Bank of America, N.A., v. The Willows Homeowners' Association, et al

Filing 53

ORDER granting 42 Motion for Partial Summary Judgment; Counterclaims are dismissed with prejudice. Signed by Chief Judge Gloria M. Navarro on 8/8/2018. (Copies have been distributed pursuant to the NEF - JM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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BANK OF AMERICA, N.A.,
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)
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Plaintiff,
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vs.
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THE WILLOWS HOMEOWNERS’
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ASSOCIATION AKA THE WILLOWS HOA, )
et al.,
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Defendants.
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______________________________________ )
PREMIER ONE HOLDINGS, INC.; WEISUN )
PROPERTY, INC.,
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Counterclaimants,
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vs.
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BANK OF AMERICA, N.A.,
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Counter-defendant.
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Case No.: 2:16-cv-00347-GMN-CWH
ORDER

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Pending before the Court is the Motion for Partial Summary Judgment, (ECF No. 42),
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filed by Plaintiff Bank of America, N.A., successor by merger to BAC Home Loans Servicing,
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LP f/k/a Countrywide Home Loans Servicing, LP (“BANA”). Defendants The Willows
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Homeowners’ Association (“HOA”) and Solera at Premier One Holdings, Inc. (“Premier One”)
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(collectively “Defendants”) filed Responses, (see ECF No. 43, 44), to which BANA filed a
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Reply, (see ECF No. 46). For the reasons discussed below, the Court GRANTS BANA’s
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Motion.
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I.

BACKGROUND

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BANA filed its Complaint on February 19, 2016, asserting claims involving the non25

judicial foreclosure on real property located at 785 Crest Valley Place, Henderson, Nevada
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89011 (the “Property”). (Compl. ¶ 8, ECF No. 1). On August 20, 2008, non-parties Michael A.

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Britain, Barbara J. Britain, and Tracy L. Baker purchased the Property by way of a loan in the

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amount of $266,118.00 secured by a Deed of Trust (“DOT”) recorded August 28, 2008. (Id.

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¶ 14).

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On April 12, 2011, HOA, through its agent Absolute Collection Services, LLC

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(“Absolute”), recorded a notice of delinquent assessment lien. (Id. ¶ 18). On July 18, 2011,

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HOA recorded a notice of default and election to sell to satisfy the delinquent assessment lien.

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(Id. ¶ 19). Although BANA requested the super-priority amount HOA alleged was due, HOA

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did not provide this amount. (Id. ¶ 28). Nevertheless, BANA attempted to tender what it

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calculated as the super-priority amount to HOA, which HOA rejected. (Id. ¶¶ 29–30). On June

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7, 2013, HOA recorded a notice of trustee’s sale, and on September 23, 2013, HOA foreclosed

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on the Property. (Id. ¶¶ 22, 30). Premier One purchased the Property at the foreclosure sale

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pursuant to NRS § 116.1113. (Id. ¶ 31).

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BANA asserts the following causes of action against various parties involved in the

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foreclosure and subsequent sales of the Property: (1) quiet title with a requested remedy of

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declaratory judgment; (2) breach of Nevada Revised Statute (“NRS”) 116.1113; (3) wrongful

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foreclosure; and (4) injunctive relief. (Id.).

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II.

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LEGAL STANDARD
The Federal Rules of Civil Procedure provide for summary adjudication when the

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pleadings, depositions, answers to interrogatories, and admissions on file, together with the

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affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant

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is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those that

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may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

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A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to

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return a verdict for the nonmoving party. Id. “Summary judgment is inappropriate if

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

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in the nonmoving party’s favor.” Diaz v. Eagle Produce Ltd. P’ship, 521 F.3d 1201, 1207 (9th

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Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 (9th Cir. 1999)). A

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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 applies a burden-shifting analysis. “When

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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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the absence of a genuine issue of fact on each issue material to its case.” 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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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

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

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

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court need not consider the nonmoving party’s evidence. Adickes v. S.H. Kress & Co., 398 U.S.

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144, 159–60 (1970).

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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. 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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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 that are unsupported by factual

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data. 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. Celotex Corp., 477 U.S. at 324.

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At summary judgment, a court’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. Anderson, 477 U.S. at 249. The

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evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in

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his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not

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significantly probative, summary judgment may be granted. Id. at 249–50.
II.

DISCUSSION

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BANA asserts claims against Defendants for quiet title, violation of NRS § 116.1113,

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wrongful foreclosure, and injunctive relief. The Court first considers the impact of the Ninth

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Circuit’s ruling in Bourne Valley Court Trust v. Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir.

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2016), cert. denied, No. 16-1208, 2017 WL 1300223 (U.S. June 26, 2017), before turning to

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BANA’s individual claims.

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A.

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In Bourne Valley, the Ninth Circuit held that NRS § 116.3116’s “‘opt-in’ notice scheme,

The Scope and Effect of Bourne Valley

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which required a homeowners’ association to alert a mortgage lender that it intended to

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foreclose only if the lender had affirmatively requested notice, facially violated the lender’s

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constitutional due process rights under the Fourteenth Amendment to the Federal Constitution.”

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Bourne Valley, 832 F.3d at 1156. Specifically, the Court of Appeals found that by enacting the

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statute, the legislature acted to adversely affect the property interests of mortgage lenders, and

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was thus required to provide “notice reasonably calculated, under all circumstances, to apprise

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interested parties of the pendency of the action and afford them an opportunity to present their

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objections.” Id. at 1159. The statute’s opt-in notice provisions therefore violated the Fourteenth

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Amendment’s Due Process Clause because they impermissibly “shifted the burden of ensuring

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adequate notice from the foreclosing homeowners’ association to a mortgage lender.” Id.

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The necessary implication of the Ninth Circuit’s opinion in Bourne Valley is that the

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petitioner succeeded in showing that no set of circumstances exists under which the opt-in

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notice provisions of NRS § 116.3116 would pass constitutional muster. See, e.g., United States

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v. Salerno, 481 U.S. 739, 745 (1987) (“A facial challenge to a legislative Act is, of course, the

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most difficult challenge to mount successfully, since the challenger must establish that no set of

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circumstances exists under which the Act would be valid.”); William Jefferson & Co. v. Bd. of

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Assessment & Appeals No. 3 ex rel. Orange Cty., 695 F.3d 960, 963 (9th Cir. 2012) (applying

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Salerno to facial procedural due process challenge under the Fourteenth Amendment). The fact

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that a statute “might operate unconstitutionally under some conceivable set of circumstances is

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insufficient to render it wholly invalid.” Salerno, 481 U.S. at 745. To put it slightly differently,

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if there were any conceivable set of circumstances where the application of a statute would not

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violate the constitution, then a facial challenge to the statute would necessarily fail. See, e.g.,

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United States v. Inzunza, 638 F.3d 1006, 1019 (9th Cir. 2011) (holding that a facial challenge to

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a statute necessarily fails if an as-applied challenge has failed because the plaintiff must

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“establish that no set of circumstances exists under which the [statute] would be valid”).

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Here, the Ninth Circuit expressly invalidated the “opt-in notice scheme” of NRS

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§ 116.3116, which it pinpointed in NRS 116.3116(2). Bourne Valley, 832 F.3d at 1158. In

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addition, this Court understands Bourne Valley also to invalidate NRS 116.311635(1)(b)(2),

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which also provides for opt-in notice to interested third parties. According to the Ninth Circuit,

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therefore, these provisions are unconstitutional in each and every application; no conceivable

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set of circumstances exists under which the provisions would be valid. The factual

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particularities surrounding the foreclosure notices in this case—which would be of paramount

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importance in an as-applied challenge—cannot save the facially unconstitutional statutory

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provisions. In fact, it bears noting that in Bourne Valley, the Ninth Circuit indicated that the

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petitioner had not shown that it did not receive notice of the impending foreclosure sale. Thus,

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the Ninth Circuit declared the statute’s provisions facially unconstitutional notwithstanding the

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possibility that the petitioner may have had actual notice of the sale.

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Accordingly, the HOA foreclosed under a facially unconstitutional notice scheme, and

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thus the HOA foreclosure cannot have extinguished the DOT. Therefore, the Court must quiet

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title as a matter of law in favor of Plaintiff as assignee of the DOT.

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B.

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BANA’s Remaining Claims for Violation of NRS § 116.1113, Wrongful
Foreclosure, and Injunctive Relief

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In its prayer for relief, BANA requests primarily a declaration that CSC and the

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Martinez-Avilezes purchased the Property subject to its DOT. (See Compl. 16:12–27). The

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other relief requested—with the exception of the injunctive relief—is phrased in the alternative.

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(See id. 16:16–20). Therefore, because the Court grants summary judgment for BANA on its

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quiet title claim, BANA has received the relief it requested. Accordingly, the Court dismisses

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BANA’s second and third causes of action as moot.

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With regard to BANA’s request for a preliminary injunction pending a determination by

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the Court concerning the parties’ respective rights and interests, the Court’s grant of summary

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judgment for BANA moots this claim, and it is therefore dismissed.

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III.

CONCLUSION
IT IS HEREBY ORDERED that BANA’s Motion for Summary Judgment, (ECF No.

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42), is GRANTED pursuant to the foregoing.

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IT IS FURTHER ORDERED that Premier One’s Counterclaims are DISMISSED
with prejudice pursuant to the foregoing.

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The Clerk of Court is ordered to close the case.

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DATED this _____ day of August, 2018.

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___________________________________

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Gloria M. Navarro, Chief Judge
United States District Judge

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