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Bank of New York Mellon v. Copper Sands Homeowners Association, Inc.

United States District Court, D. Nevada

January 16, 2020

BANK OF NEW YORK MELLON, Plaintiff
v.
COPPER SANDS HOMEOWNERS ASSOCIATION, INC., et al., Defendants

          ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [ECF NO. 42]

          ANDREW P. GORDON UNITED STATES DISTRICT JUDGE.

         Plaintiff Bank of New York Mellon (BONY) sues to determine whether a deed of trust encumbering property located at 8101 W. Flamingo Road #1118 in Las Vegas, Nevada was extinguished by a nonjudicial foreclosure sale conducted by a homeowners association (HOA), defendant Copper Sands Homeowners Association, Inc. (Copper Sands). Defendant Saticoy Bay LLC Series 8101 Flamingo[1] (Saticoy) 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 Copper Sands and Copper Sands' foreclosure agent, Defendant Alessi & Koenig, LLC (Alessi). Saticoy counterclaims for declaratory relief that it purchased the property free and clear of the deed of trust.

         BONY moves for summary judgment, arguing a previous loan servicer, Bank of America, tendered the superpriority amount prior to the sale and thereby preserved the deed of trust. Saticoy opposes BONY's motion. Copper Sands agrees with BONY that the tender preserved the deed of trust. ECF No. 47 at 3. Alessi did not respond to BONY's motion.

         The parties are familiar with the facts so I do not repeat them here except where necessary. I grant BONY'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 BONY's alternative damages claims against Copper Sands and Alessi.

         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 the superpriority amount was tendered in full. The HOA assessment was $164.45 per month. ECF No. 42-6 at 12. Prior to the HOA foreclosure sale, Bank of America tendered $2, 303.10 to Alessi to cover the superpriority amount of nine months of assessments plus some collection costs. Id. at 16-18. Alessi refused to accept the check. Id. at 20. Saticoy has presented no contrary evidence in response. 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.

         Saticoy raises several arguments as to why I nevertheless should not grant summary judgment in BONY's favor. None precludes summary judgment.

         A. Weighing the Equities

         Saticoy contends I should weigh the equities in its favor as a bona fide purchaser. It also argues BONY waived its tender, should be estopped from asserting it, and has unclean hands because it did not take other action to stop the sale or inform others about its tender attempt.

         “[T]ender of the superpriority portion of an HOA lien satisfies that portion of the lien by operation of law.” Bank of Am., N.A., 427 P.3d at 120. Because “valid tender cured the default as to the superpriority portion of the HOA's lien, the HOA's foreclosure on the entire lien resulted in a void sale as to the superpriority portion.” Id. at 121. A “party's status as a [bona fide purchaser] is irrelevant when a defect in the foreclosure proceeding renders the sale void.” Id. For these same reasons, if tender was valid I do not weigh the equities because “the voiding of the foreclosure sale as to the superpriority portion of the lien is ultimately the result of the operation of law and not equitable relief.” Salomon v. Bank of Am., N.A., No. 75200-COA, 2019 WL 3231009, at *2 n.3 (Nev. App. July 17, 2019).[2] Finally, BONY “has not waived its right to protect its deed of trust, is not estopped from asserting that right, nor does it have unclean hands because it allowed [the HOA's] foreclosure to proceed without interceding to halt the foreclosure” because Bank of America satisfied the superpriority portion of the lien before the foreclosure, so it “was under no obligation to intercede or halt the foreclosure once it protected its own interest.” Bank of New York Mellon v. Green Valley S. Owners Ass'n, No. 1, No. 2:17-CV-2024-KJD-EJY, 2019 WL 4393356, at *6 (D. Nev. Sept. 13, 2019); see also Bank of Am., N.A., 427 P.3d at 119-21 (tender need not be recorded or deposited into court).

         B. ...


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