Wells Fargo Bank, N.A. v. SFR Investments Pool 1, LLC et al
Filing
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ORDER Granting Plaintiff's 32 Motion for Leave to File First Amended Answer. Wells Fargo shall separately file the Amended Answer (which is attached hereto as Exhibit A) as a separate docket entry forthwith. Signed by Magistrate Judge Peggy A. Leen on 02/05/2016. (Copies have been distributed pursuant to the NEF - NEV)
Case 2:15-cv-00577-APG-PAL Document 32 Filed 11/16/15 Page 1 of 5
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Jeffrey Willis, Esq.
Nevada Bar No. 4797
Amy F. Sorenson, Esq.
Nevada Bar No. 12495
Wayne Klomp, Esq.
Nevada Bar No. 10109
SNELL & WILMER L.L.P.
50 West Liberty St., Suite 510
Reno, Nevada 89501-1961
Telephone: (775) 785-5440
Facsimile: (775) 785-5441
Email: jwillis@swlaw.com
asorenson@swlaw.com
wklomp@swlaw.com
Attorneys for Plaintiff and Counter Defendant
Wells Fargo Bank, N.A.
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LAW OFFICES
50 WEST LIBERTY STREET, SUITE 510
RENO, NEVADA 89501
(775) 785-5440
Snell & Wilmer
L.L.P.
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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WELLS FARGO BANK, N.A.;
Plaintiff,
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vs.
SFR INVESTMENTS POOL 1, LLC, a
Nevada limited liability company; TOWN
CENTER VILLAGE COMMUNITY
ASSOCIATION, a Nevada non-profit
corporation; ALESSI & KOENIG, LLC, a
Nevada limited liability company;
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Defendants.
SFR INVESTMENTS POOL 1, LLC, a
Nevada limited-liability company,
Counter-Claimant,
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Case No.: 2:15-cv-00577-APG-PAL
vs.
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WELLS FARGO BANK, N.A., a national
association,
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Counter-Defendant.
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-122877398
WELLS FARGO BANK, N.A.’S MOTION
FOR LEAVE TO FILE FIRST AMENDED
ANSWER TO SFR INVESTMENTS POOL
1, LLC’S COUNTERCLAIM
Case 2:15-cv-00577-APG-PAL Document 32 Filed 11/16/15 Page 2 of 5
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TOWN CENTER VILLAGE
COMMUNITY ASSOCIATION, a Nevada
non-profit corporation,
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Cross-Claimant,
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vs.
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ALESSI & KOENIG, LLC, a Nevada
limited-liability company,
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Cross-Defendant.
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MOTION FOR LEAVE TO FILE FIRST AMENDED ANSWER
Fargo Bank, N.A. (“Wells Fargo”), by and through undersigned counsel, hereby moves the Court
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(775) 785-5440
Pursuant to Rule 15 of the Federal Rules of Civil Procedure, Counter-Defendant, Wells
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Snell & Wilmer
L.L.P.
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for leave to amend Wells Fargo’s answer (“Answer”) to Counter-Claimant SFR Investments Pool
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1, LLC’s Counterclaim (“Counterclaim”) to assert the affirmative defense of preemption pursuant
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to the Housing and Economic Recovery Act of 2008 (“HERA”). A proposed First Amended
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Answer is attached hereto as Exhibit A. In support of this motion, Wells Fargo submits the
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following memorandum of points and authorities.
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MEMORANDUM OF POINTS AND AUTHORITIES
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I.
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Wells Fargo seeks leave to amend its answer to the Counterclaim to add the following
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affirmative defense: Plaintiff's claim of free and clear title to the Property is barred by 12 U.S.C.
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§ 4617(j)(3), which precludes an HOA sale from extinguishing the Deed of Trust on the Property
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and preempts any state law to the contrary. This Court should grant Wells Fargo’s motion
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because the motion is brought in good faith and amending the Answer will not prejudice the
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Counter-Claimant, SFR Investments Pool 1, LLC (“SFR”).
INTRODUCTION
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II.
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Wells Fargo initiated this litigation seeking declaratory relief that a foreclosure sale
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conducted by the Town Center Village Community Association (“HOA”) did not extinguish the
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deed of trust recorded against residential property located in Clark County, Nevada. Complaint
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(Dkt. #1). Before any party responded, Wells Fargo filed its First Amended Complaint pursuant
BACKGROUND
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Case 2:15-cv-00577-APG-PAL Document 32 Filed 11/16/15 Page 3 of 5
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to FRCP 15. (Dkt. #12). SFR filed an answer and counterclaim alleging that it purchased the
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subject property at the HOA foreclosure sale and, through its counterclaim, seeks declaratory
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relief that it took title to the subject property free and clear of the deed of trust. (Dkt. #17). Wells
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Fargo filed an answer to SFR’s counterclaim and asserted affirmative defenses. (Dkt. #21).
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Wells Fargo now seeks to assert an additional affirmative defense related to federal preemption of
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the statute allowing for the HOA foreclosure sale.
Rule 15(a) of the Federal Rules of Civil Procedure provides that courts considering
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motions for leave to amend pleadings “freely give leave when justice so requires.” “[T]his
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mandate is to be heeded.” See Foman v. Davis, 371 U.S. 178, 182 (1962). “In the absence of any
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III.
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Snell & Wilmer
L.L.P.
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apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the
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movant . . .—the leave sought should, as the rules require, be ‘freely given.’” Id.
ARGUMENT
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Leave to amend is left to the discretion of the trial court which “must be guided by the
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underlying purpose of Rule 15 to facilitate a decision on the merits, rather than on the pleadings
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or technicalities.” U.S. v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). Thus, the policy favoring
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leave to amend is to be applied with “extreme liberality.” Id. Where a party opposes a motion for
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leave to amend based on prejudice caused by the amendment, that party bears the burden of
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showing prejudice. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987).
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Wells Fargo seeks to amend its Answer to assert the affirmative defense of preemption
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that was not raised in the original answer to the Counterclaim, but that Wells Fargo now deems
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necessary to defend against the counterclaim.
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Wells Fargo has not exhibited undue delay, bad faith, or dilatory motive in failing to
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previously amend its Answer. The deadline to file motions for leave to amend pleadings is
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November 16, 2015. See Order at 1:25 (Dkt. #30). Because Wells Fargo has filed its motion
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prior to expiration of the court-ordered deadline for motions seeking leave to amend pleadings,
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the motion is timely.
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depositions, and therefore no previously conducted discovery would need to be repeated.
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Moreover, the Parties have not yet engaged in written discovery or
Additionally, the amended answer would not be futile. An amendment “is futile only if no
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set of facts can be proved under the amendment to the pleadings that would constitute a valid and
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sufficient claim or defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988).
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Thus, the proper standard to determine whether an amendment is futile is the FRCP 12(b)(6)
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standard for failure to state a claim upon which relief can be granted. Id. Here, Wells Fargo’s
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affirmative defense is not insufficient. Rather, Wells Fargo is asserting a colorable claim with
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sufficient facts for Wells Fargo to show that the affirmative defense applies to bar SFR’s
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counterclaim.
For the reasons stated above, Wells Fargo requests leave to file the Amended Answer
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attached as Exhibit A. SFR is not prejudiced by this request and there has been no undue delay or
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IV.
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Snell & Wilmer
L.L.P.
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dilatory motive on the part of Wells Fargo.
CONCLUSION
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Dated: November 16, 2015
SNELL & WILMER L.L.P.
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By:
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/s/ Wayne Klomp
Jeffrey Willis (NV Bar No. 4797)
Amy F. Sorenson (NV Bar No. 12495)
Wayne Klomp (NV Bar No. 10109)
50 West Liberty Street, Suite 510
Reno, Nevada 89501-1961
Telephone: (775) 785-5440
Facsimile: (775) 785-5441
Attorneys for Plaintiff and Counter Defendant
Wells Fargo Bank, N.A.
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No opposition having been filed,
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IT IS ORDERED that the Motion for Leave to File First Amended Answer (Dkt. #32)
is GRANTED. Wells Fargo shall separately file the Amended Answer (which is
attached hereto as Exhibit A) as a separate docket entry forthwith.
Dated this 5th day of February, 2016.
_________________________
_________________________
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_____ __
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Peggy A Leen
Peggy A. Leen
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L
United States Magistrate Judge
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Case 2:15-cv-00577-APG-PAL Document 32 Filed 11/16/15 Page 5 of 5
CERTIFICATE OF SERVICE
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I hereby certify that on November 16, 2015, I electronically filed the foregoing with the
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Clerk of Court for the U.S. District Court, District of Nevada by using the Court’s CM/ECF
system. Participants in the case as follows who have appeared and are registered CM/ECF users
will be served by the CM/ECF system:
Diana S. Cline, Esq.
Howard Kim & Associates
1055 Whitney Ranch Drive, Suite 110
Henderson, NV 89014
diana@hkimlaw.com
Elizabeth B Lowell, Esq.
Pengilly Robbins
1995 Village Center Cir., Ste. 190
Las Vegas, NV 89134-0562
elowell@pengillylawfirm.com
Attorneys for Town Center Village Community
Association
Attorneys for SFR Investments Pool 1, LLC
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LAW OFFICES
50 WEST LIBERTY STREET, SUITE 510
RENO, NEVADA 89501
(775) 785-5440
Snell & Wilmer
L.L.P.
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Steven T. Loizzi, Jr., Esq.
Alessi & Koenig, LLC
9500 W. Flamingo Road, Suite 205
Las Vegas, NV 89147
steve@alessikoenig.com
Attorneys for Alessi & Koenig, LLC
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DATED: November 16, 2015.
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/s/ Lara J. Taylor
An Employee of Snell & Wilmer L.L.P.
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Case 2:15-cv-00577-APG-PAL Document 32-1 Filed 11/16/15 Page 1 of 10
EXHIBIT A
EXHIBIT A
Case 2:15-cv-00577-APG-PAL Document 32-1 Filed 11/16/15 Page 2 of 10
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Jeffrey Willis, Esq.
Nevada Bar No. 4797
Amy F. Sorenson, Esq.
Nevada Bar No. 12495
Wayne Klomp, Esq.
Nevada Bar No. 10109
SNELL & WILMER L.L.P.
50 West Liberty St., Suite 510
Reno, Nevada 89501-1961
Telephone: (775) 785-5440
Facsimile: (775) 785-5441
Email: jwillis@swlaw.com
asorenson@swlaw.com
wklomp@swlaw.com
Attorneys for Plaintiff and Counter Defendant
Wells Fargo Bank, N.A.
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LAW OFFICES
50 WEST LIBERTY STREET, SUITE 510
RENO, NEVADA 89501
(775) 785-5440
Snell & Wilmer
L.L.P.
11
UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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WELLS FARGO BANK, N.A.;
Plaintiff,
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Case No.: 2:15-cv-00577-APG-PAL
vs.
SFR INVESTMENTS POOL 1, LLC, a
Nevada limited liability company; TOWN
CENTER VILLAGE COMMUNITY
ASSOCIATION, a Nevada non-profit
corporation; ALESSI & KOENIG, LLC, a
Nevada limited liability company;
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Defendants.
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SFR INVESTMENTS POOL 1, LLC, a
Nevada limited-liability company,
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Counter-Claimant,
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vs.
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WELLS FARGO BANK, N.A., a national
association,
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Counter-Defendant.
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-122877418
WELLS FARGO BANK, N.A.’S FIRST
AMENDED ANSWER TO SFR
INVESTMENTS POOL 1, LLC’S
COUNTERCLAIM
Case 2:15-cv-00577-APG-PAL Document 32-1 Filed 11/16/15 Page 3 of 10
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TOWN CENTER VILLAGE
COMMUNITY ASSOCIATION, a Nevada
non-profit corporation,
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Cross-Claimant,
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vs.
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ALESSI & KOENIG, LLC, a Nevada
limited-liability company,
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Cross-Defendant.
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ANSWER TO COUNTERCLAIM
through its counsel, the law firm of Snell & Wilmer L.L.P, hereby submits its Answer to SFR
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LAW OFFICES
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Counter Defendant, Wells Fargo Bank, N.A. (“Wells Fargo” or “Counter Defendant”),
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Snell & Wilmer
L.L.P.
9
Investments Pool 1, LLC’s Counterclaim as follows:
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PARTIES
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1.
Wells Fargo admits that SFR is a Nevada limited-liability Company with its
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principal place of business in Clark County, Nevada. Wells Fargo denies the remaining
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allegations in paragraph 1.
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2.
record under the deed of trust.
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GENERAL ALLEGATIONS
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Wells Fargo admits that it claims an interest in the Property as beneficiary of
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Wells Fargo lacks sufficient knowledge or information to respond, and therefore
denies the allegations in paragraph 3.
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4.
Wells Fargo admits the allegations in paragraph 4.
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5.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
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denies the allegations in paragraph 5.
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6.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
denies the allegations in paragraph 6.
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7.
The allegations contained in paragraph 7 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 7 does require a response, Wells
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Fargo denies.
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8.
The allegations contained in paragraph 8 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 8 does require a response, Wells
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Fargo denies.
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9.
The allegations contained in paragraph 9 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 9 does require a response, Wells
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Fargo denies.
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10.
The allegations contained in paragraph 10 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 10 does require a response, Wells
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Fargo denies.
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11.
The allegations contained in paragraph 11 state legal conclusions for which no
LAW OFFICES
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RENO, NEVADA 89501
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Snell & Wilmer
L.L.P.
11
response is required. Notwithstanding, to the extent paragraph 11 does require a response, Wells
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Fargo denies.
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12.
The allegations contained in paragraph 12 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 12 does require a response, Wells
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Fargo denies.
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13.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
denies the allegations in paragraph 13.
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14.
Wells Fargo denies the allegations in paragraph 14.
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15.
Wells Fargo denies the allegations in paragraph 15.
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16.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
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denies the allegations in paragraph 16.
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17.
Wells Fargo denies the allegations in paragraph 17.
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18.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
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denies the allegations in paragraph 18.
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19.
Wells Fargo denies the allegations in paragraph 19.
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20.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
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denies the allegations in paragraph 20.
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21.
The allegations contained in paragraph 21 state legal conclusions for which no
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22877418
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response is required. Notwithstanding, to the extent paragraph 21 does require a response, Wells
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Fargo denies.1
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24.
Wells Fargo admits the allegations in paragraph 24.
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25.
Wells Fargo admits the allegations in paragraph 25.
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22.
Wells Fargo lacks sufficient knowledge or information to respond, and therefore
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denies the allegations in paragraph 22.2
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23.
The Counter Claimant’s Notice of Delinquent Assessment (Lien) was not recorded
notice of something that did not exist and had not been recorded when it funded the loan at issue.
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Wells Fargo lacks sufficient knowledge or information to respond to the allegations remaining in
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until June 3, 2011, accordingly, neither Wells Fargo nor its predecessor in interest could have had
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Snell & Wilmer
L.L.P.
8
paragraph 23, and therefore denies.
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24.
Wells Fargo admits the allegations in paragraph 24.
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25.
Wells Fargo admits the allegations in paragraph 25.
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26.
Wells Fargo admits the allegations in paragraph 26.
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27.
Wells Fargo admits the allegations in paragraph 27.
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28.
Wells Fargo admits the allegations in paragraph 28.
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29.
Wells Fargo admits the allegations in paragraph 29.
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30.
The allegations contained in paragraph 30 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 30 does require a response, Wells
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Fargo lacks sufficient knowledge or information to respond, and therefore denies the allegations
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in paragraph 30.
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31.
The allegations contained in paragraph 31 state legal conclusions for which no
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response is required. Notwithstanding, to the extent paragraph 31 does require a response, Wells
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Fargo denies.
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32.
Wells Fargo admits that SFR voluntarily dismissed Wells Fargo in Case No. A-13-
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The Counterclaim skips paragraphs 22 and 23, going directly from 21 to 24. The numbering in this Answer follows
the numbering in the Counterclaim.
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After paragraph 25, the Counterclaim numbering resets to paragraph 22 and continues from that point. The Answer
matches the numbering in the Counterclaim.
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Case 2:15-cv-00577-APG-PAL Document 32-1 Filed 11/16/15 Page 6 of 10
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679367-C. Wells Fargo denies the remaining allegations.
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33.
Wells Fargo admits the allegations in paragraph 33.
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34.
Wells Fargo admits the allegations in paragraph 34.
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35.
Wells Fargo denies the allegations in paragraph 35.
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FIRST CLAIM FOR RELIEF
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(Declaratory Relief/Quiet Title Pursuant to NRS 30.010, et seq.,
NRS 40.010 & NRS 116.3116)
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36.
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each of its admissions, denials, or other responses herein.
37.
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court has jurisdiction and authority over the claims in the First Amended Complaint and the
Counterclaim.
38.
Wells Fargo denies the allegations in paragraph 42.
43.
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Wells Fargo denies the allegations in paragraph 41.
42.
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Wells Fargo denies the allegations in paragraph 40.
41.
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Wells Fargo denies the allegations in paragraph 39.
40.
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Wells Fargo admits the allegations in paragraph 38.
39.
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The allegations contained in paragraph 43 state legal conclusions for which no
response is required. Notwithstanding, to the extent paragraph 43 does require a response, Wells
Fargo denies.
SECOND CLAIM FOR RELIEF
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(Preliminary and Permanent Injunction)
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44.
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The allegations contained in paragraph 37 state legal conclusions for which no
response is required. To the extent paragraph 37 does require a response, Wells Fargo admits this
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Answering paragraph 36, Wells Fargo hereby repeats, re-alleges, and incorporates
Answering paragraph 44, Wells Fargo hereby repeats, re-alleges, and incorporates
each of its admissions, denials, or other responses herein.
45.
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Wells Fargo denies the allegations in paragraph 46.
47.
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Wells Fargo admits the allegations in paragraph 45.
46.
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Wells Fargo denies the allegations in paragraph 47.
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48.
Wells Fargo denies the allegations in paragraph 48.
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49.
Wells Fargo denies the allegations in paragraph 49.
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50.
Wells Fargo denies the allegations in paragraph 50.
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AFFIRMATIVE DEFENSES
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FIRST AFFIRMATIVE DEFENSE
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(Failure to State a Claim)
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SFR Investments Pool 1, LLC (“SFR”) and its Counterclaims fail to state a claim against
Wells Fargo upon which relief can be granted.
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SECOND AFFIRMATIVE DEFENSE
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(Priority)
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SFR took title of the Property subject to the first priority deed of trust, thereby forestalling
any enjoinment/extinguishment of the Wells Fargo’s interest in the Property.
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THIRD AFFIRMATIVE DEFENSE
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(Assumption of Risk)
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SFR, at all material times, calculated, knew and understood the risks inherent in its
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situations, actions, omissions, and transactions upon which it now bases its various claims for
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relief, and with such knowledge, SFR undertook and thereby assumed such risks and is
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consequently barred from all recovery by such assumption of risk.
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FOURTH AFFIRMATIVE DEFENSE
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(Commercial Reasonableness)
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The HOA Foreclosure Sale by which SFR took its interest was commercially
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unreasonable if it extinguished the Deed of Trust as SFR contends. The sales price when
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compared to the fair market value of the Property demonstrates that the sale was not conducted in
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good faith as a matter of law, and such a windfall to SFR at the expense of a priority lien-holder is
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commercially unreasonable.
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FIFTH AFFIRMATIVE DEFENSE
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(Equitable Doctrines)
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Wells Fargo alleges that the SFR’s claims are barred by the equitable doctrines of laches
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and failure to do equity in the matters alleged in the Counterclaim.
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SIXTH AFFIRMATIVE DEFENSE
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(Acceptance)
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Wells Fargo asserts that any acceptance of any portion of the excess proceeds does not
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“satisfy” the amount due and owing on the promissory note and deed of trust and would not
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constitute a waiver of its rights under the promissory note and deed of trust or statute.
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SEVENTH AFFIRMATIVE DEFENSE
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(Waiver and Estoppel)
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Wells Fargo alleges that by reason of SFR’s acts and omissions, SFR has waived its rights
and is estopped from asserting the claims against Wells Fargo.
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EIGHTH AFFIRMATIVE DEFENSE
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(Due Process Violations)
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The foreclosure sale pursuant to statute through which SFR claims an interest in the
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Property violated Wells Fargo’s rights to due process under the Fifth and Fourteenth
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Amendments to the United States Constitution and relevant portions of the Nevada Constitution.
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NINTH AFFIRMATIVE DEFENSE
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(Mitigation)
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SFR failed to mitigate, minimize, or otherwise avoid its losses, damages, or expenses.
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TENTH AFFIRMATIVE DEFENSE
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(Bad Faith)
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SFR has acted in bad faith and is entitled to no damages as a result.
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ELEVENTH AFFIRMATIVE DEFENSE
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(Unclean Hands)
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SFR has unclean hands and should be barred from bringing this action.
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TWELFTH AFFIRMATIVE DEFENSE
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(Good Faith)
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At all times relevant to SFR’s allegations, Wells Fargo’s actions were taken in good faith,
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for legitimate purposes, and for just cause, and at no time did Wells Fargo act wrongfully or with
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malice or reckless indifference toward SFR’s purported rights.
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THIRTEENTH AFFIRMATIVE DEFENSE
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(Wrongful Foreclosure)
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The foreclosure through which SFR alleges it obtained an interest in the Property was
conducted in violation of Nevada law and is void.
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FOURTEENTH AFFIRMATIVE DEFENSE
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(Public Policy)
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The claims contained in the Counterclaim violate Nevada’s well-established homeowner
protection laws and violate Nevada’s public policy.
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FIFTEENTH AFFIRMATIVE DEFENSE
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Snell & Wilmer
L.L.P.
10
(Property Clause)
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The actions of SFR and other relevant entities in conducting the HOA Foreclosure Sale
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did not operate to extinguish the deed of trust pursuant to the Property Clause of the United States
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Constitution.
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SIXTEENTH AFFIRMATIVE DEFENSE
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(Supremacy Clause)
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The actions of SFR and other relevant parties violate the Supremacy Clause of the United
States Constitution and the actions are void.
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SEVENTEENTH AFFIRMATIVE DEFENSE
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(Preemption)
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Plaintiff's claim of free and clear title to the Property is barred by 12 U.S.C. § 4617(j)(3),
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which precludes an HOA sale from extinguishing the Deed of Trust on the Property and preempts
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any state law to the contrary.
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EIGHTEENTH AFFIRMATIVE DEFENSE
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(Additional Affirmative Defenses)
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Pursuant to Rules 11 and 12 of the Federal Rules of Civil Procedure, all possible
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affirmative defenses may not have been alleged insofar as sufficient facts are not available after
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reasonable inquiry upon the filing of SFR’s Counterclaim. Therefore, Wells Fargo reserves the
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right to amend this Answer to allege additional affirmative defenses and claims, counterclaims,
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cross claims, or third-party claims, as applicable, upon further investigation and discovery.
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PRAYER
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WHEREFORE, Counter Defendant Wells Fargo prays for judgment as follows:
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1.
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That the Court make a judicial determination that the deed of trust is superior to
Counter Claimant SFR’s claim of title;
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2.
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That the Court make a judicial determination that the deed of trust survived the
HOA Foreclosure Sale;
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3.
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That the Court make a judicial determination that Counter Claimant SFR took title
subject to the deed of trust;
LAW OFFICES
50 WEST LIBERTY STREET, SUITE 510
RENO, NEVADA 89501
(775) 785-5440
Snell & Wilmer
L.L.P.
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4.
That Counter Claimant SFR recover nothing on account of its Counterclaim;
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5.
For reasonable attorney’s fees and costs; and
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For any such other and further relief as the Court may deem just and proper in the case.
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Dated: November 16, 2015
SNELL & WILMER L.L.P.
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By:
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/s/
Wayne Klomp
Jeffrey Willis (NV Bar No. 4797)
Amy F. Sorenson (NV Bar No. 12495)
Wayne Klomp (NV Bar No. 10109)
50 West Liberty Street, Suite 510
Reno, Nevada 89501-1961
Telephone: (775) 785-5440
Facsimile: (775) 785-5441
Attorneys for Plaintiff and Counter Defendant
Wells Fargo Bank, N.A.
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