally motioned the court to reconsider its prior order on summary judgment (ECF No. 59), in which the court held that a 5-year limitations period exists for Nationstar's quiet title claim. Id. Nationstar objected to the motion as untimely, however, the court entertained SFR's argument. Without waiving its objection, Nationstar responded to SFR's argument, and SFR replied. Id.

         As the court found in its order denying Nationstar's motion to reconsider, such a motion to reconsider is untimely. See ECF No. 118. SFR has had almost 9 months to file a motion on the issue: if SFR wished to argue for reconsideration it should have timely filed a motion following the court's January 2019 order. Therefore, consistent with the court's prior order, the court also denies SFR's motion for reconsideration as untimely. Moreover, the court is not persuaded by SFR's argument that a shorter statutory period is applicable: the court maintains that a 5-year statute of limitations period applies to Nationstar's quiet title claim. Accordingly, SFR's oral motion is denied.

         II. MOTIONS IN LIMINE

         On September 6, 2019, defendant, SFR filed a motion in limine to exclude the “Corrective Corporate Assignment of Deed of Trust, ” recorded in the Washoe County Recorder's Office on July 23, 2018 as document number 4835207, from evidence presented during trial. ECF No. 88. Plaintiff, Nationstar responded. ECF No. 92. Nationstar filed a motion in limine to exclude reference, testimony, argument and documents concerning prior acts and other properties and litigation (ECF No. 89), to which SFR responded (ECF No. 93). On September 26, 2019, during calendar call, the parties conferred and agreed that a bench trial was appropriate to decide the only remaining issue before the court. ECF No. 106. At the start of the bench trial on October 23, 2019, the court reserved ruling on SFR's motion in limine. ECF No. 131; see Hawthorne Partners v. AT&T Techs., Inc., 831 F.Supp. 1398, 1400 (N.D. Ill. 1993) (a court may wait to resolve the evidentiary issues at trial where the evidence can be viewed in its “proper context”). No. argument was made at the bench trial as to Nationstar's motion in limine (ECF No. 89), and SFR did not attempt to introduce the evidence Nationstar sought to exclude.

         Generally, all relevant evidence is admissible. Fed.R.Evid. 402. Evidence is relevant if “it has any tendency to make a fact more or less probable than it would be without the evidence.” Fed.R.Evid. 401. The determination of whether evidence is relevant to an action or issue is expansive and inclusive. See Sprint/United Mgmt. Co. v. Mendelsohn, 552 U.S. 379, 384-87 (2008). However, the court may exclude otherwise relevant evidence “if its probative value is substantially outweighed by the danger of” unfair prejudice. Fed.R.Evid. 403. Additionally, “[i]f a party fails to provide information . . ., the party is not allowed to use that information . . . to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed.R.Civ.P. 37(c)(1).

         SFR argues that Nationstar failed to disclose this corrective assignment during discovery. As Nationstar indicated, they did not disclose the recorded document during discovery because it was not in existence until after discovery closed on July 5, 2018 (see ECF No. 28). The court finds that such a failure to disclose was substantially justified-Nationstar cannot be required to disclose documents that don't exist. Further, any failure to disclose the assignment was harmless. Nationstar disclosed the corrective assignment on August 2, 2018, over a year before trial. See ECF No. 88. If SFR had felt it necessary following this disclosure, it could have motioned the court to re-open discovery, but it did not do so. Therefore, the court cannot find that such late disclosure harmed SFR such that the evidence should be excluded. Accordingly, the court denies SFR's motion in limine (ECF No. 88) and shall consider the corrective assignment when making its further rulings. Additionally, because SFR did not attempt to introduce the evidence Nationstar sought to exclude, the court denies Nationstar's motion in limine (ECF No. 89) as moot.

         III. FINDINGS OF FACT

         A. Facts Stipulated to by the Parties

         1. Nevada adopted the Uniform Common Interest Ownership Act as NRS Chapter 116, including NRS 116.3116(2), in 1991.

         2. The property at issue in this case, located at 480 Cicada Ct., Reno, Nevada 89521 (“the property”), is subject to the declarations of covenants, conditions, restrictions, reservations, and easements (CC&Rs) recorded by Curti Ranch.

         3. Homeowner, Mr. Guillermo Carey (non-party borrower), became delinquent on his Association monthly assessments. The Association, through its agent Alessi & Koenig, LLC (“Alessi”), recorded a Notice of Delinquent Assessment (Lien) on November 30, 2010, in the Washoe County Recorder's Office as document number 3947650. See Nationstar Trial Exhibit No. 9.

         4. The Association then recorded, through Alessi, a Notice of Default and Election to Sell under the Homeowners' Association Lien on February 24, 2011, in the Washoe County Recorder's Office as document number 3976810. See Nationstar Trial Exhibit No. 10.

         5. Bank of America, N.A., through its attorneys at Miles Bauer Bergstrome & Winters LLP, contacted Alessi on April 5, 2011, and requested a nine-month payoff statement so that it could satisfy the super-priority portion of the Association lien.

         6. On June 6, 2011, Alessi responded with a total payoff demand for $2, 407. The payoff stated the Association assessments were $112-per-month. No. nuisance abatement charges were included.

         7. Based on the $112 monthly assessment amount identified in the June 6, 2011 payoff demand, Bank of America calculated the super-priority portion of the lien as $1, 008, which was the sum of nine-months of common assessments, and sent a check for that amount to Alessi on June 17, 2011.

         8. Alessi refused to accept Bank of America's payment, and returned the $1, 008 check.

         9. On March 13, 2013, the Association, through Alessi, recorded a Notice of Trustee's Sale in the Washoe County Recorder's Office as document number 421678. See Nationstar Trial Exhibit No. 14.

         10. Curti Ranch, through Alessi, foreclosed on the property on September 19, 2013. A Trustee's Deed upon Sale was recorded on September 27, 2013, in the Washoe County Recorder's Office as document number 4284677. See Nationstar Trial Exhibit No. 6.

         11. At the sale, defendant/ counterclaimant SFR placed the highest cash bid of $22, 000. Id.

         B. Additional Findings of Fact

         12. In June 2005, Guillermo and Sandra Carey obtained a purchase money loan in the original principal amount of $344, 685 from Countrywide Home Loans, Inc., which was secured by a deed of trust encumbering the property. The deed of trust identified Countrywide Home Loans, Inc. as the lender, and Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for the lender and lender's successors and assigns as the record beneficiary. A copy of the deed of trust was recorded on July 6, 2005, in the Washoe County Recorder's Office as document number 3241354. See Nationstar Trial Exhibit No. 1.

         13. On May 2, 2011, the deed of trust was assigned from MERS to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing LP. It was recorded in the Washoe County Recorder's Office as document number 3998967. See Nationstar Trial Exhibit No. 2.

         14. On June 17, 2011, Bank of America, N.A., as successor by merger[1] to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing LP, tendered $1, 008.00 to Curti Ranch in an attempt to satisfy the HOA's super priority lien. Curit Ranch rejected the tender.

         15. On December 26, 2012, MERS recorded another assignment, this time transferring its interest in the property to U.S. Bank National Association for the Benefit of the Certificateholders CSFB Mortgage Securities Corp. Adjustable Rate Mortgage Trust 2005-11 Adjustable Rate Mortgage-Backed Pass-through Certificates, Series 2005-11 (“U.S. Bank”). It was recorded in ...


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