Bank of Am., N.A. v. Travata & Montage At Summerlin Ctr. Homeowners' Ass'n

BANK OF AMERICA, N.A.,SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, LP,FKA COUNTRYWIDE HOME LOANS SERVICING, LP, Plaintiff, v. TRAVATA AND MONTAGE AT SUMMERLIN

CENTRE HOMEOWNERS' ASSOCIATION, et al., Defendants,SFR INVESTMENTS POOL 1, LLC,a Nevada limited liability company, Counter/Cross-Claimant, v. BANK OF AMERICA, N.A., et al., Counter/Cross-Defendants.

Case No.: 2:16-cv-00699-GMN-PAL

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

March 11, 2019

ORDER

Pending before the Court is the Motion for Summary Judgment, (ECF No. 70), filed by SFR Investments Pool 1, LLC ("SFR"). Bank of America, N.A. ("Plaintiff") filed a Response, (ECF No. 79), and SFR filed a Reply, (ECF No. 88).

Also pending before the Court is Plaintiff's Motion for Summary Judgment, (ECF No. 69). SFR and Travata and Montage at Summerlin Centre Homeowners' Association ("HOA") filed Responses, (ECF Nos. 78, 82), and Plaintiff filed a Reply, (ECF No. 85).¹

I. BACKGROUND

This case arises from the non-judicial foreclosure on real property located at 1960 Hollywell Street, Las Vegas, Nevada 89135 (the "Property"). (See Deed of Trust, Ex. A to Pl.'s Mot. Summ. J. ("MSJ"), ECF No. 69-1). In 2009, Phillip and Lorri Liebmann ("Borrowers") purchased the Property by way of a loan in the amount of $279,023.00, secured by a deed of trust (the "DOT"). (Id.). Plaintiff gained beneficial interest in the DOT through an assignment recorded on November 5, 2010. (See Assignment, Ex. D. to Pl.'s MSJ, ECF No. 69-4).

Upon Borrowers' failure to stay current on their payment obligations, Nevada Association Services ("NAS"), on behalf of HOA, initiated foreclosure proceedings by recording a notice of delinquent assessment lien and a subsequent notice of default and election to sell. (See Notice of Delinquent Assessment Lien, Ex. I to Pl.'s MSJ, ECF No. 69-9); (Notice of Default, Ex. J to Pl.'s MSJ, ECF No. 69-10).

On September 9, 2011, the law firm Miles, Bauer, Bergstrom & Winters LLP ("Miles Bauer"), on behalf of Plaintiff, sent a letter to NAS requesting a ledger identifying the amount of HOA's superpriority lien. (See Request for Accounting at 6-9, Ex. 1 to Miles Aff., ECF No.69-12). NAS responded with a ledger detailing the amount of HOA's lien. (See Statement of Account, Ex. 2 to Miles Aff., ECF No. 69-12). Miles Bauer, on behalf of BANA, subsequently delivered a check to NAS for $1,386.00, based on the provided ledger, purportedly representing nine months' worth of HOA assessments. (See Tender Letter, Ex. 3 to Miles Aff., ECF No. 69-12).

Notwithstanding the alleged tender, NAS proceeded with the foreclosure by recording a notice of foreclosure sale and subsequently foreclosing on the Property. (See Notice of Trustee's Sale, Ex. K to Pl.'s MSJ, ECF No. 69-11). On September 7, 2012, SFR recorded a foreclosure deed, stating that it purchased the Property for $9,200. (Foreclosure Deed, Ex. M to Pl.'s MSJ, ECF No. 69-13).

Plaintiff filed the instant Complaint on March 30, 2016, asserting the following causes of action arising from the foreclosure and subsequent sale of the Property: (1) quiet title; (2) breach of NRS 116.1113; (3) wrongful foreclosure; and (4) injunctive relief. (See Compl. ¶¶ 31-85). On June 13, 2016, SFR filed crossclaims and counterclaims against Plaintiff and Borrowers, respectively, for quiet title and injunctive relief. (See Answer 9:17-15:1, ECF No. 24).

II. LEGAL STANDARD

The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "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). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. "Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdictin the nonmoving party's favor." Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

In determining summary judgment, a court applies a burden-shifting analysis. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoidsummary judgment by relying solely on conclusory allegations that are unsupported by factual data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. Celotex Corp., 477 U.S. at 324.

At summary judgment, a court's function is not to weigh the evidence and determine the truth; it is to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. The evidence of the nonmovant is "to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. Id. at 249-50.

III. DISCUSSION

Plaintiff moves for summary judgment on its quiet title and declaratory relief claims, asserting that Bourne Valley Court Tr. v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), cert. denied, 137 S. Ct. 2296, 198 L.Ed.2d 726 (2017), compels the Court to hold that the HOA foreclosure sale did not extinguish Plaintiff's DOT. (Pl.'s MSJ 6:5-7:17, ECF No. 69). Plaintiff alternatively argues that summary judgment is warranted because Plaintiff properly tendered the superpriority HOA lien prior to the foreclosure sale, thus eliminating the superpriority status of the HOA's lien. (Id. 13:10-18:18).

SFR conversely seeks summary judgment on the basis that Bourne Valley is not controlling authority, Plaintiff lacks standing to assert its quiet title claim, Plaintiff's claims are barred by the statute of limitations, and Plaintiff is otherwise not entitled to an equitable remedy. (SFR's Mot. Summ. J. ("SFR's MSJ") 8:13-25:5, ECF No. 70). SFR also opposes Plaintiff's Motion by arguing, inter alia, that Plaintiff's purported tender did not satisfy HOA's superpriority lien, Plaintiff's tender contained impermissible conditions rendering it invalid, and SFR obtained the Property as a bona fide purchaser. (SFR's Resp. 17:9-26:14, ECF No.82). The Court's discussion below first addresses the applicable statute of limitations for Plaintiff's quiet title claim.

A. Statute of Limitations

Courts in this District, interpreting Nevada law, apply either a four or five-year limitations period to a lender's quiet title action, triggered by the HOA foreclosure sale or its recordation. U.S. Bank Nat'l Ass'n v. SFR Invs. Pool 1, LLC, No. 2:16-cv-00576-GMN-NJK, 2019 WL 303004, at *4 (D. Nev. Jan. 22, 2019); Wilmington Tr., Nat'l Ass'n v. Royal Highlands St. & Landscape Maint. Corp., No. 2:18-cv-00245-JAD-PAL, 2018 WL 2741044, at *2 (D. Nev. June 6, 2018). See also Saticoy Bay LLC Series 2021 Gray Eagle Way v. JPMorgan Chase Bank, 388 P.3d 226, 232 (Nev. 2017); Weeping Hollow Ave. Tr. v. Spencer, 831 F.3d 1110, 1114 (9th Cir. 2016). Moreover, a three-year statute of limitations under NRS 11.190(3)(a) does not apply to a lender's quiet title claim when the claim is substantively based on a court's equitable power to settle title disputes, rather than a wrongful-foreclosure tort claim for damages. See Ocwen Loan Servicing, LLC v. SFR Investments Pool 1, LLC, No. 2:17-cv-01757-JAD-VCF, 2018 WL 2292807, at *3 (D. Nev. May 18, 2018) (citing Shadow Wood Homeowners Association, Inc. v. New York Community Bancorp, 336 P.3d 1105 (Nev. 2016)).

Here, Plaintiff's quiet title claim against SFR focuses on the Court's equitable power to settle title disputes, evinced by Plaintiff's requests for relief in its quiet title claim of a declaration about the viability of its DOT. (See Compl. ¶¶ 2,...