Collegium Fund Series 32 v. Snyder et al
Filing
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ORDER denying 26 Motion for Summary Judgment. Signed by Judge James C. Mahan on 7/5/2017. (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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***
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COLLEGIUM FUND SERIES 32,
Case No. 2:16-CV-1640 JCM (PAL)
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Plaintiff(s),
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ORDER
v.
MARK DANIEL SNYDER, et al.,
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Defendant(s).
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Presently before the court is intervenor-defendant/counterclaimant Federal Home Loan
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Mortgage Corporation’s (“Freddie Mac”) motion for summary judgment (ECF No. 26), in which
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defendant
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Plaintiff/counterdefendant Collegium Fund LLC, Series 32 (“Collegium”) filed a response (ECF
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Nos. 45, 52), to which Freddie Mac replied (ECF No. 53).
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I.
Wells
Fargo
Bank,
N.A.
(“Wells
Fargo”)
joined
(ECF
No.
29).
Facts
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This case involves a dispute over real property located at 1796 Nuevo Road, Henderson,
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Nevada 89014 (the “property”). On October 18, 2006, Mark Daniel Snyder (“Snyder”) obtained
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a loan from Wells Fargo in the amount of $134,500.00 to purchase the property, which was secured
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by a deed of trust recorded on November 19, 2007. (ECF No. 1-2).
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On December 12, 2006, Freddie Mac purchased the loan and Wells Fargo began servicing
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the loan on Freddie Mac’s behalf pursuant to Freddie Mac’s single-family seller/servicer guide
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(“the guide”). (ECF No. 26-2). Neither Freddie Mac nor Wells Fargo recorded the assignment.
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On September 6, 2008, pursuant to the Housing Economic Recovery Act of 2008, 12
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U.S.C. § 4617 et seq. (“HERA”), Federal Housing Finance Agency’s (“FHFA”) director placed
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Freddie Mac into conservatorship.
James C. Mahan
U.S. District Judge
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On June 5, 2012, Absolute Collection Services, LLC (“ACS”), acting on behalf of Nuevo
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Vista Homeowners Association, Inc. (the “HOA”), recorded a notice of delinquent assessment
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lien. (ECF No. 1-2). On May 16, 2013, ACS recorded a notice of default and election to sell to
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satisfy the delinquent assessment lien. (ECF No. 1-2). On November 4, 2013, ACS recorded a
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notice of trustee’s sale. (ECF No. 1-2).
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On January 16, 2014, Collegium purchased the property for $63,500.00 at the HOA
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foreclosure sale. (ECF No. 1-2). A trustee’s deed upon sale in Collegium’s favor was recorded
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on January 16, 2014. (ECF No. 1-2).
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FHFA did not consent to any purported extinguishment of Freddie Mac’s ownership
interest in the property. (See, e.g., ECF No. 26-12).
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On October 9, 2015, Collegium filed (in state court, case no. A-15-725950-C) the
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underlying complaint against Snyder and Wells Fargo, alleging five causes of action: (1) quiet
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title; (2) declaratory relief; (3) unjust enrichment; (4) injunctive relief; and (5) award of attorney’s
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fees and costs. (ECF No. 1-2).
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On November 30, 2015, Wells Fargo filed (in state court) an answer and counterclaim
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against Collegium, ACS, and the HOA for declaratory relief, wrongful foreclosure, violation of
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NRS 116.1113, intentional interference with contract, and quiet title. (ECF No. 1-2).
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On February 26, 2016, the HOA filed (in state court) a crossclaim against ACS for implied
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indemnity, contribution, apportionment, express indemnity, breach of contract, and declaratory
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relief. (ECF No. 1-2).
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On June 23, 2016, the state court granted Freddie Mac’s motion to intervene. (ECF No. 1-
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2). On July 12, 2016, Freddie Mac removed the action to federal court pursuant to 28 U.S.C. §§
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1442 and 1446 and 12 U.S.C. § 1452(f). (ECF No. 1). On July 13, 2016, Freddie Mac filed an
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answer and counterclaim for declaratory relief against Collegium, ACS, and the HOA and quiet
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title against Collegium. (ECF No. 3).
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On September 29, 2016, the HOA filed an answer to Freddie Mac’s counterclaim and a
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second crossclaim against ACS, which is virtually identical to the crossclaim ACS previously filed
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in state court in February (ECF No. 1-2). (ECF No. 22).
James C. Mahan
U.S. District Judge
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In the instant motion, Freddie Mac moves for summary judgment in its favor on Freddie
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Mac’s counterclaims (ECF No. 3) and on Collegium’s quiet title and declaratory relief claims
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(ECF No. 1-2). (ECF No. 26).
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II.
Legal Standard
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The Federal Rules of Civil Procedure allow summary judgment when the pleadings,
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depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,
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show that “there is no genuine dispute as to any material fact and the movant is entitled to a
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judgment as a matter of law.” Fed. R. Civ. P. 56(a). A principal purpose of summary judgment is
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“to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317,
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323–24 (1986).
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For purposes of summary judgment, disputed factual issues should be construed in favor
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of the non-moving party. Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 888 (1990). However, to be
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entitled to a denial of summary judgment, the nonmoving party must “set forth specific facts
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showing that there is a genuine issue for trial.” Id.
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In determining summary judgment, a court applies a burden-shifting analysis. 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. In such a case, the moving party has
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the initial burden of establishing the absence of a genuine issue of fact on each issue material to
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its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000)
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(citations omitted).
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By contrast, when the nonmoving party bears the burden of proving the claim or defense,
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the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential
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element of the non-moving party’s case; or (2) by demonstrating that the nonmoving party failed
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to make a showing sufficient to establish an element essential to that party’s case on which that
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party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24. If the moving
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party fails to meet its initial burden, summary judgment must be denied and the court need not
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James C. Mahan
U.S. District Judge
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consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–
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60 (1970).
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If the moving party satisfies its initial burden, the burden then shifts to the opposing party
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to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith
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Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the
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opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient
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that “the claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing
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versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626,
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631 (9th Cir. 1987).
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In other words, the nonmoving party cannot avoid summary judgment by relying solely on
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conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040,
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1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the
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pleadings and set forth specific facts by producing competent evidence that shows a genuine issue
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for trial. See Celotex, 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. See Anderson v. Liberty Lobby,
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Inc., 477 U.S. 242, 249 (1986). The evidence of the nonmovant is “to be believed, and all
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justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the
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nonmoving party is merely colorable or is not significantly probative, summary judgment may be
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granted. See id. at 249–50.
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III.
Discussion1
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In the instant motion, Freddie Mac argues that 12 U.S.C. § 4617(j)(3) preempts NRS
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Chapter 116 to the extent that it permits a HOA foreclosure sale to extinguish Freddie Mac’s
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property interest while it is under FHFA’s conservatorship. (ECF No. 26). Freddie Mac thus
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James C. Mahan
U.S. District Judge
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The court takes judicial notice of the recorded deed of trust attached as exhibit A (ECF
No. 26-1) to Freddie Mac’s motion for summary judgment (ECF No. 26), as well as the recorded
foreclosure deed attached as exhibit 18 (ECF No. 52-18) to Collegium’s response (ECF No. 52).
See, e.g., United States v. Corinthian Colls., 655 F.3d 984, 998–99 (9th Cir. 2011) (holding that a
court may take judicial notice of public records if the facts noticed are not subject to reasonable
dispute); Intri-Plex Tech., Inv. v. Crest Grp., Inc., 499 F.3d 1048, 1052 (9th Cir. 2007).
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maintains that the deed of trust continues to encumber the property and that Collegium’s interest
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in the property is subject to Freddie Mac’s first secured interest therein.
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Accordingly, Freddie Mac requests that the court declare the foreclosure invalid and that the deed
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of trust continues to encumber the property. (ECF No. 26 at 18).
(ECF No. 26).
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Under the Property Clause of the United States Constitution, only “Congress shall have the
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power to dispose of and make all needful rules and regulations respecting the territory or other
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property belonging to the United States . . . .” U.S. Const. Art. IV, § 3, cl. 2. The Supremacy
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Clause provides that the “Constitution . . . shall be the supreme law of the land . . . .” U.S. Const.
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Art. VI, cl. 2. “State legislation must yield under the Supremacy Clause of the Constitution to the
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interests of the federal government when the legislation as applied interferes with the federal
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purpose or operates to impede or condition the implementation of federal policies and programs.”
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Rust v. Johnson, 597 F.2d 174, 179 (9th Cir. 1979).
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In Rust, the Ninth Circuit held that a city’s foreclosure on property insured by the Federal
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National Mortgage Association was invalid under the Supremacy Clause. Id. The court reasoned
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that upholding the sale “would run the risk of substantially impairing the Government’s
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participation in the home mortgage market and of defeating the purpose of the National Housing
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Act.” Id.
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Foreclosure on federal property is prohibited where it interferes with the statutory mission
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of a federal agency. See United States v. Lewis Cnty., 175 F.3d 671, 678 (9th Cir. 1999) (holding
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that the state could not foreclose on federal Farm Service Agency property for non-payment of
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taxes).
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Under NRS 116.3116, a HOA has a lien on a unit for assessments levied against that unit
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and such HOA liens are prior to all other liens and encumbrances, subject to exceptions. NRS
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116.3116(1)–(2). In SFR Investment Pool 1 v. U.S. Bank, 334 P.3d 408, 409 (Nev. 2014) (“SFR
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Investments”), the Nevada Supreme Court found that a HOA’s foreclosure of a superpriority lien
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extinguishes a first recorded security interest.
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HERA established FHFA to regulate Fannie Mae, Freddie Mac, and Federal Home Loan
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Banks. See Pub. L. No. 110–289, 122 Stat. 2654, codified at 12 U.S.C. § 4511 et seq. In September
James C. Mahan
U.S. District Judge
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2008, FHFA placed Fannie Mae and Freddie Mac into conservatorships “for the purpose of
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reorganizing, rehabilitating, or winding up [their] affairs.”
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conservator, FHFA immediately succeeded to “all rights, titles, powers, and privileges” of Fannie
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Mae and Freddie Mac. 12 U.S.C. § 4617(b)(2)(A)(i). Moreover, Congress granted FHFA
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exemptions to carry out its statutory functions—specifically, in acting as conservator, “[n]o
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property of [FHFA] shall be subject to levy, attachment, garnishment, foreclosure, or sale without
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the consent of [FHFA], nor shall any involuntary lien attach to the property of [FHFA].” 12 U.S.C.
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§ 4617(j)(3).
12 U.S.C. § 4617(a)(2).
As
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In Skylights LLC v. Fannie Mae, 112 F. Supp. 3d 1145 (D. Nev. 2015), the court addressed
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the applicability of 12 U.S.C. § 4617(j)(3) and held that the plain language of § 4617(j)(3) prohibits
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property of FHFA from being subjected to a foreclosure without its consent. See also Saticoy Bay,
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LLC v. Fannie Mae, No. 2:14-CV-01975-KJD-NJK, 2015 WL 5709484 (D. Nev. Sept. 29, 2015)
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(holding that 12 U.S.C. § 4617(j)(3) preempts NRS 116.3116 to the extent that a HOA’s
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foreclosure of its superpriority lien cannot extinguish a property interest of Fannie Mae while those
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entities are under FHFA’s conservatorship). See generally G & P Inv. Enters., LLC v. Wells Fargo
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Bank, N.A., 199 F. Supp. 3d 1266 (D. Nev. 2016).
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Here, Freddie Mac has held an interest in the property since the purchase of the loan on
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December 12, 2006. In turn, FHFA has held an interest in the deed of trust as conservator for
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Freddie Mac since September 6, 2008, prior to the HOA foreclosure on January 16, 2014. FHFA
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did not consent to the extinguishment of Freddie Mac’s property interest through the HOA’s
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foreclosure sale.
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However, neither Freddie Mac nor Wells Fargo recorded the assignment of deed of trust
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so as to put Collegium and the HOA on notice of Freddie Mac’s/FHFA’s interest in the property.
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Pursuant to NRS 111.320, “[e]very such conveyance or instrument of writing . . . recorded in the
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manner prescribed in this chapter . . . must from the time of filing the same with the . . . recorder
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for record, impart notice to all persons of the contents thereof; and subsequent purchasers and
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mortgagees shall be deemed to . . . take with notice.” Nev. Rev. Stat. § 111.320. Moreover, NRS
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111.315 provides that “[e]very conveyance of real property, and every instrument of writing . . .
James C. Mahan
U.S. District Judge
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whereby any real property may be affected . . . to operate as notice to third persons, shall be
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recorded in the office of the recorder of the county in which the real property is situated.” Nev.
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Rev. Stat. § 111.315; see also All Am. Van & Storage, Inc. v. DeLuca Realty, Inc., 592 P,2d 951,
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952 (Nev. 1979) (“All American, by reason of the knowledge imputed to it pursuant to the
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recording statutes, must be deemed to have had notice of the recorded encumbrance.”).
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Because neither Freddie Mac nor Wells Fargo recorded the assignment of deed of trust,
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genuine issues exist precluding summary judgment. Accordingly, the court will deny Freddie
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Mac’s motion for summary judgment (ECF No. 26).
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IV.
Conclusion
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Accordingly,
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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that Freddie Mac’s motion for
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summary judgment (ECF No. 26) be, and the same hereby is, DENIED.
DATED July 5, 2017.
__________________________________________
UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge
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