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Deutsche Bank National Trust Co. v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

January 16, 2020

DEUTSCHE BANK NATIONAL TRUST COMPANY, Plaintiff
v.
SFR INVESTMENTS POOL 1, LLC, et al., Defendants

          ORDER (1) GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT, (2) GRANTING IN PART SFR'S MOTION FOR SUMMARY JUDGMENT, AND (3) SETTING DEADLINES FOR FURTHER ACTION [ECF NOS. 75, 76]

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         Plaintiff Deutsche Bank National Trust Company (Deutsche) sues to determine whether a deed of trust encumbering property located at 9432 Melva Blue Court in Las Vegas, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA), defendant Centennial Point Community Association, Inc. (Centennial). Defendant SFR Investments Pool 1, LLC (SFR) purchased the property at the foreclosure sale. Deutsche seeks a declaration that the deed of trust still encumbers the property and it asserts alternative damages claims against Centennial. Deutsche also asserts an unjust enrichment claim against SFR and Centennial. SFR counterclaims against Deutsche and cross-claims against Nationstar Mortgage LLC for declaratory relief that it purchased the property free and clear of the deed of trust and that its claim to title is superior to Deutsche and Nationstar. SFR also filed a declaratory relief cross-claim against the former homeowners, Mark Kitchen and Nicole Kitchen.

         Deutsche and Nationstar move for summary judgment, arguing that Deutsche's prior loan servicer, Bank of America, tendered the superpriority amount prior to the HOA foreclosure sale and thereby preserved the deed of trust. Centennial agrees with Deutsche and Nationstar. ECF No. 86. SFR moves for summary judgment, arguing Deutsche and Nationstar lack standing and are not the real parties in interest. Alternatively, SFR contends that Deutsche's declaratory relief claim and Nationstar's defenses are untimely. SFR also argues Deutsche's unjust enrichment claim lacks supporting evidence. In its opposition to Deutsche's motion, SFR argues that the equities weigh in its favor as a bona fide purchaser and that Deutsche has not established there were no maintenance or nuisance abatement charges for this property. Deutsche and Nationstar respond that Deutsche is the real party in interest and has standing because the assignment of the deed of trust from Bank of America to Nationstar is a rogue filing that conveyed nothing. They also contend Deutsche's declaratory relief claim is timely.

         The parties are familiar with the facts so I do not repeat them here except where necessary. I grant Deutsche's motion and deny in part SFR's motion because 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 Deutsche's alternative damages claims against Centennial. I grant in part SFR's motion as to its quiet title counterclaim against Nationstar and as to Deutsche's unjust enrichment claim. Finally, I set a deadline for (1) SFR to either dismiss or move for default judgment on its cross-claim against the Kitchens, and (2) for Deutsche to state whether it intends to proceed on its unjust enrichment claim against Centennial.

         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. Standing

         A plaintiff must have suffered an “injury in fact” that is fairly traceable to the defendant and that a favorable court decision could likely redress. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (quotation omitted). Additionally, “as a prudential matter, ” the plaintiff must “assert [its] own legal interests as the real party in interest.” Dunmore v. United States, 358 F.3d 1107, 1112 (9th Cir. 2004).

         SFR questions whether either Deutsche or Nationstar has standing and is a real party in interest because of an assignment to Nationstar in the recorded documents related to this property. Deutsche and Nationstar contend that assignment is a rogue document.

         The deed of trust identifies Mortgage Electronic Registration Systems, Inc. (MERS) as the original beneficiary under the deed of trust. ECF No. 75-2. In February 2010, MERS assigned the deed of trust to Deutsche. ECF No. 75-3. In October 2013, Bank of America purported to assign the deed of trust to Nationstar. ECF No. 75-4. As explained by Nationstar's Rule 30(b)(6) witness, Keith Kovalic, the assignment from Bank of America to Nationstar was invalid because there is no assignment from Deutsche to Bank of America, so Bank of America had no means to assign the deed of trust to Nationstar. ECF No. 75-5 at 8-10. There is no evidence that MERS assigned the deed of trust to Bank of America before it assigned it to Deutsche, or that Deutsche assigned the deed of trust to Bank of America before Bank of America purported to assign it to Nationstar. Because there is no evidence Bank of America ever had an interest in the deed of trust, it could not have assigned it to Nationstar. See CitiMortgage, Inc. v. Saticoy Bay LLC Series 3084 Bellavista Lane, No. 71606, 448 P.3d 573, 2019 WL 4390765, at *1 n.2 (Nev. 2019) (“An assignee stands in the shoes of the assignor and ordinarily obtains only the rights possessed by the assignor at the time of the assignment, and no more.”) (quotation omitted).

         Accordingly, Deutsche is the beneficiary of record for the deed of trust, has standing, and is the real party in interest to assert the declaratory relief claim. Nationstar has effectively conceded that it does not have standing and has no interest in the property beyond acting as Deutsche's loan servicer. I therefore grant SFR's motion for summary judgment on its cross-claim against Nationstar.

         B. Declaratory Relief

         1. Statute ...


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