Williston Investment Group, LLC v. JP Morgan Chase Bank NA et al

Filing 75

ORDER Granting 44 Motion for Summary Judgment. IT IS FURTHER ORDERED that Freddie Mac, FHFA, Wakefield, Chase and MERS are granted summary judgment on Williston's claims for quiet title. Signed by Chief Judge Gloria M. Navarro on 7/13/15. (Copies have been distributed pursuant to the NEF - PS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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WILLISTON INVESTMENT GROUP, LLC, )
a Nevada limited Liability Company,
)
)
Plaintiff,
)
vs.
)
)
JP MORGAN CHASE BANK NATIONAL )
ASSOCIATION, a National Association;
)
MORTGAGE ELECTRONIC
)
REGISTRATION SYSTEMS, INC., a Foreign )
Corporation; MTC FINANCIAL, INC., a
)
Foreign Corporation; FEDERAL HOME
)
LOAN MORTGAGE CORPORATION, a
)
Foreign Corporation; ROBERT WAKEFIELD, )
an individual; DOES I through X; and ROE
)
CORPORATIONS I through X, inclusive,
)
)
)
Defendants,
FEDERAL HOUSING FINANCE AGENCY, )
)
as Conservator of the Federal National
)
Mortgage Corporation,
)
Intervenor,
JP MORGAN CHASE BANK NATIONAL )
)
ASSOCIATION, a National Association;
)
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., a Foreign )
Corporation; and FEDERAL HOME LOAN )
)
MORTGAGE CORPORATION, a
)
Foreign Corporation,
)
)
Counter-Plaintiffs,
)
vs.
)
WILLISTON INVESTMENT GROUP, LLC; )
)
and DESERT LINN CONDOMINIUMS,
)
)
Counter-Defendants.
)
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Case No.: 2:14-cv-02038-GMN-PAL
ORDER

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Pending before the Court is the Motion for Summary Judgment (ECF No. 44) filed by
Defendant Federal Home Loan Mortgage Corporation

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reddie Mac

ff/Counter-Defendant Williston Investment Group,

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LLC

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(ECF No. 59).

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I.

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Williston

54), and Freddie Mac and FHFA filed a Reply

BACKGROUND
The present action involves the interplay between Nevada Revised Statutes § 116.3116

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and 12 U.S.C. § 4617 as it relates to

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Placid Terrace, Henderson, NV, 89014

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Wakefield

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interests in real property located at 1519 Lake
On July 12, 2005, Robert Wakefield

obtained a loan in the amount of $153,000 from Washington Mutual Bank, FA
that was secured by a Deed of Trust on the Property. (Deed of Trust, ECF No. 45-

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1).1 The Deed of Trust named WAMU as the beneficiary and California Reconveyance

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Company as the trustee. (Id.). Freddie Mac purchased the Wakefield Loan on August 23, 2005

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and has owned it ever since. See (Exs. A B to Am. Meyer Decl., ECF No. 69-1).

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conservatorships pursuant to HERA. See (Pollard Decl. ¶ 2, ECF No. 44-1).

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On February 23, 2012

Desert

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Linn Condominiums (the HOA , recorded a Notice of Delinquent Assessment Lien against

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the Property for $1,712.38. (Not. of Delinquent Assessment Lien, ECF No. 54-4). Then on

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April 10, 2012, NAS recorded a Notice of Default and Election to Sell, warning that the HOA

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would foreclose on its lien unless the assessment payments were brought up to date. (Not. of

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Default and Election to Sell, ECF No. 54-5). On November 6, 2012, NAS, as agent for the

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The Court takes judicial notice of Exhibits 1 5 (ECF Nos. 45-1 45s Request for
Judicial Notice (ECF No. 45). The Court also takes judicial notice of Exhibits 1 2, 4 9 (ECF Nos. 54-1 54-2,
54-4 54-9) of Williston Response. See Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986).
Each of these documents

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HOA, recorded a Notice of Foreclosure Sale, setting a foreclosure sale of the Property on

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December 7, 2012. (Not. of Foreclosure Sale, ECF No. 54-6). Williston subsequently

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purchased the Property as the highest bidder at the March 15, 2013 foreclosure sale.

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(Foreclosure Deed, ECF No. 45-2). At no time during the process did FHFA, as conservator of

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See (Pollard Decl. ¶¶ 3 4, ECF No. 57-1).

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On September 25, 2008, WAMU submitted to receivership under the Federal Deposit

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to a purchase and assumption agreement. (See Purchase and Assumption Agreement, ECH No.

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54-3). Moreover, on August 14, 2012, Chase substituted Trustee Corps

as

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the trustee of the Deed of Trust. (Substitution of Trustee, ECF No. 45-3). Shortly thereafter, on

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August 13, 2013, Trustee Corps recorded a Notice of Breach and Default and Election to Sell,

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indicating that Wakefield had failed to perform obligations pursuant to the Deed of Trust. (Not.

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of Breach and Default and Election to Sell, ECF No. 54-7). On June 3, 2014, Trustee Corps

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uly 11, 2014.

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(Not.

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the highest bidder at the Jul

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and Chase assigned its beneficial interest in the Deed of Trust to Freddie Mac on June 16, 2014

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(Assignment of Deed of Trust, ECF No. 45-4).

-9). Freddie Mac subsequently purchased the Property as
45-5),

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Williston initiated this action by filing the original complaint in state court on October

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21, 2014, asserting, inter alia, a claim for quiet title against Freddie Mac, MERS, Chase, and

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MTC Financial, Inc. (Compl. ¶¶ 60 68, ECF No. 1-1). Chase and Freddie Mac subsequently

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removed the action to this Court on December 04, 2014. (Not. of Removal, ECF No. 1). On

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December 12, 2014, Freddie Mac filed its Answer, asserting counterclaims against Williston.

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(Ans. to Compl. & Counterclaims, ECF No. 9). On December 22, 2014, Freddie Mac filed its

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Amended Answer, asserting counterclaims against Williston and the HOA. (Am. Ans. To

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Compl. & Counterclaims, ECF No. 13).

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On February 06, 2015, this Court entered an Order granting

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to Intervene. (Intervenor Order, ECF No. 40). Shortly thereafter, on February 25, 2015, Freddie

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Mac and FHFA filed the pending Motion for Summary Judgment. (MSJ, ECF No. 44).

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On June 18, 2015, the Court held a hearing on the pending Motion for Summary

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Judgment, which was attended by the parties in this case as well as the parties in several related

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cases2

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judgment motion. (Min. of Proceedings, ECF No. 67). After listening to the arguments

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presented by all parties present at the hearing, the Court took the motion under submission.

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II.

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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

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P. 56(a). Material facts are those that

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may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

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(1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable

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jury to return a verdict for the nonmoving party. See id.

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reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict

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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

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Celotex Corp. v. Catrett, 477 U.S. 317, 323 24 (1986).

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In determining summary judgment, a court applies a burden-

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These related cases are: Elmer v. JP Morgan Chase Bank NA, No. 2:14-cv-1999-GMN-NJK; and Skylights LLC
vs. Fannie Mae, No. 2:15-cv-0043-GMN-VCF.

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the party moving for summary judgment would bear the burden of proof at trial, it must come

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forward with evidence which would entitle it to a directed verdict if the evidence went

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uncontroverted at trial. In such a case, the moving party has the initial burden of establishing

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C.A.R. Transp.

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Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In

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contrast, when the nonmoving party bears the burden of proving the claim or defense, the

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moving party can meet its burden in two ways: (1) by presenting evidence to negate an

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e; or (2) by demonstrating that the nonmoving

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on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323

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24. If the moving party fails to meet its initial burden, summary judgment must be denied and

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See Adickes v. S.H. Kress & Co.,

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398 U.S. 144, 159 60 (1970).
If the moving party satisfies its initial burden, the burden then shifts to the opposing

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party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v.

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Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute,

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the opposing party need not establish a material issue of fact conclusively in its favor. It is

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T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors

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Ass’ n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid

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summary judgment by relying solely on conclusory allegations that are unsupported by factual

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data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go

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beyond the assertions and allegations of the pleadings and set forth specific facts by producing

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competent evidence that shows a genuine issue for trial. See Celotex Corp., 477 U.S. at 324.

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s function is not to weigh the evidence and determine the

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truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249.

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in

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not significantly probative, summary judgment may be granted. See id. at 249 50.

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III.

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Id. at 255. But if the evidence of the nonmoving party is merely colorable or is

DISCUSSION
In the instant Motion for Summary Judgment, Freddie Mac and FHFA request that the

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that would permit a
foreclosure on a superpriority lien to extinguish a property interest of Freddie Mac while it is

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superior to the interest of Plaintif

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(Mot. Summ. J. 14:2 13, ECF No. 44).

The Court addressed the applicability of 12 U.S.C. § 4617(j)(3) in Skylights LLC v.

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Fannie Mae, 2015 WL 3887061 (D. Nev. June 24, 2015). After addressing many different

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arguments regarding the applicability of section 4617(j)(3), the Court held that the plain

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language of section 4617(j)(3) prohibits property of FHFA from being subject to a foreclosure

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without its consent. Id. at *10.

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Here, Freddie Mac has held an interest in the Property since August 23, 2005. See (Exs.

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A B to Am. Meyer Decl., ECF No. 69-1). Accordingly, because FHFA held an interest in the

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Deed of Trust as conservator for Freddie Mac prior to the HOA foreclosure, section 4617(j)(3)

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he Deed of Trust.
IV.

CONCLUSION
IT IS HEREBY ORDERED that Freddie Mac

for Summary

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Judgment (ECF No. 44) is GRANTED. The Court finds that 12 U.S.C. § 4617(j)(3) preempts

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Nevada Revised Statutes § 116.3116 to the extent that a homeowner asso

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of its super-priority lien cannot extinguish a property interest of Fannie Mae or Freddie Mac

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sale of its super-priority interest on the Proper

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property secured by the Deed of Trust or convey the Property free and clear to Williston.

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IT IS FURTHER ORDERED that Freddie Mac, FHFA, Wakefield, Chase, and MERS
are granted summary judgment on Williston
DATED this 13th day of July, 2015.

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___________________________________
Gloria M. Navarro, Chief Judge
United States District Judge

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