Bank of America, N.A. v. Azure Manor/Rancho de Paz Homeowners Association et al
Filing
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ORDER Denying Plaintiff's 93 Motion for Reconsideration. The parties shall file dismissal documents within 21 days of this Order. Signed by Chief Judge Gloria M. Navarro on 4/17/2019. (Copies have been distributed pursuant to the NEF - SLD)
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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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Plaintiff,
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vs.
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AZURE MANOR/RANCHO DE PAZ
HOMEOWNERS ASSOCIATION, et al.,
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Defendants.
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Case No.: 2:16-cv-00764-GMN-GWF
ORDER
Pending before the Court is the Motion to Reconsider, (ECF No. 93), filed by Plaintiff
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Bank of America, N.A. (“BANA”). Defendants Azure Manor/Rancho de Paz Homeowners
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Association (“HOA”) and SFR Investments Pool 1, LLC (“SFR”) (collectively “Defendants”)
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filed Responses, (ECF Nos. 97, 98), to which BANA filed Replies, (ECF Nos. 100–01).
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For the reasons discussed below, BANA’s Motion to Reconsider is DENIED.
I.
BACKGROUND
This quiet title action arises from the non-judicial foreclosure on real property located at
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2820 Tilten Kilt Avenue, North Las Vegas, Nevada 89081 (the “Property”). (See Deed of Trust,
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ECF No. 63-1). In 2006, Charles G. Campbell (“Borrower”) financed his purchase of the
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Property by way of a $323,000.00 loan secured by a deed of trust. (Id.). BANA, as lender and
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beneficiary, recorded the deed of trust on May 8, 2007. (Id.). Upon Borrower’s failure to pay
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all amounts due to HOA, Alessi & Koenig (“A&K”), on behalf of HOA, initiated foreclosure
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proceedings. (See Notice of Lien, ECF No. 63-2); (see also Notice of Default, ECF No. 63-3).
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Relevant to the instant Motion,1 A&K recorded a notice of foreclosure sale on August 2,
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2012, setting a sale date for September 5, 2012. (See Notice of Sale, ECF No. 63-5). BANA
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mailed a letter to A&K on August 31, and sent a fax on September 4, requesting the amount of
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HOA’s superpriority lien. (See Accounting Request, ECF No. 63-8); (see also Second
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Accounting Request, Ex. A to Mot. to Recons. at 4, ECF No. 93-1).
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On September 5, 2012, A&K conducted the foreclosure sale, at which the Property
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reverted to HOA for a credit bid of $7,695.22. (See Trustee’s Deed Upon Sale, ECF No. 63-6).
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Following the sale, on September 12, 2012, A&K responded to BANA with a ledger providing
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the outstanding fees, interest, and costs. (A&K Ledger, ECF No. 75-5). A&K also sent BANA
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an email the same day, stating “the nine-month super-priority is not triggered until the
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beneficiary under the first deed of trust forecloses.” (A&K Email Correspondence, Ex. A to
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Mot. to Recons. at 5, ECF No. 93-1). On March 11, 2013, A&K sold the Property to SFR
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through a quitclaim deed. (See Quitclaim Deed, ECF No. 63-7).
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On February 14, 2019, the Court issued its decision on the parties’ summary-judgment
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motions. (See Order, ECF No. 90). The Court held that BANA was not entitled to summary
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judgment on its quiet title claim because, among other things, BANA failed to tender the HOA
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superpriority amount ahead of the foreclosure sale. (Id. 8:17–16:12). The Court rejected
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BANA’s argument that A&K’s “alleged refusal to cooperate—by not responding to BANA’s
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accounting request—constitutes an affirmative effort to prevent BANA’s tender,” such that
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BANA’s attempt to tender was enough to save its deed of trust from extinguishment. (Id. 10:3–
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11). Finding BANA’s remaining quiet-title arguments unavailing, the Court granted
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Defendants’ motions for summary judgment. (Id. 8:17–16:12, 17:2–9).
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A complete statement of the facts can be found in the Court’s prior Order. (See Order 1:20–2:23, ECF No. 90).
Page 2 of 5
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Shortly thereafter, the Nevada Supreme Court handed down its decision in Bank of Am.,
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N.A. v. Thomas Jessup, LLC Series VII, 435 P.3d 1217 (Nev. 2019), and BANA filed the
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instant Motion to Reconsider, (ECF No. 93).
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II.
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LEGAL STANDARD
The court has inherent power to entertain motions for reconsideration of interlocutory
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orders. See Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996) (“[I]nterlocutory orders . . .
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are subject to modification by the district judge at any time prior to final judgment.”); see also
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Fed. R. Civ. P. 54(b). The standard governing reconsideration of an interlocutory order is the
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same as the standards governing motions to alter or amend final judgments under Federal Rule
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of Civil Procedure 59(e) or 60(b). Motions for reconsideration are disfavored, and “should not
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be granted, absent highly unusual circumstances, unless the district court is presented with
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newly discovered evidence, committed clear error, or if there is an intervening change in the
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controlling law.” McDowell v. Calderon, 197 F.3d 1253, 1254 (9th Cir. 1999) (per curiam)
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(internal quotation and citation omitted).
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III.
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DISCUSSION
BANA moves for reconsideration on the basis that Jessup constitutes an intervening
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change in controlling law which entitles BANA to judgment in its favor on its quiet title claim.
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(Mot. to Recons. 2:8–17, ECF No. 93).
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As a general rule, a first deed of trust holder may pay off the superpriority portion of an
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HOA lien to prevent the foreclosure sale from extinguishing the deed of trust. See NRS
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116.31166(1); see also SFR Invs. Pool 1 v. U.S. Bank, 334 P.3d 408, 414 (Nev. 2014). “Valid
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tender requires payment in full,” and must be either unconditional or limited to “conditions on
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which the tendering party has a right to insist.” Bank of Am., N.A. v. SFR Invs. Pool 1, LLC,
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427 P.3d 113, 117–118 (Nev. 2018).
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In Jessup, the Nevada Supreme Court introduced a narrow exception to the foregoing
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rule: a first deed of trust holder is excused from tendering the superpriority amount where an
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HOA agent represents that it would reject any such tender if attempted. Jessup, 435 P.3d at
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1220. In that case, like the instant one, the deed of trust holder sent a letter requesting the
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amount of the HOA’s superpriority lien. Id. at 1219–20. Citing the general rule, the Court held
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that a mere offer to pay the “yet-to-be-determined superpriority amount was not sufficient to
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constitute valid tender.” Id. at 1220. Nevertheless, the Court held that tender was excused
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because the HOA’s agent represented to the deed of trust holder that any attempted tender
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would be rejected.
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Specifically, the HOA’s agent, ACS, responded in writing to the lender’s request for the
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payoff amount, stating “a 9-month statement of Account is not valid,” until the lender—rather
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than HOA—initiates foreclosure. Id. While ACS’s correspondence did not expressly state
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tender would be rejected, the Nevada Supreme concluded this was “the only reasonable
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construction” of ACS’s language. Id. Given the futility of tender, the Court found it immaterial
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that the deed of trust holder took no further action to preserve its deed of trust in the ten-month
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window between ACS’s rejection and the foreclosure sale. Id. 1218–1219. Accordingly, the
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lender’s offer to pay the “yet-to-be-determined superpriority amount,” combined with “ACS’s
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rejection of that offer, operated to cure the default as to [the superpriority] portion of the lien
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such that the ensuing foreclosure sale did not extinguish the first deed of trust.” Id. at 1220.
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Applying Jessup here, the Court finds reconsideration is unwarranted. The Jessup
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Court’s excusal of tender was based upon the lender’s offer to pay the “yet-to-be-determined
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superpriority amount,” and the HOA agent’s “rejection of that offer.” Id. The problem for
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BANA here is the second requirement. BANA received A&K’s letter of rejection after the
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foreclosure sale. Stated differently, BANA’s deed of trust was already extinguished by the
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time BANA could have reasonably determined that tender would be futile. That A&K did not
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respond sooner is a function of BANA’s decision to inquire about its deed of trust a mere six
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days before the foreclosure sale. Thus, were Jessup to work in BANA’s favor, the Court would
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have to find that A&K’s mere failure to respond to BANA within six days could reasonably be
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interpreted as an unequivocal statement that any tender would be rejected. The Court declines
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to read Jessup so broadly as to sanction this result. Accordingly, BANA’s Motion for
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Reconsideration is denied.
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IV.
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CONCLUSION
IT IS HEREBY ORDERED that BANA’s Motion for Reconsideration, (ECF No. 93),
is DENIED.
IT IS FURTHER ORDERED that pursuant to the parties’ representations in their joint
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status report, (ECF No. 92), the parties shall file dismissal documents within twenty-one (21)
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days of this Order.
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DATED this _____ day of April, 2019.
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___________________________________
Gloria M. Navarro, Chief Judge
United States District Judge
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