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U.S. Bank National Association v. Ou

United States District Court, D. Nevada

January 9, 2020

U.S. BANK NATIONAL ASSOCIATION, Plaintiff
v.
ZILIAN OU, et al., Defendants

          ORDER (1) GRANTING SFR AND ARLINGTON'S MOTIONS FOR SUMMARY JUDGMENT, (2) DENYING SFR'S MOTION TO DISMISS AS MOOT, (3) DENYING U.S. BANK'S MOTION FOR SUMMARY JUDGMENT, AND (4) SETTING DEADLINE FOR PRETRIAL ORDER OR STATUS REPORT [ECF NOS. 23, 35, 36, 37]

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE

         Plaintiff U.S. Bank National Association sues to determine whether its deed of trust encumbering property located at 9010 Harbor Wind Avenue located in Las Vegas, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA), defendant Arlington West Twilight Homeowners Association (Arlington). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the foreclosure sale. U.S. Bank seeks a declaration that its deed of trust still encumbers the property and it asserts damages claims against Arlington. U.S. Bank also brings a claim for judicial foreclosure against the borrower, defendant Zilian Ou, on the deed of trust that secures the loan U.S. Bank made to Ou.

         SFR moves to dismiss and for summary judgment, asserting that U.S. Bank's declaratory relief claim is untimely.[1] SFR also argues that the sale is presumptively valid and U.S. Bank cannot overcome that presumption. Arlington separately moves for summary judgment, contending all of U.S. Bank's claims against it are time-barred.

         U.S. Bank opposes SFR's and Arlington's motions and moves for summary judgment on its declaratory relief claim, arguing that its predecessor, Bank of America, tendered the superpriority amount before the sale, thereby satisfying the superpriority lien and preserving the deed of trust. U.S. Bank contends that all of its claims are timely or, alternatively, that SFR and Arlington have waived the statute of limitations defense or should be estopped from asserting it. U.S. Bank also argues equitable tolling applies because it did not learn of the sale right away and it believed that a pre-sale tender of the superpriority amount preserved the deed of trust. U.S. Bank argues its damages claims are timely because the statute of limitations has not been triggered where the deed of trust has not been declared invalid. Alternatively, it argues its damages claims run from the date the Supreme Court of Nevada issued the decision in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (en banc).

         The parties are familiar with the facts so I do not repeat them here except where necessary. I grant SFR's and Arlington's motions for summary judgment and deny U.S. Bank's motion because U.S. Bank's claims against them are time-barred. I deny SFR's motion to dismiss as moot. Finally, I order the parties to submit either a joint pretrial order or a status report regarding the remaining judicial foreclosure claim.

         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).

         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 its 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). Claims for breach of Nevada Revised Statutes § 116.1113, wrongful foreclosure, and violations of the Nevada Deceptive Trade Practices Act (NDTPA) are governed by limitation periods of four years or less. See Bank of New York for Certificateholders of CWALT, Inc. v. S. Highlands Cmty. Ass'n, 329 F.Supp.3d 1208, 1219 (D. Nev. 2018) (three or four years for wrongful foreclosure); Nationstar Mortg. LLC v. Amber Hills II Homeowners Ass'n, No. 2:15-cv-01433-APG-CWH, 2016 WL 1298108, at *5 (D. Nev. Mar. 31, 2016) (stating that a § 116.1113 claim is governed by a three-year limitation period in Nev. Rev. Stat. § 11.190(3)(a)); Nev. Rev. Stat. § 11.190(2)(d) (four years for NDTPA).

         The HOA foreclosure sale took place on January 9, 2013. ECF No. 37-6. The deed upon sale was recorded on January 11, 2013. Id. U.S. Bank's evidence shows that its predecessor's agent knew that the property had been sold as of February 12, 2013. ECF No. 35-11 at 7. U.S. Bank accepted the assignment of the deed of trust in April 2017. ECF No. 35-5. U.S. Bank filed its complaint about two weeks later, on May 11, 2017. ECF No. 1. U.S. Bank's claims thus are untimely because the complaint was filed more than four years after Bank of America's agent learned of the foreclosure sale.

         I have previously rejected arguments similar to the ones U.S. Bank makes that its declaratory relief claim is not subject to a statute of limitations, that the limitation period runs from the date the Supreme Court of Nevada issued the opinion in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., that its declaratory relief claim is a defense to a potential wrongful foreclosure claim by SFR and so is not subject to a limitation period, and that its damages claims are not ripe. See Bank of New York Mellon Tr. Co., Nat'l Ass'n v. SFR Investments Pool 1, LLC, No. 2:18-cv-00978-APG-CWH, 2019 WL 982378, at *2 (D. Nev. Feb. 28, 2019); Bank of New York for Certificateholders of CWALT, Inc., 329 F.Supp.3d at 1213-14, 1220; Country Garden Owners Ass'n, 2018 WL 1336721, at *3. I again reject those arguments here.

         U.S. Bank raises a new argument: that because its predecessor's tender “preserved the deed of trust by operation of law, the court need not reach SFR's statute of limitations argument.” ECF No. 42 at 3. But whether tender preserved the deed of trust by operation of law and whether U.S. Bank timely filed suit to obtain a judicial declaration to that effect are two different things. A four-year limitation period applies to U.S. Bank's declaratory relief claim regardless of whether it tendered.

         No later than February 2013, U.S. Bank's predecessor, Bank of America, knew the content of the HOA's Covenants, Conditions, and Restrictions (CC&Rs) and foreclosure notices, that Bank of America had tendered, that Arlington had not accepted tender, and that the property had been sold at an HOA foreclosure sale for $10, 000. See ECF No. 35-18 at 2. Thus, as of February 2013, Bank of America knew the facts supporting U.S. Bank's contention that the HOA foreclosure sale did not extinguish the deed of trust due to tender, a violation of the CC&Rs, lack of proper notice, and sale for an inadequate price. See Country Garden Owners Ass'n, 2018 WL 1336721, at *3; Nationstar Mortg., LLC v. Falls at Hidden Canyon Homeowners Ass'n, No. 2:15-cv-01287-RCJ-NJK, 2017 WL 2587926, at *2 (D. Nev. June 14, 2017) (holding the plaintiff's predecessor-in-interest “could have asserted claims for violation of NRS 116.113 and wrongful foreclosure as soon as it obtained facts to support a contention that the HOA's sale of the Property was improper”). U.S. Bank does not identify any other fact that it or Bank of America discovered after the HOA foreclosure sale that would extend the limitation period for its claims. Its claims thus are untimely.

         C. Waiver, Estoppel, and ...


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