Bank of America, N.A. et al v. Santa Barbara Homeowners Association et al

Filing 130

ORDERED that ECF Nos. 85 , 86 , 88 , 90 , 101 are denied accordance with this order. Plaintiffs' motion to stay discovery (ECF No. 87 ) is granted. Per the parties' stipulation (ECF Nos. 128 , 129 ) the parties must file the replies supporting their respective motions for summary judgment (ECF Nos. 84 , 119 , 121 ) by 6/9/2019. Signed by Judge Miranda M. Du on 6/4/2019. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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BANK OF AMERICA, N.A., successor by
merger to BAC HOME LOANS
SERVICING, LP fka COUNTRYWIDE
HOME LOANS SERVICING, LP and
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,

Case No. 2:16-cv-02768-MMD-CWH
ORDER

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Plaintiffs,
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v.
SANTA BARBARA HOMEOWNERS
ASSOCIATION; SFR INVESTMENTS
POOL 1, LLC; ABSOLUTE COLLECTION
SERVICES, LLC,

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Defendants.
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AND RELATED CASES

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This case focuses on whether Plaintiffs Bank of America, N.A (“BANA”) and the

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Federal National Mortgage Association (“Fannie Mae”) own a property interest that is

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entitled to protection under 12 U.S.C. § 4617(j)(3) (“Federal Foreclosure Bar”). Plaintiffs

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argue that Fannie Mae’s first deed of trust could not have been extinguished as the

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Federal Foreclosure Bar preempts the Nevada HOA foreclosure statute and that the Ninth

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Circuit has held that Fannie Mae’s property interest survives an HOA sale when a servicer

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or nominee acting on behalf of Fannie Mae appears as record deed of trust beneficiary.

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(ECF No. 84.)

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On February 11, 2019, the Court issued a minute order granting the parties’

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stipulation to extend the time to file the necessary replies to the parties’ respective motions

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for summary judgment pending in this case (ECF Nos. 84, 119, 121). (ECF No. 129.) In

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ECF No. 128, the parties particularly stipulate to extend the deadline for filing their related

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replies until 5 days after the Court rules on ECF No. 187. There are five other pending

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discovery related motions that are either related to ECF No. 187 or should be resolved

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prior to the Court’s consideration of the pending motions for summary judgment (ECF Nos.

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85, 86, 88, 90, 101). ECF No. 187 and these other five motions are collectively referred to

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as the Non-MSJ Motions. The Court rules on each of these Non-MSJ motions as follow:

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1.

ECF No. 85

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Defendant SFR Investments Pool I, LLC’s (“SFR”) motion to strike (ECF No. 85) is

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denied. SFR’s contention that Plaintiffs’ motion for summary judgment should be stricken

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because Plaintiffs’ supporting evidence was produced after the close of discovery fails in

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light of the parties’ prior submitted joint status report to the Court, setting a new discovery

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deadline for November 16, 2018. (ECF Nos. 78, 79.) The Court viewed the status report

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and implicitly accepted the new discovery deadline per its minute order lifting the stay of

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the case. (ECF No. 82; see also ECF No. 117 at 2 (providing that “unless the Court agrees

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that the parties’ joint status report reset the discovery deadlines without a new scheduling

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order, SFR’s Countermotion to strike should be granted”).)

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2.

ECF No. 86

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SFR’s alternative motion for relief under Fed. R. Civ. P. 56(d) (ECF No. 86) is

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denied. The crux of this motion is that SFR seeks further discovery, including to depose

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Fannie Mae’s Assistant Vice President and declarant Graham Babin (see ECF No. 84-7)

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for the purpose of “discern[ing] if his conjecture about the meaning of the computer records

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he testified from is actually supported by those records.” (See, e.g., ECF No. 86 at 11.)

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SFR also seeks to obtain discovery on facts SFR claims Plaintiffs must establish to invoke

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the Federal Foreclosure Bar (ECF No. 86 at 23). The latter again focuses on Babin’s

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declaration and underlying documents. SFR further contests the admissibility and

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relevance of FHFA’s Statement on Super-Priority Lien Foreclosures (“FHFA’s Statement”)

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and Fannie Mae’s servicing guide (ECF Nos. 84-8, 84-9) and insists additional discovery

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is needed to challenge Fannie Mae’s ownership of the Loan/Note, the alleged existence

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of a trust—going to securitization of the Loan and Plaintiffs’ Article III and prudential

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standing. (ECF No. 86 at 23–24.)
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To the extent SFR’s motion for Rule 56 (d) relief is connected to its position that

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certain evidence was undisclosed prior to the close of discovery, the argument is moot in

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light of the Court’s finding that discovery was extended until November 16, 2018—after

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ECF No. 86 and accompanying reply (ECF No. 118) were filed. The gist of the SFR’s

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motion is otherwise that discovery is needed beyond the public records in this case to

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establish that Fannie Mae owned the Loan at the time of the HOA Sale and has a servicing

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relationship with the beneficiaries of record. (See, e.g., ECF No. 118 at 5.) Said differently,

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SFR argues that it cannot respond to Plaintiffs’ motion for summary judgment without

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additional discovery into the nature and extent of claimed property interests.

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However, the evidence of Babin’s declaration, Fannie Mae’s business records and

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other documents, such as the FHFA’s Statement and Fannie Mae’s servicing guide (ECF

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Nos. 84-8, 84-9) have repeatedly been found as sufficient evidence establishing Fannie

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Mae’s property interest for purposes of the Federal Foreclosure Bar. See Berezovsky v.

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Moniz, 869 F.3d 923, 932–33 & n.8 & n.9 (9th Cir. 2017); Williston Invs. Grp. v. JPMorgan

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Chase Bank, NA, 736 F. App’x 168, 169 (9th Cir. 2018) (confirming that Berezovsky held

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that an Enterprises business records and a supporting declaration are “sufficient” to show

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an Enterprise’s property interest for purposes of summary judgment); see also U.S. Bank

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Home Mortg. v. Jensen, No. 3:17-cv-00603-MMD-VPC, 2018 WL 3078753 (D. Nev. June

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20, 2018) & Springland Vill. Homeowners Ass’n v. Pearman, No. 3:16-cv-00423-MMD-

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WGC, 2018 WL 357853 (D. Nev. Jan. 10, 2018) (granting summary judgment under the

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Federal Foreclosure Bar based on the same kind of evidence Fannie Mae presents here);

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see Nationstar Mortg. LLC v. East Trop 2073 Trust, No. 2:17-cv-01769-MMD-CWH, 2019

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WL 469897 (D. Nev. Feb. 6, 2019) & Nationstar Mortg. LLC v. Stonefield Homeowners

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Ass’n, No: 3:17-cv-00627-MMD-WGC, 2019 WL 2062952 (D. Nev. May 9, 2019) (deciding

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issues of standing, note ownership—based on securitization and what the note reflects,

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and providing that FHFA’s Statement and Fannie Mae’s servicing guide were judicially

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noticeable documents); see also USROF IV Legal Title 2015-1 by U.S. Bank Nat’l Ass’n

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v. White Lake Ranch Ass’n, No. 3:15-cv-00477-MMD-CBC, 2019 WL 539037, at *3 (D.
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Nev. Feb. 11, 2019) (also addressing essentially the same standing and note ownership

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arguments SFR raises here).

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In short, the Court is convinced no further discovery is warranted here.
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ECF Nos. 87 and 89

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Relatedly, Fannie Mae’s motion and BANA’s joinder to stay discovery until the

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Court rules on Plaintiffs’ motion for summary judgment based on the Federal Foreclosure

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Bar (ECF Nos. 87, 89) are granted.

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Courts have broad discretionary power to control discovery. See Little v. City of

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Seattle, 863 F.2d 681, 685 (9th Cir.1988). In deciding whether to grant a stay of discovery

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the Court is guided by Fed. R. Civ. P. 1’s objectives of ensuring “just, speedy, and

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inexpensive determination of every action.” Kor Media Group, LLC v. Green, 294 F.R.D.

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579, 581 (D. Nev. 2013) (internal quotation and citation omitted). The Court may grant a

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motion to stay where “(1) the pending motion is potentially dispositive; (2) the potentially

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dispositive motion can be decided without additional discovery; and (3) the Court has

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taken a “preliminary peek” at the merits of the potentially dispositive motion and is

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convinced that the plaintiff will be unable to state a claim for relief.” Id.

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After conducting a “preliminary peek” of the parties’ motions for summary judgment

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and based on its rulings on SFR’s motions to strike and for Rule 56(d) relief the Court finds

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that a stay of discovery is warranted. The Court agrees with Plaintiffs that further discovery

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is unnecessary to determine whether Fannie Mae had a property interest at the time of

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the HOA Sale (ECF No. 105 at 2) because, as noted, the Ninth Circuit has already

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determined that the type of documentary evidence and declaration Fannie Mae has

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produced are sufficient to establish its interest in support of a motion for summary

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judgment based on the Federal Foreclosure Bar.

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4.

ECF No. 88

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Fannie Mae’s motion in the alternative—to quash SFR’s various deposition

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requests and for protective order to limit SFR’s 30(B)(6) deposition topics (ECF No. 88) is

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denied. It is denied as moot in light of the Court’s ruling granting ECF No. 87.
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ECF No. 90

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BANA’s motion—In the Alternative, Emergency Motion for Protective Order to Limit

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Defendant’s 30(B)96) Deposition Topics (ECF No. 90)—is denied. It is denied for the same

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reason Fannie Mae’s alternative motion is denied—because the Court grants Plaintiffs’

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request staying discovery pending its ruling on Plaintiffs’ pending motion for summary

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judgment (ECF No. 84).
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ECF No. 101.

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SFR’s motion seeking to stay the entire case pending the Nevada Supreme Court

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ruling in either of two separate actions—SFR Investments Pool 1, LLC v. Green Tree

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Serv., LLC, Case No. 72010, (“Perrone”) or a rehearing of Nationstar Mortgage, LLC v.

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Guberland LLC-Series 3, No. 70546, 420 P.3d 556 (Table), 2018 WL 3025919 (Nev. June

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15, 2018) (ECF No. 101)—is denied. This motion is premised on the argument that a ruling

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in either matter would invalidate the Ninth Circuit’s interpretation of Nevada law in

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Berezovsky. (See, e.g., ECF No. 111 at 2.) SFR has not filed a status report regarding if

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or how the Nevada Supreme Court has subsequently ruled in either case. In any event,

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Guberland which accords with Berezovsky in establishing a property interest for an

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enterprise such as Fannie Mae remains good law. See Guberland, 2018 WL 3025919, at

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*2. SFR’s motion to stay the entire case is accordingly denied.
It is therefore ordered that ECF Nos. 85, 86, 88, 90, 101 are denied in accordance

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with this order.
It is further ordered that ECF No. 87—Plaintiffs’ motion to stay discovery pending

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the Court’s ruling on Plaintiffs’ motion for summary judgment—is granted.

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It is further ordered that per the parties’ stipulation (ECF Nos. 128, 129) the parties

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must file the replies supporting their respective motions for summary judgment (ECF Nos.

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84, 119, 121) within 5 days of when this order is entered.

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DATED THIS 4th day of June 2019.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE

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