U.S. Bank, National Association vs Countryside Homeowners Association, et al

Filing 57

ORDER granting ECF No. 48 Motion for Summary Judgment. Within 14 days, Plaintiff shall submit either a proposed form of judgment or a notice of its intent to prosecute the remaining claims under NRS 116.1113 and/or the common law of wrongful foreclosure. Signed by Judge Robert C. Jones on 04/13/2017. (Copies have been distributed pursuant to the NEF - KW)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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U.S. BANK, NATIONAL ASSOCIATION, )
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Plaintiff,
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vs.
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COUNTRYSIDE HOMEOWNERS
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ASSOCIATION et al.,
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Defendants.
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2:15-cv-01463-RCJ-GWF
ORDER

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This case arises out of a homeowners’ association foreclosure sale. Pending before the

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Court is a Motion for Summary Judgment (ECF No. 48). The Court grants the motion.

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I.

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FACTS AND PROCEDURAL HISTORY
In 2005, Jayson Barangan gave Countrywide Home Loans, Inc. (“Countrywide”) a

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promissory note for $228,800 (the “Note”) to purchase real property at 8543 Ebony Hills Way,

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Las Vegas, Nevada, 89123 (the “Property”), secured by a deed of trust (the “DOT”) against the

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Property. (Compl. ¶¶ 7, 12, ECF No. 1). The DOT was later assigned to Plaintiff U.S. Bank,

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National Association (“US Bank”). (Id. ¶ 13). Barangan has defaulted with over $228,580.16

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due on the Note, and US Bank intends to foreclose the DOT against the Property. (Id. ¶¶ 14–16).

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Defendant Countryside Homeowners’ Association (“the HOA”) has completed its own
foreclosure sale, however. (See id. ¶¶ 2, 17–27). The HOA caused its agent Nevada Association

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Services (“NAS”), to record a notice of delinquent assessment lien (the “NDAL”) in 2010

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indicating that $738 was due, which amount included late fees, collection fees, and interest

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totaling $554. (Id. ¶ 17). The HOA later caused NAS to record a notice of default and election to

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sell (the “NOD”), indicating that $1,773 was due, without specifying what amount was due for

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assessment fees versus interest, collection costs, etc., and without specifying the superpriority

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amount of the HOA’s lien. (Id. ¶ 18). The HOA later caused NAS to record a notice of sale (the

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“NOS”), scheduling a sale for June 24, 2011 and indicating that $3,116.42 was due, without

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specifying what amount was due for assessment fees versus interest, collection costs, etc., and

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without specifying the superpriority amount of the HOA’s lien. (Id. ¶ 19). On January 6, 2012,

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the HOA sold the Property to itself for $5,259.27, less than 3% of the outstanding principal

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balance on the Note. (Id. ¶¶ 25–26). Defendant KK Real Estate Investment Fund, LLC (“KK”)

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obtained the Property from the HOA via quitclaim deed on May 7, 2013. (Id. ¶¶ 3, 27).

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US Bank sued the HOA and KK in this Court for: (1) quiet title based on, inter alia,

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violations of due process and commercial unreasonableness; (2) violation of Nevada Revised

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Statutes section (“NRS”) 116.1113; and (3) common law wrongful foreclosure, asking the Court

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in the alternative to set aside the sale or to declare that it did not extinguish the DOT. 1 KK filed

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counterclaims for quiet title and cancellation of instruments. The HOA moved to dismiss, and

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the Court denied the motion, ruling: (1) although Barangan might be entitled to intervene if he

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were to so move under Rule 24, he was not a necessary party under Rule 19; (2) the affirmative

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defense of non-exhaustion under NRS 38.310 did not appear on the face of the Complaint; and

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(3) noncompliance with Chapter 116 and bad faith with respect to the Covenants, Conditions,

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1 The fourth claim for injunctive relief is not a separate cause of action but a prayer for relief,
and no motion for preliminary injunctive relief is pending.
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and Restrictions (“CC&R”) had been sufficiently alleged. The HOA moved for defensive

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summary judgment. The Court denied the motion. US Bank has now moved for offensive

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summary judgment against the HOA and KK.

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II.

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SUMMARY JUDGMENT STANDARDS
A court must grant summary judgment when “the movant shows that there is no genuine

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dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.

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Civ. P. 56(a). Material facts are those which may affect the outcome of the case. See Anderson

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v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if

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there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See

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id. A principal purpose of summary judgment is “to isolate and dispose of factually unsupported

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

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In determining summary judgment, a court uses a burden-shifting scheme. The moving

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party must first satisfy its initial burden. “When the party moving for summary judgment would

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bear the burden of proof at trial, it must come forward with evidence which would entitle it to a

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directed verdict if the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co. v.

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Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation and internal quotation marks

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omitted). In contrast, when the nonmoving party bears the burden of proving the claim or

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

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an essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving

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party failed to make a showing sufficient to establish an element essential to that party’s case on

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which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24.

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

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the court needn’t consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., 398

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U.S. 144 (1970). If the moving party meets its initial burden, the burden then shifts to the

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nonmoving party to establish a genuine issue of material fact. 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 nonmoving party need not establish a material issue of fact conclusively in its favor. It is

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sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the

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parties’ differing versions of the truth at trial.” 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 unsupported by facts. See Taylor

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

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

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evidence that shows a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S.

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at 324.

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At the summary judgment stage, a court’s function is not to weigh the evidence and

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determine the truth, but to determine whether there is a genuine issue for trial. See Anderson, 477

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U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are

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to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely

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colorable or is not significantly probative, summary judgment may be granted. See id. at 249–50.

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Notably, facts are only viewed in the light most favorable to the nonmoving party where there is

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a genuine dispute about those facts. Scott v. Harris, 550 U.S. 372, 380 (2007). That is, even

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where the underlying claim contains a reasonableness test, where a party’s evidence is so clearly

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contradicted by the record as a whole that no reasonable jury could believe it, “a court should not

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adopt that version of the facts for purposes of ruling on a motion for summary judgment.” Id.

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III.

ANALYSIS

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The Court grants offensive summary judgment to US Bank based on the Court of

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Appeals’ intervening decision holding that Chapter 116’s opt-in notice scheme is facially

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unconstitutional under the Due Process Clause of the Fourteenth Amendment. See Bourne Valley

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Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154, 1160 (9th Cir. 2016). The Court of Appeals

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has denied a motion to rehear the case en banc. Defendants provide no evidence of actual notice

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in this case. KK’s counterclaims for quiet title and cancellation of US Bank’s deed of trust

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necessarily fail given US Bank’s victory on its quiet title claim. Unless US Bank wishes to

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further pursue its claims under NRS 116.1113 or the common law of wrongful foreclosure for

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the purposes of obtaining damages, there appears to be nothing left to determine in this case.
CONCLUSION

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IT IS HEREBY ORDERED that the Motion for Summary Judgment (ECF No. 48) is

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GRANTED. Within fourteen (14) days, Plaintiff shall submit either a proposed form of

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judgment or a notice of its intent to prosecute the remaining claims under NRS 116.1113 and/or

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the common law of wrongful foreclosure.

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IT IS SO ORDERED.
DATED: 8th 13th day of April, 2016.
Dated thisThis day of December, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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