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Bank of New York Mellon v. Gleneagles Homeowner Association

United States District Court, D. Nevada

January 13, 2020




         Plaintiff Bank of New York Mellon (BONY) sues to determine whether a deed of trust encumbering property located at 3740 Singing Lark Court in North Las Vegas, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA), defendant Gleneagles Homeowner Association (Gleneagles). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the foreclosure sale. BONY seeks a declaration that the deed of trust still encumbers the property, and it asserts alternative damages claims against Gleneagles[1] and Gleneagles' foreclosure agent, Defendant Nevada Association Services, Inc. (NAS). SFR counterclaims for a declaration that it purchased the property free and clear of the deed of trust. It also cross-claims against the former homeowner, cross-defendant Jose Luis Mendez, to quiet title.

         BONY moves for summary judgment, arguing its loan servicer, Bank of America, tendered the superpriority amount prior to the sale and thereby preserved the deed of trust. SFR opposes BONY's motion but did not move for summary judgment.

         The parties are familiar with the facts so I do not repeat them here except where necessary. I grant BONY's motion 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 dismiss as moot Bank of America's alternative damages claims against NAS. Finally, I set a deadline for SFR to address its claim against Mendez.

         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).

         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 either be “unconditional, or with conditions on which the tendering party has a right to insist.” Id. at 118.

         BONY has established that it tendered the superpriority amount in full. The HOA assessment was $35 per month. ECF Nos. 85-5 at 9; 85-7 at 11-17. Prior to the HOA foreclosure sale, Bank of America tendered $315.00 to NAS to cover the superpriority amount of nine months of assessments. Id. at 11-19. NAS refused to accept the check. Id. at 15-19. SFR has presented no contrary evidence in response. Consequently, no genuine dispute remains that the superpriority lien was extinguished and the property remains encumbered by 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 Challenges

         SFR contends BONY has not presented sufficient evidence that its tender was delivered to NAS. BONY relies on the affidavit of Adam Kendis (Kendis), a paralegal with Miles, Bauer, Bergstrom & Winters, LLP (Miles Bauer). SFR contends that Kendis's affidavit is insufficient because Kendis does not state his dates of employment with Miles Bauer and does not establish his personal knowledge regarding the specific file at issue. SFR also asserts that it learned in another trial that Douglas Miles from the Miles Bauer law firm did not review the file or retrieve the records himself when he prepared a similar affidavit, but instead gave the bank's counsel access to the law firm's database. Finally, SFR argues that BONY cannot show delivery because the runner's slip is not authenticated, and it is not linked to the tender check. BONY responds that it has presented evidence of delivery and other courts have accepted similar evidence in other cases. BONY also contends that SFR's arguments about testimony in another case have no bearing on this case.

         BONY has presented sufficient evidence from which a reasonable jury could find that it delivered the tender check. Kendis's affidavit properly authenticated the documents offered and explained what the screenshot of Miles Bauer's case management notes reflects. ECF No. 85-5. The notes state that the check was delivered on February 12, 2012, which corresponds to the date on the Legal Wings runner slip. Id. at 15, 19. The notes also reflect that the check was returned, which corresponds with both the runner slip and with the voided checks. Id. at 17, 19. SFR has not presented any evidence to raise a genuine dispute that the check was not delivered.

         Federal Rule of Civil Procedure 56 does not require that evidence be presented in admissible form at summary judgment. Rather, under Rule 56(c)(2), a party “may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.” Under Federal Rule of Evidence 901(a), a party offering evidence “must produce evidence sufficient to support a finding that the item is what the proponent claims it is.” Under ...

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